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.
As a point of entry, two categories of people will benefit hugely by using secured credit cards; those planning to repair credit and the newbies to credit. Some people refer to secured credit cards as last resort but there are actually immense benefits offered. From the name, you must already have a clue to what we are talking about here; a credit card that a lender secures with a collateral. In simple terms, you deposit a certain amount and the creditor lends you credit in like sum. You will wonder why you will want to have such in place? No credit means bad credit score remember? But with a secured credit card you are playing safe and smart.
A survey of most lenders shows that the opening deposit starts between $200 to $500, in any case you default in paying your credit, the deposit will be used to offset such. You should know this though, your credit limit will be increased by the lender in the long run if you are not late with your credit payment. With a regular payment reported by the credit card issuer to the credit bureaus, you are on your way to having a positive credit score that can allow you have more credit options.
In any case, you have no history or bad credit rating, secured credit cards have it advantages which you can benefit from. One reason why many people suggest secured credit cards is the ease of your rebuilding your credit options. Yes! Secured credit cards is a sure way of going from the negatives of credit score in order to be eligible for traditional credit options later.
So also, if you are planning to cut low on your spending, secured credit cards as provided by Fresh Start Credit Repair allows you to have control over this. One aspect of secured credit cards is the lower spending limit, you will have a spending limit on your secured credit cards that prevents you from impulse buying and unnecessary spending. You must also know that secured credit cards have lower fees. Unsecured cards often have a double of the fees of the secured credit cards, you will rarely be charged at the standard credit card rate.
One other sweet benefit of secured credit card you will not believe is the interest rate. Some lenders allow you to earn interest on your deposit for secured credit cards, this alone should cover the low fees that will be charged.
In essence, the ultimate aim of using a secured credit card is graduating to the unsecured traditional cards. You will end up having a traditional credit line with regular payment of your credit as at when due. With a secured credit card, you will have more spending power, this can also be useful in any case of emergency as you can rely on the cards without hurting your credit score.
At Fresh Start Credit Repair, we are poised at helping your repair your credit and providing you with a secured credit cards. Contact us today, we are just a call away.
Getting is credit report is quite easy and free. The issue is understanding your credit report without consulting anyone. If you don’t, it’s not a crime. You may not be aware of the means of getting a credit report, this guide will help in acquiring one and knowing what to check. According to law, you are entitled to a free credit report each from either of the three credit report annually. To get your free credit report, just visit AnnualCreditReport.com for a free copy by providing your full name, address, social security number and date of birth.
To understand your credit report, you need to look at the three reports from the three credit bureaus. Looking at just one will be a fruitless endeavor, with the three at hand, you are making the task easier. Don’t assume you will have the same information on it all, creditors provides information to whichever bureau they want due to voluntary nature of the credit report system. You should not just ask for a credit report from that your friend working in a bank, you will definitely find it difficult to comprehend. A direct copy from the credit bureaus are customer friendly.
No need to talk further about the personal details; quite self-explanatory. Just a breakdown of who you are, what you do and where you live.
In your credit report, you will see four sections; personal details, credit history, public records, and enquiries. Your credit history is the most important section you should be concerned about for the sake of your credit. This is where you’ll find the items that will prevent you from getting any loan approved and give you a negative credit report. In case you’ve ever had a credit turned over to a collection agency by your credit company, this is where you’ll find it. This is the most negative thing that can ever happen to your credit.
Your credit history will reveal your credit; mortgages, car loan and department credit cards. The essence of reading through your credit report is to be able to calculate and ascertain your credit score. Be aware that your credit score is determined by five specific factors that you should know. Your payment history is the first and is weighed at 35% of the today score; the punctuality of your payment will lead to higher score. However, payment history is rendered into lower scores due to bankruptcies, late payment and delinquencies.
Another determinant of your credit score is your debt to credit ratio. This is reached by weighing your credit debt against your credit limit, this factor accounts for 30% of the credit score. You should also be aware that the duration of your credit and the management of your financial history is not left out of the formula. That is the main reason why you should never close your old accounts, it will amount to 15% of the credit score.
Opening of new credit lines and seeking for answers to opening new credit account is also used in calculating the credit score. This criteria forms a basic 10% of the credit score; spread your enquiries for new credit over a long period to arrive at a positive credit rating. Lastly, the number of credit facilities you utilize is a great credit score builder. Lenders want to be sure you are performing well in other line of credit other than theirs, this is also another 10% of the credit score.
When it comes to credit, just know you are being watched. The credit bureaus and your creditors are watching you closely. Don’t turn a blind eye towards your credit, request for your credit report from all the three bureaus annually and correct every inaccuracies.
Having adverse accounts reflect on your credit report is rather detrimental to getting a better credit score. It could be extremely frustrating seeing negative information on your credit report. You just want it to go away. You probably would have seen lots of ads make claims like “We can erase your bad credit-100% guaranteed”. These are ads from professionals. You can also do it yourself actually. To help your way to a better credit score, here are some tips to getting adverse accounts removed from your credit report. You will agree with me that a better credit report is a key to getting approved for credit cards. Therefore take advantage of these tips and get a credit repair as fast as you can.
• Start with a Credit Dispute Letter
By law, the FCRA (Fair Credit Reporting Act) allows you to dispute any item that you find questionable. Write a detailed dispute letter using this advanced credit dispute letter template. Send the letter to the credit bureau. Once the bureaus receive a dispute, they contact your creditor. Creditors are given 30 days to verify the account. In a situation where the account cannot be verified, it must be removed from your credit report.
• Write a Goodwill Letter
Disputing the negative entry might not work. Don’t worry. The next step to take is to write the creditor or collection agency. Ask them to remove the negative entry out of goodwill. Writing a goodwill letter is basically to explain your situation to the creditor. This would work faster if you’re a current customer because they would want to keep your business.
• Negotiate “Pay For Delete”
If you have charge offs, the best way to get them removed is to negotiate with the creditor. Many times, they might have already sent the account to a collection agency. However, some might be willing to negotiate. Offer to pay the unpaid debts if they agree to delete the negative entry from your credit report. Don’t do this over the phone. Removal is more successful when you get everything in writing.
• Have a Professional Remove the Negative Entry
You might not be comfortable handling your credit repair yourself. If you are the type of person who would prefer a professional handle it, hire a professional credit repair form to get it fixed. They usually get adverse accounts removed a lot quicker. They can delete all kinds of negative items from your credit reports, including: bankruptcies, foreclosures, repossessions, charge offs, judgments, tax liens, collections, late payments and more.
In reality, you will need a professional to get this done for your quicker and better. Doing it yourself without the right knowledge will not help your credit, be ready to involve a professional firm.