Establishing Credit - What You Need To Know Part 1
Establishing credit is one of the most important things you can do in order to add stability to your financial record and dramatically increase your ability to borrow necessary funds in order to purchase a new home, new car or even pay for college expenses. Unfortunately credit has two sides to it that consumers can exploit. The good side is very valuable and prevents consumers from having to save for many years in order to afford the finer things in life. The bad or dark side of credit can lead to individuals amassing large amounts of debt they eventually find themselves unable to repay. With this in mind one of the best investments anyone can give himself or herself is the financial knowledge necessary to handle and ultimately use credit wisely.
Before you can begin to establish your credit record you will need to find a lender that will loan you the necessary funds in order to start your credit history. The rates that lenders charge varies depending on the consumer they are loaning funds to but they all look at various types of information in order to initially determine the credit risk or liability an individual may present when looking to obtain funds. This information will include a consumer's ability to take on additional debt, which is easily obtained based on current expenses (such as rent, food, utilities?etc) subtracted from current income. The result is the amount of additional expense that a consumer can comfortably handle without problems of repayment. Lenders like consumers that own assets such as stocks, bonds, insurance, bank accounts, rental homes and cars. A lender may view these assets as collateral against any amount borrowed.
Perhaps you already have a small amount of credit history already on record, if so this can help in the loan approval process. If a consumer has already borrowed money before and paid that loan back in full without any types of problems or late payments then a credit history has already been started. Additionally if that same individual has or uses a credit card wisely it can also help in projecting an image of being creditworthy. A lender can use this information to determine the amount of debt a consumer may already have, how many credit cards they have, and whether they make payments on time, which helps the lender make a determination if that consumer can be trusted to handle the repayment responsibility of additional credit.
If a consumer already has some amount of credit history built it then it becomes easier to qualify for additional credit in order to increase and improve their current credit history. Unfortunately for the individuals that have never used credit before establishing a good credit history can be difficult. This includes people who always pay in cash, work out of their home or perhaps just started working. Part two of this article provides information on what they need to do in order to establish credit.
Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com He provides more debt relief, consolidation and free credit counseling information that you can research in your pajamas on his website.
MORE RESOURCES:
 AFP | Your Money One Thing You Can Control: Your Credit Score New York Times, United States - Your credit score, however, is something that you have a fair bit of control over, since it reflects your behavior as a borrower. ... Credit Crisis Collapse What Happens Next? Regional financial experts focus on lending; say credit crunch is ... Market news this week for strong stomachs |
 Calgary Herald | Stock markets end week of credit crunch worries Newsday, NY - Credit-crunch worries continued to weigh on US stock markets Friday, but the hemorrhaging evident for most of the week was contained. ... Video: Stocks Fluctuate After Fed Corporate Debt Plan Easy credit and financial crisis Overseeing Finance's New Era |
 Voice of America | Global leaders seek answer to credit crisis San Francisco Chronicle, USA - At the same time, loan markets everywhere remained broken, especially the critical wholesale credit markets, in which financial institutions lend each other ... Video: Bernanke: More Economic Pain Ahead TREASURIES-Surge in Europe as shares skid on credit woes Stocks down despite government moves to free up credit |
 The Associated Press | US will work with partners on credit crisis: Bush CBC.ca, Canada - It was the 21st time in 26 days that the president has spoken publicly about the credit crisis gripping financial markets and dragging down stock markets. ... Meeting G7, Bush Vows World Economic Fix |
 New York Times | Lehman Credit-Default Swap Payout Could Climb as High as $365 Billion Washington Post, United States - By Heather Landy NEW YORK, Oct. 10 -- In what may shape up to be the most expensive payout ever in the credit-default swap market, sellers of insurance ... STOP FINANCIAL WMD'S: Credit Default Swaps Insurance on Lehman Debt Is the Industry’s Next Test Lehman Credit-Swap Auction Sets Payout of 91.38 Cents (Update1) |
Fears Grow That Tight Credit Could Crush GM, Ford NPR - Standard & Poor's downgraded the credit of both companies and their financing arms this week. AFP/Getty Images Ford F-150 trucks sit at a dealership in ... Video: Money Minute: GM, GE, Oil GM, Ford too big to fail? CREDIT WATCH HITS GM, FORD |
 BBC News | IMF endorses G7 plan to fight global credit crisis CTV.ca, Canada - The International Monetary Fund is backing a plan by Canada and the other G7 countries to fight the worldwide credit crisis, which continues to play havoc ... Video: IMF: Timing right for G7 Credit CRISIS ALERT Press demands some G7 credit crunch punch |
 Boston Globe | Transcript: President Bush's Radio Address FOXNews - The Fed has joined with central banks around the world to coordinate a cut in interest rates — a step that should help free up credit. ... Text of Bush's remarks Friday on the economy Comprehensive strategy to tame crisis: Bush Bush says financial rescue plan big enough to work |
DTCC Addresses Misconceptions About the Credit Default Swap Market MarketWatch - Since that time, the vast majority of credit default swaps traded have been registered in the Warehouse. In addition, all of the major global credit default ... |
 Dividend.com | CME Group Details On Future Credit Default Swaps Market istockAnalyst.com (press release), OR - ... owned in the past (we just rebought CME Friday morning) are positioning for a piece of the very huge (and very troublesome) credit default swaps market. ... Credit swaps dragged out of shadows State Controller Chiang to Treasury Secretary Paulson ... Financials Got You Down? CME Pitches Credit-Default Swaps the ... |
Useful Tips On Avoiding Credit and Charge Card Fraud
Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways.
Trying to Land a Job? Poor Credit Scores May Hurt Your Chances
Many employers are now looking at an applicant's credit report for hiring purposes. During an interview process a potential employer may request your written consent to access your credit report.
Beware the Shopping Mall Monster
Like me, you've probably been offered a fair old number of these by now..
Credit Cards, Merchant Accounts, and Your Bottomline
Q: I'm opening a gift shop and want to be able to accept credit cards. I talked to the branch manager at my bank, but he didn't seem to know much about how it all worked.
The Credit Card Surprise That You Need to Look Out For
Companies that issue credit cards want to make a profit. No one disagrees with that.
Rate Tarts Losing Ability to Cherry Pick
A "rate tart" is someone who switches from one zero per cent introductory credit card deal to another to avoid paying interest; however they may be set to become something of the past. Recently a number of the major credit card companies, including Egg, Barclays, the Royal Bank of Scotland and MBNA have introduced transfer charges for people who want to shift their outstanding credit card balances to a new card to take advantage of a zero per cent introductory rate.
Learning the Disturbing Facts about Credit Card Debt
When I received my first credit card in the mail at age 18 I was ecstatic, I said to myself, wow now I'm getting somewhere in life. This credit card company thinks I'm worthy of 500 dollars in credit.
What Can Happen to You as a Victim of Identity Theft, Facts & Figure
Is identity theft really that serious? Thousands of people every year are victims of this terrible crime. Thieves use your personal information to commit fraud or other crimes in your name and can cause significant credit damage.
3 Free Credit Reports For You
If you were to tell someone that they can have a certain item for free, more than likely their response would be, "what's the catch?" In the case of credit reports there is no catch, you can now get a free copy of this report through the three credit reporting agencies: Equifax, TransUnions, and Experian. Let's take a look at the law and how you can benefit from it.
Check Your Credit Before Shopping For That Home Loan
Review Your Credit Score.Nearly every bank, credit union, and mortgage lender relies on a three digit score provided by one of the three major credit bureaus to help them make lending decisions.
Establishing Credit - What You Need To Know Part 1
Establishing credit is one of the most important things you can do in order to add stability to your financial record and dramatically increase your ability to borrow necessary funds in order to purchase a new home, new car or even pay for college expenses. Unfortunately credit has two sides to it that consumers can exploit.
Will Inquiries Lower Your Credit Score?
What are inquiries?When you apply for credit the creditor or lender checks your credit report to verify that you qualify for the credit or loan you are applying for. The "inquiry" is then reported to the credit bureaus and shows up on your credit report.
Collection Agencies: What Do They Do?
Collection agencies are businesses that collect past-due bills and accounts receivable for other persons or businesses in exchange for a fee. Collection agencies charge for their services one of three ways:1) A flat fee.
Credit Cards -- What You Should Know
There are a lot of questions about using credit cards. Here's some important points for you:A quick look around on the Internet this morning shows that more than 9 million people in the UK do not pay off their credit card balances each month.
Beat Credit Card Companies at Their Own Game!
Have you ever wondered how much money a credit card company makes? Have you ever wondered how much of that comes from late fees? Everyone has and if you haven't you should because most likely you own a credit card, which means that these late fees has or could directly affect you.As you have probably taken notice, credit card late fees are on the rise and have been so for awhile.
Harassment of People in Debt by Creditors
HarassmentHarassment of people in debt by creditors or their agents is a criminal offence under the Administration of Justice Act 1970. It is often difficult to know what to do when you feel a creditor is not dealing with your account fairly.
Credit Repair Services vs. Do-It-Yourself Credit Repair
Millions of Americans suffer because of bad credit these days, and almost all of these people turn to the Internet for help. In the past 5 years hundreds of 'internet-based' credit repair services have sprung up, preying on consumers in need of real help.
Credit Repair, How To
Credit repair, is in a word, vital to reestablishing your credit. Unless you plan to never use your credit again, then you have to find a way to fix it.
What Is a FICO Score and How Do I Make It Work for Me?
Whether or not you receive a loan and what interest rate you get on your credit card may be determined by something called a FICO score. Named for Fair, Isaac & Co.
How To Boost Your Credit Score
Years ago your credit score was a big secret, known only to a select few such as your mortgage and credit card companies. In 2000, Fair, Isaac Co.