Those who manage
their credit well enjoy lower limits, more freedom of which instruments
they choose and can pay off balances more quickly. In general, having good
credit saves you money.
What does your credit score include? When you are establishing your
credit, you may wonder what the credit agencies are actually looking for.
Generally, they start out with your name, social security number,
employers, current and past addresses, and your marital status. When
someone gets your credit report, it includes things like when you make
payments to your utility bills. Paying a bill late can stay on your credit
history for years. Things that you might not imagine would affect your
score can be heavily weighted when determining how high of a risk you are.
They look at whether you own or rent, how long you have lived at the same
address, what your occupation is and how many years you have you been at
your current job.
They look at your financial situation as well. They will see how
many credit cards and loans you have, if you have made any late payments
and how many years have you had a credit history. Eight or more years of
credit history is preferred, so get started as early in your life as
possible. Don’t let your debt add up to over 15% of your income. Don’t let
your balance get up to 50% of your available credit on credit cards.
Keep the number of inquiries on your credit low. You should take a
look at your own credit report once a year to make sure there are not any
mistakes on it. One inquiry does not hurt you, but multiple inquiries can
significantly impact your score. Even two inquiries can lower your score
by eight points.
Building good credit takes time, effort and maybe some sacrifices. Start
early building your net worth. Having a checking and a savings account
earns you a score four times higher in that area than a checking account
alone. Use direct deposit. Set up an automatic savings plan, no matter how
small of an amount is being contributed. Take advantage and invest heavily
in your employer’s retirement plan.
Organize your budget and don’t ever charge luxuries. Pay your
credit cards before the due date and always pay more than the minimum. Pay
your bills on-time, every time. If you realize that you are going to have
to pay a bill late, don’t settle on paying a late fee and forgetting about
it. That one late payment will be on your credit report for a long time.
One option may be to utilize something short-term which can actually help
build your credit instead of hurting it. A payday loan can be obtained
quickly and easily, usually within one business day, online. A cash
advance can help you make your bill payments by the due date, but also
establish a good credit history when you pay it off on-time.
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About the Author:
Mike Smith is the Online Marketing Strategist of http://www.paydayone.com,
a company that can provide a payday loan, cash advance, or payday advance
to individuals.
Article Source:
http://www.articlesbase.com/credit-articles/how-to-create-a-good-credit-score-219618.html
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