Alarm Bells to Credit Providers

Alarm Bells to Credit Providers

Alarm bells to credit providers

Old fire alarm bells, Belfast (2) (Photo credit: Wikipedia

Most lenders periodically review the accounts of those creditors they already have.  What do they look for?

Here are Some Alarm Bells to Credit Providers

  • Multiplying lines of credit.  Nothing signals desperation more than a sudden surge of applications for more credit.  File this under self explanatory.  This is the first of the alarm bells to credit providers.
  • A lot of inquiries.  A sudden need for a lot of credit may signal someone who sees trouble in their future.
  • Cash advances.  You really need the cash or you wouldn’t be using a credit card to do this. There are hefty fees for using this feature from both the lender and the bank you use.  The interest rate for cash advances is always considerably higher than it is for normal charges.  Those who do this on more than a rare occasion do so only because they are in trouble.  Many credit card issuers ask new applicants if they have made any cash advances in the last 6 months.
  • .Minimum payments month after month.  Of course you should always make at least your minimum payment on time.  But if the minimum payment is all you can come up with for a long stretch of time you’re signaling trouble.  TIP:  If you are in a squeeze try to make at least slightly more than the minimum payment.  Even an extra $10.00 takes you out of the category of those who make only the minimum payment.
  • Payday loans.  Payday loans are the last resort of the truly desperate.  Proponents argue that with the high fees banks charge to cover overdrafts these loans are sometimes a necessary evil. They are one of the critical alarm bells to credit providers. The pay day providers vary widely as to whether or not they do an actual credit check.  If you absolutely must go this route check first on whether the credit check is done.  Any credit check will be a hard inquiry.  This causes a small drop in your score with the credit reporting agency they use for 1 year.  You don’t want a record of a pay day loan showing up there.  You don’t want their name on your bank statements either.  Auto title loans are just as bad.

Think long and hard before co-signing for another person for anything.  This counts against your credit score as if it were your own.  It has also been known to place an intolerable strain on friendships and family relations.  I know refusing to co-sign places a strain too.  Refusing to co-sign is the lesser of two evils.

Don’t you be the one to ring the alarm bells to credit providers

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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