Achieve An Enviable Credit Report
Are you a credit virgin? If so, you have a wonderful chance of building up a good credit reputation right from the start. This will later reflect in an excellent credit report score; an AAA credit rating. Well, it will if you do all the right things. But the fact that you are reading this at least suggests you are trying to learn about credit and credit reports.
If you are just starting out with a clean slate and want to build a good credit score, and maintain it long into the future, the first thing you should do is to set up checking and savings accounts. If you don’t have these two basic accounts, points will be deducted from your score if you don’t have them. If you have no credit history at all, I suggest you begin by getting a credit card. That is, a credit card that has a manageable credit limit and low competitive interest rate.
One important piece of advice: never borrow more than you can pay back, on time. Credit cards are an excellent way to build AAA credit, but always make sure you never go over your credit limits, or keep balances permanently too high. Eventually, you will probably need to own between two and four credit cards.
This experience will help to build your credit score, as it will show lenders that you are capable of managing your credit, and can handle the responsibility. If, on the other hand, you are trying to rebuild your credit report score, you may have to start with a secured credit card, and then restore your score from there.
Many people do not find out that there is such a thing as AAA credit, until it’s too late. It is possible to repair your credit once things have gone wrong and re-establish your credit report score at a high level, but always beware of gimmicks. You have the obvious options of bankruptcy, credit counselling, and debt negotiation in order to get your credit cleaned up. Those are viable options, but you may be disappointed to learn that they may take several, or many, years to rebuild your credit score. Unfortunately, many people try and leapfrog these common sense methods, and instead turn to the plethora of books and videos that make such promises as “AAA Credit Rating in 30-Days.”
They make promises of credit “secrets,” and amazing tricks that they will share with you. For a fee of course. Unfortunately, all of these are either scams, or someone packaging and selling information that’s available for free. In short, if your goal is to reestablish AAA credit, it might be best to take the long road instead of the quick fix.
It is wise practice to keep your debt:income ratio below 20 percent, and not to make too many applications for additional credit. Every enquiry for a credit card or a loan shows on your report. If there are more than four such enquiries or applications over the past year, then that will be a mark against you in calculating your credit report score.
One thing to bear in mind, stability with your home and your employment helps a great deal in establishing AAA credit. If you’ve been in your home four years or longer, and with your current employer for five years or more, you add more points to your credit score, and are the sort of borrower lenders are most keen to have as customers.
Finally, make sure you monitor your credit report history. There are agencies that will send you notification every time someone makes an inquiry on your report, and will allow you a certain number of requests for your credit report per year. If you do not need that much monitoring, just request a copy of your report once a year from each bureau. Look it over carefully, and then follow the procedures to challenge any errors in writing. If you are diligent and responsible, you will have AAA credit before you know it!