Top 3 Credit Card No-Nos

At this point, everyone knows about the credit crisis. Banks gave credit to high risk borrowers who were often completely unable to pay the debt that they incurred.

Whether or not you were (or are) one of these people, struggling to make ends meet as well as pay off a debt which may seem insurmountable, there are some unofficial rules to using your credit card that you should know about. Keep yourself from going into deep debt, or stop from shoveling yourself any deeper, by keeping these top three credit card no-nos in mind:

1. Don't use a credit card to pay for another card. This needs clarification: consolidating credit cards can be an excellent idea. You're able, very quickly, to eliminate hundreds of dollars worth of debt by putting all of the money you owe on a single card, with a single payment (which means that you have less of a chance of missing that payment and incurring additional charges) and a single, lower, interest rate. That's sounds perfect, so what's wrong with using a credit card to pay for another credit card?

The answer is that many people are exactly consolidating their credit cards as they are procrastinating payments. If this sounds like you, do everything you can to stop this terrible spending habit immediately.

For clarity's sake, what you should not be doing goes something like this: you log onto your credit card's website and notice that you have a payment due today. So you pull out another credit card, one which you have more time to pay the minimum monthly bill for, and charge the bill on that.

The problem with this line of thinking is that you aren't ever actually reducing your total debt. Instead, you prolong the time that it takes to pay the debt, and raise the amount of interest that you ultimately have to pay.

2. Don't use a credit card to pay for shady purchases. This may sound obvious, but you'd be surprised at how many people make purchases with credit because they figure that bank will somehow protect them from anything that isn't legit. They might. But betting on something like that when you can just avoid a purchase that seems too good to be true for one which is smart and safe can end up costing you more money than you can afford--and your identity, which is a nightmare to try to recover from. Just ask anyone who's had their identity stolen.

So if you're at a website you're not completely sure is a real company, paying for something at a flea market that you think might be stolen, or otherwise handing that little rectangle of plastic to anybody you think could do anything with your information you don't want them doing, think twice. Your bank probably has policies enacted that will protect you in some way, but what if they don't?

3. Don't use your credit card to earn reward points. You may be shaking your head right now, calling this rule insanity. Especially if you're on a computer that you were able to buy because of reward points, or on a plane whose tickets were purchases with points you earned doing nothing more than using your card for purchases.

But ask yourself: were the things that you paid for to get those points services and goods that you were going to buy anyway? If the answer is a definite yes, then you've used the reward points program to your best benefit, and you've got nothing to worry about. But if, for any reason, at any time, you made a purchase with those bonus points in mind, you've fallen in the trap of bonus point programs.

Every time that you charge your card for something that you were on the fence about, the credit card company makes money, and you lose it. You may feel good about the purchase; after all, a part of you wanted whatever it is you bought, and now you have it, plus you have some bonus points to spare. But if you'd never enrolled in the bonus point program, and you take away all of the purchases you made solely because of that program, then you may have ended up spending far more money on things you would never have bought to get that final reward than you would have buying the reward itself outright.

What is a Credit Rating?

The Word is introduced by 3 agencies called FICO, Means after the Fair Isaac Credit Org, among so many companies this has became the first company who started the word using credit ratings in the year 1950. A FICO score is all about score of numbers starts between 300 to 900, and formally evaluate the certain risk where a person poses to a lender. is a rating between 300 is known as too high risk profile , while in the other side 900 syndicates opposite the 300 means there is virtually no risk.

This FICO ratings is also calculated on the certain percentage of the total credit you are in to and utilizing like 30% of the basic FICO score) which is normal, You must had have lines of open credit in Google or certain places which is (15%), and the sort of credit lines you need have is like (10%), how a big extant of your past boundary of credit have been (10%), finally your amount of delinquent payments and disbursements is (35%).

As some certain a principal of thumb, a credit rating has to be around 500 is also a great amount of risk which many lenders will obviously refuse a boundary of of credit, also for those that do allow one also be penalize the money-owner with great amount of interest rates and which will be much more impossible terms. A credit rating above 850 will grant the lowest possible interest rates and a very small down payment where applicable. A credit rating of over 650 is good is also sufficient to get comfortable a desirable terms and consequential always be accepted for Fresh and new lines of credit.

