I am writing my 5 STEPS TO MAINTAINING EXCELLENT CREDIT because ones credit score is vital in today's marketplace. A person applying for a mortgage will need a credit score of 750 and above in order to obtain a great mortgage rate. Many people do not even know their credit score. We will need to start paying more attention to this three digit number as more companies will use this number to judge us on credit worthiness.
- OBTAIN COPY OF YOUR CREDIT REPORT-You can obtain a copy of your credit report at www.myfico.com or I would highly recommend to obtain a copy of your report from a mortgage professional. This is just my personal recommendation.
- CHECK FOR MISTAKES-Experts have stated that 70% of all credit reports contain some type of mistake. Wow, that is a large number. You must contest all mistakes to the credit bureaus in writing to remove the mistakes.
- NEVER BE LATE-My Mom always told me to pay my bills on time. This has been instilled in me since I was a kid. If you have one 30 day late, then call that company for mercy so it does not get recorded on your credit report.
- NO MORE THAN 20% OF MAXIMUM-Experts state not to charge no more than 20% of the total maximum allowed. If you are over that percentage, then pay down your debt as soon as possible.
- DO NOT CLOSE OLD CARDS-Many people close out their old cards. This is a huge mistake because it does lower ones credit score. Today, a person needs three trade lines open for one year or more. It is best to have older trade lines open.
Please review the pie chart above that better shows the makeup of our individual credit score. People have tried to figure out the magical formula that creates our credit score. My simple advice is to pay your bills on time and do not over extend yourself. Keep it simple and you will be rewarded.