We’ve looked at the following questions concerning buying a consumable item.

• Should I use Credit to buy the item?
• Have I found the best credit use or buy for the purchase?

Now let’s look at Question #3: How is my credit rating or score?

You often hear it said that it is an advantage to establish credit and build your credit score, but perhaps not as much is said about keeping your credit good. Once you establish credit, you are watched – not only your record of payments, but any reports about your activities from newspapers and other sources. Through national credit bureaus – Equifax, Transunion and Experian your credit rating (score) follows you all over the country and even to some foreign countries.

Keep Your Credit Good!

Protect this valuable property – your credit:

• Make payments promptly, at the agreed time.
• If you are unable to meet a payment, call your creditor or visit him and tell him what you will be able to do.
• Be especially careful to protect property until it is paid for.

Just because your credit isn’t the best doesn’t mean you can’t get a personal or signature loan from a bank or institution. However, having an excellent credit rating makes it much easier and with lower interest. But, these types of loans are now available and can be a great way to build your credit rating and manage your finances effectively.

Obviously, there is a price for having less than perfect credit and in this case, it’s higher interest rates. They aren’t always unreasonable, however, so shop around and see what is available first. It should go without saying that the worse off your credit is, the less likely you’re going to find a good interest rate. So be reasonable in your expectations and demands.

Secured personal loans, backed by property or collateral, are also good choices. It also gives you incentive to make sure your payments are on time, every time. Creditors know this and will be more likely to give a loan under these circumstances. Your car, home, or other property are all viable sources of credit for you.

Each time you successfully use and pay off credit, your credit account will go up and you’ll have a better and better score. That all-important score is what secures your ability to get better and bigger loans, easier terms, and better interest rates. So keep building that credit score up.

Utilize the tools you have and make sure your credit is being used well. Wisely paying your loans on time or early and making sure your terms are acceptable so that this can happen is the key to success in building or renewing credit.

There are many credit repair companies and counselors claiming to give the cure-all for your credit woes, promising insider tricks to repair your credit fast. These services don’t come cheap, but based on the potential money they can save you in interest rates, it certainly looks like a great deal… if they can deliver! Or is it?

The truth is… everything these companies or individuals do to repair your credit, you can do yourself. The Federal Trade Commission claims it, urging Americans to educate themselves and take their money matters into their own hands.

Of course to take advantage of this, you must know which steps to take, the ones which will get the greatest response from lenders and other financial institutions to help repair your credit. The same tactics credit repair companies would use on your behalf, and learned after years of trial. These tips are not secrets, and any good credit repair manual can fully detail how and why each tactic works, and detail which ones should be right for you based on your situation.

Contrary to some popular belief, repairing your credit goes beyond sending out a few simple letters, than waiting for lenders to magically wipe large chunks of your debt out and remove the negative entries from your credit reports.

The FTC itself states that time, and a concerted effort of paring down your debts through a debt repayment plan are your main keys to success. Instant fixes simply aren’t as powerful as others may perceive them to be. Cutting down on the number of credit cards you own and similar quick fixes can help, but the improvement in score will be marginal at best.

The core of the problem is your debt and past history of non-payments or late payments, which must themselves be addressed. Doing this takes the type of effort and sacrifice some simply are not willing to make for our greater good. This means drastically cutting back on expenses for an extended period until the debt is well within a manageable level or entirely paid off.

If you are going to look into other quick fix options as well, you should first obtain a copy of your credit report, to which you’re entitled to a free copy each year. This report will show you who’ll need to contact to get those negative entries removed and improve your score, as well as giving you the ability to make sure the data on the report is correct.

If there is something amiss on your report that is severely damaging to your score, getting this corrected could be the one quick fix that could actually have a major impact on your score.

With the knowledge of the information contained in your credit report, and what to do with it, you should be able to make small inroads into your FICO score woes. The meat and potatoes of the problem will need to be delved into head first though, with a long, grueling road ahead that will be anything but gravy.

Have you seen your credit report recently? Chances are you haven’t. You may not even know the relevance or significance this report has, well here’s to opening your eyes.

Your credit report is your financial history in regards to lending and spending habits. You may not be looking at your credit report but others have and probably will in the near future. You may not know it but everyone from new employers, insurance providers and banks all look at it, and you need to know what they’re looking at!

Why Should I Care About My Credit Report?

The impact a clean or tarnished credit report can have is more wide spread than you would think. It can affect anything from car insurance rates, to interest rates on loans or standard Lines of Credit to something as trivial as a denial on services such as cell phone coverage. The worst part of all of this, inaccuracies on a credit report are not as rare as you would think.

In 2004 a survey by U.S. PIRG, (Public Interest Research Groups) Found that 1 in 4 credit reports found errors serious enough to result in denial of credit. 1 in 4! How can you fix your report if you have not seen it. Your report includes information regarding from credit cards, balances and anything financial. Sometimes mix ups occur with people with similar names or addresses, and since lenders have no obligation to share information, reports can be missing information all together.

It’s been estimated that 60% of those looking for a loan have not seen their report, and many have errors. This could be a threat to a possible mortgage.

