Get Smart About Credit
10 Tips to Live Credit Smart
What is a 'Credit Score': A credit score is a statistical number that evaluates a consumer's creditworthiness and is based on credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts. A person's credit score ranges from 300 to 850, and the higher the score, the more financially trustworthy a person is considered to be.
Get a copy of your credit report.
It’s a good idea to review your credit report from each of the credit bureaus, Experian, Equifax and TransUnion regularly. You are entitled to one free credit report from each of the three credit bureaus annually. Visit www.annualcreditreport.com or call 1-877-322-8228 for your free copy.
Know your credit score
Your credit score reflects the risk of doing business with you. You can request your credit score from any of the three credit reporting agencies, may be charged a fee for the information.
Set up a budget and live within it.
Credit should not be used to live beyond your means.
Have some credit, but not too much.
You only need a few active account reported to demonstrate smart credit management.
Always pay your bills on time.
Late payments can have a negative impact on your credit score which can make it difficult to get credit. Automatic payments can be helpful to avoid forgetting to make a payment.
Have a mixture of credit types.
It's great to show that you are able to repay an installment loan. Have a revolving account, such as a credit card can show that you can responsibly manage credit because you have to control how much you charge and pay each month.
Keep credit card balances low.
Keeping your credit card balance low compared with your credit card limits shows that you aren’t tempted to charge more that you can repay.
Only apply for credit if you need it.
Recent inquiries indicate that you may have taken on new debt that isn't yet showing on a credit report. Too many inquiries in a short period of time may reflect that you are trying to live off of credit.
Protect your identity.
If you suspect that your identity has been compromised, file a complaint with the Federal Trade Commission by calling 1-877-438-4338 or visit www.ftc.gov/idtheft
Be organized and set up auto payments.
Setting up automatics helps ensure that you will not miss or be late on any of your bills.
Please come in and visit with your local Iowa State Banker to discuss your credit questions and needs.