Many companies and org offering the online access to your credit rating. These sites are also providing the related informational and reports from each 3 major agencies, so finally grab the suggestions on how to improve it. and improve Your rating.

3 Tips to ignore The Credit card Trap

Credit cards are like become a part of daily life and now days most among us have a money wallet full of credit cards. Even it provides
Numerous amount of convenience, it also reaches to us with an immense scene of responsibility - a responsibility that so many people just hardly contain. What you actually ought to identify is that, a credit card which is in reality just nothing more than a huge expensive loan and liability. Until you arrange in correct way, you might discover yourself in a very serious financial fix earlier then you recognize it.

This is just Because credit has nowadays become such a unnecessarily maintained matter bans, several institutions and even few stores are also handing out some cards as if it is little bit candy - which enticing more us to spend . There are few things which are really changing but in lack of your own strict discipline there is no actual solution.

Just check out 3 very unique tips and idea for basic Wealth management with a credit card.

1. Do not allow yourself more than one Credit Card

Even if tempting to take up each offer that reaches your path, you just ought to be little firm on. the time When we require something it might be a huge temptation to just purchase it on credit and after purchasing "worrying about making a payment for it in the future ahead". The main difficulty is that it will most likely come back to locate you. One credit card is enough for purchasing and lots of people do not have the effective skills to manage more than one card effervescently

However always try to ignore it.

2. Disburse Your Card In total in each Month

Spending is the happy area of a coin. But Paying after purchasing is most horrible part of that coin. Also, its so frustrating that you one day you will wake up and see yourself knee deep in so much debt. The simply way to use the credit card sensibly to disburse off your credit cards in full in each month. also the interest is a real horrible trap and the time when you do not make you complete reimbursement then there are some chances that you are spending for a fortune in.

3. Try to ignore purchasing the Luxuries in Credit

If you are planning to purchase a brand new TV, or new cloths, the integration to buy luxuries on credit is always available. "The important realty is so many shops, stores now offering credit shopping also credit cards makes it so easier than ever since so grab it ". All the time you do not have to check your wallet now and then and take cash out it, also the time when you feel you are in a great extent of getting higher in debt because of credit cards. I will advice you that you start having cash simply - just make a use of it for some time lets say for 1 week or two week then you will be able to control your credit card debt.

The ways of credit restoration (2)

So, already gave some idea about the possible ways of credit restoration to you all, in my last post. Those ways were not all.....lets continue with the rest part of that discussion here:

Disputing Inquiries: Another "investigation kinda" way out. Overall 2 kinds of inquiries can be carried out upon our credit report.....1) soft inquiry & 2) hard inquiry. Hard inquiries takes place, at the time when you are authorizing a particular creditor to generate the credit report for you. If such inquiries are run in too many no. in a short time span, for sure its gonna lower your credit score. Soft inquiries takes place when a creditor pulls such inquiry on their own accord, mostly to pre-qualify you for an offer. Sometimes soft inquiries show up as hard inquiries. You have to make sure they're reporting accurately. Dispute any hard inquiries that you have not authorized, and if they are found to be inaccurate, they will be removed!

Building diversified credit: 2 parts of our credit score structure, is generally combined for this step.....they are:

1) types of credit &

2) the credit history length.

No doubt this process takes time & is lengthy, but indeed useful for your credit. Your chance for credit increases a lot. This credit restoration process works just wonderfully, as if an automated savior of your credit life......really you don't need to pay attention to its working. Just 1 thing you'll do... if you got a few loans, like mortgage and car loans, get yourself 3-4 more credit cards along with them. ....JUST DON'T USE THEM MUCH. Thinking its destructive?? But, having plastic cards upon your loans ACTUALLY WORKS IN FAVOR OF YOUR CREDIT SCORE....as long as you limit their usage.

The ways of credit restoration (1)

Credit restoration process is a great means to enhance, restore & satisfactorily fix your credit profile. There are several ways for restoring your credit score.....these credit restoration techniques are common, but not widely known. Let us take a look those techniques below:

Reducing your debt-to-income ratio: An individual's debt-to-income ratio is a significantly large portion of his credit score model (30%). This ratio figure clearly indicates out how much debt you should bear (i.e. measures your true affordability), compared to how much credit you have. Great credit situation is getting your loans paid down to under 30%. Of course, the most healthy credit status is to keep them at 0% . A very important factor is having your open accounts. Never close an account just because you spend it too much, because closing a balance carrying account destroys the debt-income ratio.

