You Can Get A Good Credit Score With Bank Secured Credit Card
Bank secured credit cards are ideal for those who have no credit history or for those who have bad credit scores. Since banking or financial institutions will not grant you any loan facility or credit cards if you have no credit history to check against. Since credit history and credit score are important, your initial course would be through bank secured credit cards.
Bank secured credit cards are also extended to individuals who would like to repair their credit scores by keeping their credit reports active with new rounds of credit transactions and manifest their rehabilitated paying habits. A person may have gone through a trying experience that affected his or her capacity to pay. A major illness perhaps, a divorce or sudden loss of job are situations beyond his control which caused him or her credit score to drop from good to bad.
In some cases however, a person was simply too reckless with his spending habits until every credit purchase caught up with him. A declaration of bankruptcy was his only way out. However, these persons are not doomed for life since some banks will still take the risks of extending credit facilities through bank secured credit cards. In fact, they have very minimal risk exposure via this type of credit card since the individual will be required to put up a bank deposit account. The bank deposit account should maintain a balance, usually 0, which will be equivalent to the cardholder’s maximum credit limit. Depending on the cardholder’s history, the credit limit may be equivalent to 100% of his deposit or can even be less.
The only objective of the bank secured credit cards is to provide a credit facility that the cardholder can use to create a new credit history that will eventually overwrite the bad credit score attached to his report. It may take 5 to 7 seven years before the bad credit score can be removed in a person’s credit reputation. For those who resorted to bankruptcy declaration, it will take about 10 years from the date bankruptcy was declared before the bad credit score can be removed.
The cardholder will be prevented from incurring additional bad credit points in bank secured credit cards. The maintaining deposit will be applied in case the cardholder fails to add additional funds in his account as payment for his current credit obligation. There is a price to pay though, because the cardholder will be hit with considerable amounts of bank charges. Naturally, he will be required to replenish the maintaining balance of his security deposit in order to continue with the use of his bank secured credit card.
There are banks however who will reward a cardholder for good credit records by increasing the amount of his bank secured credit card limit, although with an equivalent increase in his bank deposit balance. What is important however is for the bank to report your good credit performance to the credit monitoring bureaus. Otherwise, all the additional costs on your bank secured credit card purchases as well as the fees and charges you have paid for will all go to waste. Your bad credit score will not change unless these reports reach FICO through the credit monitoring bureaus.
FICO or First Isaacs and Co. is responsible for tabulating all the points created by your bank secured credit card history and the company can only use the information supplied by any of the three bureaus namely Experian, TransUnion and Equifax.
Be wary of banks or credit unions that will charge you with unnecessary fees just to have a bank secured credit card. Checkout Bankrate.com for a comprehensive list of credit card companies or credit unions that issue bank secured credit cards for reasonable interest rates.
For more useful information, please visit our website: THE KNOWLEDGE BASE, and look for the BUSINESS & FINANCE section.
Written by ja_schmidt
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How to Keep a Perfect Credit Score
A perfect score of 850 may just be a technical perfection since it is very rare to see people with a credit score as high as this. A good perfect score usually includes the following: a mortgage that is over three years old, one or two auto loans that are more than two years old and less than five credit cards with very low balances that are over 2 years old.
Build up your personal credits
If you want to start out by buying things out of credit, you should enroll yourself first to credit card companies so they can already provide you with credit cards. You may need the help of a family member or friend to sign the papers for your first. These companies may also need proofs that you can pay your monthly bills. A good example is a letter of employment from your company.
Avoid delayed payments
Aside from not being able to pay late payment processing charges, paying on time is vital to maintain a good credit score. A single delayed payment can already have a huge impact on one’s credit score and every credit detail matters. If you have billing disputes, you can still pay on time and wait for your disputes to be resolved. Anyway, you will be receiving refunds in case your dispute gets approved.
Maintain a low credit card balance
It is always recommended to maintain a limit of 25% or below when it comes to your credit card balance. By doing so, it will show credit card companies that you are still interested in paying off your debts and is a good borrower. Some of these companies will even maintain or increase your credit limit.
