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?

How can credit scores impact your dating life, marriage or divorce? Part 3 of 4: Divorced? How do you build your credit?

Part 3 of 4:  Divorced?  How do you build your credit?

Your credit score is based on several different factors and these things can impact your score:

• Late payments - late payments will negatively impact your score, typically the late payment needs to be 30 days or more late to impact your score, but why risk it;
• High balances - a high balance in your bank account is good, a high balance on your credit card?  Not so good.  Pay down your cards, starting with the card with the highest interest rate or the highest balance;
• Utilization of credit - maxed out cards will impact your score negatively; 
• Opening new accounts all at once - What about that new cell phone account you have to open to separate your account from your Ex-spouse?  The cell phone company will run your score before they open the account and that will impact your score too;
• Debt to income ratio, how much debt you carry verses how much income you earn will impact your score;
• Length of credit history - old credit cards are good credit cards (years of consistent payments are a good thing).  If you have a hard time controlling your spending don't call and cancel the account.  Cut up the card or freeze it in a block of ice to prevent you from using it as closing an account that you've had forever will shorten your credit history.

Next I will provide more credit building tips and mistakes to avoid.

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

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