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Here’s Why Your Credit Score May Have Recently Gone Up

Credit Scores and credit reports play a vital role in the life of most Americans today. It determines the interest rates consumers pay for the credit card, mortgages and car loans and can ascertain if they qualify for a loan or not. 

Your credit report may get a makeover as the three big reporting agencies (Experian, Equifax, and TransUnion) are doing things a little differently and have started excluding certain items from your credit report that used to damage your credit. This comes in the wake of a study by the New York Federal Reserve which found problems with credit reporting. It has recommended some reforms to improve the accuracy of their credit reports and also remove some negative items so that it can help consumers’ improve their credit scores. Some of the changes that can boost your all-important three-digit credit scores are:

CREDIT SCORE

1. Tax Liens and Civil Judgments

Because of improved standards for utilizing new and existing public records, Experian, Equifax, and TransUnion have scraped most of the tax liens and civil judgments from consumer credit files in July 2017. Again in April this year, they went a step further by deciding to remove all tax liens from credit reports. Once this data is removed some credit scores can go up by as much as 30 points.

According to an estimate by LexisNexis Risk Solutions, about 11% population had a tax lien or judgment removed from their credit file. 

2. Collections

Credit Bureaus have also been removing certain collection accounts from credit reports under the terms of the National Credit Assistance Plan (NCAP). Since the new rules came into effect in June 2017 some eight million people had collection accounts completely removed from their credit reports, according to the New York Fed.

3. Medical Debt

The new rules will make it harder for medical debt to hurt your credit scores. Medical billing process can be complicated and confusing. To give time to resolve medical issues the three important credit bureaus have agreed to exclude medical bills on credit reports until they are at least 180 days due. Another plus is that unpaid medical bills that later get paid by your insurance should be removed from the credit bureau files so that it does not linger on and damage your score.

4. Fines and Tickets

 Due to the recent changes by NCAP, library fines, unpaid gym memberships or traffic tickets that have been lurking in your life will now be removed from your credit records and not damage your credit score.

As a result of these changes consumers are now witnessing a steady stream of changes which have boosted up their scores and according to the findings of New York Federal Reserve report the:  

  • Credit scores of consumers’ have gone up by 11 points on an average.
  • 18% of people saw credit scores go up by 30 points. In some cases, this increase was enough to make a difference between qualifying for a loan and getting it turned down.
  • About 8 million people had collection accounts completely removed from their credit reports after the second half of 2017.
  • The study also found $11 billion reductions in the total collection account balances.

According to Bruce McClary, Vice president of Communications at the National Foundation of Credit Counseling, “If anyone has experienced a jump in their credit scores due to these changes, they should take advantage of the momentum and work towards improving their credit health.”

If your credit score has also seen an increase, you could consider calling your credit card company and negotiate a lower interest rate. This can result in major savings.

The other financial moves you could consider with this better score is taking out a new loan for a mortgage, refinancing your car, getting a better credit card or checking insurance rates, said Kimberly Palmer, the personal finance expert at NerdWallet.  However, you should be strategic, she added.

It is important to note that because of the prevalence of reporting errors, FICO recommends that you should double-check your reports for inaccuracies that can hurt your score.  The recipe to keep your score moving and reaching a good score is that you should consistently pay your bills on time and keep your credit utilization low. You should also apply for credit only when needed and reduce the amount of debt you owe as much as possible.

What Is A Hardship Program & How Can It Impact Your Credit Score?

While we all hope that we will never be in a situation where we can’t afford to keep up with our payments, things do happen. Rising debt can cause excessive stress, especially if you are facing financial hardship due to circumstances beyond your control like health issues, unemployment, sudden major expenses or any other change in income. Even if your financial hardship is temporary it does not mean it is easy to handle. Things can become tricky if you rely on your credit card to make ends meet on your bills. This strategy can greatly raise your debt and lower your credit score.

The good news is that assistance is available. Your card issuer likely offers an unadvertisedhardship programthat could give you the breathing space you need to dig out and get back on the road to good credit. Let us dive into what a credit card hardship plan is and how it might impact your credit in unexpected ways.

  1. WHAT IS A HARDSHIP PLAN?

A hardship plan is also known as a credit card payment plan. It is offered by banks to provide immediate relief to customers who are dealing with a financial crisis and cannot make regular payments due to unforeseen circumstances. This plan allows a consumer to temporarily reduce monthly payments to a manageable level.

