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A Simple Credit Score Explanation and How to Start Improving Your Financial Life
Sep 22, 2008 Credit Leave a comment
Do you remember back in school when used to receive a letter grade as an evaluation of your work? Well, now that you’re all grown up there is another grade that you have to be concerned with. It’s called your credit score, and it can have a significant impact on your financial life.
When you apply for loans, the lender wants to make sure that you’re trustworthy and will pay off the debt with interest. If you have a low credit score, this indicates that you haven’t had a good history of paying your debts on time and are considered a bigger risk for future loans.
This scale goes from 400 to 800, where 700 is considered a very good score that you should shoot for. There is not exactly a failing grade when it comes to credit scores. The truth is that you’ll end up paying much higher interest rates if you have a low credit score. In some cases, you can be turned down altogether for a loan.
There are several factors that help make up your credit score. The first component is your credit score. Have you had problems in the past with making your payments on time? Have you declare bankruptcy within the last 10 years? If so, these items will be noted on your credit report and your score will be lower as a result.
Your Credit Score Says a Lot About the Card You Can Get
Sep 18, 2008 Credit Leave a comment
Before you start putting in applications for a credit card, do you know what you are going to be able to get? The types of credit card offerings you can be approved for will depend immensely on the kind of credit history you have. While you could put through a lot of applications, hoping one gets approved, that too is going to have a negative impact on your credit record. The better option is to take a completely different route and know your credit history first.
Once you take a look at your credit history you may see things are not as great as you would like them to be. You’re not alone. Everyone hits a couple of bumps and snags in their credit history and those can play out to be a big pain in the backside when you want a new and beautiful rewards credit card with great perks.
Deal with the fact that you may not be getting that card right away. As a matter of fact, if your credit is bad enough, you will likely only be able to get bad credit credit cards, which are cards that have higher interest rates and lower limits. It’s a start. You can build from there.
If you’re not sure what is causing your bad credit score here are a couple of possibilities
Bankruptcy
What You Need to Know About Credit Card Due Dates
Sep 18, 2008 Credit Leave a comment
Credit cards can be a great boon to your financial abilities, as long as you use them right. You have likely heard from a friend or family member who blames the credit card companies for all their financial woes. The truth is, they are blaming the credit card companies only because they don’t want to blame the person really responsible for the problem, themselves.
While credit cards are great to use to spend a lot of money, it is important to realize this is not free money. This is an advance loan that you are being given, in good faith, by the credit card companies. They are entering into an agreement with you where they will let you use their money, often at low interest rates, as long as you keep up your end of the deal by paying them back on time, as you have agreed. This is where many people hit the snag. One of the quickest ways to see your credit card interest and debt go up and your credit score go down is to start missing the payments that you are supposed to be sending.
Due Dates and Interest
When you start with a credit card company, you often will have a low interest rate that the company has trusted you with. They do this because they believe you are a good credit risk and that you will pay them back as you have agreed to in the credit terms that you signed in order to be able to use their card. If you fail to hold up your end of the bargain (paying on time) the rules will often change and they will increase your interest rate, as you are no longer as good of a credit risk.
