Sep
28
My credit card interest rate decreased. Does this mean I improved my credit score?
Filed Under Credit | 5 Comments
Caroline P asked:
I noticed that my interest rate on my credit cards has decreased. For example: In Feb it was 18.74% and now it is 16.24% Does this have to do with the Feds lowering the interest rate? I completely paid off two of my credit cards in March. I’ve made some purchases on the credit card since then but I have been paying almost the whole balance amount every month.
Gabriel
I noticed that my interest rate on my credit cards has decreased. For example: In Feb it was 18.74% and now it is 16.24% Does this have to do with the Feds lowering the interest rate? I completely paid off two of my credit cards in March. I’ve made some purchases on the credit card since then but I have been paying almost the whole balance amount every month.
Gabriel
Sep
27
Mark Aucamp asked:
If you believe everything in the news these days, it’s almost impossible to get a good deal on credit. Luckily, that’s just not true. If you have a good credit rating, you can still qualify for some great deals – whether you want a card, loan, mortgage or simply the right mobile airtime package. Follow these tips and you could see a real improvement to that all-important number.
Month 1
Understand credit ratings
When lenders decide whether to grant you credit and what interest to charge, they calculate your credit rating (also known as a credit score) to assess the likelihood that you will repay what you owe them. They do this by allocating a value to items from your application and your credit report – the personal history of your credit accounts, such as loans, cards and mortgages – and adding them up to get a single number. In general, the higher your score, the easier you’ll find it to get credit.
You don’t have a single credit rating, as every lender uses a different formula. Your credit score also changes over time, as your circumstances change – which is where these tips come in.
Check your credit report
It’s crucial that this is up to date and accurately reflects your circumstances, so lenders don’t turn you down unnecessarily or lend more than you can really afford to repay. Start by getting an overview of your credit accounts and how well you’re managing them. You can see your Experian credit report online with a 30-day free trial of the credit monitoring and ID fraud protection service CreditExpert.
It’s an urban myth that your credit rating suffers every time you look at your own report. In fact, checking your credit report regularly could help you to manage your finances better and build a better credit score.
Month 2
Register to vote at your current address
The electoral roll is used to confirm that you live where you say you do – you may lose points if you don’t appear and lenders may ask you to provide further proof of residence or even turn you down.
Set the record straight
If you find any discrepancies on your report, such as an account that is closed but is listed as open or a late payment that you know you made on time, get in touch with the relevant lender and explain the problem. Be prepared to provide proof and ask them to amend the entry.
Month 3
Give yourself some breathing space
Look for zero per cent balance transfers or spending deals on credit cards, which will give you some breathing space while you sort out your finances – but remember to save up the money to repay them when the introductory period is up.
Close unused accounts
Target unused accounts listed on your credit report and close them down. Lenders take into account the amount you could borrow when they decide what to offer you. Lower that total and you could increase your credit score.
Month 4
Make the most of savings on your mortgage
If you have a tracker mortgage that has benefited from the record lows in interest rates, now’s the time to consider whether paying off more of your home loan will leave you better off rather than using the surplus to repay other debts. Check first that you won’t be penalised for any early repayment.
Rationalise your borrowing
Get out your statements and work out which of your remaining accounts are costing you most in interest, then do your research to see if you can roll them up into a single, less expensive loan. If that’s not possible and you have spare cash, use it to pay off these debts first – you’ll be better off than if you keep the money in the bank and, as your balance falls, your credit rating could rise.
Month 5
Explain yourself
Past financial problems such as missed repayments stay on your credit report for at least three years, while IVAs and bankruptcies are there for a minimum of six years. If special circumstances explain why you got into trouble, you can ask to add a note of explanation that will be seen by lenders. For example, you might have had an accident and skipped a few repayments but have never had any problems before or since.
Sweep up your footprints
Every time you make an application for credit, the lender will search your credit report and leave a record known as a footprint. These stay on your credit report for 12 months and lots of these in a short space of time can make them fear that you’re desperate for money or even suspect that a fraud is being planned, so if you spot something listed as an application when you were only asking for a quotation, contact the lender and ask for it to be removed. When you want to know what kind of a deal you can get, be careful to ask for a quotation search that won’t count against you.
Month 6
Protect your ID
ID fraud is one of the fastest-growing crimes of the 21st century. It takes place when a criminal gets hold of enough of your personal data and impersonates you, take over your accounts, borrow money in your name – and trash your credit rating. When you check your credit report, look out for unfamiliar transactions or applications and tell the lender immediately if you think you’re a victim. The Home Office recommends this as an effective protection.
