Declare War On Credit Cards » Credit Score

Don’t Take Debt To Improve Credit Score

Capt. Credit — Tue, 02 Jan 2007 20:57:51 +0000

If you take on debt, make at least your minimum monthly payments, you will improve your credit score. A lender’s best friend is someone who will borrow money at a high interest rate and then demonstrate the ability to continue to make payments on that debt. I’m not disputing that taking on debt and making payments will improve your score, what I’m saying is that you shouldn’t take on debt because you want to improve your score.

I’ve heard more than a comfortable number of people claim that they should take on some sort of debt in order to improve their score. The reason why this is a preposterous reason for taking on debt is because it’s very difficult to quantify the value of your score in any real terms and thus it makes absolutely no sense to pay anything to improve your score, above and beyond smart and time-tested credit score improvement tips (not to be reckless with your credit, pay your bills on time, don’t binge on credit cards).

Sure, if you have a mortgage or you’re buying a car, making regular payments on those loans will improve your score but don’t spend money on a credit card so you can make minimum payments on a debt that is charging you 20% interest each year. That just doesn’t make much sense.

Review Your Credit Report & Credit Score

Capt. Credit — Thu, 30 Nov 2006 23:48:14 +0000

One thing you should always be cognizant of, when it comes to credit cards, is your credit history report and your credit score. Those two things combined will dictate what offers you will receive in the mail and what cards you’ll be able to apply for and be accepted. See, the catch-22 when it comes to credit cards and lending in general is that the credit card companies will only lend you money when you don’t need it. Someone who is desperate for credit won’t get as good an offer as someone who isn’t looking for another card… it’s a paradox but it’s the truth.

So, how does your credit history factor in? The better your history, the better your score. The better your score, the better your offers. If you want to try your hand at 0% balance transfer arbitrage, you’ll definitely need a good to excellent credit history and score. Now, how do you do that? It takes good behavior and a bit of diligence, check your score three times a year via AnnualCreditReport.com. You will be able to check your history at the credit bureaus (Experian, Equifax, and TransUnion) once a year and so if you stagger your checks, you’ll be able to get a pretty good view of your report three times a year.

Canceling Credit Cards Hurt Your Credit Score

Capt. Credit — Fri, 24 Nov 2006 22:15:52 +0000

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