4 Steps To Creating Good Credit

Written by James Dimmitt

As a consumer you’ve learnedrepparttar importance of establishing a good credit rating with your lenders. Whether you are shopping for a new home or auto, or searching forrepparttar 138456 best deals on insurance, your credit worthiness will be judged by your credit rating or credit score.

A bad credit history or bad credit habits will place “black marks” on your credit profile. These include things such as late payments, having an account assigned to a collection agency, and of course bankruptcy.

Establishing good credit habits and therefore a good credit rating will improve your credit worthiness. This will be reflected in potential lenders offering you substantially lower interest rates and better deals on credit offers.

Here are 4 tips to help you create a shining credit profile:

1) Pay Your Bills On Time

Lenders only have your past payment history on which to deciderepparttar 138457 type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.

2) Don’t Use Too Many or Too Few Credit Cards

How much is too much ? How little is too little ? Many credit experts and financial planners suggest two to four credit cards is justrepparttar 138458 right mix.

3) Pay At Least The Minimum Due

The Simple $10 Debt Elimination Solution

Written by James Dimmitt

Ask a friend what money resolutions they made atrepparttar beginning ofrepparttar 138455 year and your bound to hear them reply “Pay off my credit cards.” Ask them how they planned on reaching that goal and most of them won't have an answer.

The obvious first step to paying off credit card debt or paying down credit debt load is to cut back or eliminaterepparttar 138456 use of your credit cards. For some people this first step can often berepparttar 138457 most difficult. If you’re used to spending freely with plastic and worrying aboutrepparttar 138458 consequences later, it’s difficult to break free from this “buy now, pay later” attitude.

To gain control of their careless credit card spending habits, some people cut up their credit cards therefore making it impossible to use them. Others lock up their credit cards or hide them in a safe place and vow to use them only in an emergency.

The second step to paying down credit debt is to pay more thanrepparttar 138459 minimum balance due. Most credit card companies require a minimum monthly payment of 2.5% ofrepparttar 138460 outstanding balance. For example, if you have an outstanding balance of $1100.00 on a credit card charging an Annual Percentage Rate (APR) of 18.9% your minimum monthly payment would be $27.50. It will take you 66 months or 5.5 years to pay off your balance of $1100.00 makingrepparttar 138461 minimum payments. The credit card company will make $676.94 in interest from your use of their credit card.

Monthly payments are purposely kept low byrepparttar 138462 credit card companies so that they can earn as much as possible fromrepparttar 138463 interest rate charged to yourepparttar 138464 consumer. Paying justrepparttar 138465 minimum payment will keep you tangled in credit’s web for years and years to come.

Cont'd on page 2 ==>
ImproveHomeLife.com © 2005
Terms of Use