Credit Ratings...

Credit can be a wonderful thing or for some of us it borders on evil sometimes.

You really have to know how the system works, or you can end up paying the price.
For instance I have A1, R1 credit which means I pay all my bills on time! yay me so you think that would be enough, I also have a high credit score but there are some little known things that will affect your rating negatively even if you are doing quite well.

CREDIT CHECKS/APPLICATIONS
Everytime a company checks your credit rating it goes down- the reasoning behind this is if you were to say apply for 15 credit cards within the six months they would see that as a "credit grab". Meaning you are credit hungry and may become a risk.
You have to limit how many credit applications in any six month period.

CLOSING ACCOUNTS
Yes, hard to believe but this does affect your rating. You can be fooled here as I was thinking great I found a no fee bank account I'm going to move all my banking over and stop paying monthly fees. Do you want to apply for anything in the next 6 months? well you had better hold off, your credit will be affected negatively. We're left paying banking fees until after we switch our credit card to a lower limit as we need our credit to be in good standing.

DECLINED CREDIT
This can happen to the best of us, in fact it did just last month. I applied for a balance transfer to a lower interest credit card and I was shocked to find out we were denied. The reason- our banker messed up and had to apply for a visa 4 times on our behalf-- the outcome-- never got the right one. We're tired of messing with it and are just going to wait the six months and take our business elsewhere where they have a way better rate anyway. Becareful here companies will let you re-apply within 45 days, but your credit really needs 6 months to rebound.

OVERDUE PAYMENTS
Remember that time last year where work messed up your pay and you missed a few payments (totally not your fault and out of your hands)- probably not as its been resolved a long time ago. Beware this shows on your credit rating for about 2 years. You may need a co-signer and even still in some cases such as a mortgage they may take away the option of 0% down as a penalty. We had such an issue which should be resolved and off the credit bureau by the beginning of July.

BALANCES
Potential creditors will also be looking at your balance-- ie your credit line is for $30k and you're maxed out, your visa $12k and you've got a balance of $11,995.00. While this is where they want you to be once they've got you and you're making regular payments, they don't want to take it on to start with.

MULTIPLE APPLICATIONS
You apply at more than one place for a loan/mortgage this sort of stuff first you could end up hurting your rating and result in a higher interest rate.

Keep all of these things in mind when it comes to credit.