Why You Want To Keep Your Credit Score High, Even When You Are Retired.
- Monitor your credit reports regularly. Some experts recommend using a credit monitoring service or setting up a calendar to check your credit every week. Many credit card issuers offer essential monitoring for their cardholders at no charge. Also, the law entitles you to a complimentary full credit report once a year. You can check three credit reports per year at www.annualcreditreport.com. Contact the reporting agency immediately if you find ANY wrong or incomplete information or see inquiries you do not recognize.
- Don't close accounts. It's tempting to want to close unused or paid-off credit card accounts. However, doing so may increase your debt-to-limit ratio, which is the relationship between a card balance and its' credit limit. Closing a card can cause your utilization ratio to go up, affecting your score.
- Avoid co-signing loans. You want to help a loved one or friend qualify for a loan, establish credit, or get an apartment, so you agree to be a cosigner. However, taking on the role of a cosigner can backfire in a hurry. Many people do not realize that co-signing for a debt makes you equally liable for that debt, putting your credit on the line should something go wrong. Instead of co-signing, you could potentially add your friend or family member as an authorized user on one of your existing credit cards to help them build better credit.
- Aim for 100% on-time payments. Never be late, even if you experience cash flow issues, and only pay the minimum amounts due. Payment history makes up 35% or more of your FICO score calculation.
- Never "max out" your lines of credit. Creditors don't like it when you are at, near, or over your maximum available credit. For example, if you have a card with a $2,500 limit and you have a $2,450 balance, the credit card company may categorize you as irresponsible and lower your score.
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