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How to build a strong credit rating



How to build a strong credit rating

All about the credit rating 

A credit rating, in simple terms, is an estimation of how likely you are to repay a debt. Credit is where you are given money or something for value even before you pay for it. For instance, you use a credit card to spend money and then pay for it a later date. A loan that you take is also an example of credit. You get a sum of money for your use and you repay it at a later date. When someone lends you money, they do it to earn interest on it. If you don’t repay the money on time, it puts the lender in trouble.

So lenders would like to know if it safe for them to lend to you. Based on your past record of spending and repaying debts, it is possible to understand if you can be relied upon to repay debts on time. This is the concept behind credit rating. Usually, a third party would compile data about your financial activities and based on that rate your credit-worthiness. The rating would tell a potential lender whether you are worthy of receiving credit. Higher the rating, the more reliable you are in repaying loans.

A low rating, on the other hand, indicates that you are a credit risk. This means if someone lends to you, there is a possibility that you may default on your repayment. No lender would like to take a risk of someone defaulting on debts. A default leads to having to follow-up for payment and taking legal action. To avoid such a messy situation, lenders would not lend money to those who have a low credit rating. Alternately, they may agree to lend money, but impose a number of conditions.

Individuals are provided with a credit rating or a credit score by rating agencies. The rating system usually awards points based on previous financial transactions, whether you pay interest on time, how many times you default, etc. Based on all this, you are given a rating or score, which is referred to as a credit score. This score determines your credit-worthiness. When you approach a bank or a lender for credit, they would refer to your credit score, based on which they would decide whether to give you credit or not.

Your credit score is determined by many factors. One of the well-known credit rating agency is FICO. Their ratings or score is determined as per the following weightage:

  • 35% for your history of past payments
  • 30% for the debts that you have
  • 15% for the duration of your credit history
  • 10% for new credit and new accounts
  • 10% for the various types of credit that you use

When you apply for a home loan, the credit score plays an important role in deciding whether you will get the loan or not. It also decides the terms on which you get the loan. The higher the credit score, more favorable would be the terms. It is in your interest to have a good credit rating. There are two scenarios here. One is that you are starting off fresh, probably after college. In this case, you would like to ensure you develop a good credit rating and keep it that way.

The other scenario is that you already have debts and your credit score may not be satisfactory. In this case, you would like to do something to improve your credit score. In either of the scenarios, you would need to work to build a strong credit rating. We will tell you how to build and improve on your credit score so that you would be rated as being more credit-worthy.

  1. Think before you take credit

It is easy nowadays getting credit as compared to some years back. The credit card is the classic example, where banks queue up to offer you a credit card. With a credit card in hand, you are tempted to spend money. You even start spending money to buy things you don’t need. Only when the bills start arriving, you realize that you don’t have the money to repay the lender. This puts you in a difficult situation. Failure to repay bills on time will lower your credit score. So, the first thing you need to do to have a good credit score is to think carefully before you avail of credit. If you have the money on hand to repay it or are in dire need of the purchase, only then go ahead.

  1. Have a budget

This is a simple thing to do. Make a budget that lists out all your earnings and all your expenses. This helps you ensure you don’t spend more than you earn. It also helps you to make a list of all that you are planning to spend for the month. You would know in advance what you are going to spend on and whether you would use your credit card for the same. This is a disciplined way of spending that helps you to spend money wisely.

  1. Clear your bills on time

Your bills will arrive promptly every month. It is your duty to clear them on time. This is the best way of having a good credit score. Repay each and every bill on time. This ensures that you are financially disciplined. It allows you to manage your finances better. It also helps you build a good credit score. Remember that it is not only bank loans and credit card bills you need to pay on time, but all bills. Even if you default on utility bill payment, you can be reported to the credit agency.This can lower your credit score.If you get a bill that you are not able to pay, it means you have spent more than you can afford. This is a cardinal mistake. Spend on what you can afford and pay the bill on time to build a good credit rating.

