Great Ways To… Lower Your Credit Score?
Lowering your credit score is definitely easier than raising it, but the ways that you can lower your score are not as close to being common knowledge as the ways to raise it are. Most people know how to raise their credit score: pay bills on time, pay off debts early, and make sure you have a good balance of debt to credit ratio. But, how do you lower your score?
Every home should have at least one credit card, whether they think they need to have one or not. The trick is to not be tempted to use it on things that you do not really need, especially when there are other things that you definitely are in need of. Having a credit card is not the problem for most people: it is that people feel that because they have it, they must use it. If you live paycheck to paycheck and would use the card to get by on, the best thing to do is not get one until you are able to manage your finances and are able to get ahead in savings. A credit card in the hands of someone who is unable to manage their cash is a disaster waiting to happen. Set a budget for yourself and learn to manage the money you do have before you start managing the money banks want to give you.
The last thing you want to do that can endanger your credit is co-sign on a loan for anyone. Yes, anyone. It does not matter if you have known this person for 3 years or 30 or whether they are family or friend. This puts your credit literally in the hands of another person. If they start making payments late or stop making payments period, it is your credit that will take a dive and it can be a serious one. Never co-sign, because there is never a good reason to. New high school graduate wants a new car? Let them build their own credit. Building credit is easy these days for people who can handle the responsibility. Friend or family member with bad credit need a loan? Do what you can to help them in other ways, especially if things somehow got out of their control and was no fault of their own, but do not put your credit score in danger for them. In this day and age, credit is almost the same as water: you cannot live without it.
Having a high balance on your credit cards can also lower your score. What is considered a high balance? Typically anything over 30% is considered high these days, although sometimes it can be as much as 50%. Keep your cards paid off completely every month if you can, but if you cannot, try not to let any one card break 30% of its limit.
Dror Klar is a writer in the field of finances and is currently assisting those in need of cash advances and payday loans.
http://www.jtvcashadvance.com
http://www.jtvcashadvance.com/newyork.html
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