It’s very obvious that we now live in a credit world. There are lots of banking institutions offering different forms of credit from credit card to personal loans. The amount of people with credit cards is rising very fast. Apart from that, lots of people can hardly do without credit.
Because of lack of enough financial education and discipline on the part of most of these consumers they often find themselves in bad credit situations like court judgement, bankruptcy, and loan default which often make it difficult for them to get any credit at all in future. You may now want to ask – what exactly is credit?
Credit means that you are getting a service or cash grant to use for your own purpose. You are often bound with a contract or agreement to repay in future as agreed with lender or service provider. Credit exists in different forms like loan, mortgage, or credit card.
Before you can get credit from any financial institution or lending agency, they will first check your credit history. If you have default on loan before or have bad credit history you will find it almost difficult to get credit any time you apply for it.
However, it’s possible for you to improve your credit history or build a new good credit history by repairing your credit, thus re-establishing your credit-worthiness. This process is called credit repair. It’s the process in which consumers with unfavorable credit histories attempt to re-establish their credit-worthiness.
Though there are lots of credit repair companies nowadays that promises repairing your credit for you, if you can follow simple guide, it’s very possible for you to do it yourself – afterall it’s your credit.
If you repair your credit it will make it easy for you to get low interest credit, car or home loans. However, with poor credit rating you may not be able to get loan or be subjected to high interest rates and several other unnecessary conditions. So it’s very important that you repair your credit if you have bad credit. You will get lots of tips on how to do this easily in this book.
Credit rating: - how you are scored.
Getting approval for any type of loan depends on your credit rating. If you have average credit rating, you will find it almost impossible to get approved. It’s possible to get good rating or even improve you credit rating. Most companies almost use same rating system and if you are able to know more about it you should be able to have better credit score.
Your age is the first factor which it’s almost impossible to do anything about. Yes it’s possible to lie, but don’t because it will make things more difficult for you in future if the creditor get to know. If you are between 24 to 64 years of age you will get one point. Any age bellow or above that will score you zero point.
If you are married you have chance of adding extra point to your score. If not, you still score zero as most creditors see you as a higher risk. Also if you have no dependant you will score zero. But if you have between one to three you will add to your points. Here is how it works – if you have no dependant creditors believe you can skip town and not pay off your credit.
Creditors will also want to know more about your root. They will want to know where you live. Owning a home with a big fat mortgage or even without mortgage will give you more points. How long you stay in your present or previous residence also adds more points to your score. If you’ve move so often you will score zero point. However, if you’ve stayed up to 5 years before moving, you will surely get more point. It shows you are a good risk to them.
Other factors that will add to your point are your years on job (the longer the better), kind of job, your monthly income, present debt status, previous credit history and your saving or checking account.
You credit score is usually rate between 350 and 850. The lower your score the more difficult it will be to get loan. Scoring 800 or above should be goal of every consumer. Bellow is list of short tips on how to achieve 800 credit score or above.
Limit the number of credit card you sign up for at a time. The more card you carry the debt will have to live with. If one card is not enough for you make sure you don’t sign up for more that three cards. Also make sure that you don’t go out with more than one card in your pocket. That way you will limit your purchases when you are outside.
Make sure that you make your payment on time, if possible before the end of grace period if it’s part of the service. Late payment will affect your credit score adversely.
Whenever you want to apply for credit make sure that you don’t apply for too much credit often. Credit reporting agency may score you low as it means that you can’t live without credit.
Another thing that reporting agency consider in scoring you is outstanding balance on your credit account. If you are the type of consumer that often exceeds their limit you are risking your credit score. So make sure you don’t exceed 30-35% of your available credit. It doesn’t make sense financially to always spend all your credit at a time.Grab Your credit report here:
Your credits score - how you can improve it. Your credit score is a very important in any financial transaction that you make or intend making in future. So it’s good you know what exactly your score is, understand its meaning and learn how you can improve it if it’s not good enough.
If you have ever borrow money or utilized credit before it has a score that reflects how well you handle the credit giving to you in the past. The credit score is determine by amount of credit you have, how much money you owe and whether you made payments on time or not.
Your credit score serves as predictor of how likely you are to repay any credit giving to you to your would be creditor or lender. If you usually make payments on time you will surely have good credit history and it will make it easy for you to get loan from banks or credit unions.
