Your Credit Rating And You
Credit ratings, at their most straightforward, are personal debt histories. Credit ratings can haunt us for our entire life, providing a often worrying picture of our financial behavior. Lenders and credit card companies look to credit ratings for the most simple assessment of whether we are a good or bad risk. But what kind of information does a credit rating contain?
For starters, credit ratings contain all the vital personal information you would expect them to have, such as full name, address and social security number. Any debt you owe will be added to your credit report. Credit ratings contain every store credit card you carry, their maximum limit and how close you are to reaching that limit. Payment history is included as well.
An unsoiled credit report will show no late payments, few applications for new credit or loans and low balances on existing credit cards. Good credit ratings win a higher rate of approval and lower interest rates with banks and credit card companies.
Negative comments, past foreclosures and bankruptcies obviously do not look good on credit ratings. Credit ratings carry negative information for a long time. Late payments, for instance, remain on your credit rating for 7 years. Bankruptcies can stay on for 10 years. Frequent loan and credit applications are also damaging. It pays to keep a good financial profile. You can help yourself by checking your credit report yearly. Credit ratings sometimes contain information that is out of date, such as your maiden name instead of your married name or an old address. Negative errors can occur, too. These need to be found well before you apply for credit or loans. Credit ratings can take weeks, even months, to correct.
In high school, children joke about what goes on their permanent record. Credit ratings are permanent records that are no laughing matter. You should make it a point to know what is in your credit ratings.
For starters, credit ratings contain all the vital personal information you would expect them to have, such as full name, address and social security number. Any debt you owe will be added to your credit report. Credit ratings contain every store credit card you carry, their maximum limit and how close you are to reaching that limit. Payment history is included as well.
An unsoiled credit report will show no late payments, few applications for new credit or loans and low balances on existing credit cards. Good credit ratings win a higher rate of approval and lower interest rates with banks and credit card companies.
Negative comments, past foreclosures and bankruptcies obviously do not look good on credit ratings. Credit ratings carry negative information for a long time. Late payments, for instance, remain on your credit rating for 7 years. Bankruptcies can stay on for 10 years. Frequent loan and credit applications are also damaging. It pays to keep a good financial profile. You can help yourself by checking your credit report yearly. Credit ratings sometimes contain information that is out of date, such as your maiden name instead of your married name or an old address. Negative errors can occur, too. These need to be found well before you apply for credit or loans. Credit ratings can take weeks, even months, to correct.
In high school, children joke about what goes on their permanent record. Credit ratings are permanent records that are no laughing matter. You should make it a point to know what is in your credit ratings.
About the Author:
Steve Collins is an author and journalist. In these trying times, he knows the importance of obtaining effective credit card debt solutions if necessary. Read his article about credit card debt solutions here.
posted by Credit Counseling at
2:45 PM
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