Your Personal Credit

Maintaining a good Credit Report is important to get bank loans and to apply for personal loans and credit cards. It is your financial reputation at stake where you can check your Free Credit Score from the link given. Since the credit crunch in 2008, many banks are turn to American Credit Report to assess the financial status of an individual before offering out loans for housing, business or other matters.

Hence, it is important not to max out your credit card and pay on time every month so that there is no bad history of missed payments in order to apply for future cards or housing loans. Banks are quite stringent in this area and they always do a credit report check on an individual to make sure that he is able to pay back the loan given out before even offering him the approved loan. So make sure you pay your credit card bills on time every month to have a clean standing with the financial institutions. Even if you pay your credit card bills late, it will be recorded in your credit report as a means to assess the type of paymaster you are – good or bad.

That's how most of the bankruptcy cases started - from overspending beyond one's income and maxing out credit cards. Many of the bankrupts are youngsters in their twenties who constantly splurge and spend more than what they earn. They chalk up more and more credit card debts until they are unable to pay back! This is a very bad spending habit that should not be inculcated from young. When you are a bankrupt, you will not be able to apply for bank loans, travel overseas or own properties like house or car. And whatever you earn, you have to pay back the banks of your outstanding loans until they are cleared and fully paid up.

I have an acquaintance who is a bankrupt due to fraudulent business dealings and got cheated by his business partners. The problem started when he signed as a guarantor for a huge bank loan amounting to millions of ringgit for the business dealing. Because of being too trusting and naïve with others, he has to now pay back for his mistakes – cannot travel overseas, cannot own a car or a house and whatever he earns, he has to pay back the bank bit by bit. He also cannot take legal action in court as a bankrupt!