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How Credit Works
by Serge Tamento

Credit is a word used for the trust or promise to pay for
goods or services later, according to prearranged terms of
an agreement or contract and still receive those goods or
services now. Credit is used mostly when dealing with
insurance of various types and buying of goods, however it
is becoming more common for perspective employers to check
credit to help determine honesty and personal integrity.
Your financial value determined in part by your credit
rating when you purchase large items such as a car, home
or deal if you apply for insurance. A bad mark in your
credit profile indicates a problem you have experiences in
fulfilling the terms of past credit agreements. Negative
marks can vary from being 7 days late on a payment to
having an account allocated to a collection agency or a
bankruptcy in your history. Each bad mark decreases your
credit score, or rating some according to the severity of
the offence.

If you already have bad marks on the credit report, how
can you fix it? For your credit score to improve, you must
first fix the problem, that is, go in and toke care of any
outstanding late payments etc. A good credit rating will
help you get credit easier. You will receive a better rate
of interest and pay less to the bank for the use of their
money. In some cases the thing worse then bad credit is
no credit. To build credit, try depositing an amount like
$ 500 in a savings account, then ask for a $500 loan using
the money you have deposited for security. then make the
payments on time for a year. You are building a credit
rating. If you are trying to keep a good credit score
through hard times, be sure to pay at least the minimum
due, on time, even if you cannot pay any additional. It's
a good idea to check of your credit from the major credit
bureaus regularly. This way if there is a mistake, you
can fix it right away.

To protect yourself from being a victim of identity theft,
you should check with the credit bureau to see if accounts
are listed that you have not opened. You also should check
your bank statements for any unauthorized transactions.
If you find any signs of identity theft, you need to
contact the bank or creditor and the credit bureaus ASAP.
If you can, establish a good credit rating very early.
You will find great benefits in store for you by having
good credit.

Here are some tips for correcting bad credit. You have to
tell honestly, about your financial condition, when you
contact a mortgage professional to improve your credit
rating. A mortgage professional could correct your bad
credit history by finding the root of origin of the bad
credit. If you regularly pay your require payments for a
year your credit rating may improve.

Here are four rules for correcting an excess debt problem.
The first is to change your lifestyle in order to reduce
your expenses so things won't get worse. If you have
luxuries, like extra cars or jewelry sell them. Borrowing
from a relative to pay off several small loans is an
option, though strict repayment of the loan is vital to
maintain family relations. If after you follow these
guidelines your credit rating still could not be repaired,
contact the consumer credit counseling service (cccs).
They may be able to help you in correcting your credit
rating. If they cannot help you, you may choose to declare
bankruptcy. You will need to discover which type chapter 7
or 13 will fit your situation the best. Although this step
should never be taken lightly.

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