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HOW CAN PARENTS HELP THEIR KIDS BUILD CREDIT AT A YOUNG AGE

In the day and age that we live in today credit scores have a
great influence on our financial future and that is why many
parents nowadays are not only worried about their child’s health
and safety but also about how their kids can build a good
credit.
How soon should one start to build credit? The answer is that
the teenage years are the best time to start building a credit
history. This means that parents will have to take the lead in
explaining the basics of saving, earning and spending before
their kids become teenagers.
Follow these 5 steps and by the time your kids are flying solo,
they should be well on the way to a good credit score.

1. Help your child open savings and checking accounts:

A savings account is the basic building block to help children
understand the financial world. Parents should encourage kids to
deposit birthday money, allowances and cash from any odd jobs
they go into this account and also save up for something they
want to buy. This will help them to learn firsthand as to how
compound interest works.
When your kids are in the early teens help them open a checking
account and teach them how it works and about penalties if they
overdraw or if their checks bounce. This will not only limit them
to their checking account balance but also give them some

spending independence. It will also help show financial
institutions that your teen can handle money.

2. Encourage your teen to get a part- time job:

Working part-time will not only help teach children the value
of money but will also definitely go a long way in making your
child a responsible adult. The thrill of seeing savings grow and
the disappointment of watching money disappear when they
make bad decisions will be a precursor to understanding credit.

3. Make your child an authorized user of your credit card :

The most conventional way that people start building credit is by
taking on a credit card or loan, but one has to be at least 18 to
do this. However, you can build your child’s credit even before
the age of 18 by making your child an authorized user on your
credit card. The credit card company will issue a second card in
the child’s name. The child can use this card as a card of his
own but the only difference is that the primary holder (parent) is
responsible for the entire balance.

4. Co-signing a loan or credit card:

If you think that it is not a good idea to make your teen an
authorized user on your card, you can co-sign his or her first
credit card. This will pack more punch than authorized user-
ship as your child will be the primary borrower and it will do
more to help your child build a solid credit score. But
remember to educate your child how to use the card responsibly.
You should be comfortable with this possibility before moving
forward.

5. Obtain a secured credit card:

If you feel your child is not particularly responsible with money,
the best option is to help your child apply for a secured card
when he/she is 18 years old. These cards are normally fully
secured and require cardholders to deposit a few hundred dollars
which is usually equal to the credit limit. You can make the
initial deposit together. The advantage of such a card is that your
economic risk is just the amount of deposit and some credit
cards come with some additional attractive features like a
reasonable annual fee of about $29 which allow kids to monitor
their credit scores and use a credit simulator to see what the
consequences will be if they missed a payment or continue to
pay on time over an extended period of time.

If your child uses the credit card regularly for small purchases
and pays off the balances in time he/she can qualify for an
unsecured credit card after six months.

Building up a solid credit score will help your child qualify for
loans, auto insurance and even affect whether he/she can get a
job. Therefore, you should monitor your teen’s activities as
she/he gets into the credit habit and allow more flexibility as
responsibility is demonstrated.

Obtaining a reasonable of credit at an early age and using it
responsibly will definitely pay off in the long run. There are
tricks and techniques to build a good credit score a young age
but in the end, it boils down to being responsible.

Don’t Fall into Deferred Interest Credit Cards over the Holidays or You’ll Pay 27% More Interest.

 

America is a paradise for shoppers with a multitude of retail stores that offer foods, electronics, clothing and much more. The savvy shoppers often make a sport of looking for the best prices through sales, discounts offers, perks, interest-free deals and much more. 

Many shoppers may prefer to use store cards instead of their everyday Visa card for shopping as many stores have their own cards and offer better deals. The holiday season is fast approaching and retail credit cards can really save some money. It can also help counteract the ballooning effect that holiday gifts can have on their spending.

Are store credit cards a good deal?

When checking out at a retail store we often come across stores offering 12 months or more free financing, if you apply for their credit card that very day. Chances are that you will be hearing this a lot more often if you accelerate your holiday shopping.

 No doubt these financing offers are very tempting for holiday shoppers-and many take the bait-but are stores credit cards really a good deal? The answer is yes if it is used smartly.  But, before agreeing to apply for the store credit card there is one hidden trick you must be aware of otherwise your “free financing” can backfire in a very big way.  One common miss-step will end up in you paying 25% to 28% more interest on purchases you make.

