Improving Credit History
Improving your credit history can be accomplished several ways. By planning in advance steps to accomplish that goal. This takes forethought and discipline. How to keep lenders happy.
Well established credit history
What makes you deserving of credit?
Such things as borrowing money, having a checking and savings account that is well maintained, (no unusual amounts of overdrawn checks). If you have retail charge accounts, bankcards, a mortgage for your home or you have purchased an automobile using credit. If you have paid these bills promptly, you have established a credit history.
Lenders look for certain aspects before lending to prospective borrowers. Assets enough to allow the repayment of the loan. Your character is considered, what is your reputation for taking care of your business.
„h Does your background show that you maintain a job and hold it? Thus being able without difficulty to repay a loan.
„h Do your assets outweigh your liabilities?
„h Have you paid off credit cards and other loans promptly or well within the time allotted?
„h Do you own your own home? Consideration is given to the length of time you have lived in your home.
If all is true you have assembled a credit history that needs to be continually maintained as worthy, and to be protected.
Protecting your credit history
1. Don¡¦t borrow in amounts that you cannot repay easily.
2. Honesty is always the best policy, always be truthful when applying for a loan.
3. Remember, if you owe a payment, that money is not yours, that portion belongs to the lender. . Understand this is never to be used for anything but repayment.
4. Know the due date, always pay promptly on or before that date.
Credit or Cash?
You might consider credit when: Buying something you really need that is on sale for example a washing machine. Especially if the amount of cash you have on had would be depleted and cause hardship. Perhaps to improve your home, rather than buy a more expensive one. To pay for schooling that may consequently improve your earning power. To obtain cash rather than having heavy penalties for early withdrawal of securities.
„h Vacations, which you will continue to pay for the next year.
„h Entertainment, make sure can afford it or forget it!
„h If your income is reduced for some reason then you¡¦re spending must decrease, you cannot continue to sustain a certain lifestyle.
Too many credit cards
It is tempting to have several credit cards. This is not always a good idea. With each card comes the possibility of becoming thousands of dollars in debt. Credit bureaus see this as a risk and will relate it to possible creditors. If you are prone to collect numerous credit cards, cut them up!
So much of indebtedness is a result of buying items on impulse. We are digging ourselves deeper and deeper into debt with ¡§things¡¨ we could have done without. This places a strain on our budget and our nerves. Cut back shopping without a purpose. If you are tempted by advertisements or special flyers simply throw them away. It takes work, special effort, just telling yourself, no!
Save your credit when your on the edge
If you are feeling the pressure from a few not so wise decisions where your good credit is concerned, then get to work trying to salvage what you can.
„h No more new obligations now is the time to screech to a halt and reevaluate your circumstances.
„h Focus in on how to pay your bills and try to reduce all balances.
If the hammer is about to come down on your head then it is time too handle the situation.
„h You have tried to calculate over and over how to pay your bills and just don¡¦t have enough money to go around, now is the time to stop figuring. Now you must act! It is important to pay as much as you can to each creditor and as often as possible.
„h Call your creditors, set up a repayment plan.
„h Check for the availability of a credit counseling service such as Consumer Credit Counseling Services. (800-577-CCCS) They will help with no charge, or only a small fee.
„h Bankruptcy should be only a last resort. It remains a blot on your record for up to 10 years.
Request a copy of your credit report. You will be charged a small fee as much as $8 for each report. Information that is detrimental such as tax liens, judgments, and arrest records must be removed after 7 years. The following are the three major credit bureaus listed below, call the one closest to you.
P.O. Box 740241
Atlanta, GA 30374-0241
Experian (formerly TRW)
Allen, TX 75013-0949
Trans Union Corp.
760 W. Sproul Road
Springfield, PA 19064-0390
The bureau along with the creditor who supplied the information must investigate any error in your report. You may file a statement giving your side of the story, and future references must include your story.
Not all are able to have impeccable credit, if yours is not but is good, for example late payments, then you may seek for alternative forms of credit.
It is important to protect and preserve our credit reputation, and to make sure the reports given to the credit bureau are correct.