credit score http://www.wisebread.com/taxonomy/term/8451/all en-US 5 Financial Mistakes That Won't Hurt Your Credit Score http://www.wisebread.com/5-financial-mistakes-that-wont-hurt-your-credit-score <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-mistakes-that-wont-hurt-your-credit-score" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-623515998.jpg" alt="Learning which financial mistakes won&#039;t hurt your credit score" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Certain financial mishaps can cost you dearly when it comes to your FICO credit score. Pay your credit card bill more than 30 days late, and your score can drop by 100 points. Declare bankruptcy or lose a home to foreclosure? Your score will fall by even more.</p> <p>In general, lenders today consider a FICO credit score of 740 or higher to be a very good score. They consider anything over 800 to be excellent. Keeping your score in these ranges requires that you pay your bills on time each month and keep your credit card debt low.</p> <p>But here's a secret about FICO scores: They don't measure all of your financial activity. It's possible to suffer a few financial setbacks, or make some money mistakes, without seeing your credit score take a dive.</p> <p>Here are five financial mishaps that, though they might cause problems in your daily life, won't hurt your credit score.</p> <h2>1. Paying your credit card bill just a little late</h2> <p>You should always <a href="http://www.wisebread.com/5-simple-ways-to-never-make-a-late-credit-card-payment?ref=internal" target="_blank">pay your credit card bills on time</a>. And ideally, you should pay off your cards in full each month. But if you miss your deadline by two days or three weeks, it won't impact your credit score.</p> <p>Your credit card provider will only report a payment as late to the three national credit bureaus &mdash; Experian, Equifax, and TransUnion &mdash; if you are at least 30 days late on it. As long as you pay before that 30-day deadline passes, your credit score will remain intact. (See also: <a href="http://www.wisebread.com/how-late-payments-affect-your-credit?ref=seealso" target="_blank">How Late Payments Affect Your Credit</a>)</p> <p>Of course, this doesn't mean that you won't take a financial hit. Your credit card provider could raise your card's interest rate and levy a late fee &mdash; usually around $35 &mdash; against you.</p> <h2>2. Forgetting to pay your doctor's bill</h2> <p>Not all bills are equal in the eyes of your credit score. Pay your credit card or mortgage payment more than 30 days late, and you can expect your FICO score to plunge. Do the same with your doctor's or dentist's bill, and your credit score won't budge.</p> <p>That's because medical providers don't report late payments to the credit bureaus. So paying your dentist bill 40 days late won't hurt your credit score.</p> <p>Again, though, you need to be careful. Paying your medical bills late could have other financial consequences. Your medical provider might tack on additional fees to your bill if you don't pay on time. And if you put off paying that bill for too long, your medical provider might send a collections agency after you. This <em>will</em> be reported to the credit bureaus, and it will cause your credit score to fall.</p> <h2>3. Not paying your phone or utility bill on time</h2> <p>Your phone, electrical, gas, water, garbage, and cable bills are much like your medical ones: The providers of these services don't report to the credit bureaus. You can pay these bills late without suffering a hit to your credit score.</p> <p>Again, be careful. You don't want your utility company shutting off your service or sending your late bill into collections, something that will hurt your credit score.</p> <h2>4. Paying your apartment rent late (usually)</h2> <p>It used to be that apartment rent payments were never reported to the credit bureaus. Today, that is slowly beginning to change, with some services popping up that will report on-time, and late, rental payments to credit bureaus.</p> <p>But the majority of renters still don't see their monthly rent payments reported to the credit bureaus. That's bad news for renters who pay their rent on time each month; those on-time payments could boost their credit scores if they were reported. It's a better deal for those renters with a history of late payments, as these financial mistakes won't hurt their credit scores.</p> <h2>5. Losing a job</h2> <p>You might be surprised to learn that your annual income has no impact on your FICO credit score. Your credit score only tracks how well you pay your bills and manage your credit. It does not care whether you make a $1 million or $10,000 a year.</p> <p>If you lose your job and your income suddenly dips, your credit score won't budge.</p> <p>If your reduced income causes you to run up your credit card debt or start paying your bills late, though? That will hurt your credit score.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-financial-mistakes-that-wont-hurt-your-credit-score">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-late-payments-affect-your-credit">How Late Payments Affect Your Credit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-you-shouldnt-freak-out-if-you-miss-a-payment-due-date">Here&#039;s Why You Shouldn&#039;t Freak Out If You Miss a Payment Due Date</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-repair-mistakes-that-will-cost-you">8 Credit Repair Mistakes That Will Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-debt-payoffs-that-boost-your-credit-score-the-most">The 7 Debt Payoffs That Boost Your Credit Score the Most</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills collections credit score fico financial mistakes late fees late payments utilities Thu, 23 Mar 2017 10:00:11 +0000 Dan Rafter 1911510 at http://www.wisebread.com Make These 5 Money Moves Before Applying for a Mortgage http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/make-these-5-money-moves-before-applying-for-a-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-506317138 (1).jpg" alt="Making money moves before applying for a mortgage" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Each year, millions of people apply for a mortgage and purchase a home. This, however, shouldn't convince you that getting a home loan is a piece of cake. In reality, a mortgage is one of the hardest loans to qualify for. But if you make these money moves before meeting with a lender, you can swing the odds in your favor.