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

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.