How can you avoid having bad credit scores and maintain an excellent credit standing?
Having an impressive credit score can open more doors of opportunity to people. People with good or excellent credit can easily get approved for loans or credit cards. Aside from that, lenders are willing to give them the lowest rates possible just to convince them to sign up. On the contrary, people who suffer from a low credit scores get denied most of the time.
Check out the following steps on how to avoid having bad credit scores:
Take advantage of the automatic payment system.
If you’re paying for a car loan or a mortgage, why not arrange an automatic payment system? This way, your bank can send in payment to your lender automatically each month to avoid late payments and penalties.
Check your credit report at least twice a year.
Obtain a copy of your credit report to make sure that it doesn’t contain errors or false charges. Such inaccuracies can badly pull down your credit score.
Do something about your credit report.
In case of any error in your credit report, send a dispute letter (via registered mail) to your creditor and the credit bureaus right away. After the matter has been resolved, you should receive an updated copy of your credit report for free from the bureau that conducted the investigation.
Carefully check every detail in your report.
Aside from your accounts, make sure that all the details listed under the personal information section of your credit report are correct. Someone else’s name or another person’s Social Security Number may be listed in your credit report which might be the reason for your poor credit score.
Check your spending.
How can you evaluate your own spending? One way is to see how you’ve been using your credit limit for the past months. Do you often exceed your credit limit? Financial experts advise to keep at least 40% your credit limit free to avoid debt build up and to boost your credit score.
