Every loan has a certain set of features, which are not meant for people in general. Numerous loan deals are available there that cater to different categories of people and are formulated according to their requirements. The loan that is suitable for your sibling or a friend might not be the best choice for you. The most reasonable method to determine a good loan for you is to enlist your requirements and find a loan accordingly. As there is a wide variety of loans being offered, it is beneficial if you compare loans that you find the most suitable for yourself.

Mainly there are two types of loans, secured loans and unsecured loans. A brief introduction of both will follow as well as the loans that fall into these categories.

Secured Loan: secured loan is named thus because it is protected by an asset. Primarily these loans would be safer for the finance company or bank as they can hold on to your item until you have repaid them the whole sum. However, secured loans are preferred when a huge sum of money is needed on urgent basis because a lender would not pay you a large amount of loan unless they have something to tie you down. This collateral or asset could be personal property, automobiles, savings accounts etc. This guarantees that you will everything you can to repay the loan. Additionally these loans offer lower interest rate, clear terms and negotiable repayment options.

There are several types of secured loans. These secured loans are devised according to the popular needs and demands. Examples of secured loans are secured debt consolidation loans, bad credit secured loans, secured wedding loans, secured holiday loans, secured business loans, secured car loans, secured home improvement loans, secured unemployment loans etc.

Secured loans are the best option for people who have existing sources or resources to use as collateral. The interest rate, loan duration and loan amount varies corresponding to the loan type being availed.

Unsecured Loan: unsecured loans do not have protection of an asset or collateral. The lenders loan money just based on the persons previous history and some legal papers, but they may or may not be able to claim charge on any asset of an individual. When you borrow money from your friends or family, it comes in the category of unsecured loan. Credit cards also follow unsecured loaning criterion and some banks provide unsecured loans as well. The loans are allotted after assessing creditworthiness of a borrower. Borrowers with lower credit scores are less likely to get an unsecured loan. The catch in an unsecured loan is that the lender does not have any collateral, therefore you cannot get larger loans and he/she set any interest rate, repayment amounts and increases the rate at any time they wish, as the terms are not decided beforehand.

As unsecured loans do not provide large amount of money, thereupon the scope of its utilisation is limited. With an unsecured loan, you can do some shopping or pay the bill for one visit to the doctor and medications. Best value loan is undoubtedly the secure loan as it fulfills the three basic conditions for a value loan. It has clear terms and conditions, affordable interest rate and flexible repayment amounts and duration.

Edwood Woodward is a financial consultant. You can take debt help and discuss financial matters with him

The FICO score will be used to evaluate your qualification for a particular credit line or loan program and to calculate the applicable interest rate. Depending on their specific institutional needs, some lenders may use the highest FICO score or the middle score, or only one FICO credit score if the credit transaction is for a consumer purchase.

For instance, if you were to apply for a house credit card at a department store, they would run your credit profile (with your permission, of course) to obtain a FICO score. On the assumption that the store reports to only one of the three credit bureaus – as most department stores tend to do -, then the inquiry will go only to that bureau. The store would make its decision based on only one bureau’s information, and by using only the one FICO score.

The system works differently for mortgage credit. Banks report to all three credit bureaus (Experian, Equifax and Trans Union), so they would get three different FICO scores, calculated on three credit reports that the credit bureaus sent for scoring by FICO. Since there are three FICO scores, banks generally will use the middle or average FICO score. Depending on the type of financing you are seeking, whether it is for a new car, appliances, a credit card, or a home mortgage, your FICO score makes up a significant portion of the decision-making process. The FICO score will determine the premium rates you pay for insurance and the interest rate available to you on a loan.

Your FICO score is usually a composite of the following:

35% of your FICO score is payment history, and the key items include frequency, severity, and most recent occurrences of non-payment — which means that all late or missed payments will hurt your FICO credit score, but missed payments of more recent dates will have bigger effect;

30% of the FICO score is credit utilization, and estimates the balance of credit accounts in relation to the maximum credit available, with revolving credit lines (usually, credit card accounts) being the most significant;

15% of FICO scores cover credit history, the number of years credit has been established (the longer, the better; and one trade credit line for 5 years will affect the FICO credit score better than 2 trade lines for 6 months);

10% of the FICO score involves type of credit, which will monitor the mix of revolving credit inquiries, but will not include inquiries with no finance rating (as an inquiry from your employer, for instance).

