Credit Card ’s Talk

Did you know that your credit report is telling all of your dirty secrets? And not just to lenders, but many others as well.

Having bad credit doesn’t just mean that you won’t be approved for a mortgage, auto loan or personal financing. It means a lot more.

Many companies look at your credit report to decide whether or not to do business with you. They even decide how they will do business with you based on your credit history. You may not have known that many non-lenders have been looking at your credit information for years. Your insurance rates have probably been set based on your credit history. When applying for a job, the employer may have looked at your credit to assess your character.

Did you know that your auto insurance premiums may be based on your credit history. According to a 2001 study, 92% of the top 100 automobile insurance companies report using credit information to underwrite new business. Fifty-two percent of these insurance companies use the information to determine what rates you will pay.

There is reportedly a link between bad credit and auto-insurance claims. Some companies will even give the information from your credit report more weight than your driving record. The correlation isn’t proven anywhere, but it does appear that those who manage their personal finances successfully are conscientious about their driving and car maintenance. They understand the value of their vehicle.

Not all states allow this to happen. California, for example, does not allow insurance companies to use its residents’ credit histories. Many states are starting to take notice of the practice, but many still allow it to go on.

Farmers Insurance vice president of auto-product management Greg Ciezadlo was quoted as saying that bad credit can cost a customer up to 40% more in premiums. Allstate is also reported as using your credit history to make approval determinations.

Your poor credit could even cost you that dream job. As many as 42% of employers in 1998 performed credit checks on employees prior to hiring them. The information is often used simply for verification purposes. But negative information can prove hard for potential employers to ignore. They assume that applicants with poor credit histories aren’t capable of management, and may even steal from the company.

The Fair Credit Reporting Act has limited the use of credit checks by employers. The employer must notify the applicant that the credit report will be looked at. They must also tell you if you aren’t being hired based on information on your credit report. Fewer employers are doing checks every year.

Have you checked your credit report? You may think that because you pay all of your bills on time that you don’t have to. But almost 80% of reports contain errors. Check your report at least on an annual basis. There are people looking at it, and it is telling them not only your financial standing, but your character as well. Make sure that your credit report is saying the right things about you.

Martin Lukac, represents http://www.RateEmpire.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Visit http://www.RateEmpire.com today.

Once you get that credit card, here’s how to use it most effectively!

The best way to make your scores improve is to keep the balance of your cards low in relation to your higher limit. In other words, with a $1,000 credit limit, you should carry no more than $100 in balance to optimize your score.

Paying off the account provides no activity for your scores to be calculated. Closing the account may very well make your overall debt ratio higher and bring your score down.

The best way to use a credit card is to do the following:

Start off each month by making one small charge. This could be a tank of gas, date night with your spouse, or your monthly gym membership fees. Once you make that charge, put the card away! (When your card is not in your wallet or purse, you are less tempted by those emergencies such as that shirt on sale!)

When your bill arrives in the mail, pay it off completely. Each month use the card again. By using this technique you should only spend $30-40 each month. And each month as your bill comes in, pay it off completely.

The $30-40 balance will be reported to your credit report and paying it in full will eliminate any finance charges. Altogether, this low balance on a higher limit shows that you know how to use credit and that you are not living on credit! This will boost your scores (and save you cash!)

Ed Nailor is a webmaster, writer and works in the financial and credit fields. His website, http://www.BestNewCreditCards.com has the most current credit card offers online. Each card has a comprehensive review, details about each offer, and a link to the site for instant online applications. Be sure to check out our free articles and Blog for great tips, news and feedback. Also see PlasticPlatinum.com for the best in credit cards with rewards and staus.

If you have been plagued with credit problems in the past, I would like to welcome you to your future! The first step in the process to rebuild credit is to get a new credit card. While many people will debate the best type of credit card such as secured or unsecured, I would argue that the type does not matter! What matters most is getting something and using it effectively!

The old school idea on credit was to get a card, make a large purchase and pay for it over time with no late payments. Today, that rule has changed! While making payments on time is VERY important, making the large purchase is the wrong thing to do! The way credit scores are made up, large revolving accounts (like credit cards) with high balances actually hurt your score. They figure that if your card is nearly maxed out, so is your budget and one emergency such as a flat tire could make you late on other payments.

The trick to maximizing your credit score is to use your credit card as a tool. No matter what your credit limit is, keep the charges to 20% or less of the limit. In other words, if your credit limit is $500, charge no more than $100 to the account. The most effective program is this….

