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What Makes Up Your Credit Score?

Taking charge of your credit scores has never been more crucial than now. The mounting interest rates on mortgages, credit cards and personal loans will only continue to add pressure to the overstretched finances of many people. So here is a little insight into the areas of your credit history.

If you are wondering where your credit score comes from, well, if you own a credit card right now, you would already have a credit score. So, your initial credit score would normally come from the first lender that you got your credit card or personal loan from. Another common misconception among many people is that they only have one credit score. In actual fact, there may be a variety of different credit scores that a lender may employ. Other considerations that may affect your credit score include:

Late payments have become a common occurrence among many people who either does not have the sufficient money or have just forgotten to pay. Either way, late payments for whatever time period, will adversely affect your credit score. So, you should by any means, try to pay your bills promptly as this record will remain in your credit history files for many years to come.

Entering into a joint loan with someone else is most often associated with mortgages, where for example, you may decide to take out a mortgage together with your wife. So, here is the catch; even though you may be only contributing to half of the mortgage repayments, you are still considered to have accepted responsibility for the full amount of the mortgage. Once again, this will affect your credit score and this will show up in your credit history.

Here are a few action plans for you to ponder:

There are currently information providers out there who can sell you a copy of your credit file for a small fee. This may be an effective measure if you want to know where you stand now so that you can start getting your finances right from today.

If you cannot control your spending in a responsible way, you should start considering whether to discontinue some of your credit cards. Credit cards may be convenient in your daily life, but if you have a spending problem, you should limit yourself to only having one credit card. So, if you have three credit cards, which should go first? Well, an obvious choice would be to maintain the card with the lowest interest or those that give you interest free days provided you can actually pay within those free days.

If you have mounting debts on multiple credit cards, one of the best ways to manage your finances would be to get yourself a personal loan that can consolidate your debts. Consolidating your credit card debts into one personal loan is effective because it forces you to repay your loans within a fixed period. However, you should also be careful not to continue spending on your credit cards once you have your debts transferred from your credit cards into your personal loans because this will only make things worse as you may now end up with debts on both your credit cards and personal loans.

Here is a table of the top 10 cheapest personal loans for debt consolidation:

Rank	Company	Product	Minimum Interest Rate	Minimum Amount	Apply
1	Memberfirst Credit Union	Personal Ln Sec by TD	6.8 %	$2,000
2	University Credit Soc	Personal Ln Sec by TD	7.85 %	$1,000
3	Powerstate Credit Union	Personal Loan Fix Sec	7.95 %	$5,000
4	Industries Mutual CU	Personal Loan	8 %	$5,000
5	Heritage Building Soc	Cake & Eat It Loan	8.08 %	$5,000
6	Family First CU	Assign of Savings Loan	8.1 %	$2,000
7	Encompass Credit Union	Personal Loan Sec by TD	8.24 %	$0
8	Orange Credit Union	Personal Ln Sav Sec L77	8.25 %	$2,000
9	Bananacoast Community CU	Personal Loan sec mortgage	8.3 %	$2,500
10	Holiday Coast CU	FTD Secured Loan	8.32 %	$0
Source: www.cannex.com.au 02/11/2007 based on $10,000 amount