Having good credit can save you a lot of money in life and provide you with better opportunities than someone with bad credit. If you have good credit, you will probably receive lower interest rates on credit cards, mortgages and other loans.
Bad credit can get you rejected for a loan. Employers often run credit checks on applicants these days, especially for jobs in the financial industry and jobs that involve handling large amounts of cash. The following tips can help you establish and maintain good credit.
Can These Methods Guarantee to Improve My Credit Score?
Yes, these methods are guaranteed to improve your credit score rating. There are no gimmicks, no shortcuts, just tried and tested means that work. And they don’t cost you a thing!
There are companies who boast that they can get your score lowered for you, for a fee of course. Some question the methods those companies use though. They look for loopholes or fast-fixes that might come back and bite you.
Your credit score could actually end up being worse than it was! That won’t happen if you take the following safe, sensible, and certified steps to improve your credit score rating.
Getting a Credit Card
One of the least known ways of improving your credit score rating is to obtain a credit card if you haven’t got one. If you’re unable to qualify for a standard card because of an already low rating, you can apply for what is known as a secured card.
With this type of card, you simply deposit a set amount into an account and the bank issues you a card with an equal amount of “credit.” The amount on the card is secured by your deposit. Though it is not really credit, it gives you an opportunity to establish a new payment history which will increase your credit score.
Don’t max out your credit cards
One item an interested party will examine on your credit report is your credit utilization ratio. This is your total outstanding balances divided by your total credit card limits. Try to keep this lower than 30 percent. A high ration often indicates that somebody is living beyond their means.
Keeping Old Accounts Alive
Whenever you cancel a credit card it lowers your credit score rating automatically, regardless of the circumstances. It is better to keep those old accounts alive and use them occasionally for small purchases.
Make sure you charge only small amounts that allow you to pay the balance off regularly. Establishing a consistent record of regular payments can raise your score substantially in a relatively short period of time.
Staying Within Your Limit
This is a pretty obvious one, but not something that many credit card holders adhere to. Maxing out your card regularly seriously damages your credit score rating.
The best practice is to keep your balance at about thirty percent of the limit. If you need more credit than that, use a different card. It’s better for your credit score to have two cards with a balance of thirty percent than one with sixty or seventy.
Paying Bills on Time
This is another obvious way to keep your score up, but it’s not always easy to do. If you consistently pay your bills late though, you will do serious damage to your credit score. In fact, paying bills late has the biggest negative impact on your score.
If you do have difficulty making a payment or payments, it is always best to call the creditor and ask for time. Many are happy to do so, and it saves you the penalty of having your credit score rating lowered by being reported to the credit bureau.
Your timeliness when paying your credit card bills or other loans will show up on your credit report. Late payments usually lead to lower credit scores—especially if you have a lot of late payments and/or a few very late payments.
Clearing Up Old Disputes
You might have some credit disputes that you have already settled or even outright errors in your credit report. Many of us have been overcharged or wrongly billed for products or services.
Unfortunately, if we don’t make the effort to have them removed, nobody will! The credit bureau has no way of knowing that you settled the dispute or that you were wrongly charged unless you notify them.
Unfortunately, the process is a long one, and you must write the credit bureau a dispute letter. It is better to make the effort though than to have your credit score rating suffer unjustly.
Avoid foreclosures and repossessions
Either of these can happen if you stop paying on loans secured by the property. They do show up on your credit report and they will usually lower your credit score significantly. Do not allow your home to go into foreclosure or any of your property to be repossessed.
Don’t consign on a loan
If you cosign on a loan, it goes on your credit report and factors into your score. If somebody needs a cosigner, they probably have bad credit. You do not want somebody else’s financial habits to affect your credit.
A bankruptcy stays on your credit report for ten years. This is longer than loans, which stay on your report for seven years after the date of last activity. Getting a loan will be extremely difficult and will probably come with very high interest rates.
Check your credit report often
You are entitled to one free report a year from each of the big three credit bureaus—Experian, Equifax, and TransUnion. Your report can be obtained from www.annualcreditreport.com.
Make sure your report does not contain any errors that will damage your credit. If you find any errors, dispute them with the appropriate bureau.
Using the tips above, you can establish and maintain good credit. For more information, visit the blog at Checks Superstore personal checks.
Make That Credit Report Work For You
Unsecured loans. For many, that’s how you spell relief. When you have a tight budget, and an emergency expense comes into the picture, an unsecured loan can be just what’s needed. But how do you go about getting this type of loan?
Problem Associated With Bad Credit History
If you’ve got bad credit, it can be a little more complicated, since traditional lenders, like banks and credit unions, will check your credit history. For the traditional lender, this is because they know they have no other means of recovering the money if you default on the loan. Your credit score will tell these lenders whether you are “creditworthy.”
But you can apply for an unsecured loan from lenders who specialize in lending to those with bad credit. In order to qualify, you must be at least 18 years of age, and you must provide proof of identity, income, age, and residence. Some lenders only require that you provide proof of employment.
For those who need a fast loan but also want to repay it fast, there are payday loans. For this type of loan, you offer the lender a promise of payment, plus an often-hefty interest payment and sometimes fees, to be paid back upon your next pay period, hence the name. These loans can often be paid out to borrowers within an hour of application.
