Instead of paying too much, and trying to make do with what's left.
Your credit scores
Your credit score will not only determine the home loans you can get or the interest rates you pay. Insurance companies will also use your credit score to determine what you will have to pay for coverage on your cars, or when you will pay to rent a property. Your credit score will also determine if you get the best cell phone plans or how much deposit you have to pay to get utilities. Credit scores are a financial tool, they are a lever or a hammer.
Why Your Credit Score Matters
If you have excellent credit, you can take advantage of excellent offers: loans, credit cards, insurance premiums, apartment rentals, cell phone plans. Poor scores can force you to lose or pay more.
Someone with a FICO score in the range of 620 will pay $ 65,000 more on a $ 200,000 mortgage than someone with a FICO over 760. On a five-year $ 30,000 auto loan, the lowest-scoring borrower will pay $ 5,100 more. It’s worth keeping track of your credit score and understanding how it affects your finances. You can build, defend and take advantage of great credit regardless of your age or income.
How the credit score works
The credit score differs depending on the formula that each credit bureau uses: TransUnion Experian Equifax. If you need to track the progress of your score, check the score from the same agency: TransUnion Experian Equifax. You do not have to pay for your score, you can to obtain your FICO score for free, ask your credit card issuer or your bank.
How to get credit without getting into debt
Thousands of people do not have a credit score because they have not used credit or have not used it recently to generate scores. Two ways to generate credit are:
Apply for a loan and deposit the money you borrow into a certificate of deposit or savings account that you can claim after making 12 monthly payments. Many credit unions and community development financial institutions offer credit building loans. Or if not, apply for a secured credit card, which grants you a line of credit equal to the amount you deposit with the issuing bank, it also helps to build credit.
Once you have a score, you can use a credit score simulator to see what actions can help and hurt you.
Build your credit with good habits
Good credit habits include:
Paying your bills on time is crucial to increasing your score. Nothing counts more.
Light but regular use of your credit accounts is also important. Know your credit limit on each card and don’t charge more than 30 percent of that limit.
Pay balances in full. There is no need to burden yourself with debt when your goal is to increase your scores. If you have balances, try to pay them off as quickly as possible.
Avoid closing accounts if you are trying to improve your credit. Once your scores are high, over 760 or so, you can close an account or two without major damage, but try to keep your higher limit credit cards open.
Mantén y defiende tu puntaje de crédito
Tiene mucho que perder una vez que tenga buen puntaje, cuide su crédito cuando llegue a 690 o más.
Un solo pago omitido puede reducir más de 100 puntos su puntaje. Considere poner todas sus cuentas de crédito en pago automático para evitar tardanzas.
Una cuenta de cobranza o un juicio de demanda también pueden afectar su puntaje. Manténgase al tanto de las facturas médicas, ya que muchas van a cobrar sin previo aviso.
El robo de identidad puede devastar su puntaje, una buena razón para monitorear su informe de crédito. También tiene derecho a recibir un informe de los tres bureaus de crédito al menos una vez al año. TransUnion Experian Equifax.
Take advantage of your good credit
Once your score approaches 700, you will be considered a good risk. When you go over 760 it will be gold, expect the best rates and terms that lenders can offer as they will compete for your business.
Also ask your auto insurance company for a new quote, especially if your credit has improved substantially since your policy was established. Your current insurer may not check your credit at the time of renewal; ask her to recheck her rates. It is also a good time to compare prices with other companies.
With all the money you save, you can advance your important financial goals, such as saving for retirement, increasing your emergency fund, or getting out of debt faster.