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How to protect your credit score

Your credit score is based on a statistical analysis of what is in your credit history and is a numerical expression, or “score” which represents your credit worthiness.

It is typically based on information derived from your personal credit report which is sourced from the major credit reporting agencies. Banks and lenders, as well as credit card companies refer to your credit score any time you apply for credit or a loan in order to ascertain the amount of risk that could be involved when extending you the privilege.

What can hurt your credit score?

Here are 15 different things that can hurt your credit score which we have listed below, and of course there are many more. Consider the following as a basic list of “not-to-do’s” in order to maintain a healthy credit score:

1. A home foreclosure
2. Account charge-offs
3. Applying for numerous credit cards and/or loans
4. Closing credit accounts where a balance remains
5. Closing old credit card accounts
6. Closing out credit card accounts with credit still available
7. Credit card limits that are maxed out
8. Defaulting on loans
9. Filing for bankruptcy
10. Having a judgment against you
11. Having accounts sent to a collection agency
12. Having only credit card accounts or personal loans
13. High balances on credit cards
14. Not paying your bills at all
15. Paying your bills late

Any one of the above or a combination thereof will damage your credit score and make it difficult, if not impossible, to obtain credit or get approved for a loan.

Many consumers fail to realize what an important number their credit score really is. Remember that this is how creditors and lenders determine your credit worthiness.

What can you do to protect your credit score from identity theft?

With the advent of the internet, more and more individuals are shopping online and exposing their personal information to reputable as well people of bad repute. As the threat of identity theft grows every day, consider the following 5 actions in order to protect yourself from this growing internet crime:

• Be careful when giving out your Social Security number
• Compile a list of all your account numbers
• Get a shredder and destroy old paperwork
• Review your credit card statements carefully and thoroughly
• Subscribe to a service that monitors your credit regularly

Following the advice above could save you a lot of financial grief in the long run and preserve a good credit score.

Categorised as: credit

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