| In today's world having good credit is an absolute must. | | | | There are two types of credit inquiries--Soft and Hard. |
| Credit is no longer for simply buying items today and | | | | Soft inquiries don't affectyour credit rating at all. Soft |
| paying for them later. Now, credit is used to validate | | | | inquiries are generally created when you view your |
| who you are as a person and your worth. Credit | | | | owncredit report and other minor requests. A hard |
| scores are utilized daily in life. By following some simple | | | | inquiry can hurt your credit score. |
| rules, you can keep your credit score at its highest | | | | When you apply for credit, a hard inquiry is usually |
| points. | | | | created. |
| Understand that your credit score is a living and | | | | Typically one or two inquiries in the past six months |
| breathing animal. It is everchanging and has its up days | | | | won't harm your score, butmore than this will start |
| and down days. Perhaps your credit score is 600 | | | | taking your score down. Also some potential creditors |
| rightnow. Tomorrow it could be 595 and next week | | | | willlook at how many inquiries you have in the last six |
| 615. The smallest detail can changeyour score for | | | | to twelve months. If you havemore than one or two, |
| better or worse. | | | | you might be denied credit. |
| Utilization | | | | The moral here is to only apply for credit when you |
| This is the big killer for most people. Utilization basically | | | | are pretty sure of beingapproved and when you need |
| means the amount of yourtotal credit ability you are | | | | it for personal or credit building reasons. |
| actually using. Here is an example breakdown: | | | | Accuracy |
| You have (5) credit cards with a total combined credit | | | | The last thing to do is make sure all your credit data is |
| line of $10,000. | | | | correct. Most credit reportshave errors on them and |
| You currently owe $3,000. | | | | you can indeed have information changed and |
| You are using $3,000 of your $10,000 maximum thus | | | | evenremoved. To find out how, visit CreditLiberty.com, |
| your utilization is 30%. | | | | which is a credit repairinformation website. |
| The goal is to keep your utilization under 30%. A high | | | | If you have false late payments, incorrect credit lines, |
| utilization can destroy yourcredit score. In fact, I have | | | | incorrect credit balances,incorrect account types or |
| personally seen a high utilization cost a person about | | | | payment history mistakes, your credit score will |
| 100 points. One hundred points is huge. | | | | bereduced. You owe it to yourself to check your |
| To keep your utilization low, you want to do two things. | | | | credit report with Experian, Equifaxand Trans Union |
| 1. The first is pretty obvious--Don't use too much of | | | | very often. At the very least, check your credit report |
| your credit. | | | | twice per yearand always check it before you apply |
| 2. Next, work to increase your credit lines. Bug your | | | | for credit. In fact, you should check it well inadvance |
| creditors constantly for creditline increases. Some | | | | because correcting information on your credit report |
| allow you to request credit increases every so often | | | | normally takes about |
| and someare automatic. Always work to increase | | | | 30 days. |
| your credit lines. | | | | Copyright 2005 JakeTruman. |
| Inquiries | | | | |