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Am I Credit Worthy???????? (13)

December 17, 2012
credit

credit (Photo credit: the|G|™)

Student Loan Debt Bubble, 1980-2011

Student Loan Debt Bubble, 1980-2011 (Photo credit: Occupy* Posters)

So far the only credit I have is a student loan. I know that when I graduate or leave school, I have to start paing back . Although my mother is the surety because she guarantees payment if I default, I am the debtor and whoI borrowed the mony from is the creditor. I know that maintaing good credi is iymportant in the world in which we live. So I know the importance of repaying my debt. I found the following article and thought that it sums up everything very well.

Credit, especially good credit, is very important. It affects almost every  major buying decision. Good credit can help us get a good rate on a credit card,  car loan or home mortgage. It can also help us when it comes time to sign an  apartment lease agreement or maybe even get a new job. But how do you get good  credit?

  • Getting good creditTo get good credit, you have  to have credit. Good credit ratings are gained when you borrow money and pay it  back on time and for the full amount. Let’s say you have a credit card from a  gas station that you use only for gas because you don’t carry a lot of cash  around. Each time you go to the station, you use your card to fill up your car.  In so doing, you are promising to pay the credit card company back when you get  its statement. When the statement arrives, you pay off the amount owed on time.  The gas company that issued your card then reports to a credit bureau that you  have paid on time and for the right amount. The more good reports that go to the  credit bureau, the better your credit.
  • Benefits of good creditHaving a good credit  report enables you to borrow more money at better interest rates. Why? Because  the banks know that based on your credit history you are a responsible person.  Many potential employers also look at credit reports as a way to judge a  person’s responsibility. Hence, your good credit may even help you land a new  job.

There is nothing good about bad credit. It is the exact opposite of good  credit. While good credit helps you qualify for car and home mortgage loans, bad  credit could keep you from being able to buy these large-dollar items. It will  also keep you from qualifying for credit cards and may possibly hinder your  ability to rent a house or apartment.

  • Getting bad credit It is very easy to get bad  credit. Bad credit ratings happen when a person does not pay back money borrowed  on time or when that person simply doesn’t pay it back at all. There are varying  degrees of bad credit. A person is not automatically given a bad credit rating  if he misses a payment or is late a time or two. However, if a person is  continually late or he does not make a payment for several months, his credit  rating will be affected and could possible hurt him in the future.
  • Fixing bad creditCredit ratings, even bad ones,  can be improved and fixed. Depending on the situation, with responsible credit  usage and prompt payments, bad credit can turn into good credit over time. The  first step is to understand what your credit rating is by pulling your credit  report. Credit reports are available through one of the three major U.S. credit  bureaus: Experian, Equifax and TransUnion. Because of a change of law in 2005,  each of the credit bureaus must provide you with a free credit report once a  year, through www.annualcreditreport.com.

Understanding your credit report will help you determine if there are errors.  It will also make you aware of what steps you need to take to improve your  credit.

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