Otherwise, you will find it difficult to get any institution for that matter to trust you. If that’s your case – it don’t have to be the end of the road. In this article you will learn about what you can do to improve your credit score.Make sure you pay your bills on time. Failure to do this will have negative impact on your credit score. Make sure you always meet up with the minimum monthly payment on your card if you can’t always pay the balances of your credit card each month. Make sure that you don’t exceed your monthly limit. If you can keep to 50% of your limit or less it’s better. Make sure you do away with account you don’t use most especially accounts with high annual fees and high interest rates.
Credit report – its effect on your personal credit Lots of people have been denied loan, credit card or other form of credit because of wrong information the lenders find in their credit report. Before banks or any other financial institution grant your application for loan they will first find out about your credit history from bureau by requesting for your credit report.
Credit report is a compilation of your credit history, past financial transactions and personal information possible. This report is usually compiled by accredited agencies known as credit reporting agency.
Credit reporting agencies are organizations that help credit card companies, loan companies, banks, and departmental stores in the country to ascertain the credit worthiness of their would be clients. They provide these companies information about those who are good credit risk and those who are not.
They receive most information about consumers from loan companies, credit card companies, banks, credit and lending sources. In this report you will their will be information on your occupation, place of employment, residence record, court and arrest records, income status, details on payment of your past and present bills and loans.
Once they have detail information from these sources, they give it to any organizations in need of it when requested. Though they keep on file information concerning you and your credit, they don’t make final judgments as to your credit worthiness. The decision is up to the credit card companies or any lender which you are dealing with.
The credit score is used by banks, credit card companies, loan lenders and other financial companies to determine your credit worthiness. As a matter of fact, most lenders often based their charges on information in your credit report. Also, some employers often consider few information in your credit report before they employ you. If you have severe financial problems some will find it difficult to employ you.
Whenever you apply for new credit card, loan or any form of credit from any sources lenders will base their acceptance or rejection of your application on your personal credit report. If your credit report shows you’ve been reliable in the past, then you will most likely get the credit card or loan you apply for.
However, if you have in one way or the other defaulted on particular account or you were constantly late in making payments, it will likely be impossible for you to get the credit you applied for.
While compiling your report the agency or financial institution that’s giving them the information may make mistake and give inaccurate information about your credit. If you did not dispute this error and demand necessary changes, they will leave it in your report. You can imagine the possible effects on your life in future. Because of this, it’s very important that you check your report at least once a year
In other to be able to check your report for possible inaccurate information you have to request for a copy of your report. You can get a copy of this report from credit bureau because it’s your personal credit file and you have absolute right to know what is in it.
You have right to know exact information they are giving out concerning your name and credit worthiness. If the report is not good enough or you can proof to yourself that it’s all about your past, you can change it. You can build your new credit worthiness. It’s possible.Grab Your credit report here:
Your personal credit report: - how you can correct errors. People that compile your personal credit reports are human be like me and you, they can make mistake while compiling your reports from various sources. Thus, requesting for a copy of your report often is very important. It will allow you to know what they compile about you. You will be able to discover unfavorable information, request for corrections before they started spreading non-accurate information about you.
When you get a copy of your personal report, determine the status of your credit file. Study the information in it very well and attempt to remove all unfavorable information in it. All your credit history may not be contained in one file from a firm. So if possible get from other firms too. Some information may be duplicated, or not included in the other file.
You need to note of your full name, social security number, current and previous addresses, spouse’s name, and date of birth and make sure that they are correct because they are points used in identifying you. Also, make sure that merchants name, credit account number, date opened, date closed, high credit limit, highest amount of credit used, and repayment history are correct, current and accurate.
After studying the file carefully if you notice any error, write out exact error and the way you think it should be listed. You will find a space on the right-hand side of your report where you may protest any item in your report that you feel incorrect. You will have to attach photocopies along with pertinent information to proof your claim and send it to bureau by mail. When the bureau gets your message they will investigate and send you result of their investigation. You will have to exercise patience during this period because it may take bureau some time to complete their investigation.
The fact that the agency that compiles or can compile information about you is not one will make it almost impossible for you not to encounter problem in future. When you apply for credit in bank, stores or any lending company you may be denied. This does not mean the agency you filed errors on your reports with haven’t make changes, it’s likely that the bank or store you are trying to deal with have another report about you, possibly from another agency.
So anytime that you are denied credit, you have the right to know why you were turned down! If the bank or stores used a credit report agency, they must provide you with the name and address of the agency that supplied them with the report.
Once you have the contact information of the agency involved, you should make an appointment to visit the credit agency, so that you can review your report, find out information that is causing you to be denied credit, and make corrections if you have enough evidence to proof.
