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It can happen fast. Bills and loans can accrue rapidly.
       



It is a part of life. Debt is everywhere. The national debt in the United States is over six trillion and counting. In most countries, America has a decent credit standing. Can the same be said about your debt credit score?


Does your debt outnumber your total income and savings plan? Although it’s not a topic that many care to explore, it is a reality. Your credit is indicative of your financial life. Let’s consider your credit report. What does it say about you? Irresponsible? Financially-challenged? Excessive spending habits?

Your credit file includes your age, social security number and marital status. Generally, it may include other personal information, including:

  • Current and former addresses
  • Employment history
  • Information from public/court records (judgments or bankruptcy)
  • Credit accounts, (Dates, payments, balances and the status of the
    account(s))
  • The number of inquiries about your credit history, as well as the date,
    and the name of the company making the inquiry

In essence, a credit report is like a lifetime record of your spending and payment history. As a result, it follows you through life. It determines your borrowing power. For instance, if you have excellent credit, your buying power is maximized because you can borrow money at a low interest rate. Nevertheless, if you have a poor history of remitting payment, then your financing charges will be higher.

When lenders review your credit report, there are four areas of focus: credit, net worth, assets, and economy. Obviously, your credit is the primary focal point.It represents your ability to keep your promise to make payments on time.

Secondly, creditors assess your net worth. Your net worth being what is yours after your debts are paid. It accounts for your personal property and other assets. The next consideration is whether you have an item of value that can be used to ensure repayment of the loan, collateral. Additionally, creditors evaluate the conditions of the economy during the approval process.

 

7-Commonsense Credit Tips
  1. Make bill payments as early as possible (Payments made early in the cycle keeps finance charges low and improves your credit)


  2. Close any accounts that you do not use (Creditors consider unused accounts as potential “spending sprees”).


  3. Obtain more credit only if you spend less each month than your take home pay.


  4. Only borrow within your means.


  5. Try to pay the full amount of your credit bills. (Avoid hitting credit limits.)


  6. Never skip or make late payments. (Contact your lender if you are having financial issues that will effect your payments. Request a reduced payment amount.)

  7. Review your credit report to ensure that your record is accurate.

 

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