Monday, December 25, 2006

How To Build Good Credit

By Daniel Wesley

This is a must-read for all those people who are amateurs in the world of credits. Including those consumers recovering after a bankruptcy, new to America, or applying for a credit card, car loan, etc.

If you do not establish your creditworthiness, you will be turned down by lenders or charged a higher rate of interest. In short, life will not be easy for you financially. Building a good credit score requires you to have a credit for at least half year with a minimum of one account updated and reported.

Here are five top ways to establish a good credit record. Let’s have a look at them.

Five Top Ways To Build A Good Credit

Way #1: Open Checking As Well As Saving Account

A good credit holder should give the impression of a financially responsible person. Although the accounts are not directly regarded as credits, the lenders certainly notice them and view them as symbols of stability. Eventually, your account transactions will reveal your responsible nature towards money matters. It shows that you have the “substance” and can save to pay. However, take care not to bounce checks or else it will have the reverse effect.

Way #2: Pay Bills On Time Always

A record of timely and regular payments is the key to a good credit. Even a single late or skipped payment can taint your credit. Here’s a hot tip to ensure you don’t miss any of your payment: arrange for the payment of your bills through automatic withdrawal system from your account. You can also prepare a list, along with their due dates. However, you should be careful with automatic system. If you don’t check your account often, you could get withdrawn and end with multiple overdraft fees posted by the bank.

Way #3: Obtain A Secured Credit Card

This is the ideal way to build good credit from scratch. How to do it? Well, simply deposit a fixed amount of cash at your lender bank. This amount becomes your credit limit. Here, the issuer has no risk because even if you default on payments, they will simply withdraw the money they owe from your deposit, thus, securing your credit limit.

It takes less time to set up a good credit with the help of a secured credit card. Such a card is reported just like a regular one. Once you make timely payments for 12 months with your secured card, you can try for an unsecured credit card. However, stay away from secured cards that demand processing or application fees.

Way #4: Obtain A Student Credit Card While In College

This is a superb way to build good credit. Student credit cards come with flexible eligibility criteria. Even if you don’t have a credit record, you can easily get an approval. However, you must be enrolled for a four-year university course. Once you establish a good credit record in school, you will enjoy an easy road ahead in terms of getting credit. At present, an average student in America leaves college with a burden of around $2,000 as credit card debt and a possession of four credit cards. Do not follow the footsteps of such students. Limit yourself to a single card and pay the full balance every month, if you wish to have a good credit.

Way #5: Never Open Several Accounts At A Time

A good credit cannot be build overnight. Begin with small steps. One or two accounts are okay. Use them thoughtfully for a year. Then apply for more, if needed. Too many accounts in too less time can damage your good credit.

Follow these ways and flaunt a good credit with a few years!

Good Credit It's easy to build a good credit provided you show a sense of responsibility towards money matters.

Wednesday, December 20, 2006

Credit - Repair

By Den Braun

To make the life more comfortable people purchase lots of things from clothing to cars and homes that can be very expensive. Thus, when the financial situation of an individual does not correspond to the purchasing desires, he/she has to use credit.
Banks make it quite easy to obtain credit. But the system of credits is complicated enough and most people today are not really taught how to manage their money. So, one day you may find yourself in a bad situation with your credit. You can start improving the credit score yourself: ordering your credit report, checking its accuracy, keeping any credit card balances low…and a few more things you can do. It goes without saying it will cost you much time, skills and effort.

There exists another saving way. There is a great number of organizations, agencies, bureaus that assist in guiding individuals through this complex process. When you seek help at such organizations remember that definite laws protect your interest.

There are two acts, the FCRA (Fair Credit Reporting Act) that has been recently revised into the Fair and Accurate Credit Transactions Act (FACT Act), and the FDCPA (Fair Debts Collections Practices Act). These two acts were set up to protect your credit rights. They hold your creditors and credit bureaus responsible. That means every claim against your credit they have to back up and prove.

No credit repair organization may charge or receive money or other valuable consideration for the performance of any service, which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

Due to these acts everyone can get a copy of their credit report for free at your request, once every 12 months.

You also have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. You may notify in writing that you dispute the accuracy of the information in your credit file. In such a case the credit bureau must reinvestigate and modify or remove inaccurate or incomplete information (usually within 30 days). What else you can do is to cancel your contract with any repair organization for any reason within 3 business days from the date you’ve signed it.

Whenever you use credit you just always need to be cautious and disciplined. You also should be well informed – means what you can do for free, the payment terms for services (including their total cost), a detailed description of the services to be performed, how long it will take to achieve the results, any guarantees the organization offers, the company’s name and business address.

Den Braun is an expert in finance. The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. Den Braun writes about Debt settlement & debt negotiation and other related topics on the debt-settlement website. To learn more about debt and finances in general, visit

Wednesday, December 13, 2006

UK mulls consumer carbon credit card

The UK government has released a feasibility study on a consumer emissions trading scheme that would see every British citizen issued with a carbon credit card, The Guardian newspaper reports.

Under the scheme, everyone in the country would be given a quota of carbon emissions for the food they buy and the energy they use for transport and heating. In this way household and individuals’ contribution to climate-change-producing carbon emissions could be monitored and kept in check.

The study was commissioned by the environment secretary, David Miliband, who said the scheme could be up and running within five years.

Anyone who exceeded their quota would have to buy carbon credits to cover the excess from someone who had not used up their quota and had a surplus to sell. This would encourage “carbon thrift”, Miliband told The Guardian.

For consumers, the system would work in a similar way to their popular supermarket loyalty cards, which shoppers hand over to be swiped for points every time they shop at one of provider’s outlets.

The study, carried out by the Centre for Sustainable Energy, argues that the success of the Tesco loyalty card shows a carbon card is viable.

