The first step in getting the most out of your credit cards means understanding what your creditors look for. Creditors are those who lend to you, either by a bank or by a credit card company. They are often the hated people by those consumers who are having financial difficulties, low credit score and trouble paying their unsecured credit cards. If you want to stay in good standing with them, first understand what they look for. Here’s a quick guide.
- Can you repay debts? Creditors want to make sure that you are reliable enough to pay your debts off. Thus they investigate into your credit score. If they feel that you don’t have the ability or the willingness to repay debts they probably won’t lend to you! When you apply for credit cards online you will only get positive hear back if you are a reliable consumer.
- Are you planning on repaying the debt? There are many consumers out there who are just in for a free ride. They want to take advantage of the system and get as much as they can. Creditors are going to look at your credit report and credit score to see if you are one of those card holders. They will look for your stability- how long you’ve had a job, if you’ve filed for bankruptcy in the past and whether or not you live within your means. Your character and debt have a lot in common and creditors will examine both when you search for credit cards.
- How much do you have? Creditors will most certainly take a hard look at your financial situation. They will look at your occupation, your income and your savings accounts. When you apply for credit cards they will look at all of your financial resources to determine whether you qualify as a good lender or not.
Not all creditors operate on the same guidelines but they all pretty much follow the above assessment tools to decide how good of a card holder you will be. There are all kinds of good credit cards out there (rewards credit cards, no fee credit cards, lowest APR credit cards, ECT) and they just want to make sure that you are a reliable person before handing you one of them- even if it’s just a fair credit card.
The thing is, different creditors can take a glance at your information, which is the same, and come up with different conclusions just due to what card they are willing to offer you. Creditors who offer credit cards for people with bad credit may be willing to overlook your past history while those offering good credit cards or rewards credit cards may want your credit score to peak over 700! No matter how much a creditor wants to delve into your financial history, there are some things that they are unable to look at. The Equal Credit Opportunity Act helps protect consumers (although it doesn’t state that everyone can get credit). Creditors cannot be biased toward you for any reason outside of your credit score/ history. Here are some things that creditors are unable to do according to the Equal Credit Opportunity Act:
- Creditors can’t tell you not to apply for a loan for any reason or apply for a credit card online. It is solely up to your discretion.
- Creditors can’t close any of your accounts because you reached a certain age (retirement), gender, status or religion.
- Creditors can’t refuse to give you a credit card or loan if you qualify for it. Whatever you qualify for you should be able to get according to the Act.
- Creditors can’t give you different terms from another person with the exact same credit history or score.
When you’re searching for credit cards you’ll have to remember that a creditor cannot discriminate against you when making a loan decision- know your rights!
There are some special considerations however. Age and public assistance are two of the considerations that come up often when creditors and card holders dispute. Here’s why:
Age: Before the Equal Opportunity Act many people who hit retirement complained about getting cut off, if not cut down completely, from the credit and loans that they once enjoyed. Creditors would just see that your base income was gone and just cut you off. Creditors are allowed to ask your age (for categorizing reasons) but they are not allowed to discriminate on the basis of it. Creditors are restricted from certain things such as:
- Denying you credit because you’re not qualified to get credit life insurance or other type of insurance policy through your credit card company. Many credit card searches will yield results.
- Ignoring your retirement income. Retirement income is a huge part of your income, especially once you’ve quit your job and learned how to live off your pension, social security or retirement money.
- Closing your account just because you are a certain age
Public Assistance: The other consideration that comes up quite a bit is public assistance. Public assistance is not something that people can be turned off because of credit. Creditors can’t just cut you off because your main financial assistance is gone and you are being supported through public assistance.
Keeping your credit score in good standing
There are some things that you can do to keep in better standing with your creditors and keep them liking your financial standing. How can you keep your credit score in good standing? Here are three tips to a better future!
- Don’t owe more then you can pay! Living beyond your means is sure to get you in quite a bit of financial troubles so try keeping your standing good- you’ll be glad of it in the end!
- Remember — credit cards work just like a loan that you have to pay back! Credit cards aren’t free money tickets so don’t treat them as such!
Pay your bills on time when they’re due and try to pay them in full! If you want to stay away from interest charges (which can be literally hundreds if you’re not careful!) and have creditors knocking at your door, you will pay your bills on time and in full!
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