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A good credit score can help you with your financing options. A bad credit score often hurts you. Most people associate credit scores with interest rates, whether they be for mortgage payments or for credit cards. Lower credit scores are correlated with higher interest rates, resulting in higher payments. You’ll find yourself paying more than what you originally bargained for. However, did you know low credit scores can hurt you in other ways? Here are some other areas where you might want to keep an eye out.

Many car insurance companies are increasing their premiums for customers who have low credit scores. Their rationale is that if you have credit issues, you’ll probably have a lot of things on your mind, and thus you might be more prone to accidents as you’re driving. Makes some sense. Expect to pay between 205 and 50% more in car insurance premiums when compared to a driver who’s in good credit standing.

If you’re looking for a car loan, your credit score will determine what kind of financing options you’ll have. Similar to credit cards, car dealerships want somebody who’s credit worthy. They’ll want to stay away from those who might be a risk in defaulting on their car payments. To offset this risk, higher loan payments are asked of clients with low credit scores. The difference could be a couple hundred dollars.

If you’ve ever applied for a job, chances are you’re potential employer has asked to run a credit check on you before finalizing the hire. It’s a common practice today. A good credit score may be an indicator of responsibility, whether that be with finances or with personal matters. A bad credit score would signal otherwise, and may be a cause for concern as you might be distracted in your job because of other issues going on.

Many medical procedures can be financed due to their high costs. When doctors look at your credit, they want to determine whether or not you’ll be financially responsible enough to qualify for financial assistance and financing. If not, then expect to front the entire bill at the end.

http://www.bankrate.com/brm/news/debt/debtmanageguide/bad-hurts1.asp?caret=6a

1. Paying off debts will clean up my credit report
Your credit report is a snapshot of your credit history over a period of time. Just because you pay your bills on time for a brief period of time, that doesn’t mean you’ll have excellent credit. Creditors will look into your past as well, and any delinquencies will hurt your credit score.

2. Credit counseling adversely affects my credit score
Credit counseling should not be viewed as a negative thing. To some extent, it shows financial concern and responsibility. It shows that while you might have some financial difficulties, you’re willing to come forward to work out your credit issues. Most credit bureaus will not view this as a negative thing. If your accounts are delinquent, that’s bad. If they’re current and you’ve got a plan to pay off what you owe, that’s ok. Your FICO scores probably won’t be affected by it. However, some lenders do see and are discouraged by any references to credit counseling.

3. Limiting number of credit cards helps my credit score
The number of credit cards you have may actually help you. If you have credit cards that have been opened for a significant duration of time, this shows creditors that you have experience and history with credit; even though you may not use some of your credit cards. So don’t be so quick to cancel all your unused credit cards.

4. Too many inquiries hurts my credit score
This is another common credit myth. Of course too many inquiries looks bad. It causes concern because it presupposes you’re in need of a lot of credit; a sign of financial struggles. However, soft inquiries are actually ok and don’t affect your credit score. Hard inquires do negative affect your score, but if you have a batch of them together, let’s say over a period of 30 days, then they’re all grouped together. In most instances, batch inquiries over a short period of time indicate that you’re shopping for the same item, such as a car. You aren’t red-flagged as someone looking for multiple sources of credit.

5. Looking at my own credit report hurts my score
It’s actually encouraged for you to check on your credit report for any fraud and errors. Looking at your own credit report does not hurt your score. It’s a soft inquiry.

6. FICO scores are fixed for half a year
FICO scores are adjusted when anything is changed on your credit report. So whenever something’s added or taken away, your credit score is recalculated.

7. I don’t need to check my credit report
You should periodically check your credit report, even if you pay all your bills on time. Sometimes there are erroneous credit reporting. There’s also the possibility of credit theft and fraud. You should check for these instances and report them whenever such situations develop.

8. Credit reports are all the same
No, credit reports are not the same. There are three main credit bureaus in the U.S.: Experian, Equifax and Transunion. Each credit bureau has their particular model of reporting credit.

