Many of us have been told since a young age to make decisions that won’t hurt us in the long run. Some obvious things we were told are not to steal, not to lie, and definitely don’t talk to strangers. One topic that has been rising in conversations that we have with our youth is to make decisions that won’t hurt our credit. Some recommendations are not to apply for too many credit cards, make your payments on time, and not to spend more than what we can afford. We are told about the negative consequences bad credit can have, but what are the advantages of good credit?
To begin with, we want to understand how to establish good or excellent credit. A majority of our score, 35 % of it, is related to payment history, in other words, are our payments done on time. Next large portion is amounts owed. This aspect of our credit composes 10 % of our score, and measures how much you owe in comparison to how much creditors lend you. We do like to recommend we keep this ratio below 10%. 15% of our score comes up from length of history, in other words how long have our accounts been open for. The next areas are new credit (accounts recently acquired) and types of credit, making 10% of our score each.
Now that we know how to have a healthy credit life, why is this so important? Here at Credit Services of America, we have seen clients miss out on great opportunities because of their bad credit history. Some of these include not being able to buy that house their family wants, not being able to get that loan they need for an emergency, or even not be able to get the job they have worked so hard for. To creditors like banks and finance institutions see credit reports and scores as a way to analyze the probability they will be able to recover the money they lend from an individual. Employers see credit scores and reports as a measure of responsibility and possible risk to their firm.
We have all heard the horror stories off bad credit, but it is refreshing to hear the other side, the great benefits of having good credit! Here at Credit Services of America, we have seen the joy and peace of mind our clients have when their credit starts improving. Many of our clients have come back to brag about their new house they bought, have brought us to see their new cars they recently acquired, and many clients that are glad we were able to help out with their dream job!
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!
*Individual results may vary. Please call for more details and to discuss your own individual situation