A lot of people say when you’re debt free your credit score doesn’t matter. Well, that’s just not true. If you plan to buy a house, rent a house, get car insurance, or take out a loan a lower credit score is going to hurt you. It can cost you thousands of dollars in finance charges and interest. Credit and raising your credit score isn’t complicated. Here are 4 secrets about credit no one tells you.
4 secrets about credit no one tells you.
It doesn’t always matter
The truth is if you aren’t going to use your credit score anytime soon it doesn’t really matter. If you plan on buying a house, getting a credit card, a loan, car insurance, or even renting a new house you need to pay more attention.
If you plan to do any of those things it’s important that you know where you stand and what you need to do to either be able to raise it or keep it stable. If your credit score isn’t where you want it to be you can click here for tips to help raise it.
If you don’t plan on doing any of those things, just make sure you get your yearly free credit report (pull it from one of the 3 companies every 4 months) to make sure you don’t have any incorrect information on there. Besides that just keep paying your bills on time.
Debt on your report isn’t forever
If you have debt on your report it will come off. Usually in about 7 years. Bankruptcies are an exception to the rule sometimes though. Remember though the seven years isn’t from the day the account was opened. It’s from the day you stopped making payments.
Also, if you have old debt on your account and you make a payment on that account it can hurt your score because as time goes by it stops hurting your score as much. If you pay on those debts it’s like they are brand spanking new and the time starts over.
A great way to keep track of your scores and reports is through MyFico.com. You can choose whether to get a one time score or get updates every time your score changes.
Bigger you are the harder you fall
You remember that old saying? Well, it’s true for your credit score. If you have a high credit score, even just a late payment can drop you 70-100 points. In contrast, someone with a lower score wouldn’t see such a dramatic fall, about half 35-50.
It would be awful to lose all that hard work over one payment so make sure you keep on top of all those payments.
It’s not complicated
You don’t need to be a genius to understand your credit score. If you want a higher score, you need to remember 3 things.
- Pay your bills on time.
- Don’t carry high balances (pay it off monthly)
- Don’t apply for credit often
With those three things, you’ll be on your way to a good credit score. It’s like riding a bike, you never forget it.
A high score or low score it isn’t the end of the world. Your credit score will change over time, but your actions or inactions dictate whether it goes up or down. It’s never too late to raise your score. After all your credit score will be with you for the rest of your life. Secrets about credit no one tells you.
If you want to know what your credit score is you can get your score from MyFico.com, and right now they’re giving you 20% off all three of your credit reports and scores from the top 3 credit bureaus. Just click here to save now!