When you get your bill each month, pay off the complete balance. Then each month simply make a small charge, like a tank of gas, gym membership or something else you normally would do anyway. Don’t use the card for dinners or special sales… only small charges ($30-40). Then again, as your bill arrives each month, pay off the balance. Each time your bill is sent out, the balance is reported to the credit bureaus. So you will always show a $30-40 balance, recent activity, and no late payments. You won’t even pay interest on your charges since they are paid off each month! But the activity and low balances will kick your credit score into overdrive in a short period of time!

If you use credit as a tool and not as a gift card, you will be able to get the best deals on everything you need. It just takes balance and determination.

Best of luck!

Ed Nailor is works in the financial and credit fields. For new credit cards designed to rebuild credit, visit http://www.BestNewCreditCards.com/poor-credit-cards.htm (the most current credit card offers online.) For more credit tips, visit http://www.BestNewCreditCards.com/free-articles.htm

The first thing to understand about how credit cards affect your credit score is, your score is only affected when the company issuing the card reports to one of the three major credit bureau’s, these being Equifax, TransUnion, and Expirian. Most Issuing banks report to all three however a few secured credit card companies do not. If you are looking to rebuild your credit by means of a secured credit card then it is important to find out if the issuing company is reporting to the credit bureaus.

Credit History
When a credit card issuer’s reports to your credit report you are establishing a track record so to speak. This track record allows lending institutions to see how well you are able to pay back debt. The idea behind it is, if you have paid back what you owed in the past chances are you will be able to pay back what you owe in the future. This is a simple definition however there are many facets to this picture. To illustrate it think of it this way.The credit bureau’s are like your teacher, you credit score is like a report card, and your credit history is what you are graded on. One part of your credit history you are graded on is your credit to debt ratio, this aspect can be impacted greatly by credit cards. The following will explain how.

Credit cards and credit to debt ratios
Let’s say that you have two credit cards, and each one has a limit of $10,000. Now let’s say that you consistently carry a balance of $5,000 on one of the cards. With two credit cards, your debt to available credit ratio is $20,000/$5,000 [total credit available/total debt. This means that you would be using 25% of your overall available credit; this is a good place to be. Now if you where to close one credit card, your ratio would now be $10,000/$5,000, which would lower your overall credit score since you would now be using 50% of your available credit.

One way to improve your credit score with credit cards
In light of the above paragraph could a person improve their credit simply by gaining another credit card? Yes. For example if you had one credit card with a limit of $5000 and you carried a consistent balance of $2500 on it then your debt to available credit ratio would be $5,000/$2,500 [total credit available/total debt This means that you would be using 50% of your overall available credit however if you gained a second credit card with a limit of $5,000 and put a balance of $500 then your debt to available credit ratio would be $10,000/$3,000 which means that you would only be using 30% of your available credit and your credit score would improve.

Why some are considered Risky
Basically in the eyes of the lending institution if you are always using all of your available credit then you fall into a group of people that might be over extending themselves and according to history people who over extend them selves have a greater likelihood of defaulting on money they owe, thus if you put yourself into this group your score will go down. Although the above is true there other factors, for example if you have too many credit cards then you could be seen as having the ability to be at risk in the future if your income or capacity to pay is not equal to your credit limit. And if you don’t have any credit cards than you are not establishing credit history at least not with credit cards.

Watch out because this can hurt you
Many credit card issuers allow card holders a grace period. This means that if you pay you bill every month in full you will not be charged a percentage rate or APR. If you have a card with a credit limit of $5,000 and every month you charge $1,500 but you pay it off every month in full you will avoid finance charges but it could be hurting your credit score why. Because when credit card issuers report to you credit report all they report is how much you owe and that you pay on time not the fact that you pay your balance in full each month. So on paper it looks like you always have a balance of $1,500 and that you never pay it off. It might be wise to switch between cards every few months so that you can show a balance of zero from time to time, this will help your credit score. And if you are planning to buy a house, pay off your credit card balance a few months in advance so that you have a good debt to available credit ratio as this could save you tens of thousands of dollars over the course of time on your mortgage.

Copyright ?2006 Parker Publishing

Author Hugh Parker journalist for CreditCardUmbrella.com we write weekly articles related to credit cards.

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Yes, its that time of year again… Spring is right around the corner. And while many people use this time of year to motivate themselves to clean out the garage or the attic, why not take this time and clean up some credit issues?

Right about now, most people are expecting Uncle Sam to drop them a check in the mail. You may have already received yours. Instead of running out to buy the next great thing to collect dust in your home, why not invest at least part of that money back into your financial future?

Ok, I know saving money isn’t sexy. So I am not going to tell you to put all that money away… I do live in the real world here! But I would suggest you put some of it away.. maybe 10% for a rainy day.

