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Is it difficult for millennials to overcome subprime credit?

Is it difficult for millennials to overcome subprime credit?

The lenders categorize the credit scores into several segments, which denote how risky it’d be to approve credit to an individual. Apart from loan or credit approvals, credit scores can also affect lending terms, such as applicable interest rates. The higher a person’s credit score, the lower his/her quoted APR will typically be.

Credit scores can be categorized in the following divisions:

  • 720 or more: Excellent
  • 660 – 719: Average/Fair (Prime)
  • 620 – 659: Poor (Near Prime)
  • 620 or lower: Bad (Subprime)

As per a report released by the Corporation For Enterprise Development (CFED), the majority of the population or 56% of the consumers have subprime credit scores. In general, younger Americans are more likely to have “subprime credit” (as described by TransUnion). There are few factors like age, spending habits and others that make the young people deprived from good credit score.

Let’s check out why millennials have subprime credit:

1. Credit utilization

One big reason is that millennials use too much of their available credit. As per the TransUnion it is nearly 79%. Credit utilization plays a major role in credit scoring. So, if a person who earns $1000 in a month and pays off $790 in debt, his debt-to-income ratio will be quite high. As a result his credit score will fall through time.

2. Credit history

Having a long credit history is very important. It is one of the deciding factors in credit scores – the older the credit history you have, the more it’ll provide benefits to you. As millennials are the young generation, most of them lacks of long credit history.

3. Credit mix

Consumers have two types of debt, a) revolving and b) installment. Revolving debts consists of debts with variable payments per month, like – credit card debts. Installment debts consists of fixed installments like mortgage or car loan. Millennials have to maintain a good credit mix and divide their debts in different types. If they don’t, it’ll affect their credit score badly.

How millennials can build their credit score again

So if you’re a millennial with subprime credit, there are few things you need to do to improve your credit score again:

a. Lower your credit utilization

Use less of your available credit (try to maintain the max credit utilization ratio of 30% or less).

b. Make on-time payments

Make payments on time and if possible in full. It’ll keep away negative items from your credit report.

c. Maintain credit accounts for a long time

The older you maintain your accounts, the more they’ll help you to improve credit score. Keep your accounts open even if you don’t use them often. Trust me, it’ll be beneficial.

e. Diversify your debts

Spread your debt across revolving and installment debt accounts.

f. Get help from other parties

If you are facing credit issues, you don’t have to tackle it alone. You can ask help from professional agencies who can manage your accounts, review your credit, settle issues with the credit bureaus and lenders.

g. Get rent payments reported to credit bureaus

By this way the credit bureaus will be informed about your regular rent payments. As a result, it may help your credit score to grow.

Millennial credit scores are affected because of bad financial habits, age, and short credit history. However, through smart credit habits, millennials can manage their financial issues and take control of their credit. It’s not easy to pull ourselves up from the subprime credit level, but if we work wisely and understand all the possible actions, we can build a great credit score through time.

Read more:
How to manage your credit cards in 2017
7 ways to improve credit score while having burden of debt on your back

By carol on March 17th, 2017

When is it wise to pay the minimum balances?

When is it wise to pay the minimum balances?

Being debt free is one of the most important things to improve your financial life. So, you need to focus on paying all of your major debts in full like – home loan, car loan, medical bills, and particularly credit card debts.

But, there are few instances where it is wise enough to pay only the minimum balances on your credit card. It is because the minimum payments can be a short term solution to your other financial issues.

Have a look at them:

1. You don’t have savings for emergencies

You must have some savings to meet emergency expenses. Generally, you need to save 3 to 4 months’ expenses or least $500 in your account for the emergency purpose. To maintain that amount, it is fairly acceptable that you make only the minimum payment on credit cards.

Without having that fund, you’ll be thinking about using your cards more, if you need money for sudden home repair jobs. Maintaining sufficient emergency fund can also help you to build money saving habits.

But, once you reach your minimum saving amount ($500 or more), try to jump back on your full payments again.

2. You have a fixed hardship coming your way

Sometimes we can predict bad situations that are coming our way. As a result, we make arrangements for the hardships we’ll face in the future.

For example – If you feel that you might lose your job due to some social (divorce issues) or economic (inflation) problems, then you need to save money for upcoming financial crunch. For that, you can make minimum payments and save the extra for the future.

