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Credit Cards 101


Published in January 17th, 2009
Posted in Finance and Investment

Credit sounds like a great way to go in order to have the many things in life that you want to afford for yourself and your family. Credit also sounds like a scary way of getting ahead especially when you consider all the risks involved. Just exactly what is credit and how does it work?

Credit is the means in which you can buy things today and pay for them later. You make arrangements to pay usually on a monthly basis to the merchant until you have the item paid. You normally pay interest on the amount of the value of the merchandise that you bought. You build your reputation as a reliable person by paying your bills on time. This then allows you to buy more items and spend even a greater amount of income. The creditor normally checks with the local credit bureau to get a credit score which lets them know how well you paid your bills.

There are three leading consumer credit bureaus that keep track of your spending and the way you pay your bills. The three leading consumer credit bureaus are Experian, Equifax and TransUnion. Many lending institutions report to all three your credit information, however, smaller places may only report to one of these bureaus. When this happens you find that your credit report may vary from the different bureaus. You can see all three of your files in one report with a 3 Bureau Online Credit Report.

Getting credit and paying your bill is only part of keeping a good credit report. You need to make sure that the information is kept up to date, accurate and that no one has taken the liberty of using your name or credit card to make fraudulent purchases. Your consumer credit report should contain four types of information.

Identifying you correctly:

• Your name properly spelled and complete
• Your current addresses and if you have lived their less than three years your previous address.
• Your social security number
• The correct day, month and year of your birth
• Your current employer and the length of your employment
• If you are married make sure that your spouse is included with all of her correct information.

Credit information including bank loans and credit cards

• Any loans or mortgages you have with banks and or credit unions
• Retail loans, lease to own
• Credit cards issued in your name and your spouse’s name
• Any other lenders that you and your spouse may have a loan

Public Record Information from both the state and county court records

• Bankruptcies either by you and your spouse before your marriage and during
• Tax liens
• Monetary judgments, garnishments, etc.

Finally, potential lenders are very cautious about too many inquires on your account for new credit. Your credit is very important and it determines your style of living make sure that you are using it very wisely. This is basically how credit works and what credit consists of which almost anyone may use to have an abundant life.

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