What Credit Card Debt Does to Your Credit Score

Credit card debt is known by most people as one form of bad debt. It's really the type of debt that no one should have but in an emergency. A credit card is something that gets a very high interest rate, which is one reason to avoid this type of debt. Unlike a car loan, too, you aren't steadily paying off a credit card. Instead, you can run up more and more debt until you reach your maximum limit. Then, you can just pay it down and start all over again.

Besides this, credit cards normally have very high payments. This is because they have ridiculously high interest rates. Even if your payments are high, though, making minimum payments can often land you in debt for literally years to come. Even if your original debt isn’t that large, credit card interest rates can cause your payments to drag on for months and months on end. Eventually, you can even end up paying twice as much as you originally put on your credit card all because of compounding interest!

Another reason to avoid credit card debt, though, is that it can also cause your credit score to suffer seriously. Because this is high risk debt, the credit reporting bureaus mark it very unfavorably on your report. Having a load of credit card debt is probably the surest way to get your score down other than making none of your monthly payments on time.

The main way that credit card debt is scored isn’t necessarily, though, by how much total debt you have. You can have $10,000 of credit card balances and still have a great credit score. Mainly, the companies who make your score actually adjust it based on how much debt you have compared with how much credit you have available.

If you have $10,000 worth of debt but have a $100,000 credit limit, your score will still be really high. If you have $2,000 worth of debt and have only a $2,500 limit, your score will take a huge hit. The closer you come to maxing out your cards, the worse your credit sore suffers.
This is why the quickest way to repair your credit is to pay down credit cards. As soon as you see that your score is starting to suffer, work on getting those balances down. You’d be surprised just how quickly this can turn your score around!

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Don’t Allow Bad Credit to Haunt You

Bad credit can seriously affect your life, from an inability to make small purchases to losing a coveted job prospect. Many business check credit reports for insight on your responsibility with financial matters, and a bad score will tell them everything they need to know. You don't have to allow your bad credit to haunt your daily life, though. With some time and effort, you can begin to repair your credit rating.

First of all, you need to obtain a copy of your credit report. You can get a free credit report once per year from a few different websites. A quick Internet search will find those sites for you. Once you have the report in hand, look over it for any possible credit reporting errors. These may be classed as a mistake when reporting late or missed payments, reports for someone with a similar name, or accounts opened by an identity thief. You may be surprised at the number of errors that appear on your credit report, but you can dispute the charges by calling the creditor. Most creditors will be happy to work with you to have those charges removed.

Next, you will need to focus on the accounts that have several late or missed payments. These reports will fall off of your credit report after approximately two years, but only if you manage to bring your account current and continue to make timely payments. Do not make the mistake of believing that one missed payment will not affect your score. It may only drop the actual score a few points, but the late or missed payment will be recorded for all future lenders to see. This can be the detail that causes you to be denied new credit.

If you have a loan default or a bankruptcy on your credit report, there is nothing you can do to make it disappear. Your best chances to bounce back are to continue to make timely payments to your creditors to show them that you are determined to better your credit history. You can apply for smaller credit cards, but do not use them for large purchases. Instead, make one small purchase per month and pay it off immediately when the bill arrives. This will help to build a better credit rating for you by showing that you can be responsible, but also by improving your debt to available credit ratio.

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Credit Education for College Students

College students these days have plenty of experience with credit. The average student graduates with tens of thousands of dollars worth of student loan debt, and many students even have credit card debt upon graduation. The problem, though, is that many students have absolutely no credit education. They can have degrees in anything but still know absolutely nothing about their credit and the problems it could cause for them later in life.

It's important, then, for parents and other adults to educate college students about credit. There are lots of different ways to go about this. One of the most effective, though, is to simply run the numbers. Like most people, college students are inherently logical, and they'll respond better when something is right in front of their faces. Most students are pretty poor, and they know the value of the dollar. This means that they will respond well if you give them an illustration of exactly what can happen if they go on taking out credit.

One way to do this is to use an online credit calculator. It can show you just how much interest you'll pay on even a small debt over time. You can also use these to show how long it will take to pay off a debt at a certain rate or how much money you'll pay in interest by paying minimum payments. Many students assume that it's okay to make minimum payments, for instance, on student loans. They just don't realize how much more money this will cost them over the life of a loan.

Another way to work with credit education with students is to let them know how much a bad credit score can cost them. Many students aren't even aware that they have credit scores, even if they've had credit cards for years. Talk to your college student about how a poor credit score can affect them before they start to create a terrible score that's too hard to dig out of.

Most college students graduate with big dreams. They want to get good jobs and buy beautiful homes and cars. What they don't realize is that a bad credit score can keep them from getting the job of their dreams, as many employers look at credit scores to get an overall idea of how responsible someone is. Also, a bad credit score can keep someone from getting a home or car loan, so the decisions college students make now can affect their entire lives.

