How's your credit these days? As lenders tighten requirements and with credit limits being downsized, Americans are feeling the pressure. Getting your credit in good-standing is achievable. These days, your credit score is synonymous with your middle name. 5News Financial Expert John Taylor explains, " They say you are what you eat, you are your credit score." How much do you know about yours?
Credit scores are three digit numbers lenders use to gauge your creditworthiness. A good credit score means lower interest rates, better mortgages, even better insurance premiums. One of the most popular scores is the FICO score, with a scale of 300 (the worst) to 850 (the best). The average score is 720.
How do you get above average? Or even in good standing? "It takes, discipline, and conscious effort, and avoiding the mistakes that got you where you were," says Taylor.
First, you have to nail the basics. You can't get your score up until you stop your free-fall, if you can't pay your bills on time, you won't be able to fix anything. You also can't raise your score if you don't use credit. Keep in mind, you don't have to pay credit card interest to achieve great scores. Once you've got all this in order, it's time to raise your score.
First, experts say patrol your credit reports. They advise you to make sure you don't have any account which aren't yours on your report, or any mistaken late payments. If you have bankruptcies older than 10 years, make sure you don't have accounts wiped out listed as due. Also, have negative information deleted that is more than 7 years old. If you want a score above 700, experts say you'll need a major credit card like: Visa, Discover, or American Express. Analysts say take care of any problems way before disputes go to collections. Experts point out paying on time is crucial, and remind you to remember credit rehab takes time.
Next, it's time to manage that good credit. Experts say spread out your debt, more than a third of your credit depends on your available credit. They also say shoot for using less than 10% of your available credit. It's also key to make payments before they are due so they can be reported and reflected to credit bureaus. If you have debt, moving it to installment loans can up your credit score. Lastly, experts say watch out for the things that hurt you, when you are trying to improve your score. Closing accounts will hurt your score, you'll close down the line of credit you built, and your available credit line. Analysts also add to apply for credit sparingly: each application will cost you five points or so, they say it's not a big deal, but something to watch out for before you make those big purchases. As Taylor puts it, "A good credit score is like money in your pocket."
You can get free credit reports one a year from the government.
Log onto www.annualcreditreport.com for yours.
Credit scores are three digit numbers lenders use to gauge your creditworthiness. A good credit score means lower interest rates, better mortgages, even better insurance premiums. One of the most popular scores is the FICO score, with a scale of 300 (the worst) to 850 (the best). The average score is 720.
How do you get above average? Or even in good standing? "It takes, discipline, and conscious effort, and avoiding the mistakes that got you where you were," says Taylor.
First, you have to nail the basics. You can't get your score up until you stop your free-fall, if you can't pay your bills on time, you won't be able to fix anything. You also can't raise your score if you don't use credit. Keep in mind, you don't have to pay credit card interest to achieve great scores. Once you've got all this in order, it's time to raise your score.
First, experts say patrol your credit reports. They advise you to make sure you don't have any account which aren't yours on your report, or any mistaken late payments. If you have bankruptcies older than 10 years, make sure you don't have accounts wiped out listed as due. Also, have negative information deleted that is more than 7 years old. If you want a score above 700, experts say you'll need a major credit card like: Visa, Discover, or American Express. Analysts say take care of any problems way before disputes go to collections. Experts point out paying on time is crucial, and remind you to remember credit rehab takes time.
Next, it's time to manage that good credit. Experts say spread out your debt, more than a third of your credit depends on your available credit. They also say shoot for using less than 10% of your available credit. It's also key to make payments before they are due so they can be reported and reflected to credit bureaus. If you have debt, moving it to installment loans can up your credit score. Lastly, experts say watch out for the things that hurt you, when you are trying to improve your score. Closing accounts will hurt your score, you'll close down the line of credit you built, and your available credit line. Analysts also add to apply for credit sparingly: each application will cost you five points or so, they say it's not a big deal, but something to watch out for before you make those big purchases. As Taylor puts it, "A good credit score is like money in your pocket."
You can get free credit reports one a year from the government.
Log onto www.annualcreditreport.com for yours.
