How To Get A Free Credit Report What It Means To You
If you are applying for a credit card, mortgage, car or personal loan, you should be familiar with the information included in your credit report. You are issued a number, known as a FICO score, which is calculated based on your previous payment history, number of debts with a balance, recent credit inquiries, and balance to available credit ratio.
Many consumers are aware that they can obtain a credit report, for a fee, from the three major credit reporting agencies. These include TransUnion, Experian and Equifax and they provide your credit report to loan officers, credit card companies, financial institutions and anyone whom you give permission to obtain a copy of your credit file. While many consumers know that credit reports can be obtained for a fee, many do not know that everyone is entitled to a free copy of their credit report from each of the 3 credit bureaus each year. Once every 12 months, you can visit http://www.AnnualCreditReport.com and gain instant online access to your free credit report.
When looking at a copy of your credit report, you will be able to view payment histories as submitted by each of your creditors, current and previous addresses along with any information included on public record. This may include civil judgments, bankruptcy or foreclosures, etc. If any of the information contained in your credit file is incorrect, you have the right to dispute that information directly with the credit bureau. At the time a dispute is submitted, the credit reporting agency will investigate and correct any errors that are made.
Additionally, if you are turned down for credit at any time, the creditor must provide you with a written reason for the decline. At that time, you may request a free copy of your credit report from the agency that provided the information to the creditor. By sending a copy of the denial letter to the credit reporting agency, they are then required to provide you with a copy of their entire file relating to you and your credit history.
It is recommended that consumers check their credit file every 6 months to ensure that information is accurate and to prevent or detect identity theft. If you notice an invalid address or credit line that you never applied for, this is an indication of possible identity theft and should be dealt with immediately by calling the credit bureau and having a fraud alert placed on your file. An informed consumer is a happy one.
Credit Card Words To The Wise
1. Safeguard your credit cards and credit card account numbers. Never give your credit card number to anyone who is soliciting you. If you have contacted a reputable company, and wish to use your card to pay for goods or services, you may need to give them your card number by mail or phone. Companies or individuals soliciting you may not be what or who they claim to be, and we strongly recommend you do not give them your card numbers.
2. Safeguard your checks and checking account numbers. Never give your checking account number to anyone except in a bonafide financial transaction such as a loan application. Never give your checking account number to someone who is soliciting you, particularly over the phone.
3. Do not pay up-front fees in hopes of obtaining a loan or a credit card. An exception to the rule is a mortgage loan application which usually requires payment for an appraisal and a credit report. Compare rates, fees and service before committing to a particular mortgage company. Popular loan scams ask you to send a fee promising a loan or credit card even if your credit is bad. Be especially cautious if they ask you to wire money, or send it to an out-of-state address. Some advanced-fee schemes actually provide a service, such as sending you a list of banks offering secured credit cards, but that service is usually of little or no worth.
4. Be cautious of credit repair services which claim to be able to fix bad credit. If you have inaccurate information on your credit report, you may contact the credit bureaus directly and dispute it yourself. If you have had recent credit problems, anything a credit repair service does to remove the related information from your record is very likely illegal and only temporary. You may obtain a copy of your own credit report by contacting the credit bureau.
5. Never sign blank or incomplete documents, or any documents you don't understand. Take time to read and understand documents you are asked to sign. Don't rely on what someone tells you.
Having a credit card is a big responsibility and you need to fulfill your financial obligations and safeguard your good name. Check your credit report for inaccuracies and make sure that you pay your bills on time. You don't want your credit score to drop because of reporting mistakes.
Your credit score is so important and determines the amount of interest you pay on your credit card, mortgage and the cost of your insurance rates. Keep a close watch on your credit report and resolve mistakes as soon as you spot them.
How To Use Your Rewards Credit Card Points
Competition among credit card companies is a great advantage for consumers. Credit card rewards are made bigger and better by credit card issuers to make sure that consumers would choose them over their competitors. How can you use your credit card points effectively and get the most out of your rewards credit cards?
The first thing to consider would be what type of rewards credit card do you currently have? If you're still on the process of selecting a rewards credit card, which one should you choose?
