My Personal Finance Blog

A good credit score can be an asset when you need it most. But if you don’t regularly monitor your credit status, your credit score can become a liability. Have you checked your credit report lately?

By law you are able to obtain a copy of your credit report free every 12 months from each of the three nationwide credit reporting agencies, Equifax, Experian, and TransUnion. The three companies have formed a central agency so that you can request a copy from all of them at once. It’s called Annual Credit Report and can be accessed online.

This free credit report can be a valuable tool in maintaining your lifestyle and can save you money. By monitoring your credit report on a regular basis, you can catch any errors that may have been recorded and see that they are corrected immediately. Also with the increased crime of identity theft, with a vigilant eye on your credit reports, you can catch any funny business early.

There are just a few things you need to do to maintain a good credit score.

-First and foremost, make your payments on time.

-Stick within your budget and manage your debt.

-Do just what you’re doing and monitor your credit report regularly to correct any possible errors.

-Try to avoid any unnecessary inquiries of your credit report, as each request can be marked against your good credit score.

-Reduce your credit card balances if they’re limited out.

-If you don’t have enough credit history, you may consider applying for new credit.

By carefully reviewing your credit report on a regular basis, you can be sure that you maintain a good FICO score. “What is a FICO score?” you say.

The FICO score is the ‘grade’ with which financial institutions use to judge the risk they take when extending you credit. The higher the FICO score, the better. The scores generally range from 499 – 800 plus.

By keeping a close watch on your credit reports, you can help to protect your good credit. Whether it’s a car loan, credit card, or mortgage, your credit score can dictate the interest rate of your new loan. A good credit score can save you money.

Bradley Carson is the webmaster and editor of Apply Online For A Credit Card. A website established to provide concise information about credit cards and credit card offers from premier financial institutions.

Remember the good old days? You find a home or investment property in a booming neighborhood, you get an offer accepted, and you close on your new home, and your average credit score granted you a fantastic mortgage with no hiccups and no questions asked. Finally amateurs could play with the big boys and get rich quick flipping houses.

Let’s be honest. It was quite evident that banks were being too lenient approving loans, and lenders had no problem pushing paperwork through with no documentation and taking commissions on mortgages they knew were overextending the buyer. The process was highly unregulated, and as a result the economy as a whole is suffering, and the end is nowhere in sight. Housing inventory and foreclosures are at record highs. Housing prices are dropping and many businesses are suffering as a result. The credit crisis will continue to disrupt businesses, the economy and consumer spending, and personal finances for months to come.

What About Those With Good Credit?

The credit crunch, mortgage meltdown, whatever you want to call it, only affects those with poor credit ratings who have adjustable rate mortgages, right? Sadly that’s not the case. To put it in basic terms, financial institutions gambled with mortgages and now, as a result of the foreclosure rate, they are tightening their borrowing requirements and being more selective with granting loans. Just like it used to be.

What Does This Have to Do With Me?

If you are planning to buy a home, need a car loan or even a line of credit, things are changing if they haven’t already. Some of the creative financing terms, such as no documentation and no money down loans, which made it possible for people who couldn’t actually afford to buy a home under ordinary terms, will disappear. Now, just like the days before creative financing become an acceptable option, you will actually have to prove that you are creditworthy. To prove this you will need an acceptable credit score that shows you pay your bills and your income is greater than your expenses.

The New Perfect Credit Score

John Ulzheimer, president of consumer education at Credit.com told Money Magazine, “A year ago a credit score of 720 would have been good enough to get you the best rate. Now to get the same deal, you’ve got to be in the 750 range.” So what does this mean? While your credit score has always been an important report card lenders used to judge your ability to repay a loan, an outstanding credit score is even more important going forward in order to receive the best rates and keep your payments down.

Request a free copy of your credit report every four months from one credit reporting agency at AnnualCreditReport.com. Review your report closely to look for errors that need your attention. Keep your debt to available credit ratio on your credit cards below 30 percent and pay your bills on time. These two factors alone account for 65 percent of determining your credit score.

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