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Don't Let These Credit Mistakes Happen to You

There are so many different ways that you can make mistakes on your credit report. In many cases, the mistake might not even be one that you made. If you are not diligent in keeping up with your credit history, then your credit score and purchasing power can suffer greatly. There are many mistakes that you can make that you should never want to appear on your credit report, however. These might happen because you just do not realize how negatively they might impact your life. Keep in mind that a bad credit score won't just earn you a credit rejection, but it might cost you a coveted job.

If you miss a payment for more than six months for a particular lender, chances are that the creditor will choose to write off the account. This means that the lender has deemed your debt as uncollectable. You might feel the relief when the calls cease, but you are in for a nasty surprise when you check your credit report. These charged off accounts will remain on your credit report for seven years, and every potential lender that checks your credit history will see that you allowed an account to reach default status.

You may also find that the creditor has turned your charged off account to a debt collector. This means that the debt collector has purchased your debt from the original account. For this reason, debt collectors will try even harder than the lender to collect on debts, because this is how they recoup their investment. Not only will the phone calls begin again, but the debt collector will have the power to report negative entries on your credit report, as well. This means that you will have twice the bad press for only one charged off account.

You can keep this from happening to you. If you believe that you will be late making a payment, be sure to contact the lender or creditor to let them know. Many creditors are happy to work with you until you are able to get back on your feet again. If you have had a life-changing event that could prevent you from making payments for several months, then you should definitely alert your creditors. There are often payment plans and other programs in place to help customers get through hard times, and you can get back on top without affecting your credit score.

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Why You Need to Know Your Credit History

Your credit history is basically a summary of your entire financial life up to this point. Until you started taking out credit, you didn’t have a credit history at all. Once you start this, though, you can easily create a bad history for yourself with just a few wrong moves. It’s like a game where bad moves take away more points than good moves add! Over time, though, your goal should be to build a good credit score, which is done by having a history of being financially responsible and using credit wisely and well.

If you don't know anything about your credit history, now is the time to start learning. There are many reasons to learn more about your history of credit. Here are just a few reasons to look at your credit report sometime soon so that you can start learning more about your personal financial history.

For one thing, knowing your credit history can help you see where you've made mistake in the past. Maybe you took out too large of a car loan at some point and ended up with very high payments. Maybe you have a history of using credit cards poorly so that you have a high balance all the time. This is a terrible blow to your credit score, and it can keep you from getting loans you really need in the future.

Another thing that knowing your credit history can do is to help you take note of possible identity theft. If you know where you’ve been with your own credit, you can see when other people are trying to take out credit in your name or when they have already done it. Your best defense against identity theft is to catch problems as soon as they occur. This is why you need to know what your credit history is and to check your credit report often.

For these two reasons, you really need to know what your credit history is like. Knowing where you come from can help you set a new course for the future. If you've done well with credit in the past, you'll be able to see what you should do to continue doing well in the future. If you haven't done so well, you'll be able to change your behaviors so that you can create a better financial future for yourself.

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A Snapshot of American Credit

Americans have become increasingly dependent on credit cards and loans to purchase items both large and small. Credit cards and consumer loans have allowed Americans to make purchases that are well outside of their means, which leads to a vicious cycle as we try to borrow more money to pay our existing debts. Studies show that 43% of Americans spend more money each year than they earn, and that the average household carries more than $8,000 in credit card debt. This has led personal bankruptcy cases to double in the last ten years.

Revolving credit accounts, such as credit cards, can actually help your credit score, as long as you can keep the balances low enough to pay off each month. Unusually low interest rates have prompted more Americans to apply for extra credit cards, however, which then prompt a higher level of spending. Add to the whole mix the advent of Internet shopping, which usually requires the use of a credit card, and we suddenly find ourselves in trouble with no way out.

The average American has approximately three bank credit cards, four retail credit cards, and one debit card in his or her wallet. Unfortunately, we don’t see our income as a limit for our spending, because Americans average $1.22 in spending for every dollar earned. To put it in business terms, we end each fiscal year in the red.

There are ways to counteract these numbers, however. By taking responsibility for the purchases that we make, we can begin to lower the amount of consumer debt in our own households. It is important to create a household budget, and then to stick to it implicitly. If there are large purchases that you feel you need to make, begin a savings account so that you can make these purchases with cash. You will actually feel a sense of accomplishment when you hand over a debit card instead of a credit card, knowing that you have truly earned the big-screen television or the laptop of your dreams.

If you feel that you are in over your head with your credit card debt, then it is time to make some calls to your creditors. You can work out payment plans to lower the monthly requirements, or you can work with the creditors to get the debts paid sooner. The most important thing, however, is that you take the initiative to get your household debt under control.

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7 STEPS THAT CAN HELP YOU INCREASE YOUR CREDIT SCORE

1.Make Payments on Time.

