Why is it important to have good credit?
With today’s society becoming more and more business oriented, establishing and maintaining good credit is vital if you plan to do any of the following:

1.Apply for employment
2.Rent an apartment
3.Open a bank account
4.Setup an account with public service or the telephone company

It used to be that establishing good credit was important only if you planned to buy a home or car, but not anymore. The simplest task, such as applying for employment could very much mean that you need good credit.

Having bad credit could impede your ability to survive. This is sad to say, but it is a proven fact that people have been turned down top quality job positions just because of their credit rating despite the fact that that particular job could be exactly what a person needs to fix their credit. That’s a scary catch twenty-two don’t you think?

Ok, I’m caught in that scary catch twenty-two, what do I do?
Start by requesting a copy of your credit report in writing. You are entitled by Federal Law to receive a free annual credit report. There are three major credit-reporting agencies that you need to contact, you can run a search on the internet or find their information in a phone book. If you have already received a credit report for that year, you may also use any letter of credit denial by sending in a copy of that letter within 60 days of its receipt with your written request. Be sure to include a copy of your state issued ID, proof of your address and your last known addresses for the past 5 years. It is very important to include a copy of your social security card.

What does is mean to have good credit? Who cares who sees it?
Unbelievably, your credit report is public information to anybody where you are asking for a line of credit. Any time you apply for employment, an apartment, or attempt to make a big purchase, you are asking for credit and permitting the potential creditor to view your credit report. Although your credit report does not reveal a personality diagnose, it may just as well, considering it is through your credit report how others (potential creditors) will perceive what kind of person you are.

Businesses look into your credit report and determine by your ability to pay and follow through on your promises what kind of person you are. Do you adhere to your promises? Are you stable, do you follow through on payments? If so, then you most likely are a good and reliable person. You may be worth giving a chance at that perfect job, or residing in that particular community.

What about good people with bad credit?
You may be a good person, you may even be the most considerate and compassionate person alive; however, if your credit report shows a late payment or no payment on an account at all, your entire being could be perceived as not reliable, unstable and untrustworthy. Prepare yourself to deal with a lot of paper work and phone time once you are ready to repair your credit.

What does this mean? How can I protect my reputation?
What this means is that it is time for you to fix your credit. Your income may be null or limited, that’s ok, there is still a way to save your personal reputation and open more doors of opportunity. Once you receive your credit report(s), contact the creditors listed and make payment arrangements, even if it is just $1-$5 a month. Doing this shows your willingness to get back on track, it show that you are putting effort towards establishing stability and responsibility.

Whom can I turn to for help?
There are many resources available to assist with credit repair, make use of your library or the internet. Most credit repair agencies offer free services, take advantage of their offers and assistance. Building your credit is more than being able to make a big purchase, it also means you are establishing your personal reputation and setting your survival foundation.

If you are in debt and nagged daily by creditors you might want to understand your credit files to repair your credit. If you are delinquent in payments your credit score is affected, and often you can’t get a loan. There are exceptions but if you are able to get a loan or credit card you will be paying high interest rates. Your credit file determines your faith in life. If you are credit file has a low score most landlords, lenders, or providers will turn you down when you apply for a loan. Credit files are often found in the computer systems are maintained by credit bureaus. If your credit file indicates you are a low risk then you most likely will get a loan, apartment, credit card, or whatever you apply for. Credit scores are a ‘numerical’ system that determines a person’s credit rate and score. Credit scores generally rate anywhere from ‘300 to 850’ otherwise the scores are higher if a person has an outstanding credit rate. If you apply for a loan and the lenders are unable to find your credit file you are often viewed as a mishap. This means that you haven’t established a credit history and no one can really tell if you are a good or bad risk. This is why it is important to establish credit at an early age. If you apply for department store cards, credit cards, gas cards or other items that offer you a credit, then you are on your way to establishing a credit history and your file will be on record. The problem with applying for credit cards or loans, or any type of credit, is that when we start out our parents are often co-signers. This means if we do not make payments our parents are obligated to repay the debts. The truth is that when we apply for a job, apply for an apartment, or take out an insurance policy we are establishing credit. Your credit files are often stored in TransUnion, Equifax, and Experian. The law protects us to a degree when it comes to credit repair. To understand all the legalities, as well as how our credit file affects us is important to repairing our credit history. Credit Bureaus are coordinated and monitored by the Federal Trade Commission beneath the requirements of the Federal Fair Credit Reporting Act (FCRA) and follows up with the State Laws. If you have credit files with inconsistencies the Fair Credit Reporting Act protects you in the sense that it requires the credit bureaus to delete or make the information obsolete on your credit file. This protects you if you are a victim of Identity Theft, or any other false accusations made against you. The Credit Bureaus are required by the laws to list accuracies on credit files by gathering the appropriate information against you or on your behalf. The laws protect you in the sense that it regulates the credit bureaus by only allowing them to list negative reports against you for a limited time. The laws also regulate who can see your credit files. If you are applying for a loan, license, public assistance, insurance, landlords, and courts can request your credit files without your consent. However, if you are applying for a job under certain circumstances the employers will need a written authorization form from you. Utilities are under the law and these providers cannot deny you services even if you have bad credit. As you can see there are a wide range of services that can check your credit file. The downside is each time your credit is checked points go on your files. The more points added to your credit file affects your credit so you want to be careful and only apply for what you need. If you have bad credit and trying to repair your credit be sure to request copies of your credit files, understand your score on your files, and if you suspect you are a risk it is best to apply for loans or credit cards after you have cleared your credit report.