Because rewards credit cards come in a variety of classes, it is best to choose the one that best suits your lifestyle. For instance, there are travel rewards credit cards, gas rewards credit cards, or cash rewards credit cards. You'll be able to get the most benefit if the type of rewards credit card you have is that fits your needs.
Travel Rewards Credit Card
Travel Rewards Credit Cards are especially designed for people who frequently travel. Whenever you use your credit card for purchasing, you automatically receive points that are equivalent to travel mileage points. The minimum mileage points you need to collect in order to qualify for a free travel will depend on the credit card issuer. Usually, credit card companies have partnership with an airline that sponsors free travel tickets. Thus, you may consider getting the Travel Rewards Credit Cards that is affiliated with the airline you must often fly with.
Gas Rewards Credit Card
If you're frequently on road trips, you can get the best deals out of gas rewards credit cards. Gas Rewards Points are also collected each time you make a purchase using your credit card. These points allow you to get full tanks of gas at no charge at affiliate gas stations. Imagine how much money you'll save in a month if you often get full gas tanks for free.
Cash Rewards Credit Card
Most people prefer to get cash rewards credit cards. Usually, you'll be given a point for every dollar you spend on your credit card. However, some credit card issuers give 2 points or more for every dollar spent on the card. You can use these points to make new purchases or these points can be added on your credit. Some credit card companies have their own exclusive online store where customers can shop to redeem their points.
Make sure that you will be able to use the points you'll be collecting. For example, even if you earn a free travel rewards, what if it includes restrictions, or what if you can only claim it for a limited time period? Be sure to check out all the terms and conditions that apply when claiming the reward. If you don't, the rewards you earned may simply be thrown out the window. Also, make sure that the credit card allows unlimited time for collecting points. If not, then you'll always be trying to earn enough points in time which is a very risky way of using your credit card.
Lastly, see to it that you'll be paying off your balances before the due date ends. Otherwise, you may end up paying for very high interest rates which defeats your purpose of purchasing to earn rewards. Also, some credit card issuers disqualify a card holder who has an outstanding balance in their account.
Credit Terminology Explained
When dealing with credit, there are a multitude of terms that you should understand. These terms are used frequently when dealing with credit and will help you better comprehend exactly what is involved in your credit. Read through this credit terminology guide and educate yourself on the world of credit.
Adjusted Balance - Adjusted Balance is a method of calculating your credit balance and Annual Percentage Rate (APR) where payments and/or credits made during the billing cycle are subtracted from your balance at the end of the previous billing cycle. This method is more advantageous to borrowers and credit card holders. Unlike Average Daily Balance calculations, new purchases during that billing cycle are not included in Adjusted Balance calculations, and interest is only applied to the balance remaining after payments are credited to your account.
Amortization - Amortization is a payment plan that allows the borrower to reduce his/her debt through monthly payments of principal.
Annual Percentage Rate (APR) - APR is the yearly rate lenders charge borrowers to borrow money (also called the cost of credit). Lenders must divulge the APR they are charging prior to finalizing the deal. Lenders can not reveal or make changes to the APR after the lender/borrower contract has been signed. However, some credit card companies and loan companies state in their agreement that they can change your APR when interest rates or indexes change.
Average Daily Balance - The Average Daily Balance is a method of calculation of your credit balance and interest. It's the practice of crediting your account from the day your payment is received. In other words, it's a daily tracking of what you owe. When calculating the Average Daily Balance, the lender adds the beginning balance for each day in the billing period and then subtracts any payments and/or credits made to your account that day. The end result is your Average Daily Balance. New purchases aren't necessarily added to your account the day of the purchase, and won't show in your daily balance. When the purchase is charged to your account, it affects your balance.
Bankruptcy - Bankruptcy is a form of financial protection where the borrower is unable to pay rent or mortgage payments, has no credit or means of paying for it, and is unable to reconcile with collection agencies. There are two methods of filing for personal bankruptcy: Chapter 7 and Chapter 13. A Chapter 7 bankruptcy eliminates all debts (minus taxes and possibly alimony payments) by taking all non-exempt property (as set forth in Chapter 7 filing) and converting it to cash to pay off debts. A Chapter 13 bankruptcy allows a borrower with a steady income to pay off bills over a 36 to 60-month period. Chapter 13 filing is only available to those who have predictable income and a means of paying off their debt over the established period of time.