 Hardship plans are either short-term (i.e. six months or one year), or permanent (till the card balance is paid).  They often involve lowered interest rate, altered repayment plan, or a combination of the two. Some companies also waive certain late payment fees, over-limit charges, and the like.

2. WHO IS IT FOR?

You may be eligible to enroll in this type of plan if you are struggling to make your credit card payments each month and have some sort of financial hardshipgoing on in your life. The eligible hardships situations include:

  • Major medical issues.
  • Loss of employment.
  • A death in the family.
  • The breakup of a marriage.
  • Unexpected home or automobile repair costs. 
  • Emergency event or natural disaster.
  • HOW TO ENROLL:

The credit card companies typically do not advertise this benefit so it is you who should initiate it. Shore says that most creditors will have a phone number right on the statement which will not be obvious, but you should look for language along the lines “If you have problems paying your balance, call this number.” The number could connect you to the hardship departmentor, more likely, a customer service departmentthat will screen you. But, before you contact the company make sure you have organized your finances and know what kind of help you need. You must be honest with your credit card company about why you need to enroll in such a plan and offer details about your hardship (including the reasons), and how much you can afford to pay monthly and how long expect you expect the problems to last.

3. HOW IT CAN IMPACT YOUR CREDITCREDIT SCORE?

Just signing up for a hardship plan has no effect on your credit. However, figuring out how it will impact your creditwhile you are in it (and after)can be tricky. According to Barry Paperno, consumer operations manager for FICO, “It depends on how it appears on your credit report.” He says, that how the issuer will report your agreement to the credit bureaus is the first question that you ask.So, before you sign up for a payment plan, you should talk with your issuer about what note (if any) will be sent to credit bureaus.

Secondly, while you are participating in a hardship program there is a likelihood that your card company will close or suspend your account until your payment scheduled is complete. This can affect your credit scores by:

  • Increasing your credit utilization ratio. When an account is closed, you eliminate some of the available credit and your score will drop to reflect the increase in  utilization ratio
  • It will also affect the credit mixas FICO® rewards you for having a combination of credit cards, car payments, mortgage and other types of loans. So when a card is shut down your credit mixture changes and that could affect your scores.
  • It can also affect the length of credit historyif your company closes one of your older cards when putting you on a payment plan. As a result, your average credit age will decrease, and your scores could go down.

However, if you successfully complete your program, the initial dip in your credit scores could get your credit back to where you would like it to be. Here is why:

If you are signing up for a hardship program, it is likely that you have already missed some minimum payments on one or more of your credit cards. This means that you have already seen your credit scores decline.

Fortunately, if you stick to a hardship plan’s payment schedule you will rebuild your history of timely debt repayment. Your lender who reported your late payments to the credit bureaus will now report your consistent, on-time payments.  This means good news for your scores.

Bottom line

Do you think a hardship plan is right for you?

Nitzche says “They are not right for everybody.”

If you are facing a relatively minor problem or a temporary financial crisis with just a few cards you can call up your credit card issuer and make your case. This could be a turning point in conquering your credit card debt.

 However, if you are somebody who is struggling with being organized, have multiple creditors, or are intimidated by contacting all of them directly and feel that managing all individual payments is daunting then you should see a credit counselor and consider debt management.

5 Credit Card Myths Unveiled

 

Credit Cards are a keystone of Americans’ purchasing habits. They are no doubt the best financial tool available today as it is easy to carry, provides funds for an emergency and increases your credit scores.

However, like any other financial product credit cards do seem to create a certain amount of anxiety. A Nerd Wallet survey found that a surprising number of Americans are struggling with basic credit card issues ranging from credit scores to revolving debt to reward cards. This is due to the fact that credit cards are surrounded by certain rumors and myths.

So, when it comes to credit cards, it is important to know how to separate truth from myth. Here are five popular credit related myths which plague the consumers, plus the facts that repudiate them.

 

Myth 1: Using a Credit Card can hurt your credit score.

Fact-   Credit card usage does not hurt your credit score.

One common misconception regarding the usage of credit cards is that many people fear that it would hurt their credit score. Well, it is time to burst this myth. The fact is that it should be the first step a person must take towards building a credit score. Credit scores are calculated on the basis of the past use of debt and credit. The irony of credit score is that if you do not have debt or you do not use your credit, you don’t have a score. It will be difficult for you to get certain jobs, apartments and loans in the future.