The single most important thing you can do to keep your score high, or improve upon your score is to make your payments on time. Payment history is the largest factor used to determine your credit score. Payments that are 30 days or more past due will show up on your credit report and negatively impact your score. These negative items generally stay on your report for seven (7) years.

2.Dispute Errors and Inaccuracies.

According to recent studies as many as 80% of consumer credit files contain errors. That means that 80 out of every 100 Americans have inaccuracies on their credit report. Chances are you might be 1 of those 80. Inaccuracies, especially ones that are harmful to your credit scores, can lead to higher interest rates on loans and credit cards or denials for new credit.

After you've obtained a copy of your credit reports review them carefully to identify any items that are negatively impacting your credit score and highlight everything you believe to be incorrect, inaccurate, errors or obsolete, These could be inaccurate or outdated accounts, unauthorized inquiries, collection that are not yours, duplicate derogatory accounts and outdated or unknown public records and accounts listed as "settled," "paid derogatory","paid charge-off" or anything other than "current" or "paid as agreed" if you had in fact paid on time and in full.

3.Make Sure Proper Credit lines are Posted on Your Credit Reports.

Often, in an effort to make you less desirable to their competitors, some creditors will not post your proper credit line. Showing less available credit can negatively impact your credit score. If you see this happening on your credit report, you have the right to complain and bring this to their attention. If you have bankruptcies that should be showing a zero balance make sure to they show a zero balance! Very often the creditor will not report a "bankruptcy charge off as a zero balance until it's been disputed.

4.Pay Down Debt and Don't Max Out your Credit Cards.

The second largest factor impacting your credit score is how much you owe. This accounts for 30% of your score. The more you owe, the lower your score will be. Someone who owes $30,000 is riskier than someone who owes only $1000, all else being equal. So a great way to increase your credit score is to pay down as much debt as you can. Another factor in the credit score formula is whether you use most or all of the available credit on any given account. The theory is that if you max out an account, it may reflect some financial difficulties that could increase your risk of default.

5.Keep Old Positive Accounts Open.

Length of credit history is another important credit score factor, so it can be to your advantage to keep open older accounts that are in good standing. While it is important to keep the total number of open accounts manageable, it may be more hurtful to your score to close an old account than to keep it open even though it increases the number of open accounts.

6.Keep Revolving Accounts Open.

It is very helpful that you maintain a variety of credit accounts.If you do not have four active credit cards, you might want to open some. If you have poor credit and are not approved for a typical credit card, you might want to set up a "secured credit card" account. A secured credit card requires you to make a deposit that is equal to or more than your limit. This guarantees the bank that you will repay the loan and is an excellent way to establish credit.

7.Use Caution When Applying for New Credit.

Every time you apply for a credit card, line of credit, or other loan, an inquiry is made to your credit report. While new credit is the least important factor in your score, it is still an important issue to consider. When you are shopping for a new loan or credit card, do your shopping in a relatively short period of time. So to avoid these inquiries, apply for new credit only if you must.

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Educate Yourself on Credit Scores and Reports

Your entire spending history is detailed in credit reports. Potential lenders can obtain this credit report and have access to your payment habits with utilities companies, school loans, car loans, mortgage payments, lease payments, and credit card bills. Not only can these creditors see your payment history, but they can also see the amount of debt you have in relation to the amount of credit that you have available to you. All of these factors work together to determine your credit score. If you have been irresponsible with your bill payments, and you have spent well outside of your financial means, then your credit score will suffer. This lets potential lenders know that you are a credit risk, and you could suffer the sting of a rejection, or end up with interest payments that add thousands of dollars to the cost of a large purchase.

Your credit habits are reported to three major credit bureaus: Equifax, Experian, and TransUnion. For the most part, these three credit bureaus keep separate credit histories, and what you find reported there depends on which creditors use what credit bureau. For instance, a retail store may only check the Experian credit report, which means that you will only be reported to Experian for that particular creditor. Larger lenders, however, will check all three credit bureaus. This is true for car, mortgage, and education loans. By defaulting on any of these loans, you can expect your credit score for all three credit bureaus to suffer.

Be sure to check your credit reports regularly. By doing so, you can be sure to remove any errors from your credit history, which can drastically improve your scores almost immediately. If you see that there are derogatory reports on your credit report, it is a good idea to contact the lenders in question to negotiate payment terms or pay off the loan in order to remove the bad reports from your credit history as soon as possible.

Your credit score is definitely the most important part of your credit report. Don’t be fooled into thinking that a good credit score will gain you automatic approval, though. Potential lenders check everything on your credit report, and one missed payment on your record could mean the difference between a lower interest rate and an outright credit rejection. Take responsibility for your credit rating, and actively work to keep it healthy.

