How to Use Credit
Nationwide Experienced Legal Counsel
Most Americans are in debt, plain and simple. While debt can certainly become a huge problem for people if it gets out of hand, there are instances where using credit can help you reach your goals and improve your credit score. Our consumer protection attorneys help consumers think thoroughly about their financial situation, stay savvy against fraudulent creditors, and fight back against predatory lending practices.
If you need an attorney whose experience with consumer loans and credit can help you decide how to handle a scam or a predatory lending situation, don’t hesitate to call us at (801) 820-9955. We offer a free consultation and you pay nothing unless you win your case.
How Do I Establish My Credit?
Your credit score affects absolutely everything from renting an apartment, buying a house, or purchasing a new car to setting up utilities and getting credit cards or other loans. If you pay your bills on time and have credit cards that you pay off every month, your credit score will likely get better over time. Conversely, if you don’t pay bills on time, you let a house go into foreclosure, or you stop paying your student loans, your credit score will suffer. With a bad credit score, any loans you do obtain will have high interest rates, costing you much more money in the long run.
Improve your credit score by:
- Pull your credit reports and go through them looking for any red marks for accounts that were paid late, settled, or not paid at all. Work with the companies to pay your bills or go through a process to dispute your bills at each of the three credit reporting bureaus. Get a free weekly report through April 2021 at annualcreditreport.com
- Pay your bills on time and if you do run late, call the customer service line and explain why you were late. See if they will take away the late marking for your payment so that your score does not drop. If you’ve had accounts referred to collections or have a history of paying late, your credit score will be negatively affected.
- Make sure your income to debt ratio is around 30-35%. Credit reporting agencies look at how “maxed out” you are to help determine your score. Having large amounts of debt and a low income is going to impact your credit score negatively. Paying down your debt will raise your score over time.
- If you only recently started to develop your credit, be sure to stay responsible with your monthly bills and make sure to have 1 credit card that you use and pay off monthly. Don’t cancel your oldest credit accounts to keep your rating going up. Your credit score takes into account how old your credit sources are and how long you have been responsible on an account
- According to a recent analysis by FICO, people with very high credit ratings had an average of three open credit card accounts. If you have 10 credit cards and multiple loan accounts, this may count against your credit rating.
How Do I Establish My Credit?
Your credit score affects absolutely everything from renting an apartment, buying a house, or purchasing a new car to setting up utilities and getting credit cards or other loans. If you pay your bills on time and have credit cards that you pay off every month, your credit score will likely get better over time. Conversely, if you don’t pay bills on time, you let a house go into foreclosure, or you stop paying your student loans, your credit score will suffer. With a bad credit score, any loans you do obtain will have high interest rates, costing you much more money in the long run.
Improve your credit score by:
- Pull your credit reports and go through them looking for any red marks for accounts that were paid late, settled, or not paid at all. Work with the companies to pay your bills or go through a process to dispute your bills at each of the three credit reporting bureaus. Get a free weekly report through April 2021 at annualcreditreport.com
- Pay your bills on time and if you do run late, call the customer service line and explain why you were late. See if they will take away the late marking for your payment so that your score does not drop. If you’ve had accounts referred to collections or have a history of paying late, your credit score will be negatively affected.
- Make sure your income to debt ratio is around 30-35%. Credit reporting agencies look at how “maxed out” you are to help determine your score. Having large amounts of debt and a low income is going to impact your credit score negatively. Paying down your debt will raise your score over time.
- If you only recently started to develop your credit, be sure to stay responsible with your monthly bills and make sure to have 1 credit card that you use and pay off monthly. Don’t cancel your oldest credit accounts to keep your rating going up. Your credit score takes into account how old your credit sources are and how long you have been responsible on an account
- According to a recent analysis by FICO, people with very high credit ratings had an average of three open credit card accounts. If you have 10 credit cards and multiple loan accounts, this may count against your credit rating.
Contact LawZebra Experienced Attorneys Today
If you need help making judgments about how to raise your credit score or determine if a proposed loan or mortgage is as good as it seems, schedule a consultation online or call (801) 820-9955 now.