Here’s a great idea for those with bruised credit… How about taking part of that cash and obtaining a secured credit card? Think about it… a secured credit card accomplishes two things… savings and healthy credit.

To obtain a secured credit card, you must put some money into a savings account (min $300 for most cards.) This money typically will earn interest while there. Of course, as long as you keep the secured card, then the cash must stay in the account. But since your credit limit will match the savings amount, you virtually have access to your cash!

To build that healthy credit just follow a simple plan. Each month use your new card once to buy a tank of gas. Then put the card away until your bill arrives. Pay the bill off completely and then use the card for another tank of gas. The reason for this is to allow a small balance to report to the credit bureaus (thereby increasing your score) and then pay if off each month with no finance charges! In short order, you have begun to build a healthy credit history for yourself.

One last tip… take a small part of the tax return and buy something fun… Otherwise, this will seem like torture. You can reward yourself for doing a good thing for your future!

Make this spring cleaning count for something long term… you.

Ed Nailor is a webmaster, writer and works in the financial and credit fields. His website, http://www.BestNewCreditCards.com has the most current credit card offers online. Each card has a comprehensive review, details about each offer, and a link to the site for instant online applications. Be sure to check out our free articles and Blog for great tips, news and feedback.

It is the most important rule of any sport or competition: High score wins.

Whether you love football, baseball, basketball, hockey, or even rock-paper-scissors, the key to winning is getting the highest score. And the same is true when it comes to your credit. Score high and you will score big.

A high credit score is everything in your financial life. A high credit score is to your life what 40 points a game is to Peyton Manning?s ? money in the bank. Why? Your credit score tells people ? specifically banks, lenders, and credit card companies ? how good your credit history is, which is critical when it comes to getting loans or lines of credit.

Your credit score is determined by a host of factors, but basically the things that most influence your score are your total amount of credit, your total amount of debt, late payments, non-payments, defaults and bankruptcies. Who determines your credit score? There are three major credit reporting agencies that give out scores: Equifax, Experian and TransUnion.

Each of these agencies has up until very recently used their own system for calculating your credit score. But that?s currently changing thanks to a decision by the big three to create a uniform system for calculating credit scores called VantageScore. Equifax, Experian and TransUnion will continue to issue separate credit scores for each person, but with VantageScore, your three credit scores should be virtually identical. That?s the plan, at least.

In any event, you want your credit score to be 650 or higher to get the best rates from banks and creditors. How can you find out your credit score? It?s easy.

If you go to http://www.annualcreditreport.com, you can get a free copy of your credit report from all three credit agencies that will not only include your credit score, but important details about your credit history. It is important to look at your credit report because often times a credit report will have mistakes in it ? which can mean a lower credit score. In fact, according to one report by the US Public Interest Research Group, 70% of credit reports have errors in them. If you find mistakes, you can contact them directly, in writing, to point out and rectify your credit record.

There are other ways you can learn about boosting your credit score. Stephen Snyder, who knows firsthand about financial struggles and how to rebound from them, provides an in-depth manual that tells how you can improve your credit score ? and how that can mean lower interest rates on your credit cards, higher credit card limits, lower car payments, lower insurance rates, and more. That could have you well on your way to buying that car of your dreams, whether it’s a Mercedes or a Toyota Prius.

Philip Tirone is another good source for ways of upping your credit score. His audio book, 7 Steps to a 720 Credit Score: How to Win the Credit Score, allows you to listen and learn the seven little-known rules of credit. You can turn poor credit into great credit and as a result save hundreds of dollars each month. According to Tirone, even if you’ve been denied credit or think your credit is beyond repair, you can still raise your score up to 720, the key number that can get you the best interest rates and loans.

When checking your credit report, you also want to make sure you haven?t been the victim of identity theft. Identity theft can really mess up your credit score. Identity Guard provides a service that both helps you figure out your credit score and make sure someone hasn?t stolen your identity. Furthermore, Identity Guard will continue to monitor your credit history and alert you if someone tries to use your personal information to open accounts in your name.

US Search also can help when it comes to identity theft. They will provide you with a comprehensive report that tells you if anyone has used your identity illegally. Their Personal Record Profile report includes a 10-year history and information not only about you but also those you have lived with or near who may be affecting your credit.

Unlike football or baseball, there?s no such thing as running up the score when it comes to your credit score. Aim high, and you won?t be sorry.

Copyright 2006 Find Your Prosperity.com

For more stories, visit =>www.FindYourProsperity.com

Noel Brinkerhoff is founder of http://www.FindYourProsperity.com He is a nationally-published writer specializing in journalism and screenwriting whose stories have appeared in the California Journal, San Jose Magazine, State Net Capitol Journal, among others.