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How Credit Bureaus Calculate Your Credit Score

The three major credit reporting bureaus all use a similar formula based on the Fair Isaacs formula, a proprietary mathematical algorithm that spits out your credit score number based on a bunch of information about you. The math part isn’t really what you need to know, though. What you need to know is what information goes into making your score and what type of information is the most important for your score.

Basically, your credit score is based on information about your entire financial life, including your debt, payments, and open accounts. The information that goes into your score, though, is weighted. This means that some categories count for more than others. Here is a breakdown of how the credit bureaus weight information, in general, to obtain your credit score.

The largest chunk of your credit score is based on the way you pay your bills. About 35% of your score is based on this information. Recent information counts for more here, but older information counts, too, especially if it’s something like a bankruptcy. It takes some time for missed payments, collection’s notices, and bankruptcies to fall off of your credit report, so these things may take some living down if you’ve been through them.

Next most important on the list at 30% of your score is your debt to credit ratio. This is the amount of money you owe versus the amount of money you’re allowed to borrow based on things like credit cards and lines of credit. The lower your debt compared with your credit, the better off you’re going to be in this category.

15% of your credit score has to do with the length of your credit history. The longer you’ve had good credit, especially credit in good standing, the more you’re going to get in this category. This is why you don’t want to close your oldest account after you’ve paid it off, necessarily.

Next, 10% of your score goes to each of two categories: mix of credit and recent inquiries on your report. It’s a good thing to have credit from different things, such as a car, a credit card, and a mortgage. It’s also a good idea to keep inquiries for your credit report low. If a lot of people are asking for your score, lenders will assume you’re getting ready to take out more loans, which makes you a higher risk client.

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What Goes Into a Good Credit Score?

Do you have any idea how much a good credit score can impact your life? It can open up job opportunities, make getting a cell phone contract or a new apartment a piece of cake, and even reduce your monthly payments on a car loan or mortgage. If you want good credit, though, there are a few things you need to focus on. Each credit reporting company looks at credit slightly differently, but they all emphasize different points. Here is a picture of what a good credit score looks like.

First off, a good credit score is based on a low amount of debt overall. Stationary debt like student loans and mortgages count here, but they really only count against you if you fail to make regular monthly payments on time. The most important thing here, though, is your debt-to-credit ratio. This involves revolving debt such as credit cards and lines of credit.

Let’s say that you have a credit card with a $5,000 limit. If you use it only for gas and pay it off every month, you’ll be carrying a zero balance, which is great for your credit. If you’re carrying a $2,000 balance, less than 50% of your limit, that’s not too bad and won’t count against you too much. If you’re carrying a $4,000 balance, though, that will hurt your credit because you’ve almost maxed out your limit.

Debt-to-credit ratio is one of the most important pieces of a good credit score. This is why people who want good credit scores focus on paying down revolving debt and unsecured loans.

Another important piece of your score, too, is whether or not you make payments on time. Late payments on your cell phone, apartment, credit card, mortgage, car, or pretty much anything else can count against you here. Even one or two late payments can wreck a credit score, so most people with a high score have no late payments within the past few months or even years.

One other important aspect of the credit score is the age of your credit. The longer you’ve had at least one credit account, the more your score will improve. This is why it’s important not to close lines of credit even after you aren’t using them anymore. A person with good credit will generally leave these lines open, using them occasionally and paying them off immediately.

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How to Dispute Mistakes on Your Credit Report

Did you know that almost 80% of credit reports have a mistake on them? Many times, these mistakes can keep you from getting loans, apartments, or even job offers. Your credit report and score are a huge part of your life, and if your report isn't accurate, you could suffer serious financial damage. A poor credit score can cost you hundreds or even thousands of dollars a year! The problem is that many people don't even know there are mistakes on their credit reports. If you haven't checked your report in a while, order a copy of your credit report from all three major credit bureaus – Equifax, Experian, and TransUnion – today.

When you get your reports, which you can do instantly online, check them over carefully for errors. Sometimes they have clerical errors like incorrect or misspelled addresses or even names. Other times, the errors are with account information. Look for accounts you?ve closed, credit you never took out, or amounts that are reported inaccurately. Keep in mind that your scores are only updated once a month or so. If you've recently paid off a debt or closed an account, it may not yet be shown that way on your report, but this might not actually be inaccurate – just not up-to-date.

If you do see mistakes, which is likely considering the common nature of mistakes on these reports, you need to go about fixing it. Your first step is to contact the credit bureau. You can do this online. Basically, you'll just ask them to look at that particular mistake, conduct research as to its accuracy, and take it off your account. The bureaus are required to respond to your request within three months by either removing the inaccurate information or by telling you why they can?t do that.

Sometimes things get a little messier than this. You may actually have to call the creditor or send a letter to have them report the closed account, settled debt, etc. to the credit bureau. Sometimes this takes a process of phone calls and letters sent before you can get rid of mistakes. It's important that you keep going until the information is removed. Also, keep careful records of every single phone call or letter, along with what information you get back from the companies you?re communicating with. This will give you recourse in the case that the company tries to wiggle out of your claims of inaccuracy.