As mentioned earlier, there are three FICO scores developed by the Fair Isaac Company – one each from the three major credit bureaus. Experian has the Experian/Fair Isaac Risk Model; Equifax has Beacon; and, Trans Union has Empirica. Consumers are likely to have a different rating with each agency, because although they all use the FICO model, each credit reporting bureau has its own set of reporting companies and there may be variations in the credit information that they send for calculation of FICO score.

There are other types of FICO scores:

• Application Risk Score – In this set-up, the lender uses a scoring system that includes a FICO score but also considers information extracted directly from your credit application.
• Customer Risk Score – Also called “behavior scores”; here, a lender may use the scores to make credit decisions on its current customers; this score uses the FICO score and also information on your payment history with that lender.

The range on your FICO score is from 300 to above 850 and would suggest a credit profile as follows:

FICO score 720 and above: This is a very good FICO score, and it suggests that the risk of default on your credit is very low. If the lender should find any exceptions in your credit report, these will easily be waived and set aside; and if there are any weaknesses in underwriting your credit, your high FICO credit score favorably compensates for that weakness.

FICO score 660 to 719: This is also a good FICO score, and suggests that your risk of default is low. This FICO credit score indicates that your credit history is acceptable.

FICO score 620 to 659: This FICO credit score represents a degree of risk. You can qualify for 100% financing, but certain conditions may be included in the credit agreement. The credit underwriter will more than likely consider you, but will investigate further to check whether you are: recently self-employed; have high loan to value ratios; have low cash reserves; exceeding normal debt to income ratios; staying in multiple dwelling unit properties.

FICO Scores below 630: Anything below 630 is a really bad FICO score. Your risk of default is very high, and you will need to present strong compensating factors to minimize credit risk before the underwriter would consider approving a loan. Some lenders may be willing to arrange 100% financing.

FICO score between 619 to 585: The underwriter can consider approving a loan but that depends on the credit issues, and may also consider an applicant with no previous delinquency and lack sufficient credit. Lenders are more likely to see mortgage delinquencies if they loan money to a consumer with a FICO score below 620.

FICO score between 584 to 500: You will have to explain your credit history in writing, and will need to pay off some of your debts and other payables; the underwriter may still consider you acceptable but the high risk factors should not be layered.

FICO score below 500: There may some serious issues outside your control that caused the setbacks. There are individuals who do not care so much about what happens to their credit. Perhaps this is what we should call Bad Credit. This does not mean the world has ended, though, and there is still hope.

The moment your credit report changes, your FICO scores will change as well. Your FICO credit score does not change from one month to the next at random, unless there has been a late recorded payment or an adverse report. While a late payment, collection or bankruptcy can be very damaging and will immediately lower your FICO scores, it takes time before you can raise your FICO scores. It is good to get in the habit of checking your credit profile every 3 to 6 months.

Your credit report must contain at least one trade line over a six-month period in order for a FICO score to be generated, and must have one trade line that has been updated in the last six months also. This will insure that there is enough information — and enough recent information — to calculate a FICO score.

Your FICO credit score is meant to be a measure of your creditworthiness as a borrower. In the mortgage industry, mortgage products change constantly, so if you manage your credit well you will almost certainly qualify for an advantageous home refinancing- or home purchase program. In the case of revolving credit lines, your account is reviewed periodically, and if you manage it well, you will likely be given more perks and privileges.

Credit-Wisdom.com Provides Expert opinions and reviews to help you Compare and Apply for a Credit Card – Compare Credit Card Offers with Credit-Wisdom.com – Unraveling the best in Personal and Business Credit Cards.