Miliband conceded the cost of running a card, fraud risks and “big brother” ID card hurdles would have to be overcome. How consumers would react to such a limitation on their consumption habits has also not yet been tested.

But the political fallout for a government introducing such a scheme may not be as great in Britain as it might be in other countries. Both the Conservative and Labor sides of politics are competing to be the one seen as doing most on climate change.

Wednesday, December 06, 2006

Your loan repayment record will decide your credit score


NEW DELHI: The ‘unknown citizen’ gets another number — his credit score. With retail credit the way forward, the credit score of a borrower will attach a value to his creditworthiness.

Banks will soon be relying on credit scores to assess customers. The Credit and Information Bureau of India (CIBIL) is expected to rollout credit scores, built on databases provided by various banks.

Under RBI regulations, banks and financial institutions (FIs) have been instructed to facilitate submission of details of all borrowing accounts to the credit bureau for compilation of credit information. This data will soon be accessible to member banks to help improve the quality of credit appraisal and decisions. This will benefit credit card issuers, where credit growth is to the tune of 199%.

Parameters are previous track record of loan repayments, default rate, payment delays and outstanding loans, among others. Punctuality of payment in the past, amount of debt expressed as the ratio of current revolving debt to total credit limit, length of credit history, types of credit used (installment, revolving, consumer finance), amount of credit obtained recently are some of the parameters used globally.

Lenders can now evaluate potential risk and mitigate chances of accruing bad debt. For borrowers, a good credit score will guarantee qualification for a loan, cheaper interest rates and enhancing credit limits on their own terms. So, each customer will have a credit risk attached to the credit score. Both domestic and foreign banks have been supplying credit history of commercial and consumer borrowers to CIBIL.

The credit bureau will provide this information to its members in the form of credit information reports (CIRs). The CIR is a snapshot of a borrower’s credit-payment history compiled from various credit grantors.

According to Deutsche Bank’s Asia Pacific head Shameek Bhargava, “Banks can broaden their universe by lending to different types to borrowers once their credit scores are known. Self-employed, for instance, will find it easier to borrow money, on the back of a healthy credit score.”

Credit scores are expected to give a fillip to the credit card industry by introducing competitive pricing among issuers, an analyst said. Different banks can perceive the same information differently, he added. Details such as income or revenue, amounts deposited with the bank, borrowers’ assets, value of assets mortgaged and investments will not be part of a CIR.

This is akin to the FICO score used in the US. FICO is an acronym for Fair Isaac Corporation — designed to indicate the likelihood of a borrower turning delinquent within the next 24 months. A FICO score generally ranges from 300 to 850.

Tuesday, November 28, 2006

Lowey Your Credit Card Interest Rate

You've received credit card applications in the mail promising low interest rates. Now, instead of an annoyance, you can use them to get a lower rate on your current credit card. We hit Macarthur Center in Norfolk, to find people willing to put our game plan to lower your rates to the test. We asked people to call the customer service number on the back of their credit cards.

Once they have a person on the phone, they make a simple four sentence statement. "Hi, my name is (your name). I am a good customer, but I have received several offers in the mail from other credit card companies with lower annual percentage rates. I want a lower rate on my credit card. Can you help?"

The people we spoke with saw a drop between 5% and .6%. It didn't work for everyone, but you can always try again and ask for a supervisor if you don't get anywhere with the first person you talk to. Keep in mind it may take a month or two before your credit card statement reflect the change in interest rate.

Friday, November 24, 2006

Check Your Credit Score Annually

Most North Americans no little or nothing about their current credit rating. What is your credit file and how did it get there?

Every time you apply for credit either through a credit card company or if you apply for a mortgage, buy new furniture on the don’t pay for 5 years plan, the banks, financing companies, credit card companies etc. send specific information about the transaction to the credit reporting agencies. This credit file contains all the information about your credit activities that companies have send in.

So why do you need to review your credit report annually? Because companies make mistakes when they send information in to these credit collection companies and this misinformation could be very damaging to your personal credit rating.

This alone is the major reason to check your credit score regularly.

Who has access to your credit file?

No one can access your personal credit report or file without your consent. Each time someone pulls your credit file, a note is made on the file to track this.

People can only have access to your credit file for the following reasons:

  • Applying for some form of credit – card, loan etc.

  • Debt collection

  • Housing rental

  • Applying for employment

  • Applying for insurance

How to obtain a free credit report:
You can obtain your free credit report 2 ways. Is a free online credit report available?

There are a number of companies that will try and offer a free online credit report. Credit Report Score:
Every item of credit history is given a score or rating by the credit grantor. Lenders want to lend their money out or extend your credit.

Monday, November 20, 2006

Some common myths about credit score

Today lot of myths about fico score rating is spread and some of myths are totally obsolete. So avoid bad information as it can cost you money. So here are some common credit score myths:

  • Checking your credit report will hurt your credit score

  • Closing old accounts will improve your credit report score

    Generally closing old accounts do not improve your credit rating score but the effects are reverse. If you need to close some accounts, close your new accounts. Apply for a new credit lower your credit score.

  • You need to check more than just FICO score rating

  • Credit counseling will hurt your score

The best way to improve your credit report score is paying your bills on time and paying down credit card debt. Check your credit report regularly for any errors and make sure you don't fall for these common credit score myths.

How to prevent credit card frauds

Here are some quick tips for you to prevent credit card frauds:

  • It’s actually safer to order online! Don’t call that order in

  • Never give out your 3 digit security code over the phone

  • Never email the credit card information or password

  • When purchasing online look for the Hacker Safe and BBB logos.

  • Keep on checking your credit history frequently

  • Cross out blank lines on all credit card receipts.

  • Don’t use your check card online.

Tuesday, November 14, 2006

Credit cards offer high-end clients some luxury rewards

Credit card issuers are raising the bar on rewards to encourage well-heeled customers to charge their purchases during the busy holiday shopping season.

