Jan26
Credit Repair
The past year has been tough for many people, and that goes for their credit scores, too.
If you experienced the loss of a job or other financial mess over the past year and you are now eagerly looking forward to a brighter 2010 then you must begin to assess your credit score and work towards building it back up.
In order to repair your dinged-up credit score, you must begin at the beginning again. Unfortunately, creditors simply are not willing to extend credit anymore to those with poor credit scores. So, what does that mean for you?
That means that you must begin taking small – but very necessary – steps to repair your credit so that you can once again enjoy a strong credit score and all of the advantages that go along with it.
- Start with a secured credit card. Make a point to charge purchases on that card each and every month and pay them off in full each month. A secured credit, although backed by your cash deposit, is a great way to begin proving your credit worthiness to creditors. Check out the terms and conditions of several secured credit cards, as annual fees and charges for these types of cards can vary greatly.
- Once you have developed a consistent payment history with your secured credit card, consider taking out a small retail credit card. Continue to pay on this card, each and every month, so that you can further build up your credit score.
- Once you have shown a strong payment history of at least 12 months, you can often begin applying for unsecured credit cards. However, if you are denied a credit card after this time period, don’t automatically start applying for more cards in hopes that you may get approved for one; too many credit inquiries will only further hurt your already low credit score.
- If your poor credit history is a result of irresponsible spending, consider heading to a credit consumer counseling service. These non-profit organizations are there to help you make better decisions and to start helping you to build a responsible approach towards credit cards.
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Jan18
Choosing Credit Card
Most consumers find that credit cards are not only a practical financial tool, but a necessary one. Even individuals who don’t use credit cards on a regular basis are all too aware that credit cards are important for doing everything from renting a car to reserving a hotel room.
For many individuals, the question of secured and unsecured credit cards is often raised. In particular, many individuals are confused about the differences between a secured and unsecured credit card, and which one is right for them.
With today’s changes in credit card terms and conditions, and with the recent credit card legislation currently enacted by Congress, many individuals are downright confused when it comes to credit cards. We all want the advantages of credit cards, but many of us don’t want the hassles associated with them. There is a way to make credit cards work for you; you just must educate yourself on both the advantages and disadvantages of each so that you can make the right financial decision.
There are benefits to both secured and unsecured credit cards, and there are also challenges associated with each of them.
Secured Credit Cards
Advantages
- Easy to Obtain
- Typically Requires no Credit Check – Ideal for Individuals with Poor Credit, No Credit or those who have Filed for Bankruptcy
- Ideal for Individuals who may have difficulty Managing their Debt
- Keeps Spending in Check
- Ideal for Individuals who are Looking to Build or Rebuild their Credit
Disadvantages
- Requires a Cash Security
- Typically has a Low Credit Limit
- Often comes with High interest Rates
- Often comes with High Fees and Strict Terms and Conditions
Unsecured Credit Cards
Advantages
- Gives the spender great buying power
- Often comes with Low Interest Rates and other Advantageous Reward Programs
- May be an Ideal way to Borrow Large Sums of Money
- May act as a Personal Loan
- May be Ideal for Consolidating Higher Interest Debt
Disadvantages
- Can Lower One’s Credit Score if it isn’t Handled Responsibly
- May come with High Interest Rates and Costly Terms and Conditions
- May be Dangerous for Individuals with Poor Spending Habits
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Oct07
Choosing Credit Card
A secured credit, once upon a time, was the kiss of death for consumers. It was also quite unnecessary in most cases, as consumer credit was flowing like water.
However, given the state of the economy and the state of many consumers’ credit scores, secured credit cards are making a comeback, and for plenty of good reasons.
If you are new to the credit card game, or if you’re looking for an easy way to begin rebuilding your bruised credit history then you may want to consider a secured credit card.
A secured credit card account requires that the account user open a savings account, of sorts, where the creditor will hold the funds that will act as collateral on the card. This money is the creditor’s insurance policy, although if you loyally pay your bills on time the money will remain there, unused.
Why Secured Credits are Useful in Today’s Economy:
- They provide you with a credit card – Credit cards are convenient and practical, and are often the desired payment method for things such as airline travel and online purchases. A secured credit card acts in the same fashion as a traditional credit card, thereby enabling consumers to charge their purchases – not to exceed their credit limit, of course – and repay them each month.
- They provide you with a payment history – One of the best ways to begin building or rebuilding your credit is to simply begin establishing a payment history. In that sense, a secured credit card works just like a traditional credit card, thereby enabling consumers to begin boosting their credit score.
- They provide you with an interest-bearing savings account – Once you have developed a proven track record of timely payments, many secured credit card companies can begin paying you interest on your secured funds. For many consumers on a budget, this is a great way to build their credit and keep money tucked away in a savings account at the same time.
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Sep18
Credit Score
The college years are filled with excitement and optimism, yet they can also be riddled with uncertainty about life after college. It is therefore of the utmost importance to start thinking about life beyond college, even if you’re still a freshman!
In particular, it is vital that you begin working to establish a strong credit history so that you can begin your life after college with a good FICO score in your back pocket. After all, your ability to obtain a car loan, a home loan or even a good job relies on a strong credit score.
How to Start Working toward a Great Credit Score while you’re still in College:
a) Jump onto your parent’s credit card. If your parents are good with their credit, and if you are ready to take on the responsibility of a credit card, you may want consider asking your parents if they can add you to their credit card account as an authorized user. This is often a great way to begin establishing your credit history, and is a solution to the tight restrictions due to be placed on student credit cards as a result of the new credit card legislation.
b) Ask your local bank or credit union if they provide student credit cards. Although these types of cards typically come with a low limit and a higher APR, they are still the ideal way to begin building your credit history. This is not the time, however, to get yourself into credit card debt. Make a point to purchase only needed items, and to also pay off your balance in full, every month, without exception.
c) Consider a secured credit card if options A and B aren’t possible. Secured credit cards require a cash deposit equal to your credit limit, so that the bank will be protected in case of your failure to pay. However, they are also a practical way to build your credit history. Then, once you have established a strong credit history you can move to a standard credit card.
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