Change your Thinking About Credit
by: Michael Creditfirm.
1. Your credit report is your resume
Consider your credit report as a positive reflection of how well you repay debt. A lot of people see credit, whether good, bad, or ugly, as something that happens to them. Your actions directly impact your credit report, and good credit is the result of properly managing your bills and finances. Credit is not something that just happens to you, you control your credit, and in turn how potential employers and lenders see you.
2. Your credit report is an asset
Your credit determines your creditworthiness when applying for loans. It determines your interest rates, down payment amounts, and whether a lender can trust you to pay back the amount you are borrowing. You should protect your credit the same way you would protect your child. Never sign anything until you completely understand all of the term and conditions. And do not risk your credit by co-signing for other peoples loans.
3. Build your credit Portfolio
a. Your credit file must be built thoughtfully, carefully and strategically, account by account. Make sure that you establish a good mix of credit via both installment and revolving loans, credit variance accounts for 10% of your credit score.
b. Do not close old inactive accounts, keep them open and keep them active so that the issuers do not close them. The older your accounts, the better. Length of history accounts for 15% of your credit score.
c. Keep your balances low in relation to your credit limits. A good rule of thumb is to keep your balances under 20% of your credit limits. Example: If you have a credit card with a $1,000 limit, keep your balance at $200 or less. Amounts Owed accounts for 30% of your credit score.
d. Limit yourself to applying for a maximum of one credit transaction every 6 months. New accounts will lower your average length of history and too many hard inquiries will tell creditors that you are hungry for credit and lower your credit scores.
4. Shop around and do your research
Shop around for the best available interest rates and terms. Do not settle for the first offer, haggle on everything from the price to the interest rate. Do your due diligence and read offers for credit thoroughly so that you are not blindsided. Take your time, do your research, and don’t be rushed into anything, even when pressured by a salesperson.
5. Good Credit is cheaper
Having bad credit can be very expensive. It’s very common to see people with bad credit paying twice as much as a person with good credit for a mortgage, auto loan, or credit cards. But, applying for credit doesn’t have to be a nerve wrecking experience. Buying a new house or car should be an exciting time, and it is if you have good credit. You can qualify for the best deals, the best rates, and the lowest monthly payments. Good credit dramatically improves your quality of life by decreasing your monthly expenses and increasing your borrowing potential.
So what are you waiting for? Sign up today and take the first step to Good Credit Now!