Some credit mistakes that hurt your credit report

Credit score is the determinator of your financial position and creditworthiness. Lenders use credit scores to know your financial position, thus it is an important element to qualify for a loan. A healthy score will help you to get higher loan with lower interest rate. But always we are not able to maintain a good score because of some reasons. Let's have a quick view over them.

1) The missing payment hurts a great deal over your credit score. Missing payment includes "the frequency of your late payments". If you make your payments late and it is regular then your credit score hurt seriously. So try to make your payments regular with specific time limit. Previous 2 years are very important as it keeps lot of weight over your credit score. The lenders judge these two years to confirm your loan amount because they think it is your normal payment behavior. The severity of your late payment is also an important part in your credit score. Just compare the late payment of 20 days and 90 days. 90 days late payment will certainly hurt you more than of 20 days.

2) If you take debt settlement program then it shows that you paid lower payment of what you owed. And it will show as "deficiency balance" in your credit report. This is really negative information of your credit report. This info. may show in your credit report for 7 years. Lenders may think twice to provide you loan if you have such info in your credit report. So try to pay at least the total amount that you owed, and here you can accept the debt consolidation program than to go for settlement program.

3) The credit cards have a certain limit of utilization. If you over utilize it then your credit score will not be good. Let's take an example: if you have a credit card with a limit of $20,000 and you have utilized $10,000 then you have utilized 50% of your total credit limit. Your credit report will be good if that percentage remains low.

From the above discussion we can say that try to avoid these credit mistakes and build a good credit score in your credit report to utilize a good credit facility when you will need most.

Micro Credit - a new financial trend in the developing countries

Recently we have heard about a topic "Micro credit". Let’s have a small discussion about it. It is a small loan given to the poor people or poor entrepreneurs.

This has been one of the major successes in the developing countries. It can be called a new financial innovation to the poor. The poor people are really benefited by this idea and mostly the implication of it. In the developing countries, the problem that hurts most is unemployment. But this idea can solve a major part of it. Especially the women will be mostly benefited because they will find themselves in a platform from where they can think something better. Finance companies also are more interested to give the loans to the women rather than the men. Because women are much reliable in terms of paying the loans in time.

Credit is very important word for all of us. It has vast uses, either in the terms of micro credit or credit score for individual.