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The Problem of owing too much

By Karen Anderson
Published: Friday, February 12th, 2010

The credit bureaus in their own ways can direct the financial status of many individuals. In the United States alone the three major credit bureaus are taking care of 250,000,000 of credit account holders’ information. The personal information of the credit account holders will be the basis of credit bureaus in assessing their credit worthiness. There are many technicalities in the credit bureaus’ processes of making their credit worthiness measures.

Among the technicalities and problems that credit bureaus can bring to average individuals, credit report tips can be a lot of help in dealing with these possible problems. Two of the most problematic fields in accounting for these different credit worthiness measurements are credit reports and credit scores. Credit report tips can be handy in creating a leveled- off ground between lenders and borrowers.

The proper usage of these tips combined with enough background of the nature of credit bureaus will enable credit account holders to keep their credit worthiness in a satisfactory level. One of the most misunderstood aspects of credit worthiness is the debts owed ratio. Here are some key points in understanding the ways on how debts owed ratio can affect the credit worthiness of credit account holders.

Credit account holders are misinformed on the time duration that the paid debts need to be reflected in the database of the credit bureaus. The time constraint of the process of reflecting the paid debts is not as instant as what the average credit account holders know. Paid debts will only be reflected in the credit bureaus database 30 days after the payment date. In dealing with such technicalities, reliable and credible credit report tips would prescribe complete avoidance in meeting the 50% credit limit standard of existing credit accounts.

In a credit account there is a credit limit that is determined by the lending companies, this limit is the ceiling possible amount of debt that the individual can have. However, fully using this limit will result to bad credit report and score. This happened because of the utilization measure that is determined by the ratio of debts and available debts.

The way a credit account holder used up his or her available credit limits will be the basis of the credit bureaus in lowering or increasing their scores and reports. It is in the best interest of the credit account holders as stated by credit report tips, to maintain an owed amount far from the 50% mark.

There are two major ways of paying up debts, consolidated payment or installment payment. In the light of dealing with debts, most credit repair companies through their credit report tips would urge the borrowers to consolidate payments, instead of going for installment plans.

In the credit report and credit score view of doing credit worthiness ratings, immediate and full payment is far more advantageous as compared to installments. Payments as said before need 30 days before being reflected, paying the whole of the debt will just take 30 days do lower the owed debt ratio as compared to installments that will take many sets 0f 30 days to be fully accounted for.

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