"Learn the Secrets I Used to Wipe Away Negative Items on My Credit Report & Raise My Scores Over 200 Points!"*

Credit Repair Tips - Grab Your FREE report (a $77 value!) Just enter your email addresss to the right & it will arrive within seconds!
E-Mail:

Need Credit Repair Help Right Now? Check Out the Top Credit Repair Services on the Net!

Sep 20, 2009

College Students and Credit – Staying Credit-wise

In the past, college students could expect a slew of credit card offers along with the typical college entrance paperwork. Touting themselves as a way for students to learn responsible spending habits, most credit cards targeting college students instead left these young consumers saddled with cards that charged high interest rates, excessive over-limit fees, and teaser rates that quickly increased with the first missed payment. Under the new laws set to take effect on February 2010, credit card companies won’t be able to extend credit to students without proof of income to repay the balances, or a parental cosigner – but be aware, if you cosign on your son or daughter’s account, it will definitely have an affect your credit scores as well.

When you cosign an account, whether it’s a loan, credit card, or an open line of credit, that account shows up on your credit report as well as the credit report of the individual you cosigned with so that he or she could qualify for the credit. This means that if payments are not made on time, both individuals’ credit scores will suffer. Additionally, the student credit card that you cosigned for will be added to your current available-credit-to-debt ratios and you could be denied additional credit based on the payment and purchasing activity on that card. Keep the initial credit limit low, and make sure any credit limit increases are only granted with your consent – this will help you to effectively manage both your credit scores, and your child’s credit scores.

Credit card companies probably won’t stop their aggressive marketing to students, and you can expect that the new laws will only encourage some credit card companies to offer additional incentives for new students to get their parents’ agreement to sign up for the card. If you have a student who is currently in college, or that is approaching college age, now is the time to help explain to them how credit cards work – keeping balances low, making payments on time, and paying off more than the minimum balance each month can actually improve your child’s credit, and yours as well if managed carefully.

If your student will be attending college out of state, it can be difficult to keep track of credit card activity. One way is to sign up for email alerts on purchases, or when the card is approaching its limit. Be aware of how much your child spends while in school, and help him or her to create a budget that will successfully track spending and reduce the risk of over-limit fees. Even better: opt out of any over-limit fees on the new card, and avoid getting hit with extra charges if your student does max out the card.

It’s never too soon to learn the lessons of responsible credit use; just be certain that your college student’s spending habits don’t end up costing you your good credit. Stay informed when it comes to purchases, encourage responsible spending habits, and don’t be afraid to take the credit card away or cancel the account if your child proves that he or she is not ready for the responsibility – it’s better to cancel a card with a small limit early on than it is to pay thousands in fees and late charges down the line.

Posted in credit card offers, credit cards, credit report, credit scores | No Comments »



Sep 8, 2009

Avoid Credit Card Scams and Rebuild Your Credit

If you’re trying to rebuild your credit, you’re not alone. But with the current economic problems facing many Americans, there has been a corresponding upswing in the amount of scams designed to lure those in need of a quick credit fix. So, how can you avoid getting scammed when searching for a credit card to rebuild your credit? For starters, avoid any of the following:

1.    Offers with vague terms. Be wary of credit card offers with wording such as ‘rates as low as __%’ or ‘credit limit up to ___.’ Chances are, most will not qualify for those teaser rates and credit limits, and the card you end up with could be too limited to be worthwhile.

2.    Offers with excessive fees. Likewise, avoid any credit card that offers a low credit limit, but charges high fees to issue the card. Some of these cards have fees totally more than 80% of the initial balance. If you pay off these fees, you’ll still take a hit on your credit rating because the initial debt will be seen as excessive, even though you haven’t actually charged a dime.

3.    Offers that allow you to pay off an already charged-off debt with your new card. While this may seem like a great deal, all too often it turns out to be a scam. Instead of getting your charged-off debt satisfied, along with a new credit card, you’ll find yourself making payments on that old debt for months or even longer before the company will give you an actual credit card. Meanwhile, your credit scores have little or no improvement.

