Sunday, November 21, 2010

Will I die with a low credit?

I don't get it. I currently have approx. 2,500$ in debt from a credit card and a loan for the purchase of a computer. I admit I was delinquent in the past, being a student, not having a permanent job, and being financially illiterate. Last year, I had 3 acct in collection all with disputes on my favour. We found mutual agreement, and I arranged to pay them all in full. I've been working for a year now, spend a full year at home trying to reduced everything to 0$ I have 3 acct active on my credit, 2 credit cards, and a loan. one credit card is closed because of last year delinquency, 20% paid, 1 card is at 0$ balance, the loan is at 20% paid. 6 months ago, I tried to get a raised on my limit, the credit counsellor said no, because I need more history of good payment and some savings, he said wait 6 more months. I waited 6 months. Despite having to pay for school, and all monthly expenses, I managed to save 1,800$. This time it's another story, they are referring me to equifax, and they are not sure why they can't increase my limit. the purpose of the increase was really to cover the loan and the closed credit, so that I could transfer my saving into my credit card, and still be in a good position financial. My CC that I've been with for 5 years don't want to increase my limit at my current 11% rate, but so other random company is willing to loan me at 32%. Is it how things work??? It seems like even the credit counsellor didn't know what was going on, saying that it was procedures. When I asked him which procedures, he said that's private. I don't get it....Will I die with a low credit?
Seems like your debt to income ratio may be too high.

A creditor will consider you a liability if you are using more than 30% of your available credit limits on your card. Go over 75% of your limit and they will consider you subprime.

For your future remember that carrying balances on your credit card drastically reduces your credit worthiness. More than 50% of the population pay in full each month never paying interest. These are the people with the higher scores.

Remember for your future that landlords check reports, so do employers and car insurance companies (you will pay more).

Use credit cards wisely - don't let them use you. Stop carrying balances.

/Will I die with a low credit?
Right now credit it really tight and it's a bad time to try to get credit with your history. I would pay down all my credit cards and simply use one card and pay the balance monthly. You might also go to a credit union or bank that offers a pre-funded credit card. You put your money in savings, which earns interest, and they'll give you a credit card up to the balance in savings. You're essentially borrowing your own money, but if you pay off the balance every month, you are establishing good credit, and aren't paying any interest, and will eventually be able to get your score up. Also, take advantage of your free annual report from each agency and make sure everything is correct.
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