Tuesday, July 12, 2005
Bad Credit Loans:Eight Ways to Consolidate Debt
Next to winning the lottery, a debt consolidation loan is a debtor�'s dream. With one monthly payment and a fixed monthly payment schedule, you can actually see an end to those monthly payments. more...
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Bad Credit Loans:Credit Establishment 101
Credit Establishment 101
There will come a day when you need credit. You may want to buy a home or a car and your credit rating will become very important to help make these dreams come true. One of the first things you will need to learn is the basic principle of money management, especially the ability to repay your creditors on time within the 30-day grace period they establish for you. Most people secure credit cards as the first way to establish credit in High School or College. Upon getting the credit card, usually a low spending limit, the ability to repay the card in an orderly fashion will help you establish a positive credit rating with the major repositories.
How your score is recorded
Upon making your monthly payments to the Credit Card Company or bank, your information is electronically transmitted to a credit-reporting agency. Trans Union, Equifax and Experian are the three major credit agencies. Once you have made your payments consistently your rating will rise accordingly. Once your rating has hit 650 or better, your mailbox will become flooded with attractive offers for credit cards and loans. People will want to give you the world because you can pay your bills in a timely manner.
What else is affected with the credit rating?
You may be surprised but if you do not act financially responsible, it can prevent you from getting a job, renting an apartment or even opening a bank account. The fact of the matter is that your credit rating is very important in today’s society. Your ability to keep it up to date by monitoring it is crucial. Once a year you can pull a free credit report from each agency. Check the report for accuracy, should it be reporting errors contact them immediately to resolve the issue. Some people might think a simple phone call can fix everything. That couldn’t be farther from the truth, repairing damaged credit takes time and only you can do it. Once you file a claim, stick with it and make sure it gets resolved. Once a correction has been made you will receive notification or an amended report from the agency showing the change. Your credit report has much more at stake for you in the present and in the future, watch it closely.
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
Start a Home Business
There will come a day when you need credit. You may want to buy a home or a car and your credit rating will become very important to help make these dreams come true. One of the first things you will need to learn is the basic principle of money management, especially the ability to repay your creditors on time within the 30-day grace period they establish for you. Most people secure credit cards as the first way to establish credit in High School or College. Upon getting the credit card, usually a low spending limit, the ability to repay the card in an orderly fashion will help you establish a positive credit rating with the major repositories.
How your score is recorded
Upon making your monthly payments to the Credit Card Company or bank, your information is electronically transmitted to a credit-reporting agency. Trans Union, Equifax and Experian are the three major credit agencies. Once you have made your payments consistently your rating will rise accordingly. Once your rating has hit 650 or better, your mailbox will become flooded with attractive offers for credit cards and loans. People will want to give you the world because you can pay your bills in a timely manner.
What else is affected with the credit rating?
You may be surprised but if you do not act financially responsible, it can prevent you from getting a job, renting an apartment or even opening a bank account. The fact of the matter is that your credit rating is very important in today’s society. Your ability to keep it up to date by monitoring it is crucial. Once a year you can pull a free credit report from each agency. Check the report for accuracy, should it be reporting errors contact them immediately to resolve the issue. Some people might think a simple phone call can fix everything. That couldn’t be farther from the truth, repairing damaged credit takes time and only you can do it. Once you file a claim, stick with it and make sure it gets resolved. Once a correction has been made you will receive notification or an amended report from the agency showing the change. Your credit report has much more at stake for you in the present and in the future, watch it closely.
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
Start a Home Business
Bad Credit Loans:Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report
The three major credit bureaus, Experian, Equifax and Trans Union are similar and feature a "Credit Score", which is created from credit report data submitted to them about you.But very often your credit report includes inaccurate, wrong or incomplete information (credit records). more...
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Bad Credit Loans:Secured Credit Cards- Consumer Tips
Secured Credit Cards- Consumer Tips
Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.
Several months ago Tom, a member of CreditBoards.com, filed for a Chapter 7 Bankruptcy. Now he is in the process of rebuilding his credit history. It’s a task that is not easy, but with patient persistence he is seeing progress already. Daily he checks his credit score and is slowly seeing improvement.
1 - In addition to correcting every mistake, even the smallest ones, on his credit report, he is using a secured credit card.
2 - This secured card is an important tool in the overall process of building or rebuilding credit.
