CREDIT STRATEGIES

You can liken your credit score to an adult version of a school report card. It takes some work to get a good one, and when it goes down, it can be difficult to bring back up again. But it’s not impossible. Some factors that affect your credit score are your bill-paying history, how many credit accounts you have, the type of accounts, late payments, total outstanding debt, and any collection action reported, among other things. Here are some credit strategies for managing your credit.

• It is a good idea to have more than one credit card and/or credit account – but having too many can negatively affect your credit score. Having only one will make it more difficult for creditors to assess how reliable you are at repaying your debts.
• Keep your card balances low. If you have numerous credit cards and are only able to pay the minimum monthly payments – interest continues to add up and makes it obvious you are over-extended. Also spend no more than 30% of your available credit balance on your cards.
• Monitor your credit reports. You are legally entitled to one free credit report per year from each major credit reporting entity. Mistakes on your credit report are not uncommon so look them over closely and have any errors corrected – i.e. an on time payment you’ve made show up as a late payment.
• Pay your bills on time if at all possible. Consistent late payment will negatively affect your credit score.
• Reduce your balances. This also goes back to your credit-use ratio. The lower your outstanding debt, the lower your ratio will be relative to your total credit limit. So pay as much as you can each month, and avoid charging items that aren't absolutely necessary until you get your balances under control.
  

The major advantage to having a good credit score is that you will be among the elite borrowers who are offered the lowest interest rates. Not to mention it increases your ability to buy new items when you want them. Credit strategies.