Tip:  Even if you like paying your bills as you go, it is wise to get a credit card and pay off your credit every month to maintain a credit history. You should also keep your credit utilization ratio between 20-30%.  A credit card can hurt your credit score if you do not use it wisely and rake up huge outstanding bills.

 Myth 2: Maintaining a balance on your credit card helps your credit score

Fact: Not paying your dues can hurt your credit score.

A majority of consumers (54%) are under the impression that carrying a monthly debt balance improves their credit history. This is entirely wrong as this is the worst financial mistake you can make. The minimum amount due is the amount you need to pay to avoid any late charges. It is only a fraction of your total due and varies from bank to bank.

In a short term it is nothing but a myth. You will be relieved that a burden has been lifted from your shoulders but the trouble will start when the interest on the balance unpaid amount accumulates and will be bouncing back to be paid. Your debt will build up in a huge pile and you will soon find yourself neck deep in a pool of debt. Your credit scores will see new lows along with your finances and it will also hamper your ability to raise funds in future.

 

TIP: The best strategy is to use your credit cards and pay off your bills in full each month, so you can keep your overall debt-to-credit limit low. 

 

Myth 3: Getting Rid of Old Cards Helps Your Credit Score

Fact: No, it is just the opposite

Another myth about credit cards is that old credit cards hurt your Credit Score. But, the truth is just the opposite. The saying “old is gold” is very true in this scenario. If you leave your old cards open it may have a number of benefits.  Firstly, they bear testimony to your long time money management skills. Secondly, the older the credit account the more value it adds to your credit history (determines 15% of your score). The other important benefit is that it will keep your credit utilization ratio (the amount of available credit compared to the credit limit) low. It influences 30% of your FICO score.

TIP:  You should avoid closing an old card without a good reason to do so. If you find that the fees associated with your old card are outweighing the benefits you might consider closing the account.

MYTH 4: You can improve your credit score by using a debit card. 

Fact: It will have no effect on your credit score.

 

Though both credit cards and debit cards appear identical, they are at the opposite side of the spectrum and serve different purposes. With a debit card you withdraw money out of your own account whereas, on the other hand a credit card means borrowing short-term funds from financial institutions which you should pay back in full. Your credit score reflects your repayment ability and lenders look at your behavior when you borrowed previously. Prepaid cards and debit cards will not help you better your CIBIL score as there is no involvement of debt in the process.

TIP: You should use your credit card for everyday purchases and loans which you really need and pay them off in full before the due date. Avoid withdrawing money from your credit card as you will be subjected to high fees and high-interest rates and this   will quickly subtract any short-term gains.

 

Myth 5 – Keeping many cards is bad for my credit score.

Fact- The number of credit cards that you’re holding will have no bearing on your credit score.

This myth is conceived from the belief that every card plays a role in increasing your debt.  But the fact is no one credit card can satisfy all your needs. You may need an Airline Credit Card for discounts on flights and hotels, a cash-back credit card to get some hard earned money back in your account and a shopping credit card to get special discounts. Your friends and relatives may discourage you to have more than one card as they are worried that it would play a role in increasing your debt. But as long as you are using your credit cards wisely it will not negatively affect your credit scores. You just have to keep a tab on the amount you spend on each card and pay your bills in time.

TIP: You should not apply for too many credit cards at one go. This could lead banks to reject your request as you will look like a person who is desperate for finance and you have no means to repay your debt. So you should space out your applications for credit cards.  Secondly you should not be impulsive with your purchases. Finally, avoid piling up tons of credit cards that have high annual fees.

If you have been assailed by any such myths it is time to embrace facts. It will help you to be more discerning in decision making and build a strong financial foundation.

If you know about any other credit card myth or rumor you want details on you can connect with us on Facebook or Twitter.

 

Everything You Should Know About Store Credit Cards

With today’s fast lifestyles credit cards are important for consumers and retailers because carrying cash or using checks are often more time consuming compared to retail electronic payment technology. Consumers have a lot of choices when it comes to credit cards like standard credit cards, premium credit cards and store credit cards.

There are many reasons why you would take out a store credit card. Whether you are just waiting in line at the shop to find out if you can save on that day’s shopping or the store offers you the promise of saving money in future, these cards will regularly find their way into your wallet (or phones via an app). Almost all big retailers offer their own cards which will allow you to take your purchases home with a very nice discount and without having to part with a penny at the cash counter.

