However, credit scores can be confusing too. Here are 3 ways to help protect your score.
1. Order an updated credit report each year for you and your spouse. Many people don’t realize that there may be mistakes on their credit report that lowers their score! In fact, a recent study showed that 79% of credit reports contain some kind of error! Go to HTTP://WWW.ANNUALCREDITREPORT.COM to request a free copy annually from each of the three major credit bureaus.
2. Avoid excessive credit inquiries. Only run your credit report when you are ready to apply for credit and make a purchase. Consistent and ongoing inquiries can lower your score because the bureaus assume that you will be taking on more debt.
3. Long history counts! The best scores have many years of positive credit history. That’s why it’s a good idea to keep your unused accounts open rather than closing them. They continue to show positive long-term history and help your score even if you’re not using those credit cards on a regular basis.
Obviously, you also want to make sure that you pay all of your bills on time. By keeping your long term accounts open, avoiding excessive inquiries, and checking your report annually for any mistakes, you’ll set yourself up for the best credit score possible. And with a great credit score, you’ll save thousands of dollars in interest on large long term purchases and in insurance premiums!
If you have any questions on how credit affects your insurance premium, give me a call at 612-217-0157.