Financial Independence Debt Solutions – Part 3

January 14th, 2008 | Stacey | Debt Management, Financial Freedom, Financial Independence

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Our financial independence series presents practical debt solutions and little-known information about your credit that can help you reach your economic goals. Instead of spending your life paying interest, pay off your debts so you can finally make your money work for you instead of working so hard for your money.

If you are looking to lower your ratio of debt versus your available credit limits to boost your credit score, there is something you should be aware of. Certain credit card companies do not report total available credit limits to the credit bureaus that ultimately determine your credit rating because legally speaking, they really do not have to. Reporting your debt ratio to the credit bureaus is voluntary and your creditors can decide which information they want to report and which they will withhold.

With this in mind, your credit score may be negatively impacted when creditors do not report your total credit limit. What usually occurs is the credit bureau lists your credit limit as the highest balance ever carried on the card, which can make your card look maxed out if you carry approximately the same balance each month. The only way to know is to order a free copy of your credit report and to check. You may prefer to deal with creditors who report debt ratio or discuss the situation with your current creditors to improve your overall credit rating.

Tomorrow we will discuss other ways to improve your credit and get more cash for the financial independence you desire.