| |
| |
|
Kellys Credit Information |
|
|
|
How Creditors Measure Your Credit Rating
Creditors will measure your credit rating based on the following three main things. The three "C's" show creditors your:
1. Capacity The very first question is whether you have sufficient income to repay the debt. Creditors will definitely check to see if your income exceeds your expenses so that you ca comfortably pay the debt. A creditor will then want to know:
The amount remaining from your total net income, after deducting your fixed monthly expenses and other debts, is your capacity. If your net income is $3,000 a month and your total living expenses is $2,500, then your credit capacity is an amount that requires no more than $500 in monthly payments. If you now pay $400 a month for other credit obligations, then your remaining capacity is a $100 a month, and a creditor should extend you that amount of credit. There are three techniques that will allow you to maximize your income:
2. Collateral A lender or creditor can be secured or unsecured. Secured lenders hold a lien against specific assets, such as real estate, an automobile, or boat. If you fail to pay, the secured lender can sell the pledged asset to recover debt owed. Secured lenders seldom loan more than the auction value of the collateral. Secured credit, is an almost guaranteed way to rebuild your credit. Even with poor credit, a lender may advance your credit if you ca secure the credit with a lien against some valuable asset. Many creditors extend credit entirely on the strength of the pledged assets. Other credit considerations are either ignored or carry comparatively little weight in the credit decision. What can you use as a collateral to secure your debts and rebuild your credit? You may be appreciably wealthier than you think. Add the value of your various assets (property that you own) and subtract any existing mortgages or lies against those assets. The difference is your equity or net worth in the asset. This is what you have available to secure a loan. Do not overlook any asset:
You may have other assets to pledge. The point is that collateral gives you a borrowing power approximately equal to your equity in your assets. Regardless of your credit history, if you have collateral worth a solid $100,000, you should be able to borrow close to that amount. 3. Character Creditors next consider your character. How important this is depends upon the type of credit, and who your creditors are. Asset based lenders rely chiefly on collateral, and they are less concerned with your character than are unsecured creditors who can only rely on your prior reliability for honoring your obligations. When creditors check your character, they basically look at how you satisfied your past obligations. Meaning they want to know:
Positive answers to these nine questions will often offset an otherwise negative credit report. Basically your credit character boils down to your credit history in the past. In the eyes of creditors, if your past credit character is good, there is no reason to believe why your future won't look promising. About The Author © Copyright. http://www.deleteuglycredit.com Omar M. Omar is the owner of http://www.deleteuglycredit.com. The website is dedicated to provide credit consumers with information about their credit right and how to dispute inaccurate information on their credit report. Omar M. Omar is also the author Of "The Credit Repair Bible" book. You have permission to publish this article electronically or in print, in your Newsletter, on your website, or in your E-Book, as long as the author's Resource Box is included with the article.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Know Your Credit Card Rights When you apply for a credit card, the application that you sign is also a legally binding contract laying out all the termsbetween you and the bank, such as the interest rate and how its calculated, the grace period, whether there's an annual fee, etc.While you have to agree to the terms and sign if you want the credit card and while the lender will certainly hold you to the terms, the lender doesn't feel similarly committed. Credit Repair Myths and Facts There are no secrets to repairing your credit. Many shady credit repair agencies would love you to think the contrary. Credit Establishment 101 There will come a day when you need credit. You may want to buy a home or a car and your credit rating will become very important to help make these dreams come true. Five Reasons to Repair Your Credit Score - You Can Do It Yourself There are multiple reasons that tell us why we should have a 700+ Credit Score, but these five facts will definitely give you the big picture and hopefully will drive you to want to fix your credit score starting today.Fact #1: Did you know that consumers with Credit Scores of 700+ are likely to get interest rates up to four points lower than those with scores under 640. How did a Thief get my Name? Don't be a Victim of Identity Theft How do these people get my name? If you have a credit card, your name is sold to third parties, if you do not want this to happen, you must contact your credit card companies to inform them that you do not want your information sold. Check the privacy notice that comes with your bill. The Three Largest Factors In Your Interest Rate There are three major factors that affect how much you pay for a loan. Understanding these factors can save you time, money and frustration. Lower Your Credit Card Interest Rate Now! With today's credit card companies, there are many opportunities to get your cards rate of 21% or more reduced. The higher the amount of interest your card charges will cost you more for a simple purchase and ultimately may take you years to pay off instead of months, should you make the minimum payment allowed. Ways to Look Good without Selling Your Soul to the Credit Card Sharks 1. Buy clothes at thrift stores. 7 Compelling Reasons Why A Prepaid Debit Card May Be Just The Financial Tool You Need Prepaid debit cards are great financial tools and may be just the financial tool you need. Here a seven compelling reasons why:1. How to Improve Your Credit Rating So you got into debt, had problems but you got yourself back on your feet through hard work and sacrifice and how are you rewarded? A Bad Credit Rating.You would be forgiven for thinking thats not fair and why did you bother sorting yourself out if your hands are still tied when it comes to applying for anything financial? There are ways to improve your credit rating and get back on track completely. 5 Killer Steps to avoid Credit Card SCAMS! In August, 2004, the Federal Trade Commission issued their findings of a recent study, which showed that nearly 25 million adults were victims of fraud.Now, most importantly, If you are a victim of fraud, please do not feel like you did anything wrong. Beat Credit Card Companies at Their Own Game! Have you ever wondered how much money a credit card company makes? Have you ever wondered how much of that comes from late fees? Everyone has and if you haven't you should because most likely you own a credit card, which means that these late fees has or could directly affect you.As you have probably taken notice, credit card late fees are on the rise and have been so for awhile. Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report The three major credit bureaus, Experian, Equifax and Trans Union are similar and feature a "Credit Score", which is created from credit report data submitted to them about you.But very often your credit report includes inaccurate, wrong or incomplete information (credit records). Good Credit -- Essential for the Prospective Home Buyer Credit is a funny thing. It can be a useful tool in the hands of an informed individual, or a weight of burden to the unsuspecting. Save Money and Lower your Payments by Improving or Repairing Your Credit Having a better credit score not only represents easier access to money from lending institutions, but more importantly represents instant money in your pocket.This probably sounds like something obvious for most of people, but it isn't until you start thinking in terms of real examples and real dollars that most of us start to understand the magnitude of the benefits associated with a good credit score. Tired Of Being Broke?...Learn How To Force Banks To Give You Money! Imagine.. What is a Credit Card? A credit card allows you to buy things even though you might not have the money to pay for it right away. The company that gave you the card lets you spend up to an agreed sum and then makes additional money available to you as you pay off what you've spent. Credit Report - How to Improve Your Credit Score One of the great mysteries of life is how the three major credit bureaus (Experian, Equifax, and Trans Union) score credit. They all have secret statistical formulas for determining your credit score, but they are unwilling to divulge exactly what, exactly, constitutes your score. Choosing The Best Credit Card To Apply For Always shop around to get the best deal when choosing which credit card to apply for. If you don't do your due diligence you could end up with a card that has too high of an interest rate, that has an unnecessarily high annual membership fee, etc. Why Credit Cards are a Bad Idea Credit cards are just so convenient, aren't they? There's no need to carry any money with you ever again: you can just take one with you to the shop and pay the exact amount just by handing it over. If you haven't been paid yet, then you don't need to worry, because the money will still be there.
|
| home | site map |
| © 2006 |
