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Steps To Building Good Credit
a good credit score is a vital asset for your financial present and future. to a large extent, your credit standing determines what opportunities are open to you, especially as it concerns finances. therefore, the importance of building a good credit rating cannot be over emphasized. its a thing you really can take to the bank.
there are several steps you must follow and some rules you will have to adhere to if you sincerely want a good credit standing. however, after establishing your credit worthiness, you will find that it was worth the stress.
debt is one monster that pulls down your credit and destroys your credit history. it does more harm than is generally acknowledged. the first step in building a good credit rating is always to cut down on debts as much as possible. it is recommended that you keep your total short term debts e.g. credit card balances, large telephone bills, installment loans etc. at a total of not more than 20% of your total income. this will make it easier to pay off the debts, without missing payments or defaulting. it also creates a very low debt profile that looks very good on your credit report.
another strong point you can make while building good credit is a solid income history. maintaining a good record with banks and other creditors will also go a long way in portraying you as credit worthy.
a secured credit card is another tool you will find useful in your quest for a solid credit standing. with secured credit cards you have to maintain a minimum deposit in your account. the attached credit line is always a percentage of the minimum deposit. this serves several purposes and is very useful in building a good credit rating. a secured credit card ensures that you dont over spend or accumulate unhealthy debts. it creates financial discipline in you that is essential in maintaining a good credit history. you wont need to bother about secured cards, it is not in any way different from regular cards and no one will know you have a secured card unless you tell them.
to build good credit, it is also useful to get national or local retailers card. it is always easy to win credit from retailers and once you have established a good track record with a retailer, you could use the reference to boost your credit and also to secure additional credit from others. you will find it quite easy to establish a good record with retailers and will also be pleasantly surprised at the positive influence it can have on your credit rating.
apart from retailers cards and others, it will also help to open a checking account when building your credit. when potential lenders check your credit with your bank, they, most often, only learn about your initial deposit. it makes sense, therefore to open your checking account with a large initial deposit, as much as you can afford. it is also reasonable to keep the account balanced and active and to ensure that you do not overdraw the account. just like repairing bad credit, building a good credit rating requires time and a lot of financial discipline, but in the end, you will be proud of what you have achieved.
michael russell
your independent guide to finance
article source: http://ezinearticles.com/?expert=michael_russell
Credit Repair, Doing it Yourself
we all know what bad credit can do to our ability to get financial help when it is needed the most. although, it is a part of life, things do get out of hand; missing payments and piling up debts; we dont always control everything that happens to us in life. but that does not make bad credit less damaging, anyway. bad credit could readily make a bad situation worse. it prevents you from getting loans, financial help or credit cards, or makes you pay neck-breaking interests on loans. since we all will need credit someday, the earlier you start doing something about that bad credit, the better. it sure will be no good to pay off debts just before requesting credit, because most lenders are more interested in your financial history.
it may not be so easy to repair bad credit, but there are steps you can take to make the whole process easier. so, when you find yourself in such a situation, the following advice could be of great help.
i think the first port of call should be the credit bureaus responsible for providing credit reports in your locality or country. each country has established credit bureaus with the task of monitoring your credit performance, as reported by financial institutions and you can always get your credit report from these bureaus, free or for a fee, depending on your country. if there is more than one established bureau, you may want to get each bodys version of your report. it affords you the privilege of comparing the different versions. the reason why the reports may differ is that they are prepared based on the information supplied to the bureaus and it is possible they get different information about your accounts from different reporters.
once you have the reports, scour them for errors. dont be surprised to find mistakes or negative comments that are not true in your reports, it happens. you will also want to take note of credits that have been cleared but are still showing in your report, or accounts you cannot remember opening. fraudsters do open accounts in peoples names only to clear out the credit when the attached credit line gets reasonable. these are all very bad for your credit rating. you may also find scathing negative comments in your report. for a start, you will need to clear all these anomalies. get accounts that are not yours removed from your credit report. talk to creditors who are reporting negative comments about you or still showing bad debts that have been paid. you may be pleasantly surprised at how many creditors are willing to cooperate once you have explained your situation. the bottom line is communication. talk to creditors; explain the situations you are facing. people cant help you if you dont tell them what you are experiencing. besides, you can file a dispute, if you are sure some negative comments or bad debts are not supposed to be on your credit and the creditor dont want to cooperate, especially when you have documents to back up your claims.
