Credit is a very difficult and confusing thing to understand. Sometimes you hear that no credit is good credit. Then you hear that no credit is bad credit. Sometimes you even hear that bad credit is better than no credit, and it is definite that good credit is better than no or bad credit…completely confusing! And not only will credit annoy you because you do not understand it all, but you will be amazed on how much living involves your credit. You cannot purchase a house or rent an apartment without a credit check. You cannot start cable, internet, or phone service without credit consideration. You cannot even get a decent job without having your credit checked first. This whole credit thing can cause you a great deal of headaches. However, keep reading for a list of the secrets to better credit so that when the talks of credit checks grace your ears, you and your credit will be more than ready.
A Little Debt Will Do
It is a big misconception to think that no debt a good look for your credit score. This idea is completely wrong. Although it is a good idea to decline credit card offers or payday loans, not having enough credit can hurt your credit as well. Younger people and the elderly are generally the top candidates when it comes to this secret to better credit. Young individuals may not have credit cards or have used credit cards to build credit. Also, elderly people may have paid off past debts and currently are living debt-free. A good way to keep your credit in good standings or to build your credit is to use just one credit card, make a few purchases a month, and pay back the card in a timely manner.
Talk Your Way into Better Credit
When you get a credit card, you may find yourself drowning credit card terms, interest rates, and payment due dates. However, it is very rare that those terms are permanent and set in stone. Be willing to negotiate the terms of your credit card with the credit card company. This is a recommended secret to better credit because it allows you to negotiate terms that are more suited for you. For instance, your credit card payment may be due the 30th of every month. It may be better for you to pay the bill on the 15th of every month. Inform your credit card company that the 15th is a better day for you and they will probably be willing to switch the days just to ensure that payments will be made.
Also, you may find it difficult at first to make your first payment. For every late payment, you are typically charged a late fee. With you first missed payment, you may be willing to negotiate that the late fee get waived and your first time paying late could be forgiven. All it takes is that you talk to your credit card company. They are willing to work with borrowers to guarantee that the funds will be repaid.
A New Account is a Good Thing
It is a common thought that opening new lines of credit or applying for them could hurt your credit score. In some cases, that thought reigns true. If you already have bad credit and are being constantly denied new lines of credit, than those activities are negatively reflected on your credit report. However, another secret to better credit is to shop around for the best credit card and loan rates. Shopping around and inquiring on the different rates and terms does not greatly impact your credit score and history. As a matter of fact, it is very common for individuals to be unhappy with their current credit card and choose a better option instead of sticking with the current card.
Closing Old Accounts is a Bad Thing
When credit card debt and other debts start to get the best of you, you may find it beneficial to get rid of those debts and close the accounts. This could definitely hurt your credit score tremendously. If you find yourself in the position to need to get rid of certain accounts, take heed to this secret to better credit. Aim to close accounts of cards with lower credit limits. Retail cards are a good candidate for this. Stay away from closing accounts with high limits. Instead, get rid of those debts by taking care of the balances and then closing out the account. That way, you credit score will not be greatly impacted.
Now, if you have noticed, the above tips were all secrets to better credit that can be controlled by the credit holder. However, there are some secrets to better credit that lies in the hands of others, like lenders, creditors, and companies that require credit checks. Read on the Road to Better Credit (part 2) for the secrets that are in the hands of others.