• FICO score:– APR:
• 760-850—– 5.918%
• 700-759—– 6.140%
• 660-699—– 6.424%
• 620-659—– 7.234%
• 580-619—– 8.777%
• 500-579—– 9.670%

Many people aren’t aware that you cant really negotiate the rate much with lenders. That FICO score indicates your risk factor. You may know you can pay your loan but they don’t. When they see a 500 credit score they think there is a huge risk you will default on your loan, so they give you the interest rate that makes them the most amount of money in the shortest amount of time. Don’t think the lenders actually care about you or your circumstances they don’t, they care about money, thats it, thats the bottom line. They see your score and offer you that high risk rate loan. No matter how good a loan officer/Broker is they cant get a 6% interest rate for someone with a 550 score. It doesn’t matter how long you shop around. They can however lower their fees for you, give you great service, give you a no Yield Spread Premium loan, etc. Thats why its good to shop around for loan officers and find someone who honestly cares about you, your goals, and your money. I like to treat everyones loan who comes to me as if it were my own. Any way back to credit cards and how they help. Ok so you have a credit card with a $1,000.00 limit. If you carry a balance of $850 on it you will actually hurt your credit score. You see FICO wants to see how you manage your money and bases a score on that. If it thinks you aren’t managing your money wisely then you get a lower score. If however you are carrying a balance of around 30% and making your payments on time every month that will help your credit score, looks like your managing your money well. Now it doesn’t make a difference if you have a credit limit of $300 or a Platinum $10,000 limit card it works the same way. So if you’ve had problems in the past with credit cards my suggestion is use them for small things like gas and make sure you have the money to pay them off. Remember Credit Cards are basically LOANS NOT cash! You have to pay them back and sometimes at substantial interest. Please don’t ever think of credit cards as cash. Credit cards help your FICO score by showing that you can manage your money responsibly and pay your debts on time. Your score gets higher as you continue to pay every month for years. Which will help you get a higher score a lower risk factor with the lenders and a better interest rate saving you $1,000s and $1,000.00s of dollars.

#2.- NEVER GO OVER 30 DAYS LATE ON ANYTHING! – Many people want to refinance their homes because they have gone 1,2,3 or even more months late on their mortgage. They have a 7% interest rate and suppose they can refinance at the same and take some cash out as well. If you have gone even once 30 days past due on a mortgage that is a killer to your FICO score. It causes it to just tank! So once that happens your going to end up in the High Risk score column. Your account moves to the “unsatisfactory” column on your credit report and Your refinance loan may be 9% or more and you may not even get financing. Remember the lenders just want to make money. What do you think they see when someone is 3 months past due on their current mortgage at 7% and they can only offer them a 10% loan at $300 more per month. They see default. If you think you might be short of money and before you go 30 days past due try to get refinancing then! Don’t wait till its too late because your going to be stuck with this high interest loan until you can clean up your credit report and your score goes up. That could take 1, 2, or even 3 years or more! Don’t ever go 30 days late on your credit cards! You may get charged a fee, and your interest may go sky high after you accidentally pay 10 days late, but, if you don’t go 30 days or more it wont go on your credit report. 30 DAYS LATE=TANKING FICO SCORE. Remember that.

#3.- CHECK YOUR CREDIT REPORT – Get a copy of your credit report so you can see if there are any inaccuracies on it. Most people actually have one or two inaccuracies on their report. You may have old collection accounts that should be removed. These should be looked at carefully and then disputed with the credit agencies. There are 3 credit reporting agencies. EQUIFAX, EXPERIAN (formerly trw) and TRANS UNION. You will need to order a copy from each and dispute each individually they are seperate companies. You should try to do this BEFORE talking with your loan officer/Broker/Lender. Your score can go up significantly in 30 days or less by removing inaccurate information. It could be the difference in a 9.75% loan and a 6.9% loan. You cant take that chance. ORDER, REVIEW, DISPUTE!

Stuart Lichty is a Loan officer based out of Florida. For no teaser rate honest loans visit http://www.homeloanstu.com

