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The Do's and Don'ts of Credit
Here are some important credit related facts that everyone who would like a higher credit score should know!
1. Don't Apply For New Credit. Every time that you have your credit pulled by a potential creditor or lender, you can lose points from your credit score immediately. ** Exception to the Case- When pulled for mortgage purposes or car loans, multiple credit pulls will not have a negative impact on a score, if done within a certain time frame**
2. Don't Pay Off Collections or "Charge Offs". If you want to pay off old accounts, do it through escrow, making sure that the debt is yours. Request a "letter of deletion" from the creditor.
3. Don't Close Credit Card Accounts. If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card will affect other factors in the score, including credit history.
4. Don't Max Out or Over Charge Credit Card Accounts. Try to keep your credit card balances below 40 percent of their limit during the process. Pay Down balances if possible
5. Don't Consolidate Your Debt. When you consolidate all of your debt onto one or two credit cards, it will appear that you are "maxed out" on that card and you will be penalized.
6. Do join a credit monitoring service like www.myfico.com or www.creditchecktotal.com. These inquires won’t affect your credit score and can alert you early to any potential inaccuracy or action needed to improve your credit score.
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