Friday, April 8, 2011

How to maintain good credit scores

This is information we can all use.  With the credit crisis still in full swing, lenders have put a bigger premium on credit scores than ever before.  For lending purposes, everyone should strive to have scores above 740.  Here is how you do it:

1.  Always make your payments on time.  Remember that a late payment does not show up on your credit report unless it's at least 30 days past due.  If its less than that, you will pay a late fee and if its a credit card, you may have your interest rate increased, but it will not show up on your credit report.

2.  Keep your balances under 33% of the toal credit limit.

3.  Maintain at least 4 trade lines of some type.

4.  Many times people have collections on their report that they are not aware of.  Once you are aware of it, pay it off and attempt to get the account REMOVED from your credit report.  If you just pay it, the report will still have the collection but it will reflect "paid".  This will cause your scores to go DOWN in the short term.  It can be a tall task to get it REMOVED, but well worth it if you can as your scores will bounce back much faster.

5.  NEVER, NEVER, NEVER pay your mortgage late.  That will probably have the biggest negative impact on your scores.

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