On Tuesday, American Express (AXP) will announce an expanded rewards program to allow Platinum and Centurion card holders to redeem points for high-luxury items such as a one-year lease on a $260,000 Lamborghini Gallardo Spyder convertible (10.5 million points), a more than $900,000 Chopard 53.2-carat, diamond-encrusted watch (93.2 million points) and Tiffany gift certificates.

Credit card holders already "can go on spacewalks, hobnob with celebrities, have unique experiences," says Ralph Andretta, a general manager at American Express. The new program "just brings (rewards) to another level."

American Express says it expects enhanced rewards to drive credit card spending during the holiday season, the most profitable months for retailers. The launch comes as competition for the well-heeled consumer heats up and American Express — which pioneered the Platinum credit card two decades ago — finds itself in the uncomfortable position of fending off growing challenges to its market dominance.

In an August report, Morgan Stanley analysts Kenneth Posner and Betsy Graseck wrote that, as issuers roll out more cards geared toward high-end consumers, "The question must be raised as to the possible long-term implications for AmEx's growth."

Every card issuer defines the affluent segment differently, but these households earn a minimum of $100,000 annually. While this group makes up 1.5% of all credit card holders, it accounts for 20% of card spending, according to Nilson Report, a payment-systems newsletter.

"Everyone wants a piece of them," says Rick Ferguson, editorial director of Colloquy, a consulting firm. Issuers "are all trying to outdo each other" with rewards programs to attract these consumers.

In recent years, MasterCard (MA) and Visa issuers have aggressively courted well-to-do consumers with their World and Signature credit cards, offering rewards such as Super Bowl parties and theater tickets. MasterCard, in September, launched a World Elite card that offers additional perks such as free companion airline tickets, concierge service and access to special events.

High-spending consumers respond to service and rewards tailored to them, says Nicole Risafi of MasterCard. "It's really not solely about the trip to Italy. ... It's about being able to experience Tuscany in a way few people can."

Affluent consumers often don't carry debt on credit cards, so issuers don't profit from monthly finance charges.

But their high spending levels are a boon to issuers, which receive payments from merchants for each credit card transaction.

Rewards encourage consumers to charge their purchases. They also provide consumers with another reason to hang on to their credit cards. At American Express, customers enrolled in a rewards program tend to keep their cards three times longer than those not enrolled, Andretta says.

Thursday, November 09, 2006

Co-op Bank raise credit card charges

The Co-op Bank has raised charges on its credit cards for both new and existing customers.

The cash withdrawal fee for all cards has risen from 2% and a minimum of £2 to 2.5% and a minimum £2.50. Furthermore customers with the Platinum Base Rate Tracker card will have to pay a £2 monthly fee.

This move follows hot on the heels of the Co-op Bank receiving rave reviews for lowering late payment charges to £11, however their critics claim this is their way of trying to recover the money lost in the offer.

The annual percentage rate has also been increased on their variable rate Infinity cards by 1%. This brings the current rates to: the Standard card-18.9%, the Gold card 16.9 per cent, and the Platinum Advantage 14.9 per cent.

A researcher from Moneyfacts comments that whilst Co-op did well to reduce their default payments, they are now however charging more of their customers in their attempt to retrieve some of their losses, and this is affecting ones who pay on time.

Monday, October 30, 2006

Credit report can help stop agency scam

Question: A collection agency contacted me saying I owe $900 on a Dillard's card opened in 1997. I never opened any such account at any time. What should I do?

- Sheila Maddox, Peoria

Answer: Get a copy of your credit report and check if a Dillard's account on it. If not, the call you received is probably from a scammer looking to steal personal info from you. Don't take their future calls.

If the account is on your report, call Dillard's and find out when/where the account was opened. If they can't prove it was opened with your signature; demand they remove it from your report. If they have a signature that means someone forged your signature and you must now prove that it wasn't you. One way is to prove you were in a different place at the time certain charges were made on the account.

Credit scores' link to insurance rates tested

Oregon is the latest battleground in an effort by consumer advocates to block insurers from using credit scores to set auto and homeowner rates.

On Nov. 7, Oregonians will become the first voters in the USA to decide whether to bar insurers from setting premiums based on such factors as credit history, debt load and bill-paying habits.

The insurance industry, which opposes the measure, is pumping millions of dollars into an ad campaign to defeat it. The outcome will be closely watched by other states that could come under pressure to take similar steps if the Oregon ballot measure succeeds. Hawaii, California and Massachusetts already have bans.

The battle comes as the use of credit scores — 92% of insurers factor them into auto rates, Conning Research & Consulting says — is under scrutiny elsewhere:

• The Michigan Court of Appeals will decide whether insurers can use credit scores to set rates. The state insurance department had barred such use of the scores, but its ban was struck down by a state judge.

• The U.S. Supreme Court has agreed to review lawsuits that complain that insurance companies failed to inform consumers that low credit scores led to higher rates. The lawsuits argue that failure to do so violated the Fair Credit Reporting Act.

• Oregon lawmakers in 2003 barred the use of credit scores to set rates for consumers with existing insurance policies. Measure 42 on the Nov. 7 ballot would go further by banning the use of credit scores in calculating rates for new customers.

"We've always been concerned that credit scores create unfair insurance rates," says Norma Garcia, senior attorney at Consumers Union. "And the use of them is increasing."

Only about one-third of consumers know that their credit history could affect their insurance premiums, a 2005 report by the Government Accountability Office found.

The industry argues that eliminating credit-based scoring would likely mean that people with good credit would end up paying higher insurance rates. But Garcia notes that in California, insurance rates have dropped since the use of credit scores was banned.

Insurers also argue that people with low credit scores are likelier to file insurance claims. "People who manage their finances well tend to also manage other important aspects of their lives responsibly, such as driving a car," the Insurance Information Institute says.