Avoid too many credit lines
Instead of making you look reliable, too many credit lines will show that you don’t monitor and take care of your debts. If you have a credit card that has been inactive for a couple of months, make small purchases out of it or you can just cancel the card. Using them will reflect your capability to purchase and pay the bills on the due date.
Always pay the minimum on due dates
To avoid credit reports, always pay the minimum balance every due date. If possible, pay more than the minimum. Credit reports may lower down one’s credit score. Paying even the minimum balance will show that you are still trying to pay off your debts and is working on getting them paid.
Live within your means
If you own a number of credit cards, it does not exactly mean that you can just swipe them anytime you want and make purchases. Before swiping that cute plastic of yours, ask yourself if you can handle to pay the monthly bills. Don’t take on more debt that you can handle.
Keep revolving balances low
If you are planning to apply for significant loans in the future, reduce your balances at least 60 days in advance of your planned application date. This is because credit bureau balance updates are lagging and the credit scoring model puts major importance on the amount of your revolving balances.
Hire a consultant
If your low credit scores are consistent, it may be time for you to hire a consultant and pay him for credit repair. One’s credit is important and most credit repair services are affordable. Think of it as an investment.
Written by iwizard
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Categories: Credit Score Articles Tags: Credit, keep, Perfect, Score
Get a Good Credit Score
In my opinion having a good credit score is one of the most important things in life! Anyone can maintain a high credit score no matter how rich or how poor you may be if you learn how your credit score is made up. In this article I will tell you how your credit score is made and what you can do to make your score as high as possible.
35 %- Payment History
The most important thing you can do is PAY YOUR BILLS ON TIME! Even if you are paying the minimum it is better than paying late. Although late payments stay on your credit report for 7 years the effect of late payments on your report lessens throughout the years.
30%- Debt to Credit Ratio
This is the percent of available credit you are using on your credit cards. If you have 5000 dollars available credit and have 2500 dollars charged up your debt to credit ratio is 50% which is not too good! They say you want to keep it below 30% but I think its best to keep it 20% or below. So one of the most important things to do immediately is to pay down your credit card balances. Also do not close accounts you do not use. Keep them open so you have more available credit…but DO NOT USE THEM! CUT THEM UP!
15% Length of Credit History
Having a long credit history helps your credit score so keep old accounts open even if you are not using them.
10% Inquiries
Every time you apply for a line of credit there is an inquiry on your report. Having too many inquiries in a short amount of time is bad. So even though store credit cards seem like a good idea to open because you may get 10% off your purchase it may hurt you in the long run. Inquiries only stay on your report for 12 months so it is easy to fix if that is a negative on your credit report.
10% Mix of Credit
Having a mix of credit (credit cards, home loan, student loan, auto loan etc) is what they want to see on your credit report. It shows that you can handle different kinds of credit.
So the first step in improving your credit score is to get your free report from AnnualCreditReport.com and go over it and see where you need to improve. It is important to make sure everything on your report is correct. If you find something that you believe is false you need to dispute it immediately. Good luck!
Written by CS0621
Categories: Credit Score Articles Tags: Credit, Improving, Score
Improving Your Credit Score
Improving Your Credit Score
Improving your credit score is a lot like sticking to a diet – it takes time and discipline and you will only see results after sticking with it for a significant amount of time. Unfortunately, there are no quick fixes when it comes to credit since so much of the scoring is based on patterns defined over time. Since the collapse of the housing market due to sub-prime mortgages and the banking crisis in America, it is much more difficult to obtain credit in general, never mind if you’ve had credit problems. Correcting issues on your credit report can be time consuming, but with some work you can clear it up and become a low risk borrower once again.
Collections and delinquent payments can negatively affect your credit score significantly. Paying your bills on time, even if you only pay the minimum amounts, is a major factor in increasing your overall credit score. The longer you meet your payments on time, the more your score will improve. Use your credit cards sparingly, but not too sparingly. Even if you pay your bills in full every month, racking up big balances hurts your credit score. On the other hand having a zero balance is not desirable either. Try to remain at no more than 30% of your limit at all times.