1. Your report does not show real estate loans – this was incorrect, I have had a mortgage for the past 7 years.
2. Your report shows that available credit across your open revolving accounts is too low – I only have one credit card with a limit of $3,000. They are telling me that if I had more credit cards my score would be higher.
3. Your report shows that the ratio of balances to credit limits across your open revolving accounts is too high – My balance on my credit card was approximately $900 which is only 30% of the credit limit which is the suggested balance that consumers should have on their credit cards.
4. Your report shows that the time since your oldest revolving account is too short. – Wrong. I have one revolving account, my credit card which I have had for the past 10 years.
5. Your report shows one or more inquiries on file – I had one inquiry in June 2005. One inquiry in February 2006 and one in October 2006. Inquiries should be obtained no more than twice a year unless you are doing comparison shopping. I am being penalized because I had two inquiries within one year.
Well, needless to say, I wrote each credit bureau and disputed all the reasons they gave me. I received two responses back and am waiting for the last response. After I receive it I will order a copy of my credit report again to see if my scores have increased. I have struggled to find out how one obtains an 800 FICO credit score or higher. From the looks of things it doesn’t seem like that is possible anymore. Whether you have good or bad credit, the credit bureaus will find ways to make sure your credit score is not as high as it can be.

I advise everyone whether you have bad credit or good credit to order a copy of your credit report once a year, read every single line on your credit report and read all of the information provided along with your credit report. Make sure everything listed on your credit report is accurate. Even a few points on your credit score can make the difference between getting approved or getting declined and we all need those extra points. Good luck!

Harrine Freeman is a speaker, personal finance expert and the author of, “How to Get Out of Debt: Get an “A” Credit Rating for Free Using the System I’ve Used Successfully with Thousands of Clients.

She is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company. She is a member of the American Association of Daily Money Managers, SPAWN, Toastmasters, AAUW, National Association of Women Writers and the Women Network. For more information on how to get out of debt or to buy her book please visit http://www.hefreemanenterprises.com

We all want to have enough money to pay our bills and have enough money left over to live. To accomplish this, we’re expected to manage our money and our credit wisely. Our credit score is a picture of how well we handle our debts. What are the typical purchases and decisions that are affected by a person’s credit score?

• Applying for a job
• Buying a car
• Purchasing a home
• Renting an apartment
• Applying for insurance
• Requesting a credit card
• Opening a bank account

This is only a short list of products and actions that involve a credit score. So, what is this mystery called Credit Scoring? It all starts with your “credit report”.

The three national credit reporting agencies are Equifax, Experian and TransUnion (with smaller ones including ChexSystems). These agencies act as warehouses for your information. Your credit report contains personal data, which includes your name (priors and variations), birth date, addresses, Social Security number, and past and present employers. In addition, creditor history, inquiries or authorized credit checks, relevant public records and collections are also used for identification purposes Your credit report card includes your creditor history detailing your accounts, payments to banks, credit unions, finance companies, mortgage companies, credit card companies, retail stores and other creditors. These credit lines detail if you pay on time, balances, credit limits, burden of debt and how long you have had your account. Other than you, outsiders can access your credit report by making an inquiry. Credit card companies are notorious for making inquiries, and you can see on the credit report who has accessed your account, and when.

Relevant public records and collections are also on your credit report. This may include bankruptcies, foreclosures, tax liens and any collection agency debts you may have incurred. A foreclosed property can remain on your report for as long as seven years, Chapter 7 bankruptcy for 10 years and, depending on your state, unpaid tax liens can remain on your credit report indefinitely.

The industry standard for calculating a credit score was invented by The Fair Isaac Corporation (FICO). The scores generate a three digit number ranging from 300 to 850. Credit scores are used to assess your level of credit risk by predicting whether you will pay back your credit obligations in a timely fashion. The higher your score, the better credit risk you are. Because there are three different credit agencies, consumers who have a credit report have three FICO scores. Creditors use these scores to determine if they are going to grant credit to a consumer and what interest rate they will charge.

Are you 100% confused yet? It might bring some consolation to know that information sharing is getting better. Prior to 2001, consumers did not have access to their credit scores. Now you can get free copies of your credit report once a year from each of the three reporting agencies.

Uncle Credit Score is watching you and constantly adding or deleting information. But you do have influence over your score and the fluctuations that can have instant impact. The following is a sampling of some actions you might take that can affect your score:

• Paying your mortgage on time
• Applying for a credit card
• A late payment or closure of a credit card

Your level of debt and payment performance account for 65% of your FICO score. Lenders can also consider your income, a spouse’s income, an appraisal report from a licensed appraiser and other factors when considering an application for credit. If you are turned down for credit, by law, lenders must advise you of the reason in a rejection letter. There could be an error in your credit report which you can fix and possibly increase your score. All the more reason to check your credit reports regularly.

