How to Maintain Your Credit Rating During Tough Times.

by Wade Barnes 18. December 2008

Good Credit vs. Bad Credit

Credit ratings are complied by the three credit bureaus, Equifax, TransUnion, and Experian. They all have slightly different methods and they are ever evolving but basically, credit scores are a compilation of the following:

Payment History
Outstanding Debt
Length of Time on Established Accounts
Number of Inquiries
Types of Credit

The list is in order of most important to least important with regards of impact on your credit rating. It is important to remember to always pay your bills on time. If you are unable to make a payment, talk to your lender. Most lenders will work with customers who need help.
Be sure not to max out credit cards and other credit lines. As outstanding balances reach credit limits, this has a negative impact on your credit rating. Be sure to keep old accounts open, this helps establish a positive history. Keep the number of inquires to a minimum and diversify your borrowing methods (don't have all credit card debt).

Although times may be tough, the most important factor is to make payments. If you struggle making payments talk to your lender. I can't emphasize that enough.

If you are working to rebuild your credit, remember the factors that impact your rating. Every little bit will help get you back on the road to an improved credit rating.

A great step in evaluating your position is to get a free copy of your credit report. Although the credit bureaus charge for your credit score, each bureau is obligated to provide you with one free copy of your report every year. You can obtain your free copy by visiting www.annualcreditreport.com.

Feel free to be in touch with comments, suggestions, or questions.

Wade Barnes wbarnes@1stmarinerbank.com



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