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Keeping a Healthy Credit Score

June 3, 2010 by · Leave a Comment 

A person’s creditworthiness is determined by their credit score. The FICO scoring method is widely used in this regard. Lenders resort to using a scoring system to determine the risk in giving a loan to an individual. The score ultimately decides if the loan can be given or not, how much the interest rate will be and how much the credit limits will be. So you can see why it is important to have a healthy score.

The easiest thing to do to maintain a good score is to pay your credit card bills on time. By not missing any payments and staying current on all credit cards, you will build a good score. Do not for any reason miss a payment or ignore it. If you know that an item on your bill is incorrect, dispute it immediately. Not disputing it and not paying will only harm you. Details such as this go on your report, so as long as an item is marked as disputed, your score will not be affected for non-payment.

Another thing you can do is maintain a good balance on your cards. If your limit is $25,000 then try not to take the outstanding amount past $15,000. The difference will be very beneficial for you. You should also not get rid of any old cards in your possession. Settle the outstanding amount but do not close them. Long credit histories really help your score. Getting lots of new cards will impact badly on your score.

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