credit-card-companies

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

The average household has just over $16,000 in debt. However, this doesn’t mean that you are out of luck. There are things you can do to improve your credit score and help reduce some of your debt. How? Simply ask your credit card company to help you with one or two of these five things.

1. Waive late fees

Everyone panics when they realize that the deadline for payment has passed. The issue that credit cards charge you an average late fee between $10-$49. What most people don’t know is that many banks will erase the first late fee if you simply ask them.

In fact, 89% of people who ask will get get the fee waived. This is something very important for you if it is your first time being late. It’s always best to have a pristine record, but sometimes there are legitimate reasons. There might have been a family emergency or an illness. Obviously, don’t make a habit of calling to ask for forgiveness, but every once in a while if something goes wrong, simply talk to the credit card company or the bank. Ask them if they can get rid of that fee. They are people too, and you may be surprised by how often they are willing to make exceptions.

2. Lower minimum payments

Ask for a lower minimum payment. If you have currently fallen on hard times, do not hesitate to call your credit card company and ask them about this If, for example, you have recently become unemployed, calling to ask about a forbearance agreement or long-term repayment plan something like this to help you press pause essentially on the deck below until you find another job. This will help me to stay in good standing without breaking your bank.

3. Reduce your APR

Ask your company to reduce your APR. But, be prepared to make a case. There are a negotiation tactics you can use.

If you receive mail from other credit card companies asking you to sign up now, don’t necessarily throw it away. While you might not plan on using it, keep it to negotiate with your current credit card company. This proves to your existing credit card company that you have other options and that other companies want your services. For instance, show them that the competing credit card is offering you a 15% interest rate and that yours is currently at 20%. Be polite, but ask them clearly if they can match that 15%.

If you have been a longtime client, reminds the company that you have been a loyal customer.

If your bank offers to reduce your APR by a few percentage points, but don’t hesitate to ask for a little more than that. 78% of people that ask for a lower APR end up getting one. This makes a big difference. With $5000 of credit card debt and an APR of 18%, it would take eight years to pay it down with a $100 monthly payment. On the other hand if you get your interest rates dropped by just 3%, it would only take a 6.5 years.

4. Change your due date

If you have an odd due date for your bills, call the company to change it. A lot of people end up having bills at various times throughout the month because of when they signed up for service. If you forget to pay your bill regularly because your credit card payment comes in between your two paychecks, just ask the company to change it. It’s all about making your payments on time, each time. If you only get paid once a month at the first of the month, ask them to set a due date at the beginning of the month before your money has gone to other needs.

5. Ask about bonuses

While you are calling your credit card company company, also ask if they have any additional rewards that you might be able to use. A lot of people miss out on unused and untapped potential with a credit card. Today, almost every single credit card out there as an option for a perk. These perks are things that give you rewards for each dollar you spend. If you’re smart about it, you can use a credit card to help rebuild your credit score will simultaneously earning points that get you free plane tickets or free meals at your favorite restaurant.

Takeaways

After all of these changes, you may feel like you’re getting back on track. However, perhaps there are incidents before calling your credit card company that leave a stain on your credit report. What can you do in that case? You always have the option of choosing a top credit repair company in that situation. A reputable credit repair company can also increase your credit score. Often, some combination of credit repair options is needed for optimal results.

Things Affecting Credit Scores

7 Things That Don’t Affect Your Credit Score

7 Things That Don’t Affect Your Credit Score

Your credit score can seem like one of the most ominous of numbers in your life. With a bad credit score, it is something that hangs over your every move. However, there’s no reason to stress in every situation. Here are 7 common things don’t affect your credit score, for better or for worse.

1. Bank overdraft

If you’ve ever suffered from a bank overdraft fee, you know how expensive it can get. This is especially true if you receive many overdraft fees. It can be overwhelming, but the good news is that overdraft fees don’t move your credit score at all. There’s just one important thing to note. You have to ensure that the fees are paid off, so that the fees aren’t sent to collections. Understand though that if the overdraft fee is not paid after many weeks, your bank will send your account to a collection agency. Then, that debt collection itself will hurt your credit score.