When you are visiting the agency make sure that you present yourself very well. You must dress modestly as your appearance will surely tell the agency staff more about you. If possible take a friend along with you to be a witness to whatever it’s said. You have to be very careful when you get to be bureau, don’t let the representative of the credit bureau confuse you with unnecessary terms or even upset you in any way. If there is anything you don’t understand, ask to have it explained again.
Don’t be afraid to demand explanation where you feel the agency is wrong. If there is any information in the report that is not true, point it out, and have it investigated by the agency. Once the agency correct the error you have right to demand that the bureau send correct copies of your report to all creditors who have received the incorrect reports before.
Credit Repair Company: - a blessing or a course. Credit repair companies are businesses outfits that offers debit consolidation loans, debt counseling, or debt reorganization plans that guaranteed to stop creditor’s collection effort. One thing you have to know is that these companies are established to also make money so you need to be very careful when dealing with this people.
Though, if you are having trouble paying your bills, you may be tempted to turn to one of this companies that claims to offer assistance in solving your problem. Before you sign up with any of credit Repair Company you have to investigate them thoroughly. You have to really understand the services the business provides and what it will cost you before signing up with them. Make sure they have a written contract in place as well.
Most often the consumers that engage the services of most of this business do end up getting more problems. So it’s very important that you check office of Better Business Bureau to be sure the company is not in problem already. If there has been a complaint about this company its better you do away with them.
Businesses offering credit repair services may charge substantial fees or a percentage of your debts and fail to deliver. Apart from that their fee will even add up to your debt making it more difficult for consumer to get out of debt. Though it’s through that debt problem can be distressing, but you have to be careful when selecting a solution. Some solution providers don’t do other things to add to your problem.Check out this reputable debt consolidation and debt relief option: http://www.DebtReductionnow.info/AmeriDebtRelief.php CHAPTER SEVEN Absolute truth about credit repair companies
Despite the fact that U.S Government make it very clear that nobody can repair your credit except you, the credit repair companies keeps growing in number very blessed day. They will promise you heaven and earth just for you to buy their service.
One very important thing most people that are still taking the service of the credit repair companies don’t understand is that government’s advices are often based on advices of experts. They charge upfront fees, maintenance fees, and monthly fees, all of which you are supposed to place in a trust account.
Why should you in first place pay somebody to help you fix your credit, when it’s obvious that most of their results are often temporary? You will end up losing more money.
When you use the service of credit repair companies to fix your bad credit you will be forced to share your personal information with them before they can do anything about your credit. The meaning is that you are liable to identity theft and unwanted mailings you did not solicit for from other companies trying to sell you something.
The whole truth is that you can do what most of these companies do, if you care to know how to do it. All most of them do is to write letters to credit bureaus, listing few information that are false in your credit report. When credit bureau get the information from repair company the will start investigating it.
They will remove the information temporarily during this period, thus giving you clean credit report. Since this report is temporary, if credit bureaus are able to proof their previous action right they will add it back to your report again. So if all you need is a temporary clean credit report, why not do it yourself instead of paying somebody to do it for you. It’s obvious, nobody remove negative information that’s accurate from your credit report.Since you have legal right to obtain and dispute a copy of your credit report if there is any error in it, you can improve your credit more effectively on your own.
Credit cards: - types and what you need to know about them. Nowadays, everybody wants to have at least a credit card. Everywhere you go you see adverts from various banks and other financial institution offering you credit card. However, before you apply for a credit card, there are several factors you need to consider. So it’s very important that you know more about the types of cards available, and one that will work best for you.
Secured credit card: - Secured credit cards are types of card that requires a security deposit as collateral before you can get approval. Its type of card that best suit the need of people with no or poor credit who are trying to build their credit history. Your collateral must be equal or greater in value of the credit amount you are applying for.
It can be anything of high monetary value like boat, jewelry, shares, house etc. Just like any other cards, you have to make sure that you study the terms and conditions associated with this card very well before taking the card. It’s even very important in this case when you are building your credit history.
Business credit cards: - These are the card that’s available for business owners, directors and business executives. They come with several features just like any traditional credit cards. You have to consider the terms and condition for these types of cards too before applying.
Student credit cards are another type of credit card specifically for students. These types of cards are made for students because of their lack of credit history, and if given chance they can build their credit history with such card.
Prepaid credit cards are set of cards that are just acceptable wherever the traditional credit cards are acceptable, but they are not credit card. You will have to always transfer money to your card before you can make use of the card and you may not be able to spend more than you prepaid for the card.