While there are many scams out there, getting a credit card from a reputable bank or finance company can be an important first step to rebuilding your credit. Some of the best places to get that new credit card include:

1.    Your bank. If you have a good relationship with your bank, and a direct deposit account, you may be able to qualify for a credit card even if your credit scores need improvement. Getting a secured credit card from your bank can also make it more convenient to pay the card back on time, as you can set up automatic payments.

2.    A credit union. If you can open an account at a credit union, you may find that you get better interest rates and have more options when it comes to qualifying for a card.

3.    Store cards or gas cards. Although the interest rates on these types of cards are generally higher, you can still rebuild your credit if you are careful about paying off the balance each month. Store cards are generally easier to qualify for, as well. Just be sure to keep your spending in check, and only buy what you can afford to pay off each month.

Credit cards are a necessary component to a healthy credit score. By carefully choosing the right credit card from the start, you can give yourself the best possible opportunity to rebuild your scores and get your financial health back on the road to recovery.

Posted in credit card offers, credit scores, credit unions, rebuild credit | No Comments »



Aug 21, 2009

Why Debt Consolidation Loans Don’t Work

Before the collapse of the housing market, consolidating debt through the use of home equity loans was a popular solution to the debt problem. However, this type of debt solution doesn’t help when it comes to qualifying for new credit and here’s why: your debt-to-income ratio remains the same, or higher. Additionally, assuming you have the discipline not to use those credit cards while you’re repaying your consolidation loan, you now have revolving accounts that are left idle. And without continual repayment on different types of credit, it’s difficult to rebuild positive credit history.

Credit scores are determined not only by your payments, but also by the amount of credit you have versus the amount you use. Credit scores are also partially determined by your “mix” of credit. You want to have active credit card accounts, and installment payment accounts such as a car loan or mortgage. If you cancel your credit cards in an attempt to keep your debt-to-income ratio at the same levels, then you’ve eliminated a third factor in your credit scoring – length of time for active accounts.

So what can you do instead of debt consolidation? The standard advice tends to be the best advice – start with a credit card that has the highest interest rate and pay it down first. Conversely, if you have credit cards that have a very small balance, pay those off first and then work towards paying off the ones with higher interest. If you work your way through your credit card debts systematically, you can make a difference in your credit scores.

The absolute worst thing you can do is get a debt consolidation loan and then max out the cards you just paid – not only does that leave you in a worse position financially, but it also makes it extremely difficult to qualify for credit in the future, as these types of actions are seen as high-risk by creditors. If you have a debt consolidation loan in progress, keeping your credit cards active by using them for a nominal purchase ($50 or less) may help you to lessen the potentially negative impact on your credit score. Keep in mind that you should only use the cards if you know you can pay them back in full – use them to purchase items that you would normally pay for in cash or check, and then use those funds to pay off the credit card instead.

Once you have your balances lowered, you want to keep them that way – try not to charge more than 10% – 30% of your available balance each month, and pay it off month to month. You don’t have to carry a balance in order to show a positive credit history, but you do need to have consistent charges that get paid on a monthly basis. If you’re really set on a debt consolidation loan, avoid using one that will tie up your home equity. Instead, get a personal loan through your bank or credit union, and use it to cover the amount of your high interest rate credit cards. In this way, you can continue to make payments on the lower interest cards, and maintain the balance of your credit mix.

Posted in credit scores, debt, debt consolidation, debt to income ratio | No Comments »



Aug 7, 2009

Student Loans and Your Credit – How IBR Can Help

With many students facing poor job prospects upon graduation along with the mounting debt of student loans, credit problems can quickly escalate. And the problem isn’t just for recent grads – many individuals carry student loan debt for decades after graduation. If you don’t keep up with your payments, a default on your student loan can mean big problems when you try to get approved for credit down the line. Fortunately, there is a new option available for you if you’re struggling to maintain those payments and keep your credit rating clear.

