With lending dollars tight, it’s more important than ever to make sure your credit scores are as high as they can be.
A newly updated book, "Your Credit Score, Your Money and What’s at Stake" (FT Press) walks you through everything you need to know about the three-digit number that shapes your financial future. Written by Liz Pulliam Weston, personal finance columnist for MSN Money, "Your Credit Score" is a valuable reference.
Here are some facts the book points out:
• It is punishing the way a credit score can drop over something small. The drop in your credit number seems mammoth in comparison to a "little" error, such as making a late payment. Worse, the better your credit, the more a small glitch will count against you.
• If you use a large percentage of available credit on one card, it will count against you. One solution is to move the debt between multiple cards, thus giving you a smaller balance on each card.
• Having bad credit costs you money over the long haul. Each time you apply for a loan, you won’t qualify for good interest rates. Your insurance premiums will go up, as it’s thought (by insurers) that those with low scores will file more claims.
• It’s important to check your credit report on a regular basis and go over it carefully. You’re entitled to one free report per year (in certain states it’s two per year.) Dispute inaccurate information, including the spelling of your name, wrong addresses or Social Security numbers, and inquiries you didn’t authorize.
• If you don’t use an old card, don’t close the account. It can hurt your credit score because it appears that your credit history is newer than it really is.
• Most helpful is the book’s chapter on coping with a credit crisis. Whether it’s a mountain of debt or a job loss, the chapter outlines the steps to take to get back on your feet.
The book also covers in detail what to do when you’re a victim of identity theft and how to prevent it, how to raise your credit score in only a few months, fighting back against lenders who want to change your credit limits or your interest rates, and how your credit score is determined.
Uffington does not personally answer reader questions, but will incorporate them into his column whenever possible. Write to him in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL 32853-6475, or send e-mail to firstname.lastname@example.org.