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 Summit, 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 Summit, New Jersey?
The most likely reason as to why a Summit, New Jersey bank won't give you a credit card or loan is that you have poor credit. In Summit, New Jersey, credit reports are prepared by private companies that have access to a great deal of financial information about almost anyone who has a Social Security Number. These companies are called "credit bureaus." They collect relevant information, such as one's credit-to-debt ratio, and past-due payments, and use complex mathematical algorithms to produce a numerical score. Very few people know what these exact formulas are, since they are well-guarded trade secrets.
Under U.S. law, you are legally entitled to one free credit report per year. This allows you to perform a simple financial check-up, to see what's affecting your credit, and to report any incorrect information contained in your report. There are countless websites that provide easy access to this information, but most of them require registration with a credit card. Once you view your free report, they will begin charging you a monthly fee unless you opt out. Some of them make this difficult by requiring that you cancel your membership by phone, rather than letting you do it online.
How Can I Improve My Credit Score in Summit, New Jersey?
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. It will also help to show that you can use credit responsibly. For example, if you have little to no credit history in Summit, and want to rapidly build a good credit score, you can get a credit card, and make a few very small purchases with it every month. Make sure you don't run up a balance that you can't immediately pay off in full, and at the end of each month, pay the whole balance.
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 Summit, New Jersey Lawyer Help?
A good attorney specializing in consumer bankruptcy or other consumer finance issues in Summit, New Jersey can be instrumental in resolving consumer debt concerns. These issues can be complex and frustrating, and an attorney can make the navigation of them much easier.