How to Keep your Credit Score Strong
We all need to pay close attention to our credit score these days, as a strong credit score is essential for obtaining any type of credit. Things certainly have changed in the credit sector, particularly as a result of the struggling economy and the new credit card legislation, so it certainly benefits us to find new ways to protect our credit score.
We all know that paying our debt on time, each and every month, is the number-one thing we can do to keep a strong FICO score, but there are also many other things that may hurt our credit:
- Cash Advances – Do not, under any circumstances, take out a cash advance on your credit card, unless absolutely necessary. Credit card companies see a cash advance move as a bad financial sign on your end, and will often pay close attention to the number of cash advances you take out. Many consumers wonder why in the world a creditor would offer a cash advance, given that information, but the fact of the matter is that creditors make a lot of money on cash advances, mainly due to the high fees associated with them.
- Maxed out retail cards – Your retail credit cards with high balances often send a signal that you are using your credit irresponsibly and that you may be under financial stress. In addition, most retail credit cards come with high interest rates and fees, thereby making them more difficult to pay off. The best rule of thumb, when dealing with a retail credit card, is to not purchase anything that you can’t pay off within a month or two.
- Too many new accounts – If you open too many credit card accounts at one time, or if you apply for too many credit cards, and are rejected, the credit reporting bureaus often see this as a sign of financial desperation. As a result, you may experience a hit on your credit score. If you were recently rejected for multiple cards, or if you opened more than one card within a month or two of each other, you may see a drop in your credit score, so pay close attention when opening any new accounts.
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