| |
| |
|
WebsiteAlways |
|
How Your Credit Rating Affects You, and How to Check It
You might not know it, but every time you take out any kind of loan or credit or pay something back, it gets counted on your credit rating. Who keeps a record on you will vary according to where you live, but the big three credit reference agencies are Experian, Equifax and Trans Union. They will provide your credit rating to any company that is thinking of lending you money. What is Included in Your Credit Rating. All the debts you currently have are included in your credit rating. There is a history of all the debts you've had in the past ten years or so, and special emphasis is put on anything that has gone wrong. Defaulting (never paying) on any debt will ruin your credit rating completely. Borrowing a lot before you start paying anything back will make you look like a very bad risk, and so will going all the way up to (or even over) your limit on a credit card. It is also worth considering that the credit reports of anyone you live with may be linked to your report, and could reflect badly on you - your wife or husband's credit rating is tied to yours quite closely. How Your Credit Rating is Worked Out. The most common method of coming up with your rating is called 'FICO', named after the Fair Isaac Corporation, who invented it. Your current credit status is prioritised, in this order: whether you've paid past debts, how much debt you currently have, your credit history, the types of debt you use, and how many times your rating has been checked recently. Things that happened more recently are given more weight than things that happened a long time ago. Why Your Credit Rating is Important. Any time you get turned down for a credit card or any other loan, the chances are that it was because of your credit rating. Companies giving out small loans are far more likely to rely completely on this rating than to bother checking your income, and a worse rating will mean that you are offered a higher interest rate. Your rating is important when you get car loans and mortgages too. You don't want to find a house you love only to get turned down for the mortgage thanks to your habit of paying your credit card bills late. How to Check Your Credit Rating. Credit reference agencies can't hold your information on file without telling you what it is they have. If you write them a letter and pay a very small fee, they have to send you the full credit report that they have about you. You can then check over your credit rating, and send a letter back to the agency telling them about anything that you think isn't right. You might find that a screw-up has made you look bad when it wasn't your fault. They will include anything you send in your file. In some countries, you may find that you can sign up to get credit reports regularly for a small fee, or even for free! Make sure to check your local laws. Ken Austin is the webmaster at Debt Consolidation Solutions and Credit Relief Solutions
MORE RESOURCES:
Credit - Google News |
|
|
|
RELATED ARTICLES
Understanding the Function of Credit What is Credit?Credit is the backbone and the engine behind the workings of the economy. Credit simply allows individuals and companies to borrow funds in good faith and pay it back over a specified time frame. Have You Ever Opened a Checking Account? Maybe some of you are saving it in your trusty piggy bank, under your mattress or way back in a sock drawer. Although I'm glad that you are saving, your money is not doing anything for you locked up in your house. Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK? About Search Entries:Every time a lender checks your credit history from your credit file (i.e. How To Read Your Credit Report The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus -- Equifax, Experian and TransUnion. Simple Identity Theft Protection How many of you bank, shop, or transact other business online? There are at least 4 million Department pf Defense employees that access their pay records online only. Even offline, stored financial data can be placed at risk in computers that are used on the Internet as well. ChexSystems: Who They Are and How it Affects You ChexSystems is a company that maintains a subscriber membership service used in the banking industry. The members consist mainly of Banks, and Credit Unions, but can include other types of Financial Institutions. Tackling Bad Credit The first time I heard the term credit history was when I approached a lender for a secured loan. Being a first timer I was completely ignorant of the procedure and didn't even know that a credit record of our transactions is prepared by some credit reference agencies. Credit Repair: How To Deal With Your Creditors If you are in danger of credit problems because you have more debts than you can handle, there are things you can do at least keep your creditors reasonably happy.First, prioritize your debts or rank them in terms of the ones that can give you the most trouble the quickest. Compare Credit Card Offers and Reward Yourself Here's a simple system on how to pay zero interest and get tons of free stuff. Almost everyone uses credit cards. Credit Counseling Basics Credit counseling is an option you might want to consider if you are having financial problems. The stress can be overwhelming when you have creditors calling you daily to collect money that you simply don't have. 10 Dirty Tricks Credit Card Companies Play The credit card companies make billions each year in legitimate interest charges and fees, but are under constant pressure from the shareholders to increase their earnings. To make this extra money the credit card companies sometime adopt some dirty tricks to make this money. Always Avoid Payment Holidays Once you've been paying off a credit card for a while, you might be offered a 'payment holiday'. You'll get a letter, saying that since the company knows it's difficult for some families around Christmas (or whatever other excuse they think up), they're offering you a month off from paying, as a 'special present'. Save Money and Lower your Payments by Improving or Repairing Your Credit Having a better credit score not only represents easier access to money from lending institutions, but more importantly represents instant money in your pocket.This probably sounds like something obvious for most of people, but it isn't until you start thinking in terms of real examples and real dollars that most of us start to understand the magnitude of the benefits associated with a good credit score. Five Credit Card Billing Problems and How to Fix Them It goes without saying that your first and best defense against paying fraudulent or unfair charges on your credit card is knowing what your bill says! When you receive your credit card statement each month, sit down with it and check each item to make sure that you actually DID purchase it. If you do run into inaccuracies or problems, there are procedures to follow to report and deal with the charges. Can You Acquire Good Credit Overnight? You Bet Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to credit bureaus : Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't. What Happens When Your Credit Is Damaged? Do You Have Recourse? The good thing about bad credit is that you can fix it. If you start now, over time, your bad credit can turn into good credit, and you could qualify for the loans you want at the rates you want. Credit Repair Scam - How To Avoid Being A Statistic? A good credit history is critically important for the consumer. A bad credit will prevent you from getting a business loan, owning a home, or even a job. Credit Cards - Why Prepay? With prepaid credit cards, you get the practicality of plastic while choosing exactly how much debt to charge. By taking charge of your personal financing, you determine your own limits, to the penny, and change them any time you need to. Bad Credit? No Credit? Yeah, Its a Problem. Many companies use the slogan "Bad Credit? No Credit? No Problem!" The truth is that it is in fact a problem and there is no easy way to correct it. It takes a lot of time and effort to obtain credit when you do not have any and even longer to fix bad credit. Getting Married? What Are The Finance and Credit Implications? There is a big difference between looking after your own finances while living alone, or with parents, and living with a partner. The transition can be very difficult, especially if both partners are strongly independent, or one partner is financially weak and the other strong.
|
| Interesting articles | Home | site map | Link |
| © 2006 |
