Tip #55: Follow up on closed accounts
You closed a store card years ago - but is it still listed as an open account? Bureaucratic mix-ups happen, often quite frequently. If you want to keep your credit score good, you need to follow up on financial details.
Whenever you close an account - whether it’s a credit account, bank account, or utility company account, make sure that you get written confirmation that the account is closed and paid in full and then follow up a few months later with the company to confirm the closed account. This simple precaution can save you hours of frustration - not to mention a lowered credit score.
Tip #56: Don’t move around a lot
Lenders like to see stability - it suggests stability in financial matters as well as in your life, and makes you a better credit risk. Plus, every time you move, you may have to change your credit information - including switching banks. This actually negatively affects your credit score by not allowing you to develop long-term relationships with lenders.
Remember: Your current and past addresses are listed on your credit report even if they do not directly affect your credit score. Any lender looking at your full credit report will be pleased to see that you create a stable life for yourself. Not moving too frequently can also save you money on moving costs, which can add up quite quickly.
Tip #57: Don’t change jobs frequently
Of course, there will be times when you will have to change jobs. However, avoiding changing jobs unnecessarily will help improve your credit score by allowing you to stay in one place and build a steady financial situation.
Your credit report also shows your current and past jobs - if a lender sees that you change jobs frequently, he or she may wonder whether you have the life stability required to handle debt responsibilities. Also, the lender cannot see why you left a job. If there are many employers listed on your credit report, the lender may wonder whether you have not been fired from jobs and whether that is an indication that you will be unable to pay your debts due to unemployment at some point in the future.
A lender makes their money by the interest charged on a loan. If you default on a loan, you cause the lender to lose money. Above all, the lender wants to see evidence in your credit record that you have the traits that will make you repay the loan - with interest.
Frequent job changes may indicate - to some lenders - that you will simply disappear with the money or default on a loan. Having a stable life - including a longer-term job and one place of residence - may indicate to lenders, on the other hand, that you are building up roots in a place and so will be unlikely to move and default.
Tip #58: Avoid changing switching credit companies and credit accounts a lot
Credit companies will often offer you special introductory rates, generous free gifts or other incentives to switch companies. However, you should resist the temptation unless you have a reasonable reason to switch. Establishing a good credit relationship with one company - having one credit card from your college days, for example - is a good way to show lenders that you are a steady sort of person who is likely to take money matters seriously. That is exactly what lenders want to see. Switching accounts and lenders makes you appear fickle and less than reliable.