Who should consider a secured credit card?
Someone who has no credit history.
Someone with a damaged credit history.
What is a secured credit card?
Secured cards are credit cards opened with a deposit into a savings account, money market or certificate of deposit. The amount of deposit required varies from card to card, but generally minimum amounts range from $250 - $500. These funds are considered your security and will even earn a little interest since they are being held in a savings account. Your credit limit is determined by the amount you deposit into the savings account. Sometimes the limit will be for the full amount of the deposit; other times it will be a percentage of the total.
It is important to keep in mind that a secured card is a credit card, not a debit card. If full payments are not made each month, then interest is charged on the outstanding balance. And the lending institution uses the security money to pay off the debt only as a last resort. Even though the card is secured, it is still possible to damage credit.
What are the benefits of a secured credit card?
Establishing credit. If you have never had a credit card, a good first step in establishing good credit is applying for a secured credit card. Assistant Professor of Economics at Austin Peay State University in Clarksville, TN, Jerry Plummer says, “A secured card is most useful for the person starting out on their credit history, since it says that the person is willing to take the extra step to establish credit.”
Reestablishing credit. If your credit history is damaged, you may only be able to qualify for a secured credit card. Using this secured card appropriately and within the set parameters will help rebuild your credit and qualify you for an unsecured card. If you have had to file for bankruptcy, however, you may not qualify until it has been discharged.
Preset limit cannot be exceeded. If poor spending habits were part of the cause for bad credit, then a secured credit card will help keep spending in check.
Useful for transactions that require a credit card. Hotels and car rentals require the use of a credit card. If you don’t qualify for an unsecured card but you do for a secured card, then you are still able to make the transaction.
What should I look for or avoid when shopping for a secured credit card?
Fees. This is the area you will really want to research when shopping for a secured credit card. Some cards will come with fees that run into the hundreds of dollars, eating away much of the credit you secured with the savings account. Professor Plummer says a card with no fee is the best, but a small one-time fee can be okay. Annual fees for attractive secured cards typically range from $20-$35. Be sure to watch out for hidden fees such as “registration charges” and “setup fees.”
Interest Rate. Just because you have no or poor credit doesn’t mean you have to settle for the highest interest rate. Interest rates for attractive secured cards should not exceed 19%. Shop around and get the most competitive rate available.
Read the fine print. Linda Tucker, Director of Education for Consumer Credit Counseling Service for Arkansas and Memphis, TN, stresses the importance of reading the fine print. Doing so will let you know your exact obligations to the issuing company: for example, the grace period, what happens if you don’t make a full payment, and what fees are attached if you don’t make the full payment. Understanding these details will help make sure you are not further damaging your credit.
Fraudulent Offers. As with unsecured cards you need to watch out for fraudulent offers.The Federal Trade Commission gives the following advice to protect yourself from credit card fraud:
Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.
A call to a '900' number for a credit card. You pay for calls with a '900' prefix -- and you may never receive a credit card.
Credit cards offered by "credit repair" companies or "credit clinics." These businesses also may offer to clean up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.
When will I qualify for an unsecured credit card?
It can take several months to see an improvement in your credit history. Bankrate says it’s a good indicator when you start receiving flyers in the mail for unsecured cards that your credit is improving. However, it’s a good idea to continue taking things slowly. Using a secured card will help you learn healthy habits so that when you do get an unsecured credit card you remain in control of your spending and credit.
Where can I find a secured credit card?
Most companies don’t advertise secured cards. But you can visit the Card Reports section of http://www.CardRatings.com to find out where and how to apply. Click on the link entitled “Cards for Consumers with Poor or No Credit”.
Other tips
Tom recommends sticking with only one or two cards and keeping spending to a minimum. The goal is to pay the card off each month.
Tucker emphasizes the importance of paying the amount due each month; otherwise late fees can be charged, interest rates raised, privileges lost, and credit history negatively affected.
Make sure you are getting a credit card as opposed to a gas card or a department store card.
Make sure a reputable bank or credit union, even a local one, is issuing the card. And, don’t automatically assume a bank is issuing the card.
Not all issuers report to the three major credit agencies (Experian, Equifax, and TransUnion). It’s important to get a card that does report to all three agencies; otherwise you will be wasting your time. Fortunately, secured cards normally report to the credit agencies just like unsecured cards (you should verify this before applying).