How Can I Obtain My Own Credit Report

Equifax, Experian and TransUnion are three companies that work in credit reports, they gather information and then sell it back to you for a price. However, you are entitled to one free credit report per year per company. With some exceptions if you are; victim of identity theft or denied for insurance or loan app.

AnnualCreditReport.com is the easiest way to gain access to your reports. There are other sites, but this one is proven safe and why wander into unsafe territory, especially since to receive your report you must enter sensitive information such as your Social Security Number along with birth date and any other information they choose to ask to verify your identity.

Once you have been accepted you choose the company you wish to receive your report from, Equifax, Experian or TransUnion. You verify more information to confirm your identity. Once verified you will be taken to your report. If you are not computer savvy you can call 877-322-8228 instead to get your report, this could take up to 15 days however.

Anything Else I should Be Aware Of?

Beware, each company will be trying to up sell you along the way. They are a business after all. It does cost about $10 for each report after the first one. Another thing you may be interested in is your credit score. This is a number that ranges from 300-850 based on your credit report. It basically is an interpretation of what your credit reports means to a company, this is an important piece of information to know as numbers are easy to relate to. Keep the number high and you know your credit is good. Here’s to keeping that number up.

When Diners Club first launched their charge-card in 1949, no one would have believed what the knock-on effect would be. US citizens spend more than $2 trillion annually on credit cards more than they spend in cash. Creditworthiness has become an issue for everyone.

Most people know that creditworthiness is tracked using a credit report; however few understand how the scoring works. Scores range from 300 points: highest risk, to 850 points: lowest risk, on FICO.

The FICO system was developed by Fair Isaac & Co, and used to evaluate the probability that customers will meet payment on their bills. This score is used in the US by Equifax and is the deciding factor for over 75% of applications for credit. Bear in mind that in 2003, practically 50% of Americans had FICO scores between 700 and 800.

The mathematical determination for FICO scores uses five factors: current debts, previous credit performance, credit tenure: how long you have had credit, the kinds of credit to be had and the pursuit of new credit.

What appears on The Report and Why Should it Matter?

When looking in depth at an Equifax report, it is split into seven sections. These provide an overview from the major credit reporting bureaus.

The first section encompasses personal information like present and previous addresses, employment history and social security number. This information is crucial for identity thieves, so be sure to protect it. Confirm it is correct then shred it before discarding.

The second part contains an abridged account of your credit history, including the type and number of accounts, both existing and closed, and whether these accounts are in good standing. It also gives details of all your credit inquiries for the past year.

It might appear as though the more accounts you have, the better your credit score, this is not necessarily the case, more is not always better.

Financial institutions generally assume you will use all your available credit and factor the payments that would be needed to service the debt. You might have a dozen cards with zero balances and have no problem meeting a $2 000 monthly mortgage payment, however if the bank calculates the ability of you to make payments on these cards, your creditworthiness is lessened.

The third section of the report provides comprehensive account data, including the name, opening date, balance, type, number, and status of every account you have. An analysis of every account entails date of last activity, payment history and contact information. If you see discrepancies in this information, you must challenge it. According to federal law, the credit agency has 30 days to respond to your query. If your dispute is successful, the incorrect information will be removed from the report.

The fourth part of the report contains inquiries regarding your credit history. inquiries are referred to as “hard” or “soft”. Hard inquiries are produced when you give authority to companies to access your credit report.

These are carefully tracked, if a large amount of them appear in any one-year period, it will have a negative affect on your FICO score. Soft inquiries are produced when current creditors verify your credit status, if card issuers re-evaluate your file without being asked to and also when you check your credit. Soft inquiries do not influence your credit report.

The fifth part of the report contains details about accounts that have been handed over to credit agencies and the sixth provides data about liens, wage garnishees or judgments against you in all court records.

The final part of the report outlines how to you can dispute information provided by your credit report. Regardless of claims on infomercials, there is little that can be done about delinquent accounts.

The Federal Trade Commission says this information remains on your credit report for a seven year period, bankruptcy ten years and lawsuit-related data, until the suit is settled. No one needs these problems so ensure payments are made in time and tackle credit issues without delay.

How Credit Report Information Impacts on Your Score

Equifax refer to missed or late payments, length of credit tenure as well as the account balance relative to credit limits as the major factors influencing your FICO score. You may have a good income and pay your cards in full every month, but large balances may affect your score negatively.

Additionally, if you don’t have a mortgage, car repayments or current revolving debt it is highly unlikely that your FICO score will be as high as 850.

How to Check Your Credit Score

Credit score reports are available online instantly for less than $50. When contemplating an important purchase like property, process a credit check at least ninety days prior to your anticipated purchase. This will allow ample time to deal with discrepancies appearing on the report.

Equifax, Experian and Trans Union are the three major credit bureaus used in the US. They are independent operations, so you should request for a credit report from each one to obtain a complete illustration of your credit history.

