Many people wonder why we're in such a financial crisis these days. The answer may very well be attributed to the lack of education we received in school on the topic of personal debt responsibilities. Everybody should know how to work with the credit system and unfortunately, many are unequipped to do so. It is estimated that over 50% of US citizens have never even looked at their credit report and close to 90% of people have no clue how to read a credit report.
It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.
much of what you read here will not make sense to you since you have probably been told things in the past that are simply not true. There is much confusion out there when it comes to credit, so open your mind, and get ready to learn.
To optimize your credit scores, maintain a range of account types. Mortgages, installment loans and revolving accounts (credit cards) combined will benefit you greatly.
When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards.
Installment loans are loans such as car loans. Having one to three installment loans will reflect fantastically on your reports. Having too many installment loans, however, can make you look overextended. Other kinds of installment loans, such as easy credit loans for furniture and household items, aren't as valuable to your credit scores because they are smaller in balances. Consumers with less than perfect credit or no credit at all can work on building good credit with such loans, but they aren't the best way to reach the best credit scores possible.
Revolving Accounts - Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.
With all the above, the more seasoned the accounts are the more weight they carry to affect your credit score. And when it comes to credit cards and store credit, you want to be sure that you keep your revolving balances below 50% of the available limit to maximize your credit. Be sure to keep in mind that once you cancel a good account, it will only remain on your credit for two years. If you cancel a seasoned account and it falls off your credit, your scores will most likely drop. - 15485
It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.
much of what you read here will not make sense to you since you have probably been told things in the past that are simply not true. There is much confusion out there when it comes to credit, so open your mind, and get ready to learn.
To optimize your credit scores, maintain a range of account types. Mortgages, installment loans and revolving accounts (credit cards) combined will benefit you greatly.
When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards.
Installment loans are loans such as car loans. Having one to three installment loans will reflect fantastically on your reports. Having too many installment loans, however, can make you look overextended. Other kinds of installment loans, such as easy credit loans for furniture and household items, aren't as valuable to your credit scores because they are smaller in balances. Consumers with less than perfect credit or no credit at all can work on building good credit with such loans, but they aren't the best way to reach the best credit scores possible.
Revolving Accounts - Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.
With all the above, the more seasoned the accounts are the more weight they carry to affect your credit score. And when it comes to credit cards and store credit, you want to be sure that you keep your revolving balances below 50% of the available limit to maximize your credit. Be sure to keep in mind that once you cancel a good account, it will only remain on your credit for two years. If you cancel a seasoned account and it falls off your credit, your scores will most likely drop. - 15485
About the Author:
Jon Ochs is the President/CEO of Nationwide Debt Solutions, and a well respected authority on debt relief plans.
