subject: Steps That You Can Take To Protect Your Credit Score [print this page] It's really important that you are always taking the necessary steps to prevent damaging your credit score. However, people make mistakes and sometimes, you are put into a situation where your credit score needs to be repaired. There are ways though, that you can make sure to not end up being one of those people who's credit needs to be repaired. Making smart financial plans, always staying organized, watching your spending habits, and budgeting are all ways that you can help protect your score. Also, keeping a close eye on your credit report will enable you to be able to detect if mistakes have been made and if you have become a victim of identity theft.
How Budgeting and Financial Planning Can Help Protect Your Score
As many of you know, your credit score is a reflection of your ability to repay your debt and your history of payments. Keeping your credit score at a level where you feel comfortable is very important. Proper financial planning and budgeting are both very important factors in helping you keep that score right where it is. This means making sure that you are paying all of your bills on time and paying off all of your debt in a timely fashion. Following these two simple steps will ensure that you are not seen as a high credit risk and will ensure that any credit applications you submit receive optimal interest rates and terms.
Pay Attention To Any Correspondence You Receive From Creditors
Credit repair is not necessary if your credit score is good, but this can change if you receive a letter from a creditor or collection agency which is ignored. When you receive a letter of demand, or correspondence about a potential debt, these should be answered in a timely manner. You generally have thirty days to dispute a debt when you receive this correspondence, and if you do not dispute the debt then it will be considered valid. Make sure that you answer and keep track of any correspondence, as well as keep a copy of any answering letters and paperwork
Use Available Credit Wisely, And Limit Your Credit Applications
Always making sure that you are using your available credit wisely will significantly improve your chances of maintaining that quality credit score. Smart spending is one of the easiest ways to protect your score and should always be in the back of your mind. Another way to protect your score is to limit the number of credit applications you are submitting. Having a history of numerous credit application submissions looks very bad on your credit report and will cause your score to plummet. By submitting all of your credit applications in close proximity, you are enabling potential creditors to evaluate your credit report and all possible inquiries. This will help keep you off of these creditor's "high risk" list and ensure that you are getting the best possible terms and interest rates.
