How can credit scores impact your dating life, marriage or divorce? Part 4 of 4: Credit Building Tips and Mistakes

How can credit scores impact your dating life, marriage or divorce?  Part 4 of 4:  Credit Building Tips and Mistakes

Some tips on how to build credit: 

• Get cards in your name, after about a year call and ask for an increase in credit, not to use, just to have and to increase your income to debt ratio.

• Attack your credit cards or loans with the smallest first because it feels so good to have a zero balance and it will encourage you to keep attacking your debt.  Use a company like zendough.com or creditkarma.com to track how paying down your debt is increasing your credit score, it’s like a game! 

• Have diverse loans:  credit cards, mortgage, student loans, and car.  Though you can reach a high credit score with credit cards and student loans alone, eventually you may need to make a large purchase (like a home or a car) and the loan company would like to see that you can handle something more substantial than a just the monthly minimum on your credit card.

Some mistakes to avoid:  

• If you have a spending problem, don’t cancel all your cards, this will negatively impact your score (cut the cards up if you have to in order to avoid charging or freeze them in water in your freezer, it’s hard to swipe a block of ice);

• Do not transfer your entire credit card balance to a 0% card and max that card out.  Use less than 50% of the max credit on your cards.  If you have a $10,000 limit you want to have a balance of less than $5,000.  In addition, if you continuously open new credit cards with a zero percent interest rate offer and transfer your balances this can negatively impact your score.  Though this can be a good debt pay down strategy be aware of how this will impact your score and curb this behavior before you try to buy a car or a home; and

• Limit the number of credit inquires per year this includes running your credit report, opening new accounts of any kind (car loan, credit cards, mortgage, cell phone, etc.). 

When all else fails and repairing your credit before making a large purchase is not an option or the hole is too big to climb out, here is a great article on the impact of credit damage and how there is actually a way to quantify the damage: http://www.familylawyermagazine.com/articles/credit-damage

My next blog will touch on the process of changing your name after divorce and what a pain in the a$$ it is.

Have questions call or email me:
732-545-4717 x 3859
jmazur@hoaglandlongo.com

All Four Parts of How Can Credit Scores Impact Your Dating Life, Marriage or Divorce?