With the credit crunch affecting many people on “Main Street,” consumers may be feeling hopeless about their financial future and the possibility of reduced credit lines to help them get by. However, there are some tips to follow to help improve one’s credit score and to help individual’s take charge of their financial future.
Credit scores are derived from a formula measuring such factors as timeliness of payments, credit utilization ratio and the length of having a particular credit account. It is imperative that consumers check their credit report for accuracy to stay on top of their finances. If something doesn’t look right, it is important to investigate and correct the situation as quickly and accurately as possible.
Jane M. and her husband were recently in the process of securing a mortgage. Prior to the application, they both requested their free credit reports. Jane reviewed the paperwork and noticed that her husband’s score dropped over fifty points over the previous year. “We recently moved from New York to California and one of my husband’s credit card bills got lost in the shuffle. Not only did it get reported as a late payment, but a $25 charge turned into a $200 bill because of late fees.”
The couple worked with the credit card company to clean up this debt as well as the credit bureau to adjust his FICO score back to it’s previous standing. If they didn’t review their credit history and take care of the corrections, their mortgage rate would have been significantly higher.
Consumers concerned about their credit score and financial future need to check their history for accuracy. Not only should the report reviewed for accuracy, the comments from the credit bureaus can provide valuable insight for one’s credit score.