What is the utility of this? You have the cash now, you are going to repay your debts...& get rid of your tension. And that, of course leaves improvements in your credit history. No more need to get into that lengthy, time consuming official procedures with credit bureaus.

Disputing Negative Items: If & when you find any inaccurate or unverifiable items or costs mounted up on your credit, never hesitate to check with Credit bureaus. You got the right to ask credit bureaus to inquire & investigate with the creditors who report the "bad items". If those are not verified, bureau guys will get them removed.

However, such a system, obviously, got some negative sides.

Negative: Almost all the disputes regarding "bad item reporting" complaints take long time to be resolved....sometimes, even around 90 days to complete. Then, the spider net of official formalities, process hurdles, lengthy investigation etc. etc. add more to the inconvenience of the debtors who filed it, leading to their discouragement.

Working with the creditors: Now a days several credit restoration companies are going for tie-ups directly with creditors available in market. They do it by writing a "goodwill" letter which asks the creditors to get into a profitable & peaceful commercial relationship at the cost of just "ignoring" the transgression. In order to enhance their intervention with creditor's activities into more legal action, some firms even go ahead to emerge & entitle themselves in market as a law firm.

Do you know Chapter 7 bankruptcy scars your credit rating?

It is believed that filing Chapter 7 bankruptcy allows you to make a fresh start. Does this really happen? Filing bankruptcy may allow you to make a fresh start but it has its own complications too. The number of consumers filing Chapter 7 bankruptcy has increased in number. More and more people are not being able to make payment for their bills. In fact there is a vicious cycle. People are losing their jobs as a result of which they are not being able to fulfill monthly financial obligations.

Whether you file Chapter 13 or Chapter 7 bankruptcy, it gets recorded in your credit report for a period of 7 to 10 years. So, it is best to stay away from bankruptcy as much as possible and try out different bankruptcy alternatives. The bankruptcy alternatives include debt consolidation, debt settlement, debt management etc.

Although filing bankruptcy gives you a fresh start but there is lot you have to compromise with as far as enjoying financial benefits are concerned. Let us see what price you have to pay if you file Chapter 13 or Chapter 7 bankruptcy.
• Your credit rating nosedives
When you file “liquidation” bankruptcy (where your non-exempt assets are liquidated to pay off creditors) your credit rating nosedives miserably. This is true for any type of bankruptcy you file. And it is a well known fact that your credit report is a “financial report card” and whatever you do financially gets recorded in the credit report.
• You may not get a suitable job
There are many employers that don’t hire you if they find bankruptcy filing in your credit report.
• A homeowner may not rent out his premise to you
Filing bankruptcy may act as a hindrance when you want to shift to a rented place. If the homeowner finds out that you have filed bankruptcy, he may not rent out his apartment to you.
• You need to deposit for utilities
If you are requesting for a new service such as home phone, gas, electricity, cell phone, internet or cable TV, you have to pay deposit for the same since you will be treated as “risky” as you have bankruptcy in your credit report.
• You will not get good credit
Whether you file Chapter 13 or Chapter 7 bankruptcy, it will take a long time before you can finally win back a lender’s confidence and get fresh credit again.

So, whether you file Chapter 13 or Chapter 7 bankruptcy, both impact your credit rating in a similar manner. While Chapter 7 bankruptcy remains in your credit report for a period of 10 years, Chapter 13 will haunt you for 7 years.

