friday::FINANCE

TIP::Know how your financial choices will affect your credit, and make responsible decisions based on your personal situation.

The best way to maintain a good credit report is obvious - keep current on all your payments and never spend more money than you have.

But what are some other things that affect your credit score?

With so many tips circulating out there, it can be hard to find what really works. Aside from the basics, maintaining or raising your score can be tricky. The answers aren't “one size fits all”, but here are a few guidelines to keep in mind. Most of these pointers come from the FTC website (http://www.ftc.gov/bcp/menus/consumer/credit.shtm) so if you want to learn more, check it out.

1. Keep track of how many lines of credit you have. Access to a lot of credit raises your balance-to-credit ratio which helps you look more responsible, but it also raises questions about how you plan to use your credit in the future. On the flip side, canceling a line of credit (even if it is all paid up) lowers your balance-to-credit ratio. So evaluate your situation and weigh the consequences before canceling a credit line.
2. Always make your payments on time. If you can pay off your entire balance every month, even better.
3. In most cases it's best to maintain credit card accounts for as long as possible. Credit checkers want to know how loyal you are. If you have more cards than you think is best, cancel the in-store cards (i.e. Express, JC Penny’s etc.) first and keep the card you use the most on a regular basis. Also, look at the credit limit you have on each account. The higher the limit, the more valuable the card is to your credit score. Instead of canceling a card, you may want to just cut it up and let it become inactive on its own. (Make sure you only do this with cards that do not have an annual fee.)
4. Keep your balance low. It's good to pay a portion of your balance off weekly or at least twice a month. Doing this keeps the ratio of your balance-to-available-credit low, something lenders like to see.
5. Finally, pay off all debt as quickly as you prudently can. The lower your outstanding debt, the higher your credit score.

Remember money is a talent we all have, let’s seek to use it wisely and to the glory of God.

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