Unsecured Credit – Not Necessarily a Good Idea

October 9, 2013 by  
Filed under Debt & Credit Information

It may seem appealing to have access to unsecured credit. You do not have to provide any collateral and even if you default in payment there is no property of yours that can be auctioned. There are however several major drawbacks that you should be on the lookout for. If you are not careful, these drawbacks could negatively affect your long term finances. So before you dive into unsecured credit read through the following potential pitfalls.
Unsecured Credit ~ not necessarily a good idea
  • You are spending money that you do not have. It may feel good to buy whatever you want without worrying whether your bank account is huge enough but remember that you will have to repay all that money soon.
  • High interest rates. Due to the risk lenders are exposing themselves to with unsecured credit, they set high interest rates. This means that you have to repay a lot of money and if you are not careful, you could be sinking deeper and deeper into debt.
  • Negative impact on credit. Even if you miss payment for a few days, your credit score suffers a lot. You can imagine what will happen if you default by months. A bad credit score will greatly reduce your future borrowing power.
  • Additional fees. Late payments attract fees and some unsecured credit companies also charge regular fees especially if you have been issued with a credit card.
It is important to remember that no matter how appealing the unsecured credit sounds, unsecured credit ~is not necessarily a good idea.

Building Good Solid Credit

October 6, 2013 by  
Filed under Debt & Credit Information, Featured

How to build good credit?

This is a common concern – not having strong credit means being deprived of many benefits. If your credit score is not satisfactory, the first effect may be for you to not get loans easily. Even if you are planning to shift to a new job, that may also be a problem because nowadays, most of the employers check if the potential employees they are considering have good credit. Even getting a house or apartment on rent can be a problem because land-lords may be reluctant to let their properties out to people who do not have satisfactory credit rating.

 There is no heavenly staircase that can take you to good credit rating. You must adopt the necessary steps for achieving it.

 * If bills like utility and phone bills are in a different name, you must get them changed in your name. You must pay them regularly for building good credit.

 * All the bills including credit-card bills must be paid on time. If you delay your payments or default on them, it may spoil your credit score. If you tend to forget bill payments, you can opt for setting up automatic payments.

ejsk volzhsk kiselevsk novorossijsk orenburg krasnoyarsk gelendzhik kogalym kirzhach vladimir zelenogorsk tolyatti zlatoust zheleznogorsk syktyvkar novorossijsk tynda barabinsk saransk salekhard blagoveshchensk turuhansk izhevsk meleuz tiksi asha vorkuta rezh novomoskovsk severouralsk bugulma uraj nefteyugansk kazan iskitim rybinsk tver tomsk novoshahtinsk majkop tyumen zarinsk zarinsk severouralsk ekaterinburg barabinsk yuzhno-kurilsk orenburg nikolaevsk pskov arzamas penza chelyabinsk salekhard timashevsk chebarkul krasnodar armavir

 * If you do not have perfect credit, you can deposit a certain amount with a bank and request them to issue a credit card the credit-limit of which can be restricted to your deposit amount. Any credit-card-issuing bank may agree to this proposal. If you pay these credit-card bills on time, you can easily build your credit.

 * A good credit is always linked to your employment. If you stick to a job for a good length of time, you are considered credit-worthy.

 * Similarly, if you live in the same house or apartment for many years, that is also viewed favorably by the credit rating agencies.

 These steps may be the perfect answers on how to build good credit. Meanwhile, research and some perseverance will help you deal more personally regarding this concern.

You Do Have a Second Chance

It is extremely rare to come upon anyone, who at some point in time or another has not had financial difficulties. A missed credit card payment doesn’t make you a bad person, and it doesn’t mean you are a huge debt risk to creditors either. This isn’t to say you should miss payments, in the ideal world you wouldn’t, it is simply to say that there is a way to turn things around if you do miss a payment. It is important to find a way to turn things around, and once you do, to take that path. Keeping your mind clear, makes this manageable, and will help you get things back on track.

 Although one missed payment won’t cause your score to plummet right away, it is important to take this missed payment as a sign, and to find a way to turn things around as soon as possible. If you allow longer term financial problems to occur, it is going to be much harder for you to get out of these financial woes. So, when you do miss the payment, focus in on it, and get yourself back on track; tell yourself it is not going to happen again in the future.

Make it a point to make the late payment when possible, and to make sure your future payments, are made on time. When you make this commitment and promise to yourself, that one missed payment will truly be only a one time occurrence. It might be a case where you find it hard to make payments in the future. If this is the case, look for alternatives right away. From debt consolidation to debt management plans, these are solutions that can help you, and are simple ways for you to stop the problem, before it continues to grow.