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Top Three Ways a Bad Credit Score Hurts You

Many people know that their credit scores have an effect on their lives, but they don?t realize the actual ramifications of that score. Your credit score invades every single portion of your life, and it can hold you back or push you forward in a lot of ways. If you don?t have a good credit score, you might be wondering what, exactly, that is going to affect. The truth is that a bad credit score can affect all sorts of things in your life. Here are just the top three ways a poor score can affect you.

First, a bad credit score can obviously affect your chances of getting credit. This is what it?s primarily used for. Your score helps potential lenders assess how responsible you are with money and how much extra debt you can afford to take on. If you already have a lot of debt or a history of failing to make payments on time, you are much less likely to get a mortgage, car loan, or credit card than if you had a good score.

Not only can a bad score keep you from getting the loan you need, though, but it can also keep you from getting good rates on a loan you do receive. It may not seem like much, but a difference of even one or two percent can make a big difference on your payments and overall interest payments over the life of your loan.

Second, a bad credit score can actually keep you from getting a job. That?s right. Many people are totally unaware of this fact. Basically, when you are applying for a job, your potential employer will assess your character in every way possible. Many will pull your credit score, which is a measure of overall responsibility and lifestyle. If your score is terrible, you may get turned down for a job that you are otherwise qualified for!

Third, a bad credit score can keep you from getting things like a cell phone contract or a rental home. These things, too, rely on your credit score as a measure of your responsibility. If you?re notorious for missing or making late payments, you?ll be less likely to get a contract with landlords and other companies.

As you can see, having a poor credit score can really leave you with some poor life options. This is why it?s vital to take every possible step you can to repair your credit score.


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You Have the Power to Fix Your Own Credit!

Everywhere you turn, you will see offers from others to "fix your credit." There will be debt consolidation services, credit debt lawyers that promises to create a "new credit report" so you can start from scratch. We’re not saying they are 100% scams, but we are saying that is money that you do not have to spend! You have the power to fix your own credit report.

What is required from you is that you check your credit on a regular basis. The government only guarantees you one free credit check per year. In order to get full access to your file, you may need to subscribe to a credit-reporting agency’s services. The best you can do is to purchase a credit repair kit so you can get help with the technical requirements (letter drafting, and so on). However, when it comes down to communicating with the credit bureaus, the process is rather simple.

You write a letter to the bureau or bureaus that are listing the erroneous information. You provide your evidence (always send copies) and explain the situation in a letter. You request an investigation into the matter and the bureau opens a disputes case. They report back when the case is closed, whether in your favor or not. The good news is that even if the case doesn’t close in your favor, you can still include a letter in your credit report explaining your side of the story.

Now you must take steps to repair your bad credit history. No one else can do this for you, regardless of any sensational offers made. Debt consolidation services do the same thing you have the power to do—they negotiate a payoff balance. (Even if they do get a payoff balance, they will charge you for their services, which defeats the whole purpose of "savings") A credit debt lawyer can only help you in reducing the volume of creditor harassment. As for software that promises to create a new credit profile, this action would be illegal!

Instead of letting others help you for a fee, help yourself to crawl out of debt and earn your way back to a favorable credit score. Create a budget that you can work with and then start analyzing your credit report. It all begins with you!


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Credit Scoring Can Help You

The words "credit score" have the power to strike fear into many hearts. Your credit score can be the make or break whenever you are ready to make a large purchase, so it is important that you keep a close eye on your credit report. By knowing exactly what is reported, you have the ability to work on your credit score by clearing up any old debts and derogatory reports. It can take some times, but it is definitely worth it, in the end.

Your credit score is extremely important for many reasons. When you have an excellent credit rating, many purchases become much easier. You will find that loan approvals for large purchases, such as cars or mortgages, will be approved easily. If you have an outstanding credit score, it is possible that you will receive preferential treatment and lower interest rates. Good credit also returns nearly instantaneous approvals, so your waiting time is reduced significantly.

Credit scores have become a safe and easy way to keep track of an individual’s spending and borrowing habits. Credit scores take into account your entire credit history, which means that a mistake with one account may be evened out by an excellent history with another account. You will find that your credit report can really help you in many situations, rather than hurt you, so why would you be afraid of that?

Your credit rating also lets potential lenders know exactly what kind of loan you can afford. In the past, lenders may have been a little more reserved with the amount that could be approved, but with your whole credit history in front of them, they can see just how much debt you have as compared to your income. This means that you can choose a car with heated seats, or buy the house with the swimming pool, when previously you would have had to settle for less.

