• You can use your credit card to automate your bill payments for all utilities. For example, on a designated date you can automate payment of phone bill, internet bill, insurance premiums, etc. so that you don’t miss the due dates for any of those. The more consistent you are in your bill payment, the better your credit history will be.
• The credit history is reported by 3 credit bureaus to lenders and credit card companies who request for it. You can improve your credit history by using your credit card for all your necessary expenses and then paying the bill in a timely fashion before the due date.
• You can improve your credit history by always paying your credit card bill on time, so that you are never late or are never penalized
• You should make sure your outstanding debt on the credit card is as low as possible or even zero. Greater your debt is lower your credit score will be. The credit score depends to a reasonable degree on your credit utilization which is the ratio of the outstanding debt to the credit limit.
• You can apply for credit cards with lower interest rate if you have a revolving debt. By doing so you can lower the interest that you are paying to the credit card company on your outstanding debt.
• You can also apply for cash back credit cards that can allow you to save money on your expenses. The discounts will take something off your final outstanding debt making payments easier.
• With a credit card you get the huge advantage of a monthly expenses report. You can use this report to review your expenses and also find out where you can save money. That way you can reduce wastage and manage your finances in a much better fashion. Those who manage their finances by reducing the expenses and keeping the income and expense in a balance tend to have a far better credit score in the end.
• If you have a big expense coming up then you can work out a minimum monthly payment plan with the credit card issuer. This way, you wouldn’t be burdened by a massive debt or an exponentially growing interest. Instead you can plan your payments month after month, ensuring that you clear off your outstanding debt soon enough.
• When you have a very bad credit score, you need to apply for a bad credit, credit card or a secured credit card that can help you rebuild your credit history once again.

So why not improve your credit rating?

The credit companies will judge your application for credit based on many things. One of them is on your credit history. You can get one of these through simply having a credit card.
Before you run off and apply for a credit card, have a look at what you can do to get better credit and how to handle your debt.
Did You Know that some of the world’s richest people earned their fortune through hard work? And that lobsters are naturally brown but turn red because chefs read them articles on bank boss bonuses.

How it works

True Story

(but names have been hidden to protect their identities).
Mr. Nanna & Mrs. Grandpa were very good with their money and had never had any form of debt. They decided in their forties to get a loan to buy a static caravan. Despite never being in the red with their bank, and despite them having a decent income they were refused because they had no real credit history.
The fact that they had a wage entering their bank accounts over a long period of time was a big help, but their credit rating was still poor. Even though they had saved up around a third of the caravan price themselves, they were still refused.
The bank wanted to know how well they handled debt. The bank wanted to know if they miss payments, pay partially or in full and how regularly they do it.
The fact that they had an amount coming into their account each month means little to a bank.

• They may have expenses that leave them a little disposable income.
• The couple may be unorganized and keep poor payment routines.
• Credit history gives the bank a way of knowing what you have been up to over the last few years.
• The couple may have accounts in many banks, and a credit history may help explain why.
• A credit history will give the bank a few more details on the types of money movements and expenses that the couple has. It may also show the companies that the couple use.

How do the credit companies decide?

There is no such thing as a black listed customer when people apply for credit cards. Each credit company will assess their potential customer on a risk/profit basis. The company wishes to make as much profit as possible with the least amount of risk to them. They do it with a number of considerations. This pie chart gives you a rough idea of some of their considerations.

10% recent credit inquiries

This says how often you have applied for credit. This is worth considering if you are rejected twice within six months; any further rejections will hurt your credit rating. There are also applications for loans and mortgages that will negatively affect your credit rating if you do them too often.
Tip of the Year

• Don’t apply for credit card three times within six months.
• Ask the credit/loan/mortgage company if your credit rating will be affected if you apply.
• Marry a rich person and use their credit.

10% types of credit used

The credit company will look at a customer more favorably if they have various forms of credit, such as credit cards, overdrafts, mortgages and loans. A credit history with just one form of credit on there is not as good as one with many. Consumers, who have a variety of loans to pay, generally are a better credit risk.
Tip of the Year

• Mix up your credit types so that you have a better chance of getting a credit card with a good rate of interest when you apply for credit cards.
• If get an appointment to talk to a member of staff when you apply for credit, then take four seven foot tall, muscled men with you in suits who say nothing. When the employee asks who they are, then pretend like you forgot they were there. Then say that they have to follow you, and say no more about them.

