New reports out show that about 43-million of Americans have a credit rating so poor that getting a loan is much more difficult, and when they do much more expensive.

“It can affect your borrowing costs, the amount you’ll pay to finance cars or homes or, certainly credit card rates,“ notes Morningstar Financial’s Christine Benz.

A bad credit score can even affect your ability to get a job.

“Some employers actually check up on credit ratings when they’re hiring,“ Benz says.  “So, it can actually affect your future employment history as well.“
Personal finance advisors are busy these days doling out advice on how to raise your credit rating and shed the reputation of a being credit risk.

Credit cards are usually where they begin, because that’s usually where poor credit is born.

“If you have a credit card with a $10,000 credit limit and you have $5,000 in debt on there, that’s not going to look good,“ says personal finance consultant Bob Sullivan.

Advisors say getting credit card debt below 20-percent of maximum limit should be a priority.

“Do that to all your credit cards, march through them one at a time and that’s the best way for you to quickly raise your credit score,“ advises Sullivan.

AnnualCreditReport.com is one place to get a history of your credit, but you’ll have to pay to see your credit rating.

Contrary to what you see on some tv commercials there is no way to get your credit score free of charge.

Source: counton2.com

Are you living life in the fast lane? And tired of keeping up with all your expenditures? Life is like that, sometimes you get what you want, and sometimes you don’t. And since this is a fact of life, is there anything you can do to improve your life?

Don’t be desperate; it’s not the end of the world. It’s but natural to incur expenses as you go on with your daily life. Most especially now that almost every price of an item you need is soaring high. This is one reason why people find loans, credit cards, and other credit transactions more attractive.

Transactions involving credit is not that easy to apply for, you will need to have a good credit rating based on your credit report. Your credit report holds your credit score, or formally known as the FICO score.

The FICO score of each person applying for credit is very important. This is usually the deciding factor for any company to approve your application for credit. This will determine whether you’re eligible or not.

You should not disregard your FICO score. This means that from the very start, you should have handled all your credit transactions in a good manner and pays your bill on time. If you’ve been living your life like this, then you can expect a high FICO score. Having a high credit score means that you have great chances in getting secured loans, credit cards, and the like.

A high FICO score indicates that you’re a low risk for creditors, which means that once they extend you a loan (or any credit transaction), you can pay off your dues on time.

FICO scores have different ranges. If you’ve scored 500-559, it means that you should start improving your score. 560-619 scores have great troubles in obtaining credit, and for you to have a decent score, you must get a score of 675-699. Scores from 700-719 can expect a favorable response when it comes to financing terms. For people having FICO scores from 720-850, a big round of applause for you, because you’ve attained the best score of all; you will certainly have no trouble in applying for any credit term.

Aside from the different score-range, the FICO score is divided into five categories: the payment history, the credit history’s length, amounts owned, new credit, and the type of credit that you have used. These categories have a direct relation to your credit scores.

Your credit report will contain information such as retail accounts, credit cards, mortgages, installment loans, unpaid accounts, bankruptcy, and other pertinent information regarding your history (on credit). You can’t lie because the records are pieces of evidence which proves your eligibility.

However, there are also times when some information contained in your credit report are not that accurate, so you need to check with the bureau along with your supporting papers at least once every year to have your records updated.

You are free to visit the bureau. In fact, three known bureaus gather credit reports. They are Experian, Equifax, and TransUnion.

The FICO score is your credit score, and remember, you must get a high score to have any application on your favor. One of the best ways to cope with your expenditures is through credit, so it is a must that you get a high FICO score. Be responsible with your finances.

Transferring balance from a high interest credit card to a new lower interest card can definitely save you money on interest, if nothing else at least until the introductory rate ends (if applicable). We all receive those infamous credit card offers in the mail, urging us to apply for a new card and transfer our high interest balance over, in order to take advantage of the lower interest rate that this new card has to offer.

This seems like a logical thing to do, right? I mean, lower interest rates on your credit accounts equals more money in your pocket, true? Yes, transferring your credit card balance from a high interest credit account to a lower one is an excellent way to save money on interest, especially if you carry a lot of debt on your credit card(s).

But how does this affect your credit rating and credit score? The answer to that question really depends on your situation, and how you go about it.

A closer look

Lets say you have $5,000 in debt on a credit card account from “ABC Credit Services”, which has a total credit line of $10,000. For this example, lets just say this is currently your only open credit card account. Since your debt takes up half of your total credit line, this would put your percentage of debt compared to your credit line, for this account, at 50%. We’ll call this your “debt percentage”.

You’re making payments to ABC with no problems and you seem happy with the account and the interest rate. That is, until one day you check your mail, and there it is, a credit card offer from “XYZ Credit Services” with a fixed interest rate set at half of what you’re paying now with ABC! Suddenly dollar signs start popping up in your head, and you start trying to figure out how much money you could save by transferring your $5,000 balance to XYZ. You then decide you’re going to apply for the account at XYZ. Your credit is good right? No problem! You receive the card in a week or so, and go ahead with the balance transfer.
So how does this affect my credit score?