So, it’s good if you lower your monthly credit card debt payments and gather money to repair your old car if it gives you signs of breakdown. Once the expense or hardship has passed, turn back to your regular full payments on your credit card balances.

3. You are behind on child support payments or owe the IRS

If you ignore your tax payments, you’ll definitely face some financial consequences in form of extra interest and penalties.

For example – If you fail to make payments to the IRS, your wages will be garnished, you’ll have a tax lien on your properties, and you might spend few days in prison.

Similarly, as a parent, you must pay your child support regularly to avoid penalties such as passport denial, having income withheld, or suspension of your driving license.

So, in both the above-mentioned cases, it is worth to pay the minimum balances towards your credit card bills and put the extra money towards IRS and child support.

4. You have medical bills to pay off

As per the latest survey (2016) by The Henry J. Kaiser Family Foundation and the New York Times, on an average, 20% working people have health insurance and the rest uninsured people have issues regarding medical bill debts. The survey also reveals that people are spending much more towards medical expenses than they did in the last few decades.

So, to keep that cost under control, you need to free up a decent amount of money every month. To gather that amount, it’s considerable to pay a minimum balance on your credit card. But don’t forget to roll back to your regular payments when the crisis ends.

5. A peculiar debt causing depression

Sometimes a particular debt may trigger emotional distress.

For example – Money borrowed from a close friend or a credit card debt where a collection agent is bothering you daily.

So, in these cases, psychological reasons are way bigger than financial reasons. If paying back the entire debt amount to your loved ones give you mental relief, that’ll be the primary thing you need to do first. It is something that can give you a peaceful sleep at night. After paying off those debts, you may roll back again to your regular payment schedule.

6. You have other huge debt payments queued up

It is wise to pay the minimum balance on your credit card when it has a low interest rate. Instead of paying credit cards in full, you can engage that money to pay off other huge debts like a car loan or home loan. It’s quite logical to reduce the high-interest debts rather than your nominal credit card bills. This situation also happens when a credit card company offers 0% APR introductory rate.

But don’t forget, this might be a temporary situation. Your credit card interest rates might become high again. Once it happens, start making more payment than the minimum.

7. Lucrative investment opportunities

In your entire life span, you may encounter this situation often. You may find good investment opportunity with a good return that will compensate your credit card interest.

So, it is acceptable to reduce your credit card payment and allocate the money to gain more profit. However, it is tough to find a risk-free investment that’ll generate such an attractive return.

Read more: How to manage your credit cards in 2017

By carol on March 3rd, 2017

First Credit Card: 6 Tips to avoid high fees and interest rates

First Credit Card: 6 Tips to avoid high fees and interest rates

Applying for the “first” credit card can be exciting, but challenging. A credit card is convenient and also helps to build up a credit history. But you have to be careful while dealing with it. Using a credit card signifies that you’re borrowing money from a third party, which you need to pay off within a definite time.

You have to be aware of some factors before buying your first credit card. For example, the credit card you choose needs to have the lowest fees and interest rate. Also, the card should provide some benefits and perks based on the usage.

Here are some ways you can avoid high fees and interest rates when applying for first credit card.

1. Build up a good credit history to avoid higher interest rates

Having a good credit score is important to become eligible for the best credit card. The higher your score, the better deal you’ll get.

There are many other ways you can build up a good credit score without using credit cards. One of the ways is opting for a credit-builder loan. Handling a credit-builder loan in a proper way can improve your credit score.

If your credit score is 700 to 800, then you can get a credit card with the best interest rate. The credit card company can charge a higher interest rate even if your credit score is below 700 and above 600.

As per the expert’s recommendation, you should apply for a secured credit card if your credit score is below 680.

So, you need to review your credit report regularly because there might be mistakes, which can affect your credit score negatively.

If you find out an error, dispute it with the credit reporting agencies as soon as possible.

2. Go for a secured credit card

If you’re a first timer who is not sure how to manage a credit card, then a secured credit card is for you. It provides a limited amount of credit to you for use. The amount you can get based on some factors like how much you have deposited, your income and your ability to pay.

A secured credit card is similar to a debit card to some extent but serves a credit card’s purpose. However, it is a good option to get entry into the credit card’s world.

