The 4 Keys To A Good Credit File
Keys to establishing and then maintaining a
good credit file
Repairing your credit file is one step.
Establishing and maintaining your credit file is another. Here
are some ideas to help you get a good credit file... and
maintain a good record.
Get credit in your own name -
Whether single, married, separated, or
divorced, you are entitled to a credit file in your own name.
If your spouse or former spouse had or has bad credit and most
credit was in the spouse's name, it would definitely be
advantageous to have your own credit file. Even if debt was
joint this could be a wise strategy because by separating the
files and insisting that your file not include any of the
spouse's credit, some negative credit could easily disappear.
Know how credit offers are evaluated
- When you apply for credit, most often a credit or risk score
is assigned to establish your probability to repay the debt.
- Capacity: A creditor wants to understand
your ability to repay. But additionally they want to know
how much debt you can realistically be expected to pay
back. How long have you been on the job? What is the
likelihood of advancement? Is your job and industry
stable? Are you a secretary or and executive secretary?
What is your current debt ratio? What kind of debts do you
have? Are they all unsecured such as credit card? Is
there secured loans such as car or home? How long have you
had these accounts? Do you have a good history of on time
- Collateral: Do you own a home, mutual
funds, etc. This area could be crucial in procuring a
loan if you have many late payments.
- Character: your character shows through
in objective manners such as, how long on the job and how
long at your residence. Similarly do you have checking and
savings or just checking.
Bolster Your Chances of Approval:
- Always apply in the exact same name.
Don't use a middle initial sometimes and not others. Be
- Bolster your credit application. If you
have negative remarks is there a reason? If so state it
VERY briefly. If you are an administrative assistant, don't
say clerk typist.
- Apply for credit when you are most likely
to get it. For example apply when employed, have lived
someplace for a lengthy time, have not had too many
- Apply with creditors with whom you have a
Apply Credit Wisdom When You Have
- Scrutinize pre approved cards. Many of
these can be used for special catalog purchases only and are
not accepted by most creditors. Similarly don't be swept up
because it offers rebates or other gimmicks. What is the
interest rate, annual fee, grace period. Sometimes the
gimmick could be a "good deal"... but sometimes the price
might be just too high to pay.
- If you have a card, protect it. For
example, normally do not give your number out to a salesman
who calls you on the phone. You have no idea who you are
talking to unless you placed the call.
- Rather than going over your limit, ask
for an increase. Send your creditors a change of address.
- Once approved for a card, do not go on an
ego trip and "stock up" on more cards. There is a great
danger in relying solely on credit and running up balances.
Guaranteed, they will get out of control. Similarly many
creditors will frown on too many credit cards that are
unused. You can feel greater power by refusing an
application, than by accepting another one. Once you learn
to control credit, credit applications will always be
available to you.