Update your relationships
One section of your credit report lists your financial associates – people with whom you have a financial relationship, such as a mortgage or joint credit card account. Lenders may check the credit reports of your financial associates when you apply for credit, as their situation could affect your ability to repay what you borrow, so it’s important to ensure that the list is up to date – or you could be penalised for someone else’s financial problems. It’s always best to close joint accounts when a relationship ends.
So how are you doing?
See whether you’ve boosted your credit rating by ordering your Experian Credit Score for £5.95 at any time when you check your Experian credit report with CreditExpert. It won’t be exactly the same as one calculated by a lender but it will demonstrate the impact of your credit history on your credit score and help you to track your progress.
Shane
If you believe everything in the news these days, it’s almost impossible to get a good deal on credit. Luckily, that’s just not true. If you have a good credit rating, you can still qualify for some great deals – whether you want a card, loan, mortgage or simply the right mobile airtime package. Follow these tips and you could see a real improvement to that all-important number.
Month 1
Understand credit ratings
When lenders decide whether to grant you credit and what interest to charge, they calculate your credit rating (also known as a credit score) to assess the likelihood that you will repay what you owe them. They do this by allocating a value to items from your application and your credit report – the personal history of your credit accounts, such as loans, cards and mortgages – and adding them up to get a single number. In general, the higher your score, the easier you’ll find it to get credit.
You don’t have a single credit rating, as every lender uses a different formula. Your credit score also changes over time, as your circumstances change – which is where these tips come in.
Check your credit report
It’s crucial that this is up to date and accurately reflects your circumstances, so lenders don’t turn you down unnecessarily or lend more than you can really afford to repay. Start by getting an overview of your credit accounts and how well you’re managing them. You can see your Experian credit report online with a 30-day free trial of the credit monitoring and ID fraud protection service CreditExpert.
It’s an urban myth that your credit rating suffers every time you look at your own report. In fact, checking your credit report regularly could help you to manage your finances better and build a better credit score.
Month 2
Register to vote at your current address
The electoral roll is used to confirm that you live where you say you do – you may lose points if you don’t appear and lenders may ask you to provide further proof of residence or even turn you down.
Set the record straight
If you find any discrepancies on your report, such as an account that is closed but is listed as open or a late payment that you know you made on time, get in touch with the relevant lender and explain the problem. Be prepared to provide proof and ask them to amend the entry.
Month 3
Give yourself some breathing space
Look for zero per cent balance transfers or spending deals on credit cards, which will give you some breathing space while you sort out your finances – but remember to save up the money to repay them when the introductory period is up.
Close unused accounts
Target unused accounts listed on your credit report and close them down. Lenders take into account the amount you could borrow when they decide what to offer you. Lower that total and you could increase your credit score.
Month 4
Make the most of savings on your mortgage
If you have a tracker mortgage that has benefited from the record lows in interest rates, now’s the time to consider whether paying off more of your home loan will leave you better off rather than using the surplus to repay other debts. Check first that you won’t be penalised for any early repayment.
Rationalise your borrowing
Get out your statements and work out which of your remaining accounts are costing you most in interest, then do your research to see if you can roll them up into a single, less expensive loan. If that’s not possible and you have spare cash, use it to pay off these debts first – you’ll be better off than if you keep the money in the bank and, as your balance falls, your credit rating could rise.
Month 5
Explain yourself
Past financial problems such as missed repayments stay on your credit report for at least three years, while IVAs and bankruptcies are there for a minimum of six years. If special circumstances explain why you got into trouble, you can ask to add a note of explanation that will be seen by lenders. For example, you might have had an accident and skipped a few repayments but have never had any problems before or since.
Sweep up your footprints
Every time you make an application for credit, the lender will search your credit report and leave a record known as a footprint. These stay on your credit report for 12 months and lots of these in a short space of time can make them fear that you’re desperate for money or even suspect that a fraud is being planned, so if you spot something listed as an application when you were only asking for a quotation, contact the lender and ask for it to be removed. When you want to know what kind of a deal you can get, be careful to ask for a quotation search that won’t count against you.
Month 6
Protect your ID
ID fraud is one of the fastest-growing crimes of the 21st century. It takes place when a criminal gets hold of enough of your personal data and impersonates you, take over your accounts, borrow money in your name – and trash your credit rating. When you check your credit report, look out for unfamiliar transactions or applications and tell the lender immediately if you think you’re a victim. The Home Office recommends this as an effective protection.
