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Tips For Credit Report Success

Apr 13, 2008
Ever since the early 1900's, credit has been an important part of consumer culture. To afford necessary items such as a house or car, consumers must buy on credit. This may pose a problem to consumers who don't have a perfect credit score- so how does one obtain a pristine credit history?

The Anatomy of a Credit Score

There are a myriad of factors that go into determining one's credit score. The higher the score, the better a consumer is when attempting to obtain a loan or buy on credit. For this reason, it should be a part of every consumer's goal to strive for an impressive credit rating.

One of the biggest factors that goes into determining one's credit score is the responsibility of the consumer in general. If the consumer has a good history of paying bills on time, the score of the consumer will be higher. Otherwise, the score may be impacted quite negatively on a large scale.

Young adults will find that because of their lacking history with credit, lenders will be much more reluctant to give out a loan of any sort. This is often just as bad as having a poor credit rating- since lenders don't know the worth of a consumer from their history or track record. In this case, only time can help cure the gap for younger adults.

Sadly, anything on one's credit report can be sold and traded at will by credit companies. This lets lenders decide on whether or not they should lend money to a consumer or not. But in other scenarios, the information may be bought by illegitimate corporations to send offers to the long lists of consumers.

Things to Avoid in Credit Building

There are a long list of reasons why consumers have bad credit- but as you'll see, most of the mistakes they made could have been prevented. Some acts such as identity theft are harder to prevent, but even this can be avoided if proper action is taken.

In the case of identity theft, reporting the problem to a bank as soon as you expect wrong doing can often avoid the negative marks on your credit history altogether. But to avoid the scenario completely, you should engage in security tactics such as shredding information obtained in the mail- or opting for a post office box instead of a mailbox.

Another big cause of negative credit scores lies within signing a loan for someone you know. Often, the person may skip a payment and the loan will default. In that case you will be expected to pay the remaining balance. If you aren't able, you should expect a nasty mark on your credit score as a result.

Maintaining an excellent credit rating really only takes common sense. If you exhibit responsibility and have a good history- you will have no problems in obtaining loans. Following the above advice and observing common sense will ensure your lifelong relation with credit is a good one.
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