Some credit cards require good credit. These cards offer better interest rates and terms for the consumer. But you may not be sure that you qualify for them. How do you know?

The first thing to do is be aware of your general credit history. You should have a general feel for this anyhow. Details such as how often you’ve been late or missed a payment, and other such problems you are probably aware of. If you’ve had a lot of these issues in recent years, your credit may not be up to a good credit standard.

You should also look at how much debt you are carrying relative to your income. If this is out of balance, you will be seen as a greater credit risk, and so your score will be lower.

But it’s always a good idea to know more about your credit. You can get your credit report free from each of the credit bureaus annually, and you should consider taking advantage of this regularly.

There are of course other factors, such as how far back your credit history goes, how often you apply for new credit and other issues.

In general, a score of at least 650 is good. The trick is that the credit bureaus may not always show you your score when you get your free report. This is why you have to have a feel for what it all means before you apply.

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The only bad things about credit cards is that they mean debt and they cost you money. Depending on your interest rate this can be a lot of money. But if you qualify you can pay a lot less than you may be paying right now.

Once you have started to build up a credit history, you really need to look at what you are getting from your current cards. If the rates are high it’s time to reassess what you are getting.

The simplest way to get a low rate on your credit card may well be to call and ask for one. If you’re getting credit card offers in the mail already, use them for comparison of what you could be getting. And if the first person you talk to says they can’t lower your rate, ask for a supervisor. Persistence can pay off big time.

But sometimes you want a new card for one reason or another. Maybe the current credit card issuer you are with is not pleasing you. You need to know which card you are most likely to be approved for at a low rate.

Start out by getting your credit report. You can do this free once every year from each of the big three credit bureaus. Look it over for any problems. Clear them up before applying for anything – this will improve your odds of being accepted with a low APR.

Choose the card you want to apply for carefully. Some low rate credit cards will specify that they are for people with good credit only. If you have problems with your credit report these will probably only cause you to be declined. Being declined for credit is not the healthiest thing for your credit score.

Similarly, you should apply only for one credit card at a time. Odds are you do not need more than one new credit card anyhow. Once again, a lot of inquiries into your account can look bad.

Not all low rate credit cards will demand near-perfect credit. If you have problems with your credit, take a look at the cards for people who have credit problems and see who will still offer a decent rate. But remember that unless your credit is really bad you can probably get a card fairly easily, even without focusing on your problems.

Much as you may feel the need to have a credit card, it is not something you should rush into too quickly. The smarter you can be with your credit the easier it will be to have good credit.

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A good credit score is a huge advantage when it comes to borrowing money. It can mean the difference between paying 5-6% interest on a mortgage and paying around 9% on a mortgage. It can have similar or even great impacts on other kinds of loans. It’s worth having good credit.

A the best credit scores are in the 720-850 range, although scores over 700 are still pretty good. Go beneath a score of 560 or so and you are looking at paying a lot more when you owe money.

How Do You Get a Good Credit Score?

Be good with your credit, of course. That’s the simple answer but there’s a bit more to it than just that.

If you have no credit at all, start out by establishing your credit with a card you use monthly and pay off. It will show that you know how to use credit. If you want to buy a home, having some sort of credit history is vital. Just one card is necessary, and avoid paying a fee if at all possible.

If you can’t avoid paying a fee, deal with it for six months to a year, then ask for it to be removed or choose a new card that won’t charge you a fee. There’s no point in paying a fee any longer than necessary.

The one vital ingredient to having a good credit score is treating your credit right. The first thing you need to do is use it wisely. Most important is to always, always pay your bills on time.

This is not just your credit card bills, although these may be the most important, along with any other loans you may have. Any company that loans you money is probably the most likely to be reporting to the credit bureaus, after all. But if they find out that you have been late on any other bill, most credit card companies reserve the right to increase your interest rate.

You also should do everything you can to keep your debt load down. This means try not to use more than 30% or so of your total credit limit available on your cards. Do not max out any of your credit cards.

Go Beyond How You Use Your Credit Cards

There’s one very important step to maintaining a good credit score that all too many people skip. In the past it was no doubt in part because it cost money to do so.

