What’s Your Credit Score?
A credit score is a 3-digit number, from 300 to 850, used to determine your financial responsibility. Everyone from insurance companies, cell-phone providers, utility companies, and even landlords routinely solicit this information. 3 national credit bureaus- Experian, TransUnion, and Equifax, calculate your credit score based on your payment history, the amount you owe, the length of time you have been using credit, new credit, and the types of credit you use.
Wanna know your number?
Stop by Cherokee Business Development and Sequoyah Fund office on Tuesdsay, Sept. 20 between 9am – 4pm. Guests will meet with a counselor to review a free credit report. Appointments can be made by calling Kim 497-1666.
This event is in partnership with Minority Enterprise Development Week. MED Week takes place Sept. 19- 23 and is the national celebration of minority entrepreneurs and business owners. For additional information and a list of events during the week please visit www.wncmedweek.org or Hope Huskey at 497-1670.
Improve Your Score.
Avoid at all costs
- Making Late Payments. Payment history accounts for 35% of your score. The more severe the delinquency, the more damage it can do to your score. Deduct: Up to 200 points for three or more missed due dates within a year.
- Maxing Out Credit Cards. Having a high debt-to-credit ratio (the percentage of available credit you’re using compared with your credit limit) damages your score. Make sure at least 90% of your credit is freed at any given time. Deduct: About 100 points.
Proceed with Caution
- A Hard Inquiry. When you apply for a credit card or a loan, the institution asks about your credit to determine your borrowing eligibility; this is called a hard inquiry. Its fine to open one new credit card, but don’t open several within a few months. Deduct: Up to 30-40 points for excessive inquiries.
- Closing Old Cards. Be careful about reducing the number of cards you hold, as that may lower your overall available credit. Try to keep you accounts with the largest credit limits open-unless there’s a card with an annual fee that you rarely make charges on. Deduct: About 100 points.
No Need to Fear
- A Soft Inquiry. This is a request made by you or a utility company that is not related to a lending decision, so your score won’t take a hit.
- Shopping for an Installment Loan. If you’re in the market for a mortgage a home-equity loan, or a car loan, the credit agencies realize many inquiries will be made. It will lump the requests together, as long as the banks look up your score within a 45-day period. So don’t drag out the loan search too long, or your number can be lowered, as each requested will be viewed as a separate hard inquiry.
– Cherokee Business Development