Be aware that any collections on your account remain there for seven years, regardless of whether or not you pay them off. After seven years they can no longer negatively affect your credit score, but up until the seven year mark they are there for your potential creditors to see regardless of whether or not you have paid the debt.
Contact a legitimate credit counselor. You need to be careful since there are lots of scam artists looking to take advantage of those who are desperate to improve their credit or to get out of debt. Also look to pay debt off rather than simply moving it around. While many people think they should pay down the debt with the highest interest rate, it’s actually a smarter move to pay the debt that is closest to its limits since one of the factors considered in your score is your debt to available credit ratio.
Do not look to open several new accounts all at once. This will bring your average account age number down and negatively affect your score, particularly if you have only been managing credit for a short while. Any flurry of activity like this will hurt your overall credit score.
Having credit cards is OK, as are installment loans (i.e. furniture, appliance, etc.) and it’s considered a lower risk than someone with no credit cards provided that you are timely with your payments and manage them responsibly. Resist the urge to consolidate your credit card debt onto a lower interest card. It’s better to have a small balance on several different cards, than one big balance.
Written by DuncanO
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How to Raise Your Credit Score
As the world’s economic growth slows to a trickle, many people find themselves struggling to make it. Gas prices have skyrocketed and the price of food is at all time highs. If you have bad credit, obtaining a loan can seem like an impossible task. Fear not! Here are four easy ways to raise your credit score :
1. Pay Your Bills on Time – Of all of the things you can do to raise your credit score , this is probably the easiest and most effective step. Approximately 35% of your credit score is based upon your payment history. Set up an online account with your bank and pay your bills via the internet. This takes about 10 minutes to set up and can save you at least in stamps.
2. Pay Down High Balances First – Your credit score will actually decrease if you have credit balances that exceed 50% of the available balance for that card. Free up some of this available balance and you can raise your credit score .
3. Cut Up Used Cards – If you have a card that you do not use, cut it up BUT leave the account open. Your credit score is composed of numerous items including the percentage of available credit that you have versus the amount of credit that you have used. If you cancel the card, you can actually reduce your credit score. The only time you should cancel your card is if it has an annual fee.
4. Monitor, monitor, monitor – You should check your credit score at least annually. Each of the three major credit bureaus will give you one for free each year. Get your free report from Experian immediately and review it for accuracy. After four or five months get your free report from Equifax. After another five or six months, get your final free report from Transunion. This ensures that you will be able to take the necessary steps to raise your credit score .
These four steps are not difficult to accomplish. You should be able to see positive results in about six months. In addition to following the steps outlined above, visit as many personal finance blogs that you can. These sites can help you Become Debt Free .
Written by chasingthebull
Categories: Credit Score Articles Tags: Credit, Raise, Score
What Your Credit Score Really Means
That mystery is created, in part, by the very agencies who determine the number. Formulas for figuring the scores are kept secret, and the numbers are not readily available; at least not without having to do some work to get them. People often want to know what exactly a credit score is, who is behind it, what things impact your rating and what effect a credit score can have on daily life. Add to that the tough economic times we’re now in, and your credit rating becomes more important than ever. Let’s take a deeper look at what a credit score is and how it affects you.
A credit score is nothing more than an attempt to rank your creditworthiness with an objective number. It used to be that if you wanted a loan you would go into the bank, and if you had a good standing in the community, or if the loan officer had a good feeling about you, you could get a loan. Obviously, there is a flaw in that system; anybody, no matter how well-respected, can be a bad credit risk. So, by calculating the effect of different factors on your ability to repay, the credit agencies came up with a way that seeks to treat everybody fairly.
There are several different things taken into account by the credit agencies when figuring out a score. The good news is that most of them are common sense. The one thing that makes up most of your score is your payment history. Therefore, one of the best things you can start doing (or continue doing) is pay all of your bills on time. Next, don’t owe too much. Your debt-to-income ratio should be at 25% or less. That means the amount you owe should not exceed 25% of your income. Don’t open too many accounts in a short period of time, and don’t close too many either. Only apply for a loan or credit if you really need it. As mentioned, most of these things are common sense and they will always go a long way towards improving your overall financial health.