If you have filed for bankruptcy, you may need to wait until it has been discharged before qualifying for a secured card.
Get one only if you cannot get credit, since you have no credit record; or if you have poor credit. Plummer says, “Many companies will not even count them as credit, such as automobile F&I (Finance and Insurance) people, although they will not admit it.” So, if you don’t really need a secured card, you will be doing more harm than good.
Finally, whatever situation you are in, no credit or poor credit, the best way to build good credit is to set up a budget and then stick with it.
1 You can pay membership fees to any one of the three credit bureaus – Experian, TransUnion, and Equifax- to be able to check your credit score online daily. Visit our Credit Information section for more details. Tom recommends purchasing Microsoft Money 2004, which comes with a one-year membership to Experian (value of $99.00).
2 To find out more about correcting errors on your credit report, read our article How to Correct Mixed or Split Credit Reports.
Amy Cooper-Arnold is a staff writer for http://www.CardRatings.com. Amy has been employed in various accounting-related positions. She will graduate this December from Austin Peay State University with a degree in English.
Start a Home Business
Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.
Several months ago Tom, a member of CreditBoards.com, filed for a Chapter 7 Bankruptcy. Now he is in the process of rebuilding his credit history. It’s a task that is not easy, but with patient persistence he is seeing progress already. Daily he checks his credit score and is slowly seeing improvement.
1 - In addition to correcting every mistake, even the smallest ones, on his credit report, he is using a secured credit card.
2 - This secured card is an important tool in the overall process of building or rebuilding credit.
Who should consider a secured credit card?
Someone who has no credit history.
Someone with a damaged credit history.
What is a secured credit card?
Secured cards are credit cards opened with a deposit into a savings account, money market or certificate of deposit. The amount of deposit required varies from card to card, but generally minimum amounts range from $250 - $500. These funds are considered your security and will even earn a little interest since they are being held in a savings account. Your credit limit is determined by the amount you deposit into the savings account. Sometimes the limit will be for the full amount of the deposit; other times it will be a percentage of the total.
It is important to keep in mind that a secured card is a credit card, not a debit card. If full payments are not made each month, then interest is charged on the outstanding balance. And the lending institution uses the security money to pay off the debt only as a last resort. Even though the card is secured, it is still possible to damage credit.
What are the benefits of a secured credit card?
Establishing credit. If you have never had a credit card, a good first step in establishing good credit is applying for a secured credit card. Assistant Professor of Economics at Austin Peay State University in Clarksville, TN, Jerry Plummer says, “A secured card is most useful for the person starting out on their credit history, since it says that the person is willing to take the extra step to establish credit.”
Reestablishing credit. If your credit history is damaged, you may only be able to qualify for a secured credit card. Using this secured card appropriately and within the set parameters will help rebuild your credit and qualify you for an unsecured card. If you have had to file for bankruptcy, however, you may not qualify until it has been discharged.
Preset limit cannot be exceeded. If poor spending habits were part of the cause for bad credit, then a secured credit card will help keep spending in check.
Useful for transactions that require a credit card. Hotels and car rentals require the use of a credit card. If you don’t qualify for an unsecured card but you do for a secured card, then you are still able to make the transaction.
What should I look for or avoid when shopping for a secured credit card?
Fees. This is the area you will really want to research when shopping for a secured credit card. Some cards will come with fees that run into the hundreds of dollars, eating away much of the credit you secured with the savings account. Professor Plummer says a card with no fee is the best, but a small one-time fee can be okay. Annual fees for attractive secured cards typically range from $20-$35. Be sure to watch out for hidden fees such as “registration charges” and “setup fees.”
Interest Rate. Just because you have no or poor credit doesn’t mean you have to settle for the highest interest rate. Interest rates for attractive secured cards should not exceed 19%. Shop around and get the most competitive rate available.
Read the fine print. Linda Tucker, Director of Education for Consumer Credit Counseling Service for Arkansas and Memphis, TN, stresses the importance of reading the fine print. Doing so will let you know your exact obligations to the issuing company: for example, the grace period, what happens if you don’t make a full payment, and what fees are attached if you don’t make the full payment. Understanding these details will help make sure you are not further damaging your credit.
Fraudulent Offers. As with unsecured cards you need to watch out for fraudulent offers.The Federal Trade Commission gives the following advice to protect yourself from credit card fraud:
Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.