Credit Repair Scams: an insight(2)

Before I even start to write anything, I must finish off the indispensable duty....that is, I feel I must beg my reader's apology 1st. 2 posts back, I came up with the issue of "Scams of credit repair", threw a bit light on its primary nature & aspects.....& then promised to get back with the preventive financial measures to stop credit repair scams in my very next post. But unfortunately, some Payday loan related issues came up meantime.....which, I felt, had to be discussed on an urgent basis. So last 2 weeks I got busy discussing on them in 2 blog posts, and could not get to concentrate on Credit repair scams. Finally I am back with that topic once again, & now will share with you the financial steps one can take to prevent such scams. Here they are:

• Before just taking up any program, I guess you all would like to know the best program available in market as per your affordability. How about a Free initial no obligation consultation with one or two of your chosen companies? No company would refuse that & you can easily get the overviews of the programs you mostly liked.
• Before even signing up with the credit repair program with any company, we need to be assured about the company’s clean image & trustworthiness. It is a good idea to find out the business profile & age of that company. If necessary, we have to inquire with Better Business Bureau (BBB) about the company’s past business track records & activities. These all, in fact, are the efforts to minimize the chance of being victimized, & maximize the possibility if getting genuine service. After all an unknown or new company is not as reliable as an well-known one!!
• I have found out another useful but easy-to-understand indication of a possible credit repair scam; when the company insists you not to communicate with any of the three principal credit bureaus & tries to assure that no need to contact authorities….they can handle your credit problems all well!
• Get familier with the financial laws before getting into it….less or no awareness about the Laws is the easiest way for the companies to play fraud game & gulp your money. Ae per the Credit Repair Organizations Act, you do not need need to pay the service charge untill you received their services. So if you find them requiring you to pay the charges prior to offering the assured credit repair service, say “Good bye” and walk away.
  

No Credit Check Payday Loans

Has your credit history taken a hit recently? If so, and you’re wondering how you are going to pay for your next financial emergency, you’re not alone. In today’s economy, many people are discovering that traditional bank loans can no longer meet their needs in the event of a financial crisis. Instead, they are turning to no credit check payday loans as a way to get a loan quickly and easily in a time of need.

What is a No Credit Check Payday Loan?
No credit check payday loans are short term loans intended to help hold you over until your next payday. They typically must be paid back within two to three weeks. Most companies simply require that you be employed and have a checking account. You can apply for the loan online in most cases and approval can sometimes be granted by the next business day. They won’t check your credit, so even if your credit score is low you won’t be denied the loan. They may, however, take a look at your loan history to see if you have a history of not paying back payday loans on time. As long as you have a good track record in this area, you will most likely receive the loan.

How Can a No Credit Check Payday Loan Help Me if My Credit is Poor?
A poor credit rating can affect purchases and loans of all kinds, from housing loans to appliance purchases. No credit check payday loans, however, offer quick cash to hold you over until payday without checking your credit. If you are having difficulty getting traditional financing, a payday loan may offer you the extra assistance you need to make it until you receive your next check. You’ll be able to make any necessary purchases and then pay the company back as soon as you have the money available.

How Do I Choose a No Credit Check Payday Loan?
It’s important to do a little research before you apply for your payday loan. Some loans can have very high interest rates which accrue interest to your original loan amount very quickly. Taking the time to read the fine print on the loan application can save you dollars by making sure you find a company with a reasonable interest rate that won’t surprise you with high tacked on fees when you’re ready to repay the loan. There are websites available that can help you with your research by comparing several different companies in one place. Once you’ve chosen the company that’s best for you, receiving your loan requires that you fill out an online application. Most companies will review your application and let you know whether you are approved within twenty-four hours.

Don’t allow poor credit to deter you from making the purchases necessary to your family’s health and well-being. Consider applying for a no credit check payday loan to help you meet your financial obligations in these troubled economic times.

Credit Repair Scams: an insight(1)

Good credit profile is damn necessary to build your creditworthiness to all the creditors…in order to increase your chances for getting more loans. To get your credit worthiness increased you should have a satisfactory credit score on you. And, we all know that your credit score is increased only when you are bearing a good credit report throughout your financial life. But, what if your credit suddenly broke down due to a financial disaster you had to face? If you have suddenly gone through a bankruptcy, or failed to timely repay some installments of your last taken loan & eventually got the event of missed payments marked on your credit report, these things would surely create a negative impact on your credit profile…which in turn, would harm your creditworthiness. But, already there is a solution for such bad credit, too.

