Positive & Negative Affects on Your 2015 Credit Report

While it is important to know what helps to build a good Credit Score, you also have to know what hurts your Credit Score.
Your Credit Score is a very important factor when it comes to your familyfinances.  Lenders use credit scores to determine the risk of lending money to a given borrower. It is important for getting approved for the best terms and interest rates on a Mortgage Loan.Insurance companies, landlords, and potential employers also look at your credit score to see how financially responsible you are.
Why not make a New Year’s resolution to improve your Credit Score in 2015?

Negative Affects on Your Credit
♦ Payment History: There are many factors that can negatively affect your credit score; your payment history is one of them. Have you paid your bills late or missed payments? If you have, how late were you? The later you are with your payments, the worse it is for your credit score. Also, any charge offs, debt settlements, foreclosures, bankruptcies, wage attachments, suits, liens, or judgments against you are some of the worst things to have on your credit report.
♦ High Credit Card Balance: Using more than 80 percent of your total amount of available credit is another factor that lowers your credit score. Having a high credit card balance or maxing out your credit cards increase your credit utilization (the ratio of your credit card balances to credit limits listed on your credit report) and decreases your credit score.
♦  Requests for New Lines of Credit: If you have recently opened several new accounts, you could be a greater credit risk. People tend to open new lines of credit when they are experiencing cash flow problems or are planning to take on a lot of new debt.
♦  Closing Unused Credit Cards: The unused credit accounts are contributing to the amount of credit you have available. You will want to show that you are not using all your available credit. Pay them off, cut up the card, but don’t close the account. Once you close out those credit accounts, you will suddenly have less credit available.
♦  A Greater Number of Inquiries: The more times you apply for a credit card, shop for for a better deal on a car loan, even switch cell phone providers, the more inquiries will show up on your credit report, raise the question of financial responsibility and decrease your credit score.

Positive Affects on Your Credit
♦  Paying Bills on Time and in Full: Have you paid your bills on time for each and every account on your credit report? The longer you pay your bills on time, the more your score should increase. 
♦  Using Less of Your Available Credit: Keep the balance you owe on your credit card to 25 percent or less of your available credit line. For example, you should carry a balance of no more than $2,500 if your credit limit is $10,000.
♦  Paying Off Debt: This is a lot easier said than done, but the more you pay your debt back, the more your credit score will increase.
♦  Steady Employment: People who have steady employment are viewed as being better at paying their bills on time.

Bottom Line: Your Credit Score plays an important role in your finances. As long as you are being responsible with your money, your credit score will reflect it.

Review Your Credit Report Annually
It’s smart to stay on top of your credit report, and to know what potential mortgage lenders will see. You can request a FREE Annual Credit Report from each of the 3 major credit reporting agencies – Equifax, TransUnion & Experian once a year at www.AnnualCreditReport.com