A few friends have asked me about my thoughts on credit cards. It is a love hate relationship, however, when used wisely credit cards can be your friend. Yes, read that one more time, credit cards CAN help your current credit score. How is this possible you wonder? Well it is important to understand your credit score.
Brankrate.com recently posted a great article here. From the chart below you can see how your personal FICO score is calculated.
If you notice that 50% of your credit score is based upon your payment history and the length of your accounts. What does this mean? It means, you need to go open a line of credit yesterday, and make timely payments on that line of credit consistently. This is where the love/hate relationship shall ensue. You have a large amount of money ‘available’ for your disposal, however, please use it responsibly. As seen from above 30% of your credit score is based upon how much you currently owe or are ‘leveraged’. For a more detailed article on your FICO score check out the following link.
If in the market for a new credit card (because you do not currently have one, or you are looking for a card with more options) I would look here (creditcardratings.com).
I like this site because it allows me to browse several cards based upon certain criteria (low APR, rewards, or cash back) all at the same time.
So, if you are in the market for a credit card, or have wondered about how those late payments may be affecting you later, I hope the above articles helped. ~ Ian
Lending money always involves some kind of risk to the lender, especially for a loan that isn’ t secured by anything. Lending institutions determine the amount that they are willing to lend, the interest rate they will be lending the money at, and how soon they want the money paid back based on how much of a credit risk the applicant is deemed to be. There are generally no restrictions on how you can use the money once you have been approved for a loan.
Somehow i missed the point. Probably lost in translation
Anyway … nice blog to visit.
cheers, Muralist
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