A call to a '900' number for a credit card. You pay for calls with a '900' prefix -- and you may never receive a credit card.
Credit cards offered by "credit repair" companies or "credit clinics." These businesses also may offer to clean up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.
When will I qualify for an unsecured credit card?
It can take several months to see an improvement in your credit history. Bankrate says it’s a good indicator when you start receiving flyers in the mail for unsecured cards that your credit is improving. However, it’s a good idea to continue taking things slowly. Using a secured card will help you learn healthy habits so that when you do get an unsecured credit card you remain in control of your spending and credit.
Where can I find a secured credit card?
Most companies don’t advertise secured cards. But you can visit the Card Reports section of http://www.CardRatings.com to find out where and how to apply. Click on the link entitled “Cards for Consumers with Poor or No Credit”.
Other tips
Tom recommends sticking with only one or two cards and keeping spending to a minimum. The goal is to pay the card off each month.
Tucker emphasizes the importance of paying the amount due each month; otherwise late fees can be charged, interest rates raised, privileges lost, and credit history negatively affected.
Make sure you are getting a credit card as opposed to a gas card or a department store card.
Make sure a reputable bank or credit union, even a local one, is issuing the card. And, don’t automatically assume a bank is issuing the card.
Not all issuers report to the three major credit agencies (Experian, Equifax, and TransUnion). It’s important to get a card that does report to all three agencies; otherwise you will be wasting your time. Fortunately, secured cards normally report to the credit agencies just like unsecured cards (you should verify this before applying).
If you have filed for bankruptcy, you may need to wait until it has been discharged before qualifying for a secured card.
Get one only if you cannot get credit, since you have no credit record; or if you have poor credit. Plummer says, “Many companies will not even count them as credit, such as automobile F&I (Finance and Insurance) people, although they will not admit it.” So, if you don’t really need a secured card, you will be doing more harm than good.
Finally, whatever situation you are in, no credit or poor credit, the best way to build good credit is to set up a budget and then stick with it.
1 You can pay membership fees to any one of the three credit bureaus – Experian, TransUnion, and Equifax- to be able to check your credit score online daily. Visit our Credit Information section for more details. Tom recommends purchasing Microsoft Money 2004, which comes with a one-year membership to Experian (value of $99.00).
2 To find out more about correcting errors on your credit report, read our article How to Correct Mixed or Split Credit Reports.
Amy Cooper-Arnold is a staff writer for http://www.CardRatings.com. Amy has been employed in various accounting-related positions. She will graduate this December from Austin Peay State University with a degree in English.
Start a Home Business
Bad Credit Loans:Top 5 Reasons To Check Your Credit Report Regularly
#1 Make sure mistakes aren't hurting your credit.Reviewing your credit report can help you avoid costly errors. In one recent study, more than 50% of the credit reports checked contained errors. Other studies have shown similar results with as high as a 70% error rate. The most common error occurs when the information of another person, with a similar name or account number, is recorded in your credit profile. more...
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Bad Credit Loans:Apply For Home Mortgage Loan Online With Bad Credit
When applying for a mortgage loan, you will need to watch out for your credit, one of the biggest factors in getting approved for a mortgage loan. Here are some things to watch out for. more...
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Bad Credit Loans:Home Mortgages After Bankruptcy
If you have a recent bankruptcy on your credit and are looking to get financing for a home, there is hope. Buying a home with bad credit will just put more emphasis on the other two factors needed to get a mortgage loan, which are; income verification and a down payment. more...
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Bad Credit Loans:Get Out From Under Debt Weight and Soar to Financial Security
Meg's finances were okay, but she wanted more than to just barely meet expenses. So she decided to start an Internet business. She searched around, found a reliable company that she liked, products that she felt comfortable using and promoting. But she didn't have the money to promote her business. What did she do? What any smart business owner would do. She borrowed the money to invest in herself. more...
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Bad Credit Loans: Budgeting
The Misery but Necessity of Budgeting
by Gary North
Most people hate budgets and budgeting. Budgets are a reminder of our limitations. There's no such thing as a free lunch, but we all love the idea of free lunches. What Gary North says.
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by Gary North
Most people hate budgets and budgeting. Budgets are a reminder of our limitations. There's no such thing as a free lunch, but we all love the idea of free lunches. What Gary North says.
Start a Home Business
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