30% outstanding debt cancellation / collection

Your outstanding debt, and the amount of it that has been collected will affect your credit rating and risk. This matters even more so if your credit has been cancelled in the past.
Tip of the Year

• Time your credit applications so that it syncs up with when you have the least amount of outstanding debt.
• Do what you can to stop cancellations of debt, borrow from friends or family, or sell your stuff.
• If you have a lot of debt collections people come to your home, then install a turnstile on the door that only takes notes. Then empty out your house and put your stuff in a garage. Inside your house simply leave a receipt for the money the bailiffs just had to pay to get into your home.

15% age of credit history

Your credit rating score increases over the length of your credit history. This continues to go up if your credit is well managed.
Tip of the Year

• Apply for a credit card as soon as you get a job. Spend a little on it each month and pay it off in full as soon as possible. Even a small amount of credit history is better than none.
• If bailiffs and debt collectors visit often, then shave clumps out of your hair and put radiation symbols on items around your home. Cough a lot and sit down a lot as they take your stuff so you look ill.
• Sending off your payment and writing paid in full will not convince your credit company that you have paid in full, and will be ignored, but every now and then your partially paid bill/debt will cross the hands of a new employee who may think his/her boss wrote it and so clear your debt. It’s unlikely, but worth a shot right?

Did you know that most motivational self-help books make more money for the publishers than the readers?
To manage your credit rating better, then consider your options before you apply. If you need money to upgrade your car to a more economical one that will last years, then get a loan. If you need money for an event and may need more again as you are repaying it, then apply for credit cards for fair credit. The best way to increase your credit rating and lower your debt is to be smart about it.
Follow these steps:

1. Think first
2. Research
3. Make rude phone calls to your girlfriends hot sister
4. Decide on the best type of credit for you
5. Get the best rates
6. Fall asleep at the bottom of the bed so you don’t know where you are when you wake up
7. Go ahead and apply for the best type of credit and then manage it well.
8. Stop reading.

Befitting the times, there is now a free mobile application available for smartphone-carrying consumers who are interested in monitoring changes to their credit report.

Designed for Apple’s iPhone, the app updates once a month users’ scored from big credit bureau Experian. Additionally, it provides details about their home value as well as the amount of their available credit that is currently in use. It is important for consumers to note, however, that the score provided via the app is not a FICO score, which is the one that is used by lenders to determine a prospective borrower’s creditworthiness.

“The user should be aware that this is not the precise score that the lender will be using if you’re applying for credit, but it’s useful in that it will give you a general idea of where you stand,” said Evan Hendricks, author of the book “Credit Scores & Credit Reports,” according to The Sacramento Bee.

Why is this important?

To Fix Mistakes

As incidents of identity theft continue to climb across the nation and worldwide, it is more important than ever to remain vigilant of your bank statements, especially your credit card statements and credit reports. This is partially so that you can be aware of any fraudulent activity as soon as it occurs, thereby minimizing the havoc wreaked upon your account and the hassle involved in correcting it.

Also it is important to keep a watchful eye upon your credit report so that you can correct any errors that might appear. Creditors and the credit bureaus themselves sometimes make mistakes, and if you don’t catch them they can needlessly drag your credit score lower than it should be. Everyone is entitled to one free printout of their credit report every year, so make sure that you go online and request yours. Keep it on file once you review it so that you have it in your records.

Also, thanks to the Dodd-Frank financial regulation, now all consumers who have an application for a credit card or car loan denied are entitled to receive a free copy of their credit report as well.

To Gauge Creditworthiness

If you intend to apply for a brand new credit card, it’s a good idea to keep an eye on your credit score so that you know the likelihood of your being approved, especially if you are going to be applying for a bank loan or a mortgage in the near future.

This is because every time you apply for a new line of credit your credit score suffers slightly, so there is no sense in applying for a card that you don’t have sufficient good credit to acquire. While you can never know for sure whether or not a lender will grant you a loan, you can get a pretty good idea by frankly analyzing your credit report.

The Scoop On Credit Scores

Your credit score is a number that is most commonly determined by using scoring models established by the Fair Issac Corp. – FICO – which is based in Minneapolis. The numbers range from 300 to 850, and the higher your number the easier it will be for you to obtain a great deal on a mortgage or credit card offer.

