credit report - What Is Worse Than Having Bad Credit?

An Empty File Having an empty file is not necessarily the worst situation, since bankruptcy could be even worse, but there is no information on the person's credit records and a lender who uses his common sense, will not risk lending the money solicited by a young, inexperienced person with no records. In the best of cases the lending agent will try to give some sound advice, but will more often than not, turn down the request. There Are Exceptions, Though The exceptions are lenders who will compensate the risk with a higher interest rate. So, considering the age of the prospective borrower, we must assume that his or her income is not necessarily important, making it very hard to keep up with payments. There Is A Way It does not mean cheating the system. It's just a wise use of the rules, obtaining as only benefit, a positive rating in your credit report and in a short time. Most banks will open a regular savings account to anyone over 18 years of age. If you have $400, you will be able to start sooner; otherwise just save as much as you can at a time, until you get to that amount. Then, three days after you have reached the $400, ask the same bank for a short-term loan of $400. Any bank will give you that amount, if it is exactly what you have deposited in their bank. With your new $400, go to another bank and open a savings account and do the process all over again. Three days later ask for a loan of $400. Do the same for a third time and go home with your third loan of $400. The Payments After the first month, you will need to start paying the installments. Do so with the product of the last loan and as you pay the installments for the three loans, you will begin to free credit. This will enable you to obtain the necessary cash to pay for the other installments. Finally, you will have paid them all back, with a very low cost, since the fees and interest rate for such small loans are chicken-feed. And Now, Your Credit Report Request your credit report to any of the three credit bureaus and you will find the entries of your three loans and the prompt payments of all three, or more, if you have the patience and the time to do it in a coordinated way. Now, The Big Bucks Once you have your credit report with a perfect score, you can go for the big bucks. Well, there's no hurry, but I mean to say that the doors are open to a larger loan or line of credit to get you a decent beginning in life. Even before you think of raising a family, you can start to tap into investments, financed with a loan and you will surely be better off than many others who have not cared to build themselves a good credit rating. Those, wait for the water to reach their necks and only then, start thinking about taking a loan to get by. --- Jessica Peterson writes finance articles for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more. Article Source:http://EzineArticles.com/?expert=Jess_Peterson credit report - Why It Has Become So Essential To Know Your Credit Score? Your credit score like your reputation follows you around. This is more true if you are embarking on a new venture like moving to another town or starting a new business. What you have achieved in the past remains significant. There would be very few occasions when it would not matter. You may not realize the importance of having a good credit history in the early years but be sure it will become extremely valuable at a later date. A good credit history will help you obtain loans at lower interests, get a better job, get help in renting an apartment, secure finance for white goods and even get great financial references when starting a new business. You have to therefore keep track of your credit scores and to do this you must obtain a copy, either free or paid of your credit report and score. From the report you can read the contents and understand how it is affecting you. Your credit score tells the lender what the chances of getting his money back from you would be. To understand this let's relate it to the rank your child would show on his report card. One glance and you would know the total number of students in the class and the number at which your child is placed. The determining factor here would be his performance in studies. Similarly, the lender will have a good idea of how you manage your debt, your past record in the same and any defaults or issues you have had. So just how is this score calculated? All related information like your income, credit history, employment details and the like are logged into a computer and a score is obtained. If you get a higher score, the lender knows that you are a good person to loan the money to i.e. you have a better credit risk. If the scores are lower then that spells trouble. You score can be lowered due to late payments, deferments, tax liens, delinquent accounts and similar issues. If you have settled the same, these issues continue to be mentioned on your report for up to seven years. Some people may think if they cancel their credit cards their score will be bettered. This is not true. Your credit score actually shows how well you have managed your credit. The key is to keep one or two credit cards and manage that debt rather than having multiple cards and ending in a mess. While credit scoring only puts you into a bracket, it is ultimately up to the lender to decide on the actual course of action. Based on your low score your request can be rejected. If you do get through, you may be offered the loan at a higher rate of interest. As in any kind of lending, the lender takes a chance with his money, in that he may not get it back. As the borrower you get a provision that you otherwise could not afford. The rate of interest secures the risk for the lender and pays for the facility for the borrower.