Five Practices That Hurt Your Credit Score

Image via WikipediaPresent times have put a great deal on credit scores. Know what practices to avoid so that your credit score would remain in good standing.

Our present society operates on credit. People are encouraged to lead a consumerist life despite the absence of actual money. Credit cards and loans have been available for anyone who wants to make purchases, large or small, in exchange of a promise to return what he or she would owe. Needless to say, words written on paper and signatures are not enough to serve as basis for allowing someone to borrow money. Credit scores are then devised to reflect a person’s creditworthiness. In the world of credit, it has become a significant determining factor in assessing if a person can repay the debt, what type of debt the applicant would qualify for, and on what percentage of interest the debt should operate. Credit scores should be kept in good standing to elicit trust from creditors.
Given that credit scores are important, you should make it a point to keep you credit standing in good and favorable condition. You should be aware of the practices that may hurt your credit score, as well as your finances.
1. Making late payments. One of the important components of your credit score is payment history. Your creditors look at this part of your score to know if you have been a responsible payer with your past financial obligations. You should avoid paying after the due date because missing payments can harm your score drastically.
2. Using 50 to 80 percent of your available credit. It is ideal that you only avail of 25 to 30 percent of your total allowed credit. It is better to have two or three cards with small balances than using one card up to its maximum limit.
3. Filing for bankruptcy. If you are overwhelmed with debt and you are struggling to pay them off, bankruptcy should be your last option. It can severely damage your credit score for years, as well as limit your employment opportunities and endanger your assets. If you really want to get rid of your debt, you may consider debt relief programs such as debt settlement and consolidation. This may affect your score to some extent but you can recover faster than when you file for bankruptcy.
4. Applying for multiple credit cards and loans. The number of inquiries that appear on your credit report may be regarded by creditors as a negative implication because it can indicate your critical financial situation. Your inquiries may be read as need for money or financial struggle.
5. Ignoring your debts. Some people think that ignoring their financial obligations will make their problems go away when in fact, this worsens the situation. As long as you disregard the notifications and creditor calls and not take action, interest and penalty charges add up to your principal debt and your credit score suffers. If you cannot handle your debts on your own, look into the available debt relief program that offer assistance in debt management. These solutions may somewhat harm your score but they may help you get out of debt faster. The sooner you clear up your debts, the better for your credit standing.

Despite the weight of credit scores in our present economy, you can resort to using cash and not opting for credit. However, maintaining good credit scores may be of great use if you plan to purchase a home or a vehicle. Keeping your credit score in a satisfactory condition also reflects your character, trustworthiness, and financial responsibility.

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Stock Carnival Ecstasy - October 18, 2011

Image by Getty Images via @daylife

Welcome to the October 18, 2011 edition of Stock Carnival Ecstasy.In this edition we have 20 articles from some of the best financial blogs on the Internet. Mike Piper takes a look at Vanguard’s New LifeStrategy Funds. Charles Chua C K has a great post on Ways to Determine the Worth of a Stock. We have an HELE Earnings Preview from Doug. And finally SteveR presents The Pitfalls Of Doing Your Own Taxes, which includes missing the extension deadline which occurred yesterday. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back soon.

Gordan Smith presents 10 Most Useless Statistics in Professional Sports posted at Internet Provider, saying, "We sports fans love our statistics, don’t we? Get a group of us together and the numbers just start flying. That’s because nothing conveys an understanding of, an abiding reverence for, and an unassailable expertise in, our favorite athletic pastimes than quoting lots of stats."

Everything Finance presents Visa Black Card Review posted at Everything Finance, saying, "The Visa Black Card is a unique card made of carbon, not plastic, that touts impressive benefits for its members, but also carries hefty fees. This card is available for a limited number of members (1% of the American population) and may be a good fit for those who travel frequently and are looking for travel perks."

Sandra Adams presents Historically Low Interest Rates? Not For Consumer Credit posted at Credit Cards for No Credit, saying, "The Federal Reserve Board has promised that interest rates near zero will remain in place through this year and next. Yet consumer credit card interest rates are still usurious. For an economy struggling to free itself from a balance sheet recession and based in large part on consumer purchases, a focus on lowering consumers’ debt burdens by lowering the interest rate paid on consumer debt instead of focusing on the overnight funds rate makes sense."

