Credit scores mean everything when getting the loan needed for that car or a new credit card.
Frank Abagnale, author of the bestseller "Stealing Your Life" and Leonardo DiCapprio's character in the movie "Catch Me if You Can" (2002) gave me some tips.
"You should check your credit at least once a year for anything negative or suspicious," Abagnale said. "Such activity would be another person using your name to get a loan to purchase an item (car, house). A lot of people use other people's identities to get credit since they cannot get credit. They have a bankruptcy, judgment or foreclosure."
Employers now also check the credit of most perspective hires, according to Abagnale, and why wouldn't they? More information is better information.
"Any employer, insurance company, or landlord is going to check your credit," Abagnale said. "To these companies, having good credit has a lot to do with your character, and ethics. It tells them a lot about you."
The three credit bureaus in the United States, Experian, Transunion and Equifax, have websites providing tips about how to get and keep good credit.
Experian recommends establishing a good-credit history while you are young and opening a credit card account. According to Experian, regardless of one's life circumstances, establishing and protecting a positive credit history should be priority, these days more than ever before. They warn in these difficult economic times, credit scores can affect one's ability to achieve financial goals.
Banks such as Bank of America and Wells Fargo also have tips on credit.
Bank of America suggests never borrowing too much, but one should borrow only enough to build positive credit.
Bank of America states, "If you never borrow at all, lenders have no way of knowing about your repayment habits, but if you borrow too much, you could find yourself in trouble. It's all about finding the right balance."
One of the easiest ways to show potential lenders a person is worthy of credit is to open a credit card account and wisely use the credit card. At the end of the month, persons should ensure they pay the entire balance to avoid the interest rates credit cards commonly charge.
Another way to build credit is to take out a small loan, such as on a car, and pay the bill on time. This scenario demonstrates to lenders an individual is a safe bet when lending money.
According to USA.gov, a credit score can range from 300-850. The higher the number, the better off that person is when getting jobs, loans, and apartments. The average credit score in the United States is 682. USA.gov said, "A high score makes it easier for you to obtain a loan, rent an apartment or lower your insurance rate."
Rates above 750 are considered to be excellent credit.
On recommendation of the Federal Reserve's, an individual should always pay the bills on time.
"One of the most important things you can do to improve your credit score is to pay your bills on time," FederalReserve.gov said.
If an individual does not pay their bills on time, not only will they destroy their credit, they could be foreclosed on, have their car reposed and be out on the street.
Take heed, all: it's the high flyer, elite in downtown, who never paid his bills on time and took a long trip down to the projects.
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