Being out of a job is not totally bad and uncommon. What is bad and common is the low credit that emanates from a long period of unsteady income. This leads to spending decisions that push your credit into a difficult angle and need for credit building. Leading to a low credit score that scares creditors and even prospective employers. Don’t be worried, you can still rebuild towards recovery as soon you get a new job. Fresh Start Credit believes you can go from that low credit score to having credit scores amongst the top 18% by going through these simple steps;
1. How Much Is Your Net Income?
We don’t need to know the answer, keep it to yourself. You’ll need it to determine the lifestyle it can afford you. Ascertain your net income through your first paycheck when taxes and other deductibles have been sorted out. With a true picture of your income level, you’ll be able to plan on what should go into the rebuilding of your credit ratings. Don’t make the mistake of spending above your limits, it must always be below your income.
2. Work Out A Budget
Having your income and known expenses in mind, create a budget that’ll accommodate your plan of rebuilding your credit. You can start out by paying off your debt using the minimum monthly payment plan to ease the burden on your income. Before you start to pay off your accumulated debt, do an assessment. Know all of your expenses and which you can reduce or do away with. You’ll be left with some amount that must be committed towards clearing off debts.
3. List Out All Your Debts
Scary, right? We know it is. You just have to do it to ascertain what you are going to settle in the coming months. Knowing the total value will help you work out a repayment plan to aligns with your income. In developing a list, separate the current ones from those overdue. For the ones already overdue, note the value of delinquency with the period overdue in months.
4. Get Off Your Credit Cards
That’s what got you’re here and cannot help in credit building. You can only make it worse if you are still doing the same thing while expecting a different result. You need to quit living on your credit cards. Draft out an expenses plan using your income since you already have a sort of take-home pay. It is definitely difficult to be independent of your credit cards after relying on it so much. However, there are no other means to rebuilding than to quit being too attached to your credit cards.
5. Know Which to Pay First
There are different opinions when it comes to payment of debt. However, you need to conduct a close appraisal of what needs to be paid. You may have to contact your lender or let a qualified Fresh Start Credit Repairer handle the rebuilding. It will cost you less while you get faster results.
If you are reading this, you might be one of the 143 million individuals whose confidential data was compromised through the Equifax data breach. The data breach occurred from mid-May to July and was reported by Equifax on September 17th, 2017. The breach affected not only Americans but Canadians whose Names, birth dates, Social security numbers, addresses, driver’s license number and in some cases credit card information. This implies there could be a possibility of identity theft which could be used to open a new account or take over existing ones through the data stolen.
Equifax is offering a one-year free credit file monitoring and identity theft protection to everyone, whether affected or not. Enrollment is through the newly opened website where you’ll also know if you are affected by the breach. You should be aware that by accepting Equifax offer, you are limiting your right to sue Equifax in event of any damage originating through the breach. However, this is not enough as you have to take your financial security serious by putting measures in place. Consider the following steps to protect yourself from any unsanctioned use of your personal data;
1. Review Account Statement Regularly
Through www.annualcreditreport.com you can request for your credit from each of the credit reporting agencies; Equifax, Experian, and TransUnion. With this in mind, carry out a thorough look into your account statement yourself and spot any anomaly. You may request for your credit report quarterly since you have access to three reports annually. Immediately you point out unauthorized activities, please notify your bank and credit card company immediately. Depending on the magnitude, involve law enforcement agencies also.
2. Place a Security Freeze on Your Credit Files
This is arguably the best and fastest option to protect yourself from this breach. Protect your identity from being used to cause havoc by immediately requesting for a nuclear freeze on your credit line in all the three credit reporting agencies. Luckily, Equifax will not be charging those affected by the security freeze. However, you should also have in mind that there are some financial frauds that could be perpetrated without a credit check. Still, this is an effective mechanism to protect your finances from being wrecked.
3. Early Tax Payment
This will put you ahead of whoever is trying to use your identity. Respond as a matter of urgency to any letter from IRS. You should know that your tax identity can be used to request a tax refund or get a job.
4. Fraud Alerts on Your Account
This is an alternative to a security freeze. Not as effective as credit freeze but will still go a long way to ensure you are protecting. With a fraud alert put in place, creditors will have to contact you in the event that anyone is trying to seek for credit using your information.
5. Consult Credit Repair Consultants
You will be wondering where and why you need credit repair. This is a proactive mechanism you are putting in place to protect yourself from whatever those who perpetrated the data breach could be scheming.