  1. Don’t use up your entire credit limit

When you get a credit card, you would be given a credit limit. This is usually done based on your income and other factors. Just because you have a credit limit of 60,000, it doesn’t mean you utilize the entire amount. Never use your full credit. To be financially disciplined, you need to restrict your balance to 30% of your credit limit. This means, for a credit limit of 60,000 your balance due should not cross 18,000. This is a good way of keeping your debts less, helping you to pay it back on time.

  1. Setup automatic payments

Discipline is very important when managing your finances. Even though you have money, you may decide against repaying your credit card bill in full. A disciplined way of bill payment is to setup auto payment for bills. Ask your bank or card issuer to automatically deduct the bill payment from your bank account and give them the authorization for the same. This will ensure that your bills are paid on time. It will also make you cautious.If you don’t have money, you will think twice before spending. This is a great way to build a good credit rating.

  1. Use a secured credit card

This is useful for those who are starting from scratch. A secured credit card is given after you make a deposit. This deposit is usually equal to the credit limit offered to you. This makes the card secure for the issuer as even if you default, they can take the money from your deposit. You would also be careful while spending money, as you know that you have paid a deposit on the card. It is important that when you get a secured credit card, it is reported to the credit rating agency. This helps you to establish a good credit score.

  1. Start with only one card

There is a great temptation to have more than one credit card. This would give you the option of an enhanced credit limit. Further, each card comes with its own benefits, like reward points, discounts, etc. The more the cards you have, the greater is the chance of building up a huge debt that you can’t repay. This, in turn, affects your credit score. You must know that every time you apply for a credit card, the issuer would make an inquiry to the rating agency.

Such inquiries would reflect in your credit score report. If you have too many such inquiries, it can create a perception that you are desperate for money and are looking for it from different sources. While it may not reduce your credit score, a lender may think twice before lending to you. Avoid the temptation of getting multiple cards. When you start, have only one card. Once you build a satisfactory credit history, you can then think of additional cards.

  1. Don’t close credit accounts

The credit score system is in favor of those with a credit history of long standing. The longevity of your credit history reflects on your credit score. Closing credit accounts will not help in your quest to get a good credit score. It would be advisable not to close a credit account. The age of your credit accounts is one of the factors deciding your credit score. So, allow your credit accounts to age, even if you don’t use it.

  1. Your job also counts

If you don’t have a job or keep changing jobs very frequently, it can create a bad impression on a lender. Your job history will not be reflected on your credit score. A lender would not lend money solely on the strength of your credit score. They may also consider other factors like employment history. If you have a reliable work history, then it may convince them to approve your loan application easily, even if your credit score is borderline.

  1. Check your credit report

This is something most people don’t do. It is important to check your credit report and see what is there. It is possible that there could be mistakes in the report. If so, you need to get them rectified immediately. Any mistake in the report would affect your credit score. There are other problems like credit card fraud and identity theft that can have an impact on your credit report and credit score. Regularly scanning through your credit report helps you identify such things. You can then contact the rating agency and get the report corrected.

The credit report also helps you know your outstanding bills. It is possible that you have forgotten about a bill and the lender has also not pressurized you to repay it. Finally, it ends up on your credit report as a liability and can affect your credit score. Regularly monitoring your credit report helps you identify such bills, so that you can clear them and be debt-free.

  1. Look for a credit builder loan

A credit builder loan is given for the specific purpose of helping you build your credit. This is a great way of improving your credit score. The amount you borrow would be in a bank savings account, where it earns interest. You would usually get a better interest rate for a credit-builder loan. Pay off the monthly installments on time and this is reported to the credit bureau. This helps create a credit history and also helps you establish yourself as being credit-worthy. Once you repay the loan, the money in the bank with interest is released to you. Such loans are offered by credit unions and other organization.

  1. Become an authorized user

Young people can opt to be an authorized user of their parent’s credit card. This will help them get the advantage of the good credit their parent has. This is a good way to get started in establishing credit.

Building a good credit rating is important. It can be done easily if you are financially disciplined and follow the guidelines given here.

How To

How You Can Make Money From Home



How You Can Make Money From Home 1

There is no secret to making money online, the only secret is your persistence. Hidden away between the tips on starting a wine club, taking up a photography club or joining the wine revolution, there are smart tips that anyone could use to earn money online without having to quit their day job. We have written lots about the many ways people abroad to help finance their lives.

