When it comes to your financial future, an excellent credit score is one of your most valuable assets. It will play a major part in whether or not you can get a loan for a home or a car and can even influence landlords if you’re trying to rent an apartment or condominium. Your credit score may even be brought into consideration by a prospective employer and can help determine whether or not you get a much-coveted job.
Financial analysts agree that in today’s global economy, where so much is dictated by credit worthiness, it’s more important than ever to have an excellent credit score ranging in the mid-700s and up. Maintaining a good credit score is particularly crucial in this economic climate because banks and lenders have had to contend with massive loan and mortgage defaults over the past several years.
Even if you think you have your credit status well under control, there are still ways you can improve that all-important credit score. Here are a few points to consider:
Run Your Own Credit Checks
Anyone who’s ever had a credit card can attest to the fact that mistakes do happen. Sometimes it’s simply a clerical error, while other times it may be a mix up due to another cardholder having a similar name.
Most often, however, inaccurate information on a credit report occurs because of some form of identity theft. Sometimes these errors may be so small that you won’t catch them in a glance, so it’s important to carefully scrutinize your bills every month. Many financially savvy consumers follow up on every credit card purchase as well.
Likewise, it’s crucial to periodically check your credit report every few months to make sure that fraudulent charges haven’t posted to your accounts. If your credit score has suddenly plummeted for seemingly no reason, you can immediately contact the credit bureau handling your account to make sure that identity theft hasn’t taken place on any of your charge accounts.
Limit Your Charge Cards
Even if you’ve never been late with a payment, your credit score can suffer if you have too many credit cards, particularly if your debt-to-income ratio is adversely affected.
It’s important to remember that every credit card application you fill out will show up on your credit report. Too many applications, as well as too many cards, can sabotage an excellent credit score by making you appear to be less than responsible in managing your funds.
Instead of applying for another credit card, try to get a credit line increase on one of your existing cards. Just make sure that you’re a cardholder in good standing; otherwise, you may be viewed as a loan risk, which could result in a decrease in your existing credit limit.
Use Your Cards
If you have credit cards just sitting in your wallet, it’s time to bring them out and use them occasionally. Keeping your credit cards active and maintaining an established credit history will in turn keep your credit score up to date.