Using your secured credit card and managing it properly allows to build up a good credit score. Thus, you can take out your first conventional credit card with favorable terms and conditions in the future.

According to the Gerri Detweiler, head of market education for Nav, “There might be a notation that it’s a secured card, but for credit-scoring purposes, they’re all treated the same. So if you’re worried about running into debt, this might be a good option.”

3. Research well when choosing your first credit card

Getting the best credit card is tough, but you should try at your best. Search online to compare fees and interest rate before purchasing your first credit card. Try to get a credit card that charges lower fees or no annual fees. Remember, annual fees of a credit card can vary from $0 to $75 in a year. You need to pick a card that charges lower fees. Also look for a credit card that gives benefits (Bonus points on purchases, and rewards point).

4. Take advantage of a student credit card

Try to get a student credit card; it provides a variety of benefits like lower fees and cash back opportunity. Some student credit cards come with a 0% APR as well.

5. Pick the right credit card

Now, you will find many credit cards such as cash back credit card, travel credit card, gas credit card, and store credit card. You have to pick the right one as per your lifestyle and budget.

For example, if you travel frequently, then go for a travel reward credit card to earn bonus points. A gas credit card is for people who drive a lot. Remember, these cards are good to earn points but charge higher annual fees than usual. However, a retail or store credit card is best for first-time credit card user or who haven’t established a credit history. Getting approval for a store credit card is easier than others as well.

6. know the terms and conditions of your credit card

Before buying your first credit card, you should read the terms and conditions properly. The terms vary company to company. So, make sure to read and understand all the terms beforehand.

Finally, you have to pay the minimum balance within the time to avoid late payment charges. Remember, even the best credit card can add up if you don’t manage it properly. So, keep the credit limit low and use it whenever you need it. Also, don’t use the credit card for cash advances, you’ll be charged higher interest rate.

By carol on February 17th, 2017

Credit card lost or stolen – What should you do in such a situation?

Credit card lost or stolen – What should you do in such a situation?

Amongst the list of things that you never want to lose, credit cards are one of them. However, if your credit card is lost or stolen, then you should notify the card company as soon as you can.

A lost or stolen credit card has the possibility to cause a lot of damage, particularly if you have a good credit limit. You will never want to damage your credit at someone else’s hand, and so, it’s vitally important that you know what you should do if your credit card gets lost or stolen.

4 Things you should do when your credit card gets lost or stolen

Though you don’t want such a thing to happen, yet thousands of consumers are facing such problems every day.

Taking the right steps immediately after your card gets lost or stolen will protect your rights and reduce harassment.

Read on to know the 4 things you should do when your credit card gets lost or stolen.

1. Lodge a complaint to the police

If your credit card is stolen, you should inform the police about it as early as you can. Reporting the police without delay may increase the odds that the thief will be found and brought to justice, particularly if you can give a good description of the doer.

While lodging your complaint to the police, make it a point to get a copy of the report, since you may have to send it to the credit card issuer.

2. Call up your credit card company

You should call up the agent of your credit card company as you find your card is missing or after a theft. You’ll have to inform the agent that you’ve lost your card and try to give as much information as you can about the theft or loss.

The card agent will renew your account and issue you a new credit card with a new number.

3. Evaluate the charges you will have to pay

It is important on your part to sign into your account and evaluate the charges you’ll have to pay after your card gets lost or stolen. You can access your account online and assess every charge very carefully.

Keep in mind that those unauthorized charges may not be the large ones.

Thieves often make small purchases initially with your credit card in order to test your card’s validity and then make big purchases after they know that they have a good card number.

4. Dispute the false charges on your credit card

If you find any fraudulent charges on your lost or stolen credit card, you should get in touch with the credit card agent at once to report those unauthorized deals.

Once the bank gets notified of those fraudulent charges, it will start its investigation and remove the charges you didn’t approve.

Be sure to provide a daytime telephone number to the card agent so that the bank can contact you with any additional questions as it does the inquiry.

These are the important things you should do if your credit card has got lost or stolen.

By carol on February 3rd, 2017

My spouse has a bad credit: How will it affect me?

If I tie the knot someone with bad credit, how will this affect me?