In 2011, there were around 200 million U.S. Consumers with credit scores, and approximately 18% of them – that’s roughly 36 million Americans – have a score of 800 or above according to estimates made by FICO. That same year, over 75 million had scores equal to or greater than 750 and the median score hovered around 711.

Elite Eligibility

When it comes to mortgages, any rate fluctuations due to product type and region notwithstanding, applicants with a FICO score of 120 or better tend to receive the lowest available rates.

As far as credit cards go, who the most elite card offers go to are likely dependent upon factors such as assets in addition to credit scores, as opposed to being extended based upon the merit of an individual’s credit score alone. Most card issuers, when analyzing an applicant’s creditworthiness, will examine their entire credit profile which includes pertinent information such as reported income, credit repayment history, credit bureau score and total amount of outstanding debt.

Pay On Time, Every Time

Anyone bound and determined to increase their score regardless of its current state can have the best chance of boosting their number by paying all of their credit card bills on time. Consumers who are all set with a score somewhere in the range of 750 to 800 who still want more should just carry on with the good behavior they are obviously already practicing simply maintain it for a long period of time. Other tricks to sending your score soaring aside from never being late with a payment is to keep your amount of debt low in relation to the amount of credit that is available to you and not opening up an account unless you really need to.

Cushion A Fall

Probably the biggest benefit to putting forth the effort to achieve the absolute highest credit score you are able is to create a cushion for yourself in case something unforeseeable should happen that would have an adverse effect upon your score. Additionally, bear in mind that each lender has a different cut off number when it comes to a consumer being eligible for the choicest rates. That being said, 750 should, in general, be sufficient in most cases.

Incorporate Monitoring Your Finances Into Your Daily Routine

If there are tasks you habitually perform every day such as reading the morning paper, jotting down a to do list or brewing a pot of coffee, develop the habit of looking online at the balances of your credit cards, checking and saving accounts as part of your routine. As you do so, make a quick comparison of the amount of money you have at your disposal to the current total of your debts. This will only take you a few moments and it will make you conscious of the state of your financial situation.

Admit That You Have a Problem.

Even if you have established a budget and feel that you are sticking to it, if you find yourself slipping in to debt little by little that means you may have underestimated a few of your expenses along the way. Sit down and revamp your entire budget after taking a couple weeks to track all of your expenditures – jot down every little thing that you buy on a daily basis. Once you have all the numbers, you can outline a more realistic budget based upon the actual amount of money you are spending and can then trim down expenses as needed so you can live within your means.

Cut Back On Your Charges

If you have grown accustomed to considering your credit cards as supplementary income it is high time to change your mindset as this attitude makes it oh-so-easy to sink deeply into debt. The best way to discipline yourself into not relying upon your credit cards is to leave them out of your wallet entirely. Hide them someplace safe and don’t even think about charging any new purchases until you have all of your balances entirely paid off.

Make Your Own Monthly Minimum

If you only send in the minimum amount as established by your credit card issuer each month, it will take you a very long time to unburden yourself of the debt and you will pay a tremendous amount in interest charges. Perform this quick calculation to figure out your own personal minimum amount to send in to your creditors: subtract the sum of your newly modified expenses for one month from the amount of your monthly income. Out of the amount you have left over, determine a fixed personal minimum that you can commit to applying towards your outstanding credit card balance until it is paid off. Make a promise to yourself to never go below that amount but if you ever find yourself with extra cash, add it to your payments and send it in. Using this method you will clear your debts in a reasonable amount of time while saving money on interest.

Save, Save, Save

As soon as your debts are paid off, you will have more wiggle room each month as far as your finances go. Instead of squandering the money, sock it away into a savings account and build yourself an emergency fund. If you save money on a consistent basis, you will soon have created a cushion for yourself should unexpected bills come along and trip you up.

The survey is called the Survey of Consumer Finances and is a reputable source in the industry. The survey was conducted when survey takers were asked to report their own debt, compared to their actual death reported by Equifax — one of the three major credit reporting agencies. An interesting fact is that data reported that consumers on average more accurately reported their mortgage and student loan debt, and more consistently misjudged their amount of credit card debt.

On average, households end up reporting $4,700 in credit card debt, while the facts state that most families have credit card debt close to $7,134. “Household surveys are the source of some of the most widely studied data on consumer balance sheets … at the same time, recent research questions the survey respondents’ propensity and ability to report debt characteristics accurately,” according to The Wall Street Journal in reference to the report.

