Consumers need to understand just how important their credit rating is . It affects how much interest you will pay on all kinds of loans from mortgages to vehicles to credit cards to any line of credit you apply for.
Let’s talk about how to maintain a high rating. Most importantly, pay your bills on time. Avoid late payments because it will affect your rating. What about loans you already have? Default on a loan and it will lower your credit rating drastically.Bottom line…Pay your bills and pay them on time.
Get rid of credit cards that you are not using. Every credit card is considered an open line of credit and this also affects your credit rating. It’s always enticing when a store offers you a charge card with a discount or a gift as an incentive but remember all those store charge cards are also open lines of credit.
When you cancel a line of credit make sure you get a letter from the company stating that you have closed your account. I can’t stress enough how important this is. Later on, if you discover that the account was not closed …you have documentation.
Every time a company requests your credit information it affects your score so think very carefully before applying for credit. Make sure you plan to purchase a product before giving out information that allows a company to obtain your credit rating. Every inquiry lowers your score.
Your credit rating follows you all through life. Keep it high and you will reap the benefits. And remember…It has nothing to do with with how rich you are BUT everything to do with how you handle your finances.
Also read: Learning To Manage Money 6/28/08