Many soon to be wedded couple are now concerned about the above line. Why so? You can’t discuss the financial matter because marriage is a bonding of two souls – this is now a myth. Rather, before saying “Yes, I do”, discussing finance related topics like credit standing, outstanding debts, savings, and future goals, are now considered as wise decisions.

What will happen to your credit when you tie the knot?

A marriage will not affect credit score directly, but there are some ways it can affect your financial life.

Here’s how:

1. Your partner’s credit history will not appear in your report

The credit history of your partner will not appear on your credit report; neither will your credit history appear on your partner’s credit report.

2. Changing your last name will not affect your credit history

Changing the last name after getting married doesn’t mean your credit history will be erased and you have to start with a new credit history. If you change your last name and report the changes to your creditors, then you can see some updates on your credit reports. So, it is advisable to check credit reports this time to avoid inaccuracies.

3. Your credit score will be same after marriage

Your credit score will not drop if you marry a person with a bad credit history. Neither will your credit score improve simply because your partner’s credit score is good.

4. Lenders can check both of your scores for joints accounts

If you plan to set up a joint account or a joint purchase, then both of your credit scores can be checked.

If you apply for a loan to buy a big-ticket item like a car, mortgage, lenders can check both of your credit reports and/or score before lending you money.

So, couples with bad credit can get more rejections. In case the application gets an approval, the interest rate and fees may be higher than usual.

5. Both of you are liable for debts in case of joint accounts

In case of joint accounts, both the spouses are responsible for the loan payments. If the account gets delinquent, then the lender has rights to collect the outstanding amount from both the spouses.

6. Expect late achievements due to spouse’s poor credit rating

Married couple often build big dreams for the future. Your spouse’s poor credit score can delay in achieving big dreams and may require patience.

What should you do when your spouse has bad credit?

Handling finances in a marriage isn’t a piece of cake. Sometimes it’s become complicated due to many factors. One of the major factors is one of the spouse’s bad credit.

However, you need not be worry about it. Taking some steps can help your spouse to build a good credit score.

Read carefully:

Ask your spouse to check credit report

Mistakes on the credit report are quite common; but, it can be dangerous for the credit score. So, you must tell your spouse to review his/her credit report (from each of the major credit bureaus) every year. In case there are some mistakes, dispute them.

Inspire your spouse to get rid of debts fast

Your must encourage your spouse to pay off the debts, especially credit card debts. Because high credit utilization affects the credit score negatively. Ask your spouse to pay off the higher interest debts first. You can follow the debt avalanche method; it works well to pay off the highest interest debt while paying the minimum balance on the rest of the debts. Make sure you don’t miss any single payment; otherwise, the credit rating may take a dip.

Automate your spouse’s bills to avoid late or miss payments

Remember, 35% of the credit score is based on how the person pays the bill. Late payments or missed payments is one of the major determining factors for the credit score. So, if your spouse often makes late payments, then set up automatic bill payments to avoid such inconvenience.

Ask your spouse to apply for a secured credit card

A secured card is backed by a certain amount of cash deposit. Using a secured credit card will help your spouse to build credit without incurring debts.

Lastly, knowing your partner financially before tying the knot is very important. Thus, you can take proper financial steps without making any blunders.

For example:

If you and your spouse have a different credit score, then you have to be extra watchful when dealing with the credit-based application. You should know when to apply jointly or separately to get the best rate.

Read more:

Why you should know your spouse’s credit score
7 ways to improve credit score while having burden of debt on your back

By carol on January 20th, 2017

5 Money quirks that can make you financially ill

5 Money quirks that can make you financially ill

If we go through the definition, a quirk is nothing but unnatural gesture or behaving. You may believe it or not, our financial quirks practically harm our life. To be more precise, we are damaging our financial life with our own hands.

Many of us feel ourselves financially vulnerable, and often fear about money matters. We use various ways to make the things right. Sooner or later, these ways often become drastic financial habits.

Do you believe your financial habits need attention? Try to find answers of these below-given questions and evaluate yourself:

1. Are you getting affected by the money quirks negatively?
2. Does it take too much hard work to stop the quirk?
3. Do your loved ones also getting worried about you due to your money habits?
4. Is your money quirk hampering your work, relationship, or other things?