2. Paying for insurance

Insurance companies perform a credit check when they decide if they want to give you insurance and when they calculate the insurance premium you pay. But although they’re using your credit score to make a financial decision, they don’t actually report your payments to credit bureaus. So, your insurance doesn’t change your credit score either. So, if you’ve been making timely insurance payments every month without fail, you’re unfortunately not reaping any credit score benefits.

However, much the same as an overdraft, if you missed too many of your insurance payments and the company have to send it to collections after they have canceled your policy, then it does negatively impact your credit score.

3. Paying your phone bill

Much the same as an insurance company, phone providers will look at your credit score prior to offering you a service. These phone providers often don’t give your bill payment history to the credit bureaus. They only want to see how much they should charge you as interest. Your credit score is not aided by timely bills either. So, even if you pay your cell phone bill on time every single month, it will not help your credit score at all.

But of course, like all things, if you stop paying your bills and it has to be sent to collections, the collection agency will report back to your credit score it will cause your credit score to drop.

4. Checking your own credit score

When a company looks into your credit, such as when they verify your credit in order to give you a loan, this inquiry counts against you for the first year. Every time somebody inquires for your credit score, it negatively hurts your credit score. That’s why it’s recommended that you don’t apply for multiple credit cards over the course of one year. On the other hand, you can check your credit score as often as you want. Using a legitimate third-party, you can check your credit score regularly and it won’t drop by a single point.

5. Rent payments

In most cases, your rent does not count towards your credit score. For anyone who doesn’t have a mortgage yet or is trying to repair their credit score so they can get a better loan rate on a mortgage, this might come as bad news. Naturally falling behind on your rent doesn’t hurt your credit score and your ability to get any loan in the future.

Also, you can ask your landlord to report your payments to the Experian rent bureau. This is the only aspect of rental payments which could help you with your credit score. Having this agreement set up online is a very beneficial way for you to build back your credit.

6. Credit counseling

Many people falsely believe that credit counseling affects your credit poorly, just like filing for bankruptcy. This is not true. Credit counseling appears in your credit report as an annotation but it doesn’t actually impact your score. If you are using a credit counselor to manage your credit card payments, just make sure that the creditor is making timely payments. Irony aside, if you have a credit counselor helping you and they make late payments on your behalf it will hurt your credit score.

7. Child support and alimony

Unless you fall behind on your payments and everything has to go to collections, child support and alimony payments do not affect your credit score one way or the other. However, what the other implications are of not providing child support and alimony is another story.

Summary of actions that don’t affect your credit score

Here’s a brief recap of the 7 things that don’t affect your credit score:

  1. Overdrafting your bank account
  2. Insurance payments
  3. Phone bill payments
  4. Checking your own credit score
  5. Rent payments
  6. Getting credit counseling
  7. Child support and alimony payments

For more tips, you can go to one of the best credit repair companies to seek professional help in fixing your credit score.

legit-or-scam

Is Legit Credit Repair Real?

Is Legit Credit Repair Real?

If you find yourself with a credit score lower than what you really want, it can be all too easy to jump at what appears to be the first chance to fix your credit. The sad truth of the matter is that many websites which post articles on credit scores or which have links to credit card companies often don’t have your interests in mind. Some of these ads might boast the ability to help you repair your credit instantly. There are many scams out there, but there is also such a thing as legit credit repair. The trick is to know how to identify which ones are which.

If you are able to do this and find a great credit repair company, you can avoid getting scammed and you can start saving thousands of dollars in the long run. It’s important to know how to distinguish the legit credit repair companies from the scams.

Debt management organizations

Credit repair agencies will help you improve your score in one of two ways. The first is by helping you manage and pay off your debt. The second is by disputing any negative items on your credit report which are not true.

