|
An Article for Everyone
Image Matters! Does Your Credit Reflect You©?
G. Y. Wyatt, CEO , The Wyatt Group LLC.
Is your personal credit scores - a scarlet letter or golden halo?
Your credit score is an important indicator of your financial health. These scores affect an overwhelming number of today's lending decisions.
Credit scores are important because they are used by almost all lenders. The higher your score the better your chance of getting good loan rates and approvals. The lower the score the higher interest rates you will pay because you are 'more of a risk'.
Various factors determine your credit score, including :
payment history, outstanding debt, length of credit history, severity and frequency of derogatory credit information such as bankruptcies, charge-offs, and collections, the amount of credit used compared to the credit available.
While your credit score is a key determinant of your creditworthiness, lenders also examine the information on your credit report and your loan application. Regularly checking your credit report enables you to:be informed of the most up-to-date information in your credit history; correct any inaccuracies, to make sure that your credit data is a true depiction of your credit record and increasing your chances of receiving credit under the best possible terms
Following are some simple credit risk management solutions.
No. 1: Get a copy of your credit report and credit score -- and analyze both carefully. There may be some errors on your credit report that you’ll want to correct by contacting merchants and credit reporting agencies.
You’re entitled to a free copy of your credit report if you’ve been turned down for a loan or a credit card. --- Go to the credit agency Web sites that offer a report.
No. 2: Analysis your credit profile. This step may be the hardest part of dealing with your credit profile. Put all your indebts ness in a pile. Then list your derotorgies / debts in order, starting with the largest balance first. Next to each debt amount, list the minimum monthly payment, and the interest rate you’re paying. Now you know where you stand.
No. 3: Prioritize a repayments / clean up strategy. If you have a few small balances, you might want to apply extra money to pay them off, while continuing to pay the minimums on the larger debt balances. Or you might want to pay off debts with the highest interest rate first. When you’ve paid off the smaller balances, attack the larger ones.
No. 4: Eliminate unnecessary debt and credit. When you pay off a debts / card, notify the company, in writing, that you want to close the account. Don’t just stick the remove them from your wallet. Avoid roll over balances. Apply for business credit accounts. Apply for lines of credit with national retail credit companies. Keep the business out of the "No Credit" status with lenders and credit bureaus. Not paying off the debt is a strategy that will bury your credit profile.
No. 5: Initiate a credit risk management recovery plan. Now’s the time to change your free-spending ways. To do that, track the money that’s coming in and going out.
Be careful about use the equity in your home. New entrepreneur are withdrawing billions of dollars worth of equity in their homes. The ads and commercials are tempting, because the rates on home equity loans are typically lower than the rates charged on loan balances. And the interest on a home equity loan may be deductible.
But there are dangers in home equity loans. Frequently, the money is used to pay down business operation debts, which are then charged up again. Be very careful about digging into this last reserve.
The bottom line - Image Matters! Get started. Do something.
Begin on a small scale - but get going! Not paying off the debt is a strategy that will bury your credit profile.
Sometimes credit problems are easily attacked once you’ve faced up to them. In some cases, it’s wise to seek help from professionals.
Of course, all the counseling and advice in the world is useless without your own personal determination to deal with your credit profile. Remember, with patience and discipline, you can rebuild your credit profile sooner than you may think. Reprint from Bized Guide - Other Articles
|
