Robert Livingston asked:
Your credit score is one of the most important aspects of your financial life. Not only does your credit score determine the amount of credit you can get and the interest rates you are eligible for, but it can also be used for employment, renting an apartment or house, insurance and other financial aspects of you life. You, however, are in control of your credit score. Here are two important factors you need to know about maintaining a decent credit score.
Make Payments on time
About 35% of your credit score is determined by your payment history. We’ve all been told to make are payments on time, but sometimes we simply put it off. This can have extremely negative effects on your credit score. The best way to maintain that 35% of your credit score is to pay your bills on time. Make sure you know the due dates and pay a few days before them. The added benefit of paying on time is that you will avoid those nasty late fees that can be quite substantial and only increase your debt.
Pay Down Debt
Your debt to credit ratio is extremely important for your credit score and comprises about 30% of your credit score. The fact is, lenders want to know that you are not over extended in terms of the amount of debt you have. If you have spent nearly 90% of your available credit lines, you are showing that you are unable to handle debt and are in too deep. This negatively impacts your credit score. Remember, just because you haven’t reached your credit limit, doesn’t mean you have it to spend. Live within your budget and you should be okay.
While making on time payments and keeping your debt low in comparison to how much debt you have seem like simple things, they are both part of the basics of credit management and contribute significantly to getting a good credit score. They not only show responsibility, they also show that you have respect for the nature of credit and what it is truly intended for: to help you out when you need it and not your first resort in paying for things.
Douglas
Your credit score is one of the most important aspects of your financial life. Not only does your credit score determine the amount of credit you can get and the interest rates you are eligible for, but it can also be used for employment, renting an apartment or house, insurance and other financial aspects of you life. You, however, are in control of your credit score. Here are two important factors you need to know about maintaining a decent credit score.
Make Payments on time
About 35% of your credit score is determined by your payment history. We’ve all been told to make are payments on time, but sometimes we simply put it off. This can have extremely negative effects on your credit score. The best way to maintain that 35% of your credit score is to pay your bills on time. Make sure you know the due dates and pay a few days before them. The added benefit of paying on time is that you will avoid those nasty late fees that can be quite substantial and only increase your debt.
Pay Down Debt
Your debt to credit ratio is extremely important for your credit score and comprises about 30% of your credit score. The fact is, lenders want to know that you are not over extended in terms of the amount of debt you have. If you have spent nearly 90% of your available credit lines, you are showing that you are unable to handle debt and are in too deep. This negatively impacts your credit score. Remember, just because you haven’t reached your credit limit, doesn’t mean you have it to spend. Live within your budget and you should be okay.
While making on time payments and keeping your debt low in comparison to how much debt you have seem like simple things, they are both part of the basics of credit management and contribute significantly to getting a good credit score. They not only show responsibility, they also show that you have respect for the nature of credit and what it is truly intended for: to help you out when you need it and not your first resort in paying for things.
Douglas