Update your relationships
One section of your credit report lists your financial associates – people with whom you have a financial relationship, such as a mortgage or joint credit card account. Lenders may check the credit reports of your financial associates when you apply for credit, as their situation could affect your ability to repay what you borrow, so it’s important to ensure that the list is up to date – or you could be penalised for someone else’s financial problems. It’s always best to close joint accounts when a relationship ends.
So how are you doing?
See whether you’ve boosted your credit rating by ordering your Experian Credit Score for £5.95 at any time when you check your Experian credit report with CreditExpert. It won’t be exactly the same as one calculated by a lender but it will demonstrate the impact of your credit history on your credit score and help you to track your progress.
Shane
Sep
27
Can a bad credit rating be fixed?
Filed Under Personal Finance | 3 Comments
Sep
24
Credit-wise, when does the 7 year period start?
Filed Under Credit | 4 Comments
♥ Jen ♥ asked:
Does it start when it was opened or when it was reported? I have bad credit and I’m trying to improve my credit rating.
Does it start when it was opened or when it was reported? I have bad credit and I’m trying to improve my credit rating.
Thanks!!
Leon
Sep
16
How to Build a Very Good Credit Rating
Filed Under Credit | Leave a Comment
sam asked:
From bartering in ancient times, to metal coinage, to paper currency, the latest stage and development in the evolution of currency is credit and credit ratings. With increasing ease and usage of the internet, and e-commerce, electronic transfers and so-called “plastic currency” is fast replacing cash.
The way credit works is that it is a record of your spending and borrowing habits, and is used to determine effectively, how trustworthy/dependable you are with a particular transaction, will you be likely to make good on payments, or be unable to pay on time, if indeed at all? Whilst this is a simple mechanism to protect retailers from debt and bad creditors, it can be overly harsh, catching people somewhat unfairly meaning they are unable to buy things, or buy them at such a generous rate. Therefore, it is crucial that you maintain a clean and proactive credit rating. Just as sidenote, no reputation is as bad as a negative reputation, after all, if there is no history or record of your credit transactions, how else will lenders know you are worth the risk and effort?
Bizarre as it may seem, you have to buy credit in order to get your first (crucial) step on the credit rating ladder. Think of it like Ebay with its feedback system, once you establish yourself with small, inconsequential transactions, then the bigger items will be much more accessible. A great place to start is by opening a savings account, this is a huge plus with lenders, and the bank in question may offer you a credit card. If you do get a credit card, make sure to pay off any and all debts and outstanding charges immediately. This will ensure you are not hit with penalty charges, as well as increasing your credit rating “that your a prompt customer”.
Use retailer programs, so for any large purchase, which offers instalments of a fixed amount per month spread over an agreed period of time are a great way of increasing your credit. Just make sure the retailer in question will actually reward you for your work by reporting your loan (or instalment payments) to the major credit bureaus.
For a shortcut, get a co-signer for any loans you take out. This will allow you to take advantage of their credit score, and will also provide the lenders with an extra assurance that should you be unable to pay, then payment can be recovered from the co-signer. Note that this is double-edged sword, whilst you get the benefit of the co-signers good reputation, they will bear the brunt of your bad reputation if you fail to keep up with payments or generally default. If you are going to act as co-signer for someone, be very careful and draw up a clear strategy to avoid getting a bum deal.
Remember you are legally entitled to access your credit report at anytime, and this can give you a clearer idea as to what areas you need to improve upon to increase your flagging credit score.
Vivian
From bartering in ancient times, to metal coinage, to paper currency, the latest stage and development in the evolution of currency is credit and credit ratings. With increasing ease and usage of the internet, and e-commerce, electronic transfers and so-called “plastic currency” is fast replacing cash.
The way credit works is that it is a record of your spending and borrowing habits, and is used to determine effectively, how trustworthy/dependable you are with a particular transaction, will you be likely to make good on payments, or be unable to pay on time, if indeed at all? Whilst this is a simple mechanism to protect retailers from debt and bad creditors, it can be overly harsh, catching people somewhat unfairly meaning they are unable to buy things, or buy them at such a generous rate. Therefore, it is crucial that you maintain a clean and proactive credit rating. Just as sidenote, no reputation is as bad as a negative reputation, after all, if there is no history or record of your credit transactions, how else will lenders know you are worth the risk and effort?
Bizarre as it may seem, you have to buy credit in order to get your first (crucial) step on the credit rating ladder. Think of it like Ebay with its feedback system, once you establish yourself with small, inconsequential transactions, then the bigger items will be much more accessible. A great place to start is by opening a savings account, this is a huge plus with lenders, and the bank in question may offer you a credit card. If you do get a credit card, make sure to pay off any and all debts and outstanding charges immediately. This will ensure you are not hit with penalty charges, as well as increasing your credit rating “that your a prompt customer”.
