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!
So your old car has finally bit the dust! You knew it was coming it was just a matter of when. The time has come to replace the old run down car with a new one.
Most of us have been there and done that so we can identify with your dilemma. However this situation is yours exclusively so you will have to answer certain questions to figure the next move. If it has been quite a while since you went car shopping you may suffer “sticker shock” when you shop. Let’s see if we can help you make this easier. After all life is hard enough without any extras thrown in!
If it has been awhile since you filled out a credit application here are some things the lender will be checking.
- Your credit score
- How much money you make
- Where you work and how long you’ve been employed there (two years of steady employment is what they are looking for)
- Your current credit cards and their balances according to the credit report
- How often you make on-time payments vs. 30, 60, 90 days late – and how recent were the late payments
- Whether you own your home or rent
The first two things are easy to prove. If you don’t know your credit score you will want to find out so you won’t be surprised or embarrassed. You should order a copy of your credit report to check for errors and fix those. There are three agencies (Equifax is the largest) that gather data from creditors. This information is then used to tally your credit score. They use a complex system and we explain that on our site . But the credit agencies make mistakes - sometimes lots of them - so you need to check your report for these errors.
We strongly advise getting pre-approved for your loan unless you like the headaches associated with shopping for a new car. Being pre-approved guarantees the amount of the loan and also guarantees the interest rate you will be charged. Then when you go shopping, tell the sales consultant how much you are approved for (and stick to it) because they will try to talk you into something that costs more money and of course a higher rate of interest if they arrange financing and higher monthly payments because they will make more money on the deal.
Check your local paper for pricing and the internet, but be sure to get pre-approved first so you will know how much you can afford.
Study our articles on car negotiating and verbal sales tricks that dealerships use to confuse you and get more money from you. (Car Negotiating Verbal Tricks) (Car Negotiating The Four Square)
