Improve Your Credit Score

You racked up a sizable fine by forgetting to return an overdue book to the library. And that parking ticket you got a few months ago? It’s still in the glove compartment.

Uh-oh. If those unpaid fines are turned over to a collection agency, your credit score may be pulled down by several critical points. And that, in turn, may mean you’ll pay more for car loans, credit cards and mortgages. Your collections account history is just one of the factors credit agencies assess to determine your credit score.

You can boost your credit score and get lower interest rates by following these credit-sensible guidelines:

  • Pay (all) your bills on time – delinquent payments can have a major impact on your score
  • Don’t max out your credit cards – and do pay them down. Aim for getting the balance to 30 percent of the card’s credit limit, a desirable ratio to credit scorers
  • Resist retailers’ tempting offer to save 10 percent on your purchase by opening a new account. You probably don’t need another credit card, and applying for too much credit will hurt your credit score – it can look like you’re on a borrowing binge
  • Think twice about consolidating your cards into one account – it’s better to have smaller balances on a few cards than a large balance on one. Make it a point to know what’s in your credit report, through Equifax, Experian or TransUnion. Check the Federal Trade Commission Web site, www.ftc.gov, for more information.

For informational purposes only. Should not be construed as legal or investment advice, a promise of benefit or guarantee of investment performance.

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