</p> <h2>1. Pay off debt</h2> <p>Getting approved for a mortgage doesn't require zero debt, but the more you currently owe, the harder it can be to qualify for a desired amount.</p> <p>To avoid any roadblocks along the way, come up with a clearsighted plan to pay off as much of your debt as possible, especially <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=internal" target="_blank">credit card debt</a>. A high <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> &mdash; which is your credit card balance compared to your credit limit &mdash; can lower your credit score and make it difficult to qualify for a mortgage or trigger a higher mortgage interest rate.</p> <p>As a personal goal, keep credit card balances below 30 percent of your credit limit. To attain this, stop using cards and pay more than your minimums every month. Also, ask creditors to lower your interest rate. If you can pay less interest, you'll reduce the principal faster.</p> <p>Take it a step further and make higher monthly payments on other types of debts as well, such as a car loan, student loan, etc. This is to your advantage because the less expenses you have, the easier it'll be to adjust to a mortgage payment.</p> <h2>2. Determine what you're comfortable spending</h2> <p>Your mortgage lender decides an affordable amount based on your income and existing debt. Still, it helps to have an idea of what <em>you </em>are comfortable spending on a house before meeting with a bank. Typically, banks allow borrowers to spend between 28 percent and 31 percent of their gross monthly income on a mortgage payment.</p> <p>Do the math and calculate 31 percent of your gross monthly income, and then review your budget to see if you can realistically afford this amount on a monthly basis. After determining a comfortable monthly payment, use a mortgage calculator to estimate the maximum you can borrow based on the desired payment range.</p> <h2>3. Devise a savings plan</h2> <p>Qualifying for a mortgage entails money &mdash; lots of it. Not just money for the monthly payment, but also <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=internal" target="_blank">cash for a down payment</a> (between 3.5 percent and 20 percent of the home's value), plus there's the cost of closing. These fees can run up to 5 percent of the purchase price.</p> <p>Even if you can afford a house payment at a certain price point, you'll only qualify for a particular amount if you have enough in reserves for mortgage-related fees. Let's say you want to purchase a $300,000 house. Your income may show an ability to afford the monthly payment. But if you only have $7,500 in savings for a down payment, instead of the required $10,500 (assuming you get an FHA home loan), you can't purchase the home. You then have two options &mdash; purchase a cheaper home, or postpone buying until you save additional cash.</p> <p>Once you have an idea of how much you'll spend on a property, devise a plan to save for your down payment and closing costs. Based on your amount of disposable income each month and your desired time frame for purchasing a property, decide how much to save. Keep this money in a designated high-yield savings account.</p> <h2>4. Pay your bills on time</h2> <p>There are no hard rules regarding how many late payments a lender allows within 12 or 24 months before applying for a home loan. If there are late payments on your recent credit history, it's up to your lender to calculate the risk level and determine whether you're creditworthy. To do this, some lenders request an explanation to assess whether lateness was due to irresponsibility or circumstances beyond a borrower's control. (See also: <a href="http://www.wisebread.com/5-simple-ways-to-never-make-a-late-credit-card-payment?ref=seealso" target="_blank">5 Simple Ways to Never Make a Late Credit Card Payment</a>)</p> <p>Either way, late payments in your recent history can result in a higher interest rate, which means you'll pay more for your home loan in the long run. Therefore, aim to pay all your bills on time. If you often forget due dates, set up recurring or automatic monthly payments.</p> <h2>5. Shop around for lenders</h2> <p>According to the Consumer Finance Protection Bureau, 47 percent of homebuyers don't compare mortgage lenders when applying for a home loan. What's even more surprising, 77 percent apply to only one lender at all. It might seem convenient to get this step out of the way ASAP, but it just doesn't make smart financial sense.</p> <p>When you're ready to apply for a home loan, you need to do research and shop around. Don't just settle for the first mortgage lender who approves you. You might be eager to get the process underway, but be patient. The first person to give you the green light might not be offering the lowest interest rates (or charging the lowest fees), which could mean the difference between thousands of dollars. Maybe they're just not the right fit for you, or they don't take the time to really earn your business. You won't know unless you compare, and that step can save you a lot of stress (and money) down the line. (See also: <a href="http://www.wisebread.com/4-mortgage-secrets-only-your-broker-knows?ref=seealso" target="_blank">4 Mortgage Secrets Only Your Broker Knows</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-you-shouldnt-buy-a-house-yet">5 Reasons You Shouldn&#039;t Buy a House (Yet)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to Retirement?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a home credit history credit score debt repayment down payments home loans mortgages saving money tax deductions Mon, 20 Mar 2017 10:30:21 +0000 Mikey Rox 1908934 at http://www.wisebread.com 4 Questions to Ask Before Getting a Credit Increase http://www.wisebread.com/4-questions-to-ask-before-getting-a-credit-increase <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-questions-to-ask-before-getting-a-credit-increase" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-503776840.jpg" alt="Woman asking questions before getting a credit line increase" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Feeling penned in by the low credit limits on your credit card? You might be able to boost your credit limit to a higher amount. Often, all it takes is a single call to your card provider. The bigger question, though, is whether you're financially prepared for a higher limit.