Having good credit can save you a lot of money in life and provide you with better opportunities than someone with bad credit. If you have good credit, you will probably receive lower interest rates on credit cards, mortgages and other loans. Bad credit can get you rejected for a loan. Employers often run credit checks on applicants these days, especially for jobs in the financial industry and jobs that involve handling large amounts of cash. The following tips can help you establish and maintain good credit.
Pay your bills on time
Your timeliness when paying your credit card bills or other loans will show up on your credit report. Late payments usually lead to lower credit scores—especially if you have a lot of late payments and/or a few very late payments.
Don’t max out your credit cards
One item an interested party will examine on your credit report is your credit utilization ratio. This is your total outstanding balances divided by your total credit card limits. Try to keep this lower than 30 percent. A high ration often indicates that somebody is living beyond their means.
Avoid foreclosures and repossessions
Either of these can happen if you stop paying on loans secured by property. They do show up on your credit report and they will usually lower your credit score significantly. Do not allow your home to go into foreclosure or any of your property to be repossessed.
Don’t consign on a loan
If you cosign on a loan, it goes on your credit report and factors into your score. If somebody needs a cosigner, they probably have bad credit. You do not want somebody else’s financial habits to affect your credit.
A bankruptcy stays on your credit report for ten years. This is longer than loans, which stay on your report for seven years after the date of last activity. Getting a loan will be extremely difficult and will probably come with very high interest rates.
Check your report often
You are entitled to one free report a year from each of the big three credit bureaus—Experian, Equifax and TransUnion. Your report can be obtained from www.annualcreditreport.com. Make sure your report does not contain any errors that will damage your credit. If you find any errors, dispute them with the appropriate bureau.
Using the tips above, you can establish and maintain good credit. For more information, visit the blog at Checks Superstore personal checks.