Loan and Mortgage for People with Bad Credit
You can find lenders who offer bad credit loans and payday loans in abundance online. But be aware that there are those who only seek to swindle those who are desperate for cash. When searching for the right loan for you, make sure you also remember to search for the right lender. Make sure you choose a legitimate and trustworthy lender to work with.
Once you’ve selected your lender, go ahead and ask for a copy of the contract, as well as rates and terms, so that you can review them carefully, and make sure you fully understand everything. You don’t want to sign up for a loan and later discover that you didn’t really know what you were getting yourself into. Make sure you understand before you sign.
But before you begin your search, take a look at your credit report, and make sure there are no errors or fraudulent entries.
If you find anything that’s questionable, you’ll want to get it taken care of before you apply for any type of loan – after all, no matter what type of loan you’re interested in, you can bet your credit report will have value. Make sure the value works for you, and not against you.
5 Ways To Ruin Your Credit Rating
Having a good credit score is one of the most important elements of your overall financial health. With a good credit score, you will be able to qualify for the lowest interest rates on most loan and credit cards.
With a poor credit score, you will either have a difficult time obtaining a loan or will end up spending far more on interest and origination fees, loans for people with bad credit are notoriously difficult to find and expensive.
While building a good credit score can take years to accomplish, a credit score can be ruined very quickly. Here are five easy ways to ruin your credit score;
Tip: If you want to build a good credit rating, don’t do these.
Pay your bills late
Your history of making loan and credit payments on time is one of the largest factors used when determining your credit score. If you are 30 or more days late on a loan payment even once, your score will be negatively impacted for years to come. Generally speaking, the later that you are on a loan payment, the more your score will be negatively impacted.
Fill up your credit cards
Your credit card utilization rate, which is your total credit card balances divided by credit limit, is the second largest factor in determining your credit rating.
Criteria vary, but in general, utilizing more than 25% of your credit limit can have a negative effect on your credit score. In particular, though, having long-standing debt (debt that is not paid off each month) can have the worst impact.
Apply for credit frequently
Every time you apply for credit your credit file will be marked, if you constantly apply for credit (particularly if you are rejected) your score will begin to decline rapidly.
Don’t use your credit
If you never open a credit card or personal loan, you will never be able to establish a credit history. Some people mistakenly think that not using credit is a good thing, but the reality is that using credit responsibly is the best way to get good credit.
Never look at your credit file
If you care about having a good credit rating you should make a habit of checking your credit report regularly (I would suggest at least three times per year). This can easily be done by taking advantage of the free credit report offers.
Those that do not review their report will never know what their score is, what factors are hurting their score and whether they were a victim of identity theft.
If you actually do care about your creditworthiness then consider using credit in moderation and make sure that you avoid doing anything silly like those things listed above. Simple huh?
Improving Credit Score is like Climbing Mt. Everest
Well, most of us have gone through this at some time or the other in life. I am talking about improving credit score. We all know it is a mammoth task but it is indeed doable. I for one recently went through tough times as I lost my job and had to live off my savings.
I couldn’t keep up for as long as my savings were dwindling fast. With bills mounting and credit cards completely used up, I had no option but to borrow.
Since my credit scores had taken a beating (with late payments & defaults) I was unable to get a personal loan or any other loan from a bank. Which lender will give me a loan when I am jobless?
That is when I thought of loans like payday loans, car title loans and so on. These carry heavy interest rates and the lenders simply fleece you. So I decided to tackle my credit score on a war footing. This is what I did:
Take help from family
First things first I approached my family for support. My mom was ready to help and so asked me to move in with her. What a relief to not pay lease rental. That is a blessing. Then I convinced dad that I need him to add me on his credit card so that I get his ‘good credit’ history.
Though dad was initially apprehensive (he was worried about what my siblings will say) I convinced him that I am not going to use his card. The ‘add on’ card arrived helping me to improve my score.
Here I would like to mention that except your spouse anybody else can give an ‘add on’ card, whose credit history will be reflected in your report.
Go in for secured loans
Since my car was title free I thought I’ll take car title loan and pay off my dues. Though the interest rate is high I thought it is only temporary and took the loan to finish off my dues.
Once I closed my default accounts with this money, my credit score went another notch up. Now I was eligible for unsecured loans.
Get on to the online bandwagon
This was the best thing that happened to me. I got on to internet marketing and learned all about search engine optimization and backlinks. Today I am able to work online at several market places where I get freelancing jobs.
I also sell products and promote websites as an affiliate. Initially, the income was nominal around a couple of hundred dollars but within three months I built up my portfolio and here I am earning a cool $1000. This gave me hope to pursue and I am sure to reach a minimum of $5000 within six months.
Now that I have a decent income I closed my car title loan. I am debt free at last. I decided to find a small place nearer to mom’s place so that I can be of help to her.
After all, she is not growing younger anymore. With no debt and a great job, I regained my life back. Improving credit score requires patience and practice. I felt exhilarated and wonderful as if I had climbed Mount. Everest. Indeed it is!
Read also: How You Can Improve Your Bad Credit Status?