Credit, broadly defined, is the provision of money on the assumption that payment for it will come later, or over time. Consumer credit is simply credit extended to individuals in order to buy consumer goods or services. Many people in Paramus, New Jersey deal with 1 form of consumer credit almost every day: credit cards. These little pieces of plastic are one of the largest sources of consumer debt in the United States.
Why can't I Get Credit in Paramus, New Jersey?
The most likely reason as to why a Paramus, New Jersey bank won't give you a credit card or loan is that you have poor credit. In Paramus, New Jersey, credit scores are created by private corporations called "credit bureaus." These companies compile all the available financial information on a person (such as the amount of credit currently available to them, and its ratio to their debt) and use it to calculate a simple numerical score. This number gives would-be lenders an easy way to assess a person's risk as a borrower. It is not known to many individuals exactly how your credit score is calculated, because the formulas used by these companies are closely-guarded 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 usually have to do so over the phone, and can't do it online.
How Can I Improve My Credit Score in Paramus, New Jersey?
The first thing you can do to improve your credit score is to check your report for errors. These companies are not perfect, and sometimes make errors in compiling your credit report, including extremely serious ones. If you find an error, you should report it to the credit bureau, and they will usually fix it. It's also good to show that you can use credit responsibly. For example, someone with no credit history in Paramus may get a credit card, and use it for a few affordable purchases every month, and then pay down the whole balance at the end of the month. This is a good way to quickly obtain a good credit score.
Credit reports are meant to be a tool for lenders to easily determine a person's risk as a borrower. Therefore, showing that you are able to pay back your debts on time can be extremely effective in creating a good credit score.
How Can a Paramus, New Jersey Lawyer Help?
An experienced Paramus, New Jersey Lawyer specializing in consumer financial issues can help if you believe that your credit rating reflects false information, or if you think a third party has maliciously damaged it.