9. I don’t need to be concerned about my credit after a divorce
You should separate your joint credit accounts after your divorce. Contact your creditors and make sure everything’s divided appropriately.

10. My credit history will reset after seven years
This depends on the situation. For Chapter 13 bankruptcy, the debt disappears after seven years from the filing date. However, a Chapter 7 bankruptcy resets after 10 years.

11. I can have someone improve my credit
Not really. You can have credit reporting mistakes cleared up. Or you can pay whatever balances you owe. These procedures can help improve your credit. You can also have certain companies help file dispute letters on your behalf on certain credit report entries. Credit bureaus are required to verify these entries, and if they don’t the entry must come off. This works sometimes.

Summarized from Bankrate Article
http://www.bankrate.com/brm/news/debt/debtmanageguide/report-myths4.asp?caret=3d

Parking Tickets & Library Fines
Your local government may have started a process of reporting unpaid parking tickets and library fines to collection agencies in attempts to recover the outstanding amounts. When the collection agencies get involved, your credit score can be adversely affected.

Collections, Liens, and Judgments
You never want your debt to be referred to any collection agency. If you have a debt to pay, work with your creditors for some payment plan. It doesn’t matter how small the amount may be. These records stay in your credit history for as long as seven years and account for as much as 35% of your credit score.

Payments in Full
Believe it or not, paying your credit balances in full each month can have a negative impact on your credit score. So can having credit cards and not using them. Ten percent of your score is determined by the type of credit you have and 35% of your score is based on your payment history.

Too many Inquiries
Each time someone looks at your credit history, it’s recorded in your credit report for two years. Having too many of these credit inquiries is bad because it gives the perception that you need lots of credit. Finish all your comparison shopping, whether it be for a new car loan or a mortgage, within a short period of time. Limit that number. If you complete your comparison shopping in a 14 day period, it will count as just one inquiry.

Unpaid or Late Utility Bills
Utility companies such as your electric, gas, and phone companies, have become reporting delinquent bills to collection agencies. Once this happens, you’re credit score will take a hit. Work something out with your utility company if this case ever arises. Usually they’re pretty accommodating.

Consolidation of Credit Cards
Consolidating your credit cards may not always be a good idea. When you do this, you not only decrease the amount of total available credit you have, but you also increase the percentage of credit used in whichever credit card you’ve consolidated too. You want to keep the percentage of available credit high and your balances should be no more than 25%-30% of your credit limit for each card.

Closing Old Unused Credit Cards
The length of your credit history counts for 15% of your credit score. When you close old credit cards, that may hurt you because that decreases the percentage of available balances you have.

Bankruptcy & Foreclosures
These two events can kill your score, often dropping your credit as much as 200 points. Not only that, they stay on your record for 10 years. You’ll be looking to pay extremely high interest rates afterwards.

For full article, please refer to this link:
http://money.aol.com/creditdebt/little-known-things-that-hurt-your-credit-score

The U.S. government, through the Federal Trade Commission, has designated the site AnnualCreditReport.com for free credit reports. Consumers are entitled to one free credit report every 12 months under the Fair Credit Reporting Act. Consumers must use the link www.annualcreditreport.com to redeem their free credit report under the FTC.

Many credit bureaus also offer free credit reports and scores through various ongoing promotional activities. Consumers can go directly to these credit bureaus to get their free credit reports.

CreditReportCamp.com has conveniently complied and listed many of the popular credit bureaus that offer free credit reports. There you will find the profiles and services of the three major credit bureaus such as Equifax, Transunion and Experian. You’ll also find ConsumerInfo, Privacy Matters, and CreditCheck Total, TrueCredit products. The website is found at www.creditreportcamp.com

You can contact any of the three main credit bureaus to obtain your credit reports. The three consumer reporting agencies, Experian, Transunion, and Equifax, all have various ongoing promotions with their services.

You can find the links to many popular credit bureaus at CreditReportCamp.com

www.creditreportcamp.com

CreditReportCamp has conveniently compiled a list of credit reporting agencies and their services for you to compare.