Done Deal…2980 Berrycreek in Hailey, IdahoJanuary 3, 2011
New Listing…Elk Creek Ranch in Camas County.January 12, 2011
Here’s an interesting article from guest blogger Shanna Wroten-Tucker Shanna.Tucker@Benchmark.US
It seems that as consumers we are increasingly held hostage by our credit scores. Most people know that lenders offer better loan terms to those with higher scores, but there are other ramifications as well. An insurance agent once told me that credit scores more highly correlate with insurance claims than does a person’s driving record. As a result, our insurance premiums are impacted by our credit scores. More and more frequently employers and government licensing agencies are using credit in their evaluation of prospective workers. And, I’ve even heard rumors that the I.R.S. uses credit scores to pre-screen for income tax audits. All good reasons to actively manage your credit scores. Here are some tips that will help you:
Pay on time. Paying late or defaulting on your obligations will wreak havoc on your credit scores. The more timely you are in making your payments, the better your credit score will be.
Create a long credit history. While derogatory items are usually removed from your credit after 7 years, good credit will remain on your credit as long as an account is open. Having long standing open credit accounts can increase your score… and the older the better.
Don’t max yourself out. Maxed out credit cards can be a sign of financial distress and will result in lower credit scores. You should strive to keep your balances at or below 30% of your available credit for optimal scores.
Manage the types of credit you use. The Federal Trade Commission tells us that a mix of installment loans and credit cards are optimal for a strong credit score. A word of caution however because too many credit cards or “finance company” accounts can actually lower your score.
Dispute derogatory inaccuracies. It’s important to pull your credit regularly to monitor for identity theft and simultaneously dispute any inaccurate information. Federal law allows us to receive one free credit report each year which can be obtained at www.annualcreditreport.com. And, if you need to embark on the path of credit repair, the Federal Trade Commission offers some great tips.
The uses of credit scores are constantly evolving and the factors impacting credit scores are frequently changing as well. Managing your credit score should be part of your ongoing financial health strategy because poor scores can impact you and your family for years.
Shanna Wroten-Tucker, Mortgage Banker