First of all, repairing your credit score by managing and paying off your debt has no shortcuts. This is the type of credit repair that usually involves a lot of hard work and a lot of time. If you are truly serious about improving your credit score you might need to get better about managing her finances. These are the groups I can help you do that. Most of the debt management organizations are nonprofit which means that their goal is not to make money off you like other companies but to help you and educate you.

These groups encourage you to engage in self-help so that you can repair your own credit. This starts with understanding what makes up your credit score and what things build better habits and how you can repair your credit in the long-term. All things in life worth having will take a lot of effort and a lot of time. Nothing worth having is acquired easily.

What it’s like working with them

When you work with these companies, they’ll first want to get a sense of your comprehensive financial picture before they advise you. So, they’ll probably start by looking at your credit. And if your credit is really bad, chances are you have that. Effectively managing that that will help you to increase your credit score. These organizations help you set up repayment plans with your creditors. They act as a Coordinator between you and the creditors. They can help you lower any interest rates are facing and help you to change your total monthly payments.

Another perk to setting up a plan with a debt manager is that they might let you pay off your debt with a lump sum. When you pay off your debt with a lump sum, something that you can typically do if your bills have been sent to collections, you won’t have to keep track of dozens of bills or each different due date. Instead you can have it managed in one day.

For a lot of people, especially people who are faced with bad credit and a lot of debt, working with different companies, getting everything straight, sifting out old stuff from current stuff and figuring out what has to be paid when is exhausting and terrifying. When you have somebody that you pay to act as a Coordinator on your behalf, it takes away that fear.

Disputing negative items

Other credit repair agencies help you to dispute items on your credit report. These companies look over your credit report from all three of the credit bureaus and then they draft dispute letters to object any negative items. By law you have the right to dispute negative items on your credit score. You can dispute negative listings that you think are untimely, incomplete, unclear, unverifiable, or inaccurate. If the issue cannot be verified then it has to legally be removed from your credit score. One example of what an unverified thing means is, in an instance where one of your creditors when out of business but there’s no way for the three credit report euros to verify any item on your report from the creditor so it has to be removed.

Again, the nice thing about having agency represent you is that they are persistent. If these negative items are not removed immediately they will continue to dispute them in order to maximize the chances of getting the outcome you want. These companies will charge you an initial startup fee which can range from anywhere between $20 and $100 but the average fee is about $60. Some of them won’t even let you pay until you get results while others have a money back guarantee if you choose to no longer use their services.

Avoiding the scams

No matter which method you choose to improve your credit score, check the companies by name. Simply Google them and see if they have a long history, see if they have a lot of consumer feedback. Check and see if they have a Better Business Bureau rating. Take into consideration how you heard about the company. It was a late-night television advertisement it might not be reputable. If the company has been around for 20 years, chances are it’s a legit credit repair service.

not-to-do

What NOT To Do To Increase Your Credit Score

What NOT to Do To Increase Your Credit Score

A bad credit record can cause multiple problems. With a low credit rating, you diminish your chances of being approved for new credit or loans. If you are approved, you are liable to face extremely high interest rates.

A bad credit history can also prevent you from being approved for a cell phone contract or from renting an apartment; there are also some jobs that require you to have a good credit record. The good news is that you can improve your credit rating, but it is going to be a slow and tedious process. There is a strategy to credit repair, and if you take incorrect actions, you can actually lower your credit score. Here are some tips on what NOT to do when trying to repair your credit history.

1. Apply for Multiple Accounts

Despite the fact that new credit plays an important role in keeping your account active, applying for too many accounts, particularly in a short time span, can affect you negatively. Every credit application made places a hard inquiry on your file, and having multiple hard inquiries can lower your score from this risky behavior.