</p> <p>Your credit card providers will always set a credit limit on your cards, the maximum amount you can borrow. If you have a short credit history or a low FICO credit score, your credit limits might be low ones, sometimes under $1,000. If you have a long credit history and high scores, your limit might be $10,000, $20,000, or more.</p> <p>How do know if you're ready for the financial responsibility of a higher credit limit? Here are some questions to ask yourself.</p> <h2>Do You Pay Your Credit Card Bill Late?</h2> <p>Do you pay your credit card bills by their due dates every single month? Or have you missed payments in the past? If it's the latter, you might want to hold off on requesting a higher credit limit.</p> <p>Paying your credit cards 30 days or more late will cause your FICO score to drop by 100 points or more. Your credit card provider will also charge you a penalty, and your card's interest rate might soar. If you have a higher credit limit and a high balance, an interest rate spike could cost you quite a bit in extra interest payments.</p> <p>Having a history of late payments will also give your credit card provider pause; the financial institution might not want to boost your limit if you don't always pay your bill on time.</p> <h2>Do You Carry a Balance on Your Card?</h2> <p>The smart way to use a credit card is to pay off your balance in full each month. This way, you <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal" target="_blank">boost your credit score</a> by making on-time payments, and you won't get hit by the high interest that is often attached to credit card debt.</p> <p>But what if you never pay your balance off in full? What if you roll your credit card debt over from month to month, watching it grow each 30 days as you do so?</p> <p>If that describes you, don't worry about increasing your credit limit. Instead, focus on <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">paying off your credit card debt</a> in full. It's easy to let this debt get out of control because it tends to grow so quickly. You don't want to waste your money paying off interest each month.</p> <p>If you think you need a higher credit limit to manage your bills, the better thing to do is to stop and assess your situation. A higher credit limit might save you for a few months, but you'll end up even worse off due to the high interest debt that you're accruing while your financial situation continues to spiral out of control. Make the tough cuts in your spending and <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?ref=internal" target="_blank">create your debt payment plan</a>.</p> <h2>Have You Maxed Out the Limits on Your Cards?</h2> <p>You never want to hit the maximum credit limit on your credit cards. If you've already done this on other credit cards, it's a sign that you need to get your spending under control, even if your credit card limits are relatively low ones.</p> <p>Asking for more credit is not the right solution to <a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what?ref=internal" target="_blank">maxing out your credit cards</a>. The better move is to stop charging and start paying down those balances. Don't even think about asking for more credit until you pay off your credit card debt in full.</p> <p>If instead you find you're bumping into your maximum even though you're able to pay it off each month (for example, you're trying to put your regular expenses on your card that you've been paying with cash or debit but there isn't enough credit available), that would be a good case for you to make in asking for a higher limit.</p> <h2>Do You Miss Other Bill Payments?</h2> <p>Are you constantly struggling to pay your auto, mortgage, or student loans on time? If so, you might consider higher credit limits to be a solution. After all, if you can charge more purchases each month, you might free up more cash to put toward those other bills.</p> <p>This, though, is flawed thinking. If you're struggling to pay your monthly bills, you either don't make enough money, or you're spending too much. The better solution is to <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">draft a realistic household budget</a> showing how much money you're spending each month and how much you're earning. Armed with these numbers, you can then change your spending habits, make the move to a more affordable house or apartment, or search for a side job to bring in more income. (See also: <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job?ref=seealso" target="_blank">15 Ways to Make Money Outside Your Day Job</a>)</p> <p>Simply asking for more wiggle room on your credit cards is not addressing your money struggles. That's trying to avoid them.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-questions-to-ask-before-getting-a-credit-increase">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Why the Age of Your Credit History Matters</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-put-your-spouse-on-a-budget-without-ruining-your-marriage">How to Put Your Spouse on a Budget Without Ruining Your Marriage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-scores-across-the-country-which-third-are-you-in">Credit Scores Across the Country: Which Third are You In?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-smart-things-to-do-with-your-settlement-money">8 Smart Things to Do With Your Settlement Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance carrying a balance credit limits credit score debts increase on time payments paying bills spending Wed, 15 Mar 2017 10:00:11 +0000 Dan Rafter 1908842 at http://www.wisebread.com 5 Money Moves to Make Before Moving Out on Your Own http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-before-moving-out-on-your-own" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-640229364.jpg" alt="Making money moves before moving out on her own" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Today, it's not uncommon for young adults to continue living with their parents well into their 30s. A report released in 2015 by the Pew Research Center said that 32.1% of adults from the ages of 18 to 34 were living in their parents' home in 2014, the most common type of living arrangement for people in this age range.</p> <p>But there does come a day when it's finally time to leave the nest. And before you do that, you need to be financially healthy enough to make it on your own.</p> <p>Here are five money moves you need to make before you leave your parents' home.