Are You Credit Worthy?
Having good credit is essential in today’s world. Acceptable credit will generally get you what you want, but bad credit can be the kiss of death. If you want a house, you need a mortgage. If you want a car, you’re likely going to take out a loan. Anytime you apply for credit, the lender checks your credit report. They do this to determine whether or not you are a good credit risk. Not everyone is a good credit risk—but there is something you can do to make sure you become one.
Millions of Americans have poor credit, and many are in debt because of high interest credit cards. Credit card companies often target low-income families by providing them with high interest credit cards. However, low-income families aren’t the only ones to fall in debt’s trap. In fact, one million Americans file for bankruptcy each year. Bankruptcy isn’t the answer for everyone, but there are several things you can do to get your credit healthy again.
First, make a budget and stick to it. Save money by clipping coupons, buying items on sale and not eating out as much. Don’t buy something on a whim. Go home and think about it first. Chances are you’ll never go back. Remember, buy only what you need.
The money you save can be used to pay back debts. If you have problems paying your bills, you should call the creditor immediately. If you ignore your mortgage bills, you can face foreclosure and the loss of your home. Most lenders will work with you to help you get caught up on your bills. They want to allow you to keep your home. However, if you default on your car payment loan, the lender can repossess the car. This applies even if your payment is late for just one month. Staying on top of your debts will help you on the path to good credit.
You also want to get a copy of your credit report. Obtain it from one of the three major credit bureaus: TransUnion, Experian, and Equifax. Your credit report includes your personal information and your accounts. It also includes your credit history. It notes whether or not you’ve defaulted on an account. Review the credit report carefully, looking for any errors pertaining to your personal information. Look at each of the financial statements. Determine if there’s a credit card you’ve already closed. Check for a debt that shouldn’t be there. Identify any other mistake. Contact the credit bureau immediately if you do spot any errors.
A lender determines if you’re a good credit risk by looking at your credit report and analyzing your credit score. Most people have a credit score anywhere from 300 to 750. Anything 650 and higher is considered good credit. Anything below means you’re on shaky ground.
Remember, the key to creating and maintaining good credit is to pay your bills on time. Always call the creditor if you find yourself unable to pay the total bill. See if they can help you work out a plan to get back on track. You can always repair your credit yourself, click here to find out how.
