Are there really benefits to having a good credit score? The answer is yes. Though your credit score is more crucial at some times than others, like when applying for housing or a loan, the better your credit score the more money you are likely to save throughout your lifetime.
Credit score usage has become more pervasive in recent years, and even most employers and property owners check the rating before taking on a new hire or offering housing. Along with employers, the new trend is to use the credit score as a witness to your overall responsibility. A good score will generally guarantee you lower interest rates on credit cards and loans, lower down payments, and easier qualification process for loans. All of this eventually translates to more money in your pocket.
If your credit doesn’t exactly glitter, here are some tips for restoration:
Read.
Actually take time to request and read over your credit report. How else will you know what’s truly listed there? Make sure that creditors have reported accurate information to the credit bureaus, and dispute any inaccurate information. You can request that inaccurate information be removed, including any negative information that is seven years old (ten years in the case of some bankruptcies).
Ask for Proof.
On that note, mistakes happen. The same may be true of certain debts reported and placed on your credit report. If there is a debt you aren’t certain you owe, call the creditor and ask them to send you verification that the debt is indeed yours. If it is not, you can write the credit bureau and request it be removed from your report.
Understand the Importance of Timing.
Each state has a specific statute of limitations, or a specified time in which debts may be collected. If a debt has not been paid for a certain amount of time, the original creditor may not be able to collect. Check with your state attorney general for the statute of limitations for your state.
Follow the 10% Rule.
If you want to see your credit score increase on a monthly basis, follow the 10% rule. That is, only charge 10% of your credit limits, or pay down the balance to 10% of your limits. This shows creditors that you charge a manageable amount while establishing good credit. It’s also much easier to pay off a smaller balance in the event of a financial mishap than to pay off a larger one.
The bottom line is that maintaining a great credit score is one of the best ways to protect your hard-earned assets. Those with good scores garner lower interest rates, better loan terms, and have an easier time securing housing and jobs. If your debt feels too out of control to even think about protecting your score, learn more about
