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How To Build Up Your Credit
By: Ken Snow
There are many effective ways to build credit. In order to keep creditors from
bothering you, and in order for you to get a loan with a reasonable interest
rate, you need to learn how to build your credit. The best place to start is to
not buy things that you don’t need. If you always make impulse buys, you will
find yourself in deeper debt very quickly. And if you have no credit history at
all, you must keep that in mind.
Building good credit if you have bad credit
If you have bad credit, consult one of the many books available written by
qualified financial advisors in order to get started on the right path. You can
find books like these at your local library. In these books you will find
checklists and step-by-step advice that will help you turn your credit around.
There are also guides available at the library that can instruct those in debt
on how to write letters to their creditors. Letters are probably a more
effective avenue to take rather than communicating by phone, since most
creditors will not be sympathetic to your situation.
Another value of the written communication is that if you should end up in
court, the written documentation will be easier to submit. Verbal commitments
can be easily denied without written documentation. Any documentation that is
relevant to your credit issues should be stored in a secured place. Make copies
of any communication with credit agencies (both to and from you), and keep it
under lock and key. If you notice any errors on your bills or credit, be sure to
contact the correct agencies and dispute and resolve the charges right away.
If you have used your credit card to purchase an item or service and the item
you bought was defective, you DO NOT have to make payment on the charges. You do
need to dispute the charges with the service provider that sold you the product.
If the proprietor does not exchange the item or reimburse you for it, you have
the right to deny payment. Once you have disputed the charges with the
proprietor it is then your responsibility to contact your credit card company to
dispute the charge.
If you have bad credit and have a credit card, you can use the card to repay
your other debts and then make monthly payments on the credit card. Ironically,
you are getting out of debt while remaining in debt. In other words, if you use
your credit cards to pay other debts, your debt on your credit card will
continue to increase. Since credit cards charge significant interest rates, your
debt will continue to increase unless you can make significant monthly payments.
No Credit, No problem?
If you think that you do not need credit at all, that is simply not the case.
In today’s world, in order to make many major purchases, it is often a
requirement that you have at least one major line of credit. Most lenders will
not consider lending money or give credit to someone that has no established
credit history. We are expected to establish a credit history when we are young,
and if we do not lenders often wonder why, which makes you look like a high
risk.
They have no way of knowing your payment record, or if you are able to pay off
the debt at all. There are several reasons that lenders will refuse you a loan
if you have not established a credit history. The best way to establish good
credit is to have a credit card, make your monthly payments on time, and keep
your spending under control. Good credit means managing your money each month
and paying your bills on time.
About the Author:
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