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Everyone knows the fact that having a good credit score is as important as saving money in the bank. Let’s face it, you will need this when you mortgage a house, loan a car or address life’s “financial emergencies”. Sadly, not everybody managed to maintain their good credit standing. They lost track of their expenses along the way and woke up one day with a bad credit score. Hence, it pays to be vigilant in keeping your credit at bay. A wise consumer knows when to have a debt and how to pay it as scheduled.

Reviewing your credit report annually is a good practice that you should follow. Remember that credit report is different from a credit score that you can get from banks ( e.g Citi, Discover, Chase, etc. ). Credit scores can be your source of a shorthand evaluation of your creditworthiness. If you can’t get it from your bank, you can turn online. One of them is CafeCredit.com. Here, you can have free credit score comparison and check out what works best for you.

Meanwhile, credit reports can be obtained through Experian, Equifax and TransUnion. And don’t worry; this can be availed for free. However, it can be such a challenge to obtain an optimal credit score if you are getting inaccurate reports. Try to stagger your credit reports in different dates of the year so you can check inaccuracies, inconsistencies and even fraudulent credit or identification theft.

There are major improvements in the credit scoring these days. Borrowers need not fret whether the score they are getting are the ones used by their lenders. Some major lenders are now using industry-only FICO Score Open Access Program. FICO breaks down its scoring using these stats. They take 35% on your payment history, 30% on your amount owed, 15% on the length of credit history, 10% for new credits and another 10% on your credit used.

Other than checking credit scores and reports, it is equally important to be mindful on your bills payment. Paying on time shows you to be a responsible borrower. Most of all; make sure that borrow an amount below your credit limit. Having an outstanding balance of 30% or less than the credit limit allowed will prove you to be a good creditor. In fact, some lenders will ask their banks to increase their credit limit while they keeping their credit low and pay them on time. This way, they maintain a good credit record.