Here are some things you should know about your credit report. While going through this process myself, I've found and learned a lot of myths about credit reports.
1. Pulling your own credit report does not hurt your credit score.
Credit bureaus want you to monitor your credit. They want you to report mistakes and fraudulent activities. It is absolutely untrue that pulling your own report would lower your credit score.
However, having a lender pull your credit report will lower your score. Why? Because a lender should only do this when you are trying to find financing. When they pull your report and you are declined financing, it puts a hard inquiry against you. A hard inquiry is basically showing that you're trying to over-extend yourself financially. These hard inquiries can last on your credit report for up to two years. Having 8 hard inquiries is considered "high risk".
2. Disputing entries on your credit report also does not lower your credit score.
If you don't know if something is right, then dispute it. What happens when you submit a dispute is as follows:
* the credit bureau will contact the lender/collections agency regarding the disputed account.
* the lender/collections agency has 30-45 days to respond with proof and verification that the information on the account is accurate.
* if the lender/collections agency does not respond to the credit bureau's inquiries in 30-45 days or are unable to prove that the account is yours and that the information is correct, they MUST remove it from your credit report.
3. A common thing to hear is that collection accounts will stay on your report for 7 years so there is no use in paying them off.
If you negotiate with your collections agency, you may be able to convince them to take it off your credit report sooner and thus raising your credit score. I have done this many times and for one incident, my credit score went up 51 points.
Also, if you send in a dispute for an agency that is out of business, most of the time, the credit bureau will take it off your record.
Another reason to pay off collections is that having debt settle or preferably, paid in full, will look better to your future lenders and will eventually increase your credit score.
You Can Improve Your Credit Simply by Correcting Credit Errors
Three major credit bureaus control your financial life. Their policies determine your credit score, and, in turn, your credit determines if you get a personal loan. If your loan is denied, you are asked to contact these bureaus for the reasons. However, few people do.
The average American assumes that these three bureaus, also known as consumer reporting agencies, must be a government agency because they have so much information about everyone and are able to exert so much influence on consumer's financial life. However, these credit bureaus are private corporations who earn their profit by selling consumer reports, without the consumer's permission, to interested parties inquiring about their credit history.
Although consumers can dispute their credit score free and are required by law to get a response within 30 days, most fail to inquire why their loans are rejected or why their interest rates, when they do get loans, is so high. Consequently, since these agencies don't have to hire personnel to process the claims, this increases their profits. It also increases the percentage of errors in credit reports. In fact, statistics show that 79 percent of these credit reports have blatant errors.
Now that you understand how the credit system works and how it can accommodate huge errors, the best way to improve credit is simply by hiring a credit repair company to help you to challenge your credit score. While you can theoretically fix credit yourself, it is a long and arduous process, requiring lots of expertise in asking the right questions and negotiating a favorable response. This is why it is much less time consuming and nerve wracking, as well as much more efficacious, to hire an experienced credit repair company to do the work for you.
In order to find the best credit repair agency to assist you, you have to do more than use the telephone book or do an internet search. Once you have created a list of potential companies you would like to work for you, you have to screen them.
You can screen a credit repair agency by finding out how much experience it has in repairing credit. This can be done by reviewing customer testimonials and reading online reviews. An experienced company will have numerous customers who have had a significant number of items purged from their credit report.
Experience will also correlate with the length of time a company has been in business. Usually the longer it has been in business, the more experience it has in finding errors, disputing them, and having them removed. A company that has numerous complaints filed against it with the FTC will only be in business for a short time.
When trying to gauge experience and longevity, you can check with the Better Business Bureau on when the company started and how many customer complaints it has adequately addressed. A solid company will have an excellent track record of removing numerous items, of being in business for a long time, and of efficiently addressing any customer complaints. Finally, a reputable credit repair company will have affordable fees that you can pay as you go, while a scam outfit will ask for thousands of dollars up front. Consider it a warning sign if a credit repair service is front-loading its fees.
How to Survive the Recession and Credit Crunch - How to Make Money in a Credit Crunch -- Recession
A recession normally affects the whole country not just the area you live in and can sometimes even affect the whole world. A recession or credit crunch is basically where there is a decline, cutback and loss of prosperity, and economical activity.
A credit crunch or recession affects jobs, and the job market, houses and the housing market, the banking sector, the production sector and much more. There are not many people who will not be affected by a credit crunch or recession in one way or another, however some people will prosper, find new opportunities, and ideas.
