Bad Credit Blog

In perusing Yahoo questions doing research for an interesting Blog article, I noted several questions from 18 & 19 year olds anxious to establish credit but wanting to “get it right.” Several people asked the same question, “Is it better to have several credit cards rather than just one?”

The answer is a resounding YES it is better to have two or three - provided you are disciplined enough to handle it.

The reason it’s better is because you have more companies contributing to your credit report. Of course that works both ways. If you are not a responsible person and pay just the minimum amount each month, or max your cards to the limit, or pay late regardless of the reason, your credit score will be damaged. But of course you already know that - right?

To increase your credit score and get the maximum benefit with a credit card keep your credit usage to around 30% of your credit limit. Whenever possible pay your credit card in full each month. If that’s not possible double or triple the payment they request. In other words if they only want $20 minimum you should pay $40 to $60 to keep the total amount owed as low as possible.

Finally. Keep your credit clean! A person in their 50’s can have a few negative things on their credit and still be OK. This is because they have a LOT of history on their report. And if the good outweighs the bad then they can usually be alright. But when you are just starting out you don’t have much good credit to cancel the bad. So every bad thing hits your score a lot harder. So keep your credit clean and don’t go crazy with the credit cards! Use them to BUILD credit, not buy toys you don’t need with money you don’t have!

Good luck to you!

Everyone knows it is very easy to get credit cards and into debt and why should you be any different than anyone else?

Everyone buys on credit! In fact if you survey most high school students you will find that they can hardly wait to turn 18 so they can get their first credit card. Then the real party begins!

So to help you along we’ve put together these handy steps so that you too can be broke by 25 - or before!

1. Before you can qualify for a credit card you will need a job. I know that’s a bummer but that’s the way it goes. Give a little get a lot (of credit) that is. So head out to your local fast food restaurant and get your application in!
2. Credit card applications arrive in the mail whether you solicit them or not. Pick one and fill it out and you are on your way! When they ask about income, fudge a little to make it easier. (Hey, everyone does, don’t they?)
3. Start buying all the toys and gadgets you have always wanted using your credit card (why pay cash when you can pay $20 a month for a new Wii?). But don’t max out your first credit card right away. If you do it will make it harder to get additional cards. Make extremely small payments on time so they don’t catch on that you want to apply for more and more and more credit.
4. Apply for additional credit cards (didn’t we just say that?) In fact get as many as you can! You can always transfer those balances to other cards while you learn to juggle.
5. In about six months you will have arrived! Make sure you have the yellow pages handy to look up a good bankruptcy lawyer. Hint: the bigger the ad, the better the lawyer (I think). Have fun!

Would you like to avoid bankruptcy?

If you’re tired to drowning in debt and need help NOW then read more on our site and find out how you can get out of debt, raise your credit score, and get the interest rates you DESERVE, instead of what you’re just darn lucky to get at all!

By Amber Stubbs, CardRatings.com Reporter

Lurking among many other credit related myths is the belief that paying off credit cards may cause your credit score to decline. I continue to hear this and other related credit scoring myths from consumers that I interact with on a daily basis. In reality, when you pay off credit cards you decrease your overall utilization - your total balances vs. your total available credit - which improves your score.

In fact, utilization accounts for approximately 30% of your credit score. It is best that you keep your overall utilization below 10%. For example, if your total available credit on all credit cards is $25,000, then you want to keep your collective balance at less than $2,500. And, the lower your utilization is the better your credit score. So, the idea that paying off balances will negatively affect your score is simply not true!

However, the above scenario should not be confused with closing credit card accounts, which could have an adverse affect on your score for two important reasons. First, as discussed above, you have to consider how it will affect your utilization. Typically, closing an account will cause your utilization to increase and, as a result, your credit score to decrease. So, it is important to do the math before making a final decision. (Keep in mind how it could affect your utilization in the future as well!)

Additionally, you have to consider the age of the account. If it is one of your older credit cards, then it could also adversely affect the length of your credit history which makes up 15% of your FICO Score . Most of the time it is better to just “sock drawer” the card if you do not plan to use it anymore. That way having an account in good standing and the available credit is continuing to help your credit score.

Just be sure to remember to use the card about once per year for a small purchase, then pay in full when you get your statement. Doing so will help the account stay active and reporting as such to the three major credit bureaus . Reporting your on-time payments (preferably to all three major credit bureaus) is an effective way to boost your credit score. On a related note, it’s also a good idea to check with your creditor to find out which bureaus they are reporting to.

REF: www.cardratings.com