When trying to determine the status of your financial health, there is no better tool to gauge this than your credit report. This would make it very important to understand just what goes into the credit report and what is in it for you regarding future credit applications.
You are what is in your credit report.
Your credit report is a manifestation of who you are as a borrower. It tracks late payments, collection requests, and bankruptcies. Conversely, information such as on time payments, new accounts or closed accounts and loans paid off are all in here as well. It is a compendium of your financial history and a determinant for future financial events.
The "evils" of having too much credit.
Strange but true - if you have too many credit card accounts showing on your credit report, this may do you more harm than good even if they are all paid off in full, on time, and do not carry a high balance. This is a clear and present danger for most lenders, who are concerned that people with lots of credit cards may potentially incur higher balances than they could handle and have difficulty paying back their debts. If you have credit cards in your wallet that you seldom use, close the accounts. Also, you may want to use only one gasoline credit card instead of three, for instance, or buy your gas on a general credit card instead.
What you don't know can hurt you
Credit reports are a veritable florilegium of financial information about an individual, so there is always a chance that they may contain some mistakes or errors. Some examples of these would be an account you closed still reflecting open, or a paid-off balance still listed as delinquent on your report. Whatever the discrepancy, if you notice an inaccuracy on your credit report, it is up to you to contact the credit bureau and get it corrected.
Idle hands are the financial devil's playground.
Late fees are part and parcel of missing credit card payments, but there is more than just that. Even the smallest, least frequent infraction, say, a late fee, could jeopardize your chances of qualifying for an auto loan or mortgage, and remember that it takes a good seven years for negative information to be erased from your credit report if accurate! It is absolutely essential that you make it a point to always pay on time and to think twice, thrice, multiple times before using your credit card to make a purchase.
You are what is in your credit report.
Your credit report is a manifestation of who you are as a borrower. It tracks late payments, collection requests, and bankruptcies. Conversely, information such as on time payments, new accounts or closed accounts and loans paid off are all in here as well. It is a compendium of your financial history and a determinant for future financial events.
The "evils" of having too much credit.
Strange but true - if you have too many credit card accounts showing on your credit report, this may do you more harm than good even if they are all paid off in full, on time, and do not carry a high balance. This is a clear and present danger for most lenders, who are concerned that people with lots of credit cards may potentially incur higher balances than they could handle and have difficulty paying back their debts. If you have credit cards in your wallet that you seldom use, close the accounts. Also, you may want to use only one gasoline credit card instead of three, for instance, or buy your gas on a general credit card instead.
What you don't know can hurt you
Credit reports are a veritable florilegium of financial information about an individual, so there is always a chance that they may contain some mistakes or errors. Some examples of these would be an account you closed still reflecting open, or a paid-off balance still listed as delinquent on your report. Whatever the discrepancy, if you notice an inaccuracy on your credit report, it is up to you to contact the credit bureau and get it corrected.
Idle hands are the financial devil's playground.
Late fees are part and parcel of missing credit card payments, but there is more than just that. Even the smallest, least frequent infraction, say, a late fee, could jeopardize your chances of qualifying for an auto loan or mortgage, and remember that it takes a good seven years for negative information to be erased from your credit report if accurate! It is absolutely essential that you make it a point to always pay on time and to think twice, thrice, multiple times before using your credit card to make a purchase.
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