How this balance transfer affects your credit rating and credit score really depends on what you do from this point on, and also what your credit line is on your new card from “XYZ”. If your credit line on your new card is lower than that of the original “ABC” credit account, then your “debt percentage” will be higher, which generally will lower your credit score. This would be true if you closed the original account at ABC, and kept your new account as your only open credit card account.

If you’ve had your “ABC” credit card for a while (maybe 2 years or more), and you have a good payment history with them, then it will most likely be in your best interest to keep that account open, even if you don’t use it. Especially if your credit line with your new lower interest card is below $10,000. Usually for the sake of your credit score, you don’t want to increase your “debt percentage”, you want to decrease it.

For example, if you keep both accounts open, you will have a total credit line of $20,000. With your $5,000 in debt on your new card, and your original account at ABC having no balance, your debt percentage would only be 25%, which is a good percentage and your credit score will reflect that.

Now reverse that and say that you closed your credit account from “ABC”, given that your credit line at “XYZ” stays the same, you would have a debt percentage of 50%, which is what you started out with in the beginning. Add to that a newly acquired credit card with little or no payment history on it, and you’re credit score would almost surely decrease, at least until you establish a longer payment history on your new account.

So for this example, it would probably be best to keep both accounts open. Your lower debt percentage could possibly offset the hit your score took from obtaining your new credit card. And looking to the future, it should look better on your credit report this way too.

Avoid increasing your debt percentage

When trying to keep your credit score as high as possible, try to avoid doing anything to increase your debt percentage. Even though the amount of debt you are carrying on your “revolving credit” is the same, it will always look better if you’re using 25% of your total credit, compared to using up 50% of it.
But don’t try too hard to decrease it either

Be sure not to take it too far by applying for more credit than you need, just because you think it will help your credit score by having an even lower debt percentage. Obtaining any new credit will generally bring down your credit score slightly, at least for a short period of time. Applying for credit too much and too often will almost always have a negative impact on your credit score, which is exactly what you don’t want. Your time would be better spent on trying to pay down this debt instead.
As with anything, being informed is the key

Balance transfers such as this can and will save you money on interest, if you do it right. Stay informed about how things like this affect your credit, and you should be just fine!

Getting a home loan is just like getting recognition at the end of each academic year in school. Before you are awarded of any recognition, you must comply with the requirements for such recognition. For instance, before you will be given an academic award, you must first satisfy the required general weighted average on each or all subjects. Other awards also follows particular criteria before it would be awarded to deserving students at the end of the school year.

The same thing also goes in securing a home loan. There are certain requirements that you must meet before you will be able to secure a home loan. One of which is that you must possess a good credit rating.

However, despite the wide availability of home loans, there are still thousands of individuals who failed to secure home loans merely because they possess a bad credit score. They are not fully aware that any delinquency in paying their outstanding loans caused the stain in their credit record, thus they would be having a hard time securing a good home loan.

In other words, possessing a bad credit score simply means you are giving the lender reason to get more money from you through giving you home loans with high interest payments. You want to secure a home loan because you do not have enough money to finance the purchase of your new home, and yet you will be given a financial burden if you insist on getting a home loan despite of your bad credit score. That would be a terrible situation for your part.

Fortunately, there are still loan options for you despite your possession of a bad credit score. There are commercial lenders who offer bad credit home loan for individuals who are having a hard time securing a loan to finance the purchase of their new home. However, bear in mind that because of your bad credit standing, you will automatically become a great risk to the lender. Thus, expect that they will charge you higher interest rate as an assurance that you will be able to repay your home loans in the agreed period of time.

Bad credit score will really put you in a situation wherein it is you who is on the bottom of the wheel. Thus, you need to strongly convince your preferred lender that you are still worthy of another chance and not be a risk to them. How to do it? Have a look on the following guidelines and make sure that you will follow them.

· Research for the best available bad credit home loan offer in the market. You may prefer visiting various commercial lenders and financial institutions in your local area to know their terms and conditions as well as their rate of interest for home loans with bad credit score. In addition, a personal contact inside these financial institutions could be of great help in your credit problem.

· Cleanse your credit rating while there is still time for you to do so. If there are incorrect entries posted in your account, it is best that you call the attention of the authority with regards to this matter and have them clear your record of any incorrect rating. You may also ask for some certification from your previous lenders clearing you of any financial obligations. In this way, the recovery of your credit rating will be in place before you can secure another loan.

Getting a home loan with bad credit score could really be a daunting task. But if you manage to clear your rating in the shortest time possible, you will be able to secure a home loan that will not be a financial burden to your part later on.