Nobody can really predict how long a credit crunch--recession will last, but to help you get through it here are a few survival tips:
1. Don't spend more than you can afford.
2. Consider de- cluttering and selling anything you don't ant or need, this will help free up some cash for emergencies.
3. Start an emergency fund (even if you are still in employment) you never know how safe and secure your job is or will be so its time to start saving now while you can afford to, in that case if anything does happen to your job or your income/s you will be prepared.
4. Start budgeting, spending less means you can save more for that rainy day so budget for as much as you can, create food plans, and never grocery shop or food shop when you are hungry.
TOP TIP: Utilise free websites such as www.moneysupermarket.com and other offline and online sources to help you compare your energy suppliers, household products www.mysupermarket.co.uk and much more. Save money wherever and whenever you can.
5. Try to make your home or house as energy efficient as possible, to help save you money on those pesky household bulls why not try to make your home as efficient as possible, save money both now and in the long run.
6. Don't always buy new, try second-hand instead. Sometimes second hand items or used goods are just as good as their new rivals so save yourself money ad buy second hand products, or better yet swap and get free items, products and goods from websites such as www.freecycle.org
7. Don't buy what you don't need. Before you spend your hard earned money always stop and think do I need it and will I use it?
I hope you have found this article both useful and helpful. Please take on board these quick tips to help you save both money and time during a recession--credit crunch.
In order to get good credit you need to get a credit card. With this credit card you need to purchase items. This will allow you to get a credit history and then the bank will look at your credit history to see if you paid off what you have borrowed.
Here are a few steps to follow:
Find a credit card that has a low interest rate. See if the credit card offers cash back or points(for prizes). This can always be a plus. Then fill out the credit card application.
Figure out how much you can afford on credit card bills. Make sure you are capable of paying more important bills before using the credit card.
So every time you go to a store, use your credit card set of cash. You will get a credit card bill at the end of the month. So make sure it is affordable before you purchase anything on your card.
Once a credit card arrives pay it off, therefore you will not be charged a late fee!
Here's another way to build good credit !
Go to your bank open up a checking or savings account. The bank will see all the cash you have and might offer you a credit card( this is based on how much money you have in the account).
Also get yourself a prepaid credit card. You can call your bank and askfor a charge account. There you can fund account and spend how much you put in.
You can only spend amount you have deposited, once the money is all gone you have to fund the account again.
So make sure the only charge your credit card when you are capable of paying it off each month. Remember do not pass over your credit limit, this will cause a fee and lead to bad credit.
You will see a lot of younger people wondering how to establish credit if they have no credit at all. When you are just getting started it seems like everyone is telling you that you need to have established credit before they will give you credit. If no one will give me credit how to I get credit? It sounds like which came first the egg or the chicken and for all practical purposes it is a catch 22.
What I have found is that in order for you to establish credit its just a matter of applying for credit with some creditors that are more likely to help approve you for credit. These types of accounts can be the department store accounts and gas card accounts. Sometimes they will approve you for credit with a very small line of credit even if you have no credit at all. Your credit limit will be somewhere in the area of $200 to $300 because they don't know what your paying habits are and they don't want to give you a huge line of credit until they get to know you as a customer and you start to prove to them that you can handle a small line of credit.
As time goes on and you begin to make purchases and make your payments on time your line of credit will be increased. For the most part they will do this automatically because they recognize the fact that you could be a profitable customer for them later on down the line. Eventually you will receive a letter in the mail that says something to the effect of, "Congratulations your line of credit has been increased to $1,000". Make sure you don't get carried away and begin to make purchases up to your line of credit.
If you are a college student there are a lot of credit card companies that will approve you for lines of credit any where from $300 to $500 because they know you have the potential to become a long time profitable customer in the future. It has been proven that once someone opens a credit card at an early age they are more likely to keep that credit card throughout their lives. People become sentimentally attached to their first card that's why so many credit card companies will go to college campuses and set up booths and give away free gifts in an effort to attract new customers.
There are a lot of people that don't think this is a good thing. They feel that some college students are being taken advantage of because they don't really know how to handle credit at such an early point in their lives. Some colleges and universities for that reason don't allow the banks and credit card companies to set up shop on their campuses. If a college student gets himself in to some serious problems with debt at an early age it can be quite devastating.
