what should my credit score be
and what hurts my credit score?
Good credit score will entitle you to
financial freedom. It will allow you to
get loans and get better interest rates. It
is very important to monitor your credit score
and avoid things that can hurt your credit rating.
In order for you to enjoy a financially stable life,
your credit score should be good. This means
that your credit score should be high enough to
qualify you for loans and competitive interest
rates. There are several things that can hurt your
credit score severely. Here are some of them.
Never use your debit card when renting a car.
Car companies have the right to pull down
your credit score once
you fail to use your
credit card to avail their
service. This may be a
little strange because
cash is definitely better
than having a credit
balance. However, for
car companies, a credit
card serves as insurance
in case something happens to the car you rented.
If you do not use your credit card, the company
may think that you have a low credit score and
that you cannot be trusted that much. They may
send some inquiries and some points may be
subtracted from your credit score.
Never say yes to stores offering credit cards. If
you want to keep your credit rating good, you
should never be tempted to get a department
store credit card. No matter how much discount
you can get from your first purchase, it does not
delete the fact that the interest rates are much
higher than the regular credit cards you get
from banks and other financial institutions. In
addition, you may get an inquiry as to why you
are purchasing a credit card. This inquiry can
make you lose some points on your credit score
which can range from 5 to 35 points depending
on your current credit rating.
Never buy furniture using the merchant’s
financing system. A home loan will keep your
credit score better than a credit card. However,
there are some loans that are even worse than
credit cards. An example of this is the financing
system of a local merchant. This can hurt your
credit score a whole lot because such financing
methods are seen as the last resort. This means
that when you purchase such a deal, the credit
companies will think that you have no other
choice because you have no other means
of financing or paying
for the furniture you
bought.
Ne ver al low your
credit company to
not report your credit
limits. Reporting credit
limits is very important
especially if you want
to have a better credit rating. It is the duty of
every credit card company to send reports to
the big credit reporting agencies. The reports
should include the credit limit, credit history
and the payment history of the credit card owner.
However, some credit card companies fail to fulfill
this responsibility and the backfire is on you.
FICO has its way of calculating your credit score.
Your credit limit is usually necessary in order to
compute the scores. If you do not have a credit
limit reported to them, it will be difficult for them
to determine your current credit rating. When
this happens, your credit rating might suffer a lot.
Although it is the credit card’s responsibility to
send reports, it is also your duty as a consumer to
make sure that they are doing their job.
Article by Carolyn Anderson
Money
44 WomanToWomanMagazine.com
/WomanToWomanMagazine.com
