Keeping Your Credit Rating in Mind!

By: Madusha Emeka

Having a good, strong credit rating is just as important as keeping yourself out of serious debt, but it is all too easy to ignore this in the interests of virtuously tearing up all those credit cards and becoming debt-free! The time when it was considered essential to stay completely free of debt has long gone and it is now deemed absolutely vital for people to have built up a decent credit rating for lenders to assess their creditworthiness for loans or credit cards.

Here are some of the benefits resulting from having a good credit rating:

* Knowing that you can always apply for low interest loans, mortgages or indeed credit cards from your bank

* Increasing your profile to potential employers so that they can assess how trustworthy you are.

* Being able to apply for a good insurance deal.

* Allowing potential landlords to see your credit history and thus attaining the flat that you desire!

It can be seen that it is essential to establish a good credit rating, as the lack of one will certainly have a negative impact on your future and is likely to send negative messages to prospective lenders, estate agents, landlords and certainly employers So how do you begin the task of acquiring this one all-important asset? Here are some tips to build up a solid and indeed enviable credit rating:

* Always make sure that you have some credit, whether you need it or not! After all you do need to consider your future credit rating!

* Your student or car loan is sufficient, but otherwise you just need to have a couple of credit cards really.

* It's a good idea if you can, to pay off your balance completely every month. At least, never forget to make your regular monthly payments so as to avoid those rip off late fees

* Make sure you do use your credit card now and again.

* Remember that it's important to maintain a healthy credit score during your lifetime so make sure to have a credit card for the sake of your credit report.

Vital Information about Your Credit Report

Your credit report, is held by credit agencies that collect your credit information, and gives you a credit score based on this. A credit score is sometimes known as an FICO score and is named after Fair Isaac Corp the company that established the system of credit scoring. Here in the UK you can always find out your credit rating if you are brave enough to do so. It might be a good idea in fact as sometimes people have black marks on their credit records without even being aware of it - mistakes are often made so, yes, do check!

The information held on an individual's credit report includes the following:

* Your personal details such as your name, address, date of birth and NHS number

* Your credit history - this will reveal information regarding your debts including, amount of debt and the credit limits that have been available to you, how regular you've kept up your payments and relevant information about the closing of your accounts

* Details regarding recent credit inquiries

* Information related to public records i.e. any bankruptcies, repossessions, foreclosures or liens, non payment of child support and any unpaid taxes

So you can see how important it is to build up a credit rating or score that is going to be of service to you when you need credit at any time in your life! And you never know when that might be - you could fall on hard times, become unemployed or need to support a sick or aging relative. Or indeed you might decide as you are getting older that it is time for some travel abroad and some credit to help you do so would come in very handy indeed!

Problems can arise in the case of someone who has either a negative credit rating or simply none at all. It is unfortunate when an individual has been ill for some years and may in addition have disregarded both the need to save and the necessity of at least being able to borrow! So how does such a person begin the seemingly marathon task of building - or rebuilding - a credit record so that it is at least respectable?

Well one thing they can do is to get a small level of credit on a high interest credit card. After all no one is going to let them loose with a nice 0%! Even if they have just a ?200 credit limit they can still use it wisely and pay their monthly bill on time. If they handle their current account well they'll be on their way to regaining their creditworthiness!

Credit Matters
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