These rewards and discounts are often tempting but can applying for a store credit card come back to bite you? Here is what you need to know about the upsides and downsides of using these cards and also the effect they will have on your credit scores.

Upsides of Store Credit Cards

    • Special Perks: The main benefit of store cards is that it offers an initial discount of 10% to 20% when you sign up and you may also get extra discounts the entire year if you shop at that retailer. Many store credit cards offer even more such as rewards programs which may feature other special benefits, such as bonus coupons, free shipping, free gift wrapping or free exclusive financing offers.

 

    • Easier Qualification: Store credit cards are specifically designed to work for individuals with all levels of credit quality. So if you do not want to apply for a secured card or are unable to qualify for a general-purpose credit card then a store credit card can be a good option. It also allows retailers to escalate their customer reach.

 

    • Retailer Discounts: Most retailers promote credit cards as a great way to save money. So, when you sign up for a store credit card you will not only receive an initial 10 -20 percent discount but may also be in line for extra discounts all year long.

 

    • Many stores may also offer you 0% interest on financing offers. They will give you twelve or eighteen months interest-free finance to pay off a major purchase with their credit card.

 

    Store credit card holders are also the first to receive special coupons or gain access to exclusive sales events. Everyone loves saving money, but make sure that you do not overindulge and go on a spending spree.

Downsides of store credit cards.

    • Limited Use: Some retail credit cards may offer the same flexibility as a regular card, but most of them are closed-loop credit cards that are limited to purchases at that particular store or a chain of stores. In addition, these store credit cards may have a low spending limit and can impact your credit score.

 

    • Have a High-interest Rate: The biggest negative is that they always have high-interest rates. So, if you plan to carry a balance or have trouble staying within your budget store credit cards is not a responsible choice. According to a survey by CreditCards.com in 2016 the average APR on America’s retail-branded credit cards had increased to almost 24 percent, which is far higher than the average for all credit cards (15.18%) The high APRs of typical store credit cards mean that you will have to pay hefty interest charges if you do not pay your balance before the end of the grace period and that would completely negate the 10-15 percent discount that you had received on your initial purchase.

 

    • They Encourage Debt: Another negative is the temptation to spend more when you have a retail credit card. Stores frequently offer cardholders’ incentives like discounts, emails about sales and also rewards on your spending. Many retailers will continuously raise the credit limit of your card to increase your spending. You should follow the rules of spending only on what you can afford and keep the balance below 30% of the credit limit. If you are not disciplined with your spending you could easily find yourself in debt.

 

    Potential misunderstanding: Generally when you sign up for a store credit card in-store you are not given a full explanation of all the terms and conditions at the point of sale. Typically you will be given a brochure with the credit card terms and you really may not have enough time to examine the costs of the card and compare it with other credit cards and be sure that you are getting a good deal.

How Store Credit Cards Affect Your Credit

People who are looking to establish or rebuild credit history may find a friend in retail store cards. If your credit score needs some polishing a store credit card can help you build credit. It is a great way to build credit as retail store card issuers normally approve people with lower credit scores. However, co-branded store cards are harder to qualify as people with higher credit scores will get lower interest rates.
When you apply for a new credit product like a store credit card, the issuer will perform a hard inquiry on your credit report. This is generally not harmful to your credit as many consumers will see only a temporary credit score hit of about five points. However, if you apply for several store credit cards at once it could be harmful to your credit rating especially if you have a short credit history or few accounts.
Your credit utilization ratio is one of the key factors that influence your credit scores. Store credit cards usually come with a low credit limit of about $500. So by using store credit cards, you can reach a credit utilization ratio of 30% with a purchase of just $150 dollars.
However, if you use your store credit card sparingly, keep a low balance and pay off your bills immediately, the available credit on your store card can drive down your utilization rate and increase your overall credit.
You can establish a credit history by using and paying off the bills on time and also reduce your debt-to-credit limit ratio by using it sparingly and keeping statement balances low. This makes up 30 percent of your credit score. It will also establish a pattern of good habits which in turn will boost your score.

Bottom Line

You can benefit from store credit cards if you are responsible and pay your balances each month. Still, you should take time to understand the advantages and drawbacks of store credit cards. You should also check out the other credit cards in the market to find out one with better rewards and lower interest rates.

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.