The idea of credit has been around since the early days of this country. People have often extended or been extended credit on purchases that they have made, right down to some groceries or a simple piece of clothe. Things have certainly changed over the years and as such we now have a new view of the credit concept.
The finance information tells us that we need to make some sound financial decisions in order to have the best possible credit rating. You might not be aware of it but the credit companies have been around for over one hundred years now. They were established as a method of allowing vendors to know who to extend credit too.
So you have a credit file just like everyone else. This file contains all the action that has been taken with regards to credit that has been extended to you for any reason. The good credit that you have is going to be listed, where you have made payments on time and so on. The bad will also be there where the mistakes have been made.
Using a credit file you can find out what your reputation is like. The companies that extend credit are going to use this finance information to decide whether or not you should be giving any credit or turned down. So we have put together a short finance information guide that will give you an inside look at credit good or bad.
Timely Payments The first thing that the companies are going to look at on the credit file is whether or not you have made all your payments on time. If you have credit cards and other loans the payments that you make are recorded and then reported. One late payment can actually drop your credit score down several points and mean a turn down.
Income Next the company will look at your work history and the amount of income that you have. They need to know this so that they can determine how much you have coming in and how much is going out. This will give them an idea of whether or not you could afford the payments from the new line of credit or not.
Bad Marks Finally the company will look at the bad marks that you have on the report. This could mean a loan that you defaulted on, a credit card payment that was missed, or even a medical bill that was not paid. Each bad mark drops the score that you have down. The more bad marks the worse the credit score and less likely to get credit.
You have the right to see your credit report. Each of the companies is required to offer you a free copy once a year. You can also get a copy when you have been turned down for credit. Check the report to ensure that all information is accurate. If there is something that is wrong then you have the right to dispute it.
