Consumer credit is a form of loan extended to ordinary consumers to buy consumer goods. Credit, broadly defined, is the provision of money from one entity to another, where the lender does not expect to be instantly compensated. Instead, the parties agree on payment at a later date, or in periodic installments. Many people in Towson, Maryland deal with 1 form of consumer credit almost every day: credit cards. These small pieces of plastic are one of the largest sources of consumer debt in the United States.
Why can't I Get Credit in Towson, Maryland?
If you're having trouble getting credit in Towson, Maryland the most likely reason is that you have no credit history, or a bad credit score. Credit scores in Towson, Maryland are calculated by private companies known as "credit bureaus." These entities compile all the available information about your finances, look at how much debt you have, if you've paid it back in a timely manner, and other factors, and calculate a numerical score. This number provides possible lenders with a quick assessment of how risky it is to lend money to a person. The exact formulas that these companies employ to create credit scores are trade secrets.
In the U.S., you have a legal right to view your credit report for free, once per year. This is a good chance to perform a financial check-up, and see if there are any errors on your report which need to be corrected. While some third-party companies will give you a free credit report through their website, you should be aware that many of them (without making this clear up-front) will begin charging a monthly fee afterwards, in exchange for continued access. If you just wanted the one free report, you can opt out of this, but you normally have to do so over the phone, and can't do it online.
How Can I Improve My Credit Score in Towson, Maryland?
To improve your credit score, you can do a few fairly simple things. First, you should check your credit report for mistakes, and report them to the credit bureau so they can be corrected. Also, you should show that you are willing to use credit, but able to do so responsibly. For example, using a credit card for a few modest purchases per week in Towson, then paying the entire amount at the end of the month.
Credit reports are usually meant to be used by lenders to determine the risk of a prospective borrower. For this reason, how one handles debt is a major factor in one's credit score. Paying all of your debts in a timely manner is a good way to keep a high credit score.
How Can a Towson, Maryland Lawyer Help?
A good attorney in Towson, Maryland can be very useful in helping you resolve any consumer credit issue, such as bankruptcy, or getting mistakes removed from your report if the credit bureau is being difficult.