Kurt Lehman is a financial services expert and writes about ChexSystems banks and problems as well as payday loan debt

Sometimes a credit score is also referred to as a FICO score. The term FICO comes from the Fair Isaac Company and is the method that is preferred and used by most credit bureaus to calculate a credit score.

Credit scores range from a low of around 350 (very bad credit) to a high of around 850 (excellent credit). An average score is between 650 and 700, which is where most consumers would not have big problems in getting approved for a new account. But if your score falls below the 600 range, you are going to have difficulty in being approved, at least at prime lending rates, for a loan, credit card, or new line of credit because potential lenders will view you as being a higher risk.

One thing you should note is that you should check your credit report at least once a year from each of the three major credit bureaus. It should come as no surprise to learn that the majority of consumer and business credit reports contain errors and mistakes, and the only way those get corrected is if you dispute the entries with the credit bureaus. If you have 2 or 3 negative entries on your credit report that should not be there or are being reported incorrectly, those by themselves could lower your credit score by as much as 100 points or more.

Assuming you have already gotten the inaccurate entries removed from your credit report, let’s find out how a credit report is scored. Approximately 35% of your score depends entirely on how timely you pay on your monthly financial obligations. Always make it a point to pay your bills on time, and preferably before the due date so that you can be sure that the payment is posted to your account by the due date. Note that this is more than one third of your entire score, so you can see how important it is to make your payments on time each month.

About 30% of your score depends on the level of your outstanding balances to your credit limits. This is primarily for credit cards and department store charge cards. The standard rule of thumb is to try to keep your outstanding balance at one third to one half or less of your credit limit so that it does not appear that you are stretching your credit to the limits. No matter what you do, try to NEVER exceed your credit limit, since that act will lower your credit score almost overnight.

Approximately 15% of your score is related to the length of your credit history, or in other words, how long a period of time your credit report covers. The longer the better. For a young married couple or a student fresh out of college, they may have only a year or two of credit history, whereas many people have a decade or more of credit history on file.

As a surprise to many consumers, about 10% of your score is based on the number of credit inquiries on your credit report. If you submit a lot of credit card applications just because you got them in the mail, each of those causes an “inquiry” on your credit report, and too many inquiries will lower your score.

The remaining 10% is dependent on the type of mix of financial obligations you have. For example, with a mortgage, a car payment, an installment loan, a couple credit cards, and a couple department store cards, you have a good mixture of different types of credit, and this shows your flexibility in being able to manage all of these.

Being aware of how your credit is calculated can help you keep financial strategies in mind so that your credit score can be as high as it should be for you.

For more insights and additional information about how to Raise Your Credit Score as well as getting a free copy of your credit reports, please visit our web site at http://www.credit-help-center.com

You will need to pay for reports from the three, third party companies and you will need a report from each for a complete credit history. These may cost about $9 per report. However, this is a small price to pay for the comfort of knowing that your finances are in order and that no one is attempting to use your personal details to open credit accounts. These reports may be sent by mail or can be obtained online. It is worth looking at these credit-monitoring companies websites since they may have trial offers where they offer you a free credit report. This would allow you to obtain your report and you can cancel your account with them before you need to make any payments.

You will also receive your FICO score with the report, along with some advice on how you can improve this score. FICO is named from Fair Isaac Corp., which is the company that invented the score. It is a three-digit number that encompasses your entire financial history. This score is based on information from the three, credit monitoring companies and includes all information from your payment history from loans or credit cards to bankruptcy filings that have been made. The lower the score the better your credit history and it is surprisingly important since many business that you would never imagine needing it, use it to find out about your financial status. Obviously lenders use the FICO score to assess you as a potential borrower. However, did you know that employers may access your score as well as landlords who may wish to see if you are likely not to pay your rent and if they need you to put down a larger deposit, or even insurance companies. These companies use the score to assess the risk you may be as a potential client and there fore set the policy prices accordingly.

