What is a Good Credit Score?
This is a fair question and one that everyone would like to know. Unfortunately there is no single answer to that question. Of course the higher your score is the better but you have to realize that each lender makes their own cut off point depending on how much of a risk they are willing to take. Many lenders have a cut off point of a FICO score of 720 to give the consumer their best rates. Many have a cut off point of 620 for giving any loan. Usually anything under 620 can use some improvement, 650 can be seen as decent, once you hit 700 you can say you have *good* credit, 720 would be excellent and anything over that is even more excellent. Having a credit score of 700 will usually qualify you for most things you apply for, having a credit score of 720 will almost guarantee you to get what you want. Many people thing that that a credit score can be raised overnight but as with anything else it takes time. Just make your payments on time and your score will rise slowly but surely. Making more than your minimum payment will help it to grow faster. Another thing that will make it grow faster is not maxing out your accounts. Try to keep your balance on your credit card accounts at about 30% of your credit limit, going over this can stall your credit score from growing at the pace you may want it to grow. So if your credit score is 650 be happy, work your way from there and improve it, time is your best friend to make your score grow, of course and making timely payments.
What Are Credit Card Fees?
Credit card companies are in the business of making money. It really is that simple. They earn their money through two principle methods. One is through the finance charges that they levy when you make purchases on the card, and the
other method is through the use of credit card fees. It should be understood that these are not one in the same. They are different, and knowing more about the fees that a company charges (or does not charge) its customers can help you save money.
Credit card fees can (and do) vary from one company to the next. There is no set schedule for credit card fees. This makes it very important for consumers to read carefully the literature that is supplied by the company in order to know
exactly what you will be billed for during the course of your association with the company.
Some of the more common types of fees include:
Annual Fees: Many credit card companies are moving away from this particular fee, but there are still some that use it. The annual fee is generally just a yearly fee, billed monthly, for having the card. Whenever possible, you should
avoid credit card companies that charge an annual fee. You get nothing but the card in return for this payment.
Set Up Fee: This, too, is becoming less popular with most companies, meaning they do not charge it any longer. Again, however, there may be some companies that do charge a fee for setting up your account. Read carefully exactly what the
fee is and the explanation that the company offers for charging this fee. You may find that working with another company that does not charge this initial fee is a good idea.
Cash Advance Fee: This is one fee that you will find with many credit card companies. This fee is applied to your account if you take a cash advance from the card. It can be a flat fee or it can be a percentage of the cash amount. Keep
in mind that this is in addition to any finance charge the company will levy as well.
Late Payment Fee: This fee is assessed when you make a late payment. The trigger date for this fee is the "due date" as it is stated on the bill.
Transfer Balance Fee: Not all companies will charge this fee, but some will. This fee is levied when you transfer a balance from one credit card to another one.
Exceeding the Limit Fee: This fee may be assessed should you exceed your credit limit. Modern technology has made it harder to exceed your limit in that online approval or disapproval from the company is immediate.
Increase Limit Fee: Some companies will charge a small fee when you want to increase your credit limit. Not all do, but some will want to charge this fee.
Bad Check Fee: As with most companies, if you send a bad check the credit card company will usually want to charge for this.
These are just some of the possible fees that a credit card company may charge to your account. It is important to read their literature carefully in order to know what they will charge for and what they do not charge for.
other method is through the use of credit card fees. It should be understood that these are not one in the same. They are different, and knowing more about the fees that a company charges (or does not charge) its customers can help you save money.
Credit card fees can (and do) vary from one company to the next. There is no set schedule for credit card fees. This makes it very important for consumers to read carefully the literature that is supplied by the company in order to know
exactly what you will be billed for during the course of your association with the company.
Some of the more common types of fees include:
Annual Fees: Many credit card companies are moving away from this particular fee, but there are still some that use it. The annual fee is generally just a yearly fee, billed monthly, for having the card. Whenever possible, you should
avoid credit card companies that charge an annual fee. You get nothing but the card in return for this payment.
Set Up Fee: This, too, is becoming less popular with most companies, meaning they do not charge it any longer. Again, however, there may be some companies that do charge a fee for setting up your account. Read carefully exactly what the
fee is and the explanation that the company offers for charging this fee. You may find that working with another company that does not charge this initial fee is a good idea.
Cash Advance Fee: This is one fee that you will find with many credit card companies. This fee is applied to your account if you take a cash advance from the card. It can be a flat fee or it can be a percentage of the cash amount. Keep
in mind that this is in addition to any finance charge the company will levy as well.
Late Payment Fee: This fee is assessed when you make a late payment. The trigger date for this fee is the "due date" as it is stated on the bill.
Transfer Balance Fee: Not all companies will charge this fee, but some will. This fee is levied when you transfer a balance from one credit card to another one.
Exceeding the Limit Fee: This fee may be assessed should you exceed your credit limit. Modern technology has made it harder to exceed your limit in that online approval or disapproval from the company is immediate.
Increase Limit Fee: Some companies will charge a small fee when you want to increase your credit limit. Not all do, but some will want to charge this fee.
Bad Check Fee: As with most companies, if you send a bad check the credit card company will usually want to charge for this.
These are just some of the possible fees that a credit card company may charge to your account. It is important to read their literature carefully in order to know what they will charge for and what they do not charge for.
Visa VS Mastercard - Which is Better?
The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines. While Visa can claim to have almost a billion cards issued, MasterCard has over twenty five thousand banks issuing its cards and it is difficult to find any difference in the number of locations worldwide that accept the cards, which is now estimated at over twenty million.
In fact, as far as most consumers are concerned, there is no real difference between the two. They are both very widely accepted in over one hundred and fifty countries and it is very rare to find a location that will accept one but not the other.
However, neither Visa nor MasterCard actually issue any credit cards themselves. They are both simply methods of payment. They rely on banks in various countries to issue credit cards that utilise these payment methods. Therefore, the interest rates, rewards, annual fees, and all other charges are issued by your bank and when you pay your bill you are paying it to the bank or institution that issued your card and not Visa or MasterCard.
How Visa and MasterCard make their money is by charging the retailer for using their payment method. So the truth of the matter is that a Visa issued by say the Bank of Scotland will have very little to do with a Visa issued by other banks and may in fact by more similar to the Bank of Scotland’s MasterCard.