Just use good sense once you have established credit and pay off your balances when you get the statement. Also try to use the credit cards only in emergency situations. If you receive a congratulatory letter stating that your credit limit has been increased you can call up the company and have them decrease it to the original limit. It can be very enticing to make purchases once you have received such a high line of credit.
Online credit cards are big business nowadays. There's are tons of credit companies out there and finding choosing the right one for you can be something of a challenge, keeping up it with it can be task as well. Researching what you are getting yourself into is always a good idea, walking around in the mall and seeing a 10% extra for signing up is fairly tempting regardless of how well of you are, but after signing up you find yourself with another bill you have to pay at the end of the month.
People like to use credit as it feels safe to them to purchase things, its not real cash to most people when they get their credit card. Thinking this way can be costly mistake and put you on the fast track to getting yourself in debt.
Even if you are paying the minimum balance on the due date, the amount you owe will barely change. Paying the bill on time is a good idea, however, no one wants to be charged late fees. But just paying the minimum balance will not affect your overall debt. Paying it all is the only surefire way to eliminate your credit card debt. It's a bad idea to transfer the debt to another credit card company unless you can transfer to one that does not charge interest. A good idea if you are struggling to pay off credit card debt is to stop charging anything to the card, sit down and figure out what you need to do and how long it will take to pay off the card.
When deciding on a card the big ones, Visa, Mastercard, or Discover are generally accepted anywhere you go. Keep in mind that two credit cards it usually enough for a one person, having two makes it much easier to keep track of where your money is going.
Most credit companies will offer you a cash advance available at any atm. These are also tempting but should only really be used for emergency situations as they often come with a high interest rate, that is figured on a day to day basis. Taking one can cost you a lot if not taken care of in a timely matter.
When deciding on a card, look for one that does not offer bonuses or extra incentives. These are often times used to lure people into a program or offer that will make the credit card company. When picking a card look for one that has a no nonsense attitude, has no annual fee and a low interest rate.
Credit cards are very useful for when you want to buy something big, as they help you establish a good credit history. Paying things on time consistently will reflect well on you and purchasing a house or a car will become a lot easier.
Following these tips will help you build your credit score to good level, helping you meet the goals you have set in your life.
It is an all too often scenario that people find themselves in these days; credit trouble. When credit trouble hits it may leave you with many headaches one of which includes trying to re-establish your credit when all the trouble is over. Even though it is credit cards that may have been the culprit in getting you into credit trouble, there is also a certain kind of credit card that can help you get out of trouble.
A secured credit card is one that is, well, secured. These types of credit cards are usually issued through banks and anyone can obtain one regardless of past credit history. These types of credit cards are not only ideal for those who are in the process of re-building credit, but they can also be perfect if you are just starting out and trying to establish credit in the first place. Here is how they work.
First find a financial institution such as your bank that issues secure credit cards and then make an appointment to go sit down with one of the bank finance employees. Once there they will explain the process of obtaining the secure credit card and for the most part it will go as follows:
• You give the bank a certain amount of money such as $500 as a deposit.
• The bank then issues you a secured credit card with a credit limit for $500.
• You then charge and use your credit card like any other and make monthly payments.
This represents a no risk situation for the bank as they already have your $500 so if you should fall behind or decide not to pay what you charge on the secured credit card they are fully covered. If however you make your monthly minimum payments then you will eventually get your deposit back (plus a little interest) and the secured credit card will then become a regular credit card. The amount of time depends on the financial institution and can range from six months to over a year, so be sure to ask
However you must use caution as a secured credit card, like a regular credit card, will charge interest if the balance is not paid in full each month. While that is not the best news, the good news is that most secured credit card activity is reported to all the major credit bureaus and if you maintain the account in good standing you will slowly begin to build your credit score back up.
Most of us probably know of someone that has had their identity stolen or someone that has had their identity attempted to be stolen. However, what people might not realize is that if you keep a close eye on your credit reports then you can attempt to stem off people stealing your identity. I know that I utilize the free credit reports that are provided each year to see who has been looking at my credit. Here are several benefits that I have found of checking my credit report.
The first benefit that I have found of checking my credit report on a yearly basis is that I am able to see who has been checking my credit out. Now this will give me a good idea as to who all has been looking. I know that one year when I checked my credit report and read through the actual report I noticed that about five different insurance companies had been looking at my credit report yet I did not ask for any new insurance quotes. Now I knew that this wasn't adding up and it ended up that within the next couple of weeks after checking my credit report and seeing them all checking I ended up getting several mass mailings from the insurance companies with rate quotes I did not want or need.
