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Taking Good Care Of Your Credit Report

Most people tremble in fear at the mention of a credit report, simply because so many people are dealing with creditors and debt that are dragging their credit scores down. Most people jump into the idea of owning credit cards and taking out loans before they have taken the time to think about their credit report, and how it will be positively or negatively affected by their actions. Everything that you do with your credit cards affects your credit report, and your credit report has a strong impact on your entire life, including whether or not you can take out a loan, buy a house, buy a car, or even get a job in some circumstances.

To have the best influence on your credit report and have your next one paint a happy picture of your financial standing, you should first know exactly how credit reports work. Every time you apply for credit, whether a credit card or a loan, this affects your credit report; if you are approved or denied, this will be written on your report. Your report also changes each time that a lender or a credit card company reports your payment history to the three credit reporting bureaus.

If you miss a payment, for instance, your credit card company or lender will report this to the credit reporting agencies and this will show up in your credit report. This also happens when you make your payments on time; which should be a powerful incentive to always make your payment sin a timely fashion. Your credit report is affected by whether you make the minimum payments or always pay off your credit card in full.

As long as you follow a couple of common sense rules, there is no reason you can't get a credit card or take out a loan; just keep the following in mind before you do so:

- Be sure to find out how this will affect your credit report. If there is something in the terms and conditions which you do not understand - interest rate, late payment rules, defaults and other important things about being a cardholder, you might want to think twice about doing anything which could affect your credit score negatively. Having a credit card means having to be very responsible.

- Before you take out a loan or a credit card, make sure that you are financially stable enough to handle the payments. While it may seem easy to take a loan out when you are hurting financially, what will you do when the first payment is due a month later? If you cannot afford the payments reasonably well, you should not be requesting the money.

- Remember that loans and credit cards all have different terms and conditions, as well as different interest rates. If you intend to apply for a credit card or take out a loan, be sure to shop around for one whose terms fit into your budget. Don't apply for the first credit card that comes along; be open for the best opportunity. Each card differs and some of the credit card companies have different interest rates and conditions for the same cards depending on various factors. If you want a credit card which meets your needs, you have to shop around.

Steven J. Talrechi has been writing about credit and credit practices for over a decade. He specializes in assiting others with second chance banking and obtaining a checking account when they have been turned down by banks.