How Do You Get Credit

The basis of getting credit depend on various factors, which can be broken down into three types:
 

• Collateral: The value of things you possess, and whether that value is comparable to the amount you are seeking to borrow.
• Capacity: Determines if your budget can handle an extra loan, and if you are able to make an extra payment after you pay off all your monthly bills.
• Responsibility: This is your track record as to how you have handled your previous financial commitments and debts.

 These are the three things that lenders like to examine before they lend you any amount of funds. Usually, all of these three factors can be determined from your credit report - which is why it is important to have good credit. All lenders like to see that you are a good risk, because you are responsible with paying back what you owe, and that you are true to your signature.

 Before you can begin to improve your credit, it is important that you understand what the sources of a good credit rating are. Here are the key essentials that you need to work on.

KEYS TO A POSITIVE CREDIT:

• JOB: The longer you have worked, the better for you. And if you have been at your present for many, long years, lenders will see this as an indication that your earning potential is very stable, and that you can face long-term commitments.
• CAR OWNERSHIP: Being a car owner will certainly be helpful, whether you own it outright or whether you have financed it. If you fully own your vehicle, then the lender will see this as one less debt in your favor. If you have financed it, then again it is a positive thing, because you have been deemed responsible enough to have been given the opportunity to get a car on a loan.
• BANK ACCOUNTS: If you have a checking and savings account in your own name, it is a good sign of stability. Make sure that your checks never bounce, however. This will reflect badly on you. Control the money you have tightly.
• TELEPHONE: A telephone number in your name is very essential, because it reflects your state of responsibility, and the fact that a lender can reach you at anytime.
• FINANCIAL OBLIGATIONS: Limit the number of lenders you owe money to. The fewer the better.
• HOME: If you have a home, make sure that you keep up the mortgage payments on a regular basis. If you own your home already, it will be good for your credit standing.
• ADDRESS: If you have lived at one place for a very long time, the lender sees this as a sign of stability. If you have been changing places of residence, lenders will see you as a poor risk.

These are the essential items that you need to work on in order to get your credit back in good standing.

However, if despite your hard efforts, you still have a few blemishes remaining on your credit report, you can offset these negative items by piling on positive credit. You can have a good credit rating again with this method within one or two years, even though you declared bankruptcy.

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How To Get Positive Credit