Saturday, July 18, 2015, AM | 1 Comment
Having good credit can be sexy. Learn how you can make your credit as attractive as you possibly can. It allows you to purchase a nice home, car, vacation, clothing and a whole lot of everyday life things that usually have some kind of sex appeal to many folks.
When your finances are in order, you have no stress in your financial life and that’s a great feeling. Even your sex life gets better and you sleep better at night.
Being able to pay the bills on time require dedication in your everyday life. The most important thing you can do in your finance handling is to spend less than you make. That’s the magic to personal finances.
Everyone has to straighten up his or her financial life. Being in debt can be quite stressful. Stress can even kill you. Before it kills you, it can negatively impact your eating habits. You start binging on junk food all the time. You start drinking heavily. Your credit does not look sexy any more.
Financial worries can affect your work adversely. It can cost you better raise, bonus, or other perks. But to lead a financial life with no stress, you must first have to get out of debt. To use credit smartly and efficiently, you must first understand what credit is.
Everyone has Credit History or Rating
First of all, keep in mind that these days everyone has some kind of credit history and rating even if you never carried a credit card or got a loan. In case you don’t have credit history at all, that is in itself credit history as well but your score is zero. In other words, “You ain’t got no credit history at all.”
However, when you do have credit history – good or bad, it has been compiled, over the years, in reports made by credit bureaus and provided to lenders, landlords, and utility and other similar companies.
Read fine Print…
When you are filling out application form for whatever credit or loan you are applying for – may that be mortgage, credit card or personal loan, read the fine print. You would find that it gives the lender permission to check your credit history.
The lender requests a credit report from one of the big three credit bureaus. These credit companies keep record on everyone in the form of a credit score. The lender looks at your credit score and decides whether to extend the credit to you and at what interest rate.
Of course lenders also look at your total outstanding debt, your minimum monthly payments. They also look at your credit limits to see how much you can borrow.
Basically lenders are concerned with your record delinquencies and how best you have been paying back your loan. They then calculate your risk factor for the new loan and accordingly can accept or reject your application. If they accept your application for the loan, based on your risk factor, they then decide on the interest rate they would charge you.
Your present zero credit history can be due to lack of it. In other words, you either have never tried to establish credit history or you just recently declared bankruptcy.
My nephew is a new immigrant to the United States. In order to establish a credit history, I suggested he should apply for a secured credit card which he did. Slowly and gradually, he will be able to establish good credit history, thereby receiving a good credit score. Mind you! It doesn’t happen overnight. It takes time.
In a Nutshell
This blog and a bunch of others have excellent advice how to improve your credit, how best to avoid debt and similar such articles. Read those articles and benefit from them by taking action. Take a moment to see what’s out there before you start working with your creditors.