If all of the above-mentioned questions indicate towards the answer “YES”, then let’s put some light on those money quirks or bad financial habits:

1. Avoiding the issue

One of the most significant bad financial habits that can lead you into serious financial hardship is ignoring that issue at all cost. People somehow manage to block their minds and ignore account statements, balances, or credit score. As a result, they miss important financial changes, starting from monthly payment due date to false buying.

If you don’t track your money, it’ll lead you to many serious issues that can damage your finances, including your credit score. So, being ignorant about your financial health is not wise.

2. Stress spending

Another bad would be spending like freaks. More or less all of us have experienced a time when we spent like hell due to the heat of the moment. But, when we realized our mistake, it was too late. As a result, we are getting stressed and start spending more.

The concept is like – “Oh, I’ve already messed up, some more will have no effect on me.”

This is bad. We need to stop ourselves the moment we realize that we are spending limitless. Don’t go with the flow, or else you’ll kill your finances soon.

3. Spending due to anxiety

An anxiety disorder may cause abnormal spending behavior. Some people may feel temporary relaxation by personalized spending. It’ll make them feel like a person they actually like to be. As a result, people spend more to get out of their anxiety.

So, you must treat the core problem, your anxiety. If you don’t, you’ll ruin your credit over a series of unwanted things.

4. Ignoring your future

Being teenagers, we often ignore thinking about our future at the very beginning of our live. We earn, we spend like hell, save very little and forget everything.

But when we reach our 30s and plan for marriage and kids, we realize what a grave mistake we have done in our early life. We will require funds to meet emergency expenses but we don’t have that much saving.

Saving money is an integral part of our future planning along with marriage, kids and everything else that we could have in future. If we don’t save today, there will be nothing left to spend tomorrow.

5. Living under the shadow

No matter what we have done in the past, we must recover ourselves from their shadow. We can control our habits, and change the way we treat our finances all the time.

So, learn how to control your impulses, change your unnatural spending behavior and concentrate on saving.

Few important money-managing tips:

a. Try to place your bills in your wallets in as per the date. It’ll help you to find the bill that you need to pay immediately. You can also order them by denomination.

b. Always wrap the smallest bill around larger bills. This way you won’t forget any single bill, not even worth a dollar.

c. Don’t always try to buy goods in “twos.” If possible, pick only one while shopping. Some people have a weird tendency to like things in pairs. Somehow, they tend to gather things in even numbers rather than odd ones.

Make sure that you find the reason behind your insane money habits. Don’t ignore the matter and take it seriously.

Read more:

By carol on January 6th, 2017

How to manage your credit cards in 2017

Manage credit cards in 2017

It takes more than just on-time bill payment if you want to use your credit cards properly. You must also be on the safer side to protect yourself from fraud, use reward to get more benefits, and build a good credit score by using your card.

Here are few important tips that’ll help you to manage your credit cards in 2017:

1. You must pay off debts with high interest

You need to control your credit card balances in 2017.

The Federal Reserve has informed that short-term interest rates might take a leap by a 0.5% point or more in 2017. So, it’ll have an effect on your credit card bills.

According to a calculation made by the TransUnion –

If the Federal Reserve increases the rate by 0.25%, 82% of the variable-rate credit account holders may have to add $10 more in their monthly payments.

So, it’ll be wise to pay off those credit card debts that have high interest. You’ll never know how much the rate might increase when the time comes.

2. Use your cards carefully at gas pumps

You must be careful while using your cards at the gas stations. Most of them haven’t converted to chip-enabled terminals. All the gas stations must update their terminals by October 2017 or they’ll be liable to compensate any fraud committed at their terminals.

But for now, you need to follow these steps to protect yourself:

  • Use only those gas pumps that are near to the gas station store. Most of the times, the criminals use skimmers at those gas pumps that are away from the stores.
  • Try to pay your dues inside the store directly, rather than at the pump.
  • If you don’t have any choice but to use your card at the pump, make sure you use your credit cards only.

3. Use a reward credit card as per your need

Reward points are useful if you use them. If you don’t use your points much, having a reward card is probably not a good idea.

Credit account holders don’t use thousands of rewards points and reward miles each year.

According to a recent survey, 15% of the credit card holders don’t use travel rewards points to pay off a trip.

So, being a smart consumer, consider using a rewards credit card that’ll give you cash back benefits.

