When was the last time you checked your credit report? The likelihood is that you have never ever bothered to even care about where your credit record is kept.
Knowing your credit record is the cornerstone of financial literacy and the first step in managing your own financial affairs. Information is power and the more information you have about your credit record, the better equipped you will be to make sound financial decisions.
Your credit report helps you understand where you fit into the credit system. Without this information,
you may be rejected when you apply for credit or pay more for that money.
By regularly checking your credit report, you can look for unusual activity and spot identity theft quicker.
There are some obvious indicators of a good credit score – like always paying your bills on time – but a lot of what goes into it is a mystery. When you don’t know the ins and outs of your credit score and credit reputation, they both become a little more difficult to manage.
As soon as you get a credit card or sign up for utilities, you start building what’s called a “credit history”. This history includes all your statuses
across accounts, total debts, and payment history. It also contains other details related to your financial activities such as known addresses and your date of birth.
Your credit history or credit reputation can help or hurt you when applying for a home loan, auto insurance or, in some cases, even a job. Building and maintaining “good credit” can easily save you thousands in interest and fees the next time you need access to cash for a loan.
Arguably, your credit reputation is your most valuable financial asset. You should stay in control of as many aspects of it as possible.
HERE ARE TIPS FOR BETTER MANAGING
YOUR CREDIT:
1 ONLY USE A FRACTION OF YOUR AVAILABLE CREDIT :
The more of your credit you are utilising, the more
nervous some of your creditors get. So try to keep your
utilisation below 10% of your available credit. 10-35% is
neutral, above 35% gets you into negative territory, and
below 10% is ideal.
2 USE ONLINE BANKING TOOLS TO KEEP A CLOSE EYE
ON YOUR ACCOUNT :
This is very important for a variety of reasons. First, it
could be an early warning sign that you are a victim of
identity theft and, second, it brings you face to face
with the reality of your spending. Are you getting too
close to the credit limit on any credit card account or
too close to zero in your bank account? Many current
issuers and banks have e-mail and other types of
alerts to keep you on track. Take advantage of this and
stay alert.
3 OPEN CREDIT-RELATED MAIL :
Open every single piece of mail you receive about your
credit accounts and read it. Especially the fine print.
Don’t assume it’s junk mail. When a bank or credit card
company makes a change to your account, they must tell
you in advance. It’s critical to be aware of those changes
because it could cost you money if you don’t know about
them, and you could be giving up some of your rights.
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MANAGE YOUR CREDIT PORTFOLIO LIKE AN
INVESTMENT PORTFOLIO:
The less of a credit risk you are considered, the less interest you will pay when you borrow money. If you’re paying less, that’s more money available for whatever you want in life as well as an investment. So you need to manage it. You need to be your own professional portfolio manager when it comes to your credit.
REMEMBER THAT CREDIT SEEPS INTO EVERY LAYER
OF YOUR LIFE :
Credit is everywhere you turn, whether you buy a house or car, apply for education loans or rent a car. In one way or another, all of these things are impacted by credit. Your insurance rates are impacted by your credit report.
YOUR CREDIT HISTORY IS YOURS TO PROTECT:
Don’t allow yourself to be persuaded into taking credit to help someone else, such as buying a car, house, TV, cellphone, etc. If this person for any reason stops paying the credit installment as per the agreement that you signed, you will become personally liable for the repayment of the full amount. If you fail or refuse to pay, legal action can be taken against you.
via Herb Weisbaum at NBC News