Passive Credit Repair

New credit reporting tactics mean that rent payments may now have an impact on your credit score. So if you haven’t been faithful about making timely payments because they’re not reported to the bureaus, it’s time to change that habit.

In June 2010, Experian purchased RentBureau, a rental reporting agency that collected rental payment information. Months later, Experian began reporting timely rent payments on consumers’ reports. Those payments, in turn, were reflected in consumers’ VantageScore based on Experian report data. This year, Experian plans to begin reporting both negative and positive rental history. That means late payments can hurt you the same way that timely payments can help you.

A newer reporting agency, CoreLogic, is working with FICO, provider of the well-known credit score, to create a report and score that includes rental payment history, according to the New York Times. Timely rent payments can make it easier to rebuild a bad credit score, especially if Read more…

Now that the spending holidays have passed, there is a lot of consumer concern about eliminating the debts incurred on cards and starting credit repair initiatives. For consumers that overspent and now face the inability of being able to repay their debts, it is important to explore debt relief options before choosing one, especially for those considering a zero-percent balance card.

Balance transfer credit cards give consumers the option to transfer existing card balances from other cards with the theory that it is easier to pay down one debt, especially at a zero-percent interest rate. However, there are some precautions to take with a zero-percent balance transfer card.

Consumers are being advised to look at every detail of the credit card offer before signing on to transfer balances. What you don’t know about balance transfers could cost you more in the long run. It is advisable to first look at the length of time the 0% rate is being offered and be assured you can repay the balance within that time frame. Many consumers fail to realize the zero-interest offer is only for a promotional period. Once that time frame ends, the interest rate could be much higher than you can reasonably afford.

The other important aspect of balance transfer cards consumers need to understand concerns the fees for card use. Transferring of balances from other cards is not without Read more…

People struggling with bad credit know how difficult it is to get approved for a new card. But what if you were given the chance to open a new card with the agreement that you’d pay off an old debt? Would you accept the offer?

In December 2011, the Wall Street Journal reported a credit card arrangement just like this. Consumers with bad scores were able to get a new card, but it required them to pay several hundred dollars per month toward an old debt. Is it worth it?

How Old Debts Become Duds

After a certain amount of time, creditors and collectors lose their power to pursue you for a delinquent debt. The statute of limitations, which determines how long you can be sued for a debt, is different for every state, but ranges from 3 to 15 years. In most cases, the statute of limitations on debt is six years or less. If a collector sues you for a debt you haven’t touched in several years, all you have to do is Read more…

Chase Bank recently announced a big change to its Freedom cards – the credit limit will be replaced with credit access lines, in other words the cards will no longer have a preset spending limit. The concept of no preset spending limit isn’t new, charge cards have used these spending limits for years. More cards with revolving lines are replacing the “hard” credit limit with a “soft” one that can be exceeded with no over-the-limit fee.

One of the biggest problems with the no preset spending limit is that you don’t have a physical signal telling you to stop using your card. If you have a traditional credit limit and you’ve chosen not to have over-the-limit transactions processed, you’ll get denied if you try to make a purchase that puts you over your limit. Even before you get denied at the register, you can check your available credit to see how much you can purchase. Without a credit limit, you’re prone to the type of overspending that leads to missed payments, delinquencies, and other debt problems.

Credit bureaus and scoring models handle some no present spending limit accounts in a way that hurts your credit score. Remember that 30% of your score is based on your credit utilization – the ratio of your credit card balances to their limits. Creditors who have Read more…

Though only five years old, Mint.com has quickly established itself as a highly recognized personal finance management web-service. For the uninitiated, Mint.com has been listed by Time Magazine as a top-50 website for the last three consecutive years and is the winner of the Webby Award for Excellence on the Internet for Best Financial Service in 2009, 2010, and 2011, beating out financial news giants CNNMoney, NY Times Dealbook, Nerdwallet and Yahoo! Finance.

Mint.com allows its users to aggregate their banking accounts, investments, insurance policies, IRAs and mortgages into its management system which automatically provides up-to-date categorization, support and tools for budgeting analysis and bill reminder services. Their services are essential for those wanting to take control of their financial lives and improve their credit scores. Best of all, Mint.com is completely free.

