Village Tip: Improve Your Credit Score

Many villagers have no idea what their credit score is. A credit score is a number that is used to predict how likely you are to pay back a loan. Your credit score starts with the information about you from your credit report. A mathematical formula – called a scoring model – is then used to create your credit score.

You can get a free copy of your credit report at www.AnnualCreditReport.com. The information in your credit report influences your credit score. Unlike your credit report, which you can get at no cost to you, you usually have to pay for your credit score. There are certain instances in which you are entitled to your credit score for free, for example if you are denied a loan on the basis of your credit score.

Studies show that the average person could save about $80 a year on interest by raising their credit score by just 30 points. Here are some ways to improve your credit score:

1. Pay more than the minimum payment so your balance doesn't build up.
2. Pay bills on time. If you have been late, paying on time for six to nine months can raise your score. One way to make sure your payments are on time is to set up automatic payments, or set up electronic reminders.
3. Don't borrow the maximum on any one card, even if there is a low-interest offer. If you ave card with $10,000 in available credit, don't owe more than $6,000. Credit scoring models look at how close you are to being 'maxed out', so try to keep your balances low in proportion to your overall credit limit.
4. Don't open two or three new cards within a couple of months. This will lower your score.
5. A long credit history will help your score. Credit scores are based on experience over time. The more experience you have with getting credit and paying your bills on time, the more information there is to determine whether you are a good credit risk.

A credit score of 730 or more will get you favorable rates on credit cards, auto loans and mortgages.

Village Tip: 8 Ways to Improve Your Credit Score

The 5th principle of our Declaration of Financial Empowerment pledges us to to engage in sound budget, credit and tax management practices. Dr. Boyce Watkins shared some sound tips with his blog readers about improving our credit scores. I thought that villagers would find these tips of interest as well.

People always want to improve their credit score, not only because a good credit score will help them have a cheaper interest rate when they borrowing money, but also because a good credit score will help their lives much easier. But if you forget to pay several bills on time or did something hurt your credit, what you can do to repair the damage? The following is some tips for improve your credit score.

1. Always pay your bills on time, but if you missed the deadline, get current and stay current.
2. If you have problem making the ends meet, you should get in touch with your creditors to help you with managing your credit and pay bills on time.
3. Pay off debt rather than moving it around.
4. Don’t close unused credit cards as short-term strategy to raise your score.
5. Don’t open numbers of new credit cards that you don’t need just for increase your available credit, apply for and open new credit card only as needs.
6. Don’t close paid-off, old accounts.
7. Keep balances low on credit cards.
8. Re-establish your credit history if you have had problems.

Source #1; Source#2; Source #3;

My credit score has taken a beating over the past few years. I plan to use these commonsense tips to improve it. It is never too late to do the right thing!  What say u about credit cards, credit practices or credit scores?

President's Weekly Address: 'Credit Card Reform'

I'm feelin' our president in this week's message. I think that I have singlehandedly paid for most of the dayum bank bailouts with the interest and other trick payments on my credit cards over the past few years. This week the President recaps a busy week, from strides on fiscal discipline, to financial stability, to cracking down on tax havens and tax breaks for shifting jobs overseas. For his next big step, he calls for a credit card reform bill:

"Americans know that they have a responsibility to live within their means and pay what they owe. But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all-too common in our credit card industry."

What are your thoughts on the issues raised by Obama in this week's message?