JONESBORO, AR (KAIT) – Your credit score can be a heavy burden on your shoulders. It can mean the difference in getting approved for that apartment, a home mortgage loan, even a job! With the new credit card rules, financial professionals have researched some new, maybe unconventional, tactics for keeping that safe credit score.
A credit score is like high school. Everyone starts with an A, but if you're not careful, you could get into trouble. "They want to make sure that you are going to be trustworthy, you're going to make your payments on time. banks are not wanting to loan money as freely so you have to have an even better score than what you did a couple of years ago," says Susan Campbell, with clear point counseling.
She says with new credit card changes, come different strategies to maintaining a solid credit score. One includes opening up more credit cards. "It sounds awful because that is what we were always taught is to not have more credit. You don't want to overdo it but you want to have a good variety of credit. So, if you have one or two it doesn't really show what kind of a payer you are."
There is also the tip to not ask the Credit Company for a lower APR, "It gives them a reason to look at your credit report. If they see you are having problems with other credit cards or car payment that could get them to shut your account down or raise your interest rate.
Another tactic is to max out some of your credit cards, "It is tricky. You know American express is one of them. When you pull a credit report it doesn't show a credit limit and you know sometime those are not taken into your credit score." Campbell says she doesn't recommend this, but it does help with utilization, which makes up 30% of your credit score. It is a risk because it will hurt you if you can't pay off the bill each month.
When credit changes took place some spenders decided to drop some cards to opt out of a rate hike. Campbell says that is you have drop accounts, it will help your credit score more is you do not pay them of immediately, "It helps with your utilization because it shows that credit history and they have something to go back and look at, and if you pay that off and your down to a zero balance you know all your hard work is just down the drain." Since the new laws allow credit companies to increase the interest rate, it is best to work on paying off the open accounts first.
Campbell say the safest way to really keep you credit score on point, "If you get a credit card you pay it off every month if you can or keep your payments on time each month."