Effective July 1, 2009, the government is instituting a new repayment plan called Income Based Repayment, or IBR.  This new payment plan adjusts your payments to reflect your income as well as your dependents. After 25 years, if you still have a balance on the loans, that balance is forgiven. For individuals who have low income or several dependants, this provides a viable way to keep your credit rating clear, while still maintaining affordable payments throughout your loan term.

Student loan debt is often a factor when determining whether or not you qualify for credit. Unless you are currently in deferment or forbearance, the total amount of your student loan debt is part of your debt-to-income ratio. However, most lenders view student loan debt as “good” debt, and are less likely to penalize you in that regard. Showing a consistent payment history out of forbearance and/or deferment can help to build credit as well – if your monthly payments are lower under IBR, this can also be a factor when creditors are deciding whether or not you have the ability to repay.

Regardless of whether or not you have your student loan payments adjusted under IBR or some other program, it’s important not to let payments on student loans lapse. While having student loan debt may not prevent you from qualifying for the credit that you deserve, missed payments on student loans certainly can. And because student loans fall under a special category of debt, in most cases you cannot have student loans discharged with bankruptcy, or any other means. If student loans are a potential tipping point for you with regards to your ability to repay financial obligations, IBR’s lower payments may be useful to you as well.

For individuals who have a higher income level, or who expect to have a higher income level in the future, IBR may not be the best option. Because the repayment plan is so lengthy, it is best suited for individuals with lower income jobs over the long term. If you have a temporary financial setback, forbearance and deferment are still your best options. Whichever repayment or deferment option you choose, you should check your credit report to ensure that it accurately reflects your current payment status. Often, missed payments can be removed from the credit report if you have your deferment or forbearance take effect retroactively – this will give you a clean slate to start with when you begin your repayment again, and will give your credit scores a natural boost as well.

Posted in Income Based Repayment, credit problems, student loan debt, student loans | No Comments »



Jul 31, 2009

Hidden Credit Builders: Adding Positive Information to Your Report

Most people focus on removing negative items from their credit reports in order to improve credit scores. While this is an effective means of improving scores by clearing up items that cause credit scores to drop, it is also sometimes possible to improve your credit by adding to your credit report. Just as negative information can be inaccurately reported, positive information may also have been left off, or misreported on your credit report. In some instances, it may be possible to add this positive information and give your credit scores a natural boost.

Some common mistakes with regards to positive information on your credit report include the length of time the account has been open, the credit limit on the account, and any accounts where you may be a joint account holder but the account isn’t listed on your credit report. When it comes to these types of mistakes, adding the positive information to your credit report can usually be accomplished one of two ways:

Contact the creditor. If it’s a case of not having a joint account listed on your credit report, you’ll want to contact the creditor directly. In many instances, your creditor will be able to add the account to your report for you. This is especially true if the account is listed for the other joint account holder already.

Contact the credit bureaus. After you’ve contacted your creditor, you’ll want to confirm that the information has been changed within the credit bureaus. Wait a couple of weeks, and then check your report – if you still see errors, send a letter to the credit bureau asking them to correct the information, or use the online contact form.

For accounts that are in your own name, but that aren’t listed on your credit report, you should verify with your creditor that they report to the three national credit bureaus. Not every creditor chooses to report to the bureaus, and without their voluntary reporting, the credit bureau won’t be able to help you. If you do confirm that the creditor typically reports and just hasn’t reported your account, you can take the same steps above in order to have the situation resolved.

For creditors that do not choose to report your credit to the agencies, you can still help your chances of obtaining credit if you can get a certified copy of your payment history. If possible, request a copy of the payment history on company letterhead, and signed by a manager or someone else in charge. By having this documentation on hand to bolster your credit report, you may be able to convince some lenders.

Adding positive information can be a helpful step when it comes to repairing your own credit. Listing accurate, positive information can counteract some negative marks on your report. Additionally, by verifying these positive items, you will can be more vigilant to potential errors in the reporting process overall. Don’t just look at your negative items – always look at your credit report as a whole to attain the best results.

Posted in building credit, credit bureaus, credit report, remove bad credit | No Comments »



« Older Entries
Newer Entries »