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Factors in your credit score

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Many people may not know what their credit score is. Some do not have any credit at all. But as we have seen, in the American economy, credit makes the world go round. Credit, and one's credit experience, is based on a number of factors. Paying your bills on time, the amount of outstanding debt and the age of your accounts can all contribute to good and bad credit scores. But financial experts say even if you pay your bills on time every month, if your credit cards are fairly close to their limit, your score won't improve. "Know where you stand, know your credit score - it puts you in more control, it holds you accountable to be able to know where your score is," said Sarah Cain of Carolina First Bank. Financial advisor, Ross Marino said, “Part of the process that we are in right now is paying for giving loans to sub-prime people, or sub-prime borrowers." But before you swipe your gold card, think about how it will affect your score. In order to obtain good credit, it is important to keep your balance below 30% of your credit limit. Also, experts say it is a good idea to use older credit cards every now and then, because in the world of credit, longevity is the key word. Although it may be tempting to ask a creditor to lower your limit so you do not spend more, that actually works against your credit score. Experts say a credit score is only an indicator, but what is really important is what makes up the score. For example, how customers have managed their debt over time. It is free to check your credit report once a year at www.annualcreditreport.com. Financial advisors recommend doing this, to see for yourself what is on your credit report.

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