Credit information

Read and apply this credit information. It is simple, effective and free.

Perhaps the first problem is, in this consumer society, that we are bombed with advertisements for literally thousands of "indispensable " products.

While our parents tended to pay with cash and buy only what they could afford, we have the "buy now, pay later" and "buy everything" mentality.

Unfortunately, our huge appetite for credit may be eroding our financial security, as more people (specially Americans) continue to rely on borrowed money to maintain their existing lifestyles.

Yet, installment debt, in itself, is not a bad thing. It enables us to make major purchases and start businesses that would be nearly impossible to finance up-front.

It is important to establish credit if you plan to buy a car or home some day. Credit cards also provide a means of reserving a hotel room or obtaining cash while you're traveling.

Creating a positive credit history for yourself requires using your credit card intelligently. Following is a credit information to help you manage credit effectively:

● Pay your bills by the due date.

● Don't be fooled into paying just the minimum balances. If you do, you'll stretch your payments over months, even years and incur interest charges in the process. Credit card issuers make money on interest and there's nothing they'd like more than to have you stretch out payments.

● Use credit for larger, durable purchases you really need, rather than
non-durables, such as restaurant meals that are better paid in cash.

● To establish a credit history, open a checking or savings account, then apply for an oil company or retail store card. Use your cards sparingly, charging only what you can pay off in a month or two and make your payments by the due date.

● Monitor your credit rating periodically to determine that all credit information is reported accurately.

Credit over-extension signs:

● You pay bills using money intended for other needs.

● You borrow to pay for things you once paid for with cash.

● Creditors are sending overdue notices.

● You have to juggle other bills just to pay the minimum charges on your cards each month.

● You have no savings or emergency funds to cover three to six months of living expenses.

● You don't know and/or don't want to know, how much you owe.

● Each monthly credit balance is higher than the last and you keep applying for more credit, using the cash advances to pay bills.

If you miss a payment, the information goes immediately into your credit report and affects your credit rating.

This has many negative consequences.

If your credit record has been seriously blemished within the last five years, an auto insurer may put you into its high-risk group and charge you 50% to 100% more (in most USA states).

Many property insurers also review credit histories before they issue policies.

If you're judged a poor credit risk, you may be rejected for an apartment rental or refused a home mortgage.

In addition, a prospective employer looking for clues to your character may dismiss your job application if your credit report reflects an inability to manage your finances.

Your credit report helps others decide if you are a good credit risk.

But how credit reporting works?

Credit reporting agencies (credit bureaus), gather detailed information about how consumers use credit. Businesses that grant credit regularly supply credit information to credit bureaus. Credit bureaus then compile this information into credit reports, which are sold to credit card companies, retailers, banks and others who grant credit.