</p> <h2>1. Practice Paying Bills</h2> <p>Paying a mortgage or rent is an important financial responsibility, but it's not the only bill that adults face when moving out on their own. There are groceries to buy, car loans to pay off, utilities to cover, and transportation fees that eat into monthly budgets.</p> <p>To prepare for the rigors of paying these bills, you should practice being financially responsible before moving out of your parents' home. This might mean paying monthly rent to your parents while you continue to live in their home. You should also ask if you can contribute financially in other ways, perhaps by paying part of the monthly utility or garbage pickup bills.</p> <p>By paying at least some of the bills that your parents face each month, you'll get a much more accurate taste of what it's like to live on your own.</p> <h2>2. Create a Budget</h2> <p>No one enjoys making a household budget. But a budget serves as a blueprint that tells you how much you can spend each month. Without one, it's easy to run up debts as you spend more dollars than you can afford.</p> <p>Before you leave your parents' home, you need to <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">make a budget</a> of your own. This budget should include all the money you expect to make each month, along with a list of regular monthly expenses and bills, such as rent, utilities, transportation, phone bills, student loan payments, and car payments.</p> <p>A budget should also include guidelines for costs that vary each month. This includes everything from groceries to dining out to going to the movies.</p> <h2>3. Create an Emergency Fund</h2> <p>Financial experts say that all adults should have six months' to a year's worth of daily living expenses saved in an emergency fund. You can then tap this fund if a financial crisis, such as a job loss, hits. An emergency fund can also be used to cover unexpected major expenses, such as the cost of replacing a car's transmission or a blown water heater.</p> <p><a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">Starting an emergency fund</a> doesn't have to be painful. Simply set aside $100, $200, or more each month to slowly build that fund. Smart savers will have at least some money stashed in an emergency fund before they move out on their own.</p> <h2>4. Pay Off Those Debts</h2> <p>Moving out with loads of <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=internal" target="_blank">credit card debt</a>? That's not the smartest financial move. It can be hard to pay off this high-interest debt when you're saddled for the first time with monthly rent or mortgage payments. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <p>The smart move is to set aside as much extra money as you can to pay down your credit cards before moving. That way, you can start your independent life with a clean financial slate.</p> <h2>5. Build a Solid Credit Score</h2> <p>FICO credit scores matter today. Lenders use them to determine who qualifies for auto loans, mortgages, and other loans. Most lenders today consider a FICO credit score of 740 or higher to be a top-tier score. Scores under 640 give lenders pause.</p> <p>Before you head out, you should take steps to <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=internal" target="_blank">build your credit score</a>. The best way to do this is to pay all your bills on time every month and to pay off as much of your credit card debt as possible. By making on-time payments on credit cards or auto loans, you'll steadily build your credit score. Then, when it's time to move, you'll be doing so with a healthy credit score attached to your name. This will help you whether you're looking for a place to rent or even getting a job. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-money-moves-for-empty-nesters">7 Smart Money Moves for Empty Nesters</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-debt-payoffs-that-boost-your-credit-score-the-most">The 7 Debt Payoffs That Boost Your Credit Score the Most</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills budgeting credit score debt emergency funds living with parents millennials money lessons moving out young adults Fri, 10 Mar 2017 10:30:40 +0000 Dan Rafter 1902840 at http://www.wisebread.com How to Protect Yourself From Predatory Lending http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-protect-yourself-from-predatory-lending" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-479413254_0.jpg" alt="Man learning how to recognize predatory lending" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Predatory lending has long been a problem for consumers. There is no exact definition of a predatory lender, but in general, these lenders either try to overcharge consumers for loans, or talk them into riskier loans that come with higher interest rates. Predatory lenders have one goal: They want to make as much money as possible on their loans, regardless of whether the loan product actually makes financial sense for the consumers.</p> <p>How, exactly, do people fall for this? It's actually not surprising when you understand the degree of manipulation predatory lenders will use. By targeting mainly elderly, low-income, or simply uninformed victims, these financial predators bank on convincing folks with poor or no credit that they have no other options for obtaining financing.</p> <p>If you don't fit the above criteria, don't think you're completely off their radar, either. Should you ever lose your job, need cash for an emergency, or suddenly find yourself facing steep medical bills, you just might be the next target of a predatory lender.</p> <p>Worried that a predatory lender might have targeted you? Here are the warning signs.</p> <h2>The Lender Wants You to Sign Now</h2> <p>Honest lenders will never pressure you to sign loan documents before you are comfortable. Legitimate lenders give you time to study the paperwork and research the fees and rates associated with the loan.</p> <p>Predatory lenders want you to sign paperwork as quickly as possible. That way, they can stick you with their high-cost loans before you have the chance to research lower-cost alternatives. Never do business with a lender who pressures you to act quickly. The odds are high that such a lender is a predator.</p> <h2>The Interest Rate Suddenly Rises</h2> <p>Predatory lenders like to entice new customers by advertising below-market interest rates on their websites or print ads. But when you actually call these lenders, you're told that you don't qualify for these low rates. Once these lenders have you on the phone, they'll try to convince you to sign up for a loan with a far higher rate.