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Maintaining A Good Credit Score

What Are Credit Scores?

The one parameter that is going to stick with you for the rest of your life is your credit score. This is a figure that you will frequently come across, especially when you have to take out loans or if you have to buy something and need to borrow money. Ideally, you should keep a healthy credit score to ensure that you have a sound financial history and nothing to worry about in the future.

There are a couple of things you can do to ensure that you maintain a good credit score. For starters, force yourself to always pay the bills at least a day or two before the due date. This sole act can keep you in good standing and improve your credit score significantly. Late payments, made in excess of thirty days, will reduce your credit score significantly.

Always pay your taxes on time. Improper tax payments and bankruptcy declaration will cause havoc to your credit score. If you want to retire with money to spare, then make sure that you are paying all the taxes to your state and federal body. In addition to improving your credit score, you will also be in good standing with these organizations.

Next, stop carrying an assortment of credit cards. You don’t need more than one or two, and it makes no sense to carry more than that. First of all, you are going to spending only the money you have and a credit card is such that it may tempt you to spend more than you can earn. This is exactly where the problems begin and cause you to end up making late payments and damaging your credit score.

It would also be wise to reduce your credit limits. Companies want to wring you dry and there is no better way of doing that other than using insane credit limits and tempt you to spend like a lunatic. Avoid these pitfalls and express your desire to have lower credit limits. This will prevent you from spending more than your capacity in addition to helping you maintain a healthy bank balance.

If you are in a lot of trouble, you can probably take the help of family and friends to co-sign loan applications or credit card applications. This way, you can have another shot at improving your credit and slowly work to building on it by making regular and monthly payments.

Getting back your good credit score will take time. It can take a matter of days to ruin your credit score but it will take years to repair it. One of the most effective and critical ways to repair your score is to pay your bills on time. This is a sure way to get your credit score to rise. The bottom line is that for a creditor to trust you there has got to be a long history of faithfulness to pay your debts. The longer you are consistent the better your score is. So If you don’t know where to start, you can begin with this simple step of paying your bills on time, every time.

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