What’s my score?

That question should be easily answered, but in fact… none of us have just one credit score. We have more, depending on the type of entity that has collected information.  Each entity determines their  own ‘your score’ based on a handful of things, each being assigned a certain level of ‘weight’ or importance. Not every entity puts the same weight on the same things. Hence, the differing scores.

The score is dynamic as well. It moves up or down depending on various financial/credit/debt activities at various times. Those activities are things such as

-Your credit card balance-to-limit. To lower your score, keep your balance down to about 10-20% of the credit line.

-Loan-to-value:  How much do you still owe on your home? What has your payment history been like?

-Do you have too many credit and department store cards?  And, have you been late on any of them; if so, for how long?

Your credit history may need to be reviewed. Ensure it is updated, correct and with no old or inaccurate information on it.  If there are derogatory items on it, perhaps those can be removed.

Have 3 to 5 credit cards and use them not too infrequently so that the credit reporting agencies can gather enough data to determine how you use those cards.  And try not to have too many department store cards.  No matter what kind of cards you have, pay them off each month so you don’t accumulate and end up wasting money on interest and so you don’t lean towards get into debt trouble down the road.

Learn ways to maintain good use of credit and avoid spending money that is not yours (it’s the bank’s money) needlessly.  I recently spoke with a woman with 16 different debts, including 3 mortgages, and she was deep in trouble.  “I just kept spending like I had before I lost my second job income.”  The trouble was that she wasn’t spending, but borrowing… when she had no way or means to repay the debts.

You might need to charge an emergency expense to your card, but that thirst for Nordstrom, lots of gadgets, frequenting restaurants or big screen TV can wait til you have the money in the bank to pay off the card you may charge things to.

Live well below your means, save more money, plan for the unexpected and live much more stress-free in a country stressed heavily with too much debt as it is. You’ll love yourself for it… and those affected by your choices and use of money and credit will love you for it as well.