What this means for the vast majority of customers is that you do not have to overly concern yourself with whether a credit card is MasterCard or Visa. You would be better off concentrating on the interest and other charges on the card, the balance transfer possibilities or their reward scheme. You are very unlikely to ever be effected by the fact that it is one and not the other.
If you prefer, if you are going to have two credit cards, you may decide that you want one of them to be Visa and the other MasterCard, this means that if something drastic were to happen to one company, or if you were in the unlikely position of finding a location that accepts one but not the other, then you would have the option of paying with either.
At the end of the day however, much more depends on the bank that gave you the card, than on the type of card it is.
In fact, as far as most consumers are concerned, there is no real difference between the two. They are both very widely accepted in over one hundred and fifty countries and it is very rare to find a location that will accept one but not the other.
However, neither Visa nor MasterCard actually issue any credit cards themselves. They are both simply methods of payment. They rely on banks in various countries to issue credit cards that utilise these payment methods. Therefore, the interest rates, rewards, annual fees, and all other charges are issued by your bank and when you pay your bill you are paying it to the bank or institution that issued your card and not Visa or MasterCard.
How Visa and MasterCard make their money is by charging the retailer for using their payment method. So the truth of the matter is that a Visa issued by say the Bank of Scotland will have very little to do with a Visa issued by other banks and may in fact by more similar to the Bank of Scotland’s MasterCard.
What this means for the vast majority of customers is that you do not have to overly concern yourself with whether a credit card is MasterCard or Visa. You would be better off concentrating on the interest and other charges on the card, the balance transfer possibilities or their reward scheme. You are very unlikely to ever be effected by the fact that it is one and not the other.
If you prefer, if you are going to have two credit cards, you may decide that you want one of them to be Visa and the other MasterCard, this means that if something drastic were to happen to one company, or if you were in the unlikely position of finding a location that accepts one but not the other, then you would have the option of paying with either.
At the end of the day however, much more depends on the bank that gave you the card, than on the type of card it is.
Should I use a credit repair service?
There are some benefits to using a credit repair company and there are some real disadvantages too. The first thing to think about is why you want to use a credit repair service? Is it because you have bad credit that you want to fix but simply don't know how? If this is true then try reading a bit of information about how to fix bad credit to see if you think this is something you can do.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
Is It Safer To Complete A Visa Credit Card Application Online?
Visa credit card companies send thousands of offers through the mail everyday. Dozens, if not hundreds, of websites are set up to help you compare and apply for Visa credit cards online. For years, many people were hesitant to fill out visa credit card applications online fearing identity theft from computer hackers. With the prevalence in website security now and the increase in identity theft from stolen mail, it has become safer to send your information online than through the postal service. Follows is a discussion of the ways websites have increased security as well as what to do with those application in the mail.
Website Security Better Than Ever
Surf the web and on the majority of e-merchant sites you will see the little closed lock that indicates the security over information on that page. The URL of the pages that start with https:// are also boasting a higher security than the common http:// addresses. Companies go to great lengths to insure the safety of your personal information through Secure Sockets Layer, commonly dubbed SSL, which blocked unauthorized users from seeing sensitive information. Encoding is done to social security numbers, and other personal information to keep it safe from hackers and prying eyes. Everyday, companies come out with new ways to secure the information on your visa credit card application online.
Mail Identity Theft At An All Time High
While websites are doing everything they can to keep you safe, credit card offers through the mail continue to be a major risk to consumer identities. Identity thieves sneak up to your mailbox and take your mail in hopes of obtaining your personal information. Many of these credit card offers are ripe for the picking. All the thief needs to do is call a number or go online and accept the pre-approved card. Occasionally you can even find sensitive information printed in tiny characters on the applications. Although the government and consumer advocate groups are working to pass laws to prevent information from being included with these offers, it's likely to be a long time coming.
The best thing you can do with an application you get in the mail is put it through your shredder. Then go to your computer and fill out a safe and secure visa credit card application online. You get the credit you deserve with the security you need.
Website Security Better Than Ever
Surf the web and on the majority of e-merchant sites you will see the little closed lock that indicates the security over information on that page. The URL of the pages that start with https:// are also boasting a higher security than the common http:// addresses. Companies go to great lengths to insure the safety of your personal information through Secure Sockets Layer, commonly dubbed SSL, which blocked unauthorized users from seeing sensitive information. Encoding is done to social security numbers, and other personal information to keep it safe from hackers and prying eyes. Everyday, companies come out with new ways to secure the information on your visa credit card application online.
Mail Identity Theft At An All Time High
While websites are doing everything they can to keep you safe, credit card offers through the mail continue to be a major risk to consumer identities. Identity thieves sneak up to your mailbox and take your mail in hopes of obtaining your personal information. Many of these credit card offers are ripe for the picking. All the thief needs to do is call a number or go online and accept the pre-approved card. Occasionally you can even find sensitive information printed in tiny characters on the applications. Although the government and consumer advocate groups are working to pass laws to prevent information from being included with these offers, it's likely to be a long time coming.
The best thing you can do with an application you get in the mail is put it through your shredder. Then go to your computer and fill out a safe and secure visa credit card application online. You get the credit you deserve with the security you need.
If I Close Some Credit Card Accounts Will it Hurt my Credit Score?
Many people with high credit scores lots of times find that one of the few marks against them is that they have too many open accounts. So what's one to do to make their credit score even higher? Maybe close some accounts? I could see how this makes sense since they said you have to many open accounts but one must realize that the damage (if you want to call it that) has already been done when you opened all of those accounts. But you can actually hurt your credit score if you close some accounts. Why? Closing credit card accounts can make your credit history look younger than what it is. Your credit score factors in the age of your oldest credit card and the average age of all your credit cards so closing them can lower your credit score, especially your older ones. Also, closing accounts reduces the total available credit to you, making your debt utilization ratio soar. Remember that the FICO formula measures the gap between the credit you use and your total credit limit. The wider the gap, the better. If you all of a sudden lower the gap by closing a few accounts, the gap narrows and that's a bad thing. In reality, closing revolving credit accounts can never help your score, and it might just hurt a little bit.