As you can see, the FICO score is used by many different people who want an idea of your finances. It may not be entirely accurate, but it is most often used due to its ease of use, as most companies won’t want to read numerous credit reports of all the people that they deal with. It is therefore critical that you do everything you lower the score and keep it as low as possible. Many years of buying on your credit cards without having the money to pay off the account can leave you with a high number that will be held against you long after you have forgotten what you bought. But there are ways that you can improve your credit rating and therefore FICO score.

First of all, always dispute things that are not accurately depicted on the report. For example, if there is a record of late payments on a credit card account but you don’t think it is true contact the creditor and credit agency by post. They will have to investigate the matter and if the creditor does not get in touch within 14 days, the bad credit will be dropped from your report, instantly improving your score. Easy isn’t it! In fact, disputing any mistakes is the easiest and most direct way to lower your score.

Other ways your FICO score may be lowered include spreading the cost of your credit card debts especially with the increase in 0% on balance transfer deals that are available today. Also, close any accounts that you are not using.

Since your credit score has such a strong influence during your life, it is advisable that you obtain a report once a year so you can check for any mistakes and make sure that you are doing everything possible to improve your rating. This is the first step you can take to ensure that you have a solid financial future.

Still need more information? Then visit http://www.essentialcreditreports.com for more of my articles.

Payment History

Do you pay your bills on time? Most creditors, lenders, and service providers will charge a fee if you do not. Obviously, the biggest thing wrong with that is the egregious waste of money. What is worse in the long term is that after 30 days of nonpayment, the lender will likely report you to one of the major credit bureaus. (In the U.S., there are three such credit bureaus: Experian, Equifax, and TransUnion.) Considering that thirty-five percent of your credit score is based on payment history, it becomes clear how important it is to keep up with your financial obligations. No other single factor has that much influence on your FICO score.

Debt to Total Credit

The ratio of your outstanding debt to the total of your credit lines and loan amounts counts for thirty percent of your credit score. For example, if you have a credit card with a limit of $5000, and you owe $4000, your debt to total credit ratio is eighty percent. After paying down $3000 of the principle, your outstanding balance is $1000, giving you a ratio of twenty percent, which is much better.

If your outstanding balance occupies seventy percent or more of your total credit line, it is viewed negatively by the credit bureaus. If the ratio is in the range of thirty to seventy percent, it is doing little or no harm to your credit score; however, it certainly is not helping your credit score. Bring your debt to less than thirty percent of your total available credit, and your FICO score will very likely improve. Getting balances and, therefore, debt to credit ratios down to zero is clearly a desirable goal. It is important to remember, though, that unused credit will not help your credit score. We will explore that topic a bit later.

Length of Credit History

Fifteen percent of your FICO score is based on how long you have had some type of credit. The perception is that someone who has owned a credit card for twenty years is more likely to be responsible and credit worthy than a young person right out of high school who has the same credit card. Although this is true generally, it is certainly not always the case; that is why it is weighted significantly less than payment history and the debt to credit ratio.

New Credit

If you have one credit card for ten years, and then you apply for and receive three more credit cards, expect your credit score to come down a bit. A long-established credit account is considered more stable than a new account. Of course, how your credit score reacts to new credit is also affected by other factors. A new card will increase your total credit line, thereby reducing your debt to credit ratio. An old credit account with a poor payment history is worse than a new account in good standing. All things being equal, new credit is not bad, but old credit is very good. New credit accounts for ten percent of your FICO score.

Unused credit is considered very much like new credit. If you can use a credit card every month, and pay off the balance in full every month, you will see your credit score increase steadily. This is difficult for many people, because of the temptation to overuse the credit card. Responsibility and restraint are critical when using this technique. Remember that, even though unused credit is not very good, it is not at all bad; overused credit is.

Types of Credit Used

The remaining ten percent of your credit score is based on what type of credit you have used. A retail store credit card is not very good. Too many of them could be bad for your credit score, in fact. Small loans, if paid off in a timely manner, have a positive effect. Major credit cards are even better. Big ticket items like auto loans and home mortgages are very good, once again provided that you make the payments on time.

These five areas are the basis for your FICO score. Armed with this knowledge, you are better equipped to make the changes necessary to improve your credit score. An overwhelming majority of lenders will use your FICO score when considering your application. Put yourself in position to get the best possible deal. Read this article again, and then get started!

