Credit Repair Information

Credit Repair Information

A credit score is one of the most important aspects of your finances. It is not only an indicator with how you manage your credit, but it is also a barometer of how creditors and lenders judge your responsibility of your finances. The higher your credit score, the better state your credit is in. It is important to understand the significance of your credit score, but is equally imperative to know what affects your credit. There are a few things that can improve your credit such as making credit card payments on time, maintaining a low credit utilization ratio and keeping your balance down. Along with these positive factors, there are also several that will drop your score down a few points. Whether you are an experienced credit card user or have just been issued your first card, you should be aware these financial components will have adverse effects on your credit: Credit card statement and payments
Each month you will receive a credit card statement. On this statement you will see a few different things including:

  • Account summary: This section includes your account number, balance and the credit limit you have available.
  • Transactions: This area will showcase all of your charges you have put on your credit card during a specific period of time. Generally a credit card statement will be for a month long period, but each provider is different with the timeframe of their credit card statements.
  • Payment summary: This section may be the most important as it will include the minimum payment that is due on your card and its due date.
Making payments on your card is important because they account for 35 percent of your credit score. If you fail to make the payment on the due date, you will be assessed a late fee, interest charges and your credit score will be knocked down a few points. Also, if you miss a payment, this delinquency could be on your credit report for seven years. By making payments on time you will be able to decrease your balance and maintain a good level of credit. Balances
As you start to use credit more often, you will begin to use up balance. It is important to use a credit card as making purchases will help you build credit, but remaining conservative with these charges will be your best bet as debt accounts for 30 percent of your credit score. Overspending will not only cause you to use up a good portion of your balance, but it will make it difficult to pay that balance back.
Along with using up your balance, overspending can cause you to increase your credit utilization ratio. This is the percentage of how much of your balance you are using compared to your limit. For example, if you have used $1,000 of your cards $5,000 limit, your credit utilization ratio would be 20 percent. This ratio is here to show you how much of your balance you are using and will give lenders an idea of how responsible you are with spending. It is a good idea to keep this ratio under 30 percent. Being a responsible credit user
Overspending can cause your balance to skyrocket, but it is still important to use your credit. You may think that not using your card and letting it sit in a drawer will help you curb overspending, but it can actually affect your credit in adverse ways.
Carrying a balance is good as it shows you have been using credit, but it is how you deal with that balance that lenders will be interested in. If a lender sees you are continually using your credit card, reasonably, and paying off your balance responsibly, they will see that you are a good credit user. Hard inquiry
Along with your credit score, a credit report is another indicator of how you are as a credit card user. This document will show you your credit history and any negative marks and delinquencies you may have gotten over the years. You are allowed a free one each year, but use them sparingly as there will be a cost in getting additional reports.
As you become a seasoned credit card user, you may have to open new lines of credit. This can be because you have a family and need financial assistance or you need it for business purposes. Before you go this route, think through your options. By applying for a new line of credit, a lender will have to access your credit report, which may actually hurt your credit score. Credit bureau TransUnion said this hard inquiry can stay on your credit report for up to two years. Consider your options when looking to open a new line of credit because doing so could actually hurt you.


Tiffany Obar Headshot
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Phone: 817-739-8887
Dated: February 1st 2014
Views: 1,361
About Tiffany: About Halo We understand that for many people, buying or selling a home is probably the largest i...

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