| Credit scores are used by many lenders in the United | | | | against you and lower your credit score, so it is usually |
| States to determine if an individual is credit-worthy. The | | | | recommended to avoid numerous credit inquires and |
| score itself, which is a numerical value between 300 | | | | instead limit them to only a week or two period each |
| and 850, is based upon information in a persons credit | | | | year. |
| report. | | | | The length of a persons credit history is also very |
| About 30% of the credit score is based upon how | | | | important variable included in a credit score. For those |
| much debt a person has, but more the way the | | | | who have a credit lines that they are not using, it is not |
| person has managed this debt is weighed more | | | | typically recommended to cancel these lines. Instead, |
| heavily than the actual amount of debt. As such, it is | | | | you can leave the line open, but destroy the credit |
| possible to have a high credit rating, despite having a | | | | card so that it can not be used. In this manner, the |
| high debt load. However, the key is to have a good | | | | credit line will have a much longer history, even though |
| debt to credit limit ration, which most loan officers | | | | you couldn't technically use it without having them send |
| suggest should be between 30% and 50% of your | | | | you a new credit card. |
| total credit limit. This should of course be not taken as | | | | While managing your debt effectively is extremely |
| gospel, because these individuals make money when | | | | important, spending your actual money in an efficient |
| you use and repay money in your credit line. However, | | | | manner is also imperative. Many people like to use |
| maintaining a credit balance that is in a good proportion | | | | computerized programs, such as Quicken, to help |
| compared to your total credit line does increase your | | | | manage their money. Using a debit card can also be a |
| credit score. | | | | great way to spend money, because you can quickly |
| Since the way that an individual manages their debt is | | | | and easily check how much money you have spent |
| usually more important than the amount of debt they | | | | online. Some people even find that by taking out some |
| have, it is essential to avoid making late payments on | | | | cash at the beginning of each week, they are less |
| bills. It is also important to pay off high interest credit | | | | likely to spend money, because it feels more 'real.' |
| lines first, prioritizing the debt in a smart manner. | | | | Having a high credit score can be very important |
| Another factor that goes into a credit report is the | | | | when applying for a loan or a mortgage. Statistically, it |
| amount of recent inquiries for new credit lines. It is not | | | | will also net you a lower interest rate, so having an |
| uncommon for someone who has bad credit or is | | | | un-healthy credit score can end up costing you a great |
| having credit problems to jump on any offers they are | | | | deal of money. |
| sent in the mail for credit lines. However, this can count | | | | |