Is a credit score really that important, after all, it’s only a number, right? Right, but it’s a pervasive number at that. The most well-known example are lenders. They will use your credit score to determine whether or not you get a loan, and if so, what terms you will get. However, your credit score is used by a lot more than just lenders. If you apply for a job, your potential employer may pull your credit report before making their hiring decision. Landlords use credit scores to see who they will rent to. Insurance companies use them as part of their risk assessment before offering you a policy.
There is no doubt that your credit score is important. Now that you have more information on what it’s all about, you can take steps to maintain or improve your score.
Written by Royyan
Categories: Credit Score Articles Tags: Credit, means, Really, Score
Your Credit Score Breakdown
While there is no verifiable statistic as to how many people feel this way, the fact that the credit reporting agencies don’t readily reveal their calculation methods makes easy to see why people are in the dark about it. You may not need to know the exact formula, but it’s still smart to have an understanding of how they come up with your credit score so you can whatever possible to maintain or improve your score.
After all, if you don’t know what goes into your credit score, there is no real way to do anything about it. Having a better idea of what elements go into determining it and how it’s calculated allows you to have more control over your financial health. With that in mind, here is a breakdown of what the credit score is made of.
1. The most important part of your credit score is based on your history of making payments. Believe it or not, this counts for a staggering 35% of your overall credit score. Now, if you have a spotless record of making payments on time, then this is actually good news. However, if you occasionally forget to pay a bill and are routinely a few days late, then this could be bad news. I say ‘could be’ because different creditors have different policies on when they will report a late payment to the credit agencies. However, you don’t know what that threshold is, so it’s best to pay all of your bills and loans on time.
2. Your blend of credit adds up to 10% of your score. Having a mortgage, car loan, credit card and perhaps a store account that you pay on is a sign to the agencies that you are able to handle a variety of credit options. Be sure that you are able to handle all of them, though, as not paying on time on even one type can count against you.
3. 15% of your credit score is determined by how long you have had a credit history. Of course, the better you have handled that credit over the years, the better it will be for your score. But it’s still better to have a more established credit record than a shorter one.
4. Second in weight to your payment history is the total amount you owe. This factor accounts for 30% of your score. The total amount you owe is compared to your income in what’s known as the “debt to income” ratio. The lower, the better. You should aim to keep your total debt at 25% or less of your annual income to have the best effect on your rating.
5. New inquiries into your credit are a warning sign that you may be overextending yourself and account for 10% of your total score. The one exception is if you are the one looking at your credit report.
As you can see, there is no real mystery when it comes to your credit score breakdown. Knowing how much weight is given to each portion of your score can help you decide where to first focus your efforts when you start trying to improve your credit score.
Written by Royyan
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Categories: Credit Score Articles Tags: Breakdown, Credit, Score
How to Improve Your Credit Score
In the current financial climate, it is critically important to take steps to improve your credit score. Although there are credit cards for poor credit available, a better credit rating will improve affordability. Credit history repair isn’t an overnight process, but even a discharged bankrupt could qualify for a mortgage in 2 to 3 years. Minor credit problems, such as a payment outside of the grace period, can be recovered from in about 6 months. Should a credit report contain erroneous data, it may be possible to fix credit problems within just 2 to 3 months.
Ways to Quickly Improve Your Credit Score
People with minor credit transgressions will be able to achieve a higher credit score relatively quickly. This can be achieved by doing one or more of the following:
Never max-out a credit card as this will lead to your score falling by 20 to 30 points. Liz Pulliam-Weston of MSN Money recently said that: “You typically can increase your scores by limiting your charges to 30% or less of a card’s limit.” Using less than 10% could achieve far better results.