“How do I establish credit, when I don’t have a credit history”? This is probably the most commonly asked question by most consumers looking to open a credit account. Not having credit can be just as difficult as having bad credit unless you know how to go about proving yourself to a potential creditor.

The crazy catch twenty-two:
How can you get credit if nobody is willing to extend you credit because you don’t have any credit history?
A good place to start is by obtaining a letter of credit from a company that you have been dealing with already that does not report to the credit reporting agencies.

An example would be your electric company. It is possible to contact your electric company and request a letter of credit. They are likely to require that you have had an account with them for at least a year as with most companies that you are asking for a letter of credit. Your cable company may be another option for a letter of recommendation for credit. If you have had an open account for at least a year and have made on time monthly full payments, without payment arrangements, these two companies are good candidates to provide you with a letter of recommendation for credit.

To establish credit either with or without a letter of recommendation for credit, you could also start with your banking institution. All banks offer credit card and loan accounts. If you have banked with the institution for at least a year (sometimes 6 months) they may strongly consider extending you a line of credit. In the beginning of any credit account, your interest rate may be high, but don’t despair, after your first positive review in about 6 months, the interest rate may fall dramatically as well as your payments if you have been making minimum payments.

Just to get you started. Your new account may be very low. After about 6 months of on time payments, your lender may review your account for a larger credit line. The smartest technique is to start with baby steps. Start with just a small account, pay the accounts regularly, get used to the monthly obligation, and make on time monthly payments before jumping into any other credit account(s). You are very likely going to find creditors coming out of the wood work and hunting you down to offer you a line of credit, consider their offers with caution. Actually, the best recommendation is to give your self at least 6 months to a year before taking on a new account. Jumping in too fast can easily wipe out all of the hard work you have done so far to establish some credit.

Once you jump on the credit bandwagon, it is vital that you keep track of your own credit rating. You will find many great offers online for programs that can inform you, on a regular basis, of your credit standings. You could also request your free annual credit report and verify your status regularly.

Once your credit becomes active, keeping track of your credit report is crucial for many reasons:

1. It could prevent the use of a fraudulent credit account by an unknown user.
2. It could prevent the unfortunate event of somebody stealing your identity and using your credit.
3. It could help find a lost payment and assist you with keeping track of how your creditor is reporting your payment activity.
4. It is just good credit etiquette to know your own credit rating.
5. Knowing your own credit rating and status gives you bartering power when dealing with a new potential creditor.

Once you’ve established some credit, take caution with accepting credit offers from other creditors, look into the interest rate the lenders are offering, consider the monthly obligation in addition to your other financial responsibilities such as rent, utility bills, car insurance, groceries, laundry expenses, gas, day care, etc., and feel free to decline credit offers.

In the beginning of your adventure with new credit accounts, it can be very exciting to have several creditors offering advances, it can be an uplifting and powerful event, however, pursue with caution in order to maintain a healthy credit rating and score. Keep your credit history in mind and respect the great task that you have accomplished by establishing credit with caution.

