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Guaranteed Credit Approval
Information Courtesy of Credit Accpetance
Credit: Friend or Foe?
"Cash was tight, but I had a wallet full of credit cards. Before long, the accounts were up to their limits and the monthly payments were too big for me to manage."
"Buy now, pay later" is the American way. Credit allows you to have and use the things you want and need, even if you do not have the cash righ then and there to cover their cost. Credit makes it possible to own a house, drive a car and get a college education even if you're not rich. With a mortgage, a car loan or an education loan, you can pay for these things in smaller amounts over a longer period of time instead of paying for the whole thing at the time you buy.
When you depend too much on credit, though, its benefits quickly turn into dangers. The result of using credit is debt: money that you owe to a creditor, which may be a credit card issuer, a bank or a finance company. Not only does the creditor expect you to repay the amount you borrowed, you also have to pay finance charges. A finance charge is the dollar amount that credit costs you. If you rely on credit too often, you might soon find yourself over your head in debt.
Credit: Friend or Foe?
"Cash was tight, but I had a wallet full of credit cards. Before long, the accounts were up to their limits and the monthly payments were too big for me to manage."
"Buy now, pay later" is the American way. Credit allows you to have and use the things you want and need, even if you do not have the cash righ then and there to cover their cost. Credit makes it possible to own a house, drive a car and get a college education even if you're not rich. With a mortgage, a car loan or an education loan, you can pay for these things in smaller amounts over a longer period of time instead of paying for the whole thing at the time you buy.
When you depend too much on credit, though, its benefits quickly turn into dangers. The result of using credit is debt: money that you owe to a creditor, which may be a credit card issuer, a bank or a finance company. Not only does the creditor expect you to repay the amount you borrowed, you also have to pay finance charges. A finance charge is the dollar amount that credit costs you. If you rely on credit too often, you might soon find yourself over your head in debt.
Your Credit History
"I'm a good person. Why do I keep getting turned down for a credit card?"
Before creditors will extend you credit, they want some confidence you will be able to repay them. To determine whether they should extend you credit, creditors consider factors such as your income, how long you have lived in the same place and had the same job, what you won, how much you owe to other creditors, how many credit cards you have, whether you have ever had a legal judgment against you and whether you pay your bills on time.
"I'm a good person. Why do I keep getting turned down for a credit card?"
Before creditors will extend you credit, they want some confidence you will be able to repay them. To determine whether they should extend you credit, creditors consider factors such as your income, how long you have lived in the same place and had the same job, what you won, how much you owe to other creditors, how many credit cards you have, whether you have ever had a legal judgment against you and whether you pay your bills on time.
Your Credit Score
The information in your credit history is used to create your credit score, a three-digit number that shows how likely you are to pay your debts, based on statistics of how millions of other people pay their debts. The higher your score, the nore likely you are to be a good credit risk for the creditor. For example, FICO credit scores, which are produced by Fair Isaac and Co., and used by more thatn 70 of the nation's 100 largest financial institutions, range from the 300s to about 850. Ususally you need a score at least in the low 600s to get a mortgage. Some companies charge lower interest rates to people with high scores.
The information in your credit history is used to create your credit score, a three-digit number that shows how likely you are to pay your debts, based on statistics of how millions of other people pay their debts. The higher your score, the nore likely you are to be a good credit risk for the creditor. For example, FICO credit scores, which are produced by Fair Isaac and Co., and used by more thatn 70 of the nation's 100 largest financial institutions, range from the 300s to about 850. Ususally you need a score at least in the low 600s to get a mortgage. Some companies charge lower interest rates to people with high scores.
Bad Credit Hurts
People may also want to check your credit history before they give you a job, a lease on an apartment or a house, a bank account, telephone service or an insurance policy. If your score is low, you may have to explain why. If your score is too low, you may not get what you want or you may be asked to pay more for it.
Where to Find Your Credit Information
You can request your credit report and credit score from these agencies by mail, phone or e-mail for a fee, unless you qualify for a free report because you have been denied credit, employment or insurance based on the report within the past 60 days. Charges vary by state. A typical price for a report and score is $12.95.
