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Personal Credit AdviceDO keep your balances under 10% of the limit. New potential creditors will want to see that you use your credit wisely, but are not "tapped out". The adage "the best way to get approved for a loan is to not need the money" is true. DO pay your bills 2-3 weeks before the payment is due. For business credit building, this actually does have a major improvement on your credit score. For personal credit building, it keeps your monthly average daily balance low and saves you money on interest if you carry a balance. DO pay the biggest bills first. The larger the missed payment, the more it hurts your score. Similarly, if you have to juggle bills, choose to skip the payments for the creditors that don't report and pay the ones that do report to the bureaus. DON’T cancel your credit cards. Even unused cards help your credit score. It's not until you have an extensive credit history in both time and number of accounts that lenders start to be concerned that you are over-extending yourself. If you have trouble not spending on your cards, put them in a safe deposit box, freeze them in a block of ice, or mail them to a trusted person who lives several hours away. Even cut up the cards! But don't cancel the account. DON’T sign up for more cards and get too many rate requests over an extended period of time. Strategically concentrate your efforts. DO pay your bills on time. Showing responsibility is the number one factor looked for when determining insurance rates. DON’T pay old unpaid collections that are outside the statute of limitations. Doing so will restart the clock and make the debts valid and collectable. DO have a variety of types of loans. A previous auto or mortgage loan will increase your chances of getting the next auto or mortgage loan. |
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