According to WalletHub, “the trouble arises due to deferred interest”

The difference between 0% Intro APR Cards and deferred interest cards

If you want to make a large purchase with a store credit like a home appliance you may qualify for special financing. Store Credit cards that offer free financing are 0% Intro APR cards and deferred interest cards.

You might reasonably assume that they work the same way, but they are different. You get 0% APR which will allow you to pay back the purchase money with no interest for a specified period such as 12 or 18 months. With Introductory 0% APR you will not be charged interest during the promotional period and interest will start to accrue only on the remaining balance. But on the other hand, differed interest cards are particularly dangerous.  You will be charged interest not on the balance amount as in a 0% APR but interest will be charged on your entire purchase amount.

The Trouble with Deferred Interest  Credit Cards

This is a feature which is commonly found in the fine print of 0% store financing offer plans and particularly dangerous. It is like a wolf in sheep’s clothing as it pairs an enticing offer like “no interest if paid in full” or “special financing” with a clause that can turn sour. Many retailers do not disclose deferred interest clearly enough.  If you make even the slightest mistake of not paying back the entire amount by the end of the interest-free period it can lead to some expensive post-holiday shopping surprises.

With a deferred interest, finance offers you must pay off the entire amount in full before the promotional free financing period is over. If you do not do so then you will have to pay the full amount of interest charges as if the interest rate was effective the whole time. The moment the promotional period is over the “deferred” interest rates comes rolling back, not just the balance amount you owe but on the entire purchase amount.

Let us look at an example as to how much a deferred interest card can cost.

If you had 12 months to pay off a purchase of $1,500 and you had paid $540(minimum payment of $45 dollars per month) at the end of the financing period. The store will then charge you 12 months of interest on the balance which will be a walloping $321 in interest. In addition, you will still owe the $960 balance on your purchase. Whew!

This is by far the biggest negative that is associated with credit cards. The interest rates of biggest retail-branded credit cards are often sky-high, with a standard 24.99% to 27.99% APR. In comparison “the current average interest rate for all credit cards is 13.08% APR”, according to the Federal Reserve.

So before using a “deferred interest” store card you should plan to pay off the loan before the promotional period expires, as sometimes “unexpected things occur and you may not be able to make the payment every month”, says Bowne.

Avoiding getting surprised by the deferred interest

This is how you can take advantage of zero percent finance offers by considering the following precautions:

  • You should make sure you read the terms and conditions carefully to see if the card carries an annual fee, You should also know what the go-to APR will be once deferred-interest promotion period expires.
  • You can plan to have it paid off early by dividing the purchase price by 11 months instead of 12 months.
  • Pay your balances each month by setting up the payment on auto pay. In this way, you can boost your chances of paying it off in time.
  • You should avoid any extra trips to the store to avail of offers on “card member” sales and only purchase what you want.  

No doubt store credit cards offer you much better deals and discounts then typical cash back cards.  You can save loads of money if you are a frequent shopper. But just remember not to leave a balance because “deferred interest” will always destroy any savings and rewards the cards have offered. 

For more updates  call us at  our toll-free number(800) 400-ZINU(9468)

 

 

5 Ways Millennials Can Boost Their Credit Score

boost credit score

Millennials (people aged 18-34)  don’t fully understand what impacts a credit score than older generations but according to a recent study it does not stop them from trying to improve their credit. They check their credit scores most and are trying actively to build and improve their scores according to Discover’s 2018 Credit Survey of US consumers.

If your credit score is lower than what you would like it to be then you are not alone as credit scores are influenced by many factors like   a long credit history (35%,), level of debt utilization(30%) the age of credit(15%)  mix credit(10%) and credit inquiries(10%). It is hard for many millennials to meet these criteria. But the good news is that you can boost your credit score this year by taking some concrete steps. Here are five steps that you can try.

Check Your Credit Report for Mistakes

You need to check your credit reports from time to time to see that they do not have any damaging errors by getting a copy each from the three major credit bureaus. In a study by the Federal Trade Commission in 2013 it was found that one in four consumers had a mistake on their credit reports that could have an impact on their scores. One in a five had an error that a credit reporting agency corrected after a dispute.

