I have been working really hard on getting our credit score amazing for the next time we purchase a house or new car. I have even taken classes on it for work. I learned a ton in these classes so I figure I would pass it along to you so that you can get the best interest rates. There are little things about credit that go against what we would normally think so it is important to know the facts. Credit really is more than a number so it is good to know how to be in the best position available especially in these trying times.
Here is what I have learned about credit.
Credit card companies report to three different credit reporting agencies so you can have three different scores.
You can check your credit once a year for free without hurting it.
Free credit report.com is not free.
850 is the best credit score you can achieve.
You can't fail, a lower score means higher rates and more of a liability to loan out to.
Canceling a credit card that is years old also cancels the credit tied to the card. You need credit history so canceling this past credit history hurts you. Cut up your card if you are tempted to use them is a much better option. If you have more than three or so though cancel the newest ones.
Any inquires to your credit ding it as well as late payments. Don't fall for the 10% off your first purchase at a store question when you check out. Most store charge you a crazy high interest rate that will more than make up for the measly 10% saved. I recently heard of a local jewelry store that charged 50% interest.
Paying your credit cards completely off and never using them again will actually hurt your credit. They want to see that you can have revolving debt, basically that you use it wisely.
There are three magic levels of credit card debt
From worst to best the levels are...
30% is ideal and 10% is the absolute best.
This is the amount of your overall debt not the amount debt on each card. Having a card maxed out is not good though even if your other ones are empty.
Hope this helps you make the best of your credit!!