Michael Rasco created WarOnCreditCardDebt.com to help others attain victory over debt, and control over their lives. This information is based on his research and lengthy personal experience with the burden of credit card debt.

The fact remains if your FICO rate is below 620, people won’t lend you any credit. This FICO score being low has various reasons like bankruptcy, excessive debts, inability of rendering payment of bills at proper time, among others.

However, there is a ray of hope! Your credit score can be improved. This can be done by maintaining your potential for credit,however small it may be and making it clear to creditors that you’re capable of paying your debts in time, without having to having to resort to more credit. To help you improve your credit there 5 basic steps below.

1. Get yourself a copy of the your credit report. Then utilize the various advantages of the credit report of the government (which is free) from every Bureau of the National Consumer Credit – Equifax and Trans-Union. This will get you to the start of the process. It will give you a clear picture of your present rating.

2. File an application for a credit line, which may be a secured or unsecured credit card.

3. On getting the card, do not make blind purchases. Restrict the purchases to 70 percent of limit imposed on the credit card. i.e. if the limit of the credit card is $500, use it to the extent of $350 only.

4. Then, make sure you pay pay bills at the proper time, as this alone takes up 35% of the FICO score of yours. So this is a good base for creditors to judge your creditworthiness.

5. So what about Prepaid cards?

You can also use a credit card that is prepaid. This often a solution that many borrowers are unaware of. This, is perhaps the simplest and most effective method for longer term improvement if you have debt discipline problems. This effectively means you will mean using a credit card to rebuild credit – a ‘win-win’ situation. Use a prepaid credit card that is reported to a Credit Bureau. Only a few of the credit cards regularly report to a credit bureau. So select one that does so, on a regular basis.

One thing to note about prepaid cards is that you must Keep a track of fees. The prepaid card companies often levy fees. Make a prior comparison with many companies in order to secure a credit card where the lowest fee is charged. Bear in mind that some fees need to be paid for credit cards that get reported to the credit bureau, which can be up to an annual fee of$100 – But remember the purpose of this card is to repair credit!

Check the benefits

Some prepaid cards are available with certain benefits, but not all of them. Some give you points which can be used for free call time and other activities.

Preventing abuse of the credit card

Prepaid cards have the distinct benefit that you can never cross the limit, so it enables you to avoid interest and penalties. The implication is that if a report to the credit bureau is made, it is literally impossible to get a FICO score which is lower than your current score with such a card. So you can get credit cards to rebuild credit. It only gets better!

There are many benefits to be received by getting as much unbiased information as you can on credit cards.

creditcard-4u.com is a resource site that you should look at and see what type of cards are available to fit your circumstances.

I’m sure there is information there that can help you. It is a source to help you understand the types of cards and options which are open to you. You will find the information on travel reward cards very interesting Check it out you may save money!

Peter Burke is a regular contributor of articles with the aim of being able to inform and help people with specific problems!

Peter Burke MBA has been writing Journals and Articles for academic publications for over 7 years and is Managing Director of a Consulting Company in the United Kingdom.

Does anybody can obtain this much quested plastic money?

Well, to answer that we would have to understand how this credit screening and rating system work and what are the qualifications to be approved.

Credit History

There are three major credit bureaus that keep track of our bill-paying habits and credit history reports that are collected, stored and sold by credit bureaus.

Credit reports are also called credit records, credit files, and credit histories. There are three major credit bureaus and thousands of smaller ones. Experian Credit Bureau (formerly TRW): – http://www.experian.com/

Tel: 800-301-7195 (Cost: $8)

Equifax Credit Bureau: – http://www.equifax.com/

Tel:800-685-1111

Trans Union: – http://www.transunion.com/index.jsp

Tel: 800-916-8800

Federal law was passed in 1970 to give consumers easier access to, and more information about, their credit files. The Fair Credit Reporting Act gives you the right to find out the information in your credit file, to dispute information you believe inaccurate or incomplete, and to find out who has seen your credit report in the past six months.

The Fair Credit Reporting Act states that if you dispute information on your credit file that you believe to be inaccurate or incomplete, you can ask the credit bureau to investigate the problem. If the credit bureau’s investigation does not resolve the dispute, you can file a brief statement explaining the nature of the dispute. Your statement becomes a permanent part of your file and will remain on the report as long as the negative information is reported.