In order to ensure that you do not have any damaging errors on your credit reports you should get a free copy from the three major credit bureaus; EquifaxExperian, and Trans Union at  AnnualCreditReport.com. If you come across any errors you should submit a dispute online with the bureau that is reporting the error. You should explain why you believe the information is an error and provide details about what you are specifically disputing. (Including account numbers)

If there are big mistakes clearing them up  could lead to a great improvement in your credit score.

 

Lower your Credit Utilization Ratio

The amount you owe measured by your credit utilization ratio will account for 30% of your credit score.  It can be calculated by dividing the total amount of debt owed by a total amount of available credit. For example, if you have a credit card with a limit of $1,000 and your credit card balance is $200, then your credit utilization ratio is 20% for that credit card. According to Experian a lower credit utilization (using a small amount of credit loaned to you) is preferred.  So if you pay off your debts in time you could boost your credit score.  You should decrease your credit card debt as the amount you owe will make up 30% of your score. But, using too much of your credit can be a sign of repayment risk.

Do not Skip or Miss a Payment on a Credit Card.

 

Missing a payment or skipping even one payment on your credit card can lower your credit score.  It can cause it to drop by 100 to 300 points according to Bruce McClary, spokesman for National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization. This misstep can take you about two years to restore your credit score. So the first thumb rule is to pay your bills on time as this factor makes up 35% of your credit score. You can avoid late payments going forward by setting up automatic payments from your credit cards and other bills.

 

Have a Long Credit History

Having a relatively long credit history affects 15% of your credit score.  Millennials should not close credit card accounts they have opened several years ago as it shrinks a person’s available credit.

Your credit history can be longer if a relative who has a long and awesome credit history is willing to help you and can add you as an authorized user of one of their credit cards. This is one of the simplest and fastest ways to boost your  score. The old card will show up in your credit report and you can also get credit for the history of on-time payments This also means that you have access to your relatives line of credit. If you make purchases it will affect your relative’s credit utilization and it would be the ultimate responsibility of your relative for paying back what you borrow. So that means the relative needs to trust you to be responsible for your purchases. You can avoid purchases altogether –would be vital.

The Necessity of Credit Cards

One of the great ironies of earning a good credit score is that you must have credit to build credit. So having a credit payment history is very important as it accounts for 35% of your credit score. If you do not have a credit card do get one. You can open a credit card for small day-to-day purchases and it should be paid in full each month to build your credit history.

You need to have a mix of types of credit as it affects 10% of your FICO score. Having different types of credit accounts will also improve your  score. In addition to a credit card if you have an auto loan or mortgage that you make on-time payments each month or another credit card pay off each month it will help you to improve your scores.  Obtaining more credit cards at one time can lower your score more.

According to McBride’s you have to “keep your borrowing modest particularly if you have an existing car loan or student loan debt, ”and that  “ paying bills on time , keeping debts modest and paying your debts in time accounts for almost two-thirds of your  score”.

Call us now at (800) 400-ZINU(9468) for further details.

 

 

 

 

 

 

 

CREDIT REPORT AND IDENTITY THEFT

 How to Detect Identity Theft on Your Credit Reports

If you discover some information in your credit report that’s not yours, it could be the result of a file merger error. Statistics show that the majority of people have errors in their credit report. This implies that somebody else’s credit knowledge has been merged with yours.  It may sound awful. So, before you jump to conclusions it will be helpful to understand that there are two main types of incorrect information in your credit report. 

  1. Honest Mistakes: It can be due to a confusion of similar names between people. You were mistaken for someone else at some point during the data collection and dissemination process
  2. Major warning signs
    Another major reason of false information in your credit report is because someone has misused your personal or financial information to open accounts and commit fraud.
  3. If you see a credit card that was opened, quickly maxed out and then never paid in your Credit Report

Or

  1. If you come across collections accounts, bankruptcies and liens you don’t recognize in your credit report it is a sign that something dubious is going on.

If you see one of these warning signs of identity theft, act quickly. You need to get this information off your credit reports,

 

Recovering From Identity Theft: Repairing Your Credit Reports

Have you been a victim of identity theft? Are you concerned about preventing the matter from occurring again?

Identity theft is a crime that will not only damage your reputation but also result in financial and emotional damage. If there are errors in your credit report you should :

  • make a complete list of the errors
  • Write a personalized letter for each incorrect credit report entry.
  • File a report with your local police department and ask them to provide you with an Identity Theft Report.
  • Collect documents that support your position that the entry is an error.

