Understanding the Function of Credit

What is Credit?

Credit is the backbone and the engine behind the workings of the economy. Credit simply allows individuals and companies to borrow funds in good faith and pay it back over a specified time frame. Lenders base their decisions on who they should lend to by using your credit rating.

Your credit rating is a numerical score that is based on your payment history. From your credit cards and loans right down to your phone bill, you will find a recording of each payment. It reports whether you pay your bills on time or if you are constantly late. And if you are frequently late, it records the amount of time taken to make that particular payment. Your credit report is pulled (viewed) every time you apply for a loan, credit card and even to have a phone line installed.

Good Credit vs. Bad Credit

How important is it to have clean or good credit? It's very important because the worse off your credit is the harder it will be for you to secure a loan of any sort. It is important to keep on top of your credit finances and make sure that every payment is made on time and always make sure that you pay at least the minimum amount but always try and pay more if you can.

If you currently have bad credit, you shouldn't worry too much as there are ways to still secure a loan such as having a cosigner. If you choose to go this route, remember that you are both responsible for the loan as it will be taken out in your names. Also, there are many institutions that work with people with bad credit and they will assist you with the repair of your credit file. Here's a list of a few companies to assist you:

CreditAxis.com, DebtAdvocates.cc, Lexington Law Firm and more. Simply go to your favourite search engine and type in "Credit Repair" and see how many companies show up in your search. Warning: Be wary of those companies that promise to repair your credit promptly ? ie "3 months or less". Credit repair takes time, so do your homework before you commit to one company to assist you.

Your Credit File

If you have bad credit, the first step to repairing it is to pay off all of your bad debts. This is debt that is overdue and not up to date. You may not know this, but this information may stay on your file for up to 7 years. To assist you in this, I suggest that you get a copy of your credit report from one of the credit reporting agencies such as Equifax. Look it over thoroughly because you may find some mistakes which can be easily corrected with either a simple phone call or with supporting documentation.

Sheldon C. Smith is the owner of http://www.sheldoncsmith.com, a site dedicated to keeping the public informed and educated about the mortgage and credit process.

---

Minimum Credit Card Payments to Rise

For years, major credit card companies have allowed cardholders to make minimum payments of 2% of the outstanding balances on their credit cards. Having customers pay the... Read More

Credit Repair: How To Deal With Your Creditors

If you are in danger of credit problems because you have more debts than you can handle, there are things you can do at least keep your... Read More

0% Credit Cards

These days, credit cards in the UK are competing with each other on two very attractive offers with a headline rate of 0%. These 0% credit cards... Read More

Taking Control of Your Credit History

Your credit history is important; in fact, in this day and age, only family and your time are more important than your credit history! The first time... Read More

Beware the Shopping Mall Monster

Like me, you've probably been offered a fair old number of these by now.....and, if you're like most people, chances are you maybe own at least one... Read More

Credit Card Dirty Tricks

There are many of us that have been badly stung by credit card companies that have charged exorbitant fees to use their credit cards. Several years ago... Read More

Credit Cards: Pros and Cons

Sure, there are a lot of problems with credit cards, but there are a lot of good things attached to them as well. For instance, if you... Read More

10 Ways To Protect Your Financial Identity Being Used For Someone Else?s Shopping Spree

Someone impersonating you could be spending your hard-earned money.Impossible! Not really, check, loan, and identity fraud are a real problem. In 2002, the federal trade commission estimated... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to increase that set of three numbers on your credit report that can be so important with your... Read More

Consumer Credit Reports

A consumer credit report is a factual record of an individual's credit payment history. It is provided for a purpose permitted by law: to help a credit... Read More

Do You Want to Get a New Credit Card at a Great Rate?

1) Do your homework. Applying for and getting approved for a credit card is nothing more than legwork. Credit card contracts can sometimes contain onerous terms that... Read More

What is the Check 21 Act?

Check 21 is the common name for the Check Clearing for the 21st Century Act. It's new legislation that was recently passed by congress and made a... Read More

How To Prevent Fraudulent Credit Card Transactions

What Are Possible Signs of Fraudulent Transactions see at Web Hosting Companies?Customer wants to pre-pay for a yearDomain Name Registration for 5 years or moreOrders using free... Read More

SuperCharged Secret 4, Credit Card Utopia

YOU SCRATCH MY BACK, AND I'LL BUY SOME MORE BEER!Let's just take a brief moment to recap:If you've been following along on this journey with me, learning... Read More

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.Several months ago Tom, a member of... Read More

All About Balance Transfers

What is a balance transfer?A balance transfer can be explained simply as a balance transfer! When a balance is transferred usually from a credit card, but possible... Read More

Harassment of People in Debt by Creditors

HarassmentHarassment of people in debt by creditors or their agents is a criminal offence under the Administration of Justice Act 1970. It is often difficult to know... Read More

Like It Or Not, You Have A Score To Settle!

Like It Or Not, You Have A Score To Settle! (Part 1 of 2 on Credit Scoring)Just when most people finish with school and can stop worrying... Read More

Is Your Credit Score Being Held Against You?

Credit Scores That HurtIs your credit score being held against you?More and more the staples of life depend on your credit score. Your mortgage, insurance premiums, employment... Read More

New Credit Scoring Model Could Help Millions

Mark and Beth, a young married couple in their twenties, established a goal to buy a home within the first three years of their marriage before starting... Read More

Credit Card Is Adding The Silver Lining To Your Pocket

In the new millennium plastic money or credit cards has rendered a new zing factor to your pocket. This has not only made you economically more flexible... Read More

Identity Theft ? Additional Protection for Soldiers on Active Duty

Congress passed the Fair Credit Reporting Act several years ago in an attempt to smooth out some problems in the credit reporting industry. The best known provision... Read More

Top 5 Credit Misconceptions

We have all heard the rumors?from neighbors, relatives or friends. There are a wide variety of myths floating around about what you should and shouldn't do to... Read More

7 Surefire Ways To Repair Bad Credit

Do you have a poor credit rating? If so, you are one of tens of thousands of Americans with the same problem. In fact, it seems that... Read More

10 Signs You May Need Credit Counseling

Debt management programs can be of real help for people that discover they cannot face their debts. At first, they will attempt to solve the situation all... Read More

Borrowing on a Credit Card

One of the easiest ways to borrow money of a financial institute is to use a Credit Card, available from all banks, building societies, and other financial... Read More