Thursday, February 10, 2011, AM | Leave Comment
Most consumers when they get their credit card start charging everything to their card not realizing whether they would be able to pay it back within the due date. Many consumers just pay the minimum amount every month knowing fully well they would be paying the loan for many years to come. They seem to be lost about their finances. On top of that, they keep spending and charging to their card.
However, there are those who are in excellent credit standing. They have the best rates and other services available to them. Then there are those who pay a premium for their loans or worse don’t qualify at all and it’s all based on their credit report.
The 3 Cs for getting loan
Whenever you want to get a loan, the lender basically looks at three things: Credit, Character, and Collateral – the three Cs for securing loan.
It’s important to improve on all three Cs. They are all connected and are not mutually exclusive. One is dependent on the other, especially credit and character are well connected. Of the two, you can’t have one without the other.
Fixing and improving credit will prop up the perception of character and then overtime the collateral part will follow. The reality is that good and excellent credit score is achievable for everyone.
Taking steps to improve your credit score by improving your credit character and thereby reducing debt by anyone is truly commendable. It’s not easily attainable but can be definitely done if you make it a goal and take steps toward meeting it.
Your initiative and commitment to improving your credit score situation will open financial doors for you and will ultimately enhance not only your credit but your life as well. At a minimum, you would sleep better and would be more relaxed in life. Commitment with perseverance will do the trick.
When your credit is poor…
You feel bad overall in life when your credit report is worse than you expected. It creates guilt, shame and even depression. You keep getting reminded whichever lender you request the loan from and you are denied. Bad credit is like a wound that never heals by itself. It needs action on your part, serious effort to start improving your credit.
Go ahead and be ashamed of your never-ending spending spree. You kept using your credit card without realizing whether you were able to pay it. In your mind it was free money. Now it has haunted you and has followed you to your doorstep. There is no escape. Your credit score is almost non-existent in terms of getting new loan at any interest rate.
However, never ever be ashamed to seek help. The first thing to do is to seek help from yourself. Just stop buying. Stop your free-spending behavior. Think about tomorrow. If you died before tomorrow comes, it would still be not okay. Your bad credit would still follow you to your grave in the form of debt that you would leave behind. Your spouse and your kids might have to take the burden of paying your loan and with no fault of their own. Leave your finances in the black before you depart to your final destination.
When your credit is excellent…
You would be able to get loan at the lowest possible interest rate. With your excellent credit, lenders would look at you as someone with character, someone with integrity. They would think you are trustworthy in other aspects of life as well. You would create for yourself good standing in your neighborhood and in your community.
That’s a good feeling, ain’t it? Buying a house, a car, renovating your home will be within reach of your financial existence. Of course, your credit is excellent because you have been careful not to spend more than you make. You have enjoyed your money to your own advantage and not to the advantage of the lenders. Think about it. You have been saving and increasing your own buying power instead of filling up the lenders’ bellies with their high interest charges.
Debt consolidation and debt settlement…
If you see an advertisement anywhere or you are personally approached by some companies and show you greener pastures, they are not always truthful. Be careful and we wary of them. Some might cause you financial harm instead of genuinely helping you. They place their greed above the needs of the customers. Few truly understand credit repair or even care to understand it.
Credit-repair agencies are notoriously unreliable, will charge upfront fees regardless of whether your credit gets improved. They charge exuberant fees and make dubious claims that cannot be lived up to.
Helping yourself would insulate you from disreputable companies. There are companies claiming to be nonprofit but they are what is known as pseudo nonprofit and they exist only to make money off of the ignorance and misfortunes of others.