Tag Archives: Credit risk

Rebuilding Your Credit for the Future…


American Express

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Rebuilding credit to prepare you for the future is so crucial right now.  Having good credit allows you to be prepared for life’s emergencies and big purchases.  Like I mentioned in a previous blog, you need credit to be able to show your credit worthiness to lenders.  However, maintaining and managing credit is just as important.

Ok so, you got the credit and now it’s in need of major repair.    Well, it can be done!  However, the success of rebuilding and repairing credit depends on you.  You have to be willing to do the work, make the calls, and the sacrifices.  Easier said than done.  I hear ya!  Have you heard of this quote before?

“It’s not that I’m so smart, it’s just that I stay with problems longer.”  ~Albert Einstein

Well, that’s exactly how you have to change your perception of why everyone else is able to do what they do and buy what they buy.  I stated that to say it really takes hard work and self-discipline.  Never give up!  Some have to do more work than others to bring their credit back to par.

How do you repair credit, you ask?  Well it depends on each individual situation.  I’ve included an article from ehow.com  that provides tips that should help you get started:

  • 1

    Pay all of your bills on time. Late payments (payments that are 30 days late  or more) have a negative effect on your credit rating.

  • 2

    Reduce the number of credit cards you carry. Write to your creditors to  request that they close your accounts and report this status change to all three  credit-reporting agencies.

  • 3

    Avoid bankruptcies, tax liens (a lien for not paying state or federal income  taxes or property taxes) and collections. A bankruptcy stays on your credit report for  up to 10 years. Collection accounts and paid tax liens stay on for seven years,  and unpaid tax liens will haunt you forever.

  • 4

    Request in writing that your creditors reduce the credit limits on your  accounts to lower your amount of available credit. The total amount of available  credit is considered by lenders even if you owe nothing.

  • 5

    Ask a family member or friend to co-sign on a small loan or credit card to help you  re-establish credit. Make your payments on time.

  • 6

    Get a secured credit card to help reestablish your credit. You will have to  keep a designated amount of money in an account that will be sufficient to cover  your charges. Make payments on time.

  • 7

    Get a yearly copy of your credit report  to  catch any errors (see ‘eHow to Obtain a Copy of Your Credit  Report’).

Read more:  http://www.ehow.com/how_4757_repair-credit-history.html#ixzz1MBwCxonU

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Got Credit? Why Shoud I Have It?


Credit cards

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Why?

There’s a great need to build credit in this country, especially if you’re considering buying a home or making other large purchases.  If you don’t have credit or if you need to rebuild it with credit repair, I hope this post will be a great reference point.  To prove credit worthiness, consumers and young people should build their credit over time to qualify for larger loans in the future and to also show that they are responsible debt payers.  In other words, if you don’t have credit, lenders won’t know if you’re a good customer.  When you prove your credit worthiness, the result is high credit scores.

 Who?

Who needs to have credit?   Everyone of legal age, especially young adults who are beginning to have more financial responsibilities and  U.S. immigrants who have no credit history at all need to establish credit.  When the time arises, such as a major need or emergency, solid credit will help you be able to qualify for what you need.  You certainly need to have solid credit to buy a home.  It’s the American Dream and the single most biggest purchase you will make, so build it!

How?

It is actually pretty easy to build credit.  Try one of the following ideas:

  • Ask your bank or credit union about a secured credit card.  You can make a deposit to your account and have a credit limit in the amount of your deposit.  The bank takes little risk and you build credit slowly (avoid Secured Credit Card Problems).
  • Use a co-signer on your first few credit accounts.  Lenders will consider the co-signer’s existing credit.  The co-signer essentially ‘vouches’ for you while you build credit.  Note that this is a big responsibility – you can cause major headaches for the co-signer if you don’t pay as agreed (see How Co-Signing Works for details).
  • Use retailer programs for modestly large purchases like furniture.  For example, you may buy a television on the “$40/Month Payment Plan”.  Gas station cards may work as well.  These programs can be easier to qualify for and they certainly help you build credit.  Be sure that the retailer will report your loan to the major credit reporting companies.
  • Get a credit card with any reputable institution that will give you one.  Again, you have to make sure they’ll report your timely payments to the credit reporting companies.  Of course, you have to always pay at least the minimum before the due date.

Please, please be careful after you start to build your credit.  It can lead to trouble!  Make wise decisions when it comes to purchases and “enticing” credit card deals.  Credit card companies, banks, and retail institutions may inundate you with offers so please use good judgement.  Also, monitor your credit reports for correct information and to remove any errors.  However, in case you do get into trouble, there are ways to improve it and get your life back on track.  In my opinion, these days, credit is like a life-line so in a future post, I will discuss repairing credit and other related information.  Thanks for reading my thoughts.


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