Presently this is almost the best card for people that want to avoid interest and other fees charged on traditional credit card. However, other little charges like monthly fees, application, overlimit and ATM fees are still applicable.
Whichever card you decide to choose make sure that you go over the terms applicable very well to avoid putting yourself in financial bondage. In second part of this article we will continue looking at other types of credit card.
Balance credit cards are unsecured standard cards designed to allow consumers to save money in interest charges by transferring higher interest credit card balance onto a lower interest rate credit card.
Low interest credit cards are other types of non secured standard credit card. They offer either low introductory APR that change to a higher rate after a certain period of time or a low fixed rate. You can take advantage of the low introductory APRs to make larger purchases for now and pay them off several months later.
Air Mile Credit cards are cards that are good for people that travel frequently or planning to go on vacation. It’s a form of reward card that allow you opportunity of obtaining a free airline ticket. You will need to accumulate specified air miles before you can be entitled to free ticket. All accumulated mile points will be based on dollar amount of your credit card purchases over a period of time based on predetermined point level.Specialty credit cards are other set of standard non-secure cards designed specifically for individual business users and students with unique and special needs.
Make sure that you study the terms of any of the card that you pick very well to avoid risking your credit rating. Also, when you pick any of the reward cards make sure you study the forms and offers very well because credit card issuing companies do offer different reward programs and their promotional offers often change. So make sure you thoroughly look over the card’s terms and conditions of each specific card before applying.
Shopping for new Credit Card: - Important tips to consider. When you are ready to take a new credit card there are lots of factors you need to consider. Among these factors is a credit card term. You need to choose the plan terms that best fit and suit your financial needs. You need to consider plan terms like free period or grace period, annual percentage rate (APR), annual membership or participation fee, transaction fee among others.
It’s very important that you understand each of the credit card plan terms before you accept the card to avoid putting yourself in financial bondage. For example if your issuing company did not give free period and you are unable to pay on time your account will be charged and it will ends up adding to your debt.
There are several cases of card theft in recent days so it’s advisable that you keep your card very well to avoid unauthorized use. Also don’t give away your card information where you aren’t feeling secure. Another way to avoid lost or unauthorized use of your card is to only carry the card you think you will use. And in case of lost of your card you need to call issuer and inform them of the lost quickly. So keeping separate records of each of your account number, expiration date and issuer contact information is very important as well.
It’s very important that you reconciliate your account when you get statement of account from your card issuer. In other to reconcile your account successfully you need to keep record of receipts where possible and personal note where you don’t have receipt. Most likely you will discover errors which could have been added to your statement without you noticing it.Keeping the above tips in mind will help you while shopping for new card and using it as well.
Do’s and don’t of credit card game. Credit card companies are established to make money from the service they are rendering for their customers. Though they are always happy if their clients have good credit rating, but they are not always happy when you pay off their credit card balance each month. Their wish is that you always carry balance every month so that they can charge interest on your account. Because of this reason they are responding by becoming more creative at finding ways to make money off you.
So there is need for you to be a smart customer so that you did not fall victim as it can end up affecting your credit rating. In this article we will look at few ways you can escape their financial trap.
Make sure you read information you get from your card issuing company. Read every form you get from potential card company. Also, make sure you study the bill and every other information you get from your credit card company over time because they can change their terms of your card agreement with as little as 15 days. And if you are careless to take note of this it may end up affecting your credit.
Make sure you avoid late payment of your fees. If you make late payment you can be subjected to larger balance on your account and your card issuing company may hike your interest rate as a result of this.
Avoid carrying balance every month because you will end up paying far more than you should for everything you charge to your card. Make sure you pay for everything your charge within the grace period, if there is any and you will not fall victim of high interest rate. Failure to do this will lead to accumulation of debt, which will end up spoiling your credit report if you are not careful.
If you are not feeling comfortable with the service you are getting from your issuing company or any of their terms – make sure you complaint. Don’t die in silence. Because of the competition most of this companies are facing they will be forced to answer your complaint, and as a matter of fact make adjustment where possible. For example if you’ve been getting high interest fee you can have it lowered by just making your request to your issuing company.
You are free to shop around when you are thinking of getting a new card. Why should you be forced to one company you don’t feel you are comfortable with when there are lots of them out there. Shop around – you can get whatever you want.
You can get interest rate you want, grace period or even a card without annual fee charge. So go out there, compare the rates, and terms of several cards before you make your choice. The choice you make today will surely determine your credit report tomorrow somehow.
Most card holders are careless when it comes to checking their credit report with the credit bureau or agencies involved. If you pay your balance on time and don’t ca