You can only recover from gambling addiction after realizing it is a problem and must be dealt with. Gambling is an addiction that could push your credit into a mundane position. It is not uncommon to see a gambling addict with tens of thousands in debt, bills left unpaid, credit facilities used to their limit and borrowing from loved ones. In the end, there is a stack of credit waiting to swallow you up if not taken care of. Let’s assume you’ve realized you’ve been the biblical prodigal son with a mindset to recover. You will definitely regain your financial strength. It may take a bit of time, and may look like it will swallow you up, don’t allow it.
Treat Your Addiction
Gambling is an addiction. Until you find a means to lose your mind from it, you’ll always find yourself in it every time. You cannot rebuild your credit without solving this problem, it will always come back to you. For the benefit of your finances, yourself and loved ones, evaluate critically if gambling in Las Vegas is a problem. If possible talk to a professional to assess your psychological mindset.
Even by yourself, you can know if you’ve ever used up money meant for grocery or utility bills on gambling.
What’s The Level and Magnitude of Damage?
You need an answer to this question, carry out a thorough assessment of the level of the financial derailment. Financial recovery can only occur if you can carry out an honest review of all debts that need to be sorted out. It can be quite difficult but it’s still essential and of importance to your financial recovery. If you are married, you can sit down with your partner to look through what your gambling addiction has cost you.
It will be fearful to know how much you owe and you may be looking for a means to shove it aside, the time is now!
Look at The Big Picture
No need dwelling on the past too much anymore, it will drag you back. Look away from the financial situation you are at this present time and think of where you’ll want to see yourself in 5 years. Don’t be discourages by the impracticalities of this occurrence. Create goals you want to achieve and being financially independent should be on top of such list. This is more like creating a budget to recover whatever you’ve lost. This can only happen after a thorough financial assessment has been carried out.
It’s time to now start charting your way out of the situation.
Consult Professionals to Help Your Credit Repair
You cannot do it alone, this is where financial professionals with experience of what you’ve been through can come in to help. Aside from visiting support groups like Gamblers Anonymous, seek a credit repairer to help wash off the dirty credit situation.
Don’t hide your situation from them as they have the means to salvage the damage.
Two financial imbroglios can make your life difficult as an individual; absence of a credit history or bad credit record. No need to remind you that applying for a loan will meet a dead end, no one will be willing to lease an apartment to you and no company will ever want to have you on their payroll. These situations will put you at the mercy of a consigner, who may also be scared of taking you on since you are a liability.
What is Zero Credit History
On your credit report, there will be nothing to report if you have never borrowed or applied for credit. The absence of a credit history denotes that in the last 7 years, you have not borrowed money or applied for a credit facility. This scenario is not as difficult as it appears, if you are still in college or do not believe in credit, then you may not have a credit history.
However, it becomes escalated when you need an apartment or a new job and you can’t find one. Most employers are wary of employing individuals without a history of credit, they are not sure if you are always in time with your payments or a serial defaulter. Your credit history is your proof of your financial status, everyone is expected to have one.
Starting Out Fresh With Credit
This isn’t rocket science, just walk into any credit institution and apply for a credit card or a car loan. You are about to start building a credit history, every financial decision made will reflect in your history onward. These decisions will either push you’re into bad credit or be in a good credit rating.
You may need a cosigner for your first loan, ensure you are responsible for your repayment. Any negative action will jeopardize the ability of the guarantor to access credit as it will hamper their credit score. Make prompt payments monthly and avoid poor decisions.
What Bad Credit Means
Poor decisions lead you to a bad credit situation. Every late payment you make, loans you have completely defaulted on, or when your utility payment leads to discontinuation of service. The worst can be when all these debts have been turned to a collection agency for retrieval.
Your credit score will be negatively affected by all these financial embarrassments. Many credit card user does not know their credit limit, over borrowing on your credit will also send your credit score to the rock bottom.
Any negative mark on your credit report may never leave for at least 7 years. Except you employ the services of a professional credit repair firm to help put you back on track.
A credit card may seem like any other fiat currency you used in making purchases when you are at any store. However, a credit card is much more than that. You need to learn to have a positive relationship with your credit cards. Before applying for any credit card account, understanding the basics will help you have a better use of the credit cards and avoid the credit pit. You need to understand the types of credit cards available and the legalities attached to the usage.