A good place to start with online jobs is with paid surveys. Surveys pay for your time and allow you to earn a bit of extra cash. The reason you will be able to earn more than what you are actually worth is that a survey company will pay to send you their questionnaire so that you can answer it. The more accurate and detailed your answers the more likely you are to get paid.

There are many survey companies available, you need to choose wisely and carefully as some surveys are paid better than others. For example, you may get paid well if you give an opinion on the health of wine or food. You may get paid just as well if you offer an opinion on which type of music you like.

Another great way to make money online is to write articles. You could write an article and then sell it to an affiliate. If someone likes what they read you will get a commission.

If you are unable to write or if you do not have the time, you could hire someone to write for you. This could be someone who has experience in web content writing or a freelance writer. You could also sell your own articles on an affiliate website such as Clickbank or Commission Junction.

It is easy to make money, it can take some time but it is definitely possible. All you need is determination and discipline to keep at it.

Many people overseas have chosen to live off the grid lifestyle. There are many benefits to living this way and one of them is being able to make money from home.

There are also a lot of opportunities to make money doing research online, there is a constant increase in the amount of knowledge that is available to the public. It is much easier to research and discover new ways of earning money. and you can get started in a short space of time. So, I encourage you to give it a go.

One of the easiest ways to make money online is by becoming a blogger. It really is very easy to become a blogger. Just type ‘blogging’ into Google and then fill in all the details. It is easy and it can even start to look lucrative.

Blogging is a good way to earn money if you have an understanding of the basics. You need to write about something that interests you. This could be about your family life, your interests or even a hobby that you like.

Once you have set up a good website for your blog, the next step is to get visitors to it. One way of doing this is by putting up advertisements. This is just the same as writing articles for other websites.

Some people choose to make money by selling products. You can do this in two ways, through a site such as eBay or through affiliate marketing. You could sell e-books or products related to the niche you are blogging about. The great thing about eBay is that there is always a steady flow of visitors.

These two ways are only two of the many ways to make money online. I recommend you look at all the options and find the ones that work best for you. Once you have found them, you will never stop learning about ways to make money online.

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How To

How To Avoid the Risks of Poor Credit



How To Avoid the Risks of Poor Credit 2

Security Finance is an unsecured debt collecting agency that, via a network of affiliated companies, provides “secure” personal loans to consumers who may otherwise struggle to meet their existing debts. Their loans are generally short-term, and their conditions often vary dramatically from those of traditional short term personal loans. The services they provide can be invaluable to both the consumer and the lender.

Security finance offers a wide variety of loans. These include: home equity loans, revolving credit lines, commercial and business loans, car and motorcycle loans, and other types of unsecured loans. These loans can be used for almost any purpose, and they will be more beneficial to the consumer than those offered by banks and other unsecured lenders.

Secured personal loans offer an excellent alternative to the high rate of interest paid by unsecured loans. The interest rates are often less, the terms are easier to meet, and they are often better suited to meeting a consumer’s unique financial situation. The collateral provided with the loan usually allows security that the loan will be repaid in a reasonable amount of time, with little or no difficulty.

Secured loans require the debtor to place collateral, such as his or her car, home, or other valuable asset, in order to receive the money they have been borrowing, and are therefore considered by the debt collector as an attempt to recover something that has been taken. Debt collectors will not hesitate to call a borrower who does not follow the terms of his or her loan agreement and in some cases will go as far as harassing them, calling and/or sending letters in an attempt to collect on a debt.

When applying for a secured personal loan, many borrowers are worried that the debt will affect their credit score. The fact is that there is virtually no correlation between the amount of credit available and the credit score. However, secured loans will typically have a much lower credit score than unsecured loans. This is because the borrower is putting his or her assets in a bank account where they are likely to be liquidated for payment.

It is important to remember that the loan does not negatively affect the credit history. The only time it can result in damage to a credit report is if it is reported incorrectly. If a borrower were to try to pay off a loan on a credit card that was reported as being “lost”, he or she would then be making the error a second time.

Security finance offers consumers an exceptional opportunity for personal development through the use of online applications, and the ability to make several payments on the same day to avoid late fees and penalties. This service also makes it easy to avoid late fees when paying loans off at the end of the month.

