Credit Score

If you haven't pulled a copy of your credit report, how will you be able to tell where your Credit Score is at? A score of 700 used to mean you would gain approval for any loan, now a credit score of 700 is no longer considered something great. You now need to get a higher credit score in order to gain approval for a home mortgage or a credit card. Lenders have really tightened their lending restrictions and they aren't offering lines of credit to just anyone.

Having a credit score of 750 versus 719 can drop your interest rate on a home mortgage by 1% or even more. This will add up quickly and save you thousands of dollars over the life of the loan. A credit score may just be a number to you but to lenders it is the only way to evaluate the riskiness of their borrowers. They need and want to see borrowers with higher credit scores because it means they won't need to worry about late or missed payments, collection problems, and customers overextending their line of credit.

Order a copy of your credit report or sign up for a credit monitoring service so you can view it monthly. This will help you to see how your credit history pans out and what your Credit Score is looking like. A single late payment can drop you score 10-20 points and it can take months for you to build it back up to the point where it was strong and healthy.

Take a look at how much debt you have and where you stand with payments. You have to be able to list your creditors and the interest rates in order to find a way to pay down the debt and to see which debts you need to pay down first.

Sign up for automatic payments with each of your creditors. This will prevent any late or missed payments on your part and it will improve your credit score. You also need to focus on paying more than the monthly payment limit. Take a look at your credit card statements and pay close attention to the area that shows you how quickly you can pay off your debts if you will add an extra $10 or more to your monthly payment amount. The difference can mean thousands of dollars in debt and it will save you from being in debt for years.