Consumers Union says there's no proof of that. A review of how credit scores are used to set rates in Texas found that the scores have more to do with economic status than with personal responsibility, says Birny Birnbaum, a former Texas insurance regulator who is executive director of the Center for Economic Justice, a consumer advocacy group.

Thursday, October 26, 2006

Gov't bans surcharges on credit card transactions

THE Department of Trade and Industry has ordered a ban on surcharges on retail transactions using credit cards, debit cards and automated teller machine cards, starting Nov. 5.

The new policy is part of a campaign to protect consumers from unfair trade practices, Trade and Industry Secretary Peter Favila said.

Favila has issued Department Administrative Order No. 10, which prohibits any surcharge, extra or additional charge over and above the price tag on items purchased using cards for payment.

"A number of retailers have been charging differently on specific items, depending on the client's mode of payment," Favila said. "Usually, purchases using credit card are priced higher than those paid with cash, and this discriminates against the cardholders," he said.

He said that under DAO 10, all modes of payment available to consumers must always comply with the Price Tag Law.

"When the consumer opts to pay either through cash or card, he or she should pay only what is stated on the price tag," he said. "There should only be a single price tag indicating the cost of each item."

The order also requires that the option to pay in cash, card or installment be disclosed to the consumer if the information is not indicated in the price tag.

The price tag should be inclusive of the value-added tax for items covered by the tax. "It is unlawful to charge an additional tax over the price tag," Favila said.

DAO 10 specifies the proper format of an official receipt. It says the price opposite each item should already incorporate the amount of tax to be paid. The total cost that the consumer should pay is stated and the sum of the tax is shown as a separate item in the receipt. With

Friday, October 20, 2006

Improving your credit score

Credit scoring is a system creditors use to help them determine whether to give you credit. Creditors consider information about you and your credit experience to determine if you are a good credit risk. To add to the mystique, each creditor may use its own individual criteria to determine your credit worthiness and who will get the preferred rate.

Factors that determine your credit score include the following:

Do you pay your bills on time? How large is your debt, and is your debt near its credit limits? How long is your credit history? Have you applied for credit recently? How many times? What type of accounts do you currently have?

To improve your score, pay your bills on time, pay down outstanding balances, do not take on new debt and make sure your credit report is accurate.

It may take some time to improve your score, but the savings in interest charges when you make major purchases like a home or car can amount to thousands of dollars.

Monday, October 16, 2006

Don't wait for the reset -- start thinking about your credit now

Erin Littlefield's adjustable-rate mortgage resets in May 2008. She'll have to refinance -- and she's already dreading it. "We have a 4% interest (rate), so I know it's going to go up," said the Bryan, Texas, college English professor and first-time homeowner.

Although there's some uncertainty when it comes to her future mortgage payments, Littlefield is confronting the issue head-on: She's thinking about it now, starting to budget for increased costs before the ARM's interest rate goes up and higher payments are due.

Getting finances in order and keeping credit scores high are two keys for any homeowner contemplating refinancing. Especially for those who want to trade out of adjustable-rate loans, the ability to command the best interest-rate deals will go a long way to easing the sticker shock of higher payments.

The problem is, many Americans with mortgage rates approaching a reset will delay action until they find themselves unable to make payments, said Patrick Gavin, a certified mortgage planning specialist for The Gavin Group, part of Phoenix-based CFS Mortgage Corp.

"In America, we have an extra chromosome -- it's called procrastination," he said. "People say if I ignore the problem, I don't have to make a decision."

The best way for holders of adjustable-rate, interest-only or negative-amortization mortgages to avoid a grim situation: Refinance to a better deal on or before the adjustment date if the monthly payment is set to drastically rise.

Monday, October 09, 2006

Credit Card Loans

Credit card loans have got higher interest rates than most other consumer loan rates, owed mainly to loan defaults, overhead, and the cost of funding the loans. Unlike most other consumer loans, credit card loans are not secured by assets that could be seized if the consumer defaulted. In improver a card holder is more than inclined to utilize the full line of credit when his fiscal state of affairs worsens – precisely the riskiest clip for a creditor.

Credit card loans usually include other dearly-won benefits such as frequent flyer miles, purchase guarantees, and insurance. About 40 percentages of credit card holders utilize them only as payment devices and pay off their short-term loans before the issuer complaints interest. In malice of these expenses, credit cards are an of import net income centre for most issuers.

Wednesday, October 04, 2006

Applying for and receiving credit card

To make credit all you need is hold the credit card by your name and not by the parent’s name.

You might also discover that applying for a store credit card at a department or specialty store where you shop often is an option. Be sure that the company reports the status of its accounts to credit reporting agencies. A secured credit card is another option. Secured credit cards require that you place a certain amount in savings. They typically have smaller credit lines and higher interest rates.

A secured loan is guaranteed by the money you have in a savings account. It offers a lower interest rate. After you receive the credit card, make only small purchases, and pay the bill in full when it arrives and well before the due date. Doing this regularly over time helps build your credit history as a prompt payer. Never be late and never skip payments.

Don't fall into the seductive traps of credit cards-overspending and/or making minimum payments. By paying off the balance in full each month, you probably won't incur a finance charge "interest charged on an outstanding balance," but it's still important to keep rate in mind when shopping for a credit card.

Saturday, September 30, 2006

Plunge in lending on credit cards

Credit card lending has seen its biggest fall since records began, Bank of England statistics showed today.

Net lending on cards fell by £311m last month, compared to a £117m increase during July. It is the first fall since May 1994 when credit card lending went down by £35m.
Prior to the announcement, the largest fall recorded was in August 1993 when credit card lending fell by £38m. Today's news follows reports which indicated that Britons are struggling to keep on top of their finances.

