3 Ways To Obtain Good Credit Score

Every personal financial transaction nowadays involves a credit check.  In order to get the best rate and the amount you are looking to finance, you have to have decent credit score, specially in the wake of the credit crisis of 2008 – 2009.  Having a good credit history is essential, just like in the old days when college degree has been portrayed as a necessity in order to get a “head start” in your career, having a good credit score is a necessity now.  If you ever find yourself in situation where your credit score is less than desirable, you definitely want to take every opportunity to raise that credit score.  Here are some basic things you can do to prevent yourself from having a bad credit score:

Do not perform unnecessary credit checks

What this means is that you should not try for any unnecessary loans.  Think twice before you apply for a store credit card when you are buying that new flat screen TV.  Every time a store provides you with its own financing, it inevitably has to run a credit check on you to make sure that you are “credit worthy”.  If you do this too often, almost all major credit bureaus do not like it if your credit report has been run too frequently.  The conventional thinking is that if your credit check is run too often, there is a good chance you have a lot of debt outstanding.  Creditors get worried if you have too much debt outstanding, which simply gives brings about a higher chance of default.

If you take out a loan, repay it promptly

In the absolute situation where you have to take a loan, for example a $30,000 car that you will need to commute back and forth to work, make it your number priority to pay off the loan as soon as you can.  Ideally if you have obtained a car loan for 5 years, try to see if you can pay it off in 3+ years.  If your finances do not allow you to pay back the car loan ahead of time, you should make sure that you stick to the payment plan that has been stipulated in the loan document.  Do not ever be late with any of the installment payments.

Run credit check annually

This day in age you can never be assured that your identity is safe, specially with the high tech invasion of the identity thieves.  One of the reason you want to run your credit report annually is to make sure that the information from the major 3 credit bureaus are accurate.  If you find that one of the credit bureaus is reporting a much lower score than the other two, then you will want to double-check the discrepancy.  The earlier you can catch this error, the easier and quicker it will be to resolve this discrepancy.

Another reason to run your credit check annually is to make sure that you do not have outstanding credit line that you are not using.  If you find that you have Bank XYZ’s credit card in your Experian report, and you do not need this bank’s credit card anymore, take the proactive approach and close out this credit card.  You do not want to have outstanding credit floating around that you are not using, it can only be a detriment to you in the long run.

If you ever find yourself with serious bad credit history due to poor money management, you might need to consider paying some third party institution to fix your credit score.  The worst case scenario, you might need to consult a bankruptcy lawyer if you need to file for bankruptcy in order to start rebuilding your credit history.

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