Good loans require very good credit scores. If you still want to borrow money in this tough economy, you better have very good scores. Below are some ways to maintain it.
Believe it or not, credit monitoring services are actually a good way to make sure your credit stays high. There is usually a charge for it, but these companies will check your credit, and if it changes, send you an email about it so you can deal with it if it’s not an authorized use.
Of course, there’s always the free credit report that you can get from each of the three credit report agencies per year. To maximize the benefit, separate the time that you get the reports. For example, get one in January, then another one in May and another one in September so you are on top of your credit.
You need to make sure you don’t use up all your credit all the time. This is because part of your credit score is dependent on your utilization rate, a measure of how much credit you have available versus how much you use.
Every time you apply for credit, they will ding your credit report. If there are too many within a short period of time, the score will be affected because no one with a good financial picture will keep apply for credit. If it’s not absolutely necessary, space out your applications so it doesn’t look suspicious!
Don’t let any credit card be inactive because credit card companies are starting to cancel them now. If your card is canceled, the utilization rate will automatically go down because your available credit will go down. Therefore, you should use your cards every once in a while even if you don’t need it.
Remember to apply for a few credit cards and have some lines of credit available even if you don’t need it. I used to only have one card and one day I was denied for my business credit card because they told me I only have 1 credit card and haven’t shown that I can pay off debt, even though I have tons of cash in my bank account.
Even though too much debt will curtail the total amount that you can borrow, having them will help increase the chances that you will get approved because lenders know that someone who have multiple forms of debt are used to paying them and won’t freak out when the bills arrive in the mail.
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Tags: bank, borrow, borrowing, car, Credit, credit cards, credit monitoring, credit report, credit scores, house, lender, Loan, mortgages