The Big Move: Managing Your Credit Score

The following was written by local realtor Cathy Vingelli:

It’s always important to know what your credit score is, and not just for getting a mortgage or buying a new car.

Believe it or not, prospective employers are looking into job applicant financials prior to making a hiring decision. It’s a good idea to check your credit score annually, and you can do that for free at www.anualcreditreport.com.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

Your credit report shows your address, if you pay your bills in a timely manner, and whether you’ve been sued or have filed for bankruptcy. The credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, and buying or renting a home. It’s all there … you can’t hide!

Surprisingly, losing your job and living off your savings won’t affect your score — it’s how you handle your bills that will. And of course, staying out of trouble with the law will help tremendously.

Here are some things that most of us think will affect our credit scores, but actually won’t.

1. Not having a balance on your credit cards. If you used your credit cards and pay them off every month, it shows that you are a responsible person. It can affect your rating if you are always very close to your credit limit on your cards. While it’s likely that you are using the cards to pay off everything in order to get frequent flier miles, it can become a problem. If you don’t use credit cards at all, no one will know that you buy everything for cash, so that will have an effect on your credit.
2. Sometimes just talking to your debtor will keep late payments out of the credit report system. If you are late making a payment, but not on a regular basis, you can call customer service and sweet talk them.
3. If you don’t pay your property taxes, mortgage, or the IRS is after you, it will take a long time for it to affect your credit. Most likely, these problems will take awhile to actually show up on your credit score, so if you can take care of it, please do as quickly as possible and no one will be the wiser.
4. If you owe money to a small business, it’s likely that they don’t report to the credit bureaus. But, if your account goes into collection, it will be reported. So beware.
5. Lastly, if you are consistently late with your rent, it won’t affect your score. However, it will affect you when you go to rent a new place because your potential landlord will ask for references — particularly from your last landlord.

Do order a free credit report annually because quite often there are errors on it which you can take care of with diligence and a lot of phone calls and letter writing. It can be painful, but it can be well worth the hassle.

As always, feel free to send me any questions and I’ll address them in my next column.

Cathy Vingelli
Licensed Realtor
Hal Knopf Realty
cathyvinre6@verizon.net