Knowing The Score: What’s Up With Your Credit Report?

Your credit score can be likened to your criminal record. Both will follow you around for a very long time, and both are supposed reflections of the person you are. Only you and perhaps your attorney will know your criminal record. But your credit score can be pulled when you apply for a credit card, or go to get a new car, or even try to move in to a new place.

For those not in the know, your credit score is based on a number system between 300 and 850. A secret formula (OK a mathematical algorithm) will determine what your number will be. Creditors and experts 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 crucial. If you already have a credit card, the creditor will most likely take a 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 wig out yet if you have a low credit score; there are things you can do in order 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 most effective way to improve your credit score. Don’t close your unused credit cards. 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 good.

And for the love of God, don’t open any new accounts. New accounts aren’t even helpful in credit scoring because they will decrease your average account age. Which leads me to my final point. Longevity. Try to maintain your oldest accounts. Longevity pulls a lot of weight on credit reports, so the oldest account you have is the most available.

Mallory McGuinnessis employed bya debt collection company. She also composes pieceson consumer spending, business, financeand debt collection. Get a totally unique version of this article from our article submission service

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