Responsible Credit Behavior Improves Your Credit Score
If it’s not a part of your New Year’s resolution yet, then it’s about time that it makes the
top of your list—get rid of debt for 2012.
How? Check your credit report grade. It’s as simple a reviewing your credit history and
ensuring that you score 700 and up. This ensures that your credit ratings allow you to
purchase a home, a car, insurance or even cover your mortgage should the need arise.
Anything lower essentially means you will be unable to qualify for loans.
So the next question is—how does one go about improving their credit score?
1. Start by obtaining a credit report to see if the details of purchases made on credit.
These are services and copies provided free by credit companies.
2. Make sure that you make payments on time. Ensure that, at the very least, you are
able to make the minimum payments on your cards each month.
3. Pay off your credit card debt—this adds almost 20 percent to the improvement of
your credit grade.
4. Keep a close eye on your credit cards if you will be lending them and do so only
if absolutely necessary. If possible, maintain cash transaction instead.
5. Keep in mind that credit scores are greatly affected by cancelling cards that have a
large credit line.
6. Bear in mind that you are liable to be sued by credit companies for unsettled debts
and will reflect negatively on your credit score.
7. Should you agree to a debt collection agency to settle your credit debts, make sure
you only agree to an amount which you can pay off.
8. Study your debt to income ratio—the monthly allotment you use for paying off
debts should be less than 36 percent of your total income to make you eligible for
mortgage.
Keep these in mind and keep track of your credit purchases and you will be well on your
way to a better credit score.