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Introduction:

I am tempted to begin this book with some corny saying like today is the first day of the rest of your life.  Relax! I would never do that to you. However, I want to make the point that the state of your credit and the resulting score can have a huge effect on your life.  Of course, the effect can be either positive or negative.  A great credit score means no problem getting a car loan or low-rate mortgage. Sure sounds like a great place to be.  But I am guessing that since you are reading this eBook, you are not in such a great place as far as your credit score is concerned.  Don’t worry, I have been there too.  There were the days when I had to hold my breath every time I tried to pay with my credit card.  I can clearly remember feeling like a total loser when once at restaurant with my family the waitress came back to the table to let me know my card had been declined.  Then there was the depressing experience of going to the mailbox to find that once again my application for a credit card had been declined.  I can only hope you have not had to go through some of the unpleasant situations which I have experienced due to lousy credit.  But it doesn’t do any good to get stuck in the past, right?  Good for you in taking the first step in improving your credit score and improving your life.   Remember, this is the first day of your NEW CREDIT life!  Sorry, I just couldn’t resist.  Before we move on, I want to make one point.  Despite what you may have heard or seen advertised on some website, repairing a less-than-stellar credit score can not be done overnight.  In fact, I played on this notion with the title WakeUp To Good Credit- How to quickly earn the credit score of your dreams.   The reality is credit repair is quite possible, but it is going to take some effort and some time.  The important thing here is that you should not let a bunch of late or missed payments ruin your credit rating. A big part of repairing your credit has to include being on time with your payments to creditors every month. So if you have made some mistakes in the past as far as your credit, now is the time to start fresh and establish a routine of submitting regular payments. To make it easier on yourself, look into arranging automated monthly payments or submitting payments online. This type of arrangement can go a long way in avoiding late payments and make the whole process relatively painless.  Whatever you decide about such an arrangement, it is crucial to get and keep your payment history in order, because this accounts for up to 35% of your credit rating.  If you do find yourself having difficulty making a payment when due, the one thing to do is connect with those who are owed money.  Quite often companies will work with you and may even give an extension to you.  It doesn’t hurt to ask, so makes sure you ask. Understanding How Your Credit Score is Calculated: You know how important your credit score is, right?  The dreaded number is how banks decide whether or not they will be kind enough to give us a loan.  Plus, when and if you are fortunate enough to get that loan, your credit score determines  how much the bank will loan you and at what interest rate.   Okay, I don’t want to make the banks out to be the bad guys here.  I mean, they don’t know you like I do.  They don’t know that you are a good person.  They have no idea about the tough times you have been through. The only way the banks have to judge how much of a risk they are taking in lending to you.  If you had some problems in the past that caused you to miss some payments and your credit score to go in the toilet, the lenders only see the results.   Okay, I think we can definitely agree that having a good credit score is crucial.  Now let’s take a look at some of the issues used to determine a score.  Afterall, we need to know what shapes the score, before we can take action to improve that score. The main factors influencing your credit score are the following: ** Payment History – Your payment history is obviously one of… if not the most powerful factors in determining what credit score you earn. Naturally, lenders want to find out if you are current with all of your payments or how many times you have been late in the past.  This gives them a picture of how much difficult it may be collecting from you. Not surprisingly, if you have always made payments when due, your reliability will earn you a higher credit score. On the other hand, if life has gotten in the way and there are late or missed payments in your credit history, you are very likely to be saddled with a lower number.    ** Length of Credit – How long you have had the specific credit account is another factor influencing your credit score. Since the score is based upon established past performance, a short credit history lacks this important information and will hurt your score.  Remember, the longer you have had the account the more helpful it will be.    ** Stability –  Your degree of stability is a definite concern to anyone considering extending credit to you.  To  measure how stable you are, lenders will typically check on the length of time at your current job. In addition, the reputation of and outlook for the employing organization can be considered.  Another factor may be how long you have been in your residence.  In general, at least 3 years at your present address is considered a good indication of stability.    ** Other Debts – Your lender is understandably interested in how many other lenders are owed money from you.  Banks definitely don’t like to be at the end of a long line of people trying to get money from you.  Regardless of whether or not your account is in good standing, the number of debts owed will be used to gauge your capacity to remain current with regard to added liabilities.  Clearly, paying off some debts will result in a better credit score. ** Type of Credit – The final factor in determining your credit score is the type of credit accounts which you have established. A mixture of types of credit will have the most influence upon your credit score.  The two most common types of credit are revolving and installment.  Accounts which feature debt growing  and decreasing as payments are made are examples of revolving credit.  Credit cards present the most common instances  of this type of credit.  Home mortgages and auto loans are common examples of the installment account.   Now that you are familiar with the factors behind your credit score, we can look at some methods for improving your score.

Littorno, Jeffrey. Wake Up to Good Credit!: How to Earn the Credit of Your Dreams Quick & Easy (How to... Book 1) . Unknown. Kindle Edition.