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Personal Finance

Credit reports

In this day and age having a good credit report is critical to every day life. Most landlords, employers and utility companies require a credit check before working with you. Any company that you are seeking a loan from will base the interest upon your credit score. If you have a blemish on your credit report you can be in for a world of hardship and be paying a lot more for things than you should.

Knowing how important your credit rating is, it only makes sense to check it at least once a year and definitely before financing a major purchase. On average 1 out of 4 credit reports contain inaccurate information. Any mistake on your credit report can keep you from getting a loan or may result in you paying much higher interest than you should be paying.

Obtaining your credit report is easy and can be done for free. If you have been declined credit within the last 30 days the company that declined you is obligated to provide you with a credit report. If you have not tried then simply point your browser to any of the main credit reporting bureaus and purchase a copy for them. Since each country has it own credit bureaus you will have to search the Internet to find the names of them or ask a third party lending company for the names.

If you do find that you have some blemishes or your credit report here are some tips that will help to negate them. While your everyday actions do play a role in your credit score, the best cure is time.

  • It is vital to get some kind of a loan from a third party lender if you have a bankruptcy on your file. If you do not get a loan it may be very hard, if not impossible, to get a loan after your bankruptcy has been removed from your file since a lender will assume something really bad happened during that time.
  • Never let your credit cards exceed 70% of their limit.
  • Pay all utility bills as soon as they arrive in full. If you pay before the bill arrives or after the billing period has past you will not be given credit for making payments on time and in full. After paying your utility bills on time and in full for at least 6 months request that the company update your credit report to reflect this.
  • Be careful about the amounts that you borrow. Your credit score will determine the total amount of money that you are able to borrow or finance at any time and the more of your available credit that you use the higher your interest rate will be. The most that you should be paying for loans should be 20% of your income after housing and vehicle costs.
  • Open a checking and savings account at a chartered bank. Some credit companies will see this as you are using your money wisely.

Your credit score tells a lender the odds of you repaying a loan on time and may indicate the odds of you being tempted to steal things from an employer. Lenders and employers want to know that you are dependable and reliable. Pay your bills on time, watch the total amount of your available credit that you have used and secure meaningful loans and you will have great credit in no time.