Posts Tagged ‘credit limit’
As you and I both know there is a ton of free credit building and repair information out there. But how do we separate or know whats valid, useful information and whats a scam, outdated, or just plain wrong? Luckily thats one of our goals. To find, create, and distribute highly effective and actionable information that you can start using right away.
I asked three very well known credit experts one simple question. “What are 2-3 habits that everyone building or rebuilding credit should have or adopt to be successful.” There is so much content out there that is either out of date, misleading, or simply wrong and on of our goals at CR Publishing is to provide a place for the consumer to get honest and effective credit repair help and information!
Many of you know Dan Sater. Dan has been serving as our “In-House” Credit Expert and answering all of your questions on our Members-Only Forum. Dan has also been in the credit repair industry for over 20 years and has helped thousands of his own clients and members of the CR Publishing Family build and rebuild their credit… Here is what Dan had to say when I asked him “What are three habits that someone should have or adopt when building or rebuilding their credit?”
It is hard to pick only three habits to have in building or rebuilding credit.
MAKING TIMELY PAYMENTS
The first must be to Pay Bills On Time!! If you are currently behind on a payment, you must stop the bleeding and bring that account current. A recent late payment will be devastating to building or maintaining a good credit score. If one has a great score, one late payment can drop their scores by over 100 points. Because this is so important, and we all have busy life where it is easy to forget about making a payment, I recommend that you use your banks autopay system to be set up to pay at least the minimum payment in case you forget to make the payment.
KEEPING CREDIT CARDS OPEN
Don’t close credit cards that you decide you don’t want to use. FICO has said for many, many years that you never, never, never get any benefit by closing a credit card – it can only hurt your scores. From a scoring point of view, any credit line you close will reduce the available credit limits and can lower your credit scores. If you have a number of credit cards you don’t want to use, (and they are paid off) put them in a drawer or another safe place. BUT, you need to take them out once, or better, twice a year and make at least a small purchase to keep them active and ensure that they will continue to be scored by the credit scoring model.
USING YOUR CREDIT EXCESSIVELY
The third bit of advice to build and maintain the best scores is not to charge your credit card balances anywhere near your credit limits. We call this maxing-out your credit cards.Let me impress how important this is for your credit scores. If you have good credit, no lates, collections charge offs or even public records appearing on your credit report, youwill lose a lot of points from your scores. How many points? If you have 5 or 6 credit cards and you max out those cards, you will see a point drop of 100 to125 points! This can take a perfect credit profile with no negatives reporting down from a prime, to a sub-prime rating overnight.
The second credit expert that we asked is Jose A. Rodriguez Jr. Jose is the CEO at Clean Slate Credit Solutionsand has personally helped hundred of people rebuild their credit, keep great credit, and even helps businesses build credit and get financing. Clean Slate’s mission statement is something that proves how dedicated they are when it comes to helping people with their credit. “Our mission is to help you escape credit prison and enjoy life with obtaining the credit you always wanted. With our “5 Plates to a Clean Slate” program, we will help you delete or correct inaccurate or unverifiable information from your credit report and empower you with the knowledge you need to maximize your credit scores.” Now lets take a look at what Jose has to say about building habits to build and rebuild great credit:
1. When building or rebuilding credit, you want to ensure that you are applying for the right cards. You can’t expect to get approved for an American Express or top tier Chase credit card, when your credit score doesn’t warrant that type of approval. I always tell my clients to start small. Get a secured credit card with their local bank or credit union, and possibly with Capital One & Discover who offer great credit builder/starter credit cards. They have to be able to show the top tier credit cards that they are responsible and can handle paying their credit cards on time. So in a sense, prove them selves. Even though they might have to put money down to get approved for credit cards in the beginning, it will be worth it in the long run because it is allowing them to get rewarded with a good credit score as they pay their credit card every month.
2. After getting approved for a secured credit card, you want to ask an immediate family member if they can add you as an authorized user to one or two of their credit cards. Please make sure that you are asking someone in your immediate family and not a friend. It has to be someone that you have an actual relationship with. The credit card that you get added as an authorized user to, should not have any late payments and should not be maxed out. By getting added to this credit card as an authorized user, you are adding the positive payment history and the length of history from when that card was open to your credit report. Imagine of the credit card is 10 years old, has a $10,000 limit and was never late. This would really boost your credit score and help you in the credit building process. I must add that you should never , I mean never purchase tradelines or authorized user accounts from a broker or another company. That is actually illegal since you have no direct relationship with person.
