Thursday, December 16, 2010

5 People Who Peek at Your Credit

From MSN Money.

"Your scores can play a role in your ability to rent an apartment, qualify for a loan or even get a job. They can also affect how much you'll pay on interest charges, insurance and even cell phone contracts.

Make building stellar scores a priority while you're young and you could actually save hundreds or thousands of dollars over your lifetime. However, if you don't take your credit seriously, bad scores -- or even nonexistent scores -- will cost you."

So who's keeping score? Lenders, insurers, landlords, employers, and cell phone carriers. That about covers all your life bases.

"Even if you don't plan on applying for a loan or getting a new apartment or a new insurance policy anytime soon, it's a good idea to start building your credit scores now so they're there when you need them."


"Knowing what goes into your credit scores can help you manage your debts well. Here's how to make the best impression on your credit history:

* Pay on time. 35% of your scores depend on your payment history.

* Don't max out your cards. 30% of your scores are based on how much you owe. You want to keep your credit utilization ratio -- the percentage of your credit limit that you've actually used -- no higher than 30% of your available credit limit. And pay off the balance in full every month.

* Start while you're young. 15% depends on the average age of your accounts.

* Avoid opening several accounts at once. Not only will this lower the average age of your accounts, but lenders will worry that you might go on a borrowing binge. 10% of your scores depend on new credit.

* Get the right kind of credit. This accounts for the final 10% of your scores. Your experience with revolving credit, such as credit cards, on which you control how much you charge and pay off each month, carries more weight than installment debt, such as car loans and mortgages, with fixed payments. But don't simply stock up on a pocketful of Visas -- lenders like to see that your money skills are well rounded."


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