Monday, December 18, 2006

Things You Should Know When Applying for a Credit Card

When you apply for a credit card, the lender does a credit check to how
risky the extension of credit is going to be.
There has to be a standard of risk that the lender is going to be willing to
accept. Among the things you can count on being checked are your credit
history, income, job history, current debt, how long you've lived in your
residence, whether you own your own home, how many times you've applied for
credit, and possibly if you have tax liens or judgments filed against you.
All of these factors can be listed on your personal credit report and along
with your credit score (the numerical value of your credit
worthiness) the lender will determine if and how much credit they want to
extend to you.

In today's world, there is a credit card available for just about everybody.
You are going to find yourself pummeled with credit card offers at some
point or other. This is especially true for students. This is where
patience, research, and common sense should come into play. Never choose the
first credit card offer that comes across the table. Set a standard by what
you're willing to allow yourself to be charged in interest. After all, this
is money that will be coming out of your pocket. This means getting in the
habit of reading the fine print of the offer. Some companies offer low to
zero interest but this usually for a set period of time from one month to
one year. Read the fine print so you don't wind up with a zero interest
credit card that suddenly charges you 18% interest.

It's also very important to note that if you apply for too many cards at the
same time, this can put a negative light on your credit report. Each lender
that checks your credit generates a line on your credit report called an
inquiry.
You will end up getting rejections if you apply for card after card.

If you have no credit or a bad credit rating, the best card to apply for is
the secured credit card. Getting this card and making your payments on time
signals that you're a good money manager and responsible with your financial
matters.
This is a great way to establish credit or begin rebuilding your credit.
More often than not, once you've established that you're a good credit risk,
you might be given the option of an unsecured credit card with a much higher
spending balance.

Knowledge is the key and understanding the credit game will save you a lot
of time and money over the long period.
Remember, that many people are in debt because they have a good number of
credit cards with high balances. One personal financial disaster can leave
you seriously in debt. Once you get your credit card, use it wisely and
never use the credit card to pay for anything you can write a check for.
Remember that legitimate credit card companies are not going to ask you for
money up front. Never apply for credit cards you don't need.

Use these tips to understand the application process and use your credit
wisely.


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Liz Roberts is a loan consultant with NewHorizon Finance and has been
providing consumers and business owners with financing since 1989. Bad
Credit? Join our mailing list for tips on building and repairing your credit
yourself without hiring a credit repair. Vist our site for a list of bad
credit credit cards http://www.newhorizon.org/Info/unsecured.htm

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