Credit Tips

Maintaining good credit is essential in today's society. Good credit allows you quicker loan approval at a lower rate. Follow these tips to maintain or improve your credit:

Tip #1: You should pay more than your minimum payment and you should always be on time with your payment. Being on time with your payment is critical in improving or maintaining your credit rating. If you are late making a payment, you will be assessed late fees and the late payment will be reported negatively to the credit bureaus. Having late payments on your credit report will lower your credit rating making it more difficult to be approved for loans or you may have to pay a higher interest rate.

Tip #2: If you pay interest (revolve), you should only buy items that are essential. Do not buy food with your credit card if you are revolving. You can pay over $3 for a $1 item if you will always be revolving.

Tip #3: Be disciplined when using your credit card. You are obligated to pay for the things that you purchase.

Tip #4: Know how many credit cards you have, and know what the balances and interest rates are on EACH account.

Tip #5: When making payments, pay off your highest interest rate credit card first, and, if necessary, make minimum payments on the lower interest rate cards.

Tip #6: If you don't carry a balance, get a card with no annual fee and a 25-day grace period between the day of the purchase and the day the interest meter starts running.

Tip #7: If you frequently carry a balance, get a card with a low interest rate. The annual fee matters very little.

Tip #8: Start thinking about your credit card purchases as if you were buying with cash. If you can't pay it in 25 days, don't buy it.

Tip #9: Know what's on your Credit Report. Go to www.myfico.com to learn more. Lenders perceive your credit risk based on information regarding your ability and willingness to pay other lenders. Your Annual Percentage Rate (APR) may be higher if you are perceived to be a higher risk. Those with a higher credit score are perceived to be a lower credit risk. A credit score is a three digit score calculated by a mathematical formula using the information obtained from your credit report.

Tip #10: Get an updated Credit Report annually to ensure that nobody has stolen your identity and opened new accounts. Make sure the information on your report is accurate. Contact the credit bureau if there are inaccuracies on your report.

Tip #11: If you realize that you borrowed too much, and you want to change your spending behavior, seek support from professional credit loan counselors.

Tip #12: To improve your credit score:

1. Pay on time, every month

2. Do not go over limit on your account

3. Only open new accounts when necessary

For Consumer Credit Advice, visit www.clarkhoward.com.

To get your FICO score visit www.myfico.com,