Your Credit Score - Why It Needs to Be Maintained
You've gotten a credit score you're happy with.
Congratulations! Hopefully that number is one that's over 700, if you're looking to have an easy time with everything financially.
Once you get to such a high place, will it just stay there, however? Nope, that number has to be maintained.
This score represents where your financial history is placing you at right now, and since we're always moving forward and adding more to that history, that number is always in flux.
So then how does it all work, why does it really matter if you keep it up there anyhow, and how do you maintain a high score anyway? These are all good and important questions to understand the answers to! To begin with, your rating number is calculated based on the information in your credit report.
This includes information like what your limit on your cards is, any recent inquiries about your credit (this only happens when you approve, like when you apply for something like a card, loan, or job) any late or missed payments in the past seven years, bankruptcy in the past ten, and a lot of other important information.
Because all of these things can change at any time-past mistakes aging off of your report, recent inquiries aging off, new marks showing up, a recent string of credit inquiries, or changes in limits and balances on your accounts-your history, and thus your rating, is always changing.
With this in mind, you want to look at all that you're doing and check your report regularly, so that you can be sure that your score is being maintained.
When you have a bad rating, everything you do financially is difficult.
You get offered the worst interest rates on insurance, cards, loans, and everything else that you do-and if it's bad enough, you have a hard time getting approval at all.
Maintaining a high rating saves you money on interest, gets you approved for things easily, and means that every financial door is open to you.
Not only that, but when you go to apply for things like credit cards, you'll get offered higher limits.
This actually helps you maintain your score in and of itself.
Until you've had a bad credit score, it's hard to realize just how easy and great your financial life is when you've got a good rating-and if you keep your finances maintained, hopefully you'll never have to.
How do you maintain your credit score really, though? There are lots of things that you can do to keep up a healthy financial life.
One of the big focuses can be how you use your credit cards.
Using less than thirty percent of your limit each month, and paying it off in full, is a great way to maintain a good score.
This keeps your financial life looking active, but neatly in control.
Something that is looked at when they calculate your rating is how much is available to you versus how much you are using, so this helps there as well.
Keeping a good budget each month, and having an emergency savings account so you don't have to take out emergency loans, are both great ways to keep up a healthy rating.
Don't be afraid to apply for things where your history will be checked, but do keep an eye on how often you're doing it.
Applying for a whole series of things in a short period of time does not look great.
Always make sure to at least do your once yearly free check of your score online to make sure that there are no mistakes, and to get an idea of how it is you're doing overall.
It's not a bad idea to sign up for a service and check things a bit more often than that if you're really looking to stay steady, though.
Maintaining your credit score makes your financial life easier, which in turn makes your everyday life easier.
Not having to worry about rejection, or a high interest rate, when you have to go and apply for a loan, a rental car, a job, any kind of insurance, or anything else makes your life that much easier.
Congratulations! Hopefully that number is one that's over 700, if you're looking to have an easy time with everything financially.
Once you get to such a high place, will it just stay there, however? Nope, that number has to be maintained.
This score represents where your financial history is placing you at right now, and since we're always moving forward and adding more to that history, that number is always in flux.
So then how does it all work, why does it really matter if you keep it up there anyhow, and how do you maintain a high score anyway? These are all good and important questions to understand the answers to! To begin with, your rating number is calculated based on the information in your credit report.
This includes information like what your limit on your cards is, any recent inquiries about your credit (this only happens when you approve, like when you apply for something like a card, loan, or job) any late or missed payments in the past seven years, bankruptcy in the past ten, and a lot of other important information.
Because all of these things can change at any time-past mistakes aging off of your report, recent inquiries aging off, new marks showing up, a recent string of credit inquiries, or changes in limits and balances on your accounts-your history, and thus your rating, is always changing.
With this in mind, you want to look at all that you're doing and check your report regularly, so that you can be sure that your score is being maintained.
When you have a bad rating, everything you do financially is difficult.
You get offered the worst interest rates on insurance, cards, loans, and everything else that you do-and if it's bad enough, you have a hard time getting approval at all.
Maintaining a high rating saves you money on interest, gets you approved for things easily, and means that every financial door is open to you.
Not only that, but when you go to apply for things like credit cards, you'll get offered higher limits.
This actually helps you maintain your score in and of itself.
Until you've had a bad credit score, it's hard to realize just how easy and great your financial life is when you've got a good rating-and if you keep your finances maintained, hopefully you'll never have to.
How do you maintain your credit score really, though? There are lots of things that you can do to keep up a healthy financial life.
One of the big focuses can be how you use your credit cards.
Using less than thirty percent of your limit each month, and paying it off in full, is a great way to maintain a good score.
This keeps your financial life looking active, but neatly in control.
Something that is looked at when they calculate your rating is how much is available to you versus how much you are using, so this helps there as well.
Keeping a good budget each month, and having an emergency savings account so you don't have to take out emergency loans, are both great ways to keep up a healthy rating.
Don't be afraid to apply for things where your history will be checked, but do keep an eye on how often you're doing it.
Applying for a whole series of things in a short period of time does not look great.
Always make sure to at least do your once yearly free check of your score online to make sure that there are no mistakes, and to get an idea of how it is you're doing overall.
It's not a bad idea to sign up for a service and check things a bit more often than that if you're really looking to stay steady, though.
Maintaining your credit score makes your financial life easier, which in turn makes your everyday life easier.
Not having to worry about rejection, or a high interest rate, when you have to go and apply for a loan, a rental car, a job, any kind of insurance, or anything else makes your life that much easier.
