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Category: Credit

Building Credit History

Building Credit History

When applying for a credit, if you don’t have a credit history, it is possible your credit application to be denied. This means you definitely need to start building a credit history. There are different ways to start a credit history. If you’re a student, you can get a student card from the companies that offer such special cards. On this credit card you can charge your necessities and at the same time build your own credit history.

When you’re a young adult and you have always used checks or paid cash for your purchases you’ll soon realize that you cannot apply for a credit as you don’t have a credit history. A secured credit card can really help you. These secured credit cards are considered a first step for those with no credit history. For obtaining a secured credit card a deposit is required and the spending limit is equal to the amount of the deposit. To make sure you’re building a good credit history with this first credit card, be careful not to go over the limit and pay your bills on time. After some time, depending on each company, you can apply for an unsecured credit card but only if you have a good credit history.

There are also other more simple ways of starting a credit history. One easy solution is to open a savings or checking account that will definitely show how you are able to manage your money. Or if you have a cellular phone or a pager and pay your bills on time every month, you can demonstrate that you’re capable to control your money wisely. Another way is to consider applying for a card offered by gasoline companies or retail stores. This type of card has a low credit limit and can be paid off each month.

All above methods are just first steps in building a credit history. The next steps are also important because they will greatly influence the history you have started building. Every time you pay or not pay a bill on time your credit history registers it. Having a good credit history shows that you are a person that treats debts responsibly and you’re likely to pay back the money that you want to borrow. To gain the confidence of the credit companies they have to see on your credit history that you treat with responsibility every bill. So make sure to pay the total minimum due on every one of your bills and do an effort to pay them by the statement due date so that they arrive on time. Also do you best to pay at least the minimum, if not the entire, balance each month. Try to never skip payments; it doesn’t look good on your credit history.

If you ever feel that your debts are getting out of control, immediately seek help from a financial counselor. He will be able to evaluate the entire situation better than you can and he can find the best solution that will get you out of that massy situation. A financial counselor will also advise you to annually check your credit report for any errors that may appear. Then, if any errors are present, correct them immediately.

It is not difficult to start building a credit history; it just takes time and a lot of patience from your side. Yet, we have to admit that the difficult part is to build a good credit history for which you must be able to demonstrate that you can wisely manage your money. Keep in mind that a good credit history will only bring you benefits.

Prepaid Debit Cards

Prepaid Debit Cards

First, know what you’re getting. Most people understand the prepaid debit card as the retail gift card. Others know that such gift cards can be purchased through their local bank. What some consumers don’t know is that those purchased through their bank can come with hefty fees attached, and those fees can come in a myriad of disguises from up-front purchase fees to various administration fees including replacement costs account maintenance fees and fees for checking the balance. Such fees are currently being debated in the courts, but until a fair resolution is offered, it is up to the consumers to be aware of what they are buying.

Second, despite consumer and fair trade concerns, some applications of the prepaid debit card are both innovative and convenient. For example, there are now some tax preparation services offering what is known as the “stored value” card. In other words, in lieu of waiting for your refund to arrive, you can simply tell your tax preparation service that you would like to have your refund loaded onto your prepaid debit card. Once you have your prepaid debit card “loaded” you can make arrangements with your bank to assign it a routing number so that you may use it just like a checking account. Another new use of prepaid debit cards come from the currency exchange companies, better known as remittance services. The usual remittance companies are facing new competition from small companies who are targeting the immigration population by offering speed and convenience in sending money on-line using a bank account, a credit card or a PayPal account. The customer simply electronically “loads” the desired amount onto a Visacard which is then mailed to the beneficiary.

With the help of the internet, the potential to send money via “loaded” cards is without precedent. The ease, speed and convenience of such services are becoming so popular that many companies are aggressively marketing prepaid debit cards to consumers through customization. Visa, for example, has a prepaid debit card marketed exclusively to teens, know as Buxx. American Express has the TravelFunds Card marketing “for people on the go” and MasterCard has its I-Gen MasterCard marketed to those who prefer to either forego traditional checking accounts or keep only a minimum amount while “loading” their card with the cash their budgets dictate they can spend.