Michael Donelly presents It’s not Expensive to Prevent Burglary posted at www.anotherway.org, saying, "There are certain cases in which being frugal might actually cost a lot. And one of these cases is related to home security. Hoping that burglary won’t happen is not going to protect you against one of the most common crimes."

other

Mike Piper presents Evaluating Vanguard’s New LifeStrategy Funds posted at The Oblivious Investor, saying, "Vanguard recently announced major changes to their "LifeStrategy" funds. Are the changes positive? And what type of investors should be considering these funds?"

Shoeboxpublish presents The Short Selling of America posted at DCTrader, saying, "The repeal of a little known trading rule back in July of 2007, is shown to be the primary cause for the stock markets extreme volitility in the past few years. Wild swings of 300 or more points have become common place. This article explores why that is, and why stability will not be returned to the markets or the economy - until this little known trading rule is reinstated."

Nathan Richardson presents Benefits and Drawbacks of Credit Score Monitoring posted at Deals & Tips, saying, "For roughly $15-$20 per month, consumers will receive information from the credit bureau monitoring their score showing any changes to that score - is that fee worth it?"

Mark Roberts presents What You Should Know About Federal Income Tax posted at Tax Brackets, saying, "This weeks blog post is a guide on federal income tax. We highlight what income is federally taxed and what deductions you can claim."

stocks

Charles Chua C K presents 7 Effective Ways to Determine the Worth of a Stock posted at All About Living with Life.

Doug presents HELE Earnings Preview, Part 1 - the Kaz Impact posted at The Strategic Investor, saying, "Earnings preview of a deep value consumer staples company. The company reports earnings on Thursday. Part two is already published."

Frank presents Best Swing Trading Indicators | Leaked Stock Trading Tips posted at Leaked Stock Trading Tips.

Nesher presents How TheStreet helps you to become better investor? posted at Internet Stock Trading for Beginners.

John Border presents Gold Stocks List posted at Stock Market Basics, saying, "Gold stocks are a must in your portfolio and these definitely serve as proxy for holding the gold in physical form and help you gain from price rise of gold."

Dividend Growth Investor presents Ten Top High Dividend Growth Stocks for Long Term Returns posted at Dividend Growth Investor, saying, "Dividend Growth Stocks are one of the best kept secret in the investing world. After all, these are high quality companies which have strong competitive advantages that allow them to generate rising earnings over time. As a result, most of these companies generate so much in excess cash flow, that they are able to pay a higher dividend over time without sacrificing long term growth."

The DIV-Net presents Two Industrials Catching My Eye posted at The DIV-Net, saying, "I'm a huge believer in investing in dividend growth stocks. In fact, I'm such a huge believer that I'm going to be investing the majority of my net income into such stocks every single month for the next 11 years."

tips

Paul Stogner presents What is a Good Credit Score? posted at Credit Cards Truthiness, saying, "The majority of the general public doesn’t understand how their credit score is calculated, much less what a good credit score is. Generally speaking, one has to establish a record of timely payments and available credit to increase their score."

Jennifer Hill presents Effectively Balancing Income and Expenses posted at How Does Rent To Own Work?, saying, "When balancing your income and expenses becomes difficult, you will first need to decide to live frugally. This means you need to take control of your finances and learn how to organize them to make you successful."

Deborah Brown presents Frugal Living posted at First Credit Card, saying, "Frugal living doesn’t just consist of the decisions you make before a trip to the grocery store; it is a daily choice that makes up the lifestyle a frugal shopper must live by. There are so many ways you can save money with a slight change in your shopping habits."

Linda Rodriguez presents Jury Bias in East Texas Green Patent Litigation posted at Credit Cards for Fair Credit, saying, "The Eastern District of Texas is known as a great venue for plaintiffs in patent litigation. It has it all. The district has judges who know the issues, rules and courts that get cases to resolve quickly, juries who give out large plaintiffs’ verdicts, and a reputation that increases the risk on the defendants and encourages settlements. But there may be an underlying bias against green technology that may make this venue less appealing for green patent litigation."

SteveR presents The Pitfalls Of Doing Your Own Taxes posted at 2010Taxes, saying, "Doing all your own taxes might seem like an easy enough thing to tug off. You recently draw W-2 form, make the numbers and you really are good to go. However, there are often more to making your taxes than just simple math, and in many cases that could be hard to practise for some people."

That concludes this edition. Submit your blog article to the next edition of stock carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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