A lot of companies are now providing Credit repair services, who offers to rebuild & repair your damaged or broken credit profile, & re boost your credit score…..to help you stand on a satisfactory (than before) credit position once again. The heart-broken borrowers, who need loans & badly wish betterment of their credit scores, go to these companies. But unfortunately, many dishonest & scam credit repair service providing companies have already mushroomed here & there….I warn my readers & advise to stay away from them. To earn your trust & faith, initially these company guys talk damn sweet & do not exhibit any rude, professional behaviour at all. They offer the potential victims to provide them a fast solution to their poor credit profile, & promises to get their credit scores jump high. Guess what after that?? Your (you, a supposed Victim) faith is damn restored upon the company, you are sure about the usefulness of that service….now you are ready to pay. And now!! They’ll charge a lump sum service fee from you, almost amounting to hundreds or thousands of dollars. The next day, the company guys disappears; no single credit officer is there, & when after failing to contact them through repeated phone calls, you turn up to meet, you’ll probably see the office CLOSED (Its true, most of them are are fly-by-night sort of firms).

These frauds & scams related to credit repair services have almost become a widespread problem nowadays….perhaps a social & financial nuisances. But don’t worry, there are some ways for you…which, if taken, can greatly help to prevent credit repair scams…which I will elaborately discuss on in me next post. So, keep coming to my blog, & watch out for the next entry…I’ll come back with a detailed discussion on those preventive financial measures.

Bad credit score: how to improve it amidst this recession?

It is a common matter of public concern to take care of their credit score. You, me everyone is therefore trying hard to improve this. Credit score is the principal aspect of a person’s credit profile….it is the backbone of our finance. Your creditworthiness, your loan ammount and the interest rate that will be charged on you…everything depends on the dignity of your credit score. A level of 750-850 in your credit report is the recognition of your loan repayment capability, your stable financial state, and….. your reliability. Similarly, a lower score like 300-350 makes much cautious sence in the mind of all thew potential creditors.

There are some steps, some measures to be taken for gaining that improvement, and simply we need to be caring about our own credit. I wish to share several wayouts with you to optimise your credit score.

1) View your credit report throughly. In case any error you find out, make sure you don’t seat at home silently; just imidiately bring this matter to the notice of credit buraue with your own justifications.

2) Ask for the letter of deletion from a collection agency, in case you have already made a payment successfully to them; what is the utility of a letter of that type? It works as a proof of payment and does a refreshment of your line of credit in credit report.

3) Keep a track with the credit reporting dates for your account to the credit reporting agencies through the credit card companies & request your creditor to change the due date a few days prior to the reporting day. Consiquently, scheduling payment just before the reporting date will reduce your credit obligations at last minute & magnify the score.

4) Ask the credir card companies to increase your credit limit. On other hand you could facilitate the credit score if you could manage to maintain your credit below 30you’re your prescribed limit.

Some card deals can damage your credit

There are some credit card related deals which take a severe toll on your credit instead of acting for it. These deals are totally enticing for cash-strapped users, who try to make it through the holidays. But these apparently loocrative deals would massively damage user’s credit profile in the long run. Sheryl Garrett, a certified financial planner said, "Consumers need to be aware that all credit isn't good credit and that some credit may get you into worse financial trouble than you're already in." This fact has also been supported by Gail Cunningham, the hon’ble spokesperson for the National Foundation of Credit Counseling (NFCC).
I would like to make you aware of such credit card offers that you should stay away from.

Store Credit Cards
Paying for that pricey cashmere sweater is a lot easier to stomach when you get 10% off just for opening a store credit-card account. Just be prepared to feel a little queasy when you see what that card does to your credit score.
We know well that when a consumer sends application for a credit card, an inquiry on his credit history and on his overall financial condition and capability is carried out. This may slightly lower his credit score, says Paperno. On other hand a consumer's credit utilization is increased by many store credit cards which carry low credit limits. But the biggest demerit of these cards: they charge dangerously high interest rates. For example, A Macy's (M: 10.30, -0.63, -5.76%) credit card bears 22.9% annual percentage rate (APR); in case of making 2 late payments (either consecutive or twice in a six-month period) APR increases upto 24.9%

Variable Interest Rates
Before applying for any variable interest rate card all customers should read the fine print to sense the highest extent the interest rate can increase upto. Each credit card bears a variable interest rate; based on card issuer’s decision, it may rise or fall at any time. A sudden spike in interest rates often makes the consumer unable to pay his full balance amount; this, often, severely acts upon their credit score and credit report. Of course, customers can also find and go for a fixed interest rate card, though this type of cards are not much available. Besides fixed-rate cards have their own drawbacks, like…the Pulaski Bank Visa (V: 55.62, -0.14, -0.25%), for example, offers a 6.50% fixed APR. In case of any missed payment the rate increases upto 22% .

