Lesson 1, Topic 1
In Progress

1.1. Review credit grantor portfolio

ryanrori January 23, 2021

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Credit grantor

A credit grantor is an individual or company that lends money or allows the use of a valuable property and accepts the risk involved in the transaction. Credit grantors rely on credit reports to make lending decisions about a borrower’s ability to repay a loan or honor the agreement.

Tips on getting an Excellent Credit Rating

Very good credit is considered any score over 700, and excellent credit is a score of 740. To obtain excellent credit, it is necessary to establish reliable income, consistent payment patterns and low debt ratios. While the process takes time and can be challenging, it is possible even for people with very damaged credit to achieve an excellent credit rating.

Establishing Excellent Credit

Any credit grantor will look at several basic requirements when making a decision to grant or deny credit. Especially since the Patriot Act was passed, a verifiable street address is necessary to obtain credit. Creditors also want to see a phone number listed to the potential customer and a bank account in good standing, preferably a checking account.

It is also essential to ensure that your credit report is accurate. Dispute inaccurate or outdated derogatory items. If the dispute is settled in your favor, make sure that the credit reporting bureau removes the derogatory item from your account. On the other hand, if favorable items are left off, ask the credit bureau to add them. In most cases, the request will be granted, although the credit bureau may charge a fee.

Beyond the basics, there are three major components to excellent credit: reliable income, consistent payments and low debt ratios. While it may be easier to establish excellent credit with a large income, the amount of income is not as important as its consistency and in the way in which the customer handles the money he has. A relatively low-paid worker with a 20-year history of steady employment has a substantial head start on establishing excellent credit. Living in the same place for several years is also a sign of stability that boosts credit scores.

Your payment history makes up a significant portion of your credit score. Do whatever you can to avoid late or missing payments. Additionally, try to pay more than the minimum monthly payment. If you do fall behind, attempt to resolve the situation as quickly as possible. Once you do catch up on payments or pay off a delinquent debt, be sure your current status is added to your credit report.

It’s even better not to carry a balance at all. However, you should not allow your credit to become dormant. Especially for long-standing accounts, users should make periodic small charges to ensure that the credit card company continues to report the account to the credit bureau.

With the economic crisis that began in 2007, credit card companies began cutting credit limits even for customers with good credit and consistent payment histories. If you have a good credit history, you can request the credit grantor to restore your former limit. If your request is denied, move your credit. This option is not as readily available to those with marginal or bad credit, however.

Keeping as much available unused credit as possible is important to establishing excellent credit. Debt-to-income ratio is another important aspect of a credit score. In addition, having too much credit in relationship to income can be detrimental to a credit score, even if the accounts are kept current. In this case, increasing income or closing some accounts may be in order. However, the oldest accounts should be kept open, provided that the accounts are not maxed out.