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Hard Facts of Credit by Rupert Meverich http://www.fdacredit.com In today's world, survival without financial freedom is almost impossible. But to have the same, it is absolutely essential to have a good personal credit. A bad personal credit seriously limits your purchasing power. Any person having one, would find financing very expensive and sometimes prohibitive. If a person has a bad credit, he does not have to lose hope. The situation is not clear when it comes to an individual with a low credit rating. Many considerations and situation assessment go into the determination of credit worthiness of an individual. If a person has taken a credit earlier, his payment history is studied to determine his credit worthiness. If an individual suffered mitigating circumstances as job loss and medical bills, creditors no doubt would factor these in before arriving at his credit worthiness. The modus operandi of creditors is very systematic and practical. Naturally so, since with increasing competition they not only have to protect themselves against risks besides increasing their customer base. For example, a person with a history of excessive tardy credit card bills and notes is deemed as a higher risk. The pattern of late payments is a turn-off for most financial institutions. If everyone paid their bills if and when they felt like it, our society would not be flourishing. As a result, the high risk borrower generally does not qualify for the low interest rate loan or credit card. Any time installment payments, such as auto notes exceed the thirty day pay period, financial institutions frown upon this type of payment pattern. While lenders will not reject a prospective borrower for one payment made over 30 days, a habitual tardiness is deemed as a credit risk. In the same vein, the consumers with a propensity for remitting tardy payments will generally have to pay a higher interest or fees on any loans. Every American consumer is entitled to one complimentary credit report each year. Creditors use one of the three credit bureaus (Experian, Equifax and TransUnion) to determine one's credit worthiness. In certain circles, credit scores are referred to as risk scores. |