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| Keeping
your credit history clean |
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Establishing
sources of credit and maintaining a good credit history
should always be a part of your financial planning. Maintaining
a clean credit history is often deceptively simple. Following
are the simple rules you must follow to keep your credit
history in good shape.
1. Pay Bills on Time
If you have credit cards, make sure you
understand specific policies about what
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constitutes
"timely" payments. Sometimes the time of day your check arrives
in their mail can make or break you. According to credit card companies,
it does not matter how much you pay, but matters what matters more
is when you pay.
2. When you have discontinued using a credit
card, close the account
If you have a credit card without any dues and plan not to use the
credit card again, make sure to close the credit card account. You
could also request the credit card company to report the credit
agencies that account is closed (the credit agencies are required
by law to do so). To leave your account open means that the account
would remain on your credit report even if you do not use it. As
a result, creditors will see your account as potential debt, which
can hurt your rating.
Remember, credit accounts that contain adverse information may remain
on your credit report for up to seven years from the date of first
delinquency on the account.
3. Keep your credit information secure and
private
Do not disclose your credit account details even to your nearest
friends. You are the only person who has access to, and is responsible
for your credit accounts.
4. Pay more than the minimum due
By paying more than the minimum you are required to do allows you
to move out of the debt trap quicker. The minimum payment required
by credit card companies will see that your credit balance is never
paid off.
5. Spend less than you can afford to
Credit cards often pose the biggest temptation to buy everything
which catches your fancy. Most people keep track of their card purchases
as withdrawals from a checking account. When it is time to pay the
bill, they have the money to do so.
6. Keep Track of your credit rating
If you come across any information which in your view is inaccurate,
inform the same to the credit bureau immediately. The credit bureau
investigates the information promptly and will correct your credit
rating.
7. Remember there's no free lunch
You may be lured into several offers that boast a check for free
money on signing with a new account. Be aware of such offers as
they are usually charged as cash advances and carry a rate of interest,
which you can ill afford to pay. |
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