It is fascinating to know how important it is for one to have a good credit score in the United States. For those of us that takes residing and excelling in this nation seriously, it is important to have a very good credit score. In fact, it is the key to our financial life. For example, having a good credit score will offer access to lower insurance rates and lower interest rates on credit cards, as well as access to loans. Interestingly, it also offers access to an afford security deposits on utilities, ability to get a phone contract with zero down payment, lower interest rates on home purchase and easier approval for rental apartment and houses. In fact, many high rewarding jobs will reject your job application for having a low credit score. What then is a credit score? A credit score is a three digit number, calculated by a mathematical formula using the information obtained in your credit report. Credit scores range from 300 to 800. Usually scores of between 300 and 600 are considered as low or bad credit while scores from 620 and up as considered as excellent or good credit. Thus, the advantages of having a good credit score cannot be over emphasized. However, most Americans do not have a good credit score. Majority of this fact is due to early reckless spending habits and inability to manage ‘free money’ efficiently. Credit cards are no ‘free money’. They are debts that must be repaid. I will illustrate a number of tips that have greatly helped to improve my credit score from a lousy 550 to all time high of 790. But first, let’s go on this journey:
A couple of years ago after I relocated to the United States to further my education, I will, for the first time in my life hold a credit card. I had never previously never see...
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...off to friends and family. Please do not feed your fantasies. Spend your credit cards on needs not wants.
Conclusively, improving a low or lousy credit score (like mine was three years ago) will take lots of self-discipline, self-control, time and patience. Since the debts owed on you credit cards did not occur in a day, so also, the process of rebuilding your credit for an improved credit score will not happen overnight. As I have stated, it is a process; and as we all know that credit scores means a whole lot more than just any ordinary numbers, you must take the time and effort required to follow these steps I have discussed. I have been able for example to raise my credit score from a lousy 550 to all all-time high (for me) of 790 by simply following these simple and disciplined steps and I strongly believe it’s your time to improve your credit score as well.
It is up to you to know what is on your credit report and keep the data up to date. You might have paid your bills on time, but your credit report may show that your credit is less than perfect. You may have had a credit dispute with a merchant that was corrected, but not shown on your report. You may have a bankruptcy that was not properly recorded. You may also have experienced credit fraud.
I 'm warning you that this will require a change in your behavior. Using this method is powerful, but it means that you won 't be able to buy new clothes, tools, or toys whenever you want. It also means that you will be moving quickly towards a debt-free life where you don 't have to feel guilty and stressed about how much money you owe.
As a native of Texas, Lendol Calder graduated Phi Beta Kappa from the University of Texas at Austin in 1980 and went on to earn his Ph.D. from the University of Chicago in 1993. Calder is currently a Professor of History and African-American Studies at Augustana College and is presently working on an analysis of the thrift ethos in American history and culture with a team of scholars organized by the Templeton Foundation and the Institute for the Advanced Study of American Culture at the University of Virginia. He is a scholar of the history of American consumerism and this interest led him to study the progression of consumer credit in America when little else had been published on the topic. Calder draws from some of his own experience with consumer credit in the form of a department store credit card he and his wife obtained early in their marriage to purchase what he says was “a suite of furniture costing twice as much money as we could have scraped from our bank account.” (p.5) Most of his presumptions, however, were discarded in his explorations of the “peaks and valleys of consumer credit” (p.16) due to the fact that most common sense beliefs about the history of credit are in actuality a myth. In Calder’s Acknowledgments, he gives thanks to his parents for coming to his aid and saving him “from having to do some unwanted personal research into the subject of debt.” (p.xiii)
First I will explain what credit is. Next explain one efficient way to build credit. Finally, will touch upon the importance of an excellent credit Now let us begin with what is credit. Credit is what a lender uses to determine how well a person pays back the borrowed money. Credit is general viewed at 740 to 900 are excellent, 680 to 739 are very good, and 640 to 679 are fair and below 639 are poor.
No one likes a bad credit score and many people put a lot of effort in managing their scores in a better way. However, many times, willingly or unwillingly, they make mistakes that negatively affect this number. Such mistakes have long-term consequences and if not rectified properly, can adversely affect your credit score. And it will take a long time to improve once it goes down for any reason.
