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A good credit history makes it possible to get credit, especially for major purchases like a home or car, and it keeps the cost of all borrowing to a minimum. For example, having to pay just one extra percentage point on an average home mortgage because of bad credit could cost $100,000 or more over the course of the loan. A bad credit score may also make it expensive or impossible to get some education loans, potentially making it difficult to complete your degree or go to graduate school.
To build and maintain good credit, consider these tips:
If you've been denied credit based on information in your credit report, the lender is required under the Fair Credit Reporting Act to provide you with the name of the credit reporting agency and tell you that you may obtain a free copy of your credit report at your request. Otherwise, you can use the AnnualCreditReport.com website to review your report.
Cancelling Credit Cards
When reducing your number of credit cards, it's tempting to officially cancel the account. But doing so could potentially lower your credit score. That's because your credit score is tied to both the length of your active credit history and to the amount of your total available credit that is used. The best way to "get rid" of a card is to pay off any outstanding balance and simply stop using it.
MoneyRight Financial Wellness Tools are powered by and provided by GreenState Credit Union. Organized in 1938 as the University of Iowa Community Credit Union, GreenState has grown to be Iowa’s largest credit union and one of the top financial institutions in the United States for returning profits to members in the form of better rates and lower fees.
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