Increasing Credit Worthiness
If you have none to little credit history, there are steps you can take to start building that credit history and in turn, improve your personal credit worthiness. Until you have a history of favorable transactions in your credit file, lenders do not know whether you are a good credit risk or not. Here are some unique steps you can try to increase your credit worthiness:
· Try applying for multiple credit cards within 1 year. Although they say that any inquiry into your credit file as a result of a credit card application automatically lowers your score, there is a hidden secret behind this. An inquiry for 1 credit card application has the same effect as 10 inquiries from 10 different applications if they hit the credit bureaus within 1 calendar year.
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The Major Credit Bureaus
The 3 major credit bureaus are Equifax, TransUnion, and Experian. These companies collect financial information from various creditors and sell this information in the form of credit reports to lenders or others who have a legitimate use for it. Each individual has a right to see what is contained in their credit report at the various credit bureaus. Individuals are entitled to receive one FREE copy of their credit report from each bureau, once every 12 months. The information contained in the credit reports may be as follows:
· Individual’s full name, address, place of employment, and spouse’s name, if married.
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How is your CREDIT SCORE calculated?
Well, it’s just a mathematical formula. It’s based on information contained in your credit report which is compared with millions of other people. The resulting number is in indication of how likely you are to repay your debts. The higher your number is the better deals you will get with lenders, in terms of types of plans offered and interest rates. Credit scores are used extensively by lenders when determining what rate you get for a mortgage, car loan, credit card, or auto insurance. There are many different kinds of credit scoring models used by lenders to determine credit worthiness of potential clients.
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