There are 2 straightforward and effective credit repair solutions.

  1. Request the credit bureaus to provide a warning system referred to as a Fraud Alert. A Fraud Alert may be a statement inserted into your credit report requesting prospective lenders to contact you before extending credit. However, Fraud Alerts don’t seem to be foolproof. A few lenders might ignore the alert and extend credit regardless.
  2. You can consult a credit monitoring company to fix your credit report. These services are able to warn you to any activity in your credit report together with inquiries. If somebody tries to use your identity you may be contacted in time to avert difficulty.

Any mistakes in your credit report should be taken very seriously. Failing to deal with them in a timely manner could make your financial life much harder.

To repair your credit report contact Zinu Credit Repair.com .  No upfront fees. Fees will be charged only after your Credit Record is cleared of theft identity.

You just need to send us a copy of your police identity theft report and we will take care of everything. We will, repair your credit report and get back all the benefits you deserve. We will also educate you on how you can identify identity theft.For FREE consultation Contact  

 

 

 

 

 

 

More Tips to Fix Credit Scores

To fix credit score individuals think that registering themselves with bureaus helps them manage their bad credits so here are some Awesome tips to fix credit score.

 

Credit scores can be fixed with the following two-fold process:

1. It helps to understand credit scoring and how to skew credit rating system in the favor of individuals.

2. Using credit repair techniques to clean out bad credits.

 

Practical application one can find in everyday scoring health is simple and one can find it fruitful.

Here are a few tips for credit improvement:

1. Firstly, you need to keep your credit balance below 20% and if you can keep it within 40%, or if that is not possible.

2. Do not apply for crone needs it, as if inquiries are made it can hurt credit scores badly.

3. You need to pay bills on time, how to repair bad credit is the big question? Then one needs to avoid bad credit rating.

4. Since length of credit history effects a score positively, so keeping existing credit card accounts open is essential.

5. Varying accounts, by having both unsecured credit like credit cards and secured credits like installment loans are essential to keep knowledge on.

6. Use your credit regularly.

7. Use your credit cards each month.

8. Lastly, if you have limits on credit cards, that has to be raised as high as possible.

 

Repairing bad credit reports

Now apart for repairing bad credits and using these tips mentioned above, maintaining practical credit scoring health, but getting fast credit repair is essential and what about bad credit times on a credit report?

Most bad credit must be removed from the credit report, especially for unpaid entries, recent entries and any other court or collection entries, so most bad credit accounts may be holding up a score by virtue of its age and more than it is hurting credit score.

As one can see, fast credit repair begins by first understanding credit scoring and then making lifestyle choices to twist algorithms in favor of good credits, hence, is followed up by vigorous credit repair plan to delete certain types of bad credit report.These are some awesome tips to fix credit score.

Follow us here to learn more ways to improve your credit score.

Why is it hard to get Credit Cards?

If there is an unstable economy in the state then the individual finds it tough to get a credit card. Whether it be a home loan or business loan, it becomes a bit harder to get it approved, due to bad credit score. The credit card company does look at multiple factors when they take up a decision.

Credit worthiness

It is also necessary to look up the credit worthiness, but some credit card companies do look into more detailing. Amount of debt that an individual has as his outstanding amount. It is a big factor to get a credit card. If you have a bad credit score then you might have to adapt a fast credit repair process to cover it up. Or else it will become tough to get access to a new card.

Payment History

Forwarding late payments is also another reason that falls hard on new credit cards. If once a people are late in making payments, then it is taken as mercy. But a regular one may make debtor fall into bad repute. During unstable economy, credit card companies do make some strict lending rules. During a raised economy one will not such harder situations to get a credit card.

Overall Credit Score

The overall credit score plays a major role in bringing out a credit card that one may have applied for. If the economic condition is rocky, credit score needs to higher to get a card. Outside the normal rule credit card companies have their own set of rules to maintain a stable economy.

Credit card companies do look into the financial history of individuals if they apply for a credit card. Maintaining a good credit rating will obviously have a better impact. You will be able to meet the uncertainty of economy. Alternatively, the safe way may be to apply for a new card after the uncertainty period gets over.

 

Follow us here to learn more ways to improve your credit score.