Even if analysts are uncertain about the validity of the survey, it’s clear that consumers are in the dark about their credit card debt. Some of the disparity in reporting could come from asking members of the household who were not fully aware of the household’s debt situation. But that hiccup can only account for so much, the trend seems to point much more towards the fact that the American consumers are not aware of their credit card finances.

Consumers should do their best to stay on top of their finances, the amount of debt owed and their credit score so they can make sound financial decisions in the future. If Americans are not aware of their debt, it can become easier for them to end up drowning in debt.

Consumers can keep track of their debt by monitoring their statements every month, as well as paying off bills on time and keeping spending low can be efficient ways to always know how much you owe in credit card debt. Also, many banks have phone applications that alert you to your credit card balance and the amount due on your next payment.

It seems that consumers don’t forget about mortgage and student loan payments because they are more or less the same every month. Try to keep the same habit, by paying a certain percentage of your balance every month. Falling out of touch with the amount of credit card debt you owe is not a smart move. Always keep a keen eye on your debt, your credit score and the amount of money you have.

Why

Why does an employer need one, in the first place? This is because it is a reflection of a person’s financial habits and can also, to some degree, say a lot about other aspects of their character.

Having bad credit, even, could cost you a job! Sometimes though, when a person is unemployed for a great period of time, their credit suffers. This leaves the job seeker in a catch-22.

As of 2006, when the Society for Human Resource Management was surveyed, about 43% of responding companies said they ran credit checks on their new hires.

This can be hurtful for someone who is just starting out (i.e. someone directly out of college) because, usually, they don’t have much credit to check. Certain politicians have actually come out against this tactic, but job credit checks only seem to be getting more popular. Two states, though, do prohibit these credit checks:  Hawaii and Washington.

The Importance

Although credit histories don’t carry as much weight as criminal records or even identity verifications, they still go a long way in factoring an employee’s position. This can be dependent on the company, though:  the TSA blocks off potential candidates with more than $5,000 owed in debt.

Sometimes employers simply do the credit history check as a way of seeing past employments, as well as addresses of the employee and verifying information.

That’s almost the same as when applying for a credit card, a credit card issuer does a similar check with employers to verify the candidate’s job history.

Where

If you find yourself searching for a job in the financial sector, on the other hand, a credit check will be of vital importance. Sometimes companies that deal with money will use credit checks as determining whether or not their new hire is dependable or not. This can include financial executives, as well as people who work with valuables (such as jewelry) on a regular basis.

In that field, people with big debts can be viewed as threats, because the company’s line of thinking assume that they have a greater likelihood of stealing or committing fraud themselves, because of their less-than-stellar financial situation. Understandably, then, companies keep away after a credit check which has shown more-than-average debt and other financial hindrances.

Private Or Government?

While private companies do credit checks, it is more likely that your credit history will be viewed if you are applying for a job with the federal government. This can be either by working for them directly or even as a contractor.

A bankruptcy could surprisingly not hurt your credit history; according to the U.S. Code Title 11, employers cannot discriminate against those who have declared bankruptcy. If you should find yourself having a bankruptcy held against you, you can take legal action against the company.

It Really Is All Up To You

And remember that an employer is always supposed to tell you if somehow they have used your credit history against you, as federal law demands it.

Rest assured, though. If you are someone with credit card debt or a loan you defaulted on, you have to give your employer the a-okay before they check your history. So if you are not entirely comfortable with the idea of them checking up on your credit history, you don’t have to be.

It can be advised, whether or not you are looking for work, to always have a handle on your credit report. That way, you can act before someone else does so.

1. Can I pay my loan early?
   Know the ins and outs of your repayment plan. Know how long you have to repay the money and how much interest you will be charged. A creditor might advise that you pay on a 12 month payment plan. When signing up for these plans watch out the APR and monthly rates. Some plans may offer 0 to 5% APR with higher monthly payments or a 60 month payment plan with an APR of 14%. First determine your payment personality to see which of these options a better fit is for you.

   The lower interest rates on the shorter term can be enticing, but if you’re a traditional borrower the longer payment plan might suit you because of its lower monthly payments. Either way, make sure that you will not be charged a penalty fee if you choose to pay the loan off ahead of schedule.

