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Using credit card is increasing, according to a report published this week by the known credit monitoring company, Experian. More Americans have more cards, and large consumers are only getting heavier. Texas is not doing too badly, though, ranking below the national average for the number of cards per capita, the percentage of those who own more than ten cards, and the percentage of those using fifty percent or more of their credit limits.
Residents of Texas had an average of 3.3 cards each, and just under eleven percent owned ten or more. Forty-four percent in the study had more than two cards, and 12.9% were using half or more of your available credit. That's pretty good, considering that the average American has four cards, ten percent have at least ten of them, and fourteen percent use fifty percent or more of their credit limits. New Hampshire, ranked as the higher for the average number of cards (5.3), the number of those with two or more cards (63.4%), and the percentage of those with ten or most of them (20.3%).
Experian Study was conducted randomly pulling 3.2 of its 215 million credit files. Each state was given its own statistics, and be part of the national average. Credit scores were also analyzed using Experian's own "PLUS" system, although there are many systems in use – including the most popular, FICO, which was created by Fair Isaac. Credit scores, once analyzed, are used by lenders to deny or approve credit and to determine interest rates.
Twenty to thirty factors the credit score, however – not only the use of credit cards. These can include the total debt burden, the type of debt, payment history, lines of credit and bankruptcies, including those submitted by medical bills. New England, for example, heavier users of credit in the nation, but scores of residents are also, on average, higher. The main problems with credit cards come with their misuse. The card balances exceed sixty-five percent of their limits and have poor payment histories and negative. Any carrying debt from month to month is also a bad sign, according to Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School and co-author of the fragile middle class: Americans in debt. This means that the owner does not live on their income, she says.
"Generally, the higher the utilization, the lower the (credit) Score. The New England, however, "is paying your bills on time, so your credit score are not suffering," said Pete Bolin, senior analyst at Experian.
Despite general credit assessment of the state's fine for now, health care crisis can leave residents of Dallas, Houston, Austin and other cities and towns throughout Texas particularly vulnerable to credit ruined by unpaid medical bills, as twenty-five percent of its population lives without health insurance, including twenty-seven percent of young adults. Credit reports do not deal with medical bills so unlike any other debt you owe, as evidenced by the fact that half of all bankruptcies in the U.S. submitted due to illness and medical bills, another study from Harvard. Thirty-eight percent of those who have filed for these reasons lost their health insurance at some point in their medical difficulties, many like result of employer coverage to retract.
Credit cards are enough for concern, especially for those who carry high balances. The office Federal Comptroller of the Currency is pressuring banks to cardholders double minimum payment of four per cent, to eliminate high-borrowers risk. Many are protesting the measure, forcing more Americans to file for bankruptcy, after all, is not going to solve the problems in the housing market, or the tendency to credit mismanagement.
Robert D. Manning, author of Credit Card Nation and director of the Center for Financial Services at Rochester Institute of Technology New York, believes that the current situation is partly the result of an aggressive and highly profitable industry of credit cards, however – not only cardholders credit. People with poor credit are forced into obtaining several credit cards with low limits and high fees to get what they want, he says.
Huge penalties and astronomical interest rates imposed for late payments do not help the situation well, and when payments are overwhelming, credit ratings only worse. When the credit ratings go down, so does the number of people who qualify for large loans, and therefore, the housing market – The decline of that is making big news in the afternoon. The best thing to do now? Keep your credit card if mobile while maintaining good results if not is. Bolin suggests the following:
(1) Calculate your next move. Before closing credit cards, for example, to ascertain the effect on the balance of its ratio limit.
(2) Vary the types of loans they receive. These include cars loans, mortgages, loans installment, lines of credit, credit cards and student loans. This shows creditors that the debt can handle different types of situations.
(3) Make payments on time! Never mind the debt or type, without timely payments, your credit is murdered.
(4) Limit the use of available credit sixty-five percent or less. If you can pay your debts each month, do it. The lower the balance, the better. Zero, of course, is best.
Be aware problems that affect your credit score and how that credit may be affected by their health coverage is an important aspect of maintaining control of their life. How do you take care of yourself no doubt affect you as you age, and eventually your wallet, too.
About the Author:
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com
Article Source: ArticlesBase.com – Texas Ranks Above Average on National Credit Scores
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