Avoid Credit/Debit Card Frauds

Avoid Credit/Debit Card Frauds

  1. Information related to your credit/debit cards is confidential. You must not divulge it to anybody. If you buy items online make sure that the company is legit. In fact research more about that company as a precaution.
  2. Always treat your credit/debit cards as though they are cash. If you take extra measures to make sure that your cash is safe or to prevent yourself from getting robbed, then do the same for your cards also. Keep in mind that cards are more valuable like cash. If you lose your card, some people might take advantage of it by acquiring goods and/or services. The downside of it is if your credit limit is high, they will have a good time shopping. Compared to cash, they can only buy products that are dependent on how much cash they have stolen.
  3. Make sure that your credit card has your signature on it. Use a permanent marker so that it won’t erase every time you use it. The signature shown on the card will be use by the cashier as reference when you sign your receipt. If the signature does not match, the cashier will automatically tell the authorities or their superior of possible fraud activity.
  4. Always keep a copy of all the receipts that you paid using your card. When your billing statement arrives, cross check it to the receipts that you have. If it doesn’t add, call your credit card issuer. Also if there are transactions that are not familiar to you, tell them also.
  5. Inform your bank and your credit card company that you will be having a change of address. This will make sure that your bank account statement or billing statement gets directly to you. If you do not tell them, other people might get hold of it and use it against you.
  6. If you lose your credit/debit card, tell your bank and/or your credit card issuer immediately. This action will automatically hinder all transactions made once you report it to them. If there are transactions made after you report it, your bank or credit card issuer can immediately act on it.
Getting Hired Despite Bad Credit

Getting Hired Despite Bad Credit

  • Conduct a credit check- Many employers and companies check their job applicants’ credit reports, especially if the positions being applied to are ones that involve handling huge amounts of money or having access to databases as well as sensitive and confidential information about the company and employees. If you are applying to a job in an industry where you don’t have to handle money or deal with databases yet the employer still asks for a credit check, this is likely due to the fact that your credit history provides employers a glimpse into your character and how you handles certain responsibilities. An applicant whose credit report contains a lot of missed payments and delinquencies may be deemed someone who is irresponsible, negligent, and lacking integrity. This is why it is a good idea for you to get your credit reports and read through them before your future employer sees them. By doing so, you will be more informed about what your employer will see in your credit history.
  • Bring the issues up first- Employers usually conduct a credit check after your first interview or when they finally offer you the job. Regardless of when they choose to check your credit, however, it is important that you bring up financial issues first-as well as other issues that go beyond credit checks. Doing so will give employers the impression that you have the integrity to own up to what you did in the past, and it will also point positively to your honesty, which is one of the most important attributes an employee can have.
  • Let your employer know what you are doing about your credit- Now that your employer knows your true financial situation, it is best to let him or her know that you are taking the necessary steps to fix your situation-from slowly paying down your debts to making your monthly mortgage payments. You can even get your credit reports and bring them to your prospective employer to prove that you aren’t hiding anything. Showing your employer that you are taking the steps to fix your financial mistakes will prove that you are well on your way to recovering from your financial setbacks.
  • Be prepared to explain- Sometimes your bad credit is due to circumstances that were beyond your control. If, for example, you lost your previous job because you got ill and had to stay at the hospital, and losing your job resulted in your being unable to pay your hospital bills, your future employer may sympathize with your situation and overlook your bad credit history.
  • Prescreen the job position as well as the company- A good way to raise your chances of getting hired is to apply to companies that do not conduct credit checks as part of their hiring process. If the job needs you to have security clearance, the company is working with the government, or you are applying for a management position or higher, you should expect that a credit check will be performed on you.
  • Apply to small companies- This is another way to secure your chances of getting hired. You can apply to small companies with only a few employees as they are less likely to conduct credit checks due to lack of time and resources.
  • Use connections- If you have connections, why not use them? If you have a good relationship with a prospective employer, he or she may be less likely to require you to have a good credit history to get the job you want. You should also consider getting recommendations from friends, professors, and other employers.
  • Convince your future employer that you are the best candidate for the job- Before you walk into the interview, be prepared to convince your potential employer that you are the perfect candidate for the job. If you are able to convince and prove to your employer that you will be an asset to the company, he or she may be more understanding of your financial issues and give you a chance.
  • Apply for the job- Do not avoid applying for jobs with companies that require credit checks. Take the risk and apply for the job because there is really nothing to lose. While some companies reject applicants with bad credit right away, you may come across some that are more tolerant of your financial issues and are willing to give you a chance to explain and prove to them that you are going to be the best at your job.
Banks Differ From Credit Unions