2. How will they calculate interest?
   Calculating interest can get kind of tricky. So make sure that if you don’t understand the interest guidelines laid out in front of you, consult your advisor. Lenders sometimes show interest rates as APR rates. So if your interest rate is 12% APR, 1% of your balance would be added to your bill every month. It’s important to discuss the calculation with your lender, because each one does it differently.

   One lender might add the interest monthly; some might add the interest daily. If you get a loan that adds interest daily, it can lead you to having a higher principal balance and causing you to pay more money over time. Also, you should know if your loan is an adjustable rate or fixed rate loan. This will determine the limit you are allowed to be charged over time.

3. Do they report my payments?
   If you are looking to rebuild your credit or raise your credit score, this is a very important question to ask. Loans usually don’t have an effect on your credit score unless the three major credit reporting agencies know about it. Talk to your lender to see if they will report your payments to Equifax, TransUnion and Experian so that your credit score can be affected. Most lenders will report the information to the credit reporting bureaus, but they are not required to do so.

Talk About It: It may not be easy, but bringing up personal finances as well as inquiring about your partner’s finances will help you and your relationship in the long run. Your partner may already have good budgeting and spending habits, or they may have terrible habits ransacked by student loans and poor money management. Either way, you can take note of this if you listen to how they respond in conversation regarding finances. Do they seem to pay their bills on time, or do they seem to be always running from a creditor or trying to hustle a quick buck? If there are any parts of your partner’s finances that you are unsure about, do not hesitate to ask.

Try It. You two should start out by budgeting a trip together, like an African safari, or a cruise off the waters of Honolulu. Or another possibility could be to plan a vacation as a prize for monitoring monthly expenses and prompt bill payments. If you two succeed at completing similar short term goals, such as going on a cruise, then buying large ticket items like a house or car should become easier.

To Keep It Together or Separate. Once you know the ins and outs of your partners’ debt, it is up to you to make a decision of whether or not to keep separate credit cards and histories or to merge them. Many advisors will advise against joining accounts, but couples should talk about whether they prefer joint accounts or to retain their financial individuality.

Adhering to your future financial goals. Analysts recommend that couples save at least three to six months’ of their living expenses in case of any emergency. As an engaged couple, you two should work towards this. If as a couple you are attempting to save money, you could start by regulating the costs of dates. Once you cut back on certain expenses such as excess dining out and other recreational activities, in favor of less expensive activities, your finances can grow together.

Debt comes from everywhere, so don’t worry if your partner has tallied up some along the way. Just remember to remain understanding and comforting as they work their way through their finances. If there are questions that you still haven’t asked or answers that you’re still searching for, don’t hesitate to sit down with your financial advisor and your partner.

First of all, you have to begin somewhere if you have to build credit history from scratch. Every individual’s credit history is linked to the social security number. Your credit history reveals your payment history, delinquencies, delayed payments, late payments, missed payments etc. It reveals everything that a lender might want to know such as the credit limit, the payment patterns and other such vital details.

To start off with, you should live in the US for at least a period of 6 months. If you get credit card offers in the mail, it does not mean that you will automatically get an approval for a card. You will have to meet the eligibility criteria in order to obtain a card. If you don’t meet the requirements, then you might be denied a card.

A person’s creditworthiness is determined based on your ability to pay or your willingness to repay your debt. There can be no discriminations based on religion, sex, race, nationality, age or income through public assistance. Even if you have been denied a card, the lender will give you a written explanation as to why you were denied the card.

If you have no credit history, it is important to build one at the earliest as everything is related to your credit history. Your credit history or credit report is important to lenders as they base all their lending decisions only after they are satisfied with your creditworthiness which is obtained through your credit history or your credit report.

If you have a good credit rating, then you obviously are credit worthy and you don’t pose a risk to the lenders and they will be more than happy to extend credit. However, having a poor credit history will let the lenders know that you are a risky customer and you may be denied credit by most lenders. Some lenders might offer you credit despite that but you will be charged a heavy interest rate.

Even landlords will in all likelihood, take a peek at your credit report to ensure that you are capable of paying their rent on time. Employers will also do the same to check to see if you are responsible enough or if you have stayed on in a steady job for a substantial period of time.

Hence building credit history is very important for a whole lot of things and not just merely to avail credit. So, it is better to start somewhere rather than remain without a credit history. Ideally, if you can start building your credit history from the time you are in college, it will be a lot easier for you to avail a home loan later.