Tags: pay | bills | credit | score

Pay the Bills, Limit Credit Balances to Keep Your Credit Score High

By    |   Monday, 30 December 2013 06:43 AM

A low credit score can hurt you by raising the cost of a mortgage by thousands of dollars a year and keeping attractive credit card offers at bay.

So how do you avoid letting your score slip? CNBC offers several recommendations.

Rod Griffin, director of public education at Experian, recommends starting with a free yearly look at your credit report.

Editor’s Note:
Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

"By some estimates, fewer than 10 percent of people eligible for a free annual credit report actually get it," he tells CNBC.

And the Federal Trade Commission reported earlier this year that credit reports for 5 percent of consumers had errors big enough to affect the rating itself, according to CNBC.

As for other tips, bill-paying behavior makes up 30 to 40 percent of your credit score, Griffin says. So, of course, "pay all your bills on time, every single time."

About one-third of your credit score stems from the size of balances on your credit cards and other credit lines relative to your credit limits — your utilization rate.

Zero balances are optimum, but definitely limit your utilization rate to 30 percent, Griffin urges.

If you already have damaged credit you don't need to pay a credit repair company to fix it, says Steve Bucci of Bankrate.com.

"In many cases, you’re paying a company to do things that you can do yourself," he writes.

"Plus, many of these companies are disreputable. They’ll take your money, further damage your credit and then disappear."

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

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A low credit score can hurt you by raising the cost of a mortgage by thousands of dollars a year and keeping attractive credit card offers at bay.
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2013-43-30
Monday, 30 December 2013 06:43 AM
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