Credit

If you have good credit then congratulate yourself. This is one of your biggest intangible assets. Appreciate this fact and take steps to ensure that your maintain it. If you have bad or damaged credit, then take comfort in knowing that you are not alone. While there is no quick fix to reverse the damage done, embarking onto a disciplined plan to slowly but surely tame your credit woes will work in the long run. Browse through these pages to get a better understanding of various aspects of consumer credit, the FICO store, credit bureaus and tips on getting on the road to recovery. The more you learn and understand about your credit and the faster you get started on changing your habits, the faster you will be able to put the blemished history behind you. Just to re-emphasize, no matter how you look at it, there is no overnight solution to resolving genuine and accurate blemishes that appear on your credit report; the first step is to accept this undeniable fact.

Credit – the modern lifeline

Credit is very important in your overall financial planning. To put it bluntly, your credit worthiness will to a large part dictate how you live your life. In almost every aspect of modern life, a good credit record plays a central role. It is obviously a necessity for major purchases such as a home or a car and for other forms of loans such as lines of credit, overdraft protection, credit cards, department store cards and so on. However, many people are not aware that it is also necessary for attractive packages on cell phones, for obtaining merchant accounts to accept online payments, for avoiding hefty security deposits on utility accounts, and the list goes on and on. Bad or bruised credit will significantly reduce the options available to you for all types of products and services which require some form of lending or security risk on the part of the vendor. Sadly, the social stigma associated with credit problems often holds people back from seeking help to better understanding the basics of managing their debts wisely. Many people who have been denied credit will often be frustrated and eventually contact the credit bureau for further information. Unfortunately, these bureaus are not in the business of giving advise; they are in the business of selling their information to lenders such as banks. Therefore, the response from a bureau will be very general and impersonal in nature, often further alienating the person calling them and making them more reclusive from seeking proper counseling.

Avoiding bad credit seducers

To further confuse matters, there are thousands of businesses out there that thrive on targeting people who have credit issues. Business that claim they can get you favorable rates on mortgages despite bad credit and car dealers that guarantee a car loan for you despite your credit are examples. In reality what happens is that an individual with bad credit is frustrated that he or she cannot get the things they want, or cannot get what a friend with good credit has. As such, this individual will fall prey to these businesses that prey on people in the sub-prime lending category. The individual will then be locked into a contract with very high interest rates and inflexible terms, paying hundred and sometimes thousands of dollars more through the life of the contract. Worst of all, the very reason that the individual fell into such a trap, his or her bad credit, will not get alleviated and in fact will likely become further acute. Chances are that if a person has bad credit, that person cannot afford pricey cars and high ticket items. Yet these sorts of high interest sub prime lenders will temp financially challenged individuals with the whole world. Just take a look at one of various auto trading websites or magazines and you will find reference to lenders who specialize in getting you that car no matter what your credit worthiness is. Many such businesses specialize further in securing funds for people under bankruptcy. While most such businesses are legal, their ethical and moral principles are certainly questionable. And the potential impact of these sorts of business practices on the macro scale should not be underestimated, as has been observed with the recent credit crunch in the US sub-prime mortgage scenario.

Avoiding good credit tempters

Another type of tempting offer to be avoided from lenders is the ‘buy now and don’t pay anything for so many months’ type of deal. Most furniture stores offer these sorts of payment terms, and the lender that is undertaking these debts is usually targeting people with moderate to good credit. Once you sign, you can have a lot of home furnishings delivered to you almost instantly, and you are not required to pay a single cent for so many months. A good deal? Think again. In most cases, if you have even a single dollar outstanding in your account once the pay-free period expires, you will be brick walled with very unfavorable interest rates retroactive to the first day you obtained the credit; yes you read that correctly, interest will be charged from the day you signed the contract. Furthermore, as soon as you are given the loan in these sorts of deals, your total debt load has increased considerably on your credit profile; all the while the asset itself that you purchased, the furniture, is depreciating in a free fall fashion. The lender is actually counting on you not being able to clear the entire account in the pay-free period so that they can start charging the high interest rates. Thereafter, your loan is very similar to credit card debt and any missed payments will result in a blemish on your previously impeccable score. The road from good to bad credit is now just a stone throw away.

