When It Comes To Credit Score, Maybe You Want A Credit Card.

Check Your Credit At Least 1x Year

I sat down the other day with one of our local lenders* and we were chatting about Credit Scores. This lender said something to me that I think is worth sharing.  He said that a person who has say an installment loan only and no credit cards (or revolving credit), even though that person makes his/her payments on time, the credit score will tend to stay at the same level as they are not charging and paying things off.  While the installment loan is good and they are paying it on time, a good credit report is going to show activity, and that if you don't have a credit card or some kind of revolving credit, you might want to get one and use it once in awhile (and of course pay it off as well).  Doing so demonstrates (through your credit score moving) that you are buying things on credit and you are paying for them in a responsible manner thereby helping your credit score move up. 

"Optimally, for the best scores, you want to see 5 credit cards with less than say 25 % of the balance used, an installment loan/s, and all paid on time for at least 18 months.  A credit score of 640 plus works for Government purchase loans FHA etc, and larger down payment conventional loans.  But a score of 680 opens more doors, and a credit score of  720 + opens all the doors.  Higher the score, lower the rate."

Then he shared an interesting article that I want to pass on to you.  The following link is to a very good CNN article that talks about Credit Score Killers -  If you or anyone you know is trying to improve their credit or may be looking at a large purchase (such as a home) coming up, you want to ensure that your Credit Score in on track.  
http://money.cnn.com/2013/08/19/pf/credit-score-killers/index.html .

You probably already know that you can request a copy of your credit report from each of the Reporting Agency's for free every 12 months. They 3 Big Reporting Agency's are: TransUnion - Experian and Equifax -  you can contact them directly or you can go MYFICO.com and request a copy. There are other "Free" credit report  ".com" places you can go, but keep in mind if they charge you a $1.00, you'll be signed up for a free trial for a credit tracking membership - just make sure if you don't want this membership that after you get a copy of your report that you call and cancel that trial membership.

Improving your credit or maintaining a good credit rating really isn't that difficult, it just requires diligence and taking responsibility for what you buy. Talk to your Local Lender or Mortgage person for more information.

*The local lender I reference above is James Swartzbaugh /Merrimack Mortgage
New Hampshire and Maine Licensed Loan Originator - NMLS #255001