Credit_Cards_For_Anybody_

							Title:
Credit Cards For Anybody?

Word Count:
1190

Summary:
Credit Cards are widespread all over the US as well as worldwide and are
accepted Internationally as a very convenient mean of payment either in
person at stores, via the phone and the Internet or on signed forms via
the fax.

Does anybody can obtain this much quested plastic money?


Keywords:
Credit Card, Credit Cards, Charge Card, Visa Card, Master Card, Credit
History, FICO scores,


Article Body:
Credit Cards are widespread all over the US as well as worldwide and are
accepted Internationally as a very convenient mean of payment either in
person at stores, via the phone and the Internet or on signed forms via
the fax.

Does anybody can obtain this much quested plastic money?

Well, to answer that we would have to understand how this credit
screening and rating system work and what are the qualifications to be
approved.

<b>Credit History</b>

There are three major credit bureaus that keep track of our bill-paying
habits and credit history reports that are collected, stored and sold by
credit bureaus.

Credit reports are also called credit records, credit files, and credit
histories.
There are three major credit bureaus and thousands of smaller ones.

Experian Credit Bureau (formerly TRW): - http://www.experian.com/
Tel: 800-301-7195 (Cost: $8)
Equifax Credit Bureau: - http://www.equifax.com/
Tel:800-685-1111
Trans Union: - http://www.transunion.com/index.jsp
Tel: 800-916-8800

Federal law was passed in 1970 to give consumers easier access to, and
more information about, their credit files. The Fair Credit Reporting Act
gives you the right to find out the information in your credit file, to
dispute information you believe inaccurate or incomplete, and to find out
who has seen your credit report in the past six months.
The Fair Credit Reporting Act states that if you dispute information on
your credit file that you believe to be inaccurate or incomplete, you can
ask the credit bureau to investigate the problem. If the credit bureau's
investigation does not resolve the dispute, you can file a brief
statement explaining the nature of the dispute. Your statement becomes a
permanent part of your file and will remain on the report as long as the
negative information is reported.

If you have been denied credit, you can request that the credit bureau
involved provide you with a free copy of your credit report, but you must
request it promptly. Otherwise each of the bureaus will provide you a
copy of the report for a small fee ($8 or less). You can request a copy
from their web sites or 800 numbers.

The good news: credit blemishes are cleared from your credit history
after seven years. The bad news: seven years is a long time.
Many people with no credit history find it nearly impossible to get a
major credit card or, to a lesser extent, other credit. Scoring systems
are not designed with the first-time credit user in mind.
Exactly as people who need a small loan from a bank, they have a
checking account with this Bank and their salary as well as all their
expenses are managed through this account but when they need a loan of
say $2,000 the Banks’ branch manger asks for a deposit of $2,000 or any
other solid collateral.

The natural reaction of the average person would be something like:     If I
had $2,000 in cash why would I need a loan from the Bank?

What these people don’t understand is that   a Bank is a business,
A good business, an excellent business, in   this business the Bank almost
never take any risks and it lends money to   people who proved to the bank
they will be able to return the money with   interest.

 This proof is either a cash deposit or savings account or other
collaterals like a house, so in case the client will default on his loan
the Bank would be able to quickly transform the collateral into cash.

The Problem of many people is that they never cultivated their credit
history.
They never took a small loan and paid it promptly on schedule month after
month.

All their life they just deposited their salary and handled their
expenses.
How to start creating a “Credit History” There are some ways to start
building you credit “history”.

Bankcard issuers generally want to see at least a year's worth of timely
payments on other accounts before issuing a card.

If you do not have a credit record, you may have to start small. You may
want to start by getting a gasoline card. Chevron reports payments to the
credit bureau monthly, while most other oil company cards do not.
In addition try getting a few department store cards.

Your best option for establishing a positive credit history may be a
secured Visa or MasterCard. These credit cards are offered through
bankcard issuers who have customers put up several hundred dollars in
collateral in exchange for a card with a small credit limit. As you use
the card, your bill-paying behavior is reported to a credit bureau and
your credit history improves.
Another Important advice is to try as best as you can to Pay your bills
on time.

In addition minimize your payments by choosing credit cards that have low
rates and no fees.

Try to limit credit card purchases to emergency situations only.
(This one is true with your Cell Phones calls as well...).

Take a collateralized loan with a bank or credit union and pay it on time
every month to help establish or reestablish credit.



<b>What Is FICO and how it affects you</b>

FICO is a mathematical model created by the Experian credit bureau as a
tool for lenders to use in evaluating the risk associated with lending
you money. FICO stands for Fair Isaac Company, the company that created
the original scoring model.

FICO scores consider your credit history over several years, making it
difficult to increase your credit score in a short time frame. Over the
long term you can improve your credit-worthiness by:

-   Reducing your total indebt ness.
-   making your debt payments on time and in full.
-   closing unneeded credit accounts.
-   avoiding bankruptcy and foreclosures.

<b>How is your Score Calculated?</b>

Your score is calculated by a series of questions based on both your
credit report & debt-to-income ratio. Each answer accumulates a certain
number of points that are then added together for your final score. A
typical scoring considers:

•   How long you've lived at your current address
•   Your job or profession stability.
•   Your financial obligations (debt-to-income ratio)
•   Any late payments
•   The amount of credit you have outstanding
•   The amount of credit you are using
•   The amount of time you've had credit established

<b>Most Weighted Factors:</b>
Current balances on accounts, too few bank revolving accounts, too many
bank revolving accounts, number of accounts with balances, number of
accounts opened in the last 12 months, length of time accounts have been
established, amount of past due accounts, number of delinquent accounts,
too few accounts rated "current," recent derogatory public record of
collection, past due balances, number of credit inquiries made.

<b>What is Considered a Good Score?</b>

The magic FICO number is 620. If you score below 620 you are considered
to have a very high default risk giving you the possibility of being
declined.   If you score between 620 & 650 you will be put into a
"questionable" category where you will have to provide further
documentation to get approved. A score of 650 or above is considered
golden or "cream of the crop," and most likely you will be eligible for
the best rate on your loan.