Avoid cancelling old credit cards as it affects credit utilization. This means that credit reference agencies will believe that someone is more financially stretched as they are using a higher percentage of their total credit allocation. Rather than cancelling the card, fix credit problems by using the card occasionally. Always remember to settle the balance in full and on-time at the end of the month.
Use personal savings to reduce debt.
Request a free credit report from Experian, Equifax and TransUnion and fix credit report errors. For example, a debt that was included when filing chapter 7 bankruptcy that continues to show as active or credit agreements that were never taken out by that person.
Improve Your Credit Score By paying punctually
Personal credit ratings aren’t set in stone as this would provide no incentive to perform credit history repair. If there was no incentive to pay off debt on-time, the system would break down. Although raising FICO scores can be achieved by complying with the terms and conditions of credit agreements, this doesn’t happen quickly. However, each timely repayment will result in a small credit score improvement. Provided that all debts are repaid punctually in the future, that person will be rewarded with a better credit rating.
Rebuild Bad Credit with a Credit Card for Poor Credit
Not everyone has active credit agreements, especially when they’ve filed for bankruptcy. In order to fix credit problems, it is necessary to make repayments on a source of both revolving and instalment debt. The majority of filers will reaffirm instalment debts, such as car and home mortgages. However, most people will write-off credit card debt with a debt free solution. Signing-up to the best secured or guaranteed unsecured credit card is an essential way to improve your credit score more quickly. The sooner the credit repair process begins, the quicker credit approval will take place.
Sources
Pulliam-Weston, Liz. (March 18, 2010). “7 fast fixes for your credit.” MSN Money.
Written by aghaf9999
Professional business and financial writer
Categories: Credit Score Articles Tags: Credit, Improve, Score
Free Credit Report With Credit Score
If you’ve ever been declined for a new credit card, car loan, etc you’ve most likely been offered a free credit report via snail mail to review and see why your credit was declined. Unfortunately, the numeric score that determines the approval process is nowhere to be found on these free credit reports, leaving consumers just as confused as to why they were declined in the first place. SO how does a free credit report via snail mail 10-14 days later with no numeric score actually help educate a consumer on why exactly they were declined? It doesn’t. You now have your 20-30 page credit report a week after the fact filled with verbiage that reads about as easy as mumbo jumbo.
These free credit reports contain the status and payment history of outstanding lines of credit and other financial obligations including credit cards, charge accounts, home mortgages, car notes, and delinquent medical and utility bills that have been sold or outsourced to collection agencies. This data is used by the credit bureaus to generate your credit worthiness on their 300 to 850 numeric credit score scale. Lenders primarily use the credit score itself to approve a loan process, so it’s important to know and understand what they’re seeing that coincides with the data on the credit report.
In an effort to help expand financial literacy in America and further educate the masses on credit, an amendment proposed by the Senate Monday could stand to change free credit reports and provide consumers with their numeric score to better understand where they’re at with their credit rating and where they need to be in order to get approved based on a lenders point of view. The credit score would be required to be provided in instances of credit denial, if required a higher interest rate on a loan, or if credit prevented one from establishing new employment.
The Senate verbally voted and approved a proposal by Mark Udall of Colorado to require credit reports to include the numeric credit score that gauges a consumer’s credibility (pun intended) on a scale from 300 to 850, 850 being the big winner of low interest rates on future lines of credit and loans. So what once could cost a consumer up to with their free credit report data, now may be available free of charge when obtaining a free credit report under the aforementioned circumstances.
Unfortunately, a person’s credit worthiness has become a huge factor in daily life as it now used with employers and apartment complexes to determine consumer credibility. Negative credit history = negative consumer these days. This unfair assessment of character has become norm in today’s society and it doesn’t seem like the unbalanced scale of justice will be tipping in favor of average Joe anytime soon. Reviewing your credit report once a year is encouraged to ensure you are not a victim of identity theft and are aware of what’s being reported on your behalf.
You don’t have to be denied credit for a free credit report. You can also obtain a free credit report from annual credit report .com from all three credit bureaus once a year instantly online. Instantly seeing what a lender could see before applying for credit could give consumers a better assessment as to what they would or would not be approved for based on their current data before applying for new lines of credit.
