Once in a while we get into situations where we have to borrow in order to meet some pertinent expenses.
The introduction of credit cards made it extremely easy to borrow money provided one had the ability to pay.
Consumers need credit from time to time to purchase household items and consumables.
Despite some of the risks that have been associated with credit cards, a smart person can use it artfully to meet their everyday needs.
At the heart of an effective consumer credit is the credit report and credit score.
In actual fact, the credit report, when accompanied by a credit score, is the most important personal information that is reviewed when applying for a loan.
The credit score is derived from your credit report.
The credit report is basically a history of what you've done with credit in the past, a listing of late payments that goes back to seven years and your financial position today.
All the information in your report is then used to generate your credit score.
The credit score is the most important determining data on how much credit you can get.
You will be considered a low-end borrower if you have a score of below 620 and a high-end borrower if you have a score of over 700.
Such a high score will allow you to borrow just about anything that your paycheck can support.
There are three main credit reporting agencies in the United States; Experian, Equifax and Trans Union.
The main function of these credit bureaus is to collect data from creditors and public records and generate an accurate report card on you each time that someone requests your credit report.
The credit bureaus are not government agencies as some people might believe.
In fact, they usually have to settle it out with the government most of the times because of the intense regulation by the Federal Trade Commission.
The credit bureaus act as a check on serial defaulters who may want to hop from bank to bank borrowing money.
A credit card charge-off does not mean that your debt has been cancelled by the creditor.
You will still be responsible for paying off the debt incurred on your credit card.
However; you will not be able to use your credit card to make purchases.
When your account is charged-off, it means that your debt has been declared as a loss for the company.
This simply means that the credit card company has incurred a bad debt.
However, you won't get to walk away free simply because the credit card company has acknowledged your debt as a loss to them.
Your creditor will simply add a negative entry to your report and then go ahead to attempt to collect your debt.
This negative entry is known as a charge -off.
Your account will be charged -off after 180 days (six months) for the less-than-minimum payments.
A charge-off remains on your credit report for seven years from the date when it was first charged off.
In case you manage to pay the debt, then the status will be changed to 'charge-off paid' or 'charge-off settled'.
This status is better than a normal charge-off but is still undesirable for your credit report.
It is hard to have your credit report status changed before the elapse of seven years but you may choose to negotiate with the creditor to have it removed once you have settled your debt.
The introduction of credit cards made it extremely easy to borrow money provided one had the ability to pay.
Consumers need credit from time to time to purchase household items and consumables.
Despite some of the risks that have been associated with credit cards, a smart person can use it artfully to meet their everyday needs.
At the heart of an effective consumer credit is the credit report and credit score.
In actual fact, the credit report, when accompanied by a credit score, is the most important personal information that is reviewed when applying for a loan.
The credit score is derived from your credit report.
The credit report is basically a history of what you've done with credit in the past, a listing of late payments that goes back to seven years and your financial position today.
All the information in your report is then used to generate your credit score.
The credit score is the most important determining data on how much credit you can get.
You will be considered a low-end borrower if you have a score of below 620 and a high-end borrower if you have a score of over 700.
Such a high score will allow you to borrow just about anything that your paycheck can support.
There are three main credit reporting agencies in the United States; Experian, Equifax and Trans Union.
The main function of these credit bureaus is to collect data from creditors and public records and generate an accurate report card on you each time that someone requests your credit report.
The credit bureaus are not government agencies as some people might believe.
In fact, they usually have to settle it out with the government most of the times because of the intense regulation by the Federal Trade Commission.
The credit bureaus act as a check on serial defaulters who may want to hop from bank to bank borrowing money.
A credit card charge-off does not mean that your debt has been cancelled by the creditor.
You will still be responsible for paying off the debt incurred on your credit card.
However; you will not be able to use your credit card to make purchases.
When your account is charged-off, it means that your debt has been declared as a loss for the company.
This simply means that the credit card company has incurred a bad debt.
However, you won't get to walk away free simply because the credit card company has acknowledged your debt as a loss to them.
Your creditor will simply add a negative entry to your report and then go ahead to attempt to collect your debt.
This negative entry is known as a charge -off.
Your account will be charged -off after 180 days (six months) for the less-than-minimum payments.
A charge-off remains on your credit report for seven years from the date when it was first charged off.
In case you manage to pay the debt, then the status will be changed to 'charge-off paid' or 'charge-off settled'.
This status is better than a normal charge-off but is still undesirable for your credit report.
It is hard to have your credit report status changed before the elapse of seven years but you may choose to negotiate with the creditor to have it removed once you have settled your debt.
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