Understanding Your Credit Rating
Your credit rating is critical because it determines whether you are eligible for a loan of any type. It is necessary that you are aware of what your credit rating is before seeking a new loan. You might also be surprised to learn that someone is checking into your credit just one time every four minutes.
If you are planning on applying for a loan any time soon or already have one, please consider the following information.
Remember that your credit score is a vital part of your existent; with the help of the information in this article, you should have an accurate picture of your credit rating and what is on your report; This information should become the springboard of your recovery through obtaining all three files with the reports you need to clean it up and start on the road to a decent credit rating.
There are dozens of open accounts that may be affecting your credit score. Since the late payment shock today is reported on people’s credit reports, millions of accounts have been open with no payment monthly or annually. The revolving type of accounts will be the most popular because in theory, an individual is required to make monthly payments. However, these accounts will not show up as debt on your report.
If there are negative balances on your report, these balances will take higher priority than your open accounts. Remember to use discretion when dealing with a collection agency; they will often say negative things to get paid, this is not the case.
How is your payments record? If you have made some payment arrangements in the past, but your payments have not been carried out, the creditor might report that you have not been regular on your payments. A creditor has the right to report your information and info concerning your delinquent payments.
Special consideration for collection accounts. Being in delinquency could mean you have maintenance issues. However, these are handled on an individual scenario by the creditor. For credit cards and loans, this does not make up a large portion of your scores. Make sure to protect your scores by calling the creditor and making arrangements to resolve your debt; this will positively impact your credit score.
If you show no signs of paying back your loans or credit cards, it is likely that there will be some collection agencies looking for you. In general, if you have a loan with a collection agency reporting your information and/or your payment history, you should make arrangements with the agency to resolve the problem because it is still beneficial to you.
Your ability to obtain credit and the amount of the credit accounts will also impact your score. Having three open credit cards will not make any significant impact as compared to having five or more credit cards, although having some credit cards with balances is better than having many of them. Credit accounts should generally be closed. If opened, they should be closed within a short amount of time. Also, when a credit account is opened, it is tempting just to keep it open since you can make the occasional purchase, with no need for the account to be opened. Yes, this could be a problem, and you should know that having an open line or card does not impact your scores. Although it is nice to have the available credit line, having the open account shows that you do have credit, and will not be able to obtain credit if it is closed.