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A better credit score, the higher the better, can save you thousands of dollars. Interest rates are based on your credit score, and interest accumulates over the life of your loan. With every 20-point drop in your credit score, your interest rates can go up so if you get a home mortgage loan, a home equity loan, even a car loan, a higher interest rate can cost you hundreds of dollars a year.
How can you keep your credit score rating high?
- Don’t say “yes” to the cashier at a store when she asks you to open a store-name or brand name credit card account. Not only do these cards have higher rates than non-brand cards, but every time you say “yes,” the company will check your credit. Every time they check your credit score, you can lose 2-5 points. And, if the account is actually opened, you will lose 5 to 15 more points. Why?—because every time you open a new account, it seems to the credit score keepers you are loading up on debt.
- Maintain your older credit cards. Credit scores are based on a history of good credit. The older your card, as long as you have paid it regularly, is a good history of credit. It is good for your credit score to keep cards you have had for 5 to 10 years. It’s best, of course, if that old card has a zero balance, but be careful not to keep a card that you don’t use. It must be active or used every 2 to 3 months to help your credit score.
- Have fewer cards. The more cards you have, including gas cards and grocery cards as well as credit cards, means you have a lot of credit available to you, but the more credit you have available, the lees credit you qualify for, which makes you look like a credit card risks—all, not good for your credit rating.
Be aware of what gives you a good credit rating so you an borrow money when it’s necessary at great savings.
And most importantly, you must keep your eye on your credit score! Get your free credit score now here.
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