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.
Credit monitoring services like ones from myFICO is very good because it automatically keeps track of your credit report and alerts you whenever there are any changes. You can of course choose to do it yourself but that’s 1000x harder.
The government has made it law that the credit report agencies need to give you a free report every few months. This not only allows you to stay on top of everything within your credit report but also give you a chance to dispute any changes to it in a timely manner. Just make sure you request it because it won’t be automatically sent to you.
Lenders will just pull your report when you request a loan, so if you are maxed out on your credit, they see it as a no-no. It doesn’t really matter if you pay off your credit cards every month because the utilization rate will be very high.
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!
Inactive cards will eventually be flagged by the credit card companies and be canceled. The credit report will just say canceled by card company without any explanation so use all your cards in regular intervals.
Having more than one credit card will actually help your credit. Lenders will sometimes look at your credit report and deny you because you don’t have enough different forms of borrowing. They see a lack of information as a negative so even though you may have a ton of cash somewhere to pay off any loan, the absence of proof is a big drawback.
Different types of borrowing will help your credit scores because it shows that you have debt and are proven to be able to manage it. Without it, lenders really won’t know how you will react when the big bills come due every month.
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