Credit Score - A credit score is a statistical calculation of the credit information obtained in a consumer's credit report. A common credit score type is the FICO score, others include Beacon and Empirica. They are all used to calculate the future probability of you repaying any loans, based on your historical credit history.
FICO - FICO is a mathematical equation/calculation lenders use to evaluate the risk associated with lending you money. FICO stands for Fair Isaac Company, the company that originally created the formula.
Liquidation - Liquidation is the process of converting assets into cash to pay off creditors. This process is used in personal and corporate bankruptcy as a solution to getting out of debt with lenders.
Repossession - Repossession is the forced or voluntary surrender of merchandise as a result of the customer's failure to pay what is owed. If you purchase an item on credit and fail to pay for it, the entity that sold it to you reclaims it.
Revolving Account - A Revolving Account is an account that requires a minimum payment each month in addition to a service charge. When the balance decreases, the service charge/interest also declines.
Credit terminology can be confusing. If you're investigating credit options and want to know what's involved, use this guide to get you up to speed on some of the more common credit terms.
What To Look Out For In Low Interest Rate Credit Cards
When looking for low interest rate credit cards, there are many factors you need to take into consideration in order to ensure you are really getting a great deal. Many people do not realize that low interest credit cards may not really be as low as they think they are. In fact, these supposedly cheap credit cards may be costing your more than you think.
Finance Charge Calculations
So, you think you have found a great credit card with a low interest rate, right? Well, this might be true, but it may not be as cheap as you think it is. Be sure to read the fine print on the credit card and learn more about how the finance charges are calculated. The traditional method for determining finance charges is the Average Daily Balance method. This method best when it comes to saving you money. The Two Cycles Average Daily Balance method, however, can become quite costly if you carry a balance on your card from month to month. And, since you are looking for low interest credit cards, you most likely intend to carry a balance.
With the Two Cycles Average Daily Balance method, finance charges are determined two times during your billing cycle rather than just once. Therefore, you are actually accumulating finance charges twice in your billing cycle. So, while the APR may be low, your finance charges are not because you are paying twice.
Pay Attention to the Grace Period
The grace period is how long you have to pay back what you have borrowed from the credit card before finance charges start adding up. Therefore, the longer the grace period, the less finance charges you have to pay. When looking at low interest rate credit cards, be sure to find out how long your grace period is before you have to start paying. Twenty-day grace periods are the most common. So, if you find a credit card with a low interest rate that provides a grace period for this long, or longer, then you have probably found a good card. If the grace period is shorter than this, continue your search until you find one with an acceptable grace period. Obviously, a low interest rate doesn't do you a lot of good if the finance charges begin piling up from the instant you make a purchase!
Consider Annual Fees
Some low interest rate credit cards have annual fees. This is the credit card company's way of compensating for the low interest rate it provides. For the most part, paying annual fees to receive a low interest credit card is not worth it to the cardholder. Shop around some more and see if you can find some cheap credit cards with the same APR that do not include an annual fee. Chances are, you will be able to find one that doesn't make you pay to be a cardholder.
If you cannot find a low interest credit card with the same low interest rate, then you might want to take a closer look at the card charging an annual fee. In this case, you will have to weigh the annual fee payment against your potential interest rate savings. If the annual fee and interest rates are both low enough, then it might be worth your while to apply for the card. Be sure to provide yourself with an honest assessment of your spending habits and how much money you will be able to send to the credit card each month in order to pay off your debt. The last thing you want to do is just give your money away to a credit card company in the form of an annual fee if it doesn't ultimately benefit you financially.
Applying For Instant Approval Credit Cards Online
Instant approval credit cards are convenient ways in which to get you some instant credit. Apply for an instant approval credit card online and you can find out, within a few minutes if you are eligible for one or not. So an instant approval credit card is fast, its simple, and really a boon if you want some instant credit extensions. The key for getting an approval lies in making your application correctly and wisely. Here are tips that will help you get an instant approval credit card online.
