There are some important things to consider when you are looking into your finances and one of those is your credit score. If you aren’t really sure what this is or how it influences you and your decisions it is about time that you sat down and figured out just how much it really matters.
There are a lot of different factors that influence your credit score and so it sometimes seems hard to really know what you can or can’t do to make it better. There are actually some larger catergories that consist of small details that really make up your credit score.
Payment History Is Important
One of the biggest things that affects your credit score is your payment history. There are a lot of different small things that are important when it comes to your payment history. They will look at all the different types of accounts that you have had whether it be credit cards or banking accounts.
They will also take into consideration how many cases of delinquency or how many times you defaulted on payments. Now if you have only defaulted a few times but it was a long time ago, don’t panic because they will also be looking at the time that has passed since this last happened.
Amounts That You Owe
Another important factor into your credit score is your current debt that you have. They will take a look at all the debt that you have whether it be car loans, mortgages or credit cards. They will also take a look at the number of accounts that you have that have a balance due to determine your credit score.
A Few Other Important Factors
There are a few other important things that will help determine your credit score that may not weigh as heavy in the decision but they are still important. One of these is your length of credit history. This means they are looking at how long ago you opened up each account and what kind of activity you have.
Another thing that they will look at it is how many newly opened lines of credit you have too. If you have just re-established good credit history or also the proportion of the accounts that you currently have open. Another factor they are going to be looking at is what types of credit you have used in the past.
All of these are important factors and are things that you should really take seriously. If you have recently learned that you have a poor credit score then take a look at some of these factors and see how you can improve.
These are just some of the main things that are factored into your credit score. Keep in mind that these aren’t the only things, but just a few of them. There are many other tiny details that you normally don’t even think about that could effect your score. If you are nervous about your own score, then just remember to try to stay on top of all your financial matters.
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When you get a credit card, it pretty much changes your whole life because it shows you how well you can manage the money you have, and even the money that you don’t have, but that you have to come up with eventually. Better yet, it determines how financially stable you will be in the future, because managing your credit card debt either wisely or unwisely can make or break how well off you are. So how exactly are you supposed to protect yourself from all the risk you are taking when you apply for a credit card? After all, a credit card is something most people really can’t live without in today’s world.
There are two types of credit cards to be considered when shopping for the right one: Secured or unsecured. Secured is basically one that you have to put money down on so that they can use that money if you do not make the monthly payment. An unsecured credit card goes completely on collateral, without any secure amount of money that ensures that you will pay it all back. Depending on who you are, what your spending habits are, and what type of credit history you have, you may be better off getting a secured credit card rather than an unsecured one. Here are a few things to know about secured credit cards that will allow you to know if you fall into that category.
The main thing you would need to ge a secured credit card for is if you have a bad credit history and need to repair it. Secured credit cards are a way to make punctual payments on a credit card and get rewarded for it by having your credit score go up, but this is only possible if your credit card company is willing to report your timely payments to the major credit bureaus. Make sure, when you get a secured credit card, that the company you are going with will report the payments you make on time, otherwise there is really no point in having a secured credit card.
A deposit is required for a secured credit card, as I said before. You must put a certain amount of money into a deposit where the credit card company has access to it, so that if you fail to make payments on more than one occasion, they can sometimes resort to getting it out of your deposit to ensure that it gets paid, one way or another. This is a bit more safe than an unsecured credit card, but with either one, making late payments will not improve, but hurt your credit score even more.
There are a few requirements that come with a secured credit card. These requirements can be things like your age, income, or whether or not you have some sort of bank account. Still, it is easier to get approved by a secured credit card than it is to get approved by an unsecured credit card.
You have a credit card that you’ve paid off regularly, and you have maintained your debt pretty well ever since you got it. Your credit score is pretty good, and you do not want to do anything to make it go down. You’re thinking you could handle your debt just as well if you had a higher credit limit. But how do you go about raising your credit limit without damaging your credit score? Is a higher limit worth the decrease in your credit rating? Here are a few options you could consider when asking for a higher limit on your credit card.
Just don’t do it
One opinion is that you could avoid a limit increase altogether. Lenders periodically increase your limits for you anyway, if you have a good credit history and are making your payments on time. Why would you need a higher limit anyway when you are not sure you could keep up to the debt you might incur with such high spending possibilities? Really, if you do not absolutely need to have your limits raised, you probably shouldn’t even ask. That way your credit score won’t suffer and you run less of a risk of missing a payment and building up your debt. Increasing your credit limit is risky business…from the first time you apply for student credit cards until you finally have a financial awakening, you’re most likely building up high interest balances that will haunt you for years.
Take it on the chin
Some would think it best to just ask for the credit limit increase anyway, and take whatever consequences come your direction. This may not be too bad of a solution if you have a great credit score. But overall, if you have a good credit score, wouldn’t you want to keep it that way? There has to be another way to do this and not get penalized.
Ask for an account review
This form of inquiry is sort of like asking indirectly for higher credit limits. Lenders do account reviews periodically whether you request it or not. They check the accounts on your credit reports to basically check up on you. They look to see what kind of changes they should make to your account concerning things like interest rates and credit limits. So if you ask for an account review from your lender regarding your credit limit, it sort of pushes them along in raising your limits, if you’re worthy of an increase. This way, there is less of an effect on your credit score, and you get the larger range in which you wanted to spend.
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Some people believe that when you have huge amounts of credit card debt, refinancing their home is a perfect solution it all off. Why not? That would relieve some of your interest rates and a whole lot of your stress, and you are already paying on your mortgage anyway, so what could it hurt? But think about it. Is it really a good idea to put more debt into your home? In the long run, it’s really not too great of a deal. The top three pitfalls of refinancing your house to pay off your credit cards may shed a little light no the subject, and it just might change your mind.
1. More interest
No, not necessarily higher interest rates, but more interest. You already have to pay enough interest on your house as it is. In fact, the first several thousand dollars you spend when you begin to pay for your home is wholly dedicated to paying off the interest. It is not until later that you even begin to pay on the principle. Having this much interest to pay over such a long period of time, may actually extend the time it takes you to pay for your home.
2. Longer payment period
If you refinance your home so that you can pay off your credit cards, it takes a lot longer to pay off your home. Having a home loan is a long and drawn out process as it is. If you add your credit card debt to the debt that you owe on your home, this will increase the amount, and the time it takes to pay that amount off. Sometimes, depending on how much credit card and/or mortgage debt you have, you could end up paying off your loan for the rest of your life… or perhaps your debt could even spill over to a burden your children or successors will have to carry.
3. Putting your home in jeopardy
Transferring your credit card debt over to your home loan can be high risk of greater loss. For example, if you fail to pay off your credit card debt, the worst thing that can happen to you is you lose your good name in credit, you file for bankruptcy, your credit score goes down, and you basically have an extremely low chance of ever getting anything on credit for a really long time. Sure, that’s pretty harsh, but think about your mortgage. If you fail to pay your home loan, you are not only putting your credit at risk, but you also run the possibility of losing your home.
Whether or not it’s best for you to refinance your home to pay off your credit cards is completely up to you. The best thing you can do to help you decide is to know the factors that come along with it. If you know you can successfully pay for your refinanced home, and that you can save money doing it, go for it.
Signature Loan Overnight | Mack Bartlett, 5 May 08 | 
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