Balance Transfer
We often receive the 0% card balance transfer checks in our mails which tempts us to use them; but be careful…… the credit card you are transferring the balance to MUST NOT carry a lower credit limit than the one you are transferring the balance from. Otherwise, that transaction would affect your credit utilization rate and thus, reduce your credit score. These kinds of balance transactions may increase your debt too, for these balance transfer deals usually charge fees upto 2% to 4% of the total amount being transferred. So you have to pay around $80 on a balance transfer of $2,000.

Overdraft Reserve Accounts
Most of the banks offer overdraft reserve accounts to the willing checking account customers. There is a positive point of reserve account: it cuts the pesky overdraft fees imposed by all banks. The negative point: account holder has to pay back the balance immediately in case he dips into that account. Otherwise, a blackmark of late payment comes in their credit history which affects their credit score. Your regularity and timeliness of payment making are two most important factors considered for building your FICO scores, a source confirmed. They account for 35% of your total FICO score.

Credit Report: True Recognition of your Creditworthiness

Today everybody has finally given in to the indispensability of loans whenever we take any decision related to spending money to fulfill any need which does not come within our financial capacity. You can’t do without credit. To purchase a home, you need a mortgage loan. Planning to buy a new car? It is time for an auto loan. To go for higher studies, you require a student’s loan. And credit report here plays a vital role in raising or lowering your possibilities of getting loans at a lesser interest rate when you apply for any. Creditors want to check your creditworthiness by taking copy of your credit report from the credit bureaus before giving you credit. Your credit report copy provides them with a complete history of your repayment and management of all loans you have taken so far. I want to give a quick but authentic lesson on a credit report, to give you a clear idea of every nook and corner of your credit report and how to obtain it free.

What your credit report includes
A credit report has basically 4 different parts which contain your personal and financial (loan history and repayment related) information that your creditors report to the bureaus. These are those parts:
1. Personal Information: This includes -
a) Your name, phone number and correspondence address info.
b) Your date of birth
c) Social security number
d) Names of current and previous employers.

2. Inquiries: In this section, a list of all those who have accessed your credit report so far including your lenders is given. Inquiries include:
a) Soft inquiry (involuntary): When you yourself check out your report, or when the creditor checks your report for promotional purposes, soft inquiry occurs.
b) Hard inquiry (voluntary): When you apply for any loan, hard inquiry is carried out when your possible creditor pulls your report and thoroughly goes through your previous loan repayment and default history to find out your loan reliability and exact financial position.
Only hard inquiries are shown to lenders when they order your copy. Soft inquires are shown when you ask for your credit report.

3. Tradelines: This section contains following things:
a) Opening date of your account
b) Types of credit accounts or loans you have
c) amount of loan (your Credit limit)
d) Complete account of Payment particulars, like-late payments, charge off, default etc.
e) Your account balance Account Status.

4. Public collections and records: It includes –
a) Wage garnishments
b) Liens and judgments, bankruptcy, foreclosure
c) Reports from State and County courts
d) Collections and name and contact detail of CA

How to get your free credit report
According to Federal financial laws every person has the right to get a free copy of his credit report from any or all of the bureaus, once a year. Under any of the following situations also you can get a free report:
• You are currently unemployed and plan to look for a job within 2 months.
• You are on some kind of welfare.
• Your loan application has been rejected (order report within 60 days of rejection).
• Your report shows inaccurate loans particulars due to id theft or fraud.
You may anytime call up at this toll-free number: 1-877-322-8228 to order a free credit report. You can also request for a free credit report at annualcreditreport.com which is the central website set up by the bureaus or fill out the Credit Report Request form available at the website and mail it. The address is:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

However, in free credit report credit score of a person is not given; if you like to get your credit score, you will have to buy it for $10.50. To get instant access to your free or paid credit report, you can request for it online. Otherwise you need to give your personal and financial details to the and place your order. Then bureau takes 15 days to send the report.

How credit score affects the insurance premiums you pay

Does your Credit Rating Affect the Insurance Premium you pay?

