5 Critical Facts You Need to Know About Credit

5 Critical Facts You Need to Know About Credit

Credit is the issuing of funds or commodities to another person or company without the borrower having to pay immediately. Since its normal for businesses and individuals to borrow from each other over time, there’s a need for recording and maintaining a financial report to keep the history of the transaction and repayment agreements. These details are put together to form a credit report.

A credit report contains details about the status of your loan activities and your present credit situation. That also has information about the history of your past loans payments. Individuals, as well as companies, may have several credit reports depending on the types of financial transactions they get involved in their dealings. Institutions who give loans to companies and individuals submit that data to credit bureaus who keep the data for records and reference. That financial information helps the loaning companies to decide on whether they should offer you a loan and the amount of interest to charge.

Your Credit Report Might Not Give a True Reflection of Your Credit Status

It is estimated that 25% of borrowers’ credit reports have inaccurate information. It’s crucial that you pay close attention every time you receive your credit report to react immediately to any errors. Report any inaccurate figures you identify immediately to the credit bureaus to avoid losses and negative credit scores. That will help you utilize your finances well and to grow.

As much as credit regulating bodies have the responsibility of keeping accurate records of the borrowers and lender, you have a task of ensuring that your records are indeed a true reflection of your credit status. You can get more information on how you can repair your credit card score from companies such as crediful.

Here are the 5 important things you need to know about a credit report

1. It Is Very Costly When You Miss Payments During Your Credit Repayment Period

You may have to pay a lot of funds during repayment for simply missing a payment or two during your repayment period. Such a situation usually affects the interest rates during the period which might go up and affect your credit score as well. It’s advisable to maintain a higher credit score as that will place you at a better position for credit consideration by lenders. Be very wise while choosing your repayment period as it shouldn’t be strenuous but rather accommodative. That will help you to keep on track and not miss a single repayment.

2. You May Affect Your Credit Score if You Close Your Credit Cards

Do not be in a rush to close down your credit cards thinking it will be to your advantage in terms of cutting down the cost and credit score. According to Forbes closing your credit card may immensely affect your credit score. Usually, the debt you owe a lender versus the total credit on your account determines the value of your credit score. That impacts your score negatively and lowers your chances for future loans.

3. Your Credit Report Is Accessible to All Financial Lending Institutions

Before a lender can issue a loan, they can easily access your credit score. You, therefore, do not have an escape route as your details and record are all accessible to majority lenders. Ensure to be very responsible for paying back every loan you take on time. That will help you to avoid being chased by the debt collectors upon failure. A good example is the IC Systems Inc. among other institutions that are mandated to do so when approached by the lenders to follow on loan defaulters.

Also, lenders may make inquiries and too many of them may lower your credit score.

4. Your Credit Score Has Other Significant Effects to You Apart From the Amount of Interest to Pay

Not meeting the loan repayment agreements such as missing some payments will increase the interest amount. To avoid such scenarios commit yourself to the repayment period so that to can maintain or improve your credit scores. A credit resource center known as Discover attest to the fact that other entities such as landlords, and employers also use your credit score to evaluate your accountability level.

5. How to Remove IC System From Your Credit Report

IC System which is a debt collecting company is among those companies who may come to follow up in case of loan default on behalf of the lenders. However, as a debt collecting agency, IC System Inc. has been reported to have lots of irregularities dealing with customers and below are ways to remove them from your credit report;

• Beware of your rights as a consumer and exercise them accordingly against any harassment.

• Make a written request to ask for an end to unprofessional calls from them through the FCDA.

• If you are wrongly accused, it’s in your mandate to file for a dispute with legal bodies that handle such financial matters.

Finally, the credit lifestyle is the way of life. Therefore, it’s your responsibility to learn as much about credit as possible. Monitoring your credit score helps you in making some lifestyle changes for a better score.