September 30th, 2016 | About your Credit!
According to Experian, a credit score is a number lenders use to help them decide: "If I give this person a loan or credit card, how likely is it I will get paid back on time?" The information from your credit reports is used to create your credit score. Before getting for credit, get your free credit report from each of the three major credit reporting agencies (CRAs): Experian, Equifax, TransUnion. Under federal law, you are entitled to one every year.
Order online at www.annualcreditreport.com, or call 1-877-322-8228. Check to make sure someone else's information isn't mixed into your report. If so, contact the CRA immediately and follow their policies to have each of the 3 Credit Bureaus delete it.
Next, follow these steps to help you establish credit and build your credit score:
1. Apply for a credit card or a secured card. But, make sure the issuer reports to all three CRAs. Otherwise, the card won't help you build your credit.
2. Make sure to your credit cards regularly, but wisely. Make all payments on time because the two most important factors in your score are whether you pay your bills on time and how much of you available credit you actually use.
3. Vary the types of credit for which you apply. An example would be one gas card and one department store card to add to your credit mix.
4. Piggyback on someone else's good credit by being added to a credit card as an "authorized" (joint) user.
5. If you haven't already done so, establish checking and savings accounts and maintain them responsibly. Banks regularly offer their customer's bank credit cards to those who have proven to be good credit risks.
Use your credit cards regularly, but wisely. Make all payments on time because the two most important factors in your score are whether you pay your bills on time and how much of you available credit you actually use.
Establishing and maintaining good credit will make buying a home a lot easier for you, or the refinancing of one you currently own. It will also help for times when you may need a home equity line of credit for home improvements or a home equity loan for debt consolidation, including paying off student loans.
Stay tuned for more tips for building a good, healthy credit history.
1 STOP Mortgage offers excellent guidance in establishing your credit history. Just give us a call at (901) 388-1588. We're here for you!