How Your Credit Score Affects You
If your credit score is high enough you will qualify for a lenders best rates and terms. You will also receive in the mail the best low-rate offers from credit card companies and mortgage lenders who will fight for your business. You also will have great negotiating power if you have a high credit score. Besides getting the best credit cards you'll also get great deals on auto financing, home loans and small business loans. Having a bad credit score of course will get you no where and if you do get someone to offer you credit you can be sure that you will be paying high interest rates and big fees just for the privilege. Having a good credit score not only helps you with loans but it can also determine if you have a roof over your head now and days as landlords now check your credit before renting to you. Sometimes people with great credit scores settle for lousy deals not realizing that they can negotiate better deals so it is very important to know your credit score. Having a great credit score can save you possibly millions in a lifetime. You will pay way less interest, have lower payments on auto loans and home loans and will have more extra money per month to put to other use; entertainment, investments, shopping, etc. You ever wonder why when you have two people in the same financial bracket one seems to be doing fine while the other seems to barely be making it. It all lies in the deals they got, which goes by their credit score.
How To Avoid Credit Card Late Fees
Everyone hates late fees and being late will cost you dearly these days. For some credit cards today, if you are late, you will have to shell out as much as $40 each time. This can put a nice sized hole in your pocket really quick.
Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.
Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.
Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.
While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.
An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.
Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.
Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee because the minimum due has been already been paid.
Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don’t have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.
Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee’s can range from $5 to $20.
Use other express methods. If your bank does not offer a “pay by phone” service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.
Below, I will provide you with some tips and strategies on how to steer clear of those monstrous late fees. This will not only save you a lot of money in the long run, but it will also keep those money-hungry credit card companies, I won’t mention any names, from getting your hard earned money.
Just pay your bill. One of the easiest ways of avoiding a late fee is to just pay your bill each and every month by sending in a check, money order, or other type of payment to your respective credit card issuer. Just make sure you follow the numerous guidelines, which are usually outlined on the back of each credit card bill, on how to send in your payment. These guidelines must be followed precisely if you want to guarantee that your payment will go through on time.
Payment guidelines may include everything from a specific payment address to the time of day by which the payment must be received to be credited that day. Many issuers also stipulate that payments must arrive in the preprinted envelope sent to the customer.
While the Fair Credit Billing Act requires issuers to credit payments the day they are received, each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.
An on-time payment could easily become late during that five-day period, so follow those payment guidelines carefully.
Just skip the payment. One of the more rare types of methods you hear of are Skip-A-Payment services. You can use these services to skip mortgage, credit card, or loan payments. Usually you would need to get in contact with your bank just to see if you even qualify or not. There are also independent companies out there that will allow you to do the same thing, no matter what bank you are a member of. Depending on whose service you use, the fee’s associated with it vary. When you use these types of services make sure you know how much you will be charged then decide if it’s worth it or not.
Pay minimum due immediately. One of the best ways to prevent a late fee from being charged to your account is to pay the minimum due immediately. As soon as you receive your bill, send in the minimum due. This will always insure that your credit card issuer received payment. You can always send in more money later if you decide otherwise. This is a great way to avoid missing a payment because if you forget to send extra money you can guarantee that you won’t be charged a late fee because the minimum due has been already been paid.
Move your due date. Are your credit card bills due at a time of the month when you're running low on cash? Many people have trouble saving money, so when it comes time to paying their credit card bills, they don’t have any cash to do so. One particular solution is to move your due date. Many credit card issuers will allow you to set your own due date to meet your specific needs. If you have trouble saving money, move your due date to a time when you do have money, like as soon as you get your paycheck. If you time your credit card bill to come the same day you get paid, you will always have cash to pay the bill.
Pay by phone. If you are one of those people that wait to the last minute to do everything or if you just forgot to send in your credit card payment early enough, you could always pay by phone. This guarantees that your payment will be on time. Just supply the representative on the other line with your checking account number and your bank routing number, which is printed at the bottom of each check. Usually the routing number is first and the account number is second. A lot of issuers allow you to pay by phone and some will charge you a pretty penny for doing so. Fee’s can range from $5 to $20.
Use other express methods. If your bank does not offer a “pay by phone” service and you need to get your payment to your credit card issuer as soon as possible, I recommend either sending your payment in by express mail or by Western Union. Either one of these services can get your payment to your credit card issuer immediately. These express methods are costly, but it will always most likely be cheaper than any fees associated with being late. Make sure you send your express payment to the proper address. Many issuers have separate payment addresses for express payments. The last thing you want to do is slow the processing of an express payment by sending it to the wrong address.
History of Credit Scoring
The popularity of credit scoring probably began in the late 1970's as most major lenders were using some kind of credit scoring formula. The idea of this credit scoring thing came from an engineer named Bill Flair and a mathematician named Earl Isaac. These two ended up convincing lenders that mathematical formulas could do a better job for them to predict if someone would default or not. With the help of computers, decisions could be made on the spot with this new formula also. This new formula took into account your income, occupation, length at your job, length at your address and what was the longest time that a payment was over due. All these calculations were pretty much invisible to the consumer though and were hardly even understood by most experts in the field. Fair Isaac ended up developing the first major credit bureau based scoring system in the mid 1980's which eventually led to the biggest lending databases - those that are held at the major credit bureaus - Equifax, Experian and Transunion. Instead of basing calculations on any single lenders experience, this type of scoring factored in on the behavior of millions of different borrowers. The system looked for patterns that could indicate if a borrower would default. This system checked the consumers history of paying their bills, how many credit accounts they had open and how much of the available credit they were using. Besides using this system to simply accept or reject an applicant this system even had more advantages. The lenders could accept a high risk applicant if they wanted to and charge them a higher interest rate, which of course is more money for them to make and also they could get peoples scores who met their criteria and send them pre-approved offers, it was a win-win situation for lenders. In the 1990's lenders felt real comfortable about making loans with this credit system and this is the reason that consumer credit absolutely exploded in the 90's.
Between 1990 and 2002 the amount of credit card debt rose from $173 million to $661 billion.
