Many people wonder why we're in such a financial crisis these days. The answer may very well be attributed to the lack of education we received in school on the topic of personal debt responsibilities. Everybody should know how to work with the credit system and unfortunately, many are unequipped to do so. It is estimated that over 50% of US citizens have never even looked at their credit report and close to 90% of people have no clue how to read a credit report.
It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.
much of what you read here will not make sense to you since you have probably been told things in the past that are simply not true. There is much confusion out there when it comes to credit, so open your mind, and get ready to learn.
One easy way to help your credit scores is to have a variety of accounts. Revolving accounts (credit cards), installment loans and mortgages look great when appearing together on a credit report.
When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards.
Installment Loans (Ideal 1-3 accounts): Installment loans such as auto loans are good, but you don't want to have more than a couple of them. Owning too many auto loans or other personal installment loans can cause you to look over-leveraged. There are also other types of installment loans that are not as valuable for your credit such as easy credit loans for furniture, household goods, etc. These may be a good way for someone with little to no credit to establish credit, but they are not the best way to obtain the best scores.
Credit cards can be a great way to add some zing to your credit reports. Stick with having anywhere between three and five credit cards for optimal results. Your credit will see changes based on the type of credit card you have, and the credit limit on those cards. Major credit cards, such as Visa and MasterCard, help your scores more than store credit cards will. Higher credit limits will also assist you in maintaining higher scores.
Another factor to consider with revolving account is the length of time the account has been opened. The longer an account has been opened and responsibly cared for, the better it will reflect on your credit reports. Keeping your balances below 50% of your total credit limit can help your scores immensely. Accounts in good standing that get closed will only remain on your credit reports for two years and cancelling an aged account will most likely cause a drop in your scores. - 15224
It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.
much of what you read here will not make sense to you since you have probably been told things in the past that are simply not true. There is much confusion out there when it comes to credit, so open your mind, and get ready to learn.
One easy way to help your credit scores is to have a variety of accounts. Revolving accounts (credit cards), installment loans and mortgages look great when appearing together on a credit report.
When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards.
Installment Loans (Ideal 1-3 accounts): Installment loans such as auto loans are good, but you don't want to have more than a couple of them. Owning too many auto loans or other personal installment loans can cause you to look over-leveraged. There are also other types of installment loans that are not as valuable for your credit such as easy credit loans for furniture, household goods, etc. These may be a good way for someone with little to no credit to establish credit, but they are not the best way to obtain the best scores.
Credit cards can be a great way to add some zing to your credit reports. Stick with having anywhere between three and five credit cards for optimal results. Your credit will see changes based on the type of credit card you have, and the credit limit on those cards. Major credit cards, such as Visa and MasterCard, help your scores more than store credit cards will. Higher credit limits will also assist you in maintaining higher scores.
Another factor to consider with revolving account is the length of time the account has been opened. The longer an account has been opened and responsibly cared for, the better it will reflect on your credit reports. Keeping your balances below 50% of your total credit limit can help your scores immensely. Accounts in good standing that get closed will only remain on your credit reports for two years and cancelling an aged account will most likely cause a drop in your scores. - 15224
About the Author:
Jon Ochs is the President/CEO of Nationwide Debt Solutions, and a well respected authority on Debt Relief Options.