Find the Right Instant Approval Credit Card
You will be spoilt for choice when you go shopping for an instant approval credit card online. It is easy to advice you to research each one of them thoroughly, but you need to know the precise factors to consider during your research. In order to give you immediate credit, the credit card company will take its pound of flesh with the following - annual fees, interest rates, and other miscellaneous fees. A simple Google search will show you a quick comparison of the best rates of interest, annual fees, etc in your local area. If you have good credit, negotiate for a lesser interest rate or for zero annual fees. If you have a less than perfect credit history, find cards that offer a lower interest, less annual fees, etc
Secured Instant Approval Credit Cards
However, in case your credit history is really bad, find an instant approval credit card which offers a secured advance. You need to pay cash upfront in order to get credit. Ensure that the card reports this to the credit bureaus so that it helps you build a better credit history. Clear this point even before you apply for the card or you will have wasted your cash and your time.
Online Formalities for Instant Approval Credit Cards
You will see the online form you are required to fill out is pretty much the same as a regular credit card application form. Generally, the higher your household income, the better your chances of getting an approval. Avoid lying, as this information is useful for avoiding bankruptcy. If you inflate your household expenses, then the credit company will offer a higher credit limit. Anyone will be tempted to use up that credit limit. And if your income does not allow you to pay back your debts, you will find yourself falling quickly into the debt quicksand.
Applications for a secured instant approval credit card does not requires such details - as long as you have the money and the facility to transfer the amount from your bank account, you will be able to get yourself an secured instant approval credit card. Just ensure the site is secure - you can see a small lock appearing on the bottom right side of your browser window. This prevents hackers from accessing and misusing your credit card details.
Status of Instant Approval Credit Card Online
Generally, you will know the status of your application within a minute or two. If your application has been approved, then you can immediately start spending a limited amount. However, if the company needs to have a closer look at your accounts, they may defer their decision for a few days.
However, an instant approval credit card online is still the fastest way for getting a credit card or at least, some credit extension. Instant approval credit cards have their pros and cons and if you are aware the basic formalities of getting such a card, then there is no reason why your application should be rejected. But remember, an instant approval credit card may give you increased credit and may gratify your needs immediately, but they are double edged swords - ensure that your credit history is not wounded in the process of acquiring too many credit cards.
Credit Repair Companies Provide No Cure For Your Credit Ails
"Do you have bad credit? We can help" is often a claim made in advertisements by credit repair companies who state they can erase negative information on your credit report. However, only time-not miracle cures or exorbitant fees-can heal bad credit.
Unscrupulous firms often rely on a portion of the federal Fair Credit Reporting Act (FCRA) which requires a credit bureau, or credit reporting agency, to omit some information on a credit report during the time when an investigation is being conducted after a challenge has been filed by a consumer.
As a result, credit repair firms will flood credit bureaus with multiple, frivolous disputes. Fees paid by consumers who are desperate for clean credit can range from a few dollars to thousands of dollars, but the legitimate negative information is never permanently erased from a credit file by the paperwork generated by a credit repair firm.
Rather, time is the best solution to an undesirable credit history.
Federal law mandates the time periods that accurate negative information remains on a credit report. Delinquent payments are eliminated from credit reports after seven years and personal bankruptcies after ten years.
Information concerning a lawsuit or judgment against you can be reported for seven years or until the statue of limitations runs out, whichever is longer.
Credit reporting company officials estimate that about 30 percent of their workload is wasted on credit repair companies which intentionally abuse laws and policies established to protect consumers.
Credit reporting organizations will provide consumers with a copy of their credit report upon request for a small fee. In addition, free credit reports are available to persons who have been denied credit within the past 60 days.
Consumers should be aware of the following facts:
Virtually every service a credit repair firm does legally can be done by consumers themselves for free or at minimum cost.
No one can legally remove accurate information from a credit report. Only time can wipe out bad credit.
Any consumer can dispute inaccurate information at no charge. Inaccurate information will be changed or deleted free of charge. Credit reports contain an easy-to-complete dispute form to help consumers who disagree with the information.
