debt

Don't be a credit killer!

You may not know it, but you could be perpetrating a violent crime ... against your credit. You may be a credit killer if you behave in ways that harm a valuable asset: your FICO credit score, a powerful three-digit number traditionally used by lenders to decide how much risk they're taking by doing business with you.

Fair Isaac Corp., the leading provider of credit scores and creator of the FICO score, suggests we think of the score as a snapshot of our credit standing at a particular point in time. The score incorporates information from creditors on the way consumers use their credit, and falls somewhere between a poor rating of 300 and an ideal rating of 850.

Many people become aware of the score's impact only after they've done something to mess it up.

John Ventura, a consumer bankruptcy attorney for 30 years and author of "The Credit Repair Kit," has witnessed many credit disasters. He says many people filing for bankruptcy don't know what numbers they need for a good or bad score.

Catherine Williams, vice president of financial literacy at Money Management International in Houston, discovered that nearly three-quarters of her firm's clients knew that they had the score, but didn't know what influenced it.

Credit killers revealed
Creditors and lenders constantly update credit information in your report, providing the opportunity to prevent and repair damage done by credit killers.

Credit killers
Many common behaviors slay your chances of getting a better FICO score. Here are six to look out for:

The Neglecter 
The Neglecter avoids reviewing the information used to determine his or her FICO credit score.

One in four credit reports contain errors that are serious enough to hurt a consumer's chances of getting an apartment, job, home or car loan, according to a study by U.S. PIRG, the federation of state Public Interest Research Groups.

Consumers often neglect their credit reports, but the information in the reports generates the FICO credit scores. The score is calculated from five categories: your payment history, amounts owed, length of credit history, new credit and types of credit used.

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Get free annual credit reports from each of the three major credit bureaus -- Equifax, Experian and TransUnion -- to prevent identity theft and avoid information mix-ups.

The Postponer 
The Postponer destroys credit by habitually paying bills late or by letting them become delinquent. One late payment may temporarily hurt your score, and a delinquent account may leave it impaired and haunt your credit file for seven years.

Payment history accounts for 35 percent of the credit score. Avoid being tardy on your payments by keeping a list of monthly and occasional bills. Set up reminders in a calendar. Schedule automatic payments and keep extra money in your checking account as padding against temporary shortfalls in your budget.

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