2) Collections and judgments. These items don’t just go away. They are supposed to be removed from a credit report after seven and ten years respectively, but it doesn’t always happen. The older a collection gets the less it impacts credit and if you decide to pay off a collection you must pay the collection company not the original creditor or the collection will not be changed to show it has been paid.
Medical collections
are items that many people don’t know are reporting on credit. You go to the hospital, file the insurance
claim, receive the original bill pending insurance and think the bill is paid
and go on about your business. There is
often a lag time in insurance paying medical bills. In the interim the bills go
to collection. Theoretically the collection company should notify you of a
pending collection but it doesn’t always happen. Even if the payment is
received by the original creditor, chances are they won’t notify the collection
company and you are stuck with the collection bringing down your credit score.
There is a big change pending due to the Consumer Financial Protection Bureau
ruling that medical collections can’t be used to downgrade credit as negatively
as they have in the past. So that is good news.
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You might need New Balance shoes to elude your creditors if you let your credit card balances get out of control. Even though you have a limit it is never a good idea to charge up to the limit.
3. You will want to
remember this number. 33% is the optimum
balance you should keep on each card in relation to your credit limit. It is better to have two or three cards at
33% than one with a large limit that is charged up close to the limit. A simple and fast way to boost credit scores
is to pay down balances to 33% of the credit limit.
4) Age. The age of your credit account also helps you. If your accounts have been established and paid on time for 12 months or more, you score will be better than if your accounts are new with no length of history.
5) More is better, right? Having a bunch of credit cards is better than having just one. Yes and no. One credit card won't give you the depth of credit and the maximum history you need for optimum scoring. The ideal number is up to individual preference but we always recommend at least two cards that are used regularly. They don't need to be used a lot, just regularly.
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6) Assuming we all agree that variety is the spice of life, it is important that your credit accounts are varied. For the best credit scores you need more than one type of creditor reporting on you credit report. Without a doubt revolving credit gives you the most bang for you buck. But a couple of credit cards should be varied with a car loan or another type of installment loan. Student loans and mortgages also assist in increasing your credit scores. We recommend three credit lines and maximum effectiveness tops out at about six.
7) There is one last item on my credit agenda and this has to do with closing credit cards you no long wish to use. When you close accounts, your credit score drops. Why? Because they aren't working for you anymore. If there are accounts you no longer wish to use, just pay them off and leave them alone. They won't necessarily help your credit but they won't actively hurt it either.
Credit is hard to pinpoint as it is constantly in motion based upon what accounts you are using. paying, and closing. However, if you follow the above rules, you can keep your credit in excellent condition and obtain the best rates and yes, even that dream job.
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