The 90's was also a time when consumers learned that the reason that they may have been rejected a loan was because of a three digit number. When consumers asked for more details about how this scoring system worked they got no answers as Fair Isaac, the leader in the credit scoring world wanted to keep it a secret and said that the consumer would not understand their formula anyways. Fair Isaac actually thought that if their formulas were made public that people would start changing their habits so they can boost their credit scores. We now move ahead to the year 2000, that's when internet lender E-Loan let consumers view their FICO credit scores online. This lated about a month and 25,000 people took advantage of this and also gained lots of knowledge about how the credit scoring system formula worked before E-Loans credit score source was cut off. A few months later Fair Isaac felt the pressure from advocates and gave in. It posted the 22 factors that affect a credit score on its website. After that they partnered with Equifax to provide consumers with their credit scores and reports for a fee. In 2003 congress made a law that gave people the right to see their scores, even though at the time having access to your credit score was a norm.
Between 1990 and 2002 the amount of credit card debt rose from $173 million to $661 billion.
The 90's was also a time when consumers learned that the reason that they may have been rejected a loan was because of a three digit number. When consumers asked for more details about how this scoring system worked they got no answers as Fair Isaac, the leader in the credit scoring world wanted to keep it a secret and said that the consumer would not understand their formula anyways. Fair Isaac actually thought that if their formulas were made public that people would start changing their habits so they can boost their credit scores. We now move ahead to the year 2000, that's when internet lender E-Loan let consumers view their FICO credit scores online. This lated about a month and 25,000 people took advantage of this and also gained lots of knowledge about how the credit scoring system formula worked before E-Loans credit score source was cut off. A few months later Fair Isaac felt the pressure from advocates and gave in. It posted the 22 factors that affect a credit score on its website. After that they partnered with Equifax to provide consumers with their credit scores and reports for a fee. In 2003 congress made a law that gave people the right to see their scores, even though at the time having access to your credit score was a norm.
Get Control of Your Credit Card Debt
Have you found yourself falling into a slump with credit card debt that you are unsure of how to manage it? If so,then you should know that you are really not alone in this feeling. Many people, both young adults and the older generation will fall into credit card debt that they are not quite sure how to deal with.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single
month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single
month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
Fundamentals of a low APR credit card
If a credit card is used in the right way it is a most useful financial tool. The problem is that many don't have the income to be able to afford the burden of high interest rates that come with most offers.
A good solution for those with less disposable income is the low APR credit card. They also work well for anyone who plans on carrying a balance every month.
For those who are not familiar with the term APR means annual percentage rate. It is the percentage you pay yearly on your card. It is converted to a monthly percentage to figure the amount of interest you pay on your balances every month.
An easy way to figure your monthly rate is to take the annual percentage rate and divide it by twelve. Each credit card company must give the customer the APR they will be paying. Each credit card company will have its own terms and conditions.
Because of this it is important for consumers to shop around for the best offer. A consideration one must take into consideration when choosing and offer is some have fixed interest rates while others have variable ones.
Why should you use a credit card with a low APR? The answer to that is that it helps those with a smaller budget. In addition it frees up cash that can be used to pay bills or other needs.
Anyone interested in getting a card is faced with a large number of options to choose from. Most all of these can be found online with each of their benefits listed for the consumer.
Here are some questions one should ask when they are looking for a low interest credit card.
1. It it a variable or fixed rate offer? If it is variable you can expect your monthly payments to fluctuate.
2. What if any other charges or fees does it come with?
3. What are the terms and conditions of the issuing company?
Some companies will also have offers where there is 0 percent interest for a certain period of time. After that time has expired the consumer then has an increased rate. Other offers will have no annual fees.
Those with high balances on their other cards can take advantage of the low APR credit card offers and save money by transferring their balances from their high interest accounts.
Finally these kinds of credit cards can be used to build up your credit score which will help with funding college, purchasing a home and even finding good employment.
Two things you should do before applying though is to assess whether your finances will be able to handle the payments and also find the best deal for your needs.
A good solution for those with less disposable income is the low APR credit card. They also work well for anyone who plans on carrying a balance every month.
For those who are not familiar with the term APR means annual percentage rate. It is the percentage you pay yearly on your card. It is converted to a monthly percentage to figure the amount of interest you pay on your balances every month.
An easy way to figure your monthly rate is to take the annual percentage rate and divide it by twelve. Each credit card company must give the customer the APR they will be paying. Each credit card company will have its own terms and conditions.
Because of this it is important for consumers to shop around for the best offer. A consideration one must take into consideration when choosing and offer is some have fixed interest rates while others have variable ones.
Why should you use a credit card with a low APR? The answer to that is that it helps those with a smaller budget. In addition it frees up cash that can be used to pay bills or other needs.
Anyone interested in getting a card is faced with a large number of options to choose from. Most all of these can be found online with each of their benefits listed for the consumer.
Here are some questions one should ask when they are looking for a low interest credit card.
1. It it a variable or fixed rate offer? If it is variable you can expect your monthly payments to fluctuate.
2. What if any other charges or fees does it come with?
3. What are the terms and conditions of the issuing company?
Some companies will also have offers where there is 0 percent interest for a certain period of time. After that time has expired the consumer then has an increased rate. Other offers will have no annual fees.
Those with high balances on their other cards can take advantage of the low APR credit card offers and save money by transferring their balances from their high interest accounts.
Finally these kinds of credit cards can be used to build up your credit score which will help with funding college, purchasing a home and even finding good employment.
Two things you should do before applying though is to assess whether your finances will be able to handle the payments and also find the best deal for your needs.
What you Should Know About your Free Credit Report
In 2003 Congress passed legislation that allows for every American to get a free look at their credit report once a year. You will run across many Web sites out there that will talk about "free reports."
You will not need to know scores at this point. Here is some basic information about what will negatively put low scores on your record, collections, 30 day late payments, skipping out on rent payments, co-signing for a car loan that goes bad, late payments on student loans, etc.
A young college age person can damage their credit and not even realize it. One 30 day late payment, will give you a derogatory report. If you don't have any credit cards, installment loans for cars, etc., or any creditor that doesn't report to any of the three main credit agencies, it is not likely that you will even have any scores.
Be wary of the "free reports" as the chances are they'll offer you about every type of service under the sun and it will carry a price tag! You could end up with a credit monitoring service that might prove costly and maybe even some other services as well, that may have nothing to do with your credit at all, but there will be a cost.
For my money, if you absolutely think you must have your credit scores, you can get them at www.AnnualCreditReport.com for a charge of under $10.00 but your report will actually be free!
You should know there is only one site authorized by Congress to give you that annual "free report " and it is http://www.AnnualCreditReport.com the toll free number is 1-877-322-8228. You will get a report but there will not be any scores on your report.