- Types of Credit Card
Just like millions of people out there, you will assume credit card is just one. However, there are different types of credit cards to choose from. We can point out three types of credit cards, the commonest is the general purpose cards mostly issued by banks and other financial institutions. These general purpose cards are also referred to as unsecured cards. There are also private label cards that are usable at the store of the issuer. Lastly is the secured cards which are fully backed by your deposits which the creditor can fall back to in any event you fail to pay.
- Know your Card Interest Rate.
You should know it can range from 0 to 30% depending on your credit rating and history. There are some conditions that determine your credit card interest rate; credit score, payment history, asset, income, economic condition and credit inquiries. You will receive the best interest rate if you have a positive record and early payment of credit. Therefore, to have a good interest rate on credit, you must be in the good books of your creditors.
- No Limit to Number of Credit Card
Averagely, people do have close to 9 credit cards simultaneously. There is no rule that specifies the number of credit card you are entitled to hold at any given time. You can get a couple of multipurpose cards, and also retail store cards of a store you patronize often. Most of the retail cards offer incentives on usage which is why you need to have a couple for grocery and other essential needs.
- Compare Credit Cards Before Settling for One.
Credit card issues range from Banks, retailers, credit unions and credit card issues. You may think that seeing Visa or MasterCard are card issuers, they are not; they are just payment processors. Go online and research the credit card issuer with the best rates, payment plan and their legalities. The effect of this on your credit score will be positive as you won’t be making credit inquiries that can hurt your credit score.
- Be Aware of Annual or Maintenance Fees
This should be done when you are comparing credit card issuers. Being cognizance of the maintenance or the annual fees on the credit card will help position your credit in the right angle. It’s not as if the fees are too expensive, but being aware can help you plan ahead. Don’t be caught up when you are charged your last 100 bucks before pay day as an maintenance fee.
You must have wondered what stands as a good credit score with all the noise about credit scores. You already have an inkling of what this three digit number can do to your everyday life. When you check your credit score, the human in you will want to know where you stand.
The credit bureaus have a different measurement but 300 to 850 is the standard relied upon by many individuals. However, different lender set what it considers as a “good” credit score. What lender A consider as good credit is different from that of lender B. Nonetheless, credit scores are graded below;
- 300-579: Bad Credit
- 580-669: Fair Credit
- 670-739: Good Credit
- 740-799: Excellent Credit
- 800-850: Exceptional Credit
This three digit score range is a determinant of whether the lender will grant you credit or issue you a credit card. More importantly, it will dictate the interest rate the credit will be provided.
There is no guarantee that you will be granted specific credit due to a good score, but knowing where you stand will help to consider the right offer to apply for. All in all, higher credit score portrays good credit choices with lenders having enough confidence in your ability to repay your credit as at when due.
Look at the impact of each credit range on you;
- 300 to 629: Poor Credit
This is considered the lowest credit score anyone can have and there are averagely 17% of Americans in this credit pitch. If you are within this range, you had better use a secured credit card as lenders will require you to deposit before being granted credit. The worst is that you may never be granted credit with this score. Expect a higher than the normal interest rate on your credit also, as you are considered high risk.
- 580-669: Fair Credit
Considered a fair credit score by most lenders and has around 20.2% Americans within this range. Individuals within the bracket are viewed as subprime borrowers. This denotes a below than average credit rating. In this range, you will be at the mercy of lenders who will punish you with higher interest rate. You will only qualify for higher interest rate mortgage. If you look back you have an extended and reoccurring history of late or missed payment on your credit.
- 670-739: Good Credit
Look at your credit report, if the score falls into this range then you are in the good books of the lenders. You will have a good interest rate on your credit and all other perks on your mortgages. Of the 21.5% of Americans in this credit range, 8% is expected to become high-risk borrowers in the future. To ensure you are not part of this 8%, ensure you never miss a payment and it’s not late.
- 740-799: Excellent Credit
You are in a very good position when it comes to credit score, belonging to the 18.2% of Americans with this excellent credit rating. The main benefits of this class of credit score are the lower interest rates and ability to secure any credit facility. Most lenders are ready to pitch their tent with you.
- 800-850: Exceptional Credit
The upper echelon of the credit score. You are part of the 19.9% that enjoys the best rates from lenders. Rarely will you be denied credit if you have this credit score range.
There are over 1.4 million Americans on active military duties all over the world. Ask any military personnel around about their credit score, they’ll tell you they have bad credit. If you are not in the military circle you will be surprised, but it’s common knowledge in the military. You will probably think like many others that being a military personnel, there are a financial protection and coverage. Sorry to disappoint you, there’s none. As a military personnel, getting out of the negative credit pit can be difficult as a consequence of financial inactivity for a while.