But now it’s free. This would be checking your credit report annually. Everyone has a right to get their credit report for free once a year from each credit bureau. If you want to be sure that your credit is where you think it is, you need to do this.

http://www.annualcreditreport.com/ was created by the three credit bureaus to offer a centralized place for you to ask for your reports. You do not need to ask for all three at the same time, although you can. This is the only authorized site for ordering the free credit reports that you have a right to every year.

Read over your credit report. Note any discrepancies. It is not uncommon to have several. Dispute these as necessary.

Doing this will also help to protect you from identity theft, or at least stop the problems early on. If you become aware of an issue with fraudulent use of your identity early on, there should be fewer issues to fix. It’s well worth the effort.

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Before you start shopping for a home loan or auto loan, there is one very important step you must take. You must check your credit and make sure that your record is as clean and accurate as possible. You need to give yourself time to get this done before you start shopping for loans. And that means starting probably a couple months in advance.

The very first thing you need to do is get your credit report from each of the credit bureaus. You can get this free once a year right now. Each of the companies will have slightly different information on you, so getting all of them is very important.

Check each report for accuracy. They may range from quite accurate to wildly inaccurate. People have been know to find information from completely unrelated, unknown people.

For each individual inaccurate piece, you want to write a letter to the credit bureau that has that information. Include documentation if you have any.

One of the most common mistakes is to have the same account listed two times, with the information differing just slightly. This makes you look like you have more debt than you actually do, which lowers your overall score.

Another is to fail to show when an account has been paid off. Show that the debt is paid off, and you can bring your score up a little.

For each item, the credit company that listed it has 30 days to dispute what you have said about it. If they do not, the item is corrected.

It can also be good to ask companies that you are paying regularly but not showing on your credit report to share their information with the credit bureaus. Most will do this if asked.

All of these steps are things you can do quite legitimately and without paying someone to do it for you.

The challenge, of course, is remembering to do this enough in advance to do you any good. You have to request the credit reports, receive them, find the paperwork that supports any changes you want made, then wait at least 30 days to see what happens. Obviously there is a huge advantage for those who plan ahead.

There is one final way to improve your credit score. Pay down your current debts so that you don’t owe so much. Do not close the credit card accounts you pay off; long established accounts in good standing are beneficial to your credit history, more so if they are still open.

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Did you know you can get your credit report from all three credit bureaus for free? Better yet, that you don’t have to go to the three major bureaus separately to do so?

Take a look at http://www.annualcreditreport.com/. This is the real site to request your credit report from the credit bureaus for free.

Why should you go there rather than directly to the credit bureaus? Because their sites make it difficult to get your free reports. They pitch their paid products heavily and it can be difficult to figure out how to request your free report. This is supposed to be for security reasons, but if you go through the websites, be prepared to deal with their advertising on the way to getting your free report.

You are entitled to a free copy of your credit report once a year. Take advantage of this free service and fight identity theft and get better rates when you apply for credit.

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As I’ve said before in this blog, it’s very important to keep an eye on your credit. The simplest way is to get your free annual credit report from each of the credit bureaus. This will allow you to keep a general eye on how your credit report is doing. But what about when that is not enough? What if you have reason to be concerned?

It’s time to take stronger measures.

Let’s say you just received a notice that your credit information has possibly been obtained by someone. You can request a 90-day alert be put on your credit so that you must be called in order for any credit requests to be put through. This kind of fraud alert is helpful in protecting your credit for the 90 days it is in force, although it does limit your own ability to get quick credit during that period. But if you have reason to be concerned, it is a good place to start. Best of all, you only have to tell one bureau; it will notify the others.

Now, if you know for a fact that your identity has been stolen, and have proof (a police report is sufficient), you can have an alert put on your records for seven years. Same benefits and problems as the 90-day alert. If for any reason you want it removed early, you can cancel it, but you’ll have to prove your identity.

You can also place a freeze on your account if you live in California. Other states may soon have similar measures. This is a rather extreme measure, however, as it means your credit information cannot be reviewed by anyone. But if you are having serious problems with identity theft, it may be worth your while.

Finally, if you don’t feel that getting your free annual reports is sufficient protection, consider paying for a credit monitoring service. There are ones that will monitor all three bureaus for you. You will then be notified if there is a new account or inquiry to your account.

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