Your credit score, (your FICO score) can range from the worst possible score of a 300 to a perfect 850, and is determined by such factors as paying your bills on-time, the amount of money you owe, and the length of your credit history.
It takes a long time and a lot of diligence to establish a great credit score – which will net you the best interest rates and financing terms on your big-ticket purchases. However, just a few little errors can send your score spiraling to the depths of “un-financeable”.
Late Payments. Just one occurrence of 30 days past due can cost you up to 100 points. It will take much longer to get those points back than it took you to lose them.
High Balances. If you use more than 35% of your available credit – creditors may view you as a risk, as they may not feel you are able to use good judgment – and could be likely to overspend.
Closing Accounts. While it’s true that nobody needs 5+ credit cards, having established credit accounts increases your score. The length of credit history is a big determining factor of your perceived creditworthiness. So you may consider leaving these accounts open – especially the ones you’ve had for the longest amount of time.
Too Many Store Cards. It’s tempting to sign up for a new card to receive x% off of your purchase – but watch out. Too many credit applications in a short amount of time could be considered a red flag.
Ignoring Fines. Believe it or not – that measly little unpaid parking ticket could cost you much more than the $30 fine if gone unpaid. More and more government agencies are turning unpaid accounts over to collection companies – who report these fines as unpaid to the credit bureaus.
Your credit history is used to “paint a picture” of you, in order to help companies determine your trustworthiness. In fact, many potential employers have begun to pull credit histories of their applicants as part of their review process. So, while paying an account or two 30 days late may only cost you a few dollars in fees – it could cost you much more in the long run!
Don’t forget to keep an eye on your credit score! All Americans are entitled to a free credit report every year – so take advantage! Order your copy today! Just visit www.annualcreditreport.com to order your copy today.
If you would like more information about buying or selling a home in your area, please don't hesitate to contact me! I am always available to answer your questions - and ready to serve your real estate needs. Your complete satisfaction is my goal - because I want to be your Realtor for life!
Lori Day Infinity Realty
(816) 200-4372 Cellular (816) 554-6351 Fax (816) 554-6368 Office
EMAIL: Lori@LoriDaySells.com WEB: www.LoriDaySells.com
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