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How Does Credit Affect You ?
How Does Credit Affect You ? Author: Alexander One of her girlfriends, Cindy, invites Joanne to a party where There will be lots of handsome men. Excited that life just might get interesting again, Joanne’s hopes are dashed as she stands before her closet. She hasn’t bought a new outfit in five years, and money is tighter than last year’s jeans. She goes clothes shopping at Today’s Trends Clothing, where she has shopped for years. She selects three outfits, but has no cash and no credit card since the divorce. Confidently, she applies for the store’s credit card, but is astonished when she is turned down. Listing off the credit cards she had with her ex only seems to bore the clerk. Joanne has no credit in her own name. Everyone Has a Credit History/Rating When you apply for a credit card, mortgage, or other loan, the fine print on the application gives the lender permission to check your credit history. The lender usually requests a credit report from one of the Big Three credit bureaus. In theory, the bureaus merely report the raw data of your credit history and don’t assign you any kind of credit rating. In reality though, credit companies do provide a credit rating in the form of a credit score. The lender looks at your credit score and decides whether to grant you the credit you are requesting. Of course, lenders also look at your total outstanding debts, your minimum monthly payments, even your credit limits to see how far into debt you could go if you max out your existing accounts. Primarily, though, they are concerned with your record of delinquencies, accounts paid unsatisfactorily, and anything else that suggests Good credit is Sexy 6 http://www.citicredit.asia how much of a credit risk you might be, all of which is used to calculate your credit score. Like Joanne, you may be surprised to know that part of what figures into your credit rating is a lack of credit history. If you have no credit history, you have no track record of payment and your rating is very low. Believe it or not, you’re a bit of a credit risk. Three Big Filing Cabinets-The credit Bureaus There also are local credit bureaus and reporting agencies, although their databases are not as extensive as those of the Big Three. The local bureaus are, however, worth noting because they are used by some who may judge your credit worthiness. An example of a local agency is a Residential Mortgage Credit To report information to the credit bureaus, creditors must fill out an application and pay a fee to each bureau to which they wish to belong. Membership is completely voluntary. No creditor has to report anything to any bureau. The more thrifty creditors may expend the time, trouble, and money to report to only one credit bureau. Given the fact that each bureau has its own separate, private database and, because the credit bureaus generally don’t pass information back and forth to each other, you actually may have up to three divergent credit histories. So who subscribes to the credit bureaus for their services? bank, finance companies, department stores, taxing authorities, landlords, and other credit grantors all subscribe to the CRAs. Once a creditor subscribes to a CRA’s services, the creditor is allowed to report information on your account history. This information is stored by the CRA in a national database, and contains the following: Credit bureaus also search public records for: Just how current is the public records information? From Experian’s website: Experian also states that once it receives information, that information is added to its database within 24 hours. Records on tax liens, judgments, and bankruptcies are available nationwide. Article Source: http://www.articlesbase.com/credit-articles/ About the Author:
 Credit, Loan, Loans, Debt, Mortgage, Credit-Check, Credit-Repair, Credit-Card, Credit-Report, Credit-Score, Bad-Credit, Credit-Counseling, Credit-Rating, Citi-Credit, Debt-Consolidation, Debt-Collection
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