Survive The Economic Crisis, Keep Your Credit Score HealthyYour credit score is one of the most important financial records that you have.
Your credit score serves as a check on how good of a credit owner you are. This is very important for loan and credit companies. By getting your credit score, they can determine if you are fit for getting a loan or credit or not. The better your credit score is, the better your chances are of getting a loan. Therefore, you should keep your credit score as healthy as possible.
To keep your credit score healthy, you first have to understand how your score is calculated. To put it simply, your credit score is the ration between your available credit and the balance you have. The larger your balance, the lower your score is. The lower your available credit, the lower your score is as well. Thus, if you have a large balance to your name, your credit score will be low. If you have little or no credit available your score will be low as well. Thus, to keep your credit score high, you must have as low a balance and as much credit as possible. It’s much easier said than done, though.
You need to be able to keep track of your credit score if you want to keep it healthy. You can get a free credit report easily from one of the three credit which are Experian, Equifax and Trans Union. These three credit bureaus can give you an annual credit report which you can use to trace your credit history. Through this, you can check out which credit lines are having a negative effect on your credit score and which are benefiting it. Your credit report will also have information on how you can contact your creditors which is very important because you can use it to have any problems that you find fixed.
Obviously, your credit score will be good if you keep your balances low. Therefore, try to pay off all your balances every month or, at least keep it as low as possible. However, you must also keep your credit lines open. This will keep your available credit high. So don't close your credit card because you don't use it that much. Instead, keep it active by charging minimal purchases on it and paying it off every month. A new problem cropping up for credit cardholders is the fact that credit card companies are cutting off available credit. With less credit available, even a little balance will already have a big impact on your credit score. It is therefore more important than ever to pay off your balances.