Consumer credit tips

Too often, consumers think about their credit score and credit rating too late. But monitoring your credit and working to improve your credit score can be one of the smartest ways to make sure you're getting the lowest interest rates possible for Maine auto loans. Your credit score will impact not only your auto loan and mortgage, but also other daily-life factors such as auto insurance premiums. To keep your score low, be sure to follow these tips:

• Get your score now: The only way to begin the process of monitoring your credit is to assess where it is currently. Most lenders regard scores of 720 or higher as "excellent." Scores can range from 300 to 850; the higher your score, the better off you will be.
• Review your credit report: Look over your current credit report. Verify that the loans and accounts listed are current and correct - you don't want a closed account listed as "active" because it could count against your score. If you notice any errors or discrepancies, be sure to notify the credit bureau immediately.
• Pay your bills on time: One of the fastest and easiest ways to raise your credit score is to pay your bills on time. According to FICO, the entity that generates your credit score, your payment history will affect 35 percent of your score. This means that prompt payments help you - and late payments can hurt you.
• Pay down your balances: The balances you carry - whether it's on a credit card or a mortgage - also affect your score. Pay down the balances on your credit cards. If you have an $8,000 balance on a card that has a $10,000 limit, it could hurt your score - but an $8,000 balance on a card that has $25,000 available isn't nearly as costly. The proportion of debt available to actual debt is crucial to your score.
• Only open accounts when you need them: This is particularly true for credit cards. New accounts can hurt your score, particularly if you're repeatedly opening and closing accounts. FICO likes it when you open an account and keep it for several years.
• Call your creditors if you're in trouble: Because 35 percent of your score is based on your payment history, you don't want to miss a payment. If you are unable to make a payment, be sure to call your lender or creditor. You can come up with an arrangement to make a payment late, or through installments, and still remain in good standing. This will be an easier favor for your creditor to grant if you have a strong payment history.
• Borrow what you need - not what you want: If your available credit and balances are too high, your credit score can suffer. Borrow only what you can afford. This includes splurge purchases on a credit card and auto loan for a luxury vehicle. Live within your means, so you can enjoy luxuries at lower costs later in life.