2. Co-sign a Loan

Unless this is your son or daughter, or other close family member, and you are okay with potentially ruining your credit score for their benefit, do not become a co-signer. Even if you are confident that the individual will be able to make payments on a loan agreement, it is best to refrain from becoming a co-signer. When you vouch for someone else’s loan, the following occurs:

  • Their account is placed on your credit file.
  • In certain instances, it increases your credit utilization ratio.
  • If the individual is unable to pay, you will have to take responsibility for the debt.
  • If no payment is made, your credit will suffer.

Improving your credit is and should be an individual process; you can reduce the risk of further damaging your account by simply saying “NO.”

The bottom line is this. Repairing your credit can prove very challenging; the amount of time that it takes for you to recover is dependent upon the severity of the damage. However, you shouldn’t allow your current situation to have a negative effect on your long term future. Ensure your financial security by taking a proactive position.

3. Maximize your Credit Limit

When you max out your credit, your credit utilization ratio is affected. In fact, you don’t want your credit utilization ratio to be anywhere near 100%. If your ratio is high, it implies that you are a risk, and this will have a negative effect on your credit score.

To be safe, you should aim for a 25% or lower ratio. For example if your credit card limit is $5,000, make sure that you keep a balance of $1,250 or less.

4. Close your Old Accounts

Age is a virtue in the credit scoring world. While you may think that it makes sense to close any accounts that you are not using, this can actually damage your credit score as it will increase your credit utilization ratio.

For example, you might have two credit card accounts and both of them have a $10,000 limit. You don’t use one of the cards and it has a zero balance. The other card has a balance of $3,200. Since you don’t use the card with the zero balance, you choose to close the account meaning that you lose $10,000 in available credit which will raise your utilization score from 16% to 32%. This spike in your credit utilization will lead to a lower credit score. Keep your accounts current and active to assist in improving your credit score.

5. Spend without a Budget

Credit repair begins with budgeting! By creating a budget you are able to identify:

  • Saving and spending habits
  • Your overall progress
  • Areas that need to be improved

The above three points can hurt or help your credit depending on how they are monitored. In order to create an effective budget, you will need to keep track of your monthly expenses. Check out our guide on how to budget effectively.

6. Ignore your Credit Report

A study conducted by the Federal Trade Commission discovered that one out of five consumers had at least one inaccuracy on their credit reports. Even the smallest mistake can have a negative effect on your credit score.

People who know their FICO scores are at an advantage when it comes to obtaining the best credit terms for them. Rather than searching for ways on how to fix your credit report, take an active role and review your credit score on a regular basis.

7. Miss Payments

When you are trying to rebuild your credit, missing a payment is going to have a negative effect on your credit score, and when you are in the rebuilding stage you can’t afford to have such blemishes on your record.

If you can’t afford to pay off the full balance, make sure that you at least make the minimum payment. If you are unable to make a payment at all, call your creditor to make alternative arrangements. Your credit card company would prefer to make an affordable payment plan with you than mark your debt as uncollectable.

Try and Find a Quick Credit Repair Fix

Debt is like being overweight: you didn’t gain it over a short period of time and you won’t lose it over a short period of time. There are several companies offering a quick fix. Don’t fall for it! Ask yourself this simple question: “What can they do to improve your credit rating that you can’t do for yourself?”

On the other hand, if you do hire a credit repair company to assist you and they fail to deliver what they have promised, you can sue them. Legally, such companies are not permitted to charge you any fees until they have been successful in their claims. If you have made an advance payment and been cheated out of your money, you are permitted to sue them in federal court. You can either take this action alone or join with others to form a class action lawsuit. However, it’s best to prevent it from ever getting to that state. View our top reviewed credit repair companies here.

Final thoughts

While it is essential to avoid the above information when rebuilding your credit, the worst thing that you can do is to leave your credit as it is. Rebuilding your credit history is not an easy assignment, but don’t give up. Stick to your goal, be disciplined and allow positive momentum to assist you on your quest towards excellent credit.