But remember, a rewards card usually comes with a relatively higher interest rate. So, it’s probably not suitable for you if you have too much debt.

4. Set up notifications in your phone

If you’ve issues to keep in mind about every possible transaction, or every credit card account, you can set up automatic fraud detection and notification system.

Just ask your card issuer to set up mobile notifications that can inform you about below-mentioned situations:

  • When you’re close enough to your credit limit.
  • If any unnatural financial transaction happening or from any unfamiliar locations.
  • Each time when your card is getting used.

5. Check your credit card statements and your credit report regularly

You must remain calm and patient to fight against fraud. Don’t forget to check your credit card statements and your credit score regularly. Your financial statement will show you every possible sign of fraud.

If you find any, ask your credit card company and credit reporting agencies to take required steps.

If you can see any unknown account on your credit report like a mortgage, credit card or other, call your creditors immediately.

You can fetch your credit report once a year from each 3 of the main credit bureaus. It is advisable that you collect your credit report once in every 4 months (one from each bureau). You can also grab it at AnnualCreditReport.com.

6. Try to keep your credit score intact

If your credit accounts always carry a big amount of balances regularly, that can negatively affect your credit score.

Your credit score will get the blow even if you are regular with your monthly bills.

Huge balances on your credit account increase your credit utilization ratio. The credit utilization is a prime factor of your FICO score (30%).

It’s better if you can keep your credit utilization lower than 30%.

7. Ask for a higher credit limit

If your credit score is getting lower, you can ask your credit card company to increase your credit limit. If your credit limit becomes higher, the difference between your credit card balance and available credit limit will also increase. Thus, your credit utilization ratio becomes low, which may increase your score.

A recent survey revealed that every 8 out of 10 credit card holders were approved for a credit limit raise. But the problem is only 28% of cardholders dare to ask for it.

8. You can freeze your credit account

Scammers and fraudsters may use your personal information to open new credit accounts. You can prevent this crime by checking your credit report regularly. But it’s only the way to grab those frauds that have been done already.

You can stop scammers to open new accounts by freezing the current credit account.

When you ask your credit card company to freeze your credit, you’ll order the major credit bureaus to prevent anyone to sneaking at your credit file.

9. Keep patience for the chip-based card

In 2017 fewer than half of all retail merchants have processed chip-based credit and debit cards. But still, some merchants are encouraging the magnetic stripe swipe or dip terminals. They still misguiding consumers by saying that the chip-enabled terminal is slow or difficult to use.

Do not entertain such misguidance. This is all in the name of fraud protection. Chip-based credit cards are much safer than other credit cards. It has a superior security system that’ll prevent the con artists to misuse your credit card details.

So, wait some time until you have your chip-based credit cards in your wallet.

Read more:

By carol on December 23rd, 2016

7 ways to improve credit score while having burden of debt on your back

how-can-you-grow-your-credit-score-while-being-in-debt
Your credit score can be hard to grow by 100 points while you’re in debt. A good or excellent credit score can be maintained through good financial habits.

You may apply for a low-interest loan to pay off your other high-interest loans or transfer credit card balances to a card having a zero-interest balance transfer fee. These options might provide you a safe passage to get away from debts; but, to take advantage of those options poor credit could be a hurdle for you.

If you’re searching for ways to get out of debt and also increase your credit score, consider the below-given options.

1. Check out credit card balances

The most important factor in your credit score is your credit utilization. Credit utilization denotes the percent of credit you are using from your available revolving credit limit. The lower that percentage, the better for your credit rating. The optimum percentage of a credit utilization ratio is 30 or lower.

So, if you want to boost your score, try to pay off your balances every month and use your available credit as low as possible.

You can also check if your credit card company will accept multiple payments in a month.

2. Avoid applying for several new credit cards

Don’t apply for several new credit cards. Try to avoid it as this approach could backfire and hurt your score very badly. If you really need to open a new credit account, maintain it wisely and make payments on time.

On the other hand, don’t close unused, old cards to raise your score. Keeping old credit card accounts are good due to their long credit history.

3. Set automated payment reminders

Making on-time payments is helpful for building a good payment history and to boost your score.

Few banks offer payment reminders through their online banking system, this facility provides you advance notifications through Emails or text messages about your coming payment dates. You could also enroll in an auto-debit payments facility provided by your credit card provider.