The second benefit is that you can find out if you have any loans that are still on your credit report even though they have been paid off for a long time period. I know that one year when my husband checked his credit report he found that his truck that had been paid off for almost a year was still showing up on his credit report. Now he had to make a couple of phone calls to ensure that it was off of his report, but if he hadn't done a yearly check on his credit report he wouldn't have known that this was on his report.
While people always see the commercial telling them to check their credit reports many still do not. However, checking your credit report is one great way to ensure that you are not becoming a victim of identity theft, you're able to see who all has been checking out your credit reports, and you can ensure that any old debt that has been paid off is cleared off of your report as showing up as a debt.
I'm a fan of credit cards as a smart tool in your money management basket. However, I can say that because I pay off my balance each month. It goes without saying that if you can't pay off your balance each month, credit cards are an expensive way to manage your money and should be avoided.
No Need to Carry Large Amounts of Cash
With the cost close to $75 to fill a tank of gas and a simple trip to the grocery store over $50, carrying that much cash around leaves you vulnerable to theft or loss.
Using the Credit Card Companies' Money
Depending on how much you use the credit card, this can add up over time. We once paid for a portion of a used car using our credit card, but only because we were going to pay cash for the car anyway, and did so, but six weeks later (earning interest on that money in the meantime).
We regularly earn several hundred dollars a year in rebates because we pay for almost everything with credit cards. However, this benefit is completely lost the first time you can't pay off that bill when it's due.
Tracking Your Spending
When I use cash, I quickly lose track of where I spend money. When paying with credit cards, I can easily analyze just how much, where and how often I've spent it. My credit card company allows me to download each transaction and I was once amazed just how much and how often we were eating out instead of at home. Using that information helped me to change some bad spending habits.
With more and more of my shopping being done online, a credit card is a necessity. If I'm unsure of the legitimacy of the website, my credit card company offers the ability to get a temporary number to protect me from fraud.
For me, the Cons of a credit card come down to two things:
Overspending on Things You Don't Need
It's easy to overspend when you forget that what you buy with a credit card is real money and will need to be paid off.
An Extremely Expensive Way to Borrow Money
If you can't pay off the balance each month, the interest rates, penalties and other fees can really add up over time.
Credit cards are money management great tools, but only if you can pay off the balances each month. My recommendation is that that if you have any balance on any credit cards right now, put them in a drawer and pay cash for things until you can pay off the entire balance.
Today's economy has more of a need than ever for a good credit score. This essentially affects your ability to buy a car, home, and other things that you need credit. Not only does it affect the things that you can buy, but also in some cases your ability to get an apartment or get a job, along with other things not expected.
For those that have not had a lot of credit in the past, you are more likely to quality for a lower limit credit card. The limit does not matter, but rather the way you use it to establish your credit. Using your card sparingly will allow you the opportunity to pay the entire balance off as soon as you receive the statement. Immediate and full payment reduces the risk of forgetting to pay and getting a late fee.
It never hurts to schedule a payment online, especially if you are waiting to be paid. This allows you to know the payment will come out of your account the last day of your statement and gives you enough time to cash your paycheck. Make sure you deduct any payments arranged online, since you want to avoid the risk of overdraft fees.
When you are making the choice between different cards, start by researching all the different ones available. Try to find one without an annual fee and offers incentives. If you have a card with cash back incentives, remember the money is free as long as you pay the balance off every month without interest.
Consider your present credit before applying for some of the cards, since they are not for people with little to no credit. It is not a good idea to make applications to cards, until you have found the right one, since a turn down does not show up in your credit report, but numerous inquiries do.
A credit card limit around $500.00 is a good way to start. Just make sure you keep your purchases at an amount you can afford. You really do not want to go over thirty percent, with you debt to available credit.
If however your credit scores is too low and it will not allow to qualify for a traditional type of credit card, then you my want to consider getting a secured credit card. This kind of card generally has the limits of your cash available. Establishing credit takes time and pays off in the end, however trying to re-establish credit is not as fun.
Disclaimer: We work hard to offer you valuable and reliable information about all of the products and services we review. In order to provide you with this free service, we use links on our site that provide us with commissions for referring you to the seller's site. We guarantee that this does not influence the material we present, but may influence the positioning on our site, and only supports our efforts to offer you the best and most relevant information possible