Your credit report and your credit score are two measures the most vital health of your financial situation. Tweet this
Well take care of them puts you in the position to save thousands of dollars over your lifetime.
Why?
Because your credit report and your credit score plays an important role in determining how your high interest rate will be for financial products like mortgages or car loans, not to mention the effects they have on your home and auto insurance rates.
Cultivating a higher credit score to 700 will anyone a competitive candidate for the best interest rate and mark the credit cards with the best benefits of cashback.
Here are four ways to ensure your credit report and score become the tipping equivalent of a mannequin body to the beach:
Make sure you have a credit line of
you can not establish a credit history without credit. In fact, 15% of your FICO credit score is based solely on the length of your credit history.
This is the easiest part of doing good, as long as you actually credit.
The simplest way to do this is to get an early credit card and use it regularly.
many people discourage college kids possess plastic, but the college is a great time to start building your credit history.
students can use these four years to build credit history and prepare for life after graduation when a credit report and score will play a major role.
The responsible use one credit card can result 700+ score after graduation, which will make it much easier to find an apartment, getting a car loan, or for more-efficient, secure a mortgage.
student loans are another way to establish a credit line, if they are in your name and not your parents.
Use credit responsibly card in conjunction with student loans will help improve your credit score because it diversifies your credit types, representing 10% of your score.
It is often easier to get a student credit card to get a credit card after graduation if you have no credit history.
If you need to establish a line of credit but can not get approved because of the lack of credit history, a secured credit card may be your solution.
With a secured card, you put a down payment. This deposit amount usually becomes your credit limit.
A secured card proves to the bank that you are a reliable borrower, and finally, you can upgrade to a regular credit card.
Keep your use of less than 30% and never max out
use is the amount of your available credit you use.
Say Penelope has two credit cards. It has a limit of $ 3000 and the other is $ 2,000, so that its overall credit limit is $ 5,000.
Ideally, Penelope should not spend more than $ 1,500 a month on her credit cards to keep its utilization rate to 30%.
This will look like a reliable borrower because it does not come close to maxing out his credit cards.
an option to reduce your usage is to increase your available credit without spending more.
Penelope apply another card and gets a limit of $ 2500, then it has a total of $ 7,500 in available credit.
maintaining its spending habits while $ 1,500 of purchases each month, its utilization rate is now 20%. It's even more reliable air so that his credit score increases.
Pay your time and all bills
missing a payment is one of the biggest success you can do to your credit score.
must pay all your bills on time and in full each month. If you can not make full payment on your credit card, at least make the minimum payment.
missing a payment due date simply because you'll be able to make full payment a few days does much to harm your score.
your credit card company cares about your reliability. Miss a payment due date really hurts your credibility as a good borrower
Even if you think it makes more sense to pay in full a few days late than pay a small part of the time -. The bank does not.
avoid credit card debt
in addition to pay on time and in full, you should avoid credit card debt.
interest rates on credit cards can cripple your wallet and cause you to pay hundreds of thousands of dollars in interest.
If you've landed yourself in credit card debt, but a credit score of 680 or more, consider applying for a balance transfer.
a balance transfer can significantly reduce your interest rate and save you hundreds of thousands in debt repayment.
MagnifyMoney.com offers a simple tool to see how much you could save with a balance transfer.
It is also important to avoid the debt sent to collections. The collections are noted on your credit report and dramatically decrease your credit score.
Watch your report and score
Once you have established your line of credit and were responsible for paying on time and in full, it's time to protect your report and score .
Unfortunately, the credit card and bank fraud are common. Be proactive to keep your financial life safe by regularly monitoring your credit reports and scores.
You are entitled to a free credit report from all three credit bureaus (Experian, Equifax and TransUnion) each year.
Skip to offices or use annualcreditreport.com.
In addition, you can monitor your reports with free online services of Credit Karma ™ or CreditSesame®.
Barclaycard® Discover® and provide their cardholders with their FICO score for free on each monthly statement.
When reviewing your reports, look for errors such as a loan card application or credit that you do not.
your credit report and score are essential to your overall financial health, so be proactive and set appointments with you for exams.
Do you regularly monitor your credit score and credit report?
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