In Conclusion

Prevention is the best possible cure despite advertisements that guarantee to repair bad credit. If credit information is accurate, there is very little that can be done to remove negative information from your report, you will have to wait 7-10 years. So prevent harmful information from appearing on your credit report in the first place. This will ensure your ability to obtain future finance.

Right now, according to the media there is nothing more important than having a strong solid credit score. The current economic situation has made the money that used to be available to borrow to help people pay for mortgages or credit cards, are nowadays hard to obtain is your credit score is far away from perfect.

Sadly, many consumers do not know that a weak credit rating affects the ability to borrow money from others as well as its effects on many other aspects of daily life.

For example, credit rates play a big part in how high or low insurance rates are. A lot of homeowners insurance companies no longer write policies for those who the company feels are at a risk of defaulting and not paying on time.

If you are applying for a job with a low credit score, many employers check your credit reports and some of them often deny employment for people who have bad credit. Employers back this up saying that if a person is not able to be responsible for bills, then he/she will not value the job and will not meet the standards that are needed. Credit scores affect everything from jobs to insurance, so be aware of what your credit score is.

What can I do to improve my credit score?

With a credit score, the biggest positive is that you can always improve it. The first step you need to take in improving your score is to to begin paying your bills on-time. Do this before starting to find out what is listed on all of your credit reports.

Your lenders report your credit habits to three main bureaus. The information that is collected from these reports is the date accounts are opened in your name, the credit limit on the accounts, the account type, and how pay for your account. This data determines what your FICO score is.

How do I receive my credit report?

Today, there are many great modern tools that allow you to quickly and easily obtain a copy of your credit report. You can receive your report from all three agencies all at the same time. Today, the federal government offers a program that lets people get of copy of their credit report each year without any cost.

You can quickly print out all of your reports and check them for any inaccuracies that may have occurred.

If you find something that just doesn’t look right, you should definitely notify each credit bureau in writing. Have them look into it and figure out what is wrong. If something is in fact wrong, they will remove it from the report and then raise your credit score.

Try to avoid the Common Mistakes that Many Make

Many times, people who are trying very hard to improve upon their credit score wind up unknowingly making it go even lower. An example of this is when you analyze one of your credit reports and you notice a credit card that you do not use as much anymore, so you immediately close the account of the credit card.

This is a huge mistake on the consumers part.

If the account is in great standing and it has been for awhile, this helps to elevate your credit score. Even if one of your credit cards become idle, if the account is in good standing do not close it. Also, make sure you do not have high balances on any of your credit lines.

On average, you should have nothing more than 40% over your credit line outstanding during a single time period. Anything that goes over the line will negatively affect your score.

When you try to improve your credit score, there are many ways to do it. Just be sure that you do not fall into the common mistakes that many people do. Once you build up your credit to a great score, you will notice you have many new opportunities to choose from.

Everyone has a credit history and a credit report that tells it. But do you really know what is in your credit report? Most of us are guilty of opening account after account trying to live an ideal life, however this has a major effect and takes a toll on your credit.

Information in Your Credit Report

Your credit report contains all sorts of information that is usually found in four categories, identity, credit history, public record and inquiries.

Under the identity section you will find your name and any aliases you have been known by and even some you have never been known by; your present and previous addresses as well as your date of birth and social security number. It will also list where you work at the present time and previously. Then if you have ever been married and had a joint account then some of your spouse’s information can also appear on your credit report.

The next area will give information regarding your credit history. Here it will list accounts with lenders and banks, credit card companies, utility companies, retail credit cards and any other credit account you have now or have had in the past. You will generally find that these accounts are placed in order according to the date the account were opened, the kind of loan it is, (i.e. mortgage, credit card, installment loans), loan amounts and credit limits. I will also list your payment history over the past 2 years.

Under the public records section it will list any state, federal, local and personal liens, judgments and bankruptcies. These will remain on your report for 10 years, even judgments and liens that have been satisfied will remain on your report for 10 years. Past due child support will also show on your credit report.

The section that list the inquiries made on your credit report tells the names of lenders, banks, credit card companies that you have requested credit from and will remain on your report for 2 years even if you did not receive the credit. These are referred to as credit pulls because these companies have pulled a copy of your credit record.

What is not in Your Credit Report?

There is some information (such as medical information) that should not be found in your credit report, unless you have specifically given permission for them to be listed. Other things that are not found in your credit report are your sex and race, interest rates you pay, your job position and salary.

Know Your Rights

You can get a free copy of your credit report from the three major credit-reporting agencies, TransUnion, Equifax and Experian, once a year and you have the right to know who has seen it. Everyone that has looked into your credit in the past six months will be included in the report you order yourself. A copy of your report is also available free if you have ever been refused credit.

If there is anything in your credit report that you do not agree with you can dispute it. You have the right to explain the circumstances surrounding a negative report. You can even keep the credit bureau from using the information in the report for marketing purposes. The credit agency does not decide whether or not credit is extended to you they just give the information to the potential creditor.

Use of Information

The information in your credit report not only allows creditors to decide if you will get credit, it can also decide if you get an apartment or insurance. It is vital to know and understand what is in your credit report. By knowing you are able to keep a better handle on your credit situation.