</p> <p>Don't fall for this trick. Companies that advertise interest rates that are far lower than their competitors are usually not trustworthy. The odds are high that these are predatory lenders trying to trick gullible borrowers.</p> <h2>They Tell You Not to Worry About Your Credit Score</h2> <p>Legitimate lenders rely heavily on your FICO credit score to determine if you should qualify for a loan and at what interest rate. This score tells lenders how well you've paid your bills in the past.</p> <p>Beware of lenders who say that your credit score doesn't matter or that they can approve you for a loan no matter how low your score is. Lenders who make these promises will charge you sky-high interest rates because they know that you're desperate for a loan. You're much better off working to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal" target="_blank">improve your credit score</a> than taking out a costly high-interest-rate loan. Pay all your bills on time and pay down as much of your credit card debt as possible. Slowly, but steadily, your credit score will start to rise, and you can avoid the high rates of predatory lenders. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>The Lender Asks You to Lie</h2> <p>Making false claims about your income or debt on a loan application is a crime, and you could face significant fines if you do. Predatory lenders, though, might encourage you to inflate your income or provide other false information.</p> <p>Ignore this temptation. No legitimate lender will ask you to lie on an application. Instead, lenders will take extra steps to make sure that the information you do provide on an application is true. For instance, they'll ask you to provide copies of your most recent paycheck stubs, bank account statements, and tax returns to verify your income.</p> <h2>Your Lender Tries to Talk You Into a Riskier Loan</h2> <p>Be careful if your lender continues to push a loan that sounds risky. Maybe you want to apply for a fixed-rate loan with a term of 15 or 30 years. If your lender pressures you to instead apply for an interest-only loan with a balloon payment &mdash; or something equally as complicated or risky &mdash; walk away. Legitimate lenders will never try to talk you into a loan that you don't want.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Why the Age of Your Credit History Matters</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Why You Shouldn&#039;t Panic If Your Credit Score Drops</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-keep-your-private-info-private">10 Ways to Keep Your Private Info Private</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Consumer Affairs credit score interest rates lies loans manipulation predatory lending risk scams warning signs Tue, 07 Mar 2017 10:31:34 +0000 Dan Rafter 1901334 at http://www.wisebread.com Why the Age of Your Credit History Matters http://www.wisebread.com/why-the-age-of-your-credit-history-matters <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-the-age-of-your-credit-history-matters" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-472468032.jpg" alt="the age of your credit history" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>A healthy credit score shouldn't be underestimated.</p> <p>This three-digit number plays a pivotal role in your financial life, including whether or not you'll qualify for auto loans, mortgages, or credit cards, and if so, what interest rates you'll pay. It can even affect your career, particularly if it's in the finance field: A brokerage firm isn't likely to hire a candidate they suspect isn't good with money. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Given how much weight your credit score carries, you should do everything within your power to maintain a high score. Yet, before you can maintain a good score, you have to understand the components that make up your credit score.</p> <h2>What Makes Up Your Credit Score</h2> <p>Credit scores aren't determined by a single factor, but rather multiple factors. Once you open a credit account, your creditors report account activity to the credit bureaus on a regular basis. The bureaus compile data related to your accounts, and based on reported information, the bureaus formulate a credit score.</p> <p>It probably comes as no surprise that your payment history and the amounts you owe have a tremendous impact on your personal score. Your payment history makes up 35% of your score, while the amount you owe makes up 30% of your score. If you pay your bills on time, avoid delinquencies, and keep your balances within a reasonable range, you'll eventually build up to a solid score.</p> <p>But even when you take these measures, good credit doesn't happen overnight. Because there's another factor that contributes to your overall score: When credit bureaus formulate credit scores, they also take into account the <em>age </em>of your credit history.</p> <p>The age or length of your credit history &mdash; which makes up 15% of your credit score &mdash; doesn't have as big an impact on your score as your payment history and amounts owed. Still, you shouldn't downplay the importance of credit age.</p> <h2>How Credit Age Relates to Credit Risk</h2> <p>Most of us rely on credit for an auto loan, a house, and a credit card. Even so, being a creditor is risky business, and banks don't arbitrarily approve credit applications. They consider several factors before approving financing, such as your income and your credit score. Even if you have adequate income and pay your bills on time, the bank might reject your application if you don't meet the minimum credit score requirement for a loan. This can happen if you have a young credit history. (See also: <a href="http://www.wisebread.com/why-you-need-credit-and-how-to-build-it-from-scratch?ref=seealso" target="_blank">How to Build Your Credit From Scratch</a>)</p> <p>The age of credit history affects overall scores because a longer history provides a better assessment of risk level. Credit age takes two elements into consideration: the age of your oldest account, and the average age of all your accounts. The longer accounts remain open, the more your credit matures. And as your credit matures, credit scoring models slowly add points to your score.