Each of us must pay careful attention to our credit scores if we ever hope to purchase a home, get a new credit card, buy a car and even get student loans. While most people understand that the best way to make sure your credit score stays high is to pay your bills, there are other things you can do to help ensure your credit is not damaged. Some of them include:
Careful use of credit cards – using your credit cards to improve your credit may seem counter-intuitive, but an unused credit card could actually harm your credit score in the long run. Most credit reporting agencies include both your credit card balances and your available credit. Keep your balances below 30 percent of the available credit, and in addition, pay off more than the minimum whenever possible, and if possible, pay off your entire balance on a monthly basis.
Avoid the ostrich syndrome – no matter how careful you are, you could still be a victim of identity theft. Monitoring your credit report for unauthorized activity could help you avoid potential problems that could ultimately harm your credit. Consumers are entitled to a free credit report from each of the three reporting agencies on an annual basis and should take advantage of this and request them regularly. Failing to review your credit report could result in issues that will sneak up and cause problems in the future and could also mean an identity thief can run up high credit accounts in your name.
Clean up your past – if you have had credit problems in the past, do not fall prey to these “credit enhancement programs” which promise to improve your credit. There is no legal way to remove accurate information from your credit report, but be sure to check out your state’s statutes of limitations regarding debt, as you may be able to have negative information removed legally after a certain period of time.
Some consumers face a harsh reality when they need credit and discover they have blemishes on their credit report that they did not expect. You can avoid these surprises by reviewing all of your account statements when you get them and by monitoring your own credit report on a regular basis. Well-informed consumers are not surprised when they are approved for a credit card, mortgage or car loan. They know what to expect, because they have taken the time to ensure their credit score will not be harmed.
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