Another Day with Special “K”

The business of loans and credit lines can make or break you when it comes time to make a big purchase. It’s not how much money you have but how much money people are willing to give you which gives you buying power in the market place.

When it comes to real estate, the size of a loan, required penalties, and interest rate add up to a monthly payment. This magical figure however can be lowered effectively by proactively managing one’s credit history.

In the U.S. there are three primary reporters of one’s credit history. Equifax, Transunion, and Experian may seem like your enemies at times but are merely reporting agencies. In short, they are a library of information oriented specifically toward what bills you have had to pay over the years. They record when you receive them and when you pay them.

If you ask the majority of people, they probably couldn’t tell you the last time they looked at their credit report. There are lots of agencies out there offering you your credit history for just a small fee but I am here to tell you that whether you knew it or not, you are by law allowed one free copy of your credit every year. Visit AnnualCreditReport.com and you will be shipped at no cost to you, a copy of your credit report from each of the three reporting agencies.

The first time I did this I was surprised to see how many accounts I had opened over the years and totally forgotten about. Radio Shack, American Eagle, Old Navy, Banana Republic, Gap…the list goes on. At the time it seems an easy way to get a 20% discount and possibly free shipping. What happens however is that each one of these cards counts as a line of credit and whether they were paid in full or not, these lines of credit can count against you when it comes time to apply for a loan.

I don’t think I need to tell you to consolidate your loans. One payment made every month as agreed looks better on your credit record than if you miss one out of six payments across many cards.

In summary, if you are one who has any aspiration of applying for a loan anywhere in the near future, whether home, car, or school, it is in your best interest to get a copy of your credit report. Look it over; it only takes 15 minutes. Close out the old accounts you’re not using anymore, and of course look for any errors that may be making you look bad.

Note, checking your credit report is also a really good way to check and see if you are possibly a victim of identity theft.

These are my words to the wise for all of you out there who don’t feel like you have the time or want to deal with the hassle. It’s easy to do and you will be repaid in lower monthly payments and easier days ahead.

This entry was posted on Friday, June 22nd, 2007 at 9:17 am and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.