Protecting Your Credit

Many customers are asking me how they can protect their credit ratings to ensure they will be able to get good rates when and if they decide to refinance in the future, or need to take out an equity loan in the future.

One of the best things you can do is to live within your means. This means not running up credit cards debts, and putting off unnecessary purchases until you have the funds to make the purchase. Yes, this is an old-fashioned way of thinking, but one that makes a lot of sense. It can also help you better manage your money, and keep your credit rating intact.

My mother used to save money in envelopes in her drawer - one envelope for Christmas gifts, one for this, one for that. Everytime she got paid, she put a few dollars into each envelope until she had enough money to make the purchases.

With the holidays approaching, many people are getting ready for all of the gift purchasing they want to do. So how you do you get through the holidays without running up debt? Well, some stores, like Kmart, offer Layaway so you can pick out all of your holiday gifts while they're in stock and available, and then pay for them every two weeks until Christmas. Layaway is certainly an old idea whose time has come back. No credit card debt, and no interest paid out.

Make your payments on time. This is so important. Don't let yourself fall into bad habits of making late payments.

If you're having trouble making payments, call the creditor immediately. Don't wait or them to call you because you're late. Most banks, credit cards and mortgage companies want to work with you to make sure they get their money, so talk to them the minute you think you can't make a payment. And don't be afraid to call again and again if things don't get better. Let them know and ask them to help you. You'll be surprised how willing they are to help.

Don't cancel unused credit cards. Your credit rating is a complicated equation, but one aspect of it is the amount of open credit you have available.

These few tips can help you protect your credit rating, and keep you financially safer. And remember, you can get a free copy of your credit report every year, so make sure to get yours and check it for accuracy!

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