Factors That Credit Card Companies Look at When Evaluating an Application
For many people it can be difficult to think about a credit score. Many avoid even bothering to look completely. But, if you don't manage what is going on there are certain things you won't be able to do. Let's face it paying with cash only doesn't show up on a credit report or help you purchase a vehicle or even give you the possibility of buying a home. There are many options on beginning to build your credit. The hard part is keeping it managed and not over extending yourself. There are simple ways to do both however.
Check Your Credit Score
There are a lot of places on line that you can use to check your credit score. On a daily basis, commercials run about several of the most popular ones. Sign up for one and get started on checking your numbers. Once you know your credit score, you may find a few things on there that may need to be worked on. For example, old bills you didn't realize were there. For example medical bills. That's right some hospitals, labs, radiology places actually will report to the credit bureaus about these issues. Depending on your budget, it may be a good idea to look at what ones you may be able to take care of. This will help your credit score raise. Now comes the real fun. You want to continue to increase your credit but aren't sure how? Well there are many options.
Ways To Build Your Credit
As many of us know making a large purchase like a vehicle through a bank or financing company is a good way to get started. Making payments on time and seeing them reported helps a great deal. But, there are those of us, that can't afford to start off that way due to age. However, you can begin to build up your credit by getting a simple credit card. You will want to shop around to start off with. Interest rates are very high on credit cards to begin with and if your credit isn't the greatest, it can make it more difficult to find the right one. If you signed up for one of the credit sites, sometimes they will give you suggestions on credit cards to sign up for based around your score. It is a good idea to research them before you sign up. Most credit cards will start you off at a low credit amount for the card. In between $200-$300 dollars. For many they begin to get excited and want to run out and use it right away. DON'T! By doing so, the possibility of it not being able to get paid off on time or the payments may be to high to cover depending on your budget. A good suggestion, pick a bill that you pay every month, for example your cable bill. Pay the bill with that particular card, then on your next payday, pay it off. This is called revolving credit. The information is sent to the credit bureaus and you will see your credit rise. Typically after a few months of doing this, the company that you have your card through may offer to raise your credit. If you are unsure, ask to keep it at the same level for the time being. By doing so, it gives you the opportunity to watch your budget and maintain your living expenses. Should you get a raise at work or change jobs where you are making a higher income, it is best to maintain the one card. Keep paying a monthly bill on it to continue building your credit. If you are at a point where you feel comfortable with allowing them to raise your credit, then do so. But make sure you can still manage to pay it off completely every month. If you are looking to make a large purchase, by having the one card on your report, many companies will look at your numbers and see that you are a good risk and have been responsible with your credit. You may be able to then make that large purchase and continue to build your credit in a responsible manner. Always be sure to do your research and set up a budget that is comfortable for you and your family as you build your credit.