Debt in Britain is estimated to account for a third of all unsecured debt in Western Europe, while the average Briton owes more than £3,000. Increased credit card fees and consumer debt are likely to have contributed to the fall in lending figures.

UK economist at Capital Economics Vicky Redwood puts the slump down to a combination of reasons. "People are finding it harder to get credit in the first place as banks have tightened up their lending criteria.

"People also want to borrow less because of the high levels of debt they may already have." In addition, part of the fall could be down to people repaying more off their credit card debt, she added.

November's expected rise in interest rates – the second of the year – could have a knock-on effect on credit card lending, with homeowners shying away from taking on greater unsecured debt to focus on repaying increased mortgage rates. Miss Redwood added: "We have had ten years of strong credit growth. We could now see a few years of sluggish credit card lending."

Thursday, September 21, 2006

Credit reporting agencies in US

There are approximately 5,000 credit reporting and collection agencies operating in the United States today.

Some of major credit reporting agancies are -

1) Chilton Creditmatch Systems, 12606 Greenville Ave., Dallas, TX 75243

2) CIB “Credit Bureau Inc.”/EQUIFAX, P.O. Box 4091, Atlanta, GA 30302

3) Pinger Systems/Associated Credit Services Inc., 652 E. North Belt, Ste. #400, Houston, TX 77060

4) TRW Credit Information, 505 City Parkway West, Orange, CA 92667

Saturday, September 16, 2006

Credit Report Scores

Your credit report score has been affecting your credit history for years and you may not even know you have one or what it is. A credit score is a numerical number that is determined from a mathematical formula based on the information found in your credit bureau report. The formula is complex and looks at many things in your credit report to determine your score, like, how old your credit is, how you have paid your credit in the past and what standings your debts are currently at, how many debts you have, the number and age of inquires, how you utilize your credit, as well as what your balances are in relation to your credit limits. Each one of these categories carries a percentage towards your total score. As you can see, there are many things that are reviewed in scoring your credit, and as these things, such as credit card balances, change constantly, so will your credit report scores. Therefore, your report scores are meant to be a snap shot or summary of your credit history at or on that particular date.

There are 3 major credit reporting bureaus, Equifax, TransUnion and Experion. These agencies each have a credit bureau on you as well as their own credit scoring system, and as these credit bureaus do not share information, your credit reports and your credit reporting scores may all be different.

So, now that you know what credit scores are; you are probably wondering how they affect you and why should you be concerned with them. The reason is that credit report scores are one of the major factors a lender will use in order to determine your credit worthiness. This scoring sum is used by lenders as an indicator of how likely you are to repay your loans. This is based on studies done by the credit bureaus where they have determined, based on your credit history, a direct correlation between your credit reporting scores and your chance of defaulting on your credit obligations. The higher the credit score is the lower the risk of default, therefore, the lower the scoring the higher the rate of defaulting.

Credit reporting scores average around 700, with reporting scores ranging from 400 to 900. By understanding the factors in your credit history that affect your score you can be proactive in managing your credit bureau report, ensuring better loans and lower interest rates.

A wise consumer will stay on top of their redit reports and scoring. So before you apply for a loan or credit card, check out what your credit score is by obtaining your credit report online. Today you will find all the services available to assist you with this. You can get your totally free credit report along with your scores from all the major credit reporting agencies. You will also find excellent tools such as credit monitoring services to stay on top of your credit.

Sunday, September 03, 2006

Improving your credit score

Three of the chief appraisal reporting bureaus is using unique versions of FICO in the United States. It is important to have a good credit score in order to receive the best rates on home loans.

The Benefits of Your Credit Score There are many rewards that will come. A couple of upfront benefits are that you will meet the criteria to get loans. Stemming off of that is another benefit: you will be offered better interest rates. Which will save you money? A few different strategies are suggested:

  • A lower Credit Card Balances Owing substantial amount on your credit cards (which is relative to the sum of your limit) makes a large dent on your FICO score. 25% should be the maximum balance in your credit card. There are sometimes blunders such as a late payment stated. In fact you paid on time which can take about anywhere from 30 days to 3 months to process!

  • Erase Debts (Don't Simply Move Them Around) Increasing the ratio of your credit card equilibrium is determined by the following: The Number of closed accounts your balance and limits Balance Transferred with those. Your credit score will probably lower.

  • Give Payments on Time You increase your chance of improving your credit score when you are eager to meet your deadlines. Not only is it a good practice.

Monday, August 28, 2006

How Do You Score?

Five reasons why your credit score could come as a surprise.

Borrowing is so much a part of twenty-first century life that being declined for a loan, credit card or mortgage can come as a shock, especially if your finances are well under control. Here, we explain what could be counting against you – and what you can do about it.

There’s a score that can affect your life just as much as your bank balance or your tax code. It’s the credit score that lenders calculate when you apply for a loan, mortgage or credit card and it represents the risk they take in lending to you – because there’s always a risk that a customer might not repay what they borrow.

Lenders use the information you give them on your application form plus details on your credit report – the personal financial record that shows what credit you have taken out in the recent past, your repayment history, whether you have any court judgments or have been bankrupt and whether you are registered to vote.

Each item of information is allocated a value. Generally, the higher your score, the easier you will find it to borrow. So if you’re comfortably off and managing well, why would a lender turn you down?

  1. You haven’t borrowed enough in the past
    You’d think lenders would love a customer with no debts – but it isn't as simple as that. They rely on the details in your credit report to show them that you make repayments on time and are a reliable person. If you have no track record, they cannot tell how you might behave in future and could mark you down because they have no evidence of being someone who manages credit well.
    If you fear this could happen to you, ensure that the lender has full information about your situation – for example, that you own your home and have paid off your mortgage, or that you use a debit card because you live within your means. They can then make checks and come to a rational decision.