These credit scoring bureaus have made it possible for lenders to offer lower interest rates, because they can better control credit losses. Your good credit score assures the lender that you are trustworthy, which will win you good favor when it comes time to offer the lending rates. By improving your score and repairing your credit report as you go, you are opening up the path to better credit terms, lower interest rates, and the ability to make the purchases you really want.

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Fixing Bad Credit One Step at a Time

Bad credit can really ruin your life. It can cause you to be unable to get a home loan or a car loan. It can even keep you from getting the job of your dreams, since more and more employers are checking credit reports before deciding who to hire. You don’t have to let bad credit ruin everything, though. You can actually fix it, as long as you have the right tools and the right steps to follow.

Step one of fixing your credit is knowing exactly how bad the problem is. This means that you need to spend time looking over your credit reports and credit scores. Sometimes when you do this, you’ll find that part of your problem isn’t your problem at all. Sometimes part of the issue is mistakes on the part of the credit reporting company. It’s estimated that about 70% of credit reports contain errors, some of which dramatically change a person’s resulting credit score.

Step two of fixing your credit is starting to address the problems you can work on right away. One of the major reasons people have a bad credit score is because they don’t pay bills on time. If you can’t make the payments, you might need to cut out unnecessary things like your cable and Internet bills. Another option if you have trouble with cash flow is to rearrange your due dates, if possible, so that they are due after your paychecks. Of course, you can always do it the old fashioned way and save some money to pay next month’s bills, too.

Another major reason for bad credit is a high debt to credit ratio. This means that on revolving debt like credit cards you’re carrying high balances relative to the credit you have available. It’s best to carry less than 50% of your overall credit allowance. Any more than that, and your credit score will definitely suffer. The best way to deal with this problem is to simply pay down your credit cards as much as you can.

Finally, there are some things that you just have to wait out. You can’t get rid of a bankruptcy on your report for a certain number of years, depending on which type you filed. You also won’t be able to get rid of things like notices of late payment until they are off your records in a few months or years, depending on the situation. You need to do what you can, and the rest of these things will take care of themselves over time.

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How Your Credit Score Can Be Affected

It may surprise you just how many things can affect your credit score. Your credit report is how lenders and potential employers can assess your financial responsibility and the risks that may be involved in trusting you with fiscal tasks. You can avoid any major pitfalls, however, by making yourself aware of the many things that can affect your credit rating and by practicing good credit habits.

The number one thing that will negatively affect your credit rating is a missed payment. You might not notice a large drop in your credit score, but the derogatory report from the creditor will alert any potential new lenders to your bad choice. Consistently late or missed payments will effectively destroy your chances for new loans, and could even cost you when seeking new employment.

Allowing an account to be written off may save you the hassle of creditors phone calls, but they will remain on your credit history for seven years. In addition, the account could be turned over to a collection agency, which will only double the amount of phone calls that you receive. Debt collectors also have the power to report you to the credit bureaus, and that will just add one more negative mark to your credit rating.

Bankruptcy will utterly devastate your credit report. You may think that it is your only option, but it is advisable to seek credit counseling before taking that step. A bankruptcy can wipe out your debt, but that does not mean that you are starting with a clean slate. Instead, your bankruptcy will remain on your credit report for ten years. It also alerts creditors and potential employers that you have a bad habit of getting into things over your head.

Credit cards can be useful in building a good credit rating, but many people abuse the power that a credit card can give. Do not be tempted to open multiple credit card accounts in an attempt to build better credit. Often, you will only end up with maxed out credit cards and no way to repay the debt. Your credit score takes into account the amount of credit that you have available and compares it to the amount of debt that you have built. A maxed out credit card does not offer a low debt to available credit ratio, and will result in a lower credit score.

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Get Out of Credit Card Debt to Improve Your Credit

If you’re concerned about your credit score, you should be. This little number can affect your entire life. It can keep you from getting a mortgage or a car loan, and it can also bar you from getting the job of your dreams. This number can even keep your interest rates high, which can drastically affect your monthly payments and your overall interest paid on loans of any sort.

If you want to improve your credit score, the best way to do it is to pay off credit card debt. This type of debt is known on your credit report as revolving debt. Unlike a car loan that you get for a certain amount and pay off slowly over time, you can run up credit card debt time and again. It’s not predictable, which makes it more dangerous.

When you have a credit card, as you’re probably already aware, you have a credit limit. This is the most you can take out on your credit card at any one time. If your credit limit is $5,000, you can carry a balance of up to $5,000, and if you go any higher than that, you’ll either be denied a charge or you’ll have to pay major fees and such.

Your credit report is greatly affected by how much credit card debt you have. It’s not just the total amount of debt you have, though, but it’s your credit to debt ratio that affects your score. Basically, the lower this ratio is, the better. This means that if you have that $5,000 limit, you want to carry less than $2,500 in balance to have a good credit score. If you carry a balance that is close to your limit, your credit score will dramatically drop.