Arthur is a Real Estate Broker, Mortgage Broker, with over 28 years of experience in the trenches of the housing industry. He has been helping people buy, sell, and finance homes on the "street" for all of that time. At the end of the day, you meet your past customer in the grocery store, and know they are going to a home you've helped put them in, you know it's been a good day!
You will not need to know scores at this point. Here is some basic information about what will negatively put low scores on your record, collections, 30 day late payments, skipping out on rent payments, co-signing for a car loan that goes bad, late payments on student loans, etc.
A young college age person can damage their credit and not even realize it. One 30 day late payment, will give you a derogatory report. If you don't have any credit cards, installment loans for cars, etc., or any creditor that doesn't report to any of the three main credit agencies, it is not likely that you will even have any scores.
Be wary of the "free reports" as the chances are they'll offer you about every type of service under the sun and it will carry a price tag! You could end up with a credit monitoring service that might prove costly and maybe even some other services as well, that may have nothing to do with your credit at all, but there will be a cost.
For my money, if you absolutely think you must have your credit scores, you can get them at www.AnnualCreditReport.com for a charge of under $10.00 but your report will actually be free!
You should know there is only one site authorized by Congress to give you that annual "free report " and it is http://www.AnnualCreditReport.com the toll free number is 1-877-322-8228. You will get a report but there will not be any scores on your report.
Arthur is a Real Estate Broker, Mortgage Broker, with over 28 years of experience in the trenches of the housing industry. He has been helping people buy, sell, and finance homes on the "street" for all of that time. At the end of the day, you meet your past customer in the grocery store, and know they are going to a home you've helped put them in, you know it's been a good day!
Should I use a Credit Repair Service?
There are some benefits to using a credit repair company and there are some real disadvantages too. The first thing to think about is why you want to use a credit repair service? Is it because you have bad credit that you want to fix but simply don't know how? If this is true then try reading a bit of information about how to fix bad credit to see if you think this is something you can do.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
If you don't have time to sit down, write letters and go through the credit reports to see what you can dispute, then a credit repair company is probably for you. A credit repair company will take care of all the tedious tasks that are involved in disputing bad credit marks on your credit report. You should however make sure that you use a company that knows the law so that they can properly understand your needs.
To fix bad credit yourself, all you have to do is request your credit report, read what's on it when it arrives, and write a letter to dispute the bad credit that you believe is unfair or untrue. At this point you can also write to your creditors to try and negotiate a reasonable pay off plan in return for removing the debt from your credit history. When you pay a credit repair service, this is practically all they do. Firstly they request your credit report or reports, if they are requesting more than one report from the three big credit bureaus.
When not to use a credit repair company
A good credit repair service will be upfront and honest about what they can and can't do. They will be clear about how much they charge and clear about what you will get from the service.
A bad credit repair service will probably do some the following:
* Try to confuse you with financial jargon so you don't understand what they are doing
* Don't tell you what your legal rights are
* Tell you not to contact one of the credit bureaus directly yourself
* Suggest that you try to invent a new credit identity and then apply for a new credit report. This can be done by applying for an Employer Identification Number (EIN) to use instead of your Social Security number.
* Tell you to try and remove all your bad credit regardless of whether it is true or not. If you do this and are found to be committing fraud, you may be held responsible yourself.
So if you are thinking about using a credit repair company you should remember three things:
* Only inaccurate information on your credit report can be removed. So if a credit repair service says they can repair you credit 'guaranteed', this simply isn't true. Credit repair companies have actually been successfully sued for claiming they can remove bad credit when in fact they can't.
* Credit repair companies can charge high prices for doing something that is pretty routine, so don't pay big prices because it probably isn't worth it.
* When a credit repair organization requests your credit report, the credit companies won't accept any disputes unless it is accompanied by a notarized power of attorney that authorizes a licensed attorney or if the power of attorney is unlimited and irrevocable. Alternatively you or a family member can do it on your behalf.
Using a credit repair service can greatly help you to start to repair your credit score quickly as they can quickly identify where the problems lie in your credit report and highlight any errors that may have been made.
Easily Raise Your Credit Score 100 Points
Your credit report contains information about where you work, live and how you pay your bills (On time or not). It also may show whether you've been sued, arrested or have filed for bankruptcy with in the last 10 years. Companies called consumer reporting agencies (cra) or credit bureaus compile and sell your credit report to businesses all over the world.
Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.
Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.
Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.
Getting Your Clean Credit Report
If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.
If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.
The three major national credit bureaus are:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
Correcting Errors For Clean Credit.
To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.
First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.
They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.
If your report contains erroneous information, the CRA must correct it(clean credit).
If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.
If your file shows an account that belongs only to another person, the CRA must delete it.
When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.
Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.
Second, in addition to writing to the credit agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.
When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.
Clean Credit: There are certain exceptions:
Bankruptcy information may be reported for 10 years.
Information about criminal convictions may be reported without any time limitation.
Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.
Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.
Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.
Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.
Getting Your Clean Credit Report
If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.
If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.
The three major national credit bureaus are:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
Correcting Errors For Clean Credit.
To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.
First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.
They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.
If your report contains erroneous information, the CRA must correct it(clean credit).
If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.
If your file shows an account that belongs only to another person, the CRA must delete it.
When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.
Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.
Second, in addition to writing to the credit agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.
When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.
Clean Credit: There are certain exceptions:
Bankruptcy information may be reported for 10 years.
Information about criminal convictions may be reported without any time limitation.
Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.
Credit-Card-Debt
Credit card debt is not any thing easy to get out of. It sure is easy to get in to debt but you have to scrape and crawl your way out of bottomless black hole.
Americans are saving less and charging more. We live in a world of, I want it and I want it right now. What ever happened to waiting or putting off pleasure? Credit card companies have made it too easy for us to live beyond our means. We cannot blame the credit card companies for all of our debt. We need to learn to tell ourselves "NO". We also need to learn to tell our children "NO" also. We need to learn self control and think about tomorrow and not what is going to make us happy today.
I recently saw a commercial that Gary Coleman was in. It was for one of those "payday loan" places. I am not certain on the company so I do not want to bash the wrong one. Although, I would not promote any of them. I was watching the commercial and then I saw the small print come up on the screen and I have Tivo, so I hit the pause button. I nearly fell off of my sofa when I read that you can borrow $2500.00 at 99.25% interest. After making payments back to the company you will repay over $9000.00.