</p> <p>To illustrate, if you've had a credit history for the past six years with no negative activity appearing on your credit report, credit bureaus evaluate your entire borrowing pattern, and based on your history and record, deem you a responsible borrower. This is a fairly accurate assessment given the length of credit history. As a responsible borrower, you're rewarded with additional credit score points.</p> <p>But let's say you've only had a credit file for six months or a year. Given your short credit history, credit bureaus can't accurately rate creditworthiness. Despite paying your bills on time, you don't have a long borrowing track record. There just isn't enough evidence to gauge how well you manage credit &mdash; this happens with time. You have a short credit history, and unfortunately, your credit score pays the price. The good news, however, is that this is a temporary problem.</p> <h2>What Can You Do?</h2> <p>Credit scores range from 300 to 850. If you're aiming for a <a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score?ref=internal" target="_blank">perfect credit score</a>, understand that it takes years of responsible credit habits to achieve. It doesn't matter how well you manage your credit accounts in the first one or two years, you probably won't have as high of a credit score as someone who's had A+ credit for eight or nine years &mdash; but you can get there.</p> <p>Remember, your payment history and the amount you owe make up 35% and 30% of your credit score, respectively. So while your credit score might be low due to a short credit history today, keeping your credit card balances low and making timely monthly payments will gradually increase your score. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">How to Protect Yourself From Predatory Lending</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Why You Shouldn&#039;t Panic If Your Credit Score Drops</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance age credit bureaus credit history credit score interest rates loans on time payments risk Tue, 07 Mar 2017 10:01:04 +0000 Mikey Rox 1901331 at http://www.wisebread.com Is an All-Cash Diet Right for You? http://www.wisebread.com/is-an-all-cash-diet-right-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-an-all-cash-diet-right-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-170955646.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>An all-cash diet is pretty much exactly what it sounds like: You pay cash for all of your daily expenses. The idea is that it makes you more conscious of your spending than if you use debit or credit cards. But an all-cash diet isn't necessarily right for everyone. Let's go over how this budgeting strategy might work for you.</p> <h2>How Does It Work?</h2> <p>Once you've <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">created a budget</a>, you need to determine how much income you have left every month after you've paid your fixed expenses, such as rent, utilities, debt payments, and insurance. This is the amount of money you can use for things like groceries, gas, and other day-to-day expenses during the month. You can then withdraw this amount in cash to spend on these expenses over the next four weeks. It's important that you allocate your cash properly so that you don't end up spending it all in one category at one time.</p> <p>To make it easy, consider splitting up your monthly allotment into four envelopes, one for each week. You may not spend all of the money in the envelope each week. For example, maybe you didn't drive much that week, and didn't need to stop for gas. In that case, more surplus means more for your savings.</p> <p>If you are worried about leaving that much cash in your home, then just make a trip to your ATM on the same day every week to withdraw the money for your weekly spending. (See also: <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system?ref=seealso" target="_blank">A Comprehensive Guide to the Envelope System</a>)</p> <h2>The Benefits</h2> <p>The ultimate goal of this lifestyle change is to have cash left over at the end of the month, which you can use to pay off debt or devote to savings and investments. There is a range of short- and long-term benefits associated with the strategy, too.</p> <h3>1. Helps You Cut Spending</h3> <p>Multiple studies have shown that people spend more when they use a credit card than when they <a href="http://web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf" target="_blank">pay with cash</a>. That's because when you use cash, you have a better feeling for just how much you're spending than when you use so-called invisible money (debit or credit cards).</p> <p>By physically handing over cash for your purchases, you see the money leave your possession. Hence, you're much more likely to consider on the spot if the purchase is really worth it. Alternatively, when you use a card, you don't really feel the effect of a purchase until later, when you receive your credit card bill or see the transaction online. That can make it easier to overspend with plastic.</p> <p>If you regularly go over your monthly budget and can't seem to figure out why, then switching to an all-cash diet can quickly help you pinpoint exactly where your money's going. Using cash can encourage you to only buy what you really need and avoid impulse purchases. This is especially helpful if you tend to go on shopping sprees and overspend when you're stressed, upset, or anxious.</p> <h3>2. Reduces Some Fraud and Charging Errors</h3> <p>Using cash also reduces the chance of accidental overcharging, or worse, fraud by retail and restaurant staff. Stores and restaurants do occasionally unintentionally double charge your card, and wait staff have been known to steal credit card data. It is usually not until we get home or are balancing our checkbooks later that we realize the error or fraud, and by then it can be difficult to correct. Alternatively, using cash ensures that you're never in that situation.</p> <h3>3. Streamlines Store Returns</h3> <p>When you're making a return with a card, you usually need to have the exact card that you paid with. On the other hand, if you paid with cash, you can quickly get the refund in cash.</p> <h3>4. Reduces Overdraft Fees</h3> <p>If you're prone to accidentally overspending on your debit card and then having to deal with overdraft fees, an all-cash diet may help you. You <em>can </em>still overdraw your account by taking too much money out at the ATM, but you're less likely to do that by mistake, especially if you only take out a certain amount every week. Over time, you can save quite a bit on what would have otherwise been wasted on overdraft fees.