Why Your Credit Score Matters and What You Can Do About It

By: Jon A

If you are not watching over your credit score and how to systematically keep it as high as it can be, you are not doing yourself any favors, and as a matter of fact that act of negligence could come back and bite you in the back side in the very near future.

In today's world, your credit score is consistently utilized for a large variety of purposes, some of which you probably never thought would even be close to being pertinent. For example, many car insurance companies are currently utilizing a customer's credit score when they are setting the amount of car insurance premiums that they will charge you. The reason for this is because they supposedly have statistics which show that people with lower credit scores make more claims on their policies. Of course there are various consumer advocate groups that are very much up in arms about this, but the insurance companies claim that statistics do not lie, so at this point anyway, that is still being applied as a component.

Another very important point where your credit score is applied is when you go to apply for a new job. In today's dismal economy and suffering job market, you need every advantage you can get, so now that you know that your credit score will likely be considered before they offer you the job, you may need to do some repairs on your credit score to make sure it is as good as it can possibly be.

One of the very common myths about maintaining a high credit score is that you should pay off and close as many of your credit card accounts as possible. In reality, nothing could be further from a true statement. Keep in mind, your credit score is based in large part upon your credit history, where the key word is "history". If you have had a specific credit card for a number of years and have a good payment history with them, it could in reality lower your credit score to close that account since now that good payment history will be no longer be considered as an active account on your credit report.

Another common myth about raising your credit score is that you should have as many of your credit card accounts as possible with a zero balance. Once again, this is a myth and is altogether wrong. Having credit available to you, as you would with an open account with a zero balance, is good, but your credit score is in reality calculated to be higher if you are really using your account in good standing. Put differently, you are using the account and making payments on time, so you are displaying responsible usage of credit privileges.

If you do not pay off your credit card balances at month end, that is not a problem but for the best reflection on your calculated credit score, you should strive to maintain your outstanding balance at approximately 20% to 25% of your credit limit. If your outstanding balance is more than that, chances are that it could reflect poorly on your credit score since you could be perceived to be using credit too much, but keeping your outstanding balance between these ranges, again, depicts responsible usage of credit.

Lastly and most significantly, obtain a copy of your credit report at least once a year from each of the three major credit reporting agencies and go over them with a fine tooth comb. The majority of consumers have mistakes in their credit reports and do not even realize it. What is more, these mistakes will not self-correct over time, but will stay on your report until you dispute them, which has the ability to lower your credit score. There is a right way and a wrong way to dispute errors, and if done wrong, the error will not be rectified.

Watch closely over your credit report so that your credit score will be as high as possible. This will give you an edge in more areas of your life than you even considered it affected.

Your credit score is critically important to many areas of your life, probably more than you realize. In fact, having a low credit score could actually be costing you money! Find out how you can raise your credit score and why you should do so.Your credit score is critically important to many areas of your life, probably more than you realize. In fact, having a low credit score could actually be costing you money! Find out how you can raise your credit score and why you should do so.

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For more insights and additional information about how and why you should Raise Your Credit Score as well as finding more resources to help you with that and being able to get free copies of your credit reports from the major credit reporting agencies, please visit our web site at www.credit-help-center.com

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