Debt Consolidation and Credit Card Counseling

Credit scores can make or break you at loan time

As we were discussing in part one of this article, credit score health is vital to anyone who will ever need to borrow money or obtain a credit card. The score is a system for keeping track of whether a consumer is worthy of receiving loans or credit over time. In part one, we looked at several important components of the score, such as paying bills on time, establishing older credit over time and making sure that you aren’t using too much available credit. 

Here we will look at a few more things that are important in keeping your credit score in tip top shape:

Don’t have too many cards in too short a time period - It is not uncommon for some people to receive several credit card offers per week. Some people might think that more is better, and sign up for all of them. But each time you even apply for credit, you receive a small “dent” in your credit score. A number of inquiries in a short period of time can increase the dent substantially. Creditors grow concerned when they see someone taking out or apply for a lot of credit in a short period of time. It makes them wonder if the borrower might be desperate for money for some reason. It certainly makes sense to shop around for a credit card that has the best terms, but if you can do so you are much better off finding one card that suits you. Once you have it, use it responsibly and keep it. And pay the bills on time. Too many cards and too many applications are a bad idea.

Keep an eye on your credit report - You can check your credit report for free at annualcreditreport.com. This site has been set up to allow consumers to obtain a copy of one report from each of the three credit bureaus per year at no charge. This report does not include the credit score, but will show all of your outstanding accounts and debts. You should check your report once or twice a year just to make sure that the information contained within it is corredt. You should also check to make sure that no one else is taking out credit in your name, a practice known as identity theft. It is work enough trying to keep your credit score healthy without having it lowered by some criminal who is spending money in your name. By all means, check it out and if you find something unusual, report it to the authorities and the credit bureaus immediately.

All it takes to keep your financial health is just a bit of basic responsibility.  Pay your bills on time. Don’t borrow more than you can repay. Don’t take out too many loans. Keep the accounts you have over a long period of time. Check your report from time to time to make sure the information is accurate. Do these things, and you could have a top FICO figure.

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