Money Matters - Simplified

Building a Desirable Credit Score

To enjoy greater financial options, it is advisable that you have a good credit score. MT gives you an idea on how to go about ensuring a superior credit score.
Minimum use of your credit limit is a good idea to have a good credit score which in turn influences your probability of accessing a loan in future.

It is your credit score that will eventually determine your credit worthiness and make your access to loans and other kinds of financial instruments either easy or difficult.

Credit Card and Divorce

1 Your decision to file for a divorce can even lead to your bankruptcy if you haven’t taken enough care to protect your finances and keep them separate from that of your spouse’s.

2 From a financial point of view, it will be wise on your part to maintain separate accounts for your spouse and you. This will prove to be useful in case you decide to file for a divorce.

3 It is prudent to get a prenuptial agreement. Getting one can help to ensure that a divorce will not adversely affect your finances and lead to a ruined credit rating.

4 Make sure that you have a lawyer to look over the terms and conditions of your prenuptial agreement to reduce the risks of unfavorable agreements that can put you at a disadvantage during divorce.

Let’s face it. In today’s time, you cannot survive without your plastic money or your credit card. No matter how much you try to avoid this evil, you are bound to need it to carry out a few essential transactions.

When the health of your personal finances can be impacted by this instrument, why not use it wisely to generate a good score over the years?

Here is what you could do to ensure that you have a decent credit score.

1. Settle Your Credit Card Payments on Time
Your credit card ratings are largely affected by your payment history, or in other words, whether or not you have settled in full all your credit card payments well within time.

Any payment due, whether on your insurance premiums, club membership fees, purchases or even parking tickets, can have an immediate bearing on your credit score and in turn influence your probability of accessing a loan in future.

2. Use Minimum of Your Authorized Credit Limit
Your credit balance should never exceed 30 percent of the total credit limit that you are authorized on your card.

In fact minimum use of your credit limit is a good idea to have a good credit score.

You must always take only as much credit as you can comfortably repay. Another fact to remember is not to apply for too many loans all at once.

3. Maintain a Long Credit History
It is important that you keep all your credit accounts active in order to get a good credit score.

In fact, when you approach an agency for a loan, they make it a point to check your credit track record or history of your credit cards and other credits.

So, the longer your history, the better it is, because it is the only available proof that you have been paying off all your outstandings on time. It is for the same reason that even shifting balances from one credit card to another too often, can be detrimental to your credit worthiness.

But if you are finding it difficult to handle all your credit cards, and wish to close one or more accounts, what you can do is close down the one that has the most recent history.

This way you will be able to protect the credit points that you have accumulated over the years.

4. Obtain a Good Mix Of Credit Cards
For those of you who have just begun their independent life, the right thing to do is to get a diverse mix of credit cards.

You would for obvious reasons not have a long credit history, so in order to build a strong credit score, you can get yourself an assortment of diverse credit accounts including car loans, mortgages, installments, revolving credit etc.

5. Communicate Your Difficulties to Creditors
Whenever you anticipate a difficult situation such as a loss of job, divorce, bankruptcy, or fall into an unforeseen circumstance such as illness or injury, communicate about the same to your creditors.

The sooner you get in touch with them the better. Remember, your creditors will always be ready to bail you out of the situation financially.

They may help you by lowering your rate of interest, giving you some rebate on monthly payments, postponing payments until situations improve or even foregoing the payments in certain cases so that your credit score is protected.

Your lender can also suggest financial counseling to help you pay off your debt in a planned manner.

6. Protect Your Personal Information
Safeguard the security of your credit cards and your credit score by making sure that you do not divulge your personal information comprising of your social security number, bank account numbers and even credit card or debit card details to any unknown person or site.

Never reveal such personal information when demanded through e-mails and be extra cautious while shopping online.

While it is not too difficult to build a good credit score if you follow the above mentioned tips, you should also consider getting an overdraft protection and various insurance covers to avoid bankruptcy and their subsequent ill effects on your credit score.