All about college credit cards

College credit cards are the credit cards that have been specially designed for college students. College credit cards are more popularly known as student credit cards. College credit cards allow the students to experience the benefits of credit cards much earlier in their life. Through college credit cards, the college students are able to learn more about credit cards and their use. In fact, for most of the students, their college credit card is their first credit card that acts as a gateway to the world of credit cards. Some other students might have previously used supplementary credit cards linked to their father’s credit card account; however, for such students too, their college credit card is the first one that is truly theirs.

College credit cards are not very different from other types of credit cards in the basic sense; they function in the same way as any credit card would. However, there are some differences, which basically arise from the fact that college credit cards are used by people who have no prior experience with credit cards and who perhaps don’t understand the concept of credit cards completely. Hence, the credit card supplier is at risk with issuing credit cards (college credit cards) to such people whom he is not sure about. Most of the students don’t have a credit history either. In such a case, the supplier of college credit card cannot be sure of receiving the credit card bill payments in time (and even receiving them at all). To counter such risks, the supplier of college credit card requires the parent of the student to co-sign the college credit card application form as a guarantee. Moreover, the credit limit on college credit cards is generally around $500-$1000 per month, which is lower than what it is for other credit cards (this credit limit is generally sufficient to fulfil the typical needs of a student). Another risk mitigation instrument used by the college credit card suppliers is the interest rate or APR. The APR on college credit cards is generally higher than that for other credit cards. Again, this is done to dissuade the students from overspending on their college credit card (and finally not being able to pay their credit card bills).
However, if we were to look at these impositions in a positive sense, we would find that these are actually in favour of the student (who is still getting trained to take on the real world of credit cards).  Moreover, college credit cards also help the students in establishing a (good) credit history which is another important benefit that becomes handy when the student needs any type of  loan at a later stage in his/her life.

So, college credit cards are really something that every student should consider going for.
 

Loans had been defined as an arrangement between to individuals (or groups) from which a lender gives property or money to the borrower.  The latter likewise agrees to repay the money or to return the property at a given period of time, usually with an interest.

Whenever an individual enters into an agreement for a loan or wants to secure a loan, the lender may o may not require the individual to pledge a collateral.

If the lender requires for a collateral, this is called a secured loan.  Collateral is defined as anything that has a value. This may include a house, a herd of sheep, a car, business assets, or anything that has a worth.

Usually, lenders require collaterals valued at a much higher price than that of the actual loan since its value could diminish over time.  An example may be a house that has been used as a collateral.  Its value may be lower in time if it
caught fire, had been flooded or simply damaged by unforeseen accidents.

Other lenders may not require for a collateral, this then is called an unsecured loan.

The following are the advantages of a secured loan:

These kinds of loans usually have lower interest rates since it is backed by a collateral.  The lender would feel more secure with the deal thus over a lower interest rate.
 
With the presence of a collateral, lenders may still want to lend money to borrowers who may even not have a very good credit standing since they could rely on the security of the collateral.

These though also have its own disadvantages:

The borrower may not fully enjoy the use of the collateral while the loan is still active.  For example, if a boat is used as a collateral, he or she may not be allowed to resell a part or the whole of it or make renovations to it since it could affect its value.
 
Even if an individual filed for bankruptcy, said collateral may still be seized from him or her.
 
Unsecured loans also have its own advantages and disadvantages.  Its advantages are as follows:

Applying for unsecured loans are relatively easier than that of a secured loan.  It usually requires less paperwork or documentation, requiring usually only the signature of the borrower and a given schedule for the payment scheme.
 
There usually are not restrictions on how the borrower may use the funds.
 
The lender has not right over the purchased goods with the loaned money or fund.
 
On the contrary, a loan may be both secured and unsecured.  If an individual enters into a secured loan agreement, say $10,000, and uses his automobile as a collateral (valued at $6,000), then his loan is secured only up to $6,000.  The
remaining $4,000 is deemed as unsecured.

For individuals who have bad credit standings, lenders usually offer the secured type.  This for their own assurance that the borrower will be forced to repay, and if not, the lender have the security of the collateral to fall back to.

Though some may still offer the unsecured form of loan to those with bad credit standings, these are usually backed with higher interest rates that they deem would be sufficient to cover the amount loaned even before its full payment.