Banks Differ From Credit Unions

The services that banks and credit unions provide are similar, and both of them offer benefits for borrowers as well as account holders. However, the latter is a non-profit entity where individuals put their money together to provide services and loans to their fellow members. You need to qualify to be able to join.

Credit unions provide services that are geared more toward meeting their members’ needs than driving profit. Each member has a voting share in matters no matter how small his or her holdings may be. While these establishments are subject to federal regulations as are banks, they can often offer lower fees and higher interest rates. And since they are smaller, they are often able to provide more personalized customer service.

Just because a credit union is a non-profit entity, that doesn’t mean it can’t earn a profit, of course. In order to survive, it has to make money. However, they will share more of the profits it makes with its members. It does not have the pressure to make money off its customers, as does a larger financial institution. As a result, they typically offer free accounts without a minimum balance required. Some of them are regulated in a way that the interest rates they charge on credit cards and loans cannot go over a set rate.

The smaller size of credit unions, however, also means that they have fewer ATMs and branches, and may also have fewer online banking options. Banks, on the other hand, have 24-hour customer service by phone and, in most instances, many more Internet options.

Because banks are larger, they can usually offer more variety to their account holders in terms of loan and account services. The larger the institution, the more account and loan options they can offer. They also provide a wide range of investment services as well and can be reached no matter what the time of day or night.

The answer as to whether small or larger institutions are better really depends on what your needs may be. If you are interested in purchasing a certificate of deposit or you’re looking for a loan of some kind, you should include both in your search. If you are looking for a few money market investments and a mid-size loan or two, then the smaller institution can more than likely provide you what you need. If you have a large portfolio, then you may be better off going with a larger institution.

Credit Union

Credit Union

So what exactly is a credit union? It is a cooperative financial institution in which its members use their funds to offer services and funds to other members. They are not for profit entities, and there are structurally a cooperative to ensure fairness. Many people find them to be beneficial because unlike a bank, which is a business designed to make profits for its shareholders, these financial institutions are owned by its members. Profit is not a driving factor for the institution. Each member often has the ability to vote on the organizations’ activities, and some members are even paid dividends at the end of each fiscal year.

These intuitions also offer much more personal, family-like customer service. The customers are the owners, so the decisions made will benefit everyone involved, and in most cases, this means that dealing with customer service in a credit union is much different than traditional banks. Plus, since the main incentive isn’t necessarily to make a profit, and there is much less pressure for the organization to find ways of making money, you may find your experience to be much more genuine.

There are a few disadvantages to this model. For instance, there are fewer ATMs than many banks. National commercial banks may have ATMs scatter across the country, and there are probably several in your area, which means that you are less likely to have to pay a surcharge to get money from an ATM. In many cases, a credit union will allow you to use a third party ATM, and if you are charged a surcharge to use the ATM, you will get a refund on your statement.

Membership is also restricted in these financial institutions. They tend to focus on people who are involved in the community and people of modest means. Applying to join may be slightly more difficult than getting an account at a commercial bank. Just like banks, your credit union will offer you a variety of financial services and products. From savings accounts to checking accounts, loans, and mortgages, you might find that this non-profit organization is the right choice for you.

