Everything You Need To Know About Credit Reports
Your credit score is much like your criminal record. Both follow you around for a very long time, and both are supposed reflections of the person you are. Only you and perhaps your attorney know your criminal record. But your credit score can be pulled when you apply for a credit card, or go to buy a new car, or even attempt to move in to a new house.
For those that do not know, your credit score is founded on a number system between 300 and 850. A secret formula (OK a mathematical algorithm) will determine what your score will be. Experts and creditors agree that your credit score is said to be a very accurate prediction of how likely you are to pay off your bills.
Your credit score is important. If you already have a credit card, the creditor will probably look at your credit score to decide whether to decrease your credit limit, or give you a higher interest rate. Those lucky people with the highest scores obtain the lowest rates.
But don’t freak out yet if you have a low credit score; there are ways to improve your situation. Most importantly, try to pay your bills on time. Paying late or even worse, allowing a negative account to go to collection can have a negative impact on your credit score. It logically follows that the longer you pay your bills on time the better your credit score will be.
Attempt to pay off debt rather than move it around. It’s just the best way to improve your credit score. Don’t close credit cards you have not used. Closing is going to close the gap between the amount of credit you are using, and the whole amount available. If you have a lot of credit, and only use a little, its a good thing.
And for the love of God, do not open new accounts. New accounts are just not helpful in credit scoring because they will make your average account age lower. Which leads me to my final point. Longevity. Try to maintain your oldest accounts. Longevity has a lot of clout on credit reports, so the oldest account you have is the most available.
Mallory Megan works for a debt collection agency. Also she composes stories on business and finance, consumer spending and collection agencies. Don’t reprint this exact article. Instead, reprint a free unique content version of this same article.
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