10 Steps to Avoid a Bad Credit Score

The reason why some people get a bad credit score is because they seek instant gratification. Craving for jewelry, limousines and expensive vacations are but a few of the expenses that can mar your credit score card, when you don’t have the means to pay for them on time. The credit scores that Experian, Equifax, and Trans Union give are not permanent; you can improve the score, provided you bring discipline into your lifestyle and spending habits. But, prevention is better than cure. Why get a bad score and then try to wriggle out, when you can keep it away at a safe distance? Here are the 10 steps that people take early during their life to maintain a favorable credit score.

1.  Stay within your means and avoid borrowing. To avoid borrowing, you need to have a realistic budget with some savings included to take care of unexpected expenses.

2. Write down the budget on a piece of paper and every time you spend substantially, see that you have a provision for it. Revise your budget if you have to meet an unexpected expenditure.

3. Use credit cards or for that matter any loans, with caution. Credit cards are often the first reason why so many people get into trouble with their personal finances and credit scores

4. Credit rating agencies depend on your creditors when they give you the rating. So if you have a dispute with creditors, report it to the agency immediately with your side of the story.

5. Pay your car loan, utility bills and home mortgage promptly. That you don’t have a loan is not enough reason to get a high credit rating, but a history of prompt repayment is!

6.  File your tax returns promptly and pay them ahead of time. Unpaid taxes and disputes can have a negative effect on your credit score number.

7. Continue using credit facilities, even though you may have disputes with the lenders. Closing your account doesn’t in anyway improve your credit score. In fact it works the opposite way.

8. Begin building your credit score very early in your life. The longer your history of prompt payment and credit utilization, greater is the possibility of a better credit score number.

9. Space your inquiry for credit requests evenly. Too many loan requests over short periods can have a negative impact on your score number even though you may have paid off promptly in the past.

10. Get your credit score report at least two times in a year from one agency, and once a year from the other two. Seldom, they give the same number but, they will certainly help you know where you stand.