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Maintaining A Good Credit Rating

Maintaining A Good Credit Rating

Nowadays, availing a credit card is truly a difficult task. You need to have a good credit history in order for the bank to see that you are fully capable of acquiring debt and later on paying it off. Aside from this, you also need to have a stable monthly income wherein the bank can generally rely on to decide if you are truly a creditworthy individual. However, not all people possess such good credit history and high monthly incomes, and because of these reasons, they get rejected in their application for a credit card.

Maintaining Good Credit Standing

In the world of credit and banking, it is extremely important that you maintain a good credit history or rating for you to be considered as a credible person; and of course, regarded as a person who is truly capable of owning a credit card. During the initial periods, especially if you are only starting off building your life and future, it is easy to maintain a good history with regards to finances.

Increasing Debt History

However, as circumstances may differ in the long run and you avail all sorts of assets, properties, and services, your debt history starts to increase. This in turn may lead you to have a negative implication on your credit history. And in addition, in any case, that you may acquire such a huge amount of debt, it naturally makes it more difficult for you to pay it off. Basically, you have acquired more debt than you can actually pay for.

Thus, even in the early stages, you must remember that having a good credit rating is very important if you intend to acquire another credit card in the future. Having a good credit rating not only entails you of receiving a credit card but also receiving a good deal out of it. Moreover, if you have a very good history, such as nonexistent late payments and non-violation of terms and conditions, then it means that you can have a better deal for your credit card. It means that the bank can give you a higher offer on your credit line. It will give you more opportunities to purchase much more expensive items and can even give you more offers such as bonuses and discounts.

Be A Responsible Credit Owner

In order to maintain a good credit history, you generally have to be a responsible person in terms of your finances. If you are responsible for your finances, then you can be a much more credible person to avail of a credit card. You have to make sure that you do not overspend beyond your budget and that you pay off your debt at the specified time.

Having a credit card truly can give you limitless opportunities especially if you are insistent on buying items every now and then. However, as you have such opportunities, always remember that in the end, the amount that you are spending today is accumulated for you to pay in the future. If you do not want your future to be spent on debts, then perhaps you may want to have a second thought in what you are going to spend on today. All you have to remember is that you should maintain a good credit history so that you can provide yourself with a lot more opportunities in the credit world.

Making A Debt Management Plan For Credit Repair

Making A Debt Management Plan For Credit Repair

The best solution to credit problems is to exercise a debt management plan and pay your bills as on-time as possible while avoiding spending money on items you do not really have a need for. Since it has become very difficult to purchase anything without a credit card, one consideration to helping raise a credit score, and ultimately a credit rating when you are having trouble getting a credit card is to get a pre-paid card.

Many lenders offer a pre-paid Visa or Master Card, which for all purposes looks and works just like credit cards. The main difference is, instead of purchasing things strictly on credit, you make a deposit into a bank account that secures the amount of the card limit. Often there is a deposit fee required for opening a pre-paid credit account, and your limit is based upon the size of the deposit that has been pre-paid. The advantages of prepaid cards include that they really can help with credit repair; and, if in fact, your credit is really in bad shape, they may be your only option for repairing it.

Making wise decisions about spending and considering the implications of the decisions from all perspectives will help you make better overall spending decisions. Sure, bad credit is a tough hurdle to get over once you have developed bad spending habits, but it, like bad spending habits, can eventually be overcome. If you need help formulating a working plan that you can stick with on a long term basis, consider credit counseling as an option.

Credit Reports

Taking charge of your credit reports can really help you reclaim your life. There is no reason to let bad credit ruin your plans, but in order to repair your credit, it is very important to know what your credit report status really is. After all, if you know what you owe, you can take the necessary steps to repay it. Also, it is very important to keep in mind that although the three credit bureaus (Equifax, Trans Union, and Expedient) may seem all-knowing and all-powerful, the information they have on you may contain mistakes. It has been known to happen to others.

Obtain a copy of your report from each of the bureaus, but don’t do what everyone says and just apply for a loan in order to get a free report. Every time you apply for a loan there is a mark made against your credit rating and points accumulate. Instead, just pay the fees attached, it will save you money in the long run, probably a lot more than the fees to get the reports.

As you formulate your debt management plan be sure to consider long and short term steps that you can take. For example, prepaid credit cards will help in the short-term as they allow you access to purchases that can only be made with a credit card. However, they offer little in the line of long term credit restoration. While they are used as a credit card, the contribution that they have toward building or repairing credit is so small, that it is not really distinguishable on the credit reports.

Other cards will claim they can help restore your creditworthiness by offering you a larger balance card. Of course, they want a fee of $200-300 upfront. Be warned, some of these companies are scams and should be avoided. When in doubt as to whether or not an agency is offering you a legitimate offer, check with the Better Business Bureau to see if they have any complaints on file.