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Transcript of Credit
215 Graff Main Hall It MAKE$ Cents! Things that affect your Score Inquiries from applications for new credit Number of Credit Cards New Activity on accounts that were inactive Newly listed public records (Bankruptcies, court judgements, and tax liens) Newly listed collection company records Changes in account status such as a missed payment Why the score is affected Missed payments in your history show that you don't always keep up with your debts and may have future troubles again. When your report shows multiple applications for new credit or using credit lines that were inactive, it is seen as a sign of being financially unstable. Correcting Errors If you find errors on your credit report, you want to contact that agency and correct the dispute as soon as possible! To dispute an error you can contact the agency with the error online, over the phone, or through the mail and ask that the discrepancy be removed. Errors can cause you to be denied for a loan or credit application and can hurt your score until you get it resolved. The Bad News If you have negative information on your report that is yours, it will be there for 7 years. After 7 years you can contact the agencies and have the information removed from your report and increase your score! The less stable, the higher the risk, and the more likely you are to have a high interest rate or be flat out denied Start building your credit early Starting with a secured credit card is a safe way to begin building your score up. A secured card is tied in with a bank account as collateral and reduces the risk on the lenders part. Pay your bills on time Showing that you are responsible with the money you borrow will make banks trust you more, and increase your score Even one missed payment will ding your score Reduce debt-to-limit ratio The Debt-to-Limit ratio is the total debt you have compared to the amount your credit card allows you to have. If you are constantly close to 1:1 ratio, your score will drop Keep your oldest lines of credit Credit agencies like to see that you are able to maintain accounts for long periods of time as it is a sign of stability Pay off your debts early You won't face any penalties for paying off debts early, and the money you save in interest is money in your pocket! Don't let your score slide A score that takes a lifetime to build can be destroyed much quicker. Defaulting on loans and debts, bankruptcy, and other negative actions will hurt your score, and rebuilding a score doesn't happen over night. Make good purchasing decisions, both on credit cards and with loans, and understand the repercussions of being unable to handle the responsibility Hesitate to increase credit limits Just because you are offered a credit limit increase doesn't mean you need it. Unless you never max out your cards and are stable you are only increasing your risk of getting into trouble Stay active! Don't become idle and lose track of where you stand. Stay on top of your financial life and enjoy the benefits for your life. As we've discussed, a good score is more likely to get you approved for credit, but it can do more than that for you... -Better rates on loans and credit cards. Doesn't 9% APR sound much better than 25%? -When applying for housing or an apartment they landlord will check your credit history to see if you miss payments -When applying for jobs employers check credit scores and use it to see if the potential employee is responsible or inconsistent www.uwlax.edu/itmakescents/ Follow us on Twitter! @ItMakesCentsUWL Email: ItMakesCents@uwlax.edu If you are a person who struggles with credit and managing your personal finances you can contact many services that will help you fix your problems, such as....