With the economy in the U.S. going so well, credit card companies are issuing more credit. Consumers are then using their new found credit to buy without even thinking of how they will pay for the products. They get the credit cards because of the appealingly low 5.9% introductory rate and go for it, but the credit card companies usually run those rates up to 18% or more in the first six months before the consumer pays off the purchase, (Insight into the News IIN, 1997). This in turn leads consumers into over-extending themselves. Although 96% of all consumers use credit cards responsibly, according to the American Bankers Association '97, the typical person who files for bankruptcy takes home less than $20,000 a year and has more than $17,000 in credit charges, and that's not overextending what it is.
A credit transaction is when a consumer purchases a good or service and pays in the future. The use of a credit card can be useful as it is convenient, saving time and trouble. However, due to the extensive use of credit cards in Australia, legal issues has arisen such as the inability for consumers to repay their debts, unfair contract terms and inadequate procedures of credit providers. Prior to 1996, the Credit Act 1984 (NSW) was introduced as the only piece of legislation that regulated customer credit. However, because it only offered protection for less than 20% of consumers, the Consumer Credit Code was established in 1996 under the Consumer Credit (NSW) Act 1995 (NSW). This code is a set of uniform national rules about consumer credit transactions and has been adopted by all governments throu...
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
advantage, and I will show you how to choose a proper credit card, why you should pay
Your credit score is one of your most important financial attributes. Fortunately for those who are unsatisfied with their credit rating, there are plenty of options available. Improving your score is an attainable goal that everyone should aim for, even those who are content with their credit rating.
Credit cards are something that are almost needed in everyday life now, as most dont have the money available to purchase a car or house and so need credit, thus needing credit cards to help build that credit. Those cards are hard to handle, and receiving applications in the mail daily, and commercials appearing on television don’t seem to make the struggle of staying away any easier. This starts to spark an interest. So people begin to think, "I think I 'm responsible enough to get a credit card, I 'll only use it for emergencies." Then the application process begins and it may take a couple times to finally be approved for one. This only makes it worse, of course, because realizing how long a credit card wasn’t applicable to life, but now
Statistics suggest about 32% of consumers are going to over estimate the rating on their credit, while only around 4% are going to under estimate the rating on their credit. Ones who will overestimate the quality of their credit are most likely less informative about finances overall, and will be more likely to have learned about their financial knowledge, unfortuanately, the hard way. Also the consumers who are going to overestimate the ratings of their credit will be less likely to properly budget, effectevely save their money, or learn to invest it often. With another example, in 1999 it was found that about 40 percent of mortgage borrowers didn't understand what the interest rates that were associated with their loans were.
If we don 't have credit cards, we can’t build our credit history. If we don 't have a credit history, we aren 't allowed to buy cars or houses with low monthly payments. Having credit cards is a cycle in life because without one thing, we can 't have the other. When people have credit cards they have to use them. It doesn 't help that banks offer many credit cards to people, ending in high debt. Banks also encourage low monthly payments. If people pay low monthly payments, they will never end up paying their credit card debt off. They will probably end up paying for the objects they bought, two or three times. People aren 't forced to pay high monthly payments in order for it to take longer to pay the card off. If it takes longer for a person to pay a credit card debt, the credit card companies will be making a lot of money. I can definitely say I have experienced this because I am always offered to get a credit card. There are many stores that carry their own credit cards, and offer them for their customers. Offers are tempting and they can add to a future of credit card debt.
Some credit cards allow you to spend in a currency that your debit card doesn’t carry. Some credit cards are preferred in other countries rather than your non-national debit account. Some foreign countries are smothered with corruption where you need the fraud protection that your credit card has.
The lack of knowledge plays a big part in the debt young people are getting themselves into. Credit cards are often offered to young adults as soon as they get out of high school. Many take advantage of having a credit card without even thinking about the responsibilities that come with it, instead they think about the things they will be able to buy. In “Generation Debt” the author Tamara Draut says that young people are getting into debt younger than ever before. Two of the reasons that are more costly on young students that hit hard on the budget are car repairs, and travel for students who have families and friends in other states (231). From my experience I know first-hand what it was like to be offered credit cards right out of high school, and I didn’t hesitate to get any of them. I st...