Your credit score is an important part of your personal financial situation. By making sure that your FICO score is higher, you can ensure that you save money in interest charges, and that your entire financial situation is on the right track. A while back I wrote a post on credit scores, and offered some ways to keep your credit score high. You can read about it here. However, I have a few more tips for you that can help you raise your FICO score and reap the benefits of lower interest rates and a good credit history.
- Maintain bank accounts.A checking account demonstrates that you have a grasp of financial responsibility. It can also show that you have an element of financial stability in your life. Having a savings account on top of a checking account only reinforces both of these ideas of your creditworthiness and fiscal responsibility.
- Try to use the same name on applications.Whenever you apply for credit (and this can include an apartment rental), make sure you use the exact same name. It shows consistency. Using different names, even altering whether you use your middle initial, makes it look as though you are trying to get more credit under a variety of names.
- Keep longstanding accounts open.If you have longstanding accounts in good standing, you should keep them open. This shows a longer credit history. Additionally, if your longstanding accounts have low or no balances, it looks as though you keep most of your credit strictly regulated.
- Avoid retail store credit cards and finance company loans.These are not considered “good” sources of credit. Having these accounts can actually do more harm than good. If you can, avoid getting these types of loans and focus instead of regular bank loans and major credit cards (but not very many!).
- Shred “pre-screened” credit offers.These credit offers are not usually truly pre-screened. All they do is establish that you might qualify for an offer. When you respond, your credit is then checked. This can result in a lower credit score.
By carefully considering what credit you use, and how often you get loans, you can better your financial situation and you can enjoy the benefits that come with having good credit.