This is why the most effective way to quickly raise your credit score is to pay off credit card debt. You can do this by simply paying as much over the minimum payment as possible. If you simply focus your financial efforts on paying off this particular debt, you’ll eventually find that it’s not too difficult. It will take discipline. You might need to eat at home instead of eating our or cut out the premium cable channels. You’ll find, though, that you’ll be much more comfortable when your credit card debt is low and your credit score is as high as possible.

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Using a Credit Card Wisely and Well

Credit card debt is some of the worst debt you can have. It’s dangerous debt for consumers and creditors alike. This is why interest rates on credit cards are so high. The banks who are issuing the cards know that they might lose a customer to bankruptcy, and they charge astronomical interest rates to make sure that they make money off of every possible customer.

Credit card debt can weigh down your monthly budget with unnecessary payments, and it can also cause your credit score to take a huge hit. This type of debt is known as revolving debt. This means that instead of taking out a certain amount of debt and paying it off in a certain amount of time, you can take out more and more debt, within certain limits, every month. This means that this type of debt is unpredictable, so it counts seriously against your credit score if you have a lot of it.

You can, though, use a credit card wisely and well with the right tools and self discipline. The key to all of this is that you know you’re using the card for the right reasons. You don’t need to live off of a credit card, but you can use it to build up your credit. The way you do this is to open a credit card and use only what you can pay off within a month. Then, you will have a low debt ratio, so you’ll have a good credit score.

One way to do this is to use the credit card only for particular types of purchases that you know you’ll be able to pay off within a month. For instance, you might choose to use your card only to pay for gas. Then when your bill comes in, you pay it off in full every month.

This can get you points in a couple of ways. First off, it means that you’ll have a low debt to credit ratio. You can’t have a ratio at all unless you have some credit available. If you have a credit card limit but carry no balance, you’ll have a good ratio that will cause your credit score to increase.

Also, if you pay your card on time every single month, you’ll be able to rack up credit score points for paying your card on time. It’s important that you’re never late, though, as even one late bill can really sink your score.

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Easy Credit Mistakes We All Make

Even if you are trying to clean up your credit score, there are several mistakes that you can easily make. Don’t get trapped by bad advice, because you could end up hurting your credit score more than helping it. Even if something seems like a logical decision, you should be sure to research the ramifications before putting your decisions into play.

The number one mistake the people make when trying to improve credit score is to close their credit card accounts. A large part of your credit score is your debt to credit availability ratio. It is a good idea to pay off your credit cards, but you should leave the revolving account open. This means that you will have more credit available to you, which will offset the amount of debt that you owe. By closing those accounts, you rid yourself of the available credit, which makes the debt you owe appear even larger. In fact, the wisest thing to do is to use the credit card once a month for a small purchase, and then pay it off immediately when the bill arrives. By doing this, you will keep the credit card account open and active, which will prevent the credit card company from closing the account for you.

The second most common mistake that people make is a missed payment. This is, of course, a common sense thing. However, you may believe that missing a payment here and there will not affect your credit score, and you might be right. The score may not drop more than a few points with each missed payment. When you apply for more credit, though, your potential creditors will look at more than just the credit score. Your payment history with other creditors will definitely come into play when they are making the decision to approve you. You could end up with higher interest rates because of your decision.

One mistake that may surprise you is the decision to settle with a lender on a past due account. Of course, this is a quick way to have a debt removed from your life. The settlement will not disappear from your credit report, however. It will, instead, be marked as a deficiency balance on your credit report. You may be able to negotiate terms that keep your lender from reporting the deficiency, but the best idea is to negotiate payments that will make paying the full amount a possibility.

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Easily Understand and Improve Your Credit Score

If you have ever received your credit report, then you know that it can be difficult to make heads or tails of it. There are a few easy ways to understand exactly what you are looking at, but there are a few things that you should remember. First of all, the credit score is probably the most important aspect of the entire credit report. This is the first thing that any potential creditor will see when you are attempting to make a purchase. The score can read between 300 and 850, with 300 being a very poor credit rating, and 850 being a perfect credit score. Most credit scores will fall between 400 and 750.

A credit scoring of 680 to 700 is considered an excellent score. Higher credit scores will possibly grant you preferential treatment from potential lenders, and will likely earn you lower interest rates on any new loans. You are considered a very low credit risk when you carry credit scores this high, because it is obvious to lenders that you take your finances seriously and pay all bills on time.

There are three different credit reporting bureaus: Equifax, Experian, and TransUnion. Many lenders will only refer to one credit bureau, which means that any inquiries and approvals will appear only on that particular credit bureau’s report. Larger purchases, such as auto and mortgage loans, will search all three credit bureaus for a more accurate picture of your credit history.

Every creditor on your report will state your payment history. If you find any errors, you may dispute them. The creditor’s phone number should always be readily available on the credit report to make disputing errors easier for you. Do not hesitate to report any errors on your credit report, because it could make a difference of twenty to one hundred points in your credit score.

