The majority of Texas families depend upon credit on a daily basis. Credit is often required to purchase a house and even buy a car. Many lenders want to see a credit history prior to making a lending decision. Individuals will often turn to credit card debt as a way to build a credit history. This strategy can be useful as long as the credit card debt is properly managed.
One of the first things that a lender will look at is an individual’s credit score. This number is composed of total dollars owed, total amount of credit available, credit inquiries and payment history. Each lender has its own set of criteria in making decisions; however, the higher the credit score, the lower the interest typically will be.
One way to maintain a good credit score is to make timely payments on credit accounts. This includes making credit card payments on time. Additionally, lenders will also look at the balance typically carried on each card. A history of high credit card balances may indicate a credit management problem from the lender’s point of view.
Circumstances do not always make it possible for an individual to keep low balances on their credit accounts. Furthermore, given the Texas economy over the past few years, many individuals have struggled with keeping up with some payments. When this becomes a serious issue and there does not appear to be an end in sight, bankruptcy may be the answer to recovering from credit card debt and other credit-related issues.
Source: Tahlequah Daily Press, Building and protecting credit is essential, Sean Rowley, March 21, 2014