No matter what option you choose, the thing is you have to pay on time every month.

4. Pay off debt in collections

In some special cases, once you get a negative mark on your credit report, there’s no other way you can remove it easily.

A negative mark’s effect will be removed over time, but it may take 7 to 10 long years to be fully dissolved from your credit report.

However, the latest FICO Score and Vantage Score don’t retain some negative items like already paid collections accounts. So, if you can pay off balances on those accounts that are currently into collections, it would have a prompt positive effect on your score.

5. Use cash instead of credit cards

It is the best way to reduce your credit utilization ratio. You can start making any type of payments by cash instead of your credit cards. It’ll keep you from winding up in more debts in the coming days. Try to stick to your decision firmly until your debts get under control.

6. Try to maintain different credit types

Try to maintain different types of credit lines successfully. Regular payments on student loan, auto loan, mortgage payments and credit card bills will portray your credibility through a good credit score.

7. You need to budget your finances

Budgeting is especially good for repairing credit while having debt burden. Through budgeting, you can separate your funds for daily expenses, debt payments, and emergency expenses. By this way, managing your finances as well as credit repairing will be a lot easier.

The toughest part of improving your credit score while being in debts is keeping the patience. You will definitely achieve an appreciable effect, but it will take time to reflect in your score. There is no quick fix to grow your credit score sky high; it’ll take few years to grow.

Read more:
What are the grave mistakes you need to avoid while building credit?
What are those credit score killers that you must avoid?

By carol on December 7th, 2016

Do you want hassle-free travel? Follow these 8 credit safeguard tips

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Travelling is all about hanging loose, free from worries and spending some quality time with dear ones. To make it more hassle-free and smooth, people are taking help of technology for booking flights, hotels, etc.

GPS makes road journey more hassle free, new aged apps make booking more convenient, and most importantly credit and debit cards make traveling safer.

But, as every bright sight has a disadvantage, technology is not an exception. Sometimes, people forget this fact and commit blunders and scammers take full advantage of them.

Thus, many people experience a total mess in their travel and learn a lesson.

Read my article so that you can learn the lesson beforehand and enjoy a hassle free, flawless vacation alone or with family.

1. Carry fewer cards

Carrying a wallet full of credit cards is a big boo-boo. Carry only 2 or 3 that you need the most. Make sure you have a backup card in case the first one is lost, canceled or stolen.

But, keep the backup card in a safe place or in the hotel room to avoid hassles.

2. No debit card, please

You heard right! Using debit card is not safe during traveling; especially for purchasing items. Debit only at ATMs to get cash. It has been seen that the card details or the magnetic stripe information get stolen while swiping the debit card at the stores.

Also, make sure you change the PIN time to time for its safety.

You need to be careful while using ATMs as well.

3. Give prepaid card a chance

In my opinion, a prepaid card is perfect for traveling purpose. Because it provides zero liability in case it’s lost or stolen. However read the terms and conditions carefully.

4. Recheck the terms before moving out from home

Do you know that some card charge a fee for foreign transactions?

So, verify yours from the card issuer before moving out. If you’re out for a long trip abroad, it will help you save a significant amount of money.

Keep the card details in a safe place.

Keeping the record of the card along with the card is a blunder; so no!

Don’t keep the card and the details together in a same bag or wallet.

5. Say “no” to unsecured internet connection

Free internet connection at a public place is enticing but dangerous. Try to avoid logging in using a free Wi-Fi connection. In case you don’t have any option, connect to it very carefully.

Make sure the website you’re browsing is secured.

For example, go for HTTPS://www.website.com instead of HTTP://www.website.com.

Also, don’t log in to just check how much balance is left in the account. Use the internet only when you need it.

6. Check your credit card statement time to time

Once you know the internet you’re using is safe, check your credit card statement to make sure there is no suspicious activity.

If you get any mail regarding any suspicious activity on your card, then block your card and inform the card issuer as soon as possible.

So, checking your credit card statement is necessary.

7. Inform your card issuer about your traveling

Your card issuer knows where you live, but when they see charges coming from another place that isn’t your mentioned place, they might block or freeze the card suspecting identity theft.

So, to avoid this kind of confusion, provide details about your itinerary to your credit card company.

