| Back in the day, "humans" were the ones who decided | | | | Strategy Two: Maintain Your Good Credit History |
| someone's credit worthiness. All you needed was a | | | | You have a steady job. You don't have high credit |
| handshake. But times have changed, and now a single | | | | card debt, and you pay your bills on time. Here are |
| number (your FICO credit score) decides whether you'll | | | | some tips to keep your credit score from going down. |
| get a loan or not. | | | | First off, don't close your old accounts. Closing old |
| 75% of all financial institutions use the FICO credit | | | | accounts will remove how much total credit you have |
| scoring system. It was created by the Fair Isaac | | | | available, and can lower your credit score. |
| Company. You can go to Myfico.com, and get your | | | | Second, if you pay your credit cards in full, you may |
| credit reports and scores from all 3 major credit | | | | have to watch when you pay on them monthly. For |
| bureaus. They are Experian, TransUnion, and Equifax. | | | | example: You have a $5000 limit credit card. Every |
| Your FICO score will determine how much credit your | | | | month, you charge about $1200 to that card, and you |
| approved for and at what interest rate. So monitoring | | | | pay it off in full. But here's what can happen to you. |
| your credit score can helpyou save on interest when | | | | Your credit card company reports your credit info |
| applying for loans. | | | | monthly to the credit bureaus. If they report it before |
| Improving your credit score, or maintaining it doesn't | | | | you pay off your card, it can look like you carry a |
| have to be difficult. It will just take some time to | | | | balance on your credit card every month. You may |
| implement some of the steps. | | | | find that your FICO score will improve if you pay on |
| Here are three strategies to maintain or boost your | | | | your credit cards at a different time of the month. |
| credit score. | | | | Strategy Three: Repair Your Poor Credit History |
| Strategy One: Establish a Credit History | | | | If you have poor credit, there are some things you can |
| There could be various reasons you don't have a | | | | do to boost your credit score. It will take some time to |
| credit history. Maybe you're fresh out of high school. | | | | accomplish this. |
| Maybe you only use cash, and never needed a loan. | | | | The first step to repairing your credit is to pay all of |
| Most likely, if you have no credit history, your FICO | | | | your bills on time. You'll want to establish a good |
| score will be low. | | | | payment history. Your mortgage is the most important |
| The easiest way to obtain a credit history, is through | | | | to pay on time. Installment loans are next, and then |
| an installment loan. Paying an installment loan on time | | | | credit cards. |
| can improve your score faster than paying off a credit | | | | After that, you need to reduce the percentage of |
| card. | | | | credit that you are currently using. Paying down the |
| If you have $1000 to work with, here's a great way to | | | | revolving credit debt that you have will improve your |
| establish a credit history. First, take $1000 to a bank, | | | | credit score. |
| and open a 6 month CD account. Then, apply for an | | | | One last thing is to look for errors in your credit report. |
| installment loan for $1000, using the CD as collateral. | | | | Get a copy of your credit report from all three major |
| Now, here's what you do. Take the $1000 loan, and | | | | credit bureaus from Look them over for any errors, |
| open another 6 month CD at another bank. Get | | | | and contact your creditors to remove any negative |
| another loan for $1000 from the second bank. Do all | | | | items. |
| the steps again at one more bank. | | | | Your credit score is vital to your financial health, and |
| You will now have 3 loans to pay off. Pay the | | | | implementing these strategies may help boost your |
| minimum amount for 6 months. In the final month, cash | | | | credit score. Please consult with a financial advisor |
| out your CD's and pay the loans off in full. You will | | | | about all concerns of your finances. |
| have established a credit history in just 6 months. | | | | |