Monday, June 17, 2013

Your Credit Scores Can Never Be Too High (Credit Scores Simplified)

Your Credit Scores Can Never Be Too High (Credit Scores Simplified)


By Brian Curl
June 11, 2013

Being in the mortgage business for 15 years and previously workingas a certified Neighborworks Home Ownership Counselor, I've learned a fewthings about credit scores.

Really, it is pretty simple to maximize your credit scores. By doing so, you will save on everything - credit cards, car loans, homemortgage loans and car and home insurance. It will also give you thepowerful tool of having the ability to get credit, when you want it.

The Basics
I suggest having two credit cards and at some point when you needit, an installment loan. An installment loan is paid back over a setperiod with fixed payments, for instance, a car loan, a mortgage loan andstudent loans are installment loans.

Once you have these forms of credit, make sure you do not miss anypayments. A payment is considered late if it is paid thirty days past thedue date. So, if the payment is due July 1st and you make the paymentAugust 2nd, it's thirty days past due. Thirty day past due paymentsimpact your scores negatively instantly, so avoid late payments at all costs.

Next and very important is maintaining low credit card balanceswhenever possible, especially when you are near to applying for some type ofcredit. To maximize your scores at any given time, your credit cardbalances should be below twenty percent of the high credit limit. If yourcredit limit is $3,000 on one card, then to maximize your scores pay or keepyour balance below $600. On a $300 maximum limit credit card, to maximizeyour score, pay or keep your balance below $60. A small credit card isjust as powerful as far as credit scoring goes as big credit card; it's allabout the balance you carry in relation to the high credit limit. This appliesto all credit cards you have open, try to maintain balances less than 20percent of the high credit limit at all times on all of them.

Need to Build or Rebuild your Credit Score?
If you need to build or rebuild credit and need a credit card,check out CapitalOne, it's easy to apply online and they offer secured credit cards forpeople with less than perfect credit. Capital Bank offers an installment loan creditbuilder. It's basically a savings account, so it doesn't cost youanything in interest charges. If you have had credit problems in the pastand now new credit now, you need new accounts to start off fresh and get yourscores going in the right direction, up.

Getting Rid of the Bad
Small and big collections from credit cards, utilities, medicalbills, or anything else have a negative impact on your credit score. Sometimes we don't want to pay bills or they are in dispute. Ifthat bill goes to collection, you are not going to win, see if you can settleany possible bad debts before they go to collection, bite the bullet in thename of your credit score. If you have collections, work on paying themoff. Many collection companies will settle your collection account forless than the full balance. Offer them 50% of what you owe them. Ifthey say no, then ask what the least is that they will take in order to settleyour account. Usually, they will give you a settlement amount that isless than the full asking balance.

In conclusion, pay your bills on time or within 30 days of the duedate, keep all credit card balances at 20% or less of the high credit cardlimit and limit and get rid of collection accounts.

Check your credit report once per year free at https://www.annualcreditreport.com/cra/index.jsp, you don't need to pay for scores, just check your report for any mistakes or bad debts or collections that you may want to pay