Credit Checks

Credit Checks

The type of information held relates to any applications for finance that you make, even if it is for bad credit unsecured loans. Once you have been accepted for finance, the agencies record details of any defaults, overdue payments and CCJs. They will also hold records of any bankruptcies, IVAs or Debt Management Plans.

Certain types of information can go against you when you apply for finance. For instance, CCJs, defaults, bankruptcies and various debtor repayment arrangements all demonstrate that you have had money problems in the past. However, unsecured bad credit loans can help, and are specifically aimed at people in these situations.

People who apply for finance for the first time can also have difficulties as they haven’t had a chance to build up a healthy financial record.Another factor that can go against you is making repeated applications. This could indicate that you have already been declined several times. Therefore, rather than applying repeatedly to mainstream lenders and being turned down, a specialist provider of loans for bad credit could provide a quick solution.

Unsecured bad credit loans can help you to rebuild your financial standing. There are two reasons for this. Firstly, you are displaying your success in obtaining finance, which is recorded on your report. Secondly, they give you the chance to show your ability to keep up-to-date with repayments once you have successfully obtained finance. For this reason it is importance not to fall behind with the repayments.

Some companies also use scoring systems when deciding whether to grant borrowing but they will generally also refer to your report. However, companies specialising in unsecured loans for bad credit are usually not as rigorous when it comes to carrying out checks. Therefore, these present you with the best chance of obtaining finance.

You will usually find that loans for bad credit have a higher interest attached to them and there is not as wide a selection of companies providing them as with mainstream borrowing. This is due to the higher perceived risk undertaken by the companies that grant finance to someone with a poor payment history.

Although this type of borrowing is not as widely available as finance for people who have never run into difficulties, there are still a good range of options available. The existence of online specialist companies enables you to shop around in order to secure the best deal to suit your individual financial circumstances.

Estimate Your Credit Score

Estimate Your Credit Score

Even if your bills are paid on time, there could be several other things that could impact your credit score and reports. The truth is that your scores cannot be estimated by any kind of software where you can input some data and it tells you the score. Well, at least such software is not available for general public in the market.

The easiest way to find out your score would be to utilize certain specialist services that will not only provide you with instant credit score number, but will provide several other value added services that can benefit a person in the long run. These services fetch credit information from different credit Bureaus and present it to you in a structured way. Of course, there is a fee associated with their service.

However, not every service is reliable and accurate. In fact, there are many services on the Internet that claim to provide you with free score and then start charging your credit card without your approval. This results in a lot of confusion and frustration for people. These frustrated customers will then have to spend their valuable time trying to do charge-backs and get their money back. Having said that, not all companies that claim to provide a free score are actually fraud. There are quite a few good ones out there, but little difficult to identify.

There are few companies that can provide you credit reports and scores from all three credit Bureaus and few other helpful services. Legitimate companies generally provide you a risk free trial period where you can cancel the trial without getting charged (i.e., if you are not satisfied with the service).

A definite way to find a good company that could instantly tell you the credit score estimate will be to check with any reliable sources (like friends and relatives) who may have already used such services. To avoid risk, its suggested to register with companies that can provide a free trial. Another option would be get your annual credit report, but the downside is that it gets generated only once in a year. So, it may not have the most recent information.

For certain people, not being aware of their credit score estimate would mean that they do not precisely know what actions they can take to improve their score. The best bet for such individuals is to use a reliable paid service that can provide them with accurate credit score information and help with consistent credit monitoring. However, being able to choose the right service is a real challenge.

Deal With A High Interest Credit Card Debt

Deal With A High Interest Credit Card Debt

If you are looking at your credit card bill and you are wondering how it got to that amount, you can thank the interest rate, finance charges and other card fees for that. But regardless of what is in that amount, one thing’s for sure, you need to do something about this immediately. The longer you wait, the bigger your debt will become.