Inform them which place and which dates you’ll be on vacation.

Ask the issuer to provide you a contact number.

Thus, you’ll be able to communicate with them easily when required.

8. Report the loss or theft immediately

If you report the loss sooner, then your liability is limited to $50 only.

So, try to report the scam or theft to the issuer as soon as possible.

However, now most of the credit card companies offer “zero liability” card as well.

Some easy tips to remember while traveling

Below are some handy tips for you if you don’t have time to read the whole article:

  1. Don’t let your card go. Keep it in your eyesight. If you let a waiter swipe it, then make sure you get it back.
  2. Keep the card in a secure wallet or a money belt inside your jacket to avoid pick-pocketing.
  3. Keep some cash to avoid hassles after losing the card.
  4. Use only ATMs of your bank.
  5. Write down all important contact numbers in a paper in case you lose the wallet and the mobile together.
  6. Use an Email for travel purpose only. Make sure you don’t use your business or professional Email for travelling purpose.
  7. Educate your family members as well regarding the credit card safety tips while travelling, to enjoy a smooth vacation.

You may also like:

Mistakes you shouldn’t do with airline credit card
What are the benefits of a gas credit card?
10 Startling facts about credit card scams and how to avoid them

By carol on November 25th, 2016

How much credit card companies snooping around their consumers

what-credit-card-companies-know-about-consumers

In our financial world, credit card companies have an eagle eye view on any financial transaction we perform. We do most of our monetary deals (like shopping, buying movie tickets, paying utility bills, medical bills, etc.) through credit cards. So, if the credit card companies want to know about the interests of American consumers, there’s no doubt that they’ll need to check the credit card transaction histories.

That’s why many reputed credit card companies, such as American Express, Capital One, JP Chase Morgan, and Citibank are always looking for big consumer data sources.

So, let’s discuss what type of data they know about consumers:

1. Your signature

If you’ve any doubt against any transaction or charges, you can ask your card company to verify your signature and proceed. Credit card companies can send you the receipt copies.

2. Your location and preferences

Credit card companies may track the places where you often visit or your favorite hotels, where you’ve checked in. They are also aware of the top ATMs you use and how frequently you log into your mobile app. Credit card companies can follow your tracks and send coupons from local stores.

You must remember that with new tracking technology, scammers may also use this information for identity theft purpose.

3. Your marital issues

Most credit card companies check their customer information to find out traces of financial issues. Credit card companies may use that information and decide to lower your credit limit.

FTC (Federal Trade Commission) once filed a lawsuit against CompuCredit. The case was filed for lowering the credit limit for Visa Aspire consumers who used their cards for marital counseling or other related deals.

4. You’re a regular customer

Credit card companies love regular customers. They pay on time bills, use the credit card regularly, and avail offers provided by the credit card company. They tend to make a lot of transactions and build a good payment history on their cards.

5. Your designation or job profile

Your credit card usage may reveal your designation. If you are one of the top heads of a company and use your card for company’s business, the credit card company may list you up as their top priority customer and provide you premium advantages. Sometimes they may send you attractive business card offers for your whole staff.

6. Your abusive nature

If you’ve called the credit card company and for any reason used vile language or abusive statement, credit card companies may tag your account and make a note on your profile as a “verbally abusive” customer. From next time onward, the customer care executive will be on guard before receiving your call.

7. You’re a shopping freak

Credit card companies tie up with retail stores and create special offers for you based on your previous shopping.

If you were a regular shopper at Walmart but haven’t been back in a while, an online coupon or discount card may pop up from your Email or app.

8. Whether or not you’re risky

When you contact customer care service, the representatives can see your profile status. Some companies also show your profile with “green” (normal) or “red” (risky) indicator, depending on your card usage and payment history.

Based on that indication, the card company may revoke their services and cancel the card.

9. You’re about to cancel

Credit card companies will analyze your account information, and if you haven’t been using the cards for a long time, they might consider your account as dead or assume you’re going to close the account.

So, to retain you, they might provide you heavy discounts and offers.

Credit card companies gather information about us through considering our transaction patterns, usage quantity, usage type, usage frequency, card balance, payment history and other factors. So, as much we keep these factors straight, as consumers, our profiles will become valuable to them.

By carol on November 11th, 2016