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Maintaining a good credit report

By Janet Lacey
Published: Tuesday, October 20th, 2009

A credit report decides what kind of credits you are eligible for. A good credit report usually translates into the best of credits. These include loans and mortgages for houses in the perfect locality. It would be a very easy task to get your hands on a great mortgage with very low interest rates. It would avail you the best of the student loans and enable your studies in some of the best colleges. The criterion of a good credit history is the credit score. A good credit score would mean FICO 740. Most of the loans and mortgages are approved once a customer reaches FICO 740. Once this score is achieved by a person, most of his loans go through with the utmost ease. Once you reach FICO 740, all you need to do is concentrate on staying there.

The basic of a credit check is simple. You will apply for a credit with a lender. This credit might be of any kind including house loans, mortgages, student loans or even a credit card. The creditor has to decide how financially stable you are and decide whether you are eligible for the credit itself. He also has to decide what is the amount of risk involved in giving you a credit and fix interest rates accordingly. Thus, your credit report decides your entire financial future. Do not think that credit histories start from the later ages in your life when you earn and spend big. Children today also have credit cards. The credit history starts from very young. Therefore, keeping a tab on your credit history is of paramount importance. Any and all the credits you have ever had will show up on your credit report. These details are provided to the credit agency in a regular and timely manner by banks, post offices and courts. The creditor is basically trying to estimate how willing you are to repay his loan. This basically depends on your past repayments. Based on your history, the creditor tries to estimate how you have been in your financial past. The credit report will have all the details of any debts you might have had including your credit card maximum limit. Information would remain on these credit reports for seven years. Bankruptcy filings would stay on for more than seven years in some cases. Tax liens would stay on your report for as long as they are unpaid.

The simplest method to maintain a good credit history is to ensure you are prompt. Pay your bills on time and do not delay. Your credit card debt should be kept to the bare minimum. Do not charge anything more than you can afford to pay in the next instalment. It is very important to keep a tab on your credit report. There might be some mistakes or errors in it. If such an event occurs, it is best to raise a dispute immediately. You would not want to pay extra because of some one else’s mistake. These are a few methods to maintain a good credit history.

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