We all have a need for immediate gratification, that is where credit comes into play. You get credit, in the form of loans, credit cards, etc., to pay for things which you wouldn't otherwise be able to pay for immediately.

► Examples of Credit:

▪ Secured Credit - The money you borrow is attached to an asset, such as a home. This type of credit includes mortgages and auto loans.

▪ Unsecured Credit - You are borrowing money that is not attached to an asset. The money has been lent in good faith.

▪ Credit Cards - This includes major credit cards and retail credit cards.

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Your credit score ranges from 300 to 850. The higher your score, the better it is.

► Your credit score is determined by many factors.

▪ 35% = Payment history. The more consistent your payment history, the better your score will be.

▪ 30% = Amounts owed. The amount of outstanding debt you have has a strong impact on your credit score. Carrying high balances, especially if the balances are close to the credit limit, can lower your score.

▪ 15% = Length of credit history. Accounts that you’ve had for more than two years will have a more positive impact on your score than newer accounts.

▪ 10% = New credit. This means any new loans, credit cards, etc.

▪ 10% = Types of credit. A variety of different loans (car, mortgage, credit card) look good. It means you can handle all sorts of debt.

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The good thing about credit is it can be fixed. Here are some tips to get you back on track:

▪ Make your payments on time. This can be a tough first step, but it is probably the most imporant thing you can do.

▪ Old credit lines are good for your score. Keep them current. Accounts that you’ve held for two years or more show credit history, which shows stability.

▪ Don't max out your credit. Keep your balances no more than 60 percent of the limit on revolving credit.

▪ Pay off collection accounts.

▪ Go slow in opening more accounts. A handful of open credit accounts is reasonable. You should keep in mind what types of accounts you have as well. Variety is key.

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Get motivated and check out the links below.

► Get a FREE Copy of Your Credit Report
Under the United States Fair Credit Reporting Act you are entitled to one free credit report from each nationwide credit reporting agency every 12 months.

Let's Calculate! Do the math.
How long will it take to pay of your credit card debt?


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