Credit Card eZine - News and Articles about Credit Cards

Increase Credit Rating to Make Good Credit Card Deals!

2008-03-07

Financial wealth in the US is closely tied with your credit rating. Once you have a good credit score, you may expect better terms on your loans. In other words, your credit rating may save you thousands of dollars when it comes to buying a car or home. Do you happen to know that the difference in a few score points may cost you dear? Lenders are extremely cautious about borrowers whose credit rating is low. How can you build a solid credit rating?

Actually, there are many ways of increasing your credit score. And you can find lots of them on various web sites. But as a rule, they are all similar. The Fair Isaac Company has created something new for cardholders who would like to establish their scores with non-traditional methods.

How can people establish credit history? The guidelines like pay your bills on time, and never miss the payments sound like common for cardholders, and most credit users simply cannot pay off their credit balances in full. Now that it's getting tough for most US families to control their budget, there should be another approach to this problem.

And Fair Isaac Company has developed a new approach that gives unprecedented access to credit cards and other credit products for those consumers who have been declined by the traditional scoring methods. The so-called Expansion score is based on non-traditional credit score data, like the information about your rent, or utility payments.

Thus, cardholders with no credit can gain access to credit products much faster, as this score uses alternative data sources. That's really convenient for both parties, for lenders and customers who have poor or bad credit rating. It's also a good chance for those consumers who decide to take first steps in their credit life like recent immigrants, young people, or those who get used to operate on the cash basis.

Speaking of lenders, this new system may be rather helpful. We must accept that competition between credit card issuers is still rather fierce. And lenders are also interested in new reliable clients. Let us be honest, it's not so easy to establish credit from the fresh start. The Expansion FICO score, provided by the FICO, is a way-out for those customers who are regarded as high risk when it comes to credit card deals.

The problem is, it's getting really difficult to gain the necessary information. Take for example, the traditional FICO score, it's mostly based on the data from the major credit bureaus. For gathering the alternative bits of information, FICO has launched a web site where you can enter your information into a web file. On this site, your recurring payments like utility, rental, and phone payments are verified.

This way, lenders have got an opportunity to know more about their potential clients and thus expand into credit-undeserved market. It is estimated that about 50 million US customers are unable to get a classic FICO risk score due to some reasons. The Expansion score gives a unique chance to millions of consumers, as well as to lending organizations that now can evaluate the risk of their clients. Time will show whether this idea will be a success.

My advice to everyone who wants to raise credit score is to not miss the payments. That really works!

My choice is student plastics. They are easy to obtain!! but they can be really dangerous in the hands of impulsive shoppers and irresponsible guys.