Credit+and+Debt


 * CREDIT & DEBT**

How do you maintain creditworthiness, borrow at favorable terms and manage debt?


 * //__Ways to Improve Your Credit Score__//**

Your __//**Credit Score**//__ is divided into five different categories:
 * 1) Payment History-35%
 * 2) Total Amounts Owed-30%
 * 3) Length of Credit History-15%
 * 4) New Credit-10%
 * 5) Type of Credit In Use-10%

__To Improve Your Credit Score you can__


 * __//**Make Your Payments On Time:**//__

Payment history is the largest factor that is used to determine your credit score. Payments that are 30 days or more past due will show up on your credit report and negatively impact your score.


 * __//**Keep Your Total Debt Load Under Control:**//__

With the second largest factor of your credit score being the total amount you owe, it is important to keep borrowing under control. If you currently have a significant amount of outstanding debt, your priority should be to stop borrowing and work toward lowering the balance.


 * __//**Keep Old Accounts Open:**//__

While you want to keep the total number of accounts manageable, sometimes it can hurt your score more to close an old account than to keep it open, even if that means you have more open accounts.


 * **//__Be Careful When Opening New Accounts:__//**

While __//**New Credit**//__ is the least important factor in your score, it is still an important factor.You don't want you're report to show you are constantly looking for credit.You also don't want to open new accounts you don't intend to use. It may be tempting to get that 10% off when you open that new retail store card, but the little bit of money you save may be very significant when multiple new accounts such as these actually lower your credit score.


 * __//Breaking the Minimum Payment Habit on your Credit Card//__**

One of the most costly mistakes you can make with credit cards is getting into the habit of only paying the minimum amount due each month. While the minimum amount is affordable, it will cost more money overall.

__**How the Minimum Payment is Calculated**__

Each card can use a different calculation, but they all use a certain percentage of the balance as a primary factor. It could be as low as 1% or upwards of 4-5% of the balance.

__**Putting the Plan Into Action**__

Minimum payments are low and it can free up cash flow for other financial areas of your finances. Paying the minimum can be very costly which is unfortunate. Even a really low balance can cost you more in interest and takes over decade to repay. Compound this problem with multiple credit cards and higher balances and you can see why it is so difficult to get out of debt. To combat this problem you need to pay more than the minimum each time, even if it is only a little bit extra.

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