The site was conceived by Aaron Patzer in 2006 after quitting his day job as a software architect to develop a method for analyzing numerous financial documents with high accuracy. After gaining the interest of First Round Capital, Mint.com received the seed capital to further develop their concept. Patzer’s ideas ambitions became so popular that grabbed the attention of Intuit, a financial software company and maker of Quicken, which extended an offer to purchase Mint.com for $170 million in late 2009.

CreditRepair.org was granted an opportunity to gain some insight into the company from Aaron Forth, Inuit’s Vice President and General Manager of Personal Finance Group. Read more…

A bad credit score can hold you back from a lot of things – buying a car, owning a home, getting good insurance rates, and even from getting a job. Most of the time, your credit score isn’t the only factor that’s considered when you put in an application. Don’t be an all around bad candidate just because your credit is bad. Look great – on paper – even if you have a bad credit score.

Don’t keep making credit mistakes.

The older the negative information on your credit report, the better you look. So, from now on, make sure you pay all your bills on time. Remember that creditors report 30 day late payments, so if you missed your due date by a couple of days, make your payment before the next statement arrives. You’ll still face a late fee, but you’ll avoid having the late payment being entered on your credit report.

Pay off some debt.

You’re a better candidate for credit cards and loans when you have less outstanding debt. When you do have credit card balances, it looks better when those balances are below 30% of the credit limit. So, if you can’t afford to pay off all your balances, at least pay down the balances that are close to the credit limit.

Keep your applications to a minimum.

Even an applicant with a great credit score looks risky when they start applying for several Read more…

When you are considering applying for a new credit card that offers balance transfer capabilities, it is important to consider the effect the balance transfer card will have on your finances in general – specifically your credit score.

In most cases, people will apply for a balance transfer credit card with the intention of relieving other credit card debts. For some, this may mean there is already a danger of having a low credit score due to slow payments or a lack of payment when they can’t keep up with their financial obligations. With a low credit score, there can be long-term financial problems and a balance transfer credit card can make the situation even worse.

Here are some additional considerations to make before applying for a new balance transfer credit card:

The Inquiry Will Hurt

When you apply for any credit card or line of financing, the lender will check into your history to determine if you are creditworthy. When you submit an application, the inquiry being made will impact your credit score. It may not make a big dent but if your credit score is already low, it could Read more…

While 60% of respondents to a Visa Inc survey were technically wrong when they said employment is used to calculate credit scores, they weren’t that off base. Employment status can have an impact on your credit score, even though it’s not directly included in your score.

Consider the things that do affect your credit score: how you pay your bills, the amount of debt you have, the length of time you’ve had credit, the types of accounts you have, and the number of times you’ve applied for credit. Your employment history directly impacts several of those factors.

Your job affects how you pay your bills.

Whether you have a job – and how much that job pays – impacts your ability to pay your bills on time. If you’re unemployed or your job doesn’t have a great salary, that can keep you from paying your bills on time. Payment history is 35% of your credit score and missing payments has a detrimental affect on your credit score. On the other hand, consistent employment and a good salary enable you to pay your bills on time every month and possibly in full.

Having a job lets you keep your debt levels low.

If you’re currently unemployed, that employment status can affect the amount of Read more…

A new kind of credit card is set to draw consumer interest soon. The US Fifth Third Bank has announced its plan to introduce a new kind of credit card on the market for the first time. The card, dubbed the Duo Card, will combine both debit and credit card accounts on one plastic card. Consumers using the card will have the option to use the card by accessing their bank account directly or their line of credit. This will eliminate the need to carry multiple cards in a wallet and still have access to your money.

The Duo Card will also feature popular credit card programs such as rewards programs where customers can cash in points earned on purchases to repay loans received from the bank’s line of credit. Additionally, like a traditional credit card, interest rates will vary based on consumer credit scores. Currently the annual percentage rates are Read more…

For consumers who have consistent excellent credit scores, experts warn that ignoring regular reviews of credit reports can spell trouble. Credit reports account for all of the credit activity going on in a consumer’s financial life. It may also be the first indicator that something is wrong and further investigation is necessary in regard to financial criminal activity.

Identity and credit card theft is still on the rise and if consumers forgo checking into their own credit reports, they may be missing red flags that someone has hacked their identity. Because technology has afforded may more ways for criminals to secure credit card and other personal information, it is imperative for consumers to Read more…