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Tending Your Financial Garden

An Introduction to Establishing and Maintaining Good Credit

Did you know that wherever you go, whatever you do, you leave an invisible trail behind you? Go to the mall, the grocery, a concert... apply for insurance or loan of any kind, do any banking at all, have any dealings with the law, even a ticket...and the evidence follows you for the rest of your life.

It's called a credit report. And you'd better believe it's important.

These days, you can't get anywhere without a good cerdit history. You need a good credit score for the most basic things in life: renting an apartment, applying for a loan, buying anything and everything on credit, not to mention obtaining that all-important plastic passport to the American way: the credit card.

If you are a student, or someone just beginning to immerse yourself into the wonderful world of credit, you should start a lifetime regimen of good creit maintenance right now. Check your credit frequently.

It's interesting to see records of whoever is looking into your credit history, and it's essential to maintain a good credit rating number. But you should also check your credit in order to make sure you have not been the unwitting victim of the age-old scam of identity theft, now running rampant in our computer-vulnerable age.

Identity Theft

Anyone who uses another person's identifying numbers—Social Security, phone, birthdate, credit card and bank numbers, etc.—is committing the crime of identity theft. Armed with this information, these incorrigible professional thieves can take out loans, buy cars, computers and other easily resold items on your credit card or one they obtain from your identification. Idenity thieves can even open a new checking account and write checks on it! The smart way to maneuver through the modern money maze is to protect yourself with information, by checking your credit on a regular basis.

Bugs in your Financial Garden?

It's like they say; you can't save the rose bushes unless you know what those white crawly things are! It's exactly the same with keeping your body healthy, and the same with keeping your credit healthy.

What if you discover you have insufficient or bad credit? Or even no credit file? Checking your credit rating may arm you with important ammunition to fight back. Perhaps you have other credit transactions that do not appear on your credit report. Transactions that would improve your credit if they were included. You can petition those companies to send in your credit information, and raise your rating. You can get errors removed by using a dispute letter.

The point is, don't just sit there... get out the DDT!

With a great credit rating, your life will be so much smoother. That's why it's something that people who know about personal finances do everything they can to arrange it. A couple of generations ago, cash money transactions were considered the most honorable manner to buy, with personal checks being used for the high-ticket purchases. Plastic was the last resort. These days, if you use your credit card(s) wisely, you are building a personal financial profile that shows the people you do business with they can trust you. A healthy, active credit rating is a sure sign of someone who knows how to manage his or her money.

A better credit rating means lower monthly payments on anything you buy on credit or any loans you take out. If you possess an excellent credit report you can even find any number of credit card companies who will happily grant you a zero percent credit card!

What's a Good Credit Score, Anyway?

Learn more about Fica Credit Score

It's hard to figure out what exactly is a good or a poor credit score. The best credit ratings are 770 points and up. Freddie Mac, for example, considers anything above 770 an "A plus." A FICO score of over 750 will get you an "excellent" rating from Lending Tree, while Fannie Mae says a 740 is excellent. CBS reports that if your Fyco Score is 720 or more, you have no worries at all, since that number is in the same level category as an 800. Fair Isaac has declared that anything over 700 is "golden." Even a person with a credit rating of 650 or better is considered a prime borrower, as long as there are no records of late payments on their record. Check out What is a Credit Score for more information.

Do yourself and your future a favor. Check your credit report and score on a regular basis, and maintain its health they way you would tend the garden in your back yard. It's not only worth it, these days, it's necessary!