So what type of credit is good

Apply for loans whenever it is an absolute necessity and falls within a well structured financial plan. A necessary credit purchase that we all generally need is a mortgage or a flexible and open auto loan. A home and a car is obviously more a necessity than a luxurious desire. An unnecessary credit purchase would be buying a computer on a monthly payment plan, if you cannot pay for a computer upfront, then you should delay making the purchase till you can. Even when you are purchasing a home or car, you should shop around for the best financing options. Against the backdrop of the current economic slowdown, car companies are offering very attractive and sound financing options. For example it is very common these days to find a 0% interest car loan that is fully open. The reason this is a good credit choice is because first and foremost you are not going to be paying any interest. Secondly you maintain full control of how fast you can pay back the loan, it is generally fully open and the lender in these cases likely wants to recover the funds as fast as possible. Thirdly, the reason you are getting a zero or low interest loan in such cases is because the car company actually wants to sell you the car and they are not trying to trick you into signing contracts with lots of fine print. This sort of loan is a winning situation from the credit grantors perspective (they sell their product and have the product as security against the contract) as well as the person acquiring the credit (they get a product that they want but do not have the cash for and pay little to no financing charges).

Conclusion

In conclusion, you should first honestly analyze you actual needs against your wants. Then determine a vision about what type of lifestyle you can afford and if there is any room to accommodate your wants after your needs have been paid for. Never attempt to use credit as a way to meet your needs or wants, rather use income as the indicator and matrix. Thereafter formulate a well structured financial plan with the help of a financial planner and see how to properly utilize credit within this plan.

02/15/2018 02:22 PM
How High Should My Credit Score Be?
Here are a few general rules for your consideration. Your minimum credit score needs to be at least 650. But if your credit score is below 650, there are ways to fix it. This article will explain how you can start to fix your credit.

01/30/2018 09:13 PM
Choosing the Best Money Transfer Provider
If you need to send money online, then you will discover that there are so many ways in which you can be able to do all this. There are so many exchange services that can be applied to make the transfers. However, it is usually very hard to choose the correct provider for the services. You need a reliable and well-priced provider. This can be hard but in the end, you can enjoy great savings if you do take your time to make the choice. Some of the factors worth consideration include:

01/23/2018 04:03 PM
Here Is Why Credit Is Like a Catch 22
Credit helping or hurting can be determined by what side of the fence your on. If you're financial sound individual credit helps being approved for large purchases like homes, cars and boats. Maybe you have the liquid cash, but you make more with investments than the interest paid on your accusations. What's the deal for those on the other side of the fence?

12/21/2017 11:33 AM
Insurance Benefits on Credit Cards That Help You Save More
One of the major features of credit cards, that the users are often unaware of, is insurance benefit. A number of credit cards offer insurance coverage to its users in the form of hotel insurance, cell phone replacement coverage, baggage insurance, automobile rental insurance, travel accident cover and much more. Usually, the insurance benefits are underwritten by a third party and can help you save quite a bit in case of any unfortunate event. Despite being an amazing feature, a lot of credit card users do not avail this facility majorly because of being unaware. So, here we will talk about insurance benefits on credit cards and how to utilize them.

10/19/2017 04:40 PM
In The Hall Of The Credit King
Credit has a love-hate relationship with the general populace. On one hand it allows us to buy stuff we want without having to pay on the spot, on the other hand it can spiral out of control, and leave us having to pay more than we bargained for. The latter isn't really anyone's fault except the person responsible for their card.

Your credit at Equifax
Click here for more information on credit issues from Equifax

Equifax Canada - Credit Bureau
Information for Canadian regarding their credit from Equifax Canada

Credit check at TransUnion
Check your credit at TransUnion

Credit at TransUnion Canada
Credit reports and credit information for Canadians at TransUnion Canada

Experian Credit Bureau
Your credit at Experian

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