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Equifax Information Services, LLC
P.O. Box 740241 Atlanta, GA 30374-0241 800-685-1111 www.equifax.com or www.myfico.com |
TransUnion, LLC
Consumer Disclosure Center P.O. Box 1000 Chester, PA 19022 800-888-4213 www.transunion.com |
Experian
National Comsumer Assistance Center P.O. Box 2104 Allen, TX 75013 888-397-3742 www. experian.com |
Your Credit History
"I just saw a great apartment that I want to rent, but the landlord asked me to sign a consent to a credit check. What if those bills from my student days are still on it?"
If you have never seen your credit report or if you have not checked it within the past two years, you should request a copy from at least one the reporting agencies. Check the report carefully to make sure there are no errors relected in your credit report. You can correct a mistake by showing proof of the error to both the entity that reported the inaccurate information and the reporting agency, but it may take some time and effort.
Steps Toward Better Credit
"My credit history is so bad. I wish I could just start over."
If your credit history is bad and your score is low because of too much spending and poor bill-paying habits, don't despair. With alittle time and a bit more discipline, you can improve your credit profile. Credit scores change with each new piece of information about you. Because the scoring system gives extra weight to the most recent activity, the positive steps you take today may make a quick improvement in your score. Here are some suggestions:
1. Pay all your bills on time. Late payments will cause you to lose points.
2. If you owe a lot on your credit cards, stop using the cards and make at least the minimum payment every month.
3. If you do not have a current source of credit, get one, use it and start making regular on-time payment to prove that you can. One way to get credit is to obtain a "secured" credit card issued by a bank that requires you to keep a small amount of money on deposit for the bank's protection in case you miss payments.
4. Do not apply for more credit than you need. Applications will show up on your credit report and may cause potential creditors to think you are about to take on more debt.
5. Don't ignore your debt obligations. If you are experiencing problems paying your bills, contact your creditors immediately and try to work out a reduced payment plan. If you can't work out a reduced payment plan with your creditors, consider contaction a credit counseling service for assistance. Your creditors may be more receptive to accepting reduced payments if youe nter into a repayment plan with a reputable credit counseling service company.
"My credit history is so bad. I wish I could just start over."
If your credit history is bad and your score is low because of too much spending and poor bill-paying habits, don't despair. With alittle time and a bit more discipline, you can improve your credit profile. Credit scores change with each new piece of information about you. Because the scoring system gives extra weight to the most recent activity, the positive steps you take today may make a quick improvement in your score. Here are some suggestions:
1. Pay all your bills on time. Late payments will cause you to lose points.
2. If you owe a lot on your credit cards, stop using the cards and make at least the minimum payment every month.
3. If you do not have a current source of credit, get one, use it and start making regular on-time payment to prove that you can. One way to get credit is to obtain a "secured" credit card issued by a bank that requires you to keep a small amount of money on deposit for the bank's protection in case you miss payments.
4. Do not apply for more credit than you need. Applications will show up on your credit report and may cause potential creditors to think you are about to take on more debt.
5. Don't ignore your debt obligations. If you are experiencing problems paying your bills, contact your creditors immediately and try to work out a reduced payment plan. If you can't work out a reduced payment plan with your creditors, consider contaction a credit counseling service for assistance. Your creditors may be more receptive to accepting reduced payments if youe nter into a repayment plan with a reputable credit counseling service company.
Getting a Vehicle
"How can I get a job that will enable me to pay my debts if I don't have a car to get to work?"
Credit Acceptance is an indirect sales financial services company specializing in products and services for a network of automobile dealers in North America and Europe. Credit Acceptance provides automobile dealers with financing sources for consumers with limited access to credit and delivers credit approvals in less than 30 seconds through the Internet. Through its financing program, Credit Acceptance helps consumers change their lives by providing them with an opportunity to improve their credit score (increasing credit score by 10-12 points per month) by making timely monthly payments that Credit Acceptance reports to each of three national reporting agencies.
"How can I get a job that will enable me to pay my debts if I don't have a car to get to work?"
Credit Acceptance is an indirect sales financial services company specializing in products and services for a network of automobile dealers in North America and Europe. Credit Acceptance provides automobile dealers with financing sources for consumers with limited access to credit and delivers credit approvals in less than 30 seconds through the Internet. Through its financing program, Credit Acceptance helps consumers change their lives by providing them with an opportunity to improve their credit score (increasing credit score by 10-12 points per month) by making timely monthly payments that Credit Acceptance reports to each of three national reporting agencies.