To improve your credit rating, you need to avoid taking excessive credit. Having many lines of credit or several huge debts will make you a worse credit risk because you are close to overextending your credit. This simply means that you may be taking on more credit than you can comfortably pay off. Even if you are making payments regularly now on existing bills, lenders know that you will have a harder time paying off your bills if your debt load grows too much.
The higher your debts the greater your monthly debt payments and so the higher the risk that you will eventually be able to repay your debts. Plus, statistical studies have shown that those with high debt loads have the hardest time financially when faced with a crisis such as a divorce, unemployment, or sudden illness.
Lenders (and credit bureaus who calculate your credit score) know that the more debt you have the greater problems you will have in case you do run into a life crisis.
Great resources on credit score repair
In order to have a great credit score , avoid taking out excessive credit. You should stick to one or two credit cards and one or two other major debts (car loan, mortgage) in order to have the best credit rating. Do not apply for every new credit line or credit card “just in case.” Borrow only when you need it and make sure to make payments on your debts on time.
You should also know that taking out lots of new credit accounts in a relatively short period of time will cause your credit score to nosedive because it will look as though you are being financially irresponsible.
Friday, August 27, 2010
Monday, August 23, 2010
Understanding Your Score to boost it
To boost your credit score you need to understand what a credit score is?
We all need to get some credit at some points in our life, so we need to familiarize ourselves with this. A credit score is a score on your financial history that lets people or organizations who want to lend you money know how much of a credit risk you are. It is not only your lenders that should be interested in your score; you should be interested too, because this will guide you in making some decisions in your finances. When you understand this, then you will be able to effectively make decisions that will affect your score positively and in turn the way lenders view you. If you also do not understand what your credit score is all about, you can get ripped off by companies that will claim they can help you while they really cannot.
Your credit score tells lenders how well you are paying off your debts. The higher your score, the better credit risk you will make and the more likely you will be given credit at better rates.
Your credit score is obtained from your credit report which contains a history of your past debts and repayments. This score is arrived at by some mathematical calculations from your credit report.This credit report scores are handled by a credit bureau.
How is a credit score generated?
A credit score is generated with software. Each credit bureau has a different way of computing a credit score. The math used by the software is based on research and comparative mathematics. This is an important and simple concept that can help you understand how to boost your credit score. In simple terms, what this means is that your credit score is in a way calculated on the same principles as your insurance premiums. Your insurance company determines your premium based on certain indices like your health, your lifestyle and so on, the more risky your lifestyle is, the heavier the premium you pay. For e.g. if you smoke, you are susceptible to lung problems, hence you will be expected to pay a higher premium than someone who lives a healthier lifestyle and has longer span of life to pay which makes him pay smaller amounts for premium. This is just the same principle in your credit score, if you are not able to pay your debts, you have a poor credit score and this poor credit score means you have many debts , thus you are expected to pay higher rates to cover the risk the lender has on you.
With this information, you now know that you should work towards being a person that pays off his debt immediately they arise, do not let your debts pile up. When you pay up your debts regularly, it will definitely improve your scores and your chances of getting a credit and at affordable great rates.
See more resources on credit repair.
We all need to get some credit at some points in our life, so we need to familiarize ourselves with this. A credit score is a score on your financial history that lets people or organizations who want to lend you money know how much of a credit risk you are. It is not only your lenders that should be interested in your score; you should be interested too, because this will guide you in making some decisions in your finances. When you understand this, then you will be able to effectively make decisions that will affect your score positively and in turn the way lenders view you. If you also do not understand what your credit score is all about, you can get ripped off by companies that will claim they can help you while they really cannot.
Your credit score tells lenders how well you are paying off your debts. The higher your score, the better credit risk you will make and the more likely you will be given credit at better rates.
Your credit score is obtained from your credit report which contains a history of your past debts and repayments. This score is arrived at by some mathematical calculations from your credit report.This credit report scores are handled by a credit bureau.
How is a credit score generated?
A credit score is generated with software. Each credit bureau has a different way of computing a credit score. The math used by the software is based on research and comparative mathematics. This is an important and simple concept that can help you understand how to boost your credit score. In simple terms, what this means is that your credit score is in a way calculated on the same principles as your insurance premiums. Your insurance company determines your premium based on certain indices like your health, your lifestyle and so on, the more risky your lifestyle is, the heavier the premium you pay. For e.g. if you smoke, you are susceptible to lung problems, hence you will be expected to pay a higher premium than someone who lives a healthier lifestyle and has longer span of life to pay which makes him pay smaller amounts for premium. This is just the same principle in your credit score, if you are not able to pay your debts, you have a poor credit score and this poor credit score means you have many debts , thus you are expected to pay higher rates to cover the risk the lender has on you.
With this information, you now know that you should work towards being a person that pays off his debt immediately they arise, do not let your debts pile up. When you pay up your debts regularly, it will definitely improve your scores and your chances of getting a credit and at affordable great rates.
See more resources on credit repair.
Friday, August 20, 2010
What is a credit score
Having a good credit score is very important for every one that is of age. A good credit score will increase your chances of getting some good jobs; it will help with the interest rates you enjoy when you want to borrow and so many other aspects of your life. However there are many misconceptions about credit scores out there. There are customers who believe that they don’t have a credit score or that their credit scores just don’t really matter. If you have a bank account and bills, then you have a credit score, and your credit score matters more than you might think. Having misconceptions that your credit scores does not really matter could harm you. Credit score is what helps organizations that want to lend you money determine if you will be able to pay back your loan.
Your credit score is checked anytime you apply for a credit or applying for a job that requires you to handle money and also even when you want to rent some apartments. And your score can be checked by any body that needs to do so legitimately. Your credit score is based on your past financial responsibilities and past payments and credit, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits. It can be likened to when a registered business goes to a bank for a credit facility; the bank does a check of the business financial history to determine if the bank can lend the money.
In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially - and give you better rates when you apply for a loan. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide whether you can be trusted in a high-responsibility job that requires you to handle money.
Some scrupulous companies claim that they can help individuals with their credit score for a fee; you need to be careful before engaging such people. Do not spend money on such companies that claim they can restore your credit, instead use the money to pay down your debts and you will be doing yourself a whole lot of good by doing that.
Your credit score is checked anytime you apply for a credit or applying for a job that requires you to handle money and also even when you want to rent some apartments. And your score can be checked by any body that needs to do so legitimately. Your credit score is based on your past financial responsibilities and past payments and credit, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits. It can be likened to when a registered business goes to a bank for a credit facility; the bank does a check of the business financial history to determine if the bank can lend the money.
In other words, your credit score lets lenders know quickly how much of a credit risk you are. Based on this credit score, lenders decide whether to trust you financially - and give you better rates when you apply for a loan. Apartment managers can use your credit score to decide whether you can be trusted to pay your rent on time. Employers can use your credit score to decide whether you can be trusted in a high-responsibility job that requires you to handle money.
Some scrupulous companies claim that they can help individuals with their credit score for a fee; you need to be careful before engaging such people. Do not spend money on such companies that claim they can restore your credit, instead use the money to pay down your debts and you will be doing yourself a whole lot of good by doing that.
Subscribe to:
Posts (Atom)