If you have been denied credit, you can request that the credit bureau involved provide you with a free copy of your credit report, but you must request it promptly. Otherwise each of the bureaus will provide you a copy of the report for a small fee ($8 or less). You can request a copy from their web sites or 800 numbers.

The good news: credit blemishes are cleared from your credit history after seven years. The bad news: seven years is a long time. Many people with no credit history find it nearly impossible to get a major credit card or, to a lesser extent, other credit. Scoring systems are not designed with the first-time credit user in mind.

Exactly as people who need a small loan from a bank, they have a checking account with this Bank and their salary as well as all their expenses are managed through this account but when they need a loan of say $2,000 the Banks’ branch manger asks for a deposit of $2,000 or any other solid collateral.

The natural reaction of the average person would be something like: If I had $2,000 in cash why would I need a loan from the Bank? What these people don’t understand is that a Bank is a business, A good business, an excellent business, in this business the Bank almost never take any risks and it lends money to people who proved to the bank they will be able to return the money with interest. This proof is either a cash deposit or savings account or other collaterals like a house, so in case the client will default on his loan the Bank would be able to quickly transform the collateral into cash.

The Problem of many people is that they never cultivated their credit history. They never took a small loan and paid it promptly on schedule month after month.

All their life they just deposited their salary and handled their expenses. How to start creating a “Credit History” There are some ways to start building you credit “history”. Bankcard issuers generally want to see at least a year’s worth of timely payments on other accounts before issuing a card.

If you do not have a credit record, you may have to start small. You may want to start by getting a gasoline card. Chevron reports payments to the credit bureau monthly, while most other oil company cards do not.

In addition try getting a few department store cards.

Your best option for establishing a positive credit history may be a secured Visa or MasterCard. These credit cards are offered through bankcard issuers who have customers put up several hundred dollars in collateral in exchange for a card with a small credit limit. As you use the card, your bill-paying behavior is reported to a credit bureau and your credit history improves.

Another Important advice is to try as best as you can to Pay your bills on time.

In addition minimize your payments by choosing credit cards that have low rates and no fees. Try to limit credit card purchases to emergency situations only. (This one is true with your Cell Phones calls as well…).

Take a collateralized loan with a bank or credit union and pay it on time every month to help establish or reestablish credit.

What Is FICO and how it affects you

FICO is a mathematical model created by the Experian credit bureau as a tool for lenders to use in evaluating the risk associated with lending you money. FICO stands for Fair Isaac Company, the company that created the original scoring model.

FICO scores consider your credit history over several years, making it difficult to increase your credit score in a short time frame. Over the long term you can improve your credit-worthiness by:

- Reducing your total indebt ness.

- making your debt payments on time and in full.

- closing unneeded credit accounts.

- avoiding bankruptcy and foreclosures.

How is your Score Calculated?

Your score is calculated by a series of questions based on both your credit report & debt-to-income ratio. Each answer accumulates a certain number of points that are then added together for your final score. A typical scoring considers:

• How long you’ve lived at your current address

• Your job or profession stability.

• Your financial obligations (debt-to-income ratio)

• Any late payments

• The amount of credit you have outstanding

• The amount of credit you are using

• The amount of time you’ve had credit established

Most Weighted Factors:

Current balances on accounts, too few bank revolving accounts, too many bank revolving accounts, number of accounts with balances, number of accounts opened in the last 12 months, length of time accounts have been established, amount of past due accounts, number of delinquent accounts, too few accounts rated “current,” recent derogatory public record of collection, past due balances, number of credit inquiries made.

What is Considered a Good Score?

The magic FICO number is 620. If you score below 620 you are considered to have a very high default risk giving you the possibility of being declined. If you score between 620 & 650 you will be put into a “questionable” category where you will have to provide further documentation to get approved. A score of 650 or above is considered golden or “cream of the crop,” and most likely you will be eligible for the best rate on your loan.

Amit Laufer is a writer and Internet marketer. MBA – International Trade & Finance. Bsc. Computers and Information Systems

Owner Editor of: http://www.creditcard-4-anybody.com/