How to Establish a Good Credit Score

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Debt Consolidation Through Consumer Credit Counseling
Consumer Credit Counseling agencies don't offer loans but restructure a consumer's debt with special channels available only to non-profit consumer credit counseling agencies for debt consolidation. Major creditors usually have hardship programs allowing reduced payments and lower interest for consumers enrolling in the debt consolidation program, closing all or most of their unsecured accounts to... Read credit counseling article



Improve Bad Credit
Your debts are getting out of control and you apply for a loan to pay them all off in one go. However, your loan application gets rejected because of bad credit. You are too risky a proposition to loan money to. This happens because of bad credit and lenders can figure this out by getting a credit scoring report from credit reporting agencies. This may sound familiar specially since you have all t... Read credit counseling article



How to Establish a Good Credit Score
Your credit score is a mathematical calculation done by the credit bureaus to determine your credit worthiness. A high credit score means you are a good credit risk; a low score means a lender will only lend to you if they charge you a high interest rate, or if you provide outside security, such as a car or a house.

A good credit score is important, because the better your score, the easier and cheaper it is to borrow. Even a one percent reduction in the interest rate on a mortgage can save you thousands of dollars in interest payments over the life of the mortgage.

How do you establish a good credit score? Follow these steps.

First, pay all of your bills on time. Never pay your hydro, phone or rent late, because that may significantly lower your credit score.

Second, if you are starting with bad or no credit, apply for a secured credit card. Since you are, in effect, prepaying for your purchases by putting up a security deposit, it is relatively easy to qualify for a secured credit card, and it is a good way to build towards a good credit score.

Third, check your credit report regularly. Errors happen, and if your credit report has inaccurate information, your credit score will be harmed, even though it is not your fault. Experts recommend that you check your credit report at least once each year, and before every major purchase.

If your credit score is not good, consider asking a trusted family member or friend to co-sign a loan for you (but be sure you can pay it back, or else your co-signor is liable for all of the payments).

Finally, do some research. There are lots of great resources on the web, so do some research for more ways to work towards a good credit score.

Bernard Johnson has many years experience advising people on how to get a good credit score. He has written many articles on your credit score and how to work towards a good credit score, even if you are starting out with an average credit score

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Bad Credit Charge Cards

Having a bad credit charge card and using it responsibly can help you get back on the path towards rebuilding your credit. Nothing speaks louder to the banks and credit bureaus than a strong, on-time payment history. Because of this, it is absolutely vital that you pay your bill on time and avoid late fees and other charges.

There are already plenty of other reasons to avoid having to pay late fees. Many banks have increased their late fees in an attempt to encourage people to just pay on time. Now it is not uncommon to find credit card companies with late fees as high as $50 for each time you're late. For many people the late fee might even be more than what your minimum payment would have been, not to mention the fact that if you're late you get stuck paying the late fee IN ADDITION TO that minimum payment!

Of course the best thing to do to stay out of this situation and potentially cause additional damage to your credit report is to simply pay your bill on time. Better yet, if you can get ahead by one payment, all the better.

One easy way to make sure you're never late on your payments is to enroll in online banking. Your local bank probably offers online banking and bill payment which allows you to schedule payments that are coming due to make sure they get sent on time. They'll either print a paper check or just send the money via Electronic Funds Transfer, but either way, you know it will get there on time.

You can also sign up with whatever bill payment service your credit card company has. Most companies allow you to setup payments that come right out of your checking account, either automatically paying the minimum each month whenever the payment is due or allowing you to go online and schedule the payment date and amount.

Another option most charge card companies offer is paying by phone. All you need is the routing number and account number from your checking account (found at the bottom of all of your checks) and the customer service representative can process your payment, usually that day or the next business day. They can even make it a rush payment if your bill is due so soon that you wouldn't have time to mail it in, saving you from possibly having a late payment. However it's important to keep in mind that charge card companies often times charge a fee for pay-by-phone service.

If you choose to send a paper check, be sure you include the payment stub and follow all the guidelines indicated by the bad credit charge card company. Usually these guidelines include things such as where to send the payment, when the payment will be processed (how long it takes after they receive your payment).

Another thing to keep in mind is that your bad credit charge card probably has a bit higher rate than a standard credit card, giving you more of a reason to not only pay the bill on time but also pay it off in full each month or at least every other month. That way, the impact of having a higher interest rate is minimized since you will rarely carry a balance.

However, if you must carry a balance, use one of these options to be sure you continue paying your bad credit charge card on time each and every month.




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How to Establish a Good Credit Score
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