Debt Free Destiny

One important step to insuring you have a good credit score and are not accumulating too much debt is to regularly check in on your credit history report. It is a fact that one in four personal credit reports will contain an error. Those errors can be minor or major and as a consumer, it is your responsibility to take action against such mistakes that can destroy your good credit standing. Checking your credit report at least once a year can help you keep tabs on how your personal credit score is faring and also check to make sure your identity isn't being used in a fraudulent manner.

In addition to your self checking of your credit score, others will also have cause to check your credit history. These credit inquiries from businesses are noted on your credit report. Consumers who have too many of this credit inquiries can suffer the consequences of a lower credit score by up to 5 points each time. Not all inquiries will affect your score negatively. For instance, FICO counts all inquiries on your credit from auto loan companies and mortgage lenders within any two week period as only on credit inquiry. This is largely due to the fact that many consumers will shop for the best rates when seeking a loan. It's important to remember that when you are shopping, do it consistently within that two week time frame in order to prevent negative credit problems.

If you have a habit of applying for new credit without much thought or purpose, it will come back to haunt your credit score. Lenders do not want to see you apply for too much credit or making applications too often. In fact, lenders and others checking out your credit for loans and such will often feel that if you have more than 6 inquires on your credit report, you are much more likely to file for bankruptcy than the consumers who have less inquiries or none at all.

If your credit rating has already been negatively affected by inquiries, one remedy is to stop applying for new credit for some time. The inquiries already on your credit will disappear. It may take up to two years but the removal is required by law and only the inquiries within a 12 month period are considered into the factoring of your FICO score. You also do not get a mark for inquiring after your own credit report.

Maintaining your credit report and being aware of what is on there is one of your important responsibilities for proper money management and debt control. Your credit report will carry a lot of weight throughout your lifetime and you need to be sure it is correct and up to date if you want to get the best rates on loans and mortgages. Bad credit can cause many problems and end up costing you more money in the long run and making you more susceptible to debt issues.