Credit Cards & Loans
How to Pick a Secured Credit Card for Credit Repair
You may have trouble getting approved for a new credit card when you’re trying to repair your credit. It creates a dilemma since you need to add new positive information to your credit report. Fortunately, there’s a product that can help you.
A secured credit card is a type of credit card that requires you to make a security deposit against the credit limit. Other than the security deposit, the secured credit card acts like a regular credit card. If you make your payments on time for several months, you can get your security deposit back. When you choose a secured credit card, there are several features you should consider.
Does the credit card report to the three major credit bureaus?
When it comes to secured credit cards, this is one of the most important things to consider. Any credit card you choose for credit repair must report to the major credit bureaus – at least one of them. Otherwise, your timely payments aren’t doing anything to help your credit history. The major credit bureaus are Equifax, Experian, and TransUnion. There are other credit bureaus out there, but they’re not the major ones that most lenders consider when they’re calculating your credit score.
What are the fees?
A certain number of fees are expected with a secured credit card, but these fees shouldn’t Read more…
Don’t Swear Off Credit Cards After Credit Repair
Very often people get in trouble with credit cards and promise to stay away from all credit cards and other debt instruments forever. The problem is that you may not build the best credit score by making this choice. After all, how are you going to rebuild your credit score if you don’t have any credit cards or loans to pay.
You Must Borrow Money to Borrow More Money
When you apply for a credit card or loan, the bank looks at your past credit history to decide whether to approve your application and at what interest rate. Credit repair may remove some of the negative information from your credit score, so while that won’t hurt you, your lack of new credit may hurt you. Lenders often want to see you with a certain number of active accounts within recent history before they’ll give you a new credit card or loan. If you don’t have this recent credit experience – positive or negative – your loan may be turned down.
You may think you won’t need a new loan after credit repair, but most people will need to borrow money again to buy a new car or house. Chances are you don’t have the money on hand to buy one of these without getting a loan. Using credit cards responsibly can help improve your chances of loan approval.
Your Credit Score May Plateau
Since you’re trying bring your credit score back from a low point, you’ll have to add some Read more…
Should I Cancel My Credit Cards to Eliminate My Debts?
During the process for repairing your credit, debt reduction with the goal of debt elimination is the typical starting place for most consumers. Credit card debt is often the biggest problem in the credit repair equation since missed and late payments or too much credit card debt is the reason your credit needs to be repaired in the first place.
Immediately when learning credit cards are maxed out and bills are too high to pay, many consumers will instinctively want to cancel their credit cards to help them resist the spending temptations which got them in trouble in the first place. But canceling credit cards is one of the biggest credit repair mistakes people can make and doing so, especially to multiple accounts, can be devastating to your credit score.
Here are some things you need to consider about credit cards and credit repair:
Oldest and Dearest Cards Mean Most
The credit card account you opened first means the most to your credit score. Part of the calculation for determining your three digit credit score is the amount of time for which you have established credit. By closing the oldest credit card account, you are essentially erasing part of your credit history which can drop your credit score. Read more…
How You Handle Debt Affects Your Credit Score
Credit and debt are very closely related. How you handle your debt can either help or hurt your credit score. On your credit repair journey, it’s important to be aware of what you’re doing with your debt.
Too Much Debt Hurts
A large part of your credit score – 30% – is based on how much debt you’re carrying on your credit cards. If you have a lot of debt compared to your credit limit, then your credit score will be hurt. However, carrying low balances will help improve your credit score and make you a more desirable borrower. Make paying off debt part of your credit repair plan.
Paying Late is Deadly
One of the reasons to keep your debt low is that it keeps your payments at a manageable level. Once your payments get too high, you’ll have trouble keeping up and you may have to miss a month. Late payments will kill your credit score.
It’s not ok to make a late payment just because your credit score is already bad. Doing that will just lengthen the amount of time it takes your credit to recover. Those old late payments will hurt your credit score less as time goes on, but any recent late payments will have to age before the damage lessens. Read more…
Credit Score Increased. Are You Ready for a New Credit Card?
There comes a time in every credit repair saga, that you have to ask the question, “Am I ready for a new credit card?” Disputing negative information will only take you so far. If you want to take your credit score to the next level, you’ll need to add some positive information to your credit report. One of the ways to do this is by getting a new credit card and using it responsibly.
Before you go fill out a new credit card application, you have to make sure you’re actually ready for a new credit card. If you get one prematurely, you could undo all the credit repair progress you’ve made so far.
Do you qualify for a decent credit card?
There are some credit cards out there that will approve you no matter what your credit score looks like. However, these aren’t the type of credit cards you need. These “subprime” credit cards target people with bad credit and make cardholders pay dearly with high annual fees and interest rates.
Is your credit score good enough to qualify for a credit card that doesn’t have high annual fees and has decent interest rates? An interest rate between 14% and 20% is expected for someone who’s trying to rebuild their credit score. Read more…
Credit Repair Myth: Prepaid Cards Improve Your Credit Score
One of the hardest parts of credit repair is getting new credit that can be used to rebuild your credit score. If you’ve come across prepaid cards in your quest for new credit, you’ve probably seen the advertisements that these cards improve your credit score. Unfortunately, that’s only remotely true.
The truth is that prepaid cards don’t help your credit score – at least not the credit score that most banks rely on to approve your credit cards and loans. It won’t help the credit score that keeps you from paying security deposits or the one that insurance companies use to price your insurance. Read more…
Avoid Payday Loans When Repairing Your Credit
Repairing credit often takes an extreme focus on allocating monies earned towards debt payoff. For some people who are already finding it hard to get by each paycheck, it can be easy to end up with nothing to live on several days before the next payday. Having not many options to survive until then, people have turned to payday loans as a means to get by until your next check is available.
Why Payday Loans Hurt
The problem with payday loans is not immediately apparent to those in need. They see a way to get quick cash with the worry of a credit check. Their focus is on the money at the end of the transaction and not necessarily the consequences that present after the deal is done.
When you take a payday loan, it is true you do get cash almost immediately. It is also true that payday lenders do not require a credit check. Essentially all you need to get a payday loan is proof of identification, proof of employment, and a bank account. Show up with your driver’s license, pay stub and a blank check and you’ve got yourself a loan. Read more…
Credit Repair – Getting More Positive Into Your Credit Report
When you are working to repair your credit, you need to counteract the negative impact of poor credit with more positive information. If you are recovering from a personal financial setback that has caused credit problems or if you have yet to establish a credit history for yourself, you need to pump some positive into your financial situation.
While repairing credit is not an overnight task, you can improve your credit score by large margins over a period of time if you practice consistency and follow through in your repair efforts.
Here are some ways you can incorporate positive marks into your credit score: Read more…
How Credit Cards Can Help Your Credit Score Improve
With the recent fallout of credit card debts, many consumers feel that credit cards are the root of all evil and credit repair will fix that. But in a twist of the old cliché, credit cards don’t spend themselves. It is the consumers’ lack of budgeting and the lack of knowledge as to how credit works that has gotten many into hot water.
Credit cards are not inherently evil. They actually serve many purposes and can be a tool used to improve a consumer credit score and repair credit histories. The key is to use credit cards to your advantage and not be taken advantage of by impulsive spending. Read more…