There are no miracle cures for bad credit.
Remember that lenders are in business to lend money and want to say "yes." However, their livelihood depends on extending credit only to consumers who repay their debts.
Credit Cards For Bad Credit Applications
If you have bad credit, you may be under the impression that you are not able to apply for a credit card. While it is true that you may be rejected from getting certain credit cards or loans, there are options available for those who have bad credit. Since a sizeable percentage of the population has bad credit, this has created a market which many banks and credit card companies have tapped into.
Your credit report is a reflection of your credit history, and it is very important when you need to apply for a car or mortgage. There may be situations where you will need a credit card to complete a certain transaction, and if you have bad credit you will run into problems. There are a number of options available for those with bad credit who want cards. Secured credit cards are one good option. A secured credit card allows you to deposit money into the account which you can then use.
Instead of borrowing money from the credit card company, you use your own money. You will not be allowed to go over the amount you place on the card. Despite this, you may have to pay the credit card company a fee in order to use their cards, and this is how their money is made. A secured credit card can be used to make any of the purchases you can make with a unsecured credit card. A prepaid debit card is another option that is used by people who have less than perfect credit.
If you are a student in college, an option may be available for you called a secured student credit card. These cards will allow students to begin building their credit while they're still in school. Students who use these cards are prevented from going over their limit because they can only spend money which they've placed on the cards. It is important to remember that you won't get the best deals or rates if your credit is poor. However, we live in an electronic age, and it is difficult to conduct many transactions without having either a debit or credit card.
Secured credit cards are a great way to allow you to make transactions while you continue to rebuild your credit. If you work hard to repair your credit, you won't be in debt forever, and using these cards will allow you to easily make electronic transactions.
What You Can Do To Improve Your Credit Score
It is hard to watch television these days without hearing about credit scores. If you are not looking to get a loan or credit card, you may be wandering whether or not they are important. Your credit score is important, regardless of whether or not you plan on applying for a credit card or loan. In this article I will explain what a credit score is and why it is important.
What Is A Credit Score?
Your credit score will determine whether or not you'll be approved for a mortgage loan, and how high your interest rate will be. Your credit score will also determine the cost of your car insurance. Even certain jobs, which you apply for, will require you to have good credit. Having a low score will make things much more expensive, and you may find that some companies won't hire you. The easiest way to get a good score is to make sure you're responsible with making your payments on time. It is also important to understand what is used to calculate the score.
Calculating Your Total
The type of different loans you have makes up about 10% of the score. If you don't have an established credit history, the number of different accounts you have will be considered. Your payment history makes up 35% of your credit score. The number of different accounts you make payments on is considered, as well as number of late or missed payments you have. Any liens, bankruptcies, or judgments will be reviewed, and this information will be used to factor in your score. Services such as furniture rentals and car loans are included as well as credit cards.
The total amount owed makes up about 30% of your credit score. The number of accounts you have and the amounts you owe on all of them are reviewed. The closer you are to maximizing out your loans, the more likely it is that your credit score will be lower. How much you have paid back on your loans is also taken into consideration. The age of your credit history makes up about 15% of your credit score. If you have a long credit history your score will be higher if you don't have any negative marks in the past. The last factor that makes up your credit score is called new credit.
New credit refers to the number of new loans you have opened recently, and makes up about 10% of your credit score. The number of request you've made for credit cards or loans is also computed. Now that you know all of the things that are used to calculate your score, what can you do to improve it?
What You Can Do To Improve
One of the things you can do is make sure all of your bills are paid on time. If you are too busy to make sure your bills are paid on time, set up automatic payments so that the money is debited from your account on the day it is due. You also want to make sure you don't open too many accounts within a short period of time. It is also important to keep your balance low in proportion to the total amount of credit available on the loan. You should owe 25% less than the total available credit on your loan or credit card.
It is also better to pay off your credit card instead of moving over the balance to a card that has a lower interest rate. Constantly moving around your balances can cause your score to become lower, because the total amount you owe could fluctuate if you close certain accounts.
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