Use retailer programs, so for any large purchase, which offers instalments of a fixed amount per month spread over an agreed period of time are a great way of increasing your credit. Just make sure the retailer in question will actually reward you for your work by reporting your loan (or instalment payments) to the major credit bureaus.
For a shortcut, get a co-signer for any loans you take out. This will allow you to take advantage of their credit score, and will also provide the lenders with an extra assurance that should you be unable to pay, then payment can be recovered from the co-signer. Note that this is double-edged sword, whilst you get the benefit of the co-signers good reputation, they will bear the brunt of your bad reputation if you fail to keep up with payments or generally default. If you are going to act as co-signer for someone, be very careful and draw up a clear strategy to avoid getting a bum deal.
Remember you are legally entitled to access your credit report at anytime, and this can give you a clearer idea as to what areas you need to improve upon to increase your flagging credit score.
Vivian
Sep
13
Improving Credit Score And Its Indicator
Filed Under Credit | Leave a Comment
Stephen Campbell asked:
Credit score is vital for your living because it determines your economic stability. If you are stable economically, you are able to benefit from it such that when you have business transactions-like loan. So, it of great significance that you have a good credit score rating and if you do not have, you need to improve credit score. But how to determine the stability of your credit? Well, the indicator will help you on that.
If the indicator says that you have a high score, this means that you have a stable credit score, if you have a lower score, then it will indicate that you have a bad credit score and will be far more risky to get an approval for loans.
So, if you have a bad credit rating, the first thing you need to do to make it improved is to take care of old debts. By paying all your old debts, this will stop the creditors to stop making bad reports to credit reporting companies.
That is the first thing you have to do in order to stop your credit score from plunging to a more worse than it already is. By cutting the source of negative credit reports, you will be well on your way to get a n improved credit score.
But, paying all your debts does not necessarily mean that you can immediately get good credit rating. You have to realize that this will just stop it from getting any more worse. Your old bad credit score will still be existing. So, obviously the next step would be to begin looking for methods to make some positive reports on your credit score rating.
You can do this by applying for a credit card that is specially designed for individuals who have bad credit rating, such as a secured credit card. You should also begin opening a new savings account or checking account. Always remember that you should pay your balance on time in order for you to establish a good credit report.
Eventually, your old bad credit rating will expire in time. Always keep paying your debts on time and your credit history will look better than in the previous scenarios. However, it will usually take around 5-7 years for your old credit report with negative reports to expire. This is why patience is very essential.
With patience, you will see that in time, your credit score will improve and get rid of those negative reports that you had in the previous years. Always remember to keep paying your debts on time in order to continue in improving your credit score rating.
Oscar
Credit score is vital for your living because it determines your economic stability. If you are stable economically, you are able to benefit from it such that when you have business transactions-like loan. So, it of great significance that you have a good credit score rating and if you do not have, you need to improve credit score. But how to determine the stability of your credit? Well, the indicator will help you on that.
If the indicator says that you have a high score, this means that you have a stable credit score, if you have a lower score, then it will indicate that you have a bad credit score and will be far more risky to get an approval for loans.
So, if you have a bad credit rating, the first thing you need to do to make it improved is to take care of old debts. By paying all your old debts, this will stop the creditors to stop making bad reports to credit reporting companies.
That is the first thing you have to do in order to stop your credit score from plunging to a more worse than it already is. By cutting the source of negative credit reports, you will be well on your way to get a n improved credit score.
But, paying all your debts does not necessarily mean that you can immediately get good credit rating. You have to realize that this will just stop it from getting any more worse. Your old bad credit score will still be existing. So, obviously the next step would be to begin looking for methods to make some positive reports on your credit score rating.
You can do this by applying for a credit card that is specially designed for individuals who have bad credit rating, such as a secured credit card. You should also begin opening a new savings account or checking account. Always remember that you should pay your balance on time in order for you to establish a good credit report.
Eventually, your old bad credit rating will expire in time. Always keep paying your debts on time and your credit history will look better than in the previous scenarios. However, it will usually take around 5-7 years for your old credit report with negative reports to expire. This is why patience is very essential.
With patience, you will see that in time, your credit score will improve and get rid of those negative reports that you had in the previous years. Always remember to keep paying your debts on time in order to continue in improving your credit score rating.
Oscar
Sep
8
Will Citi report negatively on my credit if I close my secured credit card early?
