Jul 012009

You can help your clients increase their scores before applying for credit. Major purchases generally require financing, and a consumer’s credit score directly affects the terms of the loan. Share the tips below to empower your clients to increase their own credit.

1. Shop around when looking for a credit card and choose a card with a low long-term interest rate

2. Review your credit report every six months to ensure that the information is accurate and up-to-date

3. Limit your credit to mortgages, auto loans and only a few major credit cards

4. Consolidate outstanding debt onto one low-interest-rate credit card

5. Pay credit cards and mortgages on time

6. Develop a plan to pay down your debt to less than 40 percent of available credit

7. Call your credit card companies once every six months to check your current interest

8. Stay at your job for longer than one year

9. Systematically pay off your loans starting with the highest interest rate loans

10. Keep telephone and utilities in your name

11. Don’t needlessly open new accounts

12. Keep the credit cards you’ve had the longest to show established credit

What you may not realize is that every time someone inquires about your credit, a deduction is made to your credit score. One point can be removed for every bank inquiry. When applying for a credit card, three points can be taken off immediately. And when a collection agency inquires about your credit, it can cost you five points.

A maximum of 15 points can be deducted each month. Those little point deductions can quickly add up. Keep this in mind when applying for credit and paying off debt. By following the tips above, you can reap the benefits of a better credit score.

Douglas Muir, CEO

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