When was the last time you checked your credit score?
Lenders automatically report whether you're paying your bills on time, late or if you have stopped paying entirely the debt you owe to them.
Take a thorough look at your credit report, you may discover there may be things on your credit that are preventing you from being approved for loans. Hopefully you are aware of the three credit reporting bureaus, Equifax, Experian and TransUnion. So why do each one have a difference of scoring credit? Well that's because each of the credit agencies have different items on their reports. The credit bureaus are business entities that reports their revenues just like all publicly traded institutions. They acquire and store as much information possible which they analyze and then sell to lenders seeking to lend you money.
Why is credit accuracy important?
The credit bureaus also rely on public records to confirm address histories, name changes, IRS tax lien or bankruptcy filing information from state and municipal courts. That information is included in your credit report as well. It is possible that credit reports can have incorrect information; whether you were a victim of an unauthorized charge or if you were a victim of stolen identity theft. Credit report accuracy can make it difficult to get new credit cards or loans, landlords or employers also may view them which may have negative effects.
You should never assume your credit report is always accurate. Take time to read your credit report by carefully going through your statement it could help save you money, time and alert you to potential signs of fraud or identity theft. In 2017, Equifax's credit systems were breached causing sensitive personal data information of over 130 million consumers to become vulnerably unsecured. The company has made several system security upgrades to better safeguard consumer data as well as to deter future breaches.
Credit Reporting is big Business don't allow them to profit off you
Today the bureaus make money selling protection products such as credit fraud protection monitoring services and programs that help to boost consumer's credit score. TransUnion is listed on the New York Stock Exchange but it was created in 1968 by the Union Tank Car Company, a railcar leasing operation. In 1969, they acquired the Credit Bureau of Cook County and many more acquisitions. A company that manually maintained over 3.6 million card drawer cabinets of individuals debt payment history . By heavily investing in virtual technology they modernized centralized system electronically to provide fast consumer credit information to creditors nationwide.Equifax, bagan as a grocery store in Tennessee was created in the late 1800's and today they are operating in over 20 countries. Experian, was created in London by business owners who shared information on customers who did not pay their bills.
Where You’re Spending Your Money?
One of the great things about credits card is that it gives you the ability for you to be able to evaluate and analyze where you are spending the most. By going over your spending on a monthly basis you will be able to discover potential savings opportunities by cutting back where necessary.
Create a calendar or a system that tracks when bills are die in order to avoid paying unnecessary
late fees. Most credit card companies charge between $29 to $39. Late payments and maxing out your credit cards can have dire effects on your credit score. It is recommended to keep your maximum usage to 30% of available credit
Your credit card statement will give you great insights of how much you owe each month, it also shows your total credit line. The amount of credit you’re using compared to the amount you have available is known as your credit utilization ratio, which is another important criteria used in credit scoring formulas. Many experts recommend keeping this ratio at or below 30%.
You can calculate the ratio by dividing your balance by your available credit limit thus: if you have a current balance of 1000 and your credit limit is 2500 your ratio will be as follow 1000 ÷ 2,500 = .40 x 100 or a credit utilization ratio of 40%.
Do you know your APR?
Unfortunately many in our communities don't understand the implications of not knowing financial terms which is the language banks and creditors use in the their contracts. APR which stands for annual percentage rate. It is the interest you’re being charged to borrow money from the bank. APR can be calculate several ways simple or compound interest, and rates can be fixed or variable meaning they can change whenever the banking lending rates change.
When was the last time you reached out to your creditor?
Unlike a bad breakup at the end of a relationship it is important for you to reach out to your creditors to see if you can lower your current interest rate and fees on your existing loans, by reducing the fees you can gain more control over your debts and limit the possibility of default. Creditors want their money if you are encounting hardship call them to work out a plan that works for you to pay down the debt.
Increase your Emergency Fund
Unplanned expenses such as last minute car repairs, or a broken pipe in your plumbing system can lead a person into a debt cycle that may be hard to repay after saving funds are emptied out. Don't play catch up plan ahead of time to enjoy more of your money and less stress
what motivates you?
Conclusion
It is extremely important to understand how credit works but of the impacts it can have in our lives good or bad. Problems of using credit cards? I believed they dissociates the user with their money current and future by having a delayed effect which causes many people to fall into debt. knowing how credit works will empower you to take proactive steps to maintain and to improve your access to the money system.
Did you find this information helpful? It is our hope that the information we provide above will help you to make the best decision for your individual needs. We are looking forward to your comments and feedback.