Filed Under Credit | 3 Comments
wakum6 asked:
I’ve had a secured credit card with Citi for a while now. It has a limit of $300 which I gave to them to put in a CD. I got this card to improve my credit rating but they haven’t reported on ny credit yet and it is a hassle having Citi as a credit card because I have USAA Bank. Will citi report negitivly because I close the account early? And what kind of penalties will I get for closing a CD early?
Dean
I’ve had a secured credit card with Citi for a while now. It has a limit of $300 which I gave to them to put in a CD. I got this card to improve my credit rating but they haven’t reported on ny credit yet and it is a hassle having Citi as a credit card because I have USAA Bank. Will citi report negitivly because I close the account early? And what kind of penalties will I get for closing a CD early?
Dean
Sep
3
Abhishek Agarwal asked:
It takes a lot of effort and perseverance as well as dedication on the part of an individual to establish and maintain a good credit rating score. Creating a good credit history is not something that happens over night. You need to have some credit in the market in order to have a score. An average American usually starts his or her credit score with their first credit card when they are in college or with their student loan. The credit rating begins with the date the first installment for the loan arrives or the date for the payment of the credit card. If you are late to make the payment or you skip it will reflect very badly in your credit rating.
So how do you go about starting and maintaining a good credit rating? Typically you could begin at the departmental store or get yourself a gas credit card. Both are fairly easy ways to get the credit rating bureaus sniff you out. If your intention is to establish and maintain a good credit rating you must ensure that you never spend an amount you cannot repay in full on the due date, and repay it by hook or by crook. Never carry a balance on your credit card as this reflects very badly in your report.
The other best way to get a good credit rating is to have someone with a very good credit rating sign as a co-signer on a large loan such as a car loan. This co-signer is doing nothing more than guaranteeing that the loan installments will be paid on time by you, and if you do pay on time, which is what you should, you are up and away with the best credit report you could possibly ever have. You need to establish that you pay on time every time and will never abuse credit. This is essential for a good credit report.
You should not get yourself several credit cards and begin charging them all. This will just demonstrate to the creditors that you are irrational when it comes to managing your finances or that you know nothing about debt management. They will use this against you when you apply for a loan or a mortgage.
We cannot stress enough on the importance of paying your bills on time. This is the crux of getting a good credit rating. When the rating goes negative it will take a month of Sundays to set it right, and a lot of time and effort it needed to achieve this mammoth feat. You can set a bad credit rating right by getting yourself a credit card and using it just enough so that you can pay back in one go how much you spend. Over a period of time you will find that with each timely payment your credit rating will improve and your report will be well on the way to recovery. But as you can see that you can make payments just once a month this process will take very, very long.
Melinda
It takes a lot of effort and perseverance as well as dedication on the part of an individual to establish and maintain a good credit rating score. Creating a good credit history is not something that happens over night. You need to have some credit in the market in order to have a score. An average American usually starts his or her credit score with their first credit card when they are in college or with their student loan. The credit rating begins with the date the first installment for the loan arrives or the date for the payment of the credit card. If you are late to make the payment or you skip it will reflect very badly in your credit rating.
So how do you go about starting and maintaining a good credit rating? Typically you could begin at the departmental store or get yourself a gas credit card. Both are fairly easy ways to get the credit rating bureaus sniff you out. If your intention is to establish and maintain a good credit rating you must ensure that you never spend an amount you cannot repay in full on the due date, and repay it by hook or by crook. Never carry a balance on your credit card as this reflects very badly in your report.
The other best way to get a good credit rating is to have someone with a very good credit rating sign as a co-signer on a large loan such as a car loan. This co-signer is doing nothing more than guaranteeing that the loan installments will be paid on time by you, and if you do pay on time, which is what you should, you are up and away with the best credit report you could possibly ever have. You need to establish that you pay on time every time and will never abuse credit. This is essential for a good credit report.
You should not get yourself several credit cards and begin charging them all. This will just demonstrate to the creditors that you are irrational when it comes to managing your finances or that you know nothing about debt management. They will use this against you when you apply for a loan or a mortgage.
We cannot stress enough on the importance of paying your bills on time. This is the crux of getting a good credit rating. When the rating goes negative it will take a month of Sundays to set it right, and a lot of time and effort it needed to achieve this mammoth feat. You can set a bad credit rating right by getting yourself a credit card and using it just enough so that you can pay back in one go how much you spend. Over a period of time you will find that with each timely payment your credit rating will improve and your report will be well on the way to recovery. But as you can see that you can make payments just once a month this process will take very, very long.
Melinda