Here are some good credit habits that could pay big dividends!

1. Pay your bills consistently on time. This is one of the most important things you can do to present a positive picture to lenders. Recent payment history is a major factor in determining your credit score.
2. Limit the amount of money you borrow to what you can afford to repay. Sounds like an obvious and simple principle? Sure, but it’s where countless consumers get into trouble. Take on too many loans, too many credit cards, or high interest rates, and before you know it, you’re in trouble. You’re behind on your payments, penalties and late fees are adding up, and a major portion of your income goes to servicing your debt, instead of securing your financial future.
3. Limit the total number of credit cards that you maintain.

1. Don’t “over-apply”. Applying for too much credit, or too many credit cards at the same time is not a good sign to lenders, and will lower your credit score.
2. Use credit responsibly by maintaining a modest level of credit accounts in various categories: Retail accounts, installment loans, mortgage loans, finance company accounts, etc.
3. Shop around for the best credit terms! Companies want your business. Even if your credit is less than perfect, very competitive rates still may be readily available to you. You can potentially save yourself a lot of money if you shop around for the best deal. Secure the best deal possible, then maintain a strong record of on-time payments!
4. Stay on top of your credit! Check your credit report, your credit score, and monitor your credit information on all three credit bureaus on a regular basis. The only one who knows if the information in your credit report is accurate is you! So, it’s up to you to make sure the information in your credit reports is accurate. It’s a very small price to pay to potentially save tens of thousands of dollars or more!

Most lenders looks into the credit score of those applying for loans, mortgage, or for credit cards. As it is part of the business, they want to know and double check the capability of the debtor to pay for the loan being applied for. The lenders are taking a lot of risk when they give somebody the use of their money.

Here are just some of the helpful guidelines in increasing ones credit score:
1. Avoid applying for credit much too frequently. Numerous credit applications will mean inquiry of ones file. A lot of new credit applications can greatly affect and lower the score.

2. Always pay all statement of accounts on time. Paying bills behind of schedule are always recorded in the credit report and can reflect a not so good paying habit. This will definitely lower the credit score.

3. Avoid high outstanding balance or debit in ones credit card and other existing credit can drop off the credit score. As much as possible, keep those debts low.

4. Catch up on missed payments. Its never too late to pay the bill.

5. Avoid closing unused accounts or credit cards. This will not help increase the score.

6. Avoid opening unnecessary accounts with the notion of increasing ones credit score by having a brand new credit card. This strategy will actually lower the score.

7. Having too few or no loan and credit account in ones name, is also measured as a credit risk to lenders. Maintaining a small number of credit cards showing a good credit standing, having a reasonable balances and limits, can help increase the credit score.

The rate of credit scores will be the deciding factor in the approval of a loan, the extent or amount of credit that will be offered, and the interest rate that will be added to the loan for the period or duration of the agreement.

Credit scores also significantly affect the rates or charges one will incur for the monthly payments. A low score will mean paying a higher interest rate on the borrowed money.

Also, if one wants to create a difference in applying for insurance premiums and employment, debtors must strive to increase their credit scores.

Some employment agencies, firms and industries check the credit scores of applicants and would-be employees before deciding on whether or not they would hire them. They would also look at credit activities, and employment and payment history.

Recently, most insurance companies do a background check especially on the credit scores of their clienteles. Through this, they will determine the cost of the insurance premiums, housing premiums, auto insurance, and others.

Credit reports can provide insights to employers and insurance agents a run-down summary about the attitude and behavior of a person.

Discipline is an important tool to maintain a good credit score. Increasing ones credit score takes time. It cant be quick and instant.

The better the person deals with his or her credit accounts to have a good and high credit score, the more assurance of saving more money in the bank there is.