The ability to apply for secured loans online provides a tremendous opportunity for the consumer to improve his or her credit score. Security loans can provide a large number of benefits to people who are in financial difficulty, including: low cost, low rate loans, low credit, and the flexibility of being able to make multiple payments.

If you are considering applying for a secured loan but have never applied online, you should take advantage of the opportunity to make several purchases in a short period of time, rather than waiting until the last minute to apply for an unsecured loan. By using the secured finance website, you can save yourself the time and stress associated with filling out an application and can ensure that your credit report shows your financial progress accurately.

Once you have applied for a secured loan, you should also make sure that you understand the terms and conditions of your loan, including any interest rate that may apply to the loan. Be sure that you understand the term of the loan in full and fully. Do not hesitate to ask any questions that may arise. You should always contact the company directly when you feel that you are not fully clear on a matter regarding a loan.

Secured finance loans are a great way to increase your credit score while avoiding the hassle and expense of filling out and paying off an application by mail. Because the borrower is making a direct deposit of money into an account, the credit report that shows up on credit reports is often inaccurate.

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How To

How To Find Free Rates On Money Exchange



How To Find Free Rates On Money Exchange 3

Money is a common item that can be bought, traded, exchanged or sold. This usually includes the value of the currency as well as gold and silver. Money is commonly accepted as payment of certain obligations, including taxes, and payment of certain goods and services in a specific country or socioeconomic context.

There are three money systems in the world. The first is the use of coins or other units of currency, which are available in fixed denominations. The second is barter. It involves exchanging items of utility with other items of utility. In the third system, known as fiat money, there is no central authority that decides what the money supply is, and the monetary base is determined by political will.

The most common monetary system is the gold standard, which was used as far back as ancient Greece and Rome. In this system, coins were designed to be redeemable for gold bars. Gold, however, had a relatively high price at the time, and most individuals had no access to it. Barter is much more popular today, and most people live their lives in barter, trading items with one another.

In some nations, the second money system is called paper money. Most countries have national currencies, and each government issues money in the name of their country. This type of money is not backed by anything of physical value. It is not held by the government or bank. It is simply made from paper. Since most countries use this kind of money, it is known as the official “money” of the country.

Electronic cash was introduced in 1970. This system is very similar to barter. Instead of bartering for items, electronic money is created electronically. It is created electronically to represent actual objects that can be used as payment, and then is transferred to the buyer. The process is very similar to barter, except that there are no actual goods to be bartered for. It is considered a virtual currency.

There are many different types of money, and each one has its own characteristics. Money in the U.S. has a backing and is created by the federal reserve. Money in England is backed by the pound sterling, while the European Central Bank in Germany uses the euro. has a currency known as the Deutschmark.

Each form of money has its own advantages and disadvantages. People who use different forms of money have their own reasons for doing so. Many people choose to exchange one form of money for the other, to get the best rate on an item they need or want. Some choose the same form of money for more than one transaction.

Money exchange services offer different services to help people get the best rates on money exchange. They include a variety of methods that can help someone get a better rate. Rates vary depending on the length of time you wish to get money, the size of your order, and the current value of the item you are exchanging. Some of these services can also provide you with a credit card or other form of online payment to transfer your money through.

These services are available almost everywhere. You may call around to various companies for rates, or you can check out the Internet. There are several places on the Web that will give you free quotes, and compare rates among companies. It is important that you understand the rules and regulations that govern the rates you receive from these companies before you agree to any deal.

There are several different online providers. You will often find them listed under the names of a variety of different names, such as Money Exchange, Moneygram and eCash. If you are interested in getting quotes from multiple companies, make sure to ask around for quotes from at least three. so that you have a clear picture of how much the rates will vary and from which company to go with.

Many places will offer you a variety of free quotes if you fill out a form. Others will charge a fee for this service. To get an estimate, you should send out several free quotes. and then make sure to follow up with the companies.

To be able to get the best rates, it is very important that you get as many quotes as possible from different companies on the Internet. There are many sites that you can go to. Some will charge a fee to get these quotes.

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