3. Now that you have one or two secured credit cards, and one or two authorized user accounts, (make sure they hit your credit report, usually within a month of applying and getting added), you want to continue to make on time payments and pay more than the minimum payment that is due. It is not necessary to pay off the entire balance, just make sure you do not go over 30-40% of the credit limit. If you have a $200 secured credit card, do not put more than $80 on the card or it can drop your credit score. Around the 6 month mark you paying your secured credit cards, you are going to ask the bank that you got the credit card from if they can switch the card to a regular credit card and return your deposit. Then, you want to apply for a department store credit card like Target or Kohls. Then in less than a year, you will have the credit score needed to apply for the top tier cards, like American Express and Chase.
So with these three steps, I promise you that if done correctly, you will build your credit properly and increase your credit score the right way. Another great tactic is that once you start applying for credit cards and are paying your cards on time & not maxing out your credit limit, you want to ask for a credit limit increase with your credit cards every 8 months. By doing this, it will increase your credit limit which will then increase your credit score.
The third expert we heard from was Derrick Harper Sr. of Point Boosters Credit Repair
Derrick was kind enough to hop on the phone with me around 7pm and share some of his amazing wealth of knowledge (you might be seeing more from him later)! He even gave us access to a FB Live Video that answers the question and then goes into some super tactical solutions that you can go and implement right away to rebuild your credit.
Did you break any records in 2015? The answer is yes.
Ok well maybe not you personally. But the rest of America made 2015 the most traveled year in recorded history. This has a lot to do with low gas prices and a whole lot of other stuff that matters (but not here and not right now).
So 2015 saw more people traveling and that inevitably means more car accidents. The Senior VP of the Insurance Information Institute, Jeanne Salvatore, notes that “When the number (and severity) of accidents rise, claims costs increase.” This also means that the cost of everything else in the realm of auto accidents goes up. Salvatore says “Everything is costing more – from the size of claim settlements to litigation costs, medical costs to auto repair, which has gotten more expensive because people are buying more new, more expensive cars.”
So you might be wondering at this point why am I here talking about auto accidents in 2015? Well the people that already know why should keep reading but for everyone else let me drop a quick (but important) knowledge bomb on you! Insurance premiums are going up as a result of increased travel and more accidents. And here’s the important part. The rates you get on your car insurance are not just based on driver history. Insurance companies take into account your FICO Score. And you guessed it. The lower your score is the higher your premiums are going to be. Now this isn’t always the case but overwhelmingly happens throughout the U.S.
Here’s the big takeaway. Whether you live in a state that does not allow your credit to affect your premiums or your insurance company doesn’t factor your score you are still wasting money on a bad score. Dan Sater, Nationally Recognized, Credit Expert and our Members-Only Forum Expert notes that having a bad score can cost you almost $40,000 over a 5-year period.
The truth is you need to have a good credit score. But there are so many faceless and greedy companies out there that are actively trying to keep your score low and drive you deep into debt. Don’t let this happen. We don’t want it to happen.
That’s why we created the Credit Repair Intelligence System and paired it with The Debt Free Bible. These two systems work to get you out of or keep you out of debt and to improve your credit score saving you tens of thousands of dollars. Imagine being able to save that money for your children’s college education, or save up for that dream house.
I am not going to lie to you. Building or rebuilding your credit can be hard and tedious. But it really doesn’t have to be. The Credit Repair Intelligence System is proven to work and has helped thousands just like you build great credit to achieve their dreams and save money.
But I understand it’s a big commitment to live a happy and debt free life. I’m not going to force you to be happy or buy your dream house. But I do want you to at least take the first step towards a great credit score. We developed a Starter’s Guide to Building and Protecting Your Credit that details some things you need to know about credit before you start. This guide is normally 50 bucks but I’m giving it away for $14.95 and I’m covering the shipping and handling for you because I don’t want anything in the way of your credit greatness.
To get the Starter’s Guide Just fill out this form and you’ll get free shipping!
You can also start with our complimentary e-book on the 28 Secrets That The Banks and Credit Agencies Don’t Want You To Know.
But if you are ready to completely get rid of your debt and build great credit to live your dream life then you need to get the Credit Repair Intelligence System and The Debt Free Bible. When you buy both you get the DFB for 50% off. You really cant lose since there is a 30 Day Money Back Guarantee. So stop wasting your time (and MONEY).
We all know a low credit score will make everything in the world of finance more expensive because of higher interest rates from lenders due to being considered a greater credit risk (i.e. higher interest rates on car, homes and credit cards). While this may be considered common knowledge by some, it’s truly devastating effects are understood by few.