Don’t just aim for good credit rating for military eligibility, there’s more after getting into the military you’ll be fighting for. Positive credit rating will help make other areas of your life easier from mortgages, car interest rate to insurance. You need to effectively manage your credit score even while at the war front. Your credit score has to be at it best by avoiding late payment. Ensuring that no one is using your identity and getting you into the red zone, or an unauthorized credit check. You can still be in control of your credit even while away, you just have to do the following;
Place Military Alert on Your Credit
You are eligible to one year of free credit while on active duty. This is where to start with your credit. Even though there’ll be need by businesses to confirm your identity, it’s worth it in the end. Contact any of the three credit bureaus; TransUnion, Equifax or Experian. You will have to present a government-issued identification relating you to the military for this important request.
Free Credit Freeze From 2018.
Remember you heard it here first. From 2018, the credit bureaus will be granting a credit freeze for eligible members of the United States Military personnel. Don’t lag behind, this is the best thing that could happen to your credit if you are eligible. With this new policy in place, you will be to pace, remove and lift from your credit files security freeze at zero cost. You don’t have to be a victim of identity theft to utilize a security freeze. With this in place, before your credit details can be accessed by any individual there will be an express approval originating from you.
Choose a Financial Executor
You will be away long for long periods and that’s why you need to have appointed a trusted family member or friend to take charge of your finances during your absence. In any event of a substantial financial event that might take place in your absence, you may need to grant someone the power of attorney. Decide the time limit and power limit of the attorney.
There’s life after military duties. Your credit score may limit the rest you deserve after giving your all to your nation. Maybe your credit score has already been damaged, you will need a credit repair service. Contact Fresh Start Credit Repair to breathe a new life into your credit.
Some people believes age is just a number, but your credit score is more than just a number. More like the most important set of digits of your life other than your social security number. Your credit score determines more than just your ability to secure credit; a bad credit score can make you jobless or even homeless. Lenders are often scared of taking on individuals with bad credit score, leaving them with a burden of paying abnormally high-interest rates on credit.
You cannot even imagine the stress you will be subjected in trying to purchase a home or leasing an apartment. Often times, the credit score of individuals is checked before a lease is signed. Aside from securing suitable housing, a good credit score will come handy with paying utilities. In any event you have a low credit score or you are aiming to take it to a comfortable zone, we’ll be suggesting free DIY tools that can make this herculean task easier;
Check Through Your Credit Reports
You are entitled to a free credit report annually according to the Fair and Accurate Transactions Acts (FACTA). There are three credit bureaus; Transunion, Equifax, and Experian. You should request your credit report from each of these credit bureau. With your credit report with you, peruse through the report looking at the identifying information which will contain your name, address, and social security number. Look out for the creditor information, this is the most important section in your credit report.
Attention must also be paid to collection account in the credit report. All the account in collection will be listed and outlined, including the contact information of the reporting agency. Another section of the credit report is the public records which will state tax liens, bankruptcy claims, and late payments. Lastly, you will see the agencies and organizations that have requested your credit report at the public section.
Make Use of Dispute Portals
Using this tool, you can dispute every inaccurate information found on your credit report. The three credit bureaus have access to a dispute portal on their website through which you can request for corrections. These dispute portals have different but related requirements for accessing the portals.
Credit Simulator Can Tell You Where It Seems Wrong
With this tool, you can ascertain what your credit looks like under wide range scenarios. You can check how opening or closing an account, changes in your credit habit and a change in credit card debt. Most importantly, a credit simulator is mostly concerned with how negative scenarios can hamper your credit scores. Credit simulators rely on carefully calculated formulas which will help in determining the best scenario to get your credit scores into a safe haven.
Identity Theft Protection Can Save You Hassles
Identity theft is not new, but it’s now on the rise. With your name and social security number, fraudsters can perpetrate evil that could lead to a colossal damage of your credit score. The use of an identity theft protection tool, will make you aware of an unauthorized use of your personal and contact information such as social security number is used. With real-time notification, the actions of identity thieves will be cut short before the damage is done.
Monitoring Alerts Will Provide Real-Time Data
Technology has made so many aspects of our lives easier especially in the area of finance. Any form of change to your credit report. This tool will enable you stay abreast of any change to your credit.
However, there are a lot you can achieve with this tools. The most potent route to having a better credit score is to consult professionals who will give your credit rating a fresh start.