Friday, January 25, 2013, AM | 1 Comment
The credit record-keeping companies – there are three of them – retain your credit for more than six years, perhaps ten. All your personal credit history is taken down and kept in their computers.
If you have taken out mortgage, credit cards, student loan, even mobile phone contracts that you may have with your wireless provider, it’s all in there. Sounds like spaghetti sauce commercial, doesn’t it?
When you apply for new credit to a financial institution, it checks with one of the three companies how your credit record stands.
The credit check will indicate if you have had payment problems. If you do, you may be charged higher interest or your application may be outright denied.
You can improve your credit score as follows:
Get annual credit report to check information for accuracy
The Government has authorized only one firm to send you one annual credit report for each of the three credit bureaus. Get Your Free Annual Credit Report Now.
You should examine your report very closely and check it for any discrepancies. If you do find discrepancy in your credit report, bring it to the respective bureau attention and clear it as soon as possible as it could count against you.
Pay bills on time
If you have not paid bills on time, it will show in your credit report. Pay bills on time even if it’s only the minimum amount. That will show lenders you can manage your finances effectively.
Don’t max out your credit card
Each credit card that you have has a maximum credit limit for the month. Don’t max it out. Finance experts suggest to stay within 50% of the maximum credit provided to you.
Don’t run up large balances on several cards as it will suggest that you are stretching your finances too thin and that you may be in some kind of financial trouble.
Registering to vote might deter fraud
Believe it or not, credit bureaus check to see if you are registered to vote. It’s one of the ways to combat fraud. Your vote registration must show your current address.
Don’t apply for many credit cards
When you apply to one credit card firm and your application is rejected, find out the reason why you were denied credit. Clear the discrepancy, if any, before you apply to another credit card.
In a Nutshell
Whenever you apply to credit, the firm checks your credit history with one of the three bureaus. Each such search leaves a footprint on your credit profile. Several rejections within a short period will show up and may damage your credit prospects.