there are times when the scathing comments on your report are indeed true. however, if your account is in a good condition now, you could still talk with the creditors and arrange to get the comments removed from your report. your credit report will look better with fewer of those negative comments. another factor that needs to be considered is the amount of debts hanging round your neck. too much debt, definitely, spells pending financial crisis and a low credit rating. lenders will be reluctant to grants loans or credit lines, if your report shows significant debts, even if you have re-paid most of the debts. too much debt is a sign of financial recklessness, it does a heck of a lot of damage to your credit rating. the ugliest side of the story is that you will be required to pay higher interest rates for loans if your credit is bad, to cover the risk of lending you money. it is wise a idea to keep debts less than 30% of your limits and to pay off debts with the highest interests rates first.
just as too many accounts will pull down your credit, too few accounts may also be harmful. if you dont have enough established accounts, your credit may be poorer than it should be. adding departmental store or gas cards account that are in good standing to your credit report will surely boost your credit standing. another idea is to get a loan or credit card and buy something you know you can pay for quickly. re-paying debts on small loans or credit card purchases quickly will speed up your chances of repairing bad credit.
bad credit is not a thing to get over with in a hurry. it takes time and requires patience. take your time, clear your debts gradually beginning with those with the highest interests rates. your seriousness in dealing with past debts could impress lenders and show them you are financially serious and reliable. whatever you do, remember that you are affecting your financial future.
michael russell
your independent guide to finance
article source: http://ezinearticles.com/?expert=michael_russell
When and How to Transfer Credit Card Balances
having multiple credit cards can end up being both somewhat of a blessing and somewhat of a curse. in most cases, it ends up that the cards with the highest interest rates are the ones that carry the largest balances while the ones with the lowest interest rates are the ones that go unused much of the time. luckily, many cards allow for the balance of one to be transferred to and from other cards to make keeping your finances under control much easier than it might seem at first.
the information provided below should help you to learn more about the process of transferring balances from one card to another and assist you in making the decision as to whether or not you should transfer your balances.
defining balance transfers
balance transfers are simply the movement of all or part of the balance of one credit card to another, usually from a card with a higher interest rate or a card that is near the credit limit to one that has a lower interest rate or that is nearly or completely paid off. this allows you to avoid going over credit limits, gives cards that have been used a lot a little more use before having to begin paying down the balance, and helps you to avoid paying the higher interest rates on older cards.
how balances are transferred
the actual act of transferring a balance is relatively simple? the amount that is being transferred is charged to the card that the balance is being transferred to, and the corresponding amount is credited to the card that the balance is being transferred from. some cards allow a transfer to be credited as a payment, whereas others do not? make sure that you know whether your cards allow this or not before assuming that the transfer will count as the payment that is due on your card.
the best time to transfer balances
often the best time to transfer balances from one card to another is before the next months balance and payment has been figured, because the lower the balance that you carry on higher-interest cards then the less interest will be charged to the card as a result. transferring balances during promotional interest periods can also be good, allowing you to pay a much lower interest rate on the transferred balance and giving you more time to pay down the balance before the greater interest rate comes into effect.
saving money with balance transfers
one of the main advantages of balance transfers is that you can often save quite a bit of money when transferring the balances to a card with a lower interest rate. balance transfers can help you to avoid fines associated with going over your credit limit, and by using a bit of common sense you should be able to keep your credit card debts under control and transfer the appropriate balances to enable to pay off your outstanding balances more quickly and for the lowest interest rates possible.
balance transfers with new cards
when applying for a new credit card, many cards will allow you to transfer the balance from older cards as a part of the application process. this can be especially useful when done with cards that offer a low fixed rate for an introductory period, because you should be able to make quite a bit of headway in paying off the older balances at the much lower rate. use caution, however, or you may end up with a new card thats mostly full when it reverts to its standard rate.
you may freely reprint this article provided the following authors biography (including the live url link) remains intact:
about the author
john mussi is the founder of direct online loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
article source: http://ezinearticles.com/?expert=john_mussi
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