But before you can tackle your debt payments, you need to stop acquiring more debt. Cut up your high interest cards or keep them in a storage place that is hard to access. Do everything to keep yourself from using it again. And once you have paid it off, close the account and just settle for your low interest rate cards (at least if you have to maintain one).

Now to help with your debt payments you have to deal with the high interest rate first. It will be very difficult for you to put a huge dent on your debts if you cannot lower it. There are various ways to lower your interest rate and here are some options.

One is to ask your credit card company if you can get a reprieve from the high rate. If you have a good track record with the card company and you can convince them that this request is born out of a recent financial tragedy, then they may agree. It wouldn’t hurt to try to ask.

Balance transferring is also another option that you can use. You can get an existing card and transfer the balance of the card with the higher interest rate. Or you can get a zero interest card that will give you at least 6 months of zero interest benefits. Of course, you have to pay a certain fee to be able to transfer balances – it is usually a percentage of the amount that you plan to move. When you opt for this, you should try to make significant payments during the months that you have zero interest. Once the introductory period is over, you may be faced with another high interest debt.

Another debt relief option is debt consolidation loans. You can get a big loan that will allow you to pay off your high interest cards. This is only work if you are qualified to receive a low interest on your loan. This can be done if you either have a high credit score or a collateral for a secured loan. Otherwise, you need to get another option that will help you pay off your high interest rate card debt.

Of course, paying off your high interest card debt is only one part of the equation. Ultimately, you need to take a peek at how you manage your debts. If you got yourself into so much debt troubles then there is obviously something wrong with how you are managing your finances. Deal with this problem so you can be assured that you will stay out of debt for a long time.

How Rewards Card Programs Work

How Rewards Card Programs Work

  1. Exchange Receipts – The most common methodology that most rewards cards work by is exchanging receipts. Once you have reached a certain spending amount, you may be eligible to exchange the receipts for goods and services from your card provider’s partner redemption outlets.
  2. Get Freebies and Discounts – Credit cards aimed at reaping rewards are usually tied to several retailers or shops. For one, a bank issued credit card may offer you some amazing reward perks or discounts if you purchase goods or services at their selected partner restaurants. If you, for example, are also fond of visiting your vet, you may reap more rewards if you use a particular card that is tied in to that vet clinic. All expenses you incur at this clinic, whether service or product oriented, will be subject for their rewards program unless otherwise specified. The value of your reward also depends on how much you actually spent. So, if you are a loyal patron of a certain retailer, make sure that you get a rewards card that’s specifically linked to them. There are a lot of these cards offering diverse program incentives, but most of them are normally based around an optimum annual expenditure value. For example, if you have a yearly spend of $12,000, you need to reach that amount, so you can really feel justice in the rewards you receive. However, if you use your card sparingly, there’s a big chance you’ll just end up paying more than what you actually get rewarded for.
  3. Accumulate Points For Regular Expenditures – You will also earn more points or rewards for recurring expenses. If you have to pay for certain bill on a monthly basis, why not charge it on your card instead? This way, you will build up more rewards points, but you should also be careful and ask them if there’s an expiration date for your accumulated points and everything will just go to waste once any unused points go beyond their redemption period or not.
  4. Rewards Cards Often Carries High Interest Rates – Be very careful when you make your credit card payments. No matter who your provider is, most rewards cards impose high interest rates. Aside from this, some card issuers may even penalize cardholders by cutting back their incentives if they are habitually paying late.
  5. Know How To Redeem Your Privilege Points – Call your provider’s customer services on how you can redeem or use your earned points for rewards on your Rewards Card. This is the surest way to stick to the rules of reward redemption. By doing so, you’ll be instructed whether there’s a need for you to manually transfer your points to a separate redemption card or if you need to search through various online catalogs just to exchange them for specific goodies. However, most of the time, the customer service personnel can take care of this hassle for you, so make sure you give them a call.