If your score is lower than you expected, there are several things that you can do to improve it. There are no quick fixes, however. You must be prepared to make all of your bill payments on time. Keep low balances on your credit cards, but do not cancel any of the accounts. Contact creditors if you feel you may need to submit a late payment, because this will often keep the creditor from reporting you to the credit bureaus. In time, you will see your credit scores rising, which will open more doors for you in the future.

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The Problem with Credit (And One Great Solution)

Where does the problem with credit start? Many believe that it is a generational problem dating back to the baby-boomer era. In the old days, when our fathers still knew their fathers and grandfathers, we as a country were recovering from The Great Depression. (Imagine a recession like we have going now but ten times as bad) When the Depression was lifted, the country seemed to learn the concept of credit; it wasn’t a free license to spend. Credit was something valuable, a note or a promise to pay within the month.

Nowadays, we are bombarded with TV advertisements and Internet ads, encouraging us to spend. In the 1950s and 1960s we were not exposed to the shamelessness of today’s modern advertising world. Today, children are being taunted to spend money with their credit card, as if these cards are free gift certificates. Make no mistake about it—the spending problems of the average consumer make up an important part of our nation’s troubled economy.

Whether you are in serious debt or have a perfect credit score that you cherish, you should strongly consider ordering credit repair software. You also have the option of subscribing to a credit-reporting agency that lets you check your credit score as often as you want. This is important, as new credit items can be reported at any time; a once-a-year review will not be much help to you.

If you are in serious debt then you should take steps to make sure that your payments are going through and delinquent notices are being removed as they are paid. If you have perfect credit, then make sure that your credit file is free from fraudulent charges. This happens more often that we would like to think—75% of all credit reports contain erroneous charges!

Be a part of the solution, not the problem. Take your credit score seriously by checking your file on a regular basis.

The 4 Worst Credit Mistakes You Can Make

It’s understandable why you’re in a panic and thinking of taking desperate measures. After all, nobody wants to be in debt. No one wants to be in a bad credit status. The very idea of owning thousands of dollars to your creditors is indeed discouraging. However, no matter how bad the situation gets for you, there is no need to resort to any of these four credit mistakes.

1. File for Bankruptcy

There are almost no advantages to filing for bankruptcy. It bludgeons your credit to death, and in many circumstances, you may still be required to pay off a negotiated balance to your creditors. This is mainly an option for company heads.

2. Attempt to Create a New Credit File

This is against the law. You are only issued one credit file for your legal name. Do not believe anyone that suggests you can change your credit history online.

3. Hire a Credit Consolidator or an Attorney

Honestly, what is this going to do for you? There is a possibility (not a guarantee) that such an expert can stop creditor harassment. However, you will be paying this individual hundreds if not thousands of dollars to do something within your own capacity.

4. Assume Your Credit is Just Fine and Dandy

Now we come to the absolute worst mistake you can make! With over 75% of all credit reports showing erroneous or fraudulent activity, you cannot afford to assume anything when it comes to your financial status. One credit report a year will not suffice when your reputation is on the line.

Why not order credit repair software and bring yourself out of debt? You can also keep tabs on your credit report by working with a credit reporting agency. Regularly checking your credit file is the first step towards a positive change. Avoid these big mistakes and protect your credit!

What Do You Need in Order to Repair Your Credit?

Anyone that is unconcerned with his or her credit score is probably not aware of the prevalence of credit card fraud and identity theft in the U.S. today. Did you know that 75-80% of all credit files have errors or fraudulent charges listed?

How does this happen? These errors could be anything from a duplicate charge to a stolen credit card number. How many times has a person gone into a restaurant, left a receipt showing and had their card number stolen as a result? It happens more often than you think. This is why it’s important to check your credit report more than once a year. When you work with a credit-reporting agency you are not limited to three free reports a year. Instead, you can check all three bureaus and other non-public databases several times a month or even a few times a week if you so desire.

What do you need to repair your own credit? You need to be aware of your informational resources. A credit repair software system could help you in this respect. The process of credit repair will involve writing dispute letters as well as negotiating with creditors individually. Financial discipline, planning and diligence will also be required. Remember that you have the right to request an investigation of any item on your credit rating. If the credit bureau cannot verify authorization, the item must be removed.

If you are making an attempt to fix your credit then you must be able to track your results and see your progress immediately. A credit-reporting agency can help you in this regard. When you have access to your file, you can place a fraud alert status on your credit report. Even if you cannot settle a dispute, you can add a letter to your report that shows new creditors your side of the unresolved issue.

Why not keep one step ahead of all those would-be credit thieves by taking an active interest in your credit report?

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CreditUmbrella is the leading credit repair software with all the tools and features needed to start to repair your own credit.