Hindrances to Higher Credit Scores – and What You Can Do About Them

April 30th, 2009 • Related • Filed Under • by Debbie Dragon

Here is a discussion of the biggest hindrances to higher credit scores. There are actions that you can take to remove these in order to get your scores to move up and provide you with lower rates on financial loans of all types.

Failed finances

If you find yourself unable to pay your household bills, you will be in no position to work on improving your credit score, either. You have to take drastic action to bring in money in order to first satisfy your living expenses. Then, you can work on increasing your credit score.

If you have enough money to just pay the minimums on a temporary basis until you get your other bills caught up, then that is preferable to incurring excessive charges for not meeting the minimum and paying late.

No credit user

This is where living a cash-only lifestyle hurts you financially, because while you are living in this manner, credit scores go down in importance to you so that when an house purchase becomes important and you do not have the money to pay cash, then you will be looking to finance at least part of the purchase price.

Your lack of credit activities will preclude you from getting low interest loans with which to purchase your new house. If you keep at least one credit card active and paid down to zero with an occasional charge, you would be in a better position for a great mortgage rate.

Card balances

Having balances on your credit cards is very costly with interest rates and fees. Also, using a very strict budget, you can pay off your balance each month and thereby attain a score of over 740 points. The most in fees that you will incur would be the annual fee and those are usually low enough that they do not pose a problem for those who keep their finances under control.

This takes a change in attitude towards the use of credit cards. No longer should you view them as a daily use item, but rather you only use them to keep them active, or in an extreme emergency.

Procrastination

The longer you put off taking control of your finances, the longer it will be until you see your credit score begin to rise significantly. Take action beginning today in order to improve your position with your credit so that you can begin to take advantage of good scores once again.

Once you do, then you will feel the positive effects of a controlled lifestyle in which your money serves you, not the other way around. Debt can be a cruel task master, but it only becomes that if we allow it. By making goals and taking steps to achieve them can we ever be assured that we can move on from where we are to better places. Imagine yourself with your credit cards under control and your life stress-free because of it. Now, make it happen with responsible action today.