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Why Your Credit Score Matters And What You Can Do About It
If you are not watching over your credit score and how to systematically keep it as high as it can be, you are doing yourself a disservice, and as a matter of fact that act of negligence may come back and bite you in the back side in the very near term.
In today's world, your credit score is being utilized for a large variety of purposes, some of which you in all likelihood never thought would even be close to being pertinent. As an example, many car insurance companies are now using a customer's credit score when they are determining the amount of car insurance premiums that they will charge you. The grounds for this is because they supposedly have statistical reports which show that consumers with poorer credit scores make more claims on their policies. Naturally there are various consumer advocate groups that are very upset about this, but the insurance companies claim that statistics do not lie, so for today anyway, that is still being used as a factor.
Another very important point where your credit score is used is when you go to apply for a new job. In today's depressing economy and suffering job market, ...
... you need every advantage you can obtain, so now that you know that your credit score will likely be considered before they offer you the job, you may want to do some repairs on your credit score to make sure it is as high as it can possibly be.
One of the really common myths about maintaining a high credit score is that you should pay off and close as many of your credit card accounts as possible. Actually, nothing could be further from the truth. Remember, your credit score is dependent in large part upon your credit history, where the key word is "history". If you have had a specific credit card for several years and have an acceptable payment history with them, it could actually lower your credit score to close that account since now that good payment history will be no longer be reflected as an active component on your credit report.
Another common myth about raising your credit score is that you should have as many of your credit card accounts as possible with a zero balance. Again, this is a myth and is totally inaccurate. Having credit available to you, as you would with an open account with a zero balance, is good, but your credit score is actually computed to be higher if you are actually using your account in good standing. In other words, you are utilizing the account and making payments on time, so you are displaying responsible usage of credit privileges.
If you do not pay off your credit card balances at the end of the month, that is not a problem but for the best effect on your calculated credit score, you should strive to keep your outstanding balance at approximately 20% to 25% of your credit limit. If your outstanding balance is more than that, chances are that it could reflect badly on your credit score since you could be thought to be utilizing credit too much, but keeping your outstanding balance between these percentages, again, shows responsible usage of credit.
Lastly and most importantly, obtain a copy of your credit report at least once a year from each of the three major credit reporting agencies and review them with a fine tooth comb. The majority of consumers have errors in their credit reports and do not even know it. What is more, these errors will not self-correct over time, but will stay on your report until you dispute them, which has the potential to lower your credit score. There is a right way and a incorrect way to challenge errors, and if done incorrectly, the error will not be rectified.
Keep an eye on your credit report so that your credit score will be as high as possible. This can give you an advantage in more areas of your life than you even considered it affected.
Your credit score is critically important to many areas of your life, probably more than you realize. In fact, having a low credit score could actually be costing you money! Find out how you can raise your credit score and why you should do so.Your credit score is critically important to many areas of your life, probably more than you realize. In fact, having a low credit score could actually be costing you money! Find out how you can raise your credit score and why you should do so.
For more insights and additional information about how and why you should Raise Your Credit Score as well as finding more resources to help you with that and being able to get free copies of your credit reports from the major credit reporting agencies, please visit our web site at http://www.credit-help-center.com
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