  2. You don’t fit the profile for that particular lender or the type of credit you asked for
    Confusingly, you don't have a single credit score. Different lenders use different ways to work out their scores and sometimes one lender will even use different calculations for different products. They target specific groups of people and you may not fit their template.

    Ideally, you should do your research before you apply and identify lenders who want to deal with people like you and what product they have for you – for example, for home owners, students, older people and so on. The personal finance pages in newspapers, specialist magazines and websites will help.

  3. There are too many recent searches on your credit report
    Each time you apply for credit, you will give permission for the lender to search – look at the information on – your credit report. This search leaves a record of the check that you and other lenders can see. If you apply to multiple lenders in a short space of time, your credit report may give the impression that you are taking on more credit than you can afford. Future lenders can interpret this as meaning that you are desperate for money, overextended or even that a fraudster is using your identity to get lots of credit, fast.

    Make sure that when you approach lenders for information about their products, they don't think you are making an application. Always explain that you want details, or a quote, but that you haven’t yet decided to apply.

    If you think there are searches on your credit report that shouldn’t be there, contact the lenders involved, explain that you were only looking for information and ask them to amend your credit report.

  4. You had problems years ago
    Today, you’re financially fit – but perhaps things haven’t always been so good. If you have missed credit repayments in the past, a record of these arrears can stay on your credit report for up to 36 months. With a court judgment, the evidence is there for six years. Information about a bankruptcy stays on record for at least six years and a bankruptcy restrictions order can remain there for as long as 15 years. Lenders see these and mark you down when scoring your credit application, because they fear you may not honour your obligations to them if you have failed with others in the past.

    Don't panic – you may be able to take remedial action. You can ask to add an explanation of the circumstances surrounding any problems that caused adverse information to be added to your credit report. For example, you might have missed a few repayments because of illness or an accident. The credit reference agency will help you add a note explaining what happened and why things are different now.

  5. You aren’t registered to vote

    Lenders use local electoral registers to check that you are who you say you are and live where you say you live. If they don't find your name at your address, they may need to make further checks or can even turn you down.

The solution is simple: register at once and ensure that you have been taken off the electoral roll at any previous addresses.

What next?

If you want to improve your credit rating, your first stop should be your credit report and you can get that from Experian. You can view your report as often as you like, ask for help in adding explanations and find advice and links to organisations that may be able to help you.

Once you have registered to view your Experian credit report online, you will be able to order your National Credit Score for just £4.99. This is based purely on information in your Experian credit report, so it will not be exactly the same as a credit score calculated by a lender, but it will give you a good idea of how lenders may view your credit report information when they are making a decision.

To check your credit report for free today visit

Monday, August 21, 2006

Credit history or credit report

Credit history or credit report is, in many countries, a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to credit score.

When a customer fills out an application for credit from a bank, store or credit card Company, their information is forwarded to a credit bureau, along with constant updates on the status of their credit accounts, address or any other changes you may have made since the last time they applied for any credit.

This information is used by lenders such as credit card companies to determine an individual's or entity's credit worthiness; that is, determining an individual's or entity's means and willingness to repay indebtedness. This helps determine whether to extend credit, and on what terms.

Determining credit rating

Credit ratings are determined differently in each country, but the factors are similar, and may include:

  • Payment record - a record of bills being paid overdue will negatively affect the credit rating.

  • Control of debt - Lenders wants to see that clients are not living beyond their means. Experts estimate that non-mortgage credit payments each month should not exceed more than 15 percent of your after tax income.

  • Signs of responsibility and stability - Lenders perceive things such as longevity in client’s home and job (at least two years) as signs of stability. Having a respected profession can improve a credit rating.

  • Re-Aging - Through re-aging, a credit history is re-written and you are given a fresh start on that particular account. This can dramatically improve the credit score. In 2000 the Federal Financial Institutions Examination Council (FFEIC) clarified guidelines on re-aging accounts for delinquent borrowers.

  • Credit inquiries – An inquiry is a notation on a credit history file. There are several kinds of notations that may or may not have an adverse effect on the credit score. Soft pulls don't affect the credit score and are characteristic of the following examples:

  • A credit bureau may sell your contact information to an advertiser purchasing a list of people with similar characteristics, like homeowners with excellent credit. A creditor can check your credit periodically. Or, a credit counseling agency, with your permission, can pull your credit report with no adverse action. Each of the preceding examples are commonly referred to as a "soft" credit pull.

    Hard inquiries from lenders directly affect your credit score. Keeping credit inquiries to a minimum can help your credit rating. A lender may perceive many inquiries on your report as a signal that you are looking for loans and will possibly consider you a poor credit risk. To keep your credit rating good, try not to let companies access your history unnecessarily.

  • Cards you don't use - Although it is believed that having too many credit cards can have an adverse effect on a credit score, closing lines of credit can not improve the score and may even hurt it. The credit rating formula looks at the difference between the amount of credit you have and the amount being used, so reducing the total credit can make the balance carried seem larger and take points off the score.

Understanding credit reports and scores

The Government of Canada offers a free publication called Understanding Your Credit Report and Score. This publication provides sample credit report and credit score documents with explanations of the notations and codes that are used. It also contains general information on how to build or improve credit history, and how to check for signs that identity theft has occurred. The publication is available online at, the site of the Financial Consumer Agency of Canada. Paper copies can also be ordered at no charge for residents of Canada.

Credit Cards type

Types of credit card

Looking to get a credit card? Before you fill out a credit card application, you need to decide what type of credit card will work best for your specific situation. Here I am providing the listing from which you can choose.

Standard Credit Cards

  • Balance Transfer Credit Cards

  • Low Interest Credit Cards

Credit Cards with Rewards Programs

  • Airline Miles Credit Cards

  • Cash Back Credit Cards

  • Rewards Credit Cards

Credit Cards for Bad Credit

  • Secured Credit Cards

  • Prepaid Debit Cards

Specialty Credit Cards

  • Business Credit Cards

  • Student Credit Cards

Standard Credit Cards

Standard credit cards are the most typical type of credit cards. These are unsecured credit cards that are readily available from most banks and financial groups.

