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Quick Tips for Healthy Credit in 2015:

The “DO’s”

1. Do pay your bills on time.

2. Do keep credit cards balances low (try to keep balances under 1/3 of your current credit limit.

3. Do pay off debt rather than opening and moving balances between credit cards.

4. Do apply and open new credit cards (ONLY when NEEDED).

5. Do check your credit report at least once a year for accuracy and completeness of information.

THE “DON’Ts”

1. Do NOT max your credit cards.

2. Do NOT miss a credit card payment. Missing a payment because you forgot not only impacts your credit score negatively, but also can affect your interest rate for that card.

3. Do NOT have your credit report pulled multiple times within a short period. Go prepared and know where you stand when you are looking to purchase something on credit.

Paying Collection Accounts

Believe it or not, it may be counterproductive to pay off an old debt. Under The Fair Credit Reporting Act, negative defaults such as collections are removed from your report after 7 years. Making a payment on an old debt, say from 5 years ago, re-ages that debt and makes it current. Again, this is noted on your file and has a negative impact on your score, causing it to fall. Before taking a course of action to make payment on an old debt, consult a professional. Re-aging old information can have a huge negative impact on your credit score.

Personal Information

Hard to believe in this day and age that clerical errors or omissions can exist. Computers running sophisticated programs are only as reliable as the care and attention to detail by those inputting the data. Off shore 3rd party suppliers and busy local data entry people do make mistakes. Incorrect personal information can lower your credit score.

Credit reports continue to be plagued by inaccurate information and errors. As a matter of fact, it has been estimated that millions and millions of Americans are victims of human error that has a negative effect on their credit score.

Legislation tabled in The Fair Credit Reporting Act, allows consumers to take action against Credit Reporting Agencies(CRA’s) in order to correct inaccuracies reported on their file. Disputes are identified by a standard code of 2 or 3 digit coding system that has to be entered on the consumers file. This process takes time and costs the CRA’s money every time a dispute is filed. Therefore, to combat that loss of profit, the CRA’s have outsourced this procedure to foreign workers, some making as little as 57 cents an hour.

What’s not on your FICO Score?

Although a FICO score on your credit report has many considerations that are used to determine your credit worthiness, there are many personal items they ignore. U.S. Law prohibits consideration of the following when determining your credit score.

Marital status, national origin, gender, race, religion, the color of your skin, receipt of public assistance, these have no place in the determination of your credit score.

While other scores might, FICO does not consider your age as a factor. Similarly, employment history, employer, date employed, title, your salary and occupation are not used. However it is worth noting that lenders may consider this information as part of their scrutiny.