Sunday, October 12, 2008

You and Your Credit Report

By Steven J. Talrechi

A lot of us start to sweat the second the phrase "credit report" comes up. A lot of us are facing some kind of financial troubles and worry about what they might find on their credit report. Many people just jump into credit cards and loans before thinking it over properly and wind up getting themselves into a lot of financial trouble in the bargain. When the time rolls around that they need a credit report, they have already done some serious damage to their credit score. Keep in mind that each time you use your credit card, it can affect your credit report - which will matter quite a lot later when you want to buy a home, a car, or even get some jobs!

To positively affect your credit report and ensure that the image it displays of your financial situation is a bright one, you need to know how your credit report may be impacted by your actions. Whenever you apply for a credit card or loan, this will show up in your credit report, whether you are approved or denied.

If you miss a payment, for instance, your credit card company or lender will report this to the credit reporting agencies and this will show up in your credit report. This also happens when you make your payments on time; which should be a powerful incentive to always make your payment sin a timely fashion. Your credit report is affected by whether you make the minimum payments or always pay off your credit card in full.

As long as you follow a couple of common sense rules, there is no reason you can't get a credit card or take out a loan; just keep the following in mind before you do so:

-Make sure that you understand how this will affect your credit report. If you don't understand the terms and conditions of the credit card or loan; interest rate, late payments, defaults or anything else, you may want to reconsider if you really need this credit card. You should be wary of doing anything which can have a negative impact on your credit report. Remember, a credit card involves a lot of responsibility.

- Make sure that you have the means to make your payments before you take out that loan or apply for a new credit card. While it might seem like a good idea to take out a loan to help you through some tough financial times, how will you make that first payment in a month? If you cannot afford to make the payments, you should not ask for a loan.

- Keep in mind that the terms and conditions, along with the interest rates vary from card to card and loan to loan. If you are considering taking out a loan or applying for a credit card, shop around for the best deal you can find. Definitely do not just take the first offer that comes your way; look around and keep yourself open for the best deal. Each card is different and shopping around for one which meets your needs and your budget is essential. - 2364

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