Balance Transfer Credit Cards

Balance Transfer Credit Cards are designed to allow consumers to transfer a higher interest credit card balance onto a credit card with a lower interest rate, thus saving them money in interest charges. For example, if you transfer a balance to a credit card with a low introductory APR of 0%, the APR for this balance will typically stay at this 0% interest level for a specified period of time, thus potentially saving the consumer hundreds of dollars in interest charges. The terms of balance transfer credit cards can vary between offers, so be sure to thoroughly read the terms and conditions for each specific card.

Low Interest Credit Cards

Low Interest Credit Cards offer either a low introductory APR that changes to a higher rate after a certain period of time or a low fixed rate APR. For example, you may get an introductory APR credit card with an interest rate of 5% for the first six months and 10% thereafter. Then, for the first six months, any purchases or balances you carry will be only charged a 5% annual interest rate. However, any new purchases or balances that carry over after the six-month period will now be subject to a 10% APR.

Many people take advantage introductory APRs to make larger purchases, so that they can take several months to pay them off. Low APR Credit Cards can help save consumers a lot of money on interest charges.

Credit Cards with Rewards Programs

Credit Cards with Rewards Programs usually "reward" the card holder incentives, rebates and even cashback rewards for purchases they make on their credit card. You can get additional airline miles, cashback rewards or discounts on merchandise for each dollar charged on such a card. Rewards Cards usually require better than average credit for approval.

Airline Mile Credit Cards

Put simply, airline mile credit cards or frequent flyer credit cards give you airline miles credits (or frequent flyer miles) whenever you use your card. Typically, you as the cardholder accumulate "points" based on the dollar amount of your credit card purchases over a period of time. Based on a predetermined point level, you can then redeem those points for airline travel (much like frequent flyer miles).

Cash Back Credit Cards

Cash back credit cards give you cash rewards for making purchases with the card. The more the card is used, the more cash rewards you usually get. Most cash back rates are around 1% of your total purchases, excluding interest and finance charges. However, some cards offer a higher cashback percentage with increased usage while still others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to the credit card companies, some cash back credit cards also have an annual fee, which can vary from $50 to $100. This type of card is particularly good for people who are faithful about paying off their balances each month. If used appropriately a cash back credit card can earn the cardholder a significant amount of money over time.

Reward Credit Cards

Reward credit cards are similar to cash back cards in that you can accumulate points towards a reward structure, which is based on how much you use the card over a period of time. Credit cards offer different reward programs and promotional offers often change, so be sure to thoroughly look over the card’s terms and conditions of each specific card before applying.

Bad Credit and/or Credit Repair

Credit can easily go from good to bad with poor judgment, mismanagement of credit cards or simply a change in job or financial situation. This does not mean you cannot get a credit card. There are several options available for people who have had bad credit in the past and for those who are currently trying to repair their credit.

Depending on your specific situation, debt consolidation, use of introductory APRs on balance transfers or other options may be the best choice. However, if you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help "rebuild" poor credit histories.

Secured Credit Cards

Secured credit cards require collateral for approval. With secured credit cards, a security deposit of a predetermined amount is needed in order to secure the credit card. Generally, the security deposit needs to be of equal or greater value to the credit amount. Collateral can come in the form of a car, a boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history.

Prepaid Credit Cards

Prepaid cards are, in fact, not credit cards at all BUT rather are used just like credit cards, wherever credit cards are accepted. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt, in that all purchases are paid for beforehand. With prepaid cards you determine the credit line. Generally speaking, a cardholder's credit line depends on how much money he/she transfers to the card. Therefore, there is little risk of running up credit card debt, while budgeting is made easier.

Specialty Credit Cards

Specialty credit cards are for individuals with unique and special needs for their credit use. Examples of these types of cardholders include business users and students. These credit card programs are designed specifically to meet the needs of these particular groups.

Business Credit Cards

Business credit cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cashback rewards, airline rewards, etc. However, business credit cards can also have many additional benefits in comparison to traditional credit cards.

Student Credit Cards

Students generally have little or no credit history. Because of this quandary, students may often find it difficult to get approved for a traditional credit card. Luckily, student credit cards do exist. This type of credit card is set up to help students build up the credit history that most of them don't already have.

Student credit cards are often scaled back in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with a student credit card.

Tuesday, August 01, 2006

To get a student credit card, follow these guidelines:

An example of this is the Aspire Visa Gold credit card which charges an annual fee of $150, a monthly fee that adds up to $78 per year and a $29.It's actually made up of thousands of tiny magnetic iron-based particles. A credit card can be a great tool for managing your monthly living expenses. Pay your bills before the due date, as your payment history from this date forward will probably be the most important factor in raising your FICO credit score. Staying home is the luxury to which they aspire.

Scott Bilker, financial guru and author of Talk Your Way Out Of Credit Card Debt, says, It's one of those new ironclad rules that does not allow much leeway for talking or negotiation. These airline miles can be redeemed for flight tickets or substantial discounts at hotels, travel destinations or car rental agencies. Your history of making debt payments is an obvious factor, so is the total amount of debt that you presently have. It is amazing how one can aspire credit card offer do everything here.

Less Americans are carrying cash today, all because of the now highly used debit cards that are issued with nearly every bank account we open. Consumers that deal with credit card debt sometimes find it necessary to a get a little outside help. But you need to read through the offer very carefully to determine if it is an introductory rate or a long-term rate ongoing. The non-negotiable fee varies from offer to offer and is directly tied to the promotional APR, so if you carry a Chase credit card it’s important to read the terms and conditions with your particular card to know exactly what fees apply. They may, say, offer triple rewards points during the first six months you have the card, or offer more cash back if you shop at specific stores or eat out at restaurants.