What part of this sounds like a good idea? I guess desperate people call for desperate measures. Even if a family members’ life depended on me giving them $2500.00, I would sell my car before I would borrow money at nearly 100% interest. That is "highway robbery" at its’ best.
Americans are saving less and charging more. We live in a world of, I want it and I want it right now. What ever happened to waiting or putting off pleasure? Credit card companies have made it too easy for us to live beyond our means. We cannot blame the credit card companies for all of our debt. We need to learn to tell ourselves "NO". We also need to learn to tell our children "NO" also. We need to learn self control and think about tomorrow and not what is going to make us happy today.
I recently saw a commercial that Gary Coleman was in. It was for one of those "payday loan" places. I am not certain on the company so I do not want to bash the wrong one. Although, I would not promote any of them. I was watching the commercial and then I saw the small print come up on the screen and I have Tivo, so I hit the pause button. I nearly fell off of my sofa when I read that you can borrow $2500.00 at 99.25% interest. After making payments back to the company you will repay over $9000.00.
What part of this sounds like a good idea? I guess desperate people call for desperate measures. Even if a family members’ life depended on me giving them $2500.00, I would sell my car before I would borrow money at nearly 100% interest. That is "highway robbery" at its’ best.
How your Personal Credit Score Helps Generate Capital
Generating capital for your business is highly dependent on your personal credit score. Your Payment History makes up 35% of your entire personal credit score. The other key indicators that make up your credit score are Length of Credit History, New Credit, Types of Credit Used, and Amounts Owed. The percentage breakdown of each in relationship to your personal credit score is as follows:
Payment History 35% Amounts Owed 30% Length of Credit History 15% New Credit 10% Types of Credit 10%
Each of these areas has specific items associated with it to determine that percentage of your personal credit score. The 30% of your score associated with Amounts Owed is made up of: Amounts Owed · Amount owing on accounts · Amount owing on specific types of accounts · Lack of a specific type of balance, in some cases · Number of accounts with balances · Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts) · Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)
The formulas that create your score look at the averages of consumers and compare you to those. For example with the Amounts Owed section the typical consumer has access to $12,190 on all credit cards combined. More then half of all people with credit cards are using less than 30% of their total credit card limit. Just over 1 in 8 are using 80% of more of their credit card limit. About 48% of credit card holders carry a balance of less than $1,000. About 10% are far less conservative in their use of credit cards and have total card balances in excess of $10,000. When we look at the total of all credit obligations combined (except mortgage loans), 54% of consumers carry less than $5,000 of debt. This includes all credit cards, lines of credit, and loans-everything but mortgages. Nearly 30% carry more than $10,000 of non-mortgage-related debt as reported to the credit bureaus.
Based on your current situation you can see how your score may be higher or lower compared to the average statistics of the general consumer. Length of Credit History that makes up 15% of your score is determined by:
· Time since accounts opened
· Time since accounts opened, by specific type of account
· Time since account activity
The average consumer's oldest obligation is 13 years old, indicating that he or she has been managing credit for some time. In fact, we found that 1 out of 5 consumers who recently applied for credit, had credit histories of 20 years or longer. Only 1 in 20 consumers had credit histories shorter than 2 years.
New Credit that makes up 10% of your score is determined by:
· Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
· Number of recent credit inquiries
· Time since recent account opening(s), by type of account
· Time since credit inquiry(s) · Re-establishment of positive credit history following past payment problems
An important indicator of new credit is inquiries. The number of times someone pulls your personal credit report. When someone applies for a loan or a new credit card account - in short, any time one applies for credit and a lender requests a copy of the credit report - this request is noted as an “inquiry” in the applicant's credit file. The average consumer has had only one inquiry on his or her accounts within the past year. Fewer than 7% had four or more inquiries resulting from a search for new credit.
Types of Credit Used makes up 10% of your score and is:
· Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.) An average consumer has a total of 11 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, or bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these 11 credit obligations, 7 are likely to be credit cards and 4 are likely to be installment loans.
Depending on what side of the averages you fall on your score will be higher or lower. Obviously if the average consumer has 11 credit obligations and you have 50, you are likely to have a lower score then someone with 13 with everything else being the same on your credit files.
Payment History 35% Amounts Owed 30% Length of Credit History 15% New Credit 10% Types of Credit 10%
Each of these areas has specific items associated with it to determine that percentage of your personal credit score. The 30% of your score associated with Amounts Owed is made up of: Amounts Owed · Amount owing on accounts · Amount owing on specific types of accounts · Lack of a specific type of balance, in some cases · Number of accounts with balances · Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts) · Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)
The formulas that create your score look at the averages of consumers and compare you to those. For example with the Amounts Owed section the typical consumer has access to $12,190 on all credit cards combined. More then half of all people with credit cards are using less than 30% of their total credit card limit. Just over 1 in 8 are using 80% of more of their credit card limit. About 48% of credit card holders carry a balance of less than $1,000. About 10% are far less conservative in their use of credit cards and have total card balances in excess of $10,000. When we look at the total of all credit obligations combined (except mortgage loans), 54% of consumers carry less than $5,000 of debt. This includes all credit cards, lines of credit, and loans-everything but mortgages. Nearly 30% carry more than $10,000 of non-mortgage-related debt as reported to the credit bureaus.
Based on your current situation you can see how your score may be higher or lower compared to the average statistics of the general consumer. Length of Credit History that makes up 15% of your score is determined by:
· Time since accounts opened
· Time since accounts opened, by specific type of account
· Time since account activity
The average consumer's oldest obligation is 13 years old, indicating that he or she has been managing credit for some time. In fact, we found that 1 out of 5 consumers who recently applied for credit, had credit histories of 20 years or longer. Only 1 in 20 consumers had credit histories shorter than 2 years.
New Credit that makes up 10% of your score is determined by:
· Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
· Number of recent credit inquiries
· Time since recent account opening(s), by type of account
· Time since credit inquiry(s) · Re-establishment of positive credit history following past payment problems
An important indicator of new credit is inquiries. The number of times someone pulls your personal credit report. When someone applies for a loan or a new credit card account - in short, any time one applies for credit and a lender requests a copy of the credit report - this request is noted as an “inquiry” in the applicant's credit file. The average consumer has had only one inquiry on his or her accounts within the past year. Fewer than 7% had four or more inquiries resulting from a search for new credit.
