Improve your Credit Score



Credit Score is a numerical index which represents an estimate of an individual's credit worthiness i.e., it gives the risk associated with you (the probability that you will default on a loan). Once you get a Credit Card, you need to maintain your Credit Score.

In this section we address some of the FAQ's regarding Credit score and credit history.

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FAQ's

What factors determine my Credit Score?

Why is the Credit Score so important?

How can I find what is my current Credit Score?

How can I improve my Credit Score?

What is identity theft?

How can I protect myself from identity theft?

Where can I find more information about identity theft?

What factors determine my Credit Score?

A credit score takes into consideration various factors such as your payment history, current earnings, current debt, length of credit history, types of credit utilized, and your new credit. For more information, please visit this link

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Why is the Credit Score so important?

If you have a good credit score, you will also be assigned a lower interest rate on your Credit Cards. It will also be easier for you to take loans in the future, i.e., car loans or home loans. Normally your credit score is considered good if you can maintain it at 700 points or more. It is rated to a cap of 800 points.

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How can I find what is my current Credit Score?

There are several companies that maintain everyone's Credit Scores. You can easily find those companies on-line by typing "credit score" on the search engine website such as google or yahoo.

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How can I improve my Credit Score?

Below are some tips to improve your credit score (Source: simplysearch4it.com, 2007)

  • Maintain a long healthy credit history. Keep alive your oldest credit card and be sure to pay all bills in time. Never keep bills pending over a 30 day period. If in a crunch at least pay the minimum charges due.

  • Do not have too many credit cards. Learn to say "NO," to offers of free credit cards. And, maintain a good credit limit. Avoid using all the available credit on the cards.

  • Ensure that the credit report you have is accurate and that there are no errors clerical or otherwise.

  • Plan your finance such that it is healthy. Consider debt consolidation.

  • Never suddenly close or open accounts. This leads to suspicion that you are trying to manipulate your credit report.

  • If you are having problems speak to your creditors well in advance and work out a stage wise repayment. Request the creditor to refrain from reporting the late payment.

  • Late or delayed payments drive your score down so always pay bills dead on time. Keep a tab on due dates and ensure that all bills are paid.

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What is identity theft?

Identity theft occurs when someone uses your personal information without your permission to commit fraud or other crimes. (Source: consumer.gov, 2007)

Identity theft may result into heavy financial losses for you as well as detriment your personal security.

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How can I protect myself from identity theft?

Below are some tips that will protect you from identity theft:

  • Tear up or shred unnecessary mails such as old bank statements, old bills/invoices, promotional mail or pre-approved credit card offers. If you don’t destroy these documents, identity thieves might raid your trash and fill out the offer in your name.

  • Memorize your Social Security Number (SSN). Do not print it out on your ID card, driver license, or personal check, do not give it out unless absolutely necessary, and keep your social security card in a safe place.

  • Make a copy of your ID, driver license, and credit cards (front and back). In the event that your purse is stolen, you still have your account number and expiration date of your credit card, so you can easily block it.

  • Examine charges on your credit card before paying them.

  • Be careful at the ATM machine. Make sure nobody sees the PIN that you input in.

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Where can I find more information about identity theft?

You can find more information about identity theft on the web site of the Federal Trade Commission

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