</p> <h2>When to Use Credit Cards</h2> <p>Even if you decide to stick to an all-cash diet indefinitely, there are some times to make exceptions and use credit cards. This is a particularly true if you're trying to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal" target="_blank">improve your credit score, </a>since using credit cards responsibly is an easy way to build credit. But you don't have to charge a lot to get the credit score benefit (in fact, it's better if you keep your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization</a> low), so you could still use cash for out-of-pocket expenses and charge one or two monthly expenses, such as your Internet and electricity bills, to your credit card. Just make sure you pay those charges off in full and on time every month.</p> <p>In fact, even if your credit score is good, you may want to keep at least one credit card open and active to help maintain your score, especially if you don't have a mortgage or other loans you're paying. It's also good to have a credit card on hand for online purchases (credit cards are safer than debit for web shopping), car rentals, and for emergencies. To keep the account open you'll need to continue using it occasionally. Again, a good way to do this is by charging a monthly expense to your credit card and paying it off in full.</p> <p>If you're racking up <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">travel rewards</a>, <a href="http://www.wisebread.com/everything-you-need-to-know-about-frequent-flyer-miles?ref=internal" target="_blank">frequent flyer miles</a>, or <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal" target="_blank">cash back</a> on a particular credit card, then you may still want to use that card for certain purchases. For example, if you earn extra points for travel expenses, then you may want to continue using your card for these types of purchases. You can also use a rewards credit card for large purchases. Not only is it safer than carrying around large amounts of cash, you'll also earn a big bunch of points for that expensive purchase.</p> <p>Some credit cards also offer <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=internal" target="_blank">additional benefits</a>, such as free travel insurance and rental car insurance. If you need these services, then it's better to use a credit card that offers them for free than to pay extra for them with cash.</p> <h2>Give It a Try</h2> <p>You don't have to devote your life to the all-cash diet right away. Consider just trying it for two to three months to see how much you can save.</p> <p>If you find that you're running out of cash midweek or are still regularly reaching for your credit cards, you may want to re-evaluate your spending habits altogether. Even if you find that the all-cash diet is not right for you, it can help you get a better handle on how much you're spending and how to improve your budget.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/is-an-all-cash-diet-right-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-no-budgeting-required">How to Manage Your Money — No Budgeting Required</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-everyday-money-tasks-youve-been-doing-wrong">12 Everyday Money Tasks You&#039;ve Been Doing Wrong</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-a-spending-ban-can-help-and-hurt-you">Here&#039;s How a Spending Ban Can Help (and Hurt) You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days">How to Come Up With $1,000 in the Next 30 Days</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting cash diet credit score Envelope system expenses overdraft fees overspending paying in cash saving money Mon, 06 Mar 2017 10:00:11 +0000 Andrea Cannon 1902771 at http://www.wisebread.com 6 Credit Card Mistakes That Could Be Ruining Your Credit http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-credit-card-mistakes-that-could-be-ruining-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-585795908.jpg" alt="Woman learning credit card mistakes that could be ruining her credit" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>It's difficult to overstate how important your credit record and credit score are. Not only will <a href="http://www.wisebread.com/what-is-a-good-credit-score-range?ref=internal" target="_blank">good credit</a> enable you be approved for the <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">most attractive credit cards</a>, it's vital for receiving the lowest rates on a car loan, a mortgage, and on home and auto insurance premiums. It can even make the difference in whether you get the apartment or job you want, since both landlords and employers often run credit checks on applicants. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Unfortunately, many credit card users are making big mistakes that are ruining their credit. Since it can take years for some of the most negative items to drop off your credit report, it's crucial to avoid making these mistakes in the first place. Here are six credit card mistakes that could be ruining your credit.</p> <h2>1. Paying Late<strong> </strong></h2> <p>The most important factor in your FICO score &mdash; the most popular credit score lenders use to evaluate you &mdash; is your payment history. It makes up 35% of your score. (See also: <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=seealso" target="_blank">5 Things with the Biggest Impact on Your Credit Score</a>)</p> <p>If you are using a credit card, your first priority should be to <em>always </em>pay your credit card bill on time. While one bill paid a few days late won't cause lasting damage to your credit score, paying late frequently will hurt more. On top of that you'll usually be subject to late fees.</p> <p>Thankfully, there are many tools to help you pay on time. Most credit card issuers offer automatic payments to ensure that you never pay late. You can also request a specific payment due date so you can arrange all your bills to be due at the same time each month. That way you can sit down and pay bills just once a month rather than keeping track of various bills as they come in. Additionally, you can sign up for payment reminders by email or text.</p> <h2>2. Paying Less Than the Minimum<strong> </strong></h2> <p>Paying just the minimum payment on your credit cards will <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=internal" target="_blank">hurt you financially</a>, but paying below that is even worse &mdash; much worse.