Credit Resources and Information
It’s hard to get by today without accumulating at least some form of credit. When you apply for a loan, negotiate the terms for a new car, or sign a lease for your apartment, your credit is checked. But while a good credit score makes it easier to be pre-approved for loans with lower rates, a bad credit score means you’ll have fewer loan options and may be forced to take out loans with less-than-ideal rates.
That’s why it’s so important that you become familiar with your credit. Keeping an eye on your credit score, understanding how credit card debt works and knowing what to do if you think your credit has been compromised will help you have a better picture of your credit standing.
Read below for more information on your credit and how it works.
Factors that Calculate & Determine Credit Score
Your credit is calculated through a credit report, which is made up of a variety of different factors. It’s an in-depth look at your finances and is what creditors use to determine whether you’re approved for a loan.
Your credit score is broken down into five parts:
1. Payment history
2. Outstanding debts
3. Credit history
4. New credit
5. Credit in use
Though each aspect is scored differently, they all have an impact on your overall score. Because lenders often check your credit score before offering you a particular loan, a low credit score lets lenders know that you may be a high-risk borrower and therefore may limit the types of loans you’ll be offered. That’s why it’s so important to keep track of your credit score.
Why Paying Down Credit Card Debt Is Hard
With most credit cards today touting interest rates that range anywhere between 10 to 30 percent, it’s no wonder more and more people are having trouble making ends meet.
The first step in successfully paying off your credit card debt is knowing which cards to pay off first. Your credit cards that have the highest interest rates are the ones you’re going to want to target first, as these are costing you the most. After you’ve paid off these debts, it’s safe to move lower down the funnel.
How to Avoid Credit Scams
Because credit scams are becoming increasingly harder to detect, it’s important that you never give your private information over the phone or via email to a company you didn’t initially contact. There are a variety of different credit scams, but according to the FBI, below are the most common:
1. Telemarketing Fraud: When someone calls you asking for money or saying your account is “in danger” and needs immediate funds. Always be suspicious of any credit company that contacts you first. A reputable credit agency should only contact you after you’ve called, emailed or asked for help first.
2. Advanced Fee Schemes: When someone asks you to pay up front in return for a larger payout later on. These types of schemes can range from anything relating to a long-lost relative to a stranger in another country asking for money in return for a “big payout” over time. The best way to avoid these schemes is to remain skeptical, and to always check the legitimacy of a person or business beforehand.
3. Phishing: Never give out your credit information online unless you know the site is both reputable and secure. And check with the Better Business Bureau before making a purchase, especially if you’ve never purchased from the site before.
If you’re currently living with a debt situation that doesn’t seem to be getting better, CreditGUARD can help. Call one of our certified credit counselors today to learn more about our credit counseling and debt management programs that can help you save money and get out of debt faster without acquiring any new debt. Call [cga-phone] today!
For more resources and information on credit, please visit:
The 5 C’s of Credit. How do lenders and banks assess credit? Read this in-depth post on the 5 C’s of credit to learn which factors play into your ability to get a loan or line of credit.
What to Know About Your Credit Reports. What goes into a credit score? Who determines a credit score? Who can access your score, and why? Find the answers to these important questions and more in our guide to credit reporting!
Credit Cards 101. Many Americans rely on credit cards on a daily basis, but there’s more to this payment method than you may think. Learn about interest rates, the rise of credit card debt, and more in this helpful post.
How to Get Out of Credit Card Debt. Debt is becoming more and more prevalent, but there are ways to manage (and overcome) credit card debt. Read our tips for getting out of debt!
Common Credit Scams. Credit card scams are common, but not unavoidable. Educate yourself on the most common types of scams and learn what to do if you’ve been targeted by reading this useful post.
Average Credit Scores (and How to Improve Yours). Curious as to how your credit score compares to the national average? In this article, we walk through what credit scores mean, what the average score looks like, and how to raise yours. Check it out!
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The Ultimate Debt Survival Guide. Need some practical advice for dealing with debt? You’ve come to the right place. This free downloadable guide can teach you the basics of managing debt (and more).
Is Debt Settlement a Good Idea? Debt settlement and debt consolidation are not the same. Learn more about the process (and consequences) of settling your debts before going down that path.