A certified credit counselor with a nonprofit consolidation agency can review your credit report for free and help explain the details of the report and how lenders use the data to determine credit eligibility. Commonly, credit counselors can find ways within your report to improve credit and possibly offer free counseling services to eliminate your unsecured debts faster than normal. Speak to a certified credit counselor today to review your credit report for free and learn how you can improve credit and be debt free with nonprofit counseling services. Call 800.905.1563 or visit our website freedomdm.org and LIVE CHAT with a counselor or complete our contact request form. You can be debt free, Freedom Debt Management, Inc. can help.
Written by BrazierM
Categories: Credit Score Articles Tags: Credit, Free, Report, Score
improve credit score rating
Article by James Galloway
Having a first-class credit score rating means everything in today’s world. It is something that you ought to possess in order to live life as comfortable and as easily as possible. This is why many individuals graft intensely in order to gain first-class credit rating score and prevent them from plunging in to a bad credit rating score.
You right away ask what kind of things that you can benefit from by having a high-quality credit score. First of all, a good quality credit score can raise your likelihood of getting the loan you apply for and secondly, it will help you obtain particular jobs and programs that will require satisfactory credit score. These are the two key reasons why you need good credit score.
However, if you are plagued with bad credit score in the past, you now ask how you can obtain good credit score again or how you can repair your credit score. It is significant to realize the fact that if you have a bad credit score, you will need to fix it as soon as possible before your credit score becomes much worse.
Repairing bad credit score will require you to have patience and also a little luck. It is something that you ought to sort out in order for you to live life comfortably and furthermore a little easier for you and your family unit. By repairing your bad credit score as soon as feasible, you will never miss out on any more good opportunities that will cross your path in the future.
Before you proceed on and start repairing your bad credit score, you primarily need to understand what credit is all about. You have to know how it can affect you life. For instance, if you are in need of a loan, lenders will take a look at your credit rating to determine if you can be accepted for the loan. A high-quality credit rating will ensure the lenders that you pay your loans on or prior to the deadline and so, will ensure them that you will be able to pay the loan you will apply for. The same applies when you are applying for a credit card.
Now that you know what it means to boast a good credit rating, the next thing you need to do is to determine if you hold a good quality credit rating or not. Surprisingly, not many people know if they hold a satisfactory credit rating or if they have a bad credit rating. To know about your credit score, you can simply ask for it in several credit reporting agencies. They will be able to provide you with a numerical indicator of how much your credit rating rates and how much credit risk you are.
If the indicator says that you hold a great score, this means that you have a good credit score, if you have a poorer score, subsequently it will indicate that you possess a bad credit score and will be far more risky to become accepted of for loans.
So, if you produce a bad credit rating, the foremost thing you need to fix to build up your credit rating is to take control of old debts. By paying all your old debts, this will bring to a halt the creditors to bring to a halt making negative reports to credit reporting agencies.
This is the foremost thing you have to accomplish in order to prevent your credit score from getting much worse than it already is. By cutting the source of negative credit reports, you will be well on your way to acquire a excellent credit score.
However, paying all your debts doesn’t necessarily mean that you will instantly acquire good credit rating. You have to remember that this will simply prevent it from getting any more worse. Your old bad credit score will still be there. So, obviously the next step would be to start looking for ways to accomplish a number of positive reports on your credit rating.
You can do this by applying for a credit card that is designed meant for people who experience bad credit rating, such as a secured credit card. You should furthermore start opening a new savings account or checking account. Always remember that you ought to pay your balance on schedule in order for you to establish a encouraging credit report.
Eventually, your old bad credit score will expire in time. Always keep paying your debts on schedule and your credit history will look better than in the past. However, it will ordinarily take around 5 to 7 years for your old credit report with negative reports to expire. This is why patience is very notable.
With patience, you will witness that in time, your credit score will increase and get rid of those damaging reports that you had in the past. Always remember to keep paying your debts on schedule in order to carry on have a good credit score.
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