Saturday, December 29, 2007

Being Responsible With Personal Credit

By Robert Bain

If you make poor choices when it comes to your personal credit, it is going to haunt you for years to come. For some individuals, they ruin it before they even get started so that makes it almost impossible to fix. After all, there are very few lenders that will overlook the fact that you have three credit accounts and they are all in bad standing. Credit isn't a free for all, you have made a commitment to repay those funds with additional money for interest.

Don't be in a rush to establish your personal credit just so you can say you have a few credit cards in your wallet. You need to really think hard about the needs you have before you apply for credit. Too many applications out there for credit is a red flag to lenders that you are desperately trying to secure funds. Even if you are only trying to compare rates you need to be careful.

A very common mistake with personal credit it using it because you have it readily available. The best way to make sure you aren't tempted is to not even have it accessible. Most people don't realize that the amount of credit you can access can affect your credit score. Some lenders won't give you additional credit because you may access the other credit you have in the process and then not have enough to pay all of your payments. Lenders don't like to get burned and so they take precautions at all turns.

As long as you can show you are responsible with your credit, you can negotiate a good interest rate on credit cards and loans. You can always call a credit card company and tell them if they won't drop your interest rate then you will cancel your card and use the one you have from another lender with lower interest. If your credit rating doesn't merit such a reduction though then they may tell you they will miss you as a customer.

Always pay your obligations on time so you can avoid late fees. There is no reason to pay $35 because you mailed your check late. If you are never late, consider calling the creditor and asking them to remove that charge for you. In many instances they will be happy to waive it if you ask. You should have enough money in savings to cover your monthly expenses for two months. If you don't, stop spending your disposable income of frivolous things and invest it in your future.

If there is no possible way for you to make your monthly payments as agreed to, you need to let those lenders know right away. Don't assume they will just know what your circumstances are. If you contact them early enough they may be able to help you find a good solution. This is better than allowing your payments to default and go to collections. This is not a responsible way to handle your credit, and it will have a severe affect on your ability to get it for years to come.

Getting personal credit is a privilege and not a right. Don't assume that just because you need funding that someone is going to give it to you. The real world doesn't work this way. If you aren't prepared for handling personal credit then be responsible enough to enroll in a class. Sometimes we fall into the same financial problems as our parents as we haven't been exposed to better ways to handle financial matters. Doing all you can to protect your personal credit is going to assure that it is there when you need it for your future.

If regular lenders aren't helping you, don't take it at face value when someone else contacts you. Chances are they will offer you credit that you think you need but the cost of it will be unbelievable. This is going to result in long term financial troubles for you compounded with what you are already dealing with. Even though you may be tempted because you need the credit, don't let yourself fall into these types of traps. Do all you can to be responsible with person credit and you will be able to benefit from it in the long run.

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