I will say most of the people that are reading these kinds of articles, have way too less credit instead of having too much credit. (Reading these kinds of articles means you are a very resposible person care about your credit history, credit score.)
What is too much credit? 50k? 100k? 200k?
We are talking about unsecured ones, credit card or credit line, not home equity loans or things like that.
The thumb up rule is, get AS MUCH AS YOU CAN. BUT, only get the ones that has good rate and term.
A big total credit room and long credit history will show the lender that, you are a VERY responsible person.
Here is how they read you: a person have big credit room, for a long time, and NEVER abuse it, yet.
So, lender will see you as a very low risk case, and be very willing to take your business.
Some background info, I know some people have 100k, 200k unsecured credit room. They don't have much asset or supre high salary. Just normal guys like you and me.
Thursday, March 15, 2007
Monday, March 12, 2007
Summary of some misunderstanding about credit
There are lots of articles out there talking about credit and credit score.
Most of them are helpful and basic.
Several misunderstanding I noticed that very common in the articles. Bellow is a list of them, and why they are not correct.
1. Don't apply for too much credit. THAT DEPENDS.
I will say most of the people that are reading these kinds of articles, have way too less credit instead of having too much credit. (Reading these kinds of articles means you are a very resposible person care about your credit history, credit score.)
What is too much credit? 50k? 100k? 200k?
We are talking about unsecured ones, credit card or credit line, not home equity loans or things like that.
The thumb up rule is, get AS MUCH AS YOU CAN. BUT, only get the ones that has good rate and term.
A big total credit room and long credit history will show the lender that, you are a VERY responsible person.
Here is how they read you: a person have big credit room, for a long time, and NEVER abuse it, yet.
So, lender will see you as a very low risk case, and be very willing to take your business.
Some background info, I know some people have 100k, 200k unsecured credit room. They don't have much asset or supre high salary. Just normal guys like you and me.
2. Don't get very high credit limit card. THAT DEPENDS.
Most of the article out there claim that this will expose you too much for credit theft, or too much total credit room will hurt your credit score.
Actually, the fact is, most cards has theft protection, so it is the bank not you taking the credit theft risk.
AND, do you know how bank/institution decide what credit limit to give you when you apply your next card?
One major factor is, your average credit limit on all your previse cards.
Another important reason to get high limit credit card: your debt/credit limit ratio is very import when credit bureaus calculate your credit score. High credit limit means low ratio, and that will give you better credit score.
So, get high credit limit card, or ask your card issurer to increase you credit limit every half year.
3. Only get the credit you need. THAT DEPENDS.
The truth is, if you only have the credit you need for now, in your raining day, you will have hard time to get more credit.
So, the better way is, get the credit you need FOR YOUR RAINING DAY, instead of just for now.
It is way easier to get credit whey you don't need it.
There will be more tips coming up.
Harry
Most of them are helpful and basic.
Several misunderstanding I noticed that very common in the articles. Bellow is a list of them, and why they are not correct.
1. Don't apply for too much credit. THAT DEPENDS.
I will say most of the people that are reading these kinds of articles, have way too less credit instead of having too much credit. (Reading these kinds of articles means you are a very resposible person care about your credit history, credit score.)
What is too much credit? 50k? 100k? 200k?
We are talking about unsecured ones, credit card or credit line, not home equity loans or things like that.
The thumb up rule is, get AS MUCH AS YOU CAN. BUT, only get the ones that has good rate and term.
A big total credit room and long credit history will show the lender that, you are a VERY responsible person.
Here is how they read you: a person have big credit room, for a long time, and NEVER abuse it, yet.
So, lender will see you as a very low risk case, and be very willing to take your business.
Some background info, I know some people have 100k, 200k unsecured credit room. They don't have much asset or supre high salary. Just normal guys like you and me.
2. Don't get very high credit limit card. THAT DEPENDS.
Most of the article out there claim that this will expose you too much for credit theft, or too much total credit room will hurt your credit score.
Actually, the fact is, most cards has theft protection, so it is the bank not you taking the credit theft risk.
AND, do you know how bank/institution decide what credit limit to give you when you apply your next card?
One major factor is, your average credit limit on all your previse cards.
Another important reason to get high limit credit card: your debt/credit limit ratio is very import when credit bureaus calculate your credit score. High credit limit means low ratio, and that will give you better credit score.
So, get high credit limit card, or ask your card issurer to increase you credit limit every half year.
3. Only get the credit you need. THAT DEPENDS.
The truth is, if you only have the credit you need for now, in your raining day, you will have hard time to get more credit.
So, the better way is, get the credit you need FOR YOUR RAINING DAY, instead of just for now.
It is way easier to get credit whey you don't need it.
There will be more tips coming up.
Harry
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