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Credit Score: How To Manage Yours


If you’ve taken out a loan, opened a credit card or been past due on a bill, you’ve contributed to your credit score. A good score can be the difference between purchasing a house, a car or nothing at all. There are many intricacies that go into creating an accurate credit score, and understanding these nuances can go a long way in solidifying your financial stance. Here are a few things everyone should know about their score. It might help you to avoid things like bankruptcy in the near future.


Monitoring Your Credit Score

Knowing you have a score is only half of the battle. The other half is knowing what you should be looking for with your score. Generally speaking, your score is made up of five portions which contribute to the whole. Each of these portions fluctuate over time, changing your credit score accordingly. It pays to keep an eye on your score to note when it changes. If you find that there have been changes made to your score that do not coincide with what you’ve been doing financially, then you might want to contact the credit bureaus to inform them of the irregularity.


Repairing Your Credit Score

While reaching out to the credit bureaus to correct mistakes that may influence your credit score is a good thing, not every item may need correcting. In many instances, your credit score may fail if your habits with money are risky. If this happens to be the case, it might be necessary to repair your credit with a few concentrated actions towards your regular finances. Repairing your score can be a lengthy process, but the rewards can also last a lifetime.


Understanding Your Credit Score

Credit worthiness is broken down into five uneven parts that make up your credit score. These parts include your payment history (35%), amount of available credit (30%), length of credit history (15%), variety of credit accounts (10%), and the new amount of accounts opened (10%). While each of these aspects of your credit influence your score, they do so disproportionately. Maintaining your credit for a long period of time will come naturally, but making payments on time has the ability to improve your score almost immediately.


Your ability to make large purchases or to borrow money depends on your credit score. Making sure your credit stays healthy can end up being the difference between receiving exorbitant interest rates or reasonable ones. Check your score often and be sure to inquire about strange fluctuations. The best way to positively impact your credit is to stay vigilant and exhibit beneficial habits with your money.