5 Ways to Protect Your Credit Score

Did you miss our last seminar- Credit & How to be Smart with it?   Don’t worry…we’ve collected the info for you!

Your credit score is a three-digit number that creditors use to decide how likely you are to repay your loans. A high score can help you qualify for the lowest interest rates and gives you the ability to borrow money. Here are 5 tips to make sure your credit score stays healthy:

  1. Pay back your debts on time. It is the most important factor (35%) in calculating your credit score. A couple of days late isn’t a big deal but make sure you’re not 30 or more days late which can drastically lower your credit score!
  2. Apply for new credit only when you need it. Ten percent of your credit score is determined by how many new credit accounts you’ve opened and the number of times lenders have checked your credit. Another 15% of your score is determined by the length of your credit history. When you add a new account into the mix, the average age of your credit accounts drops.
  3. Don’t co-sign. Be cautious about co-signing a loan, even for family members, unless you are willing and able to take on the payments later, if necessary. If a payment is missed and you don’t pay it, it can negatively affect your credit score.
  4. Keeping your oldest cards open. Even if you’ve stopped using them, it’s a good idea to keep them open. This will help the 15% of your score that comes from the length of your credit history. It also will help the (30%) of your score that’s based on your credit capacity which is the amount of your credit card debt compared to your total available credit.
  5. Guard your personal information & monitor your credit. Be very careful when giving out your Social Security number, birth date, credit card numbers, and other personal information. Use secure websites and be cautious on phone calls. Order your credit report from annualcreditreport.com and verify the information provided from all 3 credit reporting agencies.

Make sure that the good credit score you’ve worked so hard to build stays that way.  You’d be surprised the amount of money you can save by having a good credit score and paying a lower interest rate!