Applications for Credit

Governments lead by example, whether they want to or not. Sometimes they give us an example of what not to do. Wall Street execs are also unwitting role-models to millions of people. But mistakes can be made at any level, especially when irresponsible lending and spending are involved.
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To keep your own credit in tip-top shape, pay attention to these costly lessons learned by banks, mortgage lenders, home buyers, and our national government as a whole.
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Lesson #1: Credit isn’t a license to spend.
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Just because you’ve got a lot of available credit doesn’t mean you should race out to spend it all. Lenders have a job to do, and that job doesn’t always have your best interests at heart – as too many home buyers have learned in recent years.
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You must take personal responsibility for your spending. Keep records of your monthly expenses to see where your money goes. Take a hard look at the items you want versus the items you really need. Then decide if you can afford to accept and use the credit that’s been offered to you.
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Lesson #2: Living beyond your means is a bad idea.
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Many people criticize the sub-prime home buyers who got taken for a ride. Didn’t they realize they couldn’t afford those expensive houses? If so, why did they sign up for those mortgages? The answer: from top to bottom, our nation has a culture of “spend now and pay later”. Only, it’s not always easy – or even possible – to pay later.
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This situation requires foresight and honesty. Look ahead before you commit to purchase a big ticket item on credit. How do you expect your financial situation to be in 5 years? In 10? 20? Be brutally honest here. If you’re struggling to stay afloat now, how will you rearrange your income or expenses to allow such a purchase? How is the projected job growth in your industry? Are you hurting your retirement by making this purchase? You need a strong financial plan and the tenacity to stick to it.
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Lesson #3: If you ignore your credit, it will go away.
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Your credit is your financial credibility. Just like our nation is finding it hard to keep borrowing money, you, too will lose your credibility with lenders if you max out your credit cards and open more accounts just to keep on spending.
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Don’t batter your credit score by carrying too much debt. Pay down your credit cards so that your total debt is 25% or less of your total available credit. Stay on top of your payments and call your card company to negotiate if a late payment is unavoidable. It’s much better to be proactive than reactive when your credit score is on the line.
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Credit can be tricky to manage, but the effort is worth it. There’s no bailout plan in the works for the average American card holder. If you dig yourself into a hole of debt, your choices will be limited to bankruptcy, credit counseling, personal loans, or plain old default that will haunt you for years to come. Take a lesson from our current economic crisis and keep your spending in check.
<p><br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.

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Have you looked at your credit card statement lately? If so, you might have received a nasty shock. Credit limits are falling and interest rates are rising as a result of the credit crunch. If you enjoyed low interest rates before, don’t be surprised if they double in the future.
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Many card holders have protested the changes made to their accounts. Before the credit crisis, card companies were sympathetic to the occasional late payment. They would extend the grace period on purchases or waive late fees and penalty interest.
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Not anymore. Now, card holders who miss a payment by one or two days find themselves choking on 30% interest rates. Pleading calls to card companies are largely unsuccessful; customer service agents apologize, but claim that they are simply unable to waive any fees at this time. That’s because banks and other lenders, scared silly – and justifiably so – by the current economic climate, are tightening their purse strings and their standards. To maintain good relations last year, card holders simply needed to pay in a timely manner and communicate with their lenders when a late payment was unavoidable.
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Now, minor payment infractions are enough to make card companies drop your limit like a hot potato. And you might notice your limit shrinking even if you’ve always paid on time. If your credit cards are almost maxed out, companies will reduce your limit as a precautionary measure. The less you can charge, the less they risk if you default on your debt.
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Credit limits aren’t the only casualty of recent days. Approval for credit is also low. Whereas a credit score of 720 was considered excellent a year ago, lenders now want to see a 740 or higher before they’re comfortable offering a loan with good terms. And if you work in a shaky industry, like home building or mortgage brokering, expect even more hurdles when you’re applying for new credit. Card companies know what you do for a living, and they’ll clamp down on your credit if they think your job could be at risk.
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So what can you do if you need credit? Get serious about timely payments, and keep your card balances low. To keep your accounts from getting closed due to inactivity, use each card at least once every three months. Open new accounts with better lenders, but don’t close your old accounts; doing so decreases your debt to credit ratio and, in turn, your credit score. Finally, ask your bank if they’ll work with you. If you’ve been a good customer, they won’t want you to take your business elsewhere.
<p><br><br>This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.

Related posts

• 3 Credit Lessons from the Current Economic Crisis (0)
• Making Sense of Credit Card Offers (0)
• Price Controls Proposed for Fee Harvesting Cards (0)
• Choosing Between Debit and Credit Cards (0)
• Pay With Credit Cards for Maximum Security (0)

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• Card Companies Have Tightened Their Purse Strings (0)
• 3 Credit Lessons from the Current Economic Crisis (0)