Credit – More Powerful Than Love Or Money

Best Credit Guide — By Shopping Blogs on November 17, 2009 1:48 pm

Some people say love and others say that money is what makes the world go round. The truth is that credit is really what makes the world go round? It use to be in the good ol days that a mans name was all he had, and so if he shook on an agreement with his banker it was considered a done deal. In turn, if a mans name became mud, then no banker within miles of the man would take him at his word.

This may be the earliest development of the concept of credit and scores. Today, the system is much more sophisticated and just, but some may say it is very impersonal and cold. It use to be that the average Joe had a relationship with his banker. In this day and age, the average Joel has no idea who the man handling his mortgage payment or auto loan is – all he knows is that he owes the money and pays it each month.

The evolution of credit has made that six-letter word a powerful factor in ones life. It can determine whether or not you can afford a home, or what neighborhood you can afford to live in. It can dictate if you can buy a new car, a used car or no car.

And when the economy gets jittery and tightens the reigns, only those with the strongest credit will stay ahead of the rising interest rates.

So, if this small little word is just a big deal, how can you prepare yourself ? Well, the fist step is to get a report from the three major bureaus. Take a look at each item, for good or bad, and if you find information that is incorrect, take the necessary steps to try to correct it.

Correcting information with a bureau will take several weeks, so if you plan on applying for a loan, taking care of disputes well in advance will not set back your plans.

If you find that your score is not up to par or will not get you into the home you wanted, do not fret. There are several things you can do to improve your score.

The biggest changer will be to pay all your bills on time. Yes, it will take some time to build your credit back up, but the pay off will be well worth it. Even saving just 2 percent on your home loan by building better scores can ease the burden of stretching yourself too thin.

Another consideration if you are trying to rebuild your score is to resist the temptation to apply for small loans. It may be enticing to take advantage of the 0 percent interest for a new set of bedroom furniture or a high-end surround sound home theatre, but that application will hit your score.

Each of those inquiries will stay with your account for 2 years before they fall off. So ask yourself, is this something I can save up for myself and buy in a few months, or do I need this now, knowing that the hit will stay with my score for the next 2 years.

Indeed, it takes a lot of responsibility and self discipline to deny yourself the instant gratification of having that new bed or plasma TV, but when it comes to more important things you will be glad you made the sacrifice.

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