The rules of protecting your credit score are simple - behave with your credit.
But, what exactly does that involve: 1) Don't always max out your credit 2) If you are going to miss a payment, speak to your lender 3) Check your credit score report 4) At least have some credit score Don't always max out your credit Just because your lender is willing to lend you hundreds of thousands it doesn't mean that you have to take it all.
If they offer you 20,000 when you are wanting to renovate your kitchen and you don't need half of that, just take what you need.
Ideally, take a little less than you need and save up the difference.
The reason is simple.
If you borrow extra money then you will see it and be tempted to spend it.
Don't think of a loan as easy money - it isn't.
It is very difficult money, especially when the lender wants it back.
If you are going to miss a payment, speak to your lender There can be times when you know you will not be able to make a payment, but there is a right way and a wrong way to deal with this.
Maybe there's a baby on the way or you are having a planned operation and are going to be missing work and short on cash.
If so, speak to your lender as soon as possible.
They can probably arrange a payment holiday, which will protect how the information is recorded on your credit score.
Through arranging a payment holiday before the event your credit score should not suffer.
Check your credit score report There can be many errors or omissions in your report, so get hold of it and check the information.
If any debts have been paid off in full then these will count for you, so make sure they are shown on the report.
On the other hand, any errors could be accidentally counting against you and might need fixing.
At least have some credit score Although this slightly contradicts the first golden rule, not having ever had any credit can be a hindrance as you have not proven to lenders that you can handle borrowing money.
So show them you are perfect.
Apply for a credit card, asking for the lowest possible credit limit.
When it arrives destroy the card before you are tempted to use it (just make sure the card does not have any dormancy fees!).
Now you have credit and are not falling behind on repayments - you are the perfect customer.
Be reasonable with your credit and have at least some form of current credit, speak to your lender if you must miss a payment and check the information on your report and your credit score should be the best it could be.
But, what exactly does that involve: 1) Don't always max out your credit 2) If you are going to miss a payment, speak to your lender 3) Check your credit score report 4) At least have some credit score Don't always max out your credit Just because your lender is willing to lend you hundreds of thousands it doesn't mean that you have to take it all.
If they offer you 20,000 when you are wanting to renovate your kitchen and you don't need half of that, just take what you need.
Ideally, take a little less than you need and save up the difference.
The reason is simple.
If you borrow extra money then you will see it and be tempted to spend it.
Don't think of a loan as easy money - it isn't.
It is very difficult money, especially when the lender wants it back.
If you are going to miss a payment, speak to your lender There can be times when you know you will not be able to make a payment, but there is a right way and a wrong way to deal with this.
Maybe there's a baby on the way or you are having a planned operation and are going to be missing work and short on cash.
If so, speak to your lender as soon as possible.
They can probably arrange a payment holiday, which will protect how the information is recorded on your credit score.
Through arranging a payment holiday before the event your credit score should not suffer.
Check your credit score report There can be many errors or omissions in your report, so get hold of it and check the information.
If any debts have been paid off in full then these will count for you, so make sure they are shown on the report.
On the other hand, any errors could be accidentally counting against you and might need fixing.
At least have some credit score Although this slightly contradicts the first golden rule, not having ever had any credit can be a hindrance as you have not proven to lenders that you can handle borrowing money.
So show them you are perfect.
Apply for a credit card, asking for the lowest possible credit limit.
When it arrives destroy the card before you are tempted to use it (just make sure the card does not have any dormancy fees!).
Now you have credit and are not falling behind on repayments - you are the perfect customer.
Be reasonable with your credit and have at least some form of current credit, speak to your lender if you must miss a payment and check the information on your report and your credit score should be the best it could be.
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