Important info

If you owe a lot on various loans and credit cards, your credit might not be as good as you think it is. If you have sent a payment in late once or twice and that could cause bad marks in your credit history. Managing your debts today is more crucial than ever for financial stability. Since the credit markets are tight, it is important to have a practically spotless credit reports to avoid paying very high interest rates for any new loans. It might even cause you to not be approved for a loan. Your focus now should be on how to clean up credit reports and boost your credit scores.
Before you can learn how to clean up credit, you need to understand the credit ratings system. There are three credit bureaus that are widely used to evaluate the financial stability of consumers. When you apply for a loan or credit card, one or more of the credit bureaus will be used to check on your credit score. Scores can range from 300 to 850. The higher the score, the more likely you will be approved for the loan or credit card. If you have a low credit score you are deemed to be a more risky customer. When your score is low, you might still be approved for a loan, but the terms of your loan will include a high interest rate.
When you want to figure out how to clean up credit reports, look first to your credit cards. The credit bureaus reward consumers who have long credit histories and a substantial amount of available credit. Try to pay more than the minimum required each month. As difficult as it might be, use cash when making purchases to keep from piling on to your credit card debt. When you keep your balances maxed out, credit scores will continue to stay low, even if you are paying the minimum amount on time.
Don't think you can beat the system by taking out new credit cards and transferring balances. You risk taking a ding on your credit score by applying for the new cards. What you will find is that while this tactic gives you more available credit, it actually causes your scores to go down. So, as you are learning how to clean up credit, stick with the debts you currently have. Once you get them under control, you will be in a better place to get favorable terms when you really need to get a loan for a new car or a home purchase.

Just had had your application for a personal loan or credit card declined by your lender? Yikes!
What now?
As part of the investigative process each lender will do a credit check on you to see whether you're a good credit risk. Whilst there are many other factors involved in the loan application assessment process, one of the things the Banks do first up is to get a credit check done.
If there are any issues or red flags on the credit check, your application can be declined quite quickly.
The most common problem that arises is a hidden default. By this I mean a default that you didn't know about. This could occur where, for example, you change addresses. Even if you cancel all your utilities and move house thinking everything has been taken care of, it may not necessarily be the case.
It's not uncommon to discover that there was one final bill to be paid, usually from your phone company, posted to you after you have moved.
If you have not left a forwarding address with them, they cannot contact you and so the bill remains unpaid. If it remains unpaid for three months or more, they will list you on the public record as defaulting on the payment.
You will not find out about this until you make a credit enquiry.
Most banks will take a very dim view of this, and their initial reaction is to decline your application.
You will need to have an extremely good explanation to change the Banks perception, and unless the amount is extremely low, no more than a couple of hundred dollars, this may be difficult.
Most lenders take the view that you are responsible for all of your bills. In the case above, they will claim that it was your responsibility to stay in touch with each of the utility providers to ensure that everything was paid, and that you should also have provided them with your forwarding address.
Even if you pay the bill after you learn of the default, it will remain on your credit record for five years. This is the kind of blot on your copybook that you really can't afford to have.
So the lesson to be learned here is a simple one, take your financial responsibilities seriously, and make sure that you check and double check that you have paid everything on time every time.
If you don't, it may come back to bite you when you least expect it.