Types of Credit Used makes up 10% of your score and is:
· Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.) An average consumer has a total of 11 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, or bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these 11 credit obligations, 7 are likely to be credit cards and 4 are likely to be installment loans.
Depending on what side of the averages you fall on your score will be higher or lower. Obviously if the average consumer has 11 credit obligations and you have 50, you are likely to have a lower score then someone with 13 with everything else being the same on your credit files.
Good Reasons to get a Student Credit Card for your Son or Daughter
Many parents are concerned when their children go off to college. Living on your own for the first time is an expensive proposition. That's why it's important to make sure that your child is taken care of financially without having to call home for funds. Getting a student credit card for your child is a better way to provide the money needed to live away from home. If the bills are sent to you, you can even track their spending, something that's hard to do with cash.
Of course, you'll want to be careful. If you're not certain how well your child will deal with the responsibility of the credit card, you may wish to get one that doesn't allow them to take out cash advances. Many students can be tempted by what is apparently "free money", without thinking of the consequences. The money is not free, they are only "renting" it, and the sooner they understand this reality, the better off they will be. For this reason, you'll want to pay close attention to what a student credit card permits. College is a time for learning new responsibilities, however. There are a number of benefits to providing your child with a student credit card. Here are just a few of them:
Of course, you'll want to be careful. If you're not certain how well your child will deal with the responsibility of the credit card, you may wish to get one that doesn't allow them to take out cash advances. Many students can be tempted by what is apparently "free money", without thinking of the consequences. The money is not free, they are only "renting" it, and the sooner they understand this reality, the better off they will be. For this reason, you'll want to pay close attention to what a student credit card permits. College is a time for learning new responsibilities, however. There are a number of benefits to providing your child with a student credit card. Here are just a few of them:
- Your child will learn to manage their financial responsibilities. Remember that you don't have to foot the bill for their student credit card if you choose not to. Instead, your child can get a part time job to pay for non-college related expenses.
- Your child will learn about interest, particularly if he or she is paying the bills. Interest can accumulate quickly if the bill isn't paid off by the end of the month.
- Likewise, late payment fees can be an eye opening experience for many young students. College credit cards are more likely to assess this fee than cards given to people with better credit ratings.
- Learning to budget is an important part of college. If there's only a small amount of credit left on the card, your student will have to learn to plan living expenses and book fees around that amount.
Many credit card companies provide college student credit cards. These often come with a lower credit limit, say around five hundred dollars is common. These cards also often come with higher interest rates, since students are viewed as a greater risk by card companies. Keep this in mind when you choose to get your college student a credit card for personal use.
However, a credit card does offer the opportunity to learn financial responsibility and helps with the transition to adulthood. Having a credit card can also begin to build your child's credit, which will be helpful should he or she want to buy a car or home after graduation. Having one's credit established while they are still in college can be a tremendous asset instead of having to establish credit after graduation, when they are also facing new challenges, like where to find a job in their major.
Get Control of Your Credit Card Debt!
Have you found yourself falling into a slump with credit card debt that you are unsure of how to manage it? If so, then you should know that you are really not alone in this feeling. Many people, both young adults and the older generation will fall into credit card debt that they are not quite sure how to deal with.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
What you need to know is that even though your credit card debt can be a bit scary, there are usually ways that you can fix it and get yourself going on the right track to pay off your credit card debt as well as work on lifting your credit score. If you have credit card debt that is quite a bit higher than you feel you can manage on your own, there are several credit counseling agencies that may be able to help you out a bit. There is not necessarily a need to enroll in their services, but you may just want to get some sort of counseling advice and possibly put yourself on a budget so that you can begin to manage your bills.
To get organized with your credit card bills and to begin digging your way out of debt, the first step would have to be laying out all of your credit card bills. Take note of how many accounts you have, what the amount of credit used on each account is, plus the minimum payment that you owe for each card every month. It is very important that you always make at least your minimum payment every single month for every single account that you have. One missed payment can do quite a bit of damage to your credit report.
After you have gone through and taken notes of all of your amounts and so on, you can then go through and take a look at all of your incoming funds that you can spend on your credit card payments. You are sort of working out a budget for paying on your cards by doing this. Figure out the total amount of all of your minimum payments and see what is left over after that. Whatever the extra month amount it, you are best off to apply it every single month to one specific account.
By taking this step and sending more money to one of your accounts, you will be able to possibly pay off that one card much faster. If you pay off the card in a decent amount of time, you can then use those funds that would have been applied to that credit card to another and so on. You would be amazed at just how well this method can work to manage credit card debt.
Consolidating your Credit Card Debt
Credit cards have revolutionized the purchasing experience since Diners Club released the first credit card in the year 1950.
The Dinners Club credit card gave consumers limited credit that, at times, even surpassed the personal savings of some participants. It allowed them to buy items they usually could not afford if they were to make a straight cash purchase. It also provided the convenience and safety of not having to carry large amounts of cash.
On average, American households possess 4 credit cards or a total of 13 payment cards if debit cards and store cards are included. There are, actually, 1.3 billion payment cards of assorted types in circulation in the United States.
But, if you think that credit cards have made the lives of modern American consumers easier, you may be wrong...
Statistics show that the average credit card debt for each household in the U.S. is $4,800 per month. Also, there were 1.3 million credit card holders declaring bankruptcy in the year 2003.
And if you still consider yourself unaffected by credit card debt, then consider this: upon retirement, most Americans can only expect to receive about 37% percent of their annual retirement income because of prior debt payment. This will leave many individuals depending on the government, family and charity for economic survival.
These are some scary facts. So before you find yourself in a position of economic uncertainty, it might be wise to evaluate your spending and current credit card debt.
If your credit card debt exceeds what seems to be a reasonable level, you may want to consider credit card debt consolidation.
So what is credit card debt consolidation? In a nutshell, credit card debt consolidation is taking all your credit card payments and consolidating them into one monthly payment. This way, you don’t have to worry about managing the payments individually.
Aside from this advantage, it may also provide you with the following additional benefits: - Reduce interest payments - Waive late and overtime fees - Reduced monthly payments - Debt relief in a shorter time - Credit improvement - Save more money in the long run.
