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.

Hindrances to Higher Credit Scores – and What You Can Do About Them was created by and is property of American Consumer News.

Here are 5 things you might not know about your credit report.

1. Closing Accounts Help Credit - The basic rule of thumb for open accounts is to not have too many open and to not have too few open. Extremes with credit are never a good idea. While creditors want to see that you can be responsible with two or three lines of credit, they do not want to see a ton of accounts on your report either. The most important criteria is that you make your payments on time, every time.

2. Paying Everything Off Perfects your History – While it is of course great to pay off your debts, take note that even when you do, your credit score will not be shiny new. It is not called a credit history report for nothing. Your report will show creditors your past as well as your present credit situations.

3. It’s All Good After 7 Years – While some of the bad stuff on your report will disappear after the seven year mark, however filing Chapter 7 bankruptcy in which you are forgiven of all debt, will remain for ten years. As for a positive, the good stuff, such as not missing a payment or having any other account problems will stick around on your report for up to 10 years as well.

4. Credit Report Agencies are All the Same – All three of the credit reporting agencies, Experian, TransUnion, and Equifax, do track your credit information and provide you with a credit score. However, all three are separate companies with different rules for processing information. When a creditor requests a copy of your credit report they typically only request information from one company, who may or may not be as up to speed as the others with your information. Periodically requesting a report from each will help you understand how each processes your credit information and you should check all reports at least once a year.

5. Debt Management Programs Destroy Credit – Your credit score is not affected by your association with a debt counseling program unless there is a negotiation to pay back less than you own. It is then up to the creditor to decide how to report the action to the credit bureaus, especially if you remain delinquent in your payments. Your association with a debt counseling program will be evident in your credit file but will not adversely affect your score.

5 Untruths About Your Credit Report was created by and is property of American Consumer News.

“If I have a lot of money, I’ll have a good credit score.” Your credit score is not based on any wealth that you have what-so-ever. It’s completely based on your existing and past credit. 35% of your credit score is based on your past payment history, 30% is based on your existing debt, 15% is based on your length of credit history, 10% is based on new credit that you apply for and another 10% is based on the types of credit that you use. Hypothetically you could be a multi-millionaire and not have enough data to calculate a credit score if you never borrow money.

“If I check my credit report, my score will go down.” You can personally check your credit report as many times as you would like without having it effect affect you score. The one and only site to get a free credit report is AnnualCreditReport.com, if you want to find out your credit score, you’ll need to head on over to MyFico.com, all of the other sites wishing to provide you a free credit report will end up costing you money in the long run.

“I should pay off my credit cards and close them to increase my credit score.” Paying down your credit cards is an excellent idea to improve your credit score, but after the balance is paid off, do not under any means close the account. By closing the account you are essentially increasing the percentage of debt that you are using of all the debt that you have available to you, which will negatively affect your score.

“You only have one credit score.” You actually have three different credit scores from Transunion, Equifax, and Experian. Each of these companies might also have different types of scores for you. The one most commonly used by the financial industry is the FICO score; if you purchase your credit score, make sure that you are getting a FICO score rather than some other calculated number.

“If I shop around for loans, my credit score will be damaged.” It’s true that if you apply for a lot of new loans, credit cards and other accounts that your credit score will go down, but if you apply for the same type of loan at different banks and financial institution within 14 days of each other, it will only count as one application so your credit score will be very minimally affected.

“My spouse’s credit score will affect mine.” People tend to think that when they get married that there credit scores become one, but this is not the case. You still have individual credit scores, and whenever you both sign for something, say your home loan, it will appear on both of your reports. If only one of you signs for something, it will sign up on only the person who signed for it’s report and not their spouse.

6 Things Most People Get Wrong About Their Credit Scores was created by and is property of American Consumer News.