EXAMPLE: if you purchase a $200,000 home on a 30 year fixed mortgage at 8% interest instead of 6% (because of your credit score); that 2% is going to end up costing you a total of $96,934.11 over the term of the loan. Now, think about how many “extra” years you’ll have to work to pay off $96,934.11 because of an extra 2% in interest?
The part few people talk about is all the other areas in life where a low score will increase your cost of living on an annual basis. For example, in addition to paying more for a car, home and credit cards, a low credit score will most likely have you paying more for the following as well.
1. AUTO INSURANCE. As many as 92% of the 100 largest personal automobile insurers use credit information to underwrite new business, according to a 2001 study by Conning & Co., an insurance-research and asset-management firm.
2. HOMEOWNERS INSURANCE. Many insurance companies see a correlation between low credit scores and increased property insurance claims. Therefore, a low score will result in higher rates.
3. LIFE and HEALTH INSURANCE. Customers who are unable to pay their monthly insurance premium thereby pass along that increased cost to the insurance company whose stuck with the bill… resulting in a loss for the company. Since customers who pay without lapse are more profitable it is felt by many that a low credit score now even affects a monthly life and/or health insurance premium negatively.
One of the more shocking areas where a low credit score will you cost you is in the area of employment. It’s estimated as many as 42% of employers now do credit checks on applicants before hiring them (according to a 1998 survey by the Society for Human Resource Management).
While many employers claim they only do it to “verify” information on your application (such as where you live and where you have worked etc.) we can both assume they are taking the liberty to “have a peek” at how you handle your financial affairs as well. According to the
to Public Research Interest Group (PIRG) as many as 79% all credit reports contain errors — 25% of which are serious enough to cause the denial of credit (according to a 2004 report).
And that’s all the more troubling in light of the increasing impact a bad credit report can have, says Ed Mierzwinski, director of PIRG’s consumer program.
“It’s outrageous that the credit bureaus are claiming their scores are accurate enough to take people’s lives and screw with them like this”.
Remember that nobody else is going to look after your credit for you. The credit bureaus certainly won’t. It’s up to you to make the decision and take action to improve your credit score, your financial well-being, and your life.
but get too many cards or carry balances and it starts to lower your score.
To learn more and how to improve your score read on…
Consumer credit scores clearly take into account the “mix” of credit types and items consumers have on their reports. This part of the credit score is affected by what kinds of accounts a consumer has and how many of each.
The bureaus will score someone higher, for example, if they have an open mortgage, 3 credit cards, 1 auto loan, and a small amount of other open accounts. Low balances and available credit as well as timely payments are also large factors. So having a few cars is beneficial.
But, if a consumer has a ton of credit cards, their scores will be lowered.
If they have several mortgages, their scores will be lower.
Any “unhealthy” account mixes lower their scores.
The preferred number of credit cards appears to be three. This means a consumer will actually have a higher credit score if they have three open credit cards than if they have more or less than three open.
If you have more DO NOT run out and cancel your cards just yet.
Remember, 30% of the score is comprised of balances in relation to credit limit.
So if you have too many, keep your cards open, but focus on having three large balance cards and pay down the balances on time for maximum impact.
Click here to read more about our products and services to help you to get rid of debt and to build healthy credit so that you can have more of what you want out of life.
We have all been there. During the summer or during holidays our credit limits get all used up. We all know that we should really try to keep spending under 30% of our limit each month. Things happen though and sometimes we go over. Yes this can and if you do it often enough WILL hurt your credit score.
Here’s the good news though…
If you have been making regular payments and have a fairly established history on your cards, you can actually ASK for a credit line increase. Increasing your credit line will reduce your credit usage and improve your Utilization Ratio. Thus you will see a relatively fast credit boost. And it will free up some room on your credit line for those budgeted vacation expenses.
Here’s the bad news…
If you don’t practice self control when it comes to your spending, it’s a really fast way to rack up a lot of debt. Now that you got that nice boost in available credit you need keep spending down. And always make sure you are paying your card regularly and if possible paying your entire statement balance each month!
Why you should do this before you travel: Well traveling can be expensive and this might be one of those out of the ordinary months where you spend over 30% of your credit line. If you have been saving though and have the money to pay for your vacation, you now need to have the credit. A boost in your credit utilization can free up your credit line for travel and other vacation expenses while either boosting your score or keeping it where it is now. And that’s a whole lot better than your FICO Score taking a hit when you are trying to enjoy your much deserved family time.
One more thing before you go outside to enjoy the summer weather this weekend… A lot of building and keeping a great score is self control and perseverance. The system is complex and can be confusing at best. But keep at it! Always keep working and never give up even if you feel like you have hit a wall. And remember it takes a lot of self-control to keep that score up.