Maintaining Your New GIN Credit File

Great, You Now Have a New Lease on Life, So How Do You Maintain This Great Gift?

A credit score reflects credit payment patterns over time, with more emphasis on recent information. You can sign up for credit monitoring service to read a summary of what goes into your credit score.

• Pay your bills on time. Delinquent payments and collections can have a major negative impact on a credit score.
• Keep balances low on credit cards and other “revolving credit.” High outstanding debt can affect a credit score.
• Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score.
• Pay off debt rather than moving it around. Also, don’t close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may lower your credit score.

Pay Your Bills on Time (and other important tips)

Paying your bills on time is the most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you should:

• Minimize outstanding debt- Optimally You Should Only Use a Max of 30% of Your Credit Line
• Avoid overextending yourself
• Refrain from applying for credit needlessly

Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt. It may be to your advantage to use the credit you already have to prove your ongoing ability to manage credit responsibly.

It Takes Time to Improve Credit Scores

If you have negative information on your credit report, such as late payments, a public record item (e.g., evictions) or too many inquiries, you may want to pay your bills and wait. Time is your ally in improving your credit scores.

How Changes Affect Scores

One common question involves understanding how very specific actions will affect a credit score. For example, will closing two of your revolving accounts improve your credit score?

• No, but paying down your debt on that card under 30% of the Total Credit Line will AND Keeping the Lines Open

Simply closing two accounts not only lowers the number of open revolving accounts (which generally will improve credit scores), but it also decreases the total amount of available credit. That results in a higher utilization rate, also called the balance-to-limit ratio (which generally lowers scores).

One change actually affects many items on the credit report. It is impossible to provide a completely accurate assessment of how one specific action will affect a person’s credit score. This is why the credit risk factors provided with your score are important. They identify what elements from your credit history are having the greatest impact so that you can take appropriate action.

How Long Does It Take to Build a Credit Score?

You build your credit history, which then is reflected by your credit score. The length of time to rebuild your credit history after a negative change depends on the reasons behind the change.

• With No Negative Items, Your Score Will Generate Soon as You Pay Your First Credit Card Bill
• With No Negative Items, Your Score Generated Will Be a 700/+ Score On Your Credit
• With No Negative Utilization of Your New Credit, Your Score Will Maintain or Just Getter Better From There (30% of Your Credit Line Usage)