Q Securing financial credit is difficult today. Are there guidelines to follow when applying for credit, or methods to improve my credit rating?
A Credit can be a strong financial tool to help consumers and small business owners manage their money. Managing credit requires a solid understanding of some key credit “Rules of the Road” – the agreements based on trust that are being entered into, a healthy dose of personal responsibility and establishing patterns that will keep credit users in good standing with their creditors.
Debtors benefit when they have a clear understanding of one or more of these rules. At the same time, the credit industry has undergone some substantive changes, which will have a direct impact on how credit decisions will be made by the issuers as well as how borrowers can manage their credit lines effectively.
Most credit users understand the need to manage their loans effectively, but they are not a “one size fits all” group. The needs and perspectives of credit users differ based on their level of experience with credit, how large their outstanding balances are, and whether they are a consumer versus a small business owner.
While many reputable organizations have published guidelines; no one has segmented the market based on the needs and perspectives of the end user, and published customized guidelines for different kinds of credit users.
April was financial literacy month and BBB partnered with Capital One Financial Corp., using its “Managing Credit – Made Simpler,” to guide credit users based on their specific needs and perspectives. Each of three customized versions give borrowers strategies and guidelines to take charge of their situations. It offers targeted advice for:
1. Consumers interested in securing their first credit card or managing a personal credit line for the first time.
2. Cardholders who recognize they need long-term guidance on managing their credit efficiently.
3. Cardholders who face mounting bills and need advice on how to pay down high balances efficiently.
Credit users can self-select the version that fits them best: “new to credit,” “balancing act,” “overwhelming obligations.” Topics also include strategies on how to improve your credit score, reputable resources to get help now, five ways to find more cash and a set of fraud prevention guidelines.
These materials are accessible for free at www.bbb.org/credit-management/.
Get answers to your questions each Friday from Jim Winsett, president and CEO of the Better Business Bureau Inc., which serves Southeast Tennessee and Northwest Georgia. Submit questions to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at jvass@timesfreepress.com.