Indeed, it is a harsh truth that till date we lack adequate knowledge on the basic key factors associated with the term “credit” and the immediate as well as long-term impacts of credit score and credit report on different spheres of our personal finance including the insurance policies. There are people who still think that high or low credit scores have any impact only in increasing or reducing the chances of getting any more fresh loans for either buying any commodity or a brand new car or your dream home. It is possible that your credit history is the key reason you are probably paying a higher insurance premium for your car or your home insurance than your friends or neighbors. Your low credit rating score, also, may affect the premiums you pay for your home, car and health insurance premiums.


Insurance companies fix a specific premium rate for the insurance they sell, based on risk management formulas they have developed. And while doing that now-a-days many companies are taking into account their customer’s credit rating scores along with their preset insurance risk criteria to set the net insurance premium payable for each customer. This is true that there is no set rule that a person can use to determine the way insurance companies measure risk or the parameters they consider to estimate the amount of risk (if any) likely to be posed from a potential individual while striking an insurance deal with him. But it can be well understood that possessing a high credit rating and an impressive credit profile makes a person look more financially stable and trustworthy customer to the insurance firms.


Lets take an example to have a more clear understanding; suppose two home owners own same type of house, live side by side. Both applied for home insurance and got insured by the same insurance company with identical coverage. Even if both of them have no past insurance claims history, the rate of monthly/yearly premium they pay for this policy may differ from each other.

The reason of this difference in premium payment may be due to the difference in the credit scores of the two applicants. As credit ratings go up, credit score increases….so due to the difference in rating between the two men, one person may have a better credit score than the other. Customers with lower credit scores may be considered by the company to be more likely to make a claim than the one with a higher credit score.

Credit cards help to brighten your credit profile

Indeed, it is true that Credit cards are very useful for building up an impressive and attractive credit profile. Cards are being widely used by thousands of U.S. citizens to either make or repair their credit history for improving their credit score.
We know well that credit cards can be separated in two categories – 1) secured credit cards and 2) unsecured credit cards. Normally, those persons without a credit history keep a secured credit card. The most interesting point associated with secured credit card is that no deep inquiry is done on your credit report once you apply for a secured credit card. Because you deposit your own earned money as security fund to subscribe to such cards….you take them at your own risk. But, unlike this, unsecured credit cards solely depend upon your credit score. Unless your credit score is high enough, you are not eligible to get unsecured credit card. Moreover, a deep inquiry is done on your credit report when you approach a financial firm for an unsecured credit card which remains in your credit report for two years.
Anyway, whether you have a secured or an unsecured credit card, does not matter. Both of them can be effectively used to enhance your credit score. BUT you must use your credit cards on a regular basis, and, more importantly, you MUST pay off the credit card debt on time and try to maintain a transparent card bill payment report. It helps to improve your credit history. An impressive credit history contributes as much as 35% in your FICO score. Moreover, you should not spend away more than 30% of the net credit limit given on each card…. The reason is that more you spend the less will be the balance available on the card ; and the amount owed would increase. This gives negative impact on your credit score.

I would like to share with you all some tips obtained from industry experts about the fruitful use of your credit cards in order to make your credit score go high and to built up a bright credit history:
1) Before shopping anything or paying utility or other bills using your card, make sure that you have sufficient savings to repay the money within the due date. You are required to pay the minimum amount due within that due date to stop the black mark of late payment from being put on your credit report. Moreover, you should repay the credit card outstanding as early as possible for you.
2) If your bank increases the credit limit on your card, you should ask them to lower the limit so that you can keep a control on your expenses and thus, restrict your monthly payment budget. Improving your credit history does not require a high credit limit on your cards.
3) Do not go out on a credit cards collecting spree from different firms. Stay away from a lot of cards—stick to a maximum no. of two so that you can keep track and accordingly cut down on your payments. Your “credit card hungriness” is another negative factor; it creates a bitter impression for your credit score.
4) If you by chance fail to pay off the entire amount you spend on a card at a time then you must not use the card again until you pay back the entire outstanding amount.
5) Always you should apply for credit cards which are free of cost---i.e. no annual charges apply for using them. Do not get influenced by the reward points offer and make purchases only to acquire points.