There are actually two major types of credit card debt consolidation... You may want to consider a Credit Card Counseling firm. They assist consumers by consolidating all their monthly payments into one single payment and then dispersing this to the creditors on behalf of the consumers.
The other type is through a home equity loan or other secured loan. This is done by exchanging an unsecured debt (such as credit card debt) for a secured debt (a debt backed by specific assets such as real estate). Now, credit card debt consolidation isn’t a magic balm that will drive all your credit card debt malaise away. But, it will make paying all your debt easier and might save you money in the long run. Definitely an alternative worth considering...
The Dinners Club credit card gave consumers limited credit that, at times, even surpassed the personal savings of some participants. It allowed them to buy items they usually could not afford if they were to make a straight cash purchase. It also provided the convenience and safety of not having to carry large amounts of cash.
On average, American households possess 4 credit cards or a total of 13 payment cards if debit cards and store cards are included. There are, actually, 1.3 billion payment cards of assorted types in circulation in the United States.
But, if you think that credit cards have made the lives of modern American consumers easier, you may be wrong...
Statistics show that the average credit card debt for each household in the U.S. is $4,800 per month. Also, there were 1.3 million credit card holders declaring bankruptcy in the year 2003.
And if you still consider yourself unaffected by credit card debt, then consider this: upon retirement, most Americans can only expect to receive about 37% percent of their annual retirement income because of prior debt payment. This will leave many individuals depending on the government, family and charity for economic survival.
These are some scary facts. So before you find yourself in a position of economic uncertainty, it might be wise to evaluate your spending and current credit card debt.
If your credit card debt exceeds what seems to be a reasonable level, you may want to consider credit card debt consolidation.
So what is credit card debt consolidation? In a nutshell, credit card debt consolidation is taking all your credit card payments and consolidating them into one monthly payment. This way, you don’t have to worry about managing the payments individually.
Aside from this advantage, it may also provide you with the following additional benefits: - Reduce interest payments - Waive late and overtime fees - Reduced monthly payments - Debt relief in a shorter time - Credit improvement - Save more money in the long run.
There are actually two major types of credit card debt consolidation... You may want to consider a Credit Card Counseling firm. They assist consumers by consolidating all their monthly payments into one single payment and then dispersing this to the creditors on behalf of the consumers.
The other type is through a home equity loan or other secured loan. This is done by exchanging an unsecured debt (such as credit card debt) for a secured debt (a debt backed by specific assets such as real estate). Now, credit card debt consolidation isn’t a magic balm that will drive all your credit card debt malaise away. But, it will make paying all your debt easier and might save you money in the long run. Definitely an alternative worth considering...
7 Easy Ways to Increase your Credit Limit
Many credit card holders aspire for a higher credit card limit. The obvious reason for this is that a higher credit card limit enables the purchase of otherwise unaffordable merchandise.
First and foremost, credit card holders need to remember that to get a higher credit card limit, they must abide by the terms and conditions of the credit card company or bank.
Below are 7 other ways to get a higher credit card limit.
1. The most important thing to do for getting a higher credit card limit is to prove your credit worthiness. This is the first thing that banks and companies look for when giving a higher credit limit.
2. Attract positive attention from the credit card company or bank by paying finance charges once in a while. Obviously, this is not advisable on a repeating basis and should only be used as a last resort to increase your chances of getting a higher credit limit. Proving to credit card companies and banks that you are good "borrower" can be a convincing way to get a higher credit limit. But be careful because this strategy also means that you will be paying finance charges which can accumulate in a hurry. And always remember, a higher credit card limit means greater purchasing power, but it also increases the risk of your having to pay greater interest charges and other processing and late fees.
3. Always spend within your credit card limit because doing so means that you are capable of controlling your expenses.
4. Use your credit cards regularly. Don't keep your cards for emergency use only. If you use your credit cards sparingly, banks and credit cards will start to understand your spending and pay-back behavior. Under these circumstances most banks and credit card companies will be reluctant to give you a higher credit card limit.
5. Never make minimum payments. Instead, try to pay for the entire outstanding amount. This will usually give you a better chance of getting a higher credit card limit.
6. Avoid late payments as much as possible. Not only will your payment increase, but you may also have to pay an additional fine for not clearing bills on time. This will also dim your chances of getting a higher credit card limit.
7. The best and simplest strategy for getting a higher credit care limit is to use your credit card wisely. Always keep in mind that credit card companies keep a record of your transactions and payment patterns, so always pay on time.
The bottom line is that your performance in the records of banks and credit card companies will determine whether you'll get a higher credit card limit or not.
First and foremost, credit card holders need to remember that to get a higher credit card limit, they must abide by the terms and conditions of the credit card company or bank.
Below are 7 other ways to get a higher credit card limit.
1. The most important thing to do for getting a higher credit card limit is to prove your credit worthiness. This is the first thing that banks and companies look for when giving a higher credit limit.
2. Attract positive attention from the credit card company or bank by paying finance charges once in a while. Obviously, this is not advisable on a repeating basis and should only be used as a last resort to increase your chances of getting a higher credit limit. Proving to credit card companies and banks that you are good "borrower" can be a convincing way to get a higher credit limit. But be careful because this strategy also means that you will be paying finance charges which can accumulate in a hurry. And always remember, a higher credit card limit means greater purchasing power, but it also increases the risk of your having to pay greater interest charges and other processing and late fees.
3. Always spend within your credit card limit because doing so means that you are capable of controlling your expenses.
4. Use your credit cards regularly. Don't keep your cards for emergency use only. If you use your credit cards sparingly, banks and credit cards will start to understand your spending and pay-back behavior. Under these circumstances most banks and credit card companies will be reluctant to give you a higher credit card limit.
5. Never make minimum payments. Instead, try to pay for the entire outstanding amount. This will usually give you a better chance of getting a higher credit card limit.
6. Avoid late payments as much as possible. Not only will your payment increase, but you may also have to pay an additional fine for not clearing bills on time. This will also dim your chances of getting a higher credit card limit.
7. The best and simplest strategy for getting a higher credit care limit is to use your credit card wisely. Always keep in mind that credit card companies keep a record of your transactions and payment patterns, so always pay on time.
The bottom line is that your performance in the records of banks and credit card companies will determine whether you'll get a higher credit card limit or not.
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