The term credit can mean many things. For most people, it is the ability to borrow today and pay later. The idea of “credit-worthiness” defines our personal finances, and reaches out to all parts of our financial lives. Credit can be an accounting term. You can talk about credit cards, your credit history, your credit score, or the three credits you got in college for taking Bowling. This page is the credit nerve center of ThinkGlink.com. From this page you can learn more about what credit means and how having good, bad, or mediocre credit affects your personal finances.
Debt Management Program: How To Research One
One way to pay down credit card debt and avoid bankruptcy is to enroll in a debt management program through a credit counseling service. But before enrolling in a debt management program you should research the credit counseling agency who offers it and make sure that the credit counselors are educated and qualified. Learn what questions to ask before enrolling in a debt management program.
Debt Management Program Can Help Avoid Bankruptcy
Do you feel like your debt is overwhelming or out of control? It may be worthwhile to enroll in a debt management program rather than filing for bankruptcy. While both a debt management program and bankruptcy look bad on your credit report, a bankruptcy makes for worse credit. Learn what to look for when choosing a debt management program.
Opt Out And Prevent Identity Theft
Guard against identity theft by "opting out" of identity sharing arrangements. Companies share your information within their own corporate world, to the different companies they own, and they share information with outside companies, vendors and organizations with whom they do business. The Fair Credit Reporting Act gives you the opportunity to limit the sharing of information both within the company and to the other companies with whom they do business.
Fraud Alert Could Help Protect Credit
Having a fraud alert on your credit history can make it difficult to gain access to your credit history and credit score. Someone who steals your identity would not be able to open up new credit cards, buy a car or get a mortgage, because the lender would see the fraud alert at the bottom of your credit file. However, a fraud alert wouldn't stop a thief from using one of your existing credit cards to run up your bill.
Credit Score Reporting Options
Under a law passed by the California legislature, all consumers must be given access to their credit scores by July 1, 2001. The other two credit reporting bureaus, Experian and Trans-Union, have said they will make available to consumers their own credit scores, which are not based on the FICO formula created by Fair, Isaac. Giving consumers access to their credit score, a number that lenders frequently said was "too complicated" for consumers to understand, represents a major breakthrough.
When To Use A Non-Profit Credit Repair Service
Non-profit credit repair or budgeting services should only be used if you are on the verge on bankruptcy. Using a credit repair service when you aren't on the verge of bankruptcy can sometimes cause damage to your credit. Having debt reported as "closed by credit grantor" can be a black mark on your credit report. Finish the pay-back program, and then you can start to recover your credit.
A person used a non-profit credit repair service and now can not qualify for a car loan. Ilyce explains to use these services only if you are on the verge of bankruptcy.
Student Loans Hurt Mortgage Application
A home buyer is having trouble getting a mortgage due to student loans. Mortgage lenders decide how much of a mortgage you can afford based partly on your debt-to-income ratio. What lenders do is simple math. A conventional lender will allow you to spend up to 36 percent of your gross monthly income on your total debt payments (mortgage, insurance and other debt).
Previous Marriage Results In Bad Credit
A newly married couple is confronted with significant debt from a previous marriage. They may be able to clean up her credit, but the husband needs to be careful her bad credit doesn't drag his down. He needs to keep his credit separate and not use his wife's credit to qualify for a home loan or credit card, until her credit is cleared up.
Credit Card Debt: Pay Off And Improve Credit Score
After making numerous credit mistakes, can you consolidate your debt and improve your credit score? A debt management program probably won't help you pay off the debt and instead may lower your credit score. Ilyce's advice: get a second job, pay off the debt and improve your credit score.
Pay Off High-Interest Credit Cards First
You should always pay off your high-interest, non-deductible debts first. When you prepay a debt, you're effectively earning the interest rate the debt carries on each dollar. Once your debts are paid off, you start savings the cash you would have paid each month to service the debt. Consider using your tax refund to pay credit card debt, or take out a home equity loan with a lower interest rate than your credit cards.