Want To Keep Your Credit Score High?

Posted by DrorKlarIdn

April 10, 2008

There are a lot of things that you can do to lower your credit score, just as there are a lot of things you can do to raise it. Unfortunately, the ways to raise your credit score are more well known than the ways you can accidentally lower it. Here are some ways that you can lower your credit score without really realizing it.

Not having any credit cards is actually a bad idea. In order to have good credit, you need to have credit in one form or another, whether it is a loan from the bank or a credit card. Credit cards are the most common form of credit these days and while you can have too many, every household should have at least one, whether it is actually used or not. The best way to handle credit cards is to pay them off every month and never, ever pay only the minimum required payment. It could take literally decades to pay off a credit card that is maxed out by paying minimum payments.

If you have a credit card and you want to get another one, do not close out your oldest card’s account. A lot of your credit score is based on your history and if you close your account with the most history, it will lower your score. Do not worry about having more than 2 or even 3 credit cards, but be careful not to overextend yourself. Too many cards can be difficult to keep track of.

Many people think their credit score is affected by a maxed out credit card and they are right, but your score will also drop if your card’s balance is more than around 30% of your overall limit. Try to keep your cards paid down under 30% if you cannot pay them off every month.

And one of the worst things you can do for your credit score is co-sign on a loan for someone. No matter how close you are to this family member, this is always a bad idea. Once you co-sign on the loan, your credit score is in danger of falling, even though the loan is not your responsibility. Unless you have the funds to make sure the payments on the loan are made on time and there is some collateral for you to obtain possession of, such as a vehicle, steer clear of co-signing.

Dror Klar is a writer in the field of finances and is currently assisting those in need of cash advances and payday loans.
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