Archive for the ‘Building Credit or Rebuilding Credit’ Category

How Many Credit Cards Are Too Many?

There is no hard and fast answer for this question. It is true that lenders look at open credit lines as a temptation to get into more debt, but it is far more important to look at your debt-to-income ratio than just your total number of credit cards. In fact, your debt- to- income ratio can tell you if you, as an individual, are carrying too many credit cards.

Your debt-to-income ratio is your total amount of debt divided by your income. To be safe, this number should never be greater than 25%. When you apply for a loan, the lender may look at your credit file and take all of your available credit, even if you haven’t used it, and do this calculation to see what your debt-to-income ratio could become should you max out all of your credit cards. If the number is greater than 30%, then the lender will likely consider you a higher risk.

You can do this calculation yourself and if your debt-to-income ratio, with all of your credit lines maxed out is greater than 30%, then you probably are carrying too much plastic. You should consider closing some of your open accounts. Be careful, though, not to close your oldest credit accounts. Doing this will negatively affect your FICO score since account age is one of the influencing factors.

How To Rebuild Your Credit Rating

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If you’ve had trouble paying your bills (who hasn’t, in this terrible economy?) and you have dings on your credit, you may think that it will be impossible to rebuild your credit rating. Nothing could be farther from the truth. Bad marks on your credit lose their impact on your credit score as time passes. Even a bankruptcy will lose much of its impact, although it will still remain on credit report, five years after the fact. Bad marks for late payments lose their impact over a much shorter period of time; perhaps  six months to a year after the fact, assuming you make all other payments on time.

So how do you rebuild your credit rating? The following four actions will help you to improve your credit score over a period of time. 

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Is A Credit Card For Bad Credit Automatically Toxic?

When you have bad credit or no credit, shopping for a credit card can turn out to be a minefield filled with financial bombs. Regardless of your credit history, there are some things that you should never tolerate from a credit card provider as they provide absolutely no benefit to you and can in fact be harmful to you.

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Understanding Your Credit Report Score

credit-score-1 Understanding your credit report score can sometimes be like trying to decipher ancient Egyptian hieroglyphics. Until recently, the score itself and the methods for calculating it were a complete secret.

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How To Establish First Time Credit

Having a good credit history is an essential part of life. Increasingly, how your credit score stacks up determines much more than just whether you qualify for a credit card or loan, or the rates you pay. Nowadays, your credit score is used to determine your auto insurance premium and can be deciding factor in whether or not you get a job.

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Secured Credit Cards With Low Credit Score: 4 Features They MUST Have

Applying for secured credit cards with a low credit score does not mean that you must accept extremely unfavorable terms such as outrageous fees and absurdly high interest rates.

While the price of your credit is going to be higher, and while you are going to need to come up with a deposit, your secured card should, at the minimum, contain these four features:

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How To Improve My Credit Score: Five Steps To Take

That three digit number developed by those guys at FICO can determine many things in your life, from whether or not you can get a loan or a credit card to whether or not you can get hired at some jobs.

Credit scores are calculated based on the information on your credit report and every time your credit report changes, so does your credit score. Even small changes can have a major impact. With that in mind, here are a few things you can do to improve your credit score.

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Credit Cards For People With Bad Credit: Know The Costs

There are many reasons why you might want to have a credit card, even if your credit is not the best. Among these, rebuilding your credit is probably at the top of the list as well as other factors such as the ability to rent a car or reserve a hotel room. While credit cards for people with bad credit are available and relatively easy to get, you should be aware that they come with certain costs.

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How To Rebuild Your Credit After Bankruptcy

There is no doubt that bankruptcy has a major effect on your credit. That said, going bankrupt does not mean that you’ll never be able to get credit again. This article explains how to rebuild your credit after bankruptcy.

Obtain A Secured Credit Card

One of the first things you should do once your case is finalized is to get a secured credit card. A secured credit card is just like any other credit card, except that your credit line is secured by a deposit you make into a special savings account that is attached to that card. Your credit limit is equal to the amount that you have on deposit in that savings account.

Typically secured cards will not have the best terms, but more often than not, no credit check is run and so long as you can deposit necessary funds, usually between $200 to $500 and pay the application fee, you’re pretty much guaranteed approval.

After a few years of judicious use, you can apply for an unsecured credit card without too many problems. 

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