</p> <p>To avoid being considered delinquent on a credit card account, you not only have to make your payments on time, but the payments must be <em>at least </em>the minimum amount required, which is stated on your bill. If your payment is below the minimum, it doesn't matter if it was on time. The payment will still be considered late, causing a hit to your credit score.</p> <h2>3. Failing to Pay<strong> </strong></h2> <p>Miss a payment for at least 60 days and your creditors start wondering if you're going to pay at all. That's why you'll start to see more serious consequences than a single lapse of a few days would cause. After two missed billing cycles an issuer can impose a high <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">penalty interest rate</a> on the account, on top of late fees. And while those charges alone are costly, your credit will also start to really suffer.</p> <p>A payment that's 90 days overdue is extremely damaging to your credit score and takes seven years to fall off your credit record. At 120 days late, your debt will likely be <a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off?ref=internal" target="_blank">charged off</a> and sold to collectors, which harms your credit score even more. (See also: <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time?ref=seealso" target="_blank">What to Do If You Can't Pay Your Bills on Time</a>)</p> <p>If you are unable to pay your credit card bill for any reason, you should reach out to your card issuer to let them know. You may be able to <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt" target="_blank">negotiate a debt repayment plan</a>.</p> <h2>4. Having High Balances<strong> </strong></h2> <p>After payment history, the second most important factor in your credit score is how much you owe. It accounts for 30% of your FICO score. Maxing out your credit cards, or coming close to it, hurts your credit score.</p> <p>Ideally you want your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> &mdash; the amount of debt you have divided by your total available credit &mdash; to be below 30%. The lower you can get it, the better off your credit score will be. The best way to lower it is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off your balances quickly</a>. (See also: <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off" target="_blank">5-Day Debt Reduction Plan: Pay It Off</a>)</p> <h2>5. Not Having Enough Credit Cards<strong> </strong></h2> <p>The other way to lower your credit utilization ratio is to increase the amount of available credit you have. If you have just one or two credit cards, and you are using up most of the credit lines available on them, you may benefit from having another card &mdash; but only if you can resist the temptation to ring up a bunch more debt on it. Remember, raising your credit line only to add more debt will drop your credit score.</p> <p>Pick a basic, <a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees?ref=internal" target="_blank">no-annual-fee card</a> and then use it once a month or so for a small purchase, such as a tank of gas, that you can pay off immediately. That will keep the account active without putting you in debt. (See also: <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?ref=seealso" target="_blank">7 Questions to Ask to Help Choose the Perfect Credit Card</a>)</p> <p>Similarly, you could request a credit line increase for the accounts you already have. If you've been paying on time, chances are you can get a credit limit increase by simply calling your issuer and asking.</p> <p>Just be aware that credit card issuers will pull your credit report before approving you for a new credit card, and usually for a credit line increase, too. This will result in a hard pull on your credit, which will ding your credit score. Even a few points could be important if you're about to apply for a mortgage, so wait to ask for new credit until after you've done that.</p> <h2>6. Canceling Your Oldest Credit Cards<strong> </strong></h2> <p>Closing any credit card will raise your credit utilization ratio, but closing your oldest accounts harms a different part of your credit score. Your length of credit history accounts for 15% of your FICO score. While an account in good standing will remain on your credit report for about 10 years after you've closed it, it will eventually be removed and hurt your score. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso" target="_blank">5 Times It's Okay to Close a Credit Card</a>)</p> <p>If you don't need to use a card, it may be better to put the card in a secure location, but keep the account open. If the account has an annual fee, you can ask to have the fee waived, or the account changed to a different card without the annual fee.</p> <p>Don't let these credit card mistakes ruin your credit. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-credit-card-mistakes-that-could-be-ruining-your-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg&amp;description=6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg" alt="6 Credit Card Mistakes That Could Be Ruining Your Credit" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/need-a-game-to-learn-to-manage-your-credit">Need a game to learn to manage your credit?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-a-solid-credit-score-saves-you-money">How a Solid Credit Score Saves You Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-you-think-affect-your-credit-score-but-dont">10 Things You Think Affect Your Credit Score — But Don&#039;t</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">How to Avoid Getting Your Credit Card Canceled</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budgets credit credit rating credit report credit score money mistakes Tue, 21 Feb 2017 10:31:29 +0000 Jason Steele 1892848 at http://www.wisebread.com Avoid These 6 Mistakes Newbies Make With Their First Credit Cards http://www.wisebread.com/avoid-these-6-mistakes-newbies-make-with-their-first-credit-cards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/avoid-these-6-mistakes-newbies-make-with-their-first-credit-cards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-611298896.jpg" alt="Woman making mistakes with her first credit cards" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Getting your first credit card is a financial milestone. Your credit card can become an essential tool that builds your credit and helps you manage your money. But too many credit card rