No Credit - Credit Cards

By: Sean Byrne

No credit - credit cards are not new in the world of credit card finance. These
types of cards can be helpful for people with low credit scores. Some consumers
may indeed find it difficult to get a credit card due to say a low credit score.
There are primarily three credit score organizations that keep track of these
scores. Consumers need to be very aware of credit score. It is very important to
learn to raise your credit score because if affects so many areas in your
financial life. From personal short-term loans, to mortgages.

It is said that approximately 35 percent of all credit scores are based on payment
history and timely payments of your bills is essential. If you are a credit card
holder who is makes payments late on their credit card, you may already be
experiencing that late payments are the quickest route to a low credit score. Its
essential to pay your bills on time. In addition to this, low credit scores will lead to higher interest rates. This may then lead to higher interest rates and can
even result in not being able to qualify for loans from lenders who decide you are
no worth the risk based on your credit score. So again, here is the important
lesson - Always pay your bills on time!

About 30% of your credit score is then determined by the proportion of your total
credit that is currently in use. It is advised that you stay below fifty percent.
If we take for example, if all of your credit lines total to $50,000, keep your
combined balances under $25,000. Your creditors may increase your interest rates
and/or lower your credit limits if you use too much of your credit. That would
raise your utilization even more, causing a vicious cycle to begin.

It is also worth mentioning that you should work to build a credit history. Try to diversify your debt and don't apply for more credit than is prudent. The remaining 35% of the score is based on these factors, with each factor contributing to about 10-15%. The credit card system rewards seniority and longevity. SO again for example, if you have been a good customer with a credit card for 15 years1, creditors will be more than willing to help you out with a loan at a lower APR than say an early twenties person with no record of credit cards.

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