Thursday, July 13, 2006

The best approach is not to have credit card debt at all

On a positive note, Chase recently extended the introductory 0% balance transfer rate on their Chase Platinum Visa Card to up to 15 months.Contrast this with going to court, where taxpayers cover the costs of the judge, staff and courtroom and where you may not have to pay any legal fees until your case is resolved. They may be using it to make purchases in your name. That's why you need to study the filler material that comes with your statement each month. Credit cards that offer cash back programs are the Chase Cash Plus Rewards Visa Card and the Citi Dividend Platinum Select Credit Card.You'd have to pay off the entire balance transfer before a single penny gets directed to any new purchases you've made with the card. In a financial emergency, you can borrow against your own CD or savings account with an interest rate of only about 2% to 3%. Credit reports are very important when you apply for loans for a mortgage, a car, or when you fill out credit card applications. But remember, reward cards tend to have higher interest rates and carrying a balance on any credit card is generally not advisable. This also provides you the opportunity to make a more informed decision on which credit card to accept. They will base how many times you’ve paid late, how much debt you owe and how much is the credit still available. Once the Credit-ED Challenge is completed, students are encouraged to take the Credit-ED Challenge Certification quiz to become Credit-ED Certified. In order to get the lowest advertised APR you will need a good credit rating. This way, you avoid paying for interests while you pay off your credit card balances. Chase launched its Chase/Continental Airlines Banking Card back in 1999.Customers with a Chase Select checking account have the option of earning miles at a much faster rate: They earn one OnePass mile for every dollar they spend on their Chase debit card.

Tuesday, July 04, 2006

Emergency Card Replacement

Fixed-rate credit cards can change their terms in a few weeks' time, so there's no real protection from rate increases with a fixed-rate card, although my anecdotal observation is that fixed-rate cards tend to lag behind variable-rate cards in both rising and falling interest-rate environments.This is one of the factors used by the Fair Isaac Corporation to create your FICO score, and you are correct in saying it may be affecting your score. If you're filling out an application online, make sure you click on links to read the terms and conditions. There are some other factors that you need to consider before you jump on the fixed rate bandwagon. During the three-year period, you could easily have spent a total of $250 in annual fees. Studies show the speed and added value of contactless payments because typically when someone does not pay with cash the amount of the transaction increases. Students that seem to have the most credit woes? The only real advantage of a fixed rate card is the rate usually doesn't increase as often as a variable rate card in a rising rate environment this can work against you if rates are falling. Also, consumers generally have more protection than merchants for online transactions, so merchants often get stuck with the bill. Add that into the interest rate you're getting to see if it will correlate into savings over time, says Hasson. These rogue collectors don't represent the entire industry, but they are not uncommon. They’ll tell you that a low, fixed-rate card is better than a variable rate credit card that starts low and then slowly creeps up its interest rate every year.If your credit rating is good enough to qualify for a low-rate credit card, possibly even a zero percent introductory rate, transferring all your higher rate credit card balances could be a good option.Just like airline miles reward credit cards, cash back reward credit cards may provide extra points or higher percentages to for certain purchases. Receipt - A hard copy document that records when a transaction took place at the point of sale. However, some companies use this as the perfect opportunity to take advantage of people like you.

Friday, June 23, 2006

10% - The types of credit used may hurt your score

Balance Transfer Credit Cards are designed to allow consumers to transfer a higher interest credit card balance onto a credit card with a lower interest rate, thus saving them money in interest charges.And what's the fee if your payment arrives after the buzzer? So to protect yourself, be sure to follow these steps to knowing which credit card balance transfer options are the best. These benefits can add up to savings for your business expenses. There’s MasterCard. The average consumer has about $12,000 in credit available through their credit cards. You can sleep well too! Detweiler says if you have credit card balances running up with no idea how to make them start running down, if you have no idea how long it would take and how much it would cost to pay your balances off, or if you’re paying off a credit card with another credit card it’s time to get serious about your debt. That costs you $180 in interest a yearif you have a credit card with no annual fee and an 18 percent interest rate.It means that while the due date on your statement refers to your minimum payment, the due date to pay off your entire balance is different. Several companies issue unsecured and secured credit cards to people with bad credit. Using your home equity line of credit, you can eliminate bad debt, such as high interest credit cards, personal loans, or overdue bills. However, what will the interest rate revert to once the interest free period has come to an end? This is something you should be thinking about before you opt for the credit card.Some Low Interest Credit Card companies offer attractive interest rates of between 5% and 9%.Consolidating bills isn’t always easy. However do be responsible with the card and don’t overcharge it. A home equity line of credit is a revolving loan, with a minimum and maximum amount of withdrawal.

Thursday, April 13, 2006

Low Interest Credit Cards Offer

Credit card offers, including a variety of low interest credit cards, are easy to find. You hear about credit cards in discount stores while you check out, you read about credit cards in offers that come in the mail, and there are even times when you hear about credit cards when the phone disturbs an evening meal. It’s easy to get a credit card, but it may not be as easy to find low interest rate credit cards.
The good news is in the variety of choice in low interest rate credit cards. The cards provide flexibility in both use and attractive rates. A simple online comparison will assist cardholders in making the right choice for your lifestyle. For some it will remain very important to keep the lowest rates without regard to a rewards program while others will prefer the opportunity to gain the added benefits that a rewards program can offer.
For low interest rate credit cards with a rewards program, you might consider some of the American Express® card offers. This credit card does not charge an annual fee and provides an introductory 0% introductory rate for up to 15 months. The ongoing APR's are very competitive and comparably low after the introductory rate expires. Many consumers appreciate the “Smart Chip” that provides online security for cardholders. Customers have also voiced appreciation for immediate notification of approval when applying online.