Know About Creditors To Get The Best Credit Cards
Credit History
If you are dealing with creditors for the first time, you should know something called the Three C's. When a creditor looks at your file, he/she is looking for collateral, capacity, and character. Practice these Three C's closely and you will able to work with a creditor effectively.
Capacity of Credit Applicant
Basically, creditors are looking to see if you can repay your debt. They will ask about your employment information. It is highly advised that you have a steady job or have worked at job for a long period of time. It shows some sort of stability and it looks good to a creditor.
The creditor will look at how long you have worked at that job along with how much money you make. Your expenses will be evaluated as well. If you pay child support, alimony, or have any other financial obligations, the creditor will take it into consideration.
Character of Credit Applicant
The creditor not only wants to know if you can pay the debt, but the creditor wants to know if you will pay back the debt. Your credit history will be under close evaluation (that is why it is so important) because it proves to the creditor what kind of person you are when it comes to borrowing money and paying it back.
Your credit history shows how many times you borrowed money and how much you borrowed. How much you owe in debt will be an issue along with your history of making payments on time. One other thing the creditor will look at is your living situation. Creditors look at the length of time you have spent at your present address, whether you own or rent your home, and your occupation.
Collateral Credit Applicant Is Able To Pay
Creditors want to know they will be paid one way or another. If a situation arises where you cannot pay your debt, your property, savings, or other investments could be used as collateral. These possessions are used to ensure that you will pay back your debt in some way.
Not every creditor follows the Three C's exactly but if you manage your credit close to what these guidelines say, you should not have a problem finding someone that will grant you a loan. Different creditors use different rating systems and will grade you differently on certain aspects of your life.
To avoid having any doubts about your credit card eligibility, you should always make sure to make your payments on time and remain in a steady job. That is not to say that you should stay in a job you hate, but having a job over a longer period of time does look better to a creditor. If you follow these guidelines, you will be able to once again look for new credit cards.
What Information Can The Creditor Not Use?
Under the Equal Opportunity Credit Act, creditors are not allowed to discriminate people based on race, age, religion, gender, marital status, color, and national origin. This act also protects people who receive certain benefits or support from the government.
The Equal Opportunity Credit Act does not guarantee that you will receive credit but it does guarantee that you will have the same chance as everybody. It makes sure that the only thing being considered is your record from credit bureaus. Because of this law, a creditor cannot do a number of things. He/she cannot stop you from applying for a loan, receiving the loan if you qualify, lend you money on different terms because of the above criteria, or close an existing account based on the criteria explained above.
Things To Keep In Mind About Credit Eligibility
There used to be complaints from people saying they were denied credit because they were over a certain age. The Equal Opportunity Credit Act was put into law to prevent things like this from happening. You have to be a certain age to sign a contract (18 or 21 depending on the state) but there is no maximum age.
Creditors cannot automatically tell someone who is older that he/she cannot get loan because of age, although the creditor can look at other information to make a decision (such as how soon that person is retiring). Usually, someone who is older will have a good credit history working for him/her, making that person a worthy candidate.
If you are on public assistance, there is no way the creditor can use that against you when you are trying to get credit. If you receive social security or public assistance it cannot hurt your cause, but there is certain information that could affect your ability to get credit. With some kinds of assistance, you stop receiving benefits at a certain age and that is something the creditor can look at.
Your application for a loan involving your home is also covered under the Equal Opportunity Credit Act. You cannot be discriminated against on things such as your gender, color, or race or even the race of the people in the neighborhood that you live in. A creditor cannot consider any appraisal that uses the race of the people in the neighborhood as a decrease or increase in value.
The Six Rules Of Credit
1. Much like a loan, you must pay back the money you have spent with a credit card. Therefore, do not spend money you do not have because it will lead nothing to a world of financial problems.
2. You should always keep a record of what you are spending. You will be surprised to see how high your bill gets when you make unnecessary purchases.
3. By saving your receipts, you will be able to compare your records with your monthly bill. It will be much easier to find errors this way; be sure to report any problems with the credit card company.
4. Unless it is a family member (and that can even be a bad idea sometimes), you should never let anyone borrow your card. It is hard enough keeping track of your purchases and it would be even more difficult keeping track of someone else's. It is better to not let anyone use your card rather than see your statement and see that your "friend" spent hundreds of dollars that you did not know about.
5. Your credit report will be damaged if you fail to make payments because of a lack of income. It may not seem like such a big deal at first, but it can prevent you from getting important things such as a home loan, a new car, or insurance.
6. Always make sure to pay your bill on time. Try to make each payment in full but it is okay if you cannot; just make sure you pay more than the minimum balance each month. If you cannot make your payments on time or you fail to pay anything more than the minimum, you will be stuck with rising fees and a growing debt to the credit card company.
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Comments
Karen, 12:20 AM, September 17, 2007
Before applying for a credit card it's important to learn more about the creditor and his terms and conditions. It's the first step to getting a good card.
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