The Truth About Credit

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Credit can be confusing and tricky. Many claims that people believe about your credit are inaccurate or completely untrue. You can ruin your credit if you don't understand how it works and having bad credit makes it difficult to get loans, buy a home or rent an apartment. Here are a few of the most common myths and the real deal about credit from the Online Trading Academy reviews:

Myth 1: You have to have a credit card to build up credit so you can buy a house. False. This is simply not true. There are other, more responsible ways, of building credit. While credit cards can certainly help, they can and often to make it more difficult to get a home loan.

If you attended school and took out student loans, these loans reflect positively on your credit so long as you continue to pay them on time, and with a much lower interest rate than credit cards they are a safer alternative. You can build credit by simply paying all of your bills on time. Timely payment of bills (including utilities) reflects on positively on your credit score. It may take more time, but it's worth it in the end just to avoid the heavy interest rates on credit cards.

Myth 2: Bankruptcy solves everything. False. In fact bankruptcy can cause more problems, at least in the immediate future. While Bankruptcy allows you to get rid of most of your bills, you'll still have to worry about any student loans because those cannot be clean slated with a bankruptcy.

Bankruptcy also makes it near impossible to get a loan for up to 10 years depending on the type of bankruptcy you file for. You cannot get an FHA loan for at least two years after you file for bankruptcy. While bankruptcy may feel like the only option, consider the negative impact a bankruptcy could have on your credit.

Myth 3: I can always take out a payday loan: FALSE! If there ever was a bigger false, I can't think of it. Payday loans are dangerous and they are the worst option you can choose in regards to getting some extra cash. They are dangerous because most people don't just borrow $100 one time. They borrow $100, plus a fee. And then roll it over; basically extending the time they have to pay it back. Every time you roll it over you are charged a fee. You could end up paying more in fees than what you actually borrowed.

While credit can be confusing, taking a few minutes to make an educated decision can save you hundreds or even thousands of dollars. Being responsible is the only way you can get your financial life in order.

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