Did you know that you are entitled to one free credit report annually? It's true! Reporting agencies are required by law to allow you to check your credit report free of charge. You can access the report right on the website of the federal government. In addition to the free report for you, be aware that reporting agencies are also required to give you a free report if a company denies you credit, insurance, or employment because of it. You're also entitled to a free report if you're unemployed and plan to look for a job within sixty days.
Knowing your credit score is important. The credit scores range from 300-850, with 300 being extremely poor and 850 being the "maker's" dream. If your credit score is low, you can get your score increased. Pay all of your bills on time, every time. This is a slow, but effective way to increase your score. If you have late payments that happened because you just ran out of money, then contact the creditor and explain the situation. If you have paid off a bill, and then it starts costing you more money because of fees, then contact the creditor and ask for a reduction in the fees. No company with any integrity would negotiate if they didn't think you were going to pay. If you have a strong payment history, that means more money in your bank account. Pay all of your bills, on time and without fail.
Keep an eye out for identity theft, especially if you are making online purchases, shopping on a website without verifying the site, or using your credit card for the purchases. As long as you don't store personal information on your computer, then you aren't at risk. If you do decide to use your credit card on a website that's not secure, then be sure that you have adequate protection in place. The low-tech versions of signal interfering and tracking devices are beginning to show up as well.
Monitor your credit reports every year. Make sure that your identity information is not being used on other websites so that others can steal your information. If there are errors, erroneous items, or identity theft, notify the credit agencies right away. If you have cheat services introduced into your account, work with the consumer protection office to get the items verified.
Additionally, if you have constantly been denied credit, insurance, or employment because of your credit report, contact the agencies and ask for those items in writing. It's better for you to be proactive. If you are being turned down for credit, insurance, or employment because of something you know that the creditor doesn't know, contact the three major credit reporting agencies right away!
Keep lists of your credit cards and their balances, credit limits, and interest rates. Keep these items updated each month. If you remember to make a payment, then do it. If you forget to make a payment, make sure it continues to come in. Remember bankruptcy is an option, if it's been sent to you. Be sure to have copies of this letter sent to all three credit reporting agencies, along with copies of documentation showing your efforts to rectify the situation. If you have not been able to achieve favorable credit results, it may be time to switch careers and get a job making people pay.
Determine your debt ratio. This is simply the difference between the amount of credit you have used and the amount of credit it would take to pay off the loan. If a Visa card has a $10,000 limit and you have actually used $9,000, there are naturally going to be a lot of inquiries from other people who want to use your good credit. This creates a high debt-to-income ratio. The goal is to keep it below 35%. If your debt ratios get above 60%, then it's time to start using credit wisely.
Paying your bills right side of the table is the secret to keeping your credit score high. If you're charging more than about 10% of your credit limit, or by 50%, take measures to reduce the amount of debt owed. Smart employed individuals are never late, but they also never over pay. They should never max out their credit cards because they know they will never overpay. Waiting for the bill to arrive doesn't have to be a stressful situation. It's critical to keep interest rates low, but their is a need to respect their repercussions.
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