| Start building positive credit history in 3 simple steps
Credit history, credit score, credit report-- these words will greet you sooner or later when you apply for a loan, mortgage, rent an apartment, apply for a job, or last but not the least apply for a credit card. Efforts towards building a good credit history should begin early, right from the student life. Ironically most of the students are not aware what is needed to build a credit history. In this article we look at three simple steps that can get you a jumpstart towards good credit history. 1. A checking or savings account Begin with opening a checking account in your name. This is the first step towards acquaintance with banking and financial institutions. The idea is to open a bank account as early as possible, keep it in good standing, and it should reflect financial stability.
Hunt: Credit card should build credit, not create debt
Dear Mary: I have a 30-year-old son-in-law who needs to get a credit card approved so he can buy tires for his truck. Every time he applies for a card, he gets denied. He has no credit and needs to begin. He did try Orchard Bank, but their cards have an annual fee. Can you suggest a card? – Penny N., e-mailDear Penny: I can tell him how to do this, but I must say it bothers me to do so. If you said he needed a credit card to begin building his credit file (he does, and he’s about 10 years late getting started), that would be one thing. But to get a credit card for the sole purpose of going into debt is troubling. Because I assume your son-in-law has no credit history, he’ll be in the same category as those who have bad credit. Go to www.indexcreditcards.com and look for the category "Bad-Credit Credit Cards – Unsecured Credit Cards." There, you will see seven different issuers.
Never a lender or a borrower be
Something thats changing is the way people lend money in South Africa - the new National Credit Act arrives on 1 June 2007 and promises to help prevent people becoming over-indebted. Classic Business Day gets Credit Information Ombudsman Manie van Schalkwyk on the line
LINDSAY WILLIAMS: No more high charges hidden in credit agreements as the new National Credit Act (NCA) designed to protect the consumer comes into full effect in June. Manie, weve been building up to this for quite a while - is the NCA really going to protect the consumer?
MANIE VAN SCHALKWYK: Yes, I think we are entering a good era - an absolutely new era for credit where consumers can expect debt protection in various ways. To prevent over-indebtedness for the first time in history the credit granter is being made responsible to ensure that consumers can afford the loans or the goods before granting credit.
Sorting out the 'good' debt from the 'bad'
You may have heard people refer to "good debt" and "bad debt." Ideally, we'd have no debt at all because we'd be rich enough to never need a loan. But few of us belong to that exclusive club, so sometimes we take on debt out of necessity. One key to achieving financial stability is to minimize bad debt wherever possible, while looking for opportunities where so-called good debt works to your advantage. A simple distinction: Good debt can help boost your credit rating or allow you to buy something that will increase in value over time, while bad debt often fuels purchasing items that are disposable, unnecessary or that rapidly depreciate in value. Good debt might include: Building credit history. One of the best ways to build a strong credit history is to show lenders that you can pay off debt responsibly, possibly by taking out a student loan to finance your education, or by opening a credit card account and using it wisely.
3 compelling reasons why you shouldn't use a credit repair agency ...
Having negative entries in your credit card report? Looking for a credit repair agency to wipe out the blemishes. Stop! You could be heading for trouble. The three reasons listed in this article will open your eyes to the credit repair fraud. Read on to know how the credit repair companies are ripping you apart. 1. Credit repair companies take advantage fears of credit card holders with negative credit reports, and use it to fill up their coffers. To do this they aggressively market themselves as if they can get every single negative entry on your credit report removed. This is simply not the case. Naturally plenty of people see this as a great opportunity, aggressively marketing their credit repair companies to those in trouble. .
How you can maintain a good credit rating
It's surprising how many of us get turned down for credit cards or loans, even when we've been relatively good with our finances and kept up-to-date with our repayments and mortgages. It's even more frustrating because often we get very little information as to why we were turned down in the first place. Being turned down can mean very little in terms of your overall credit rating; you may just have fallen foul of an individual company's credit scoring process; but it's always worth finding out how your credit record looks to the outside world. Checking your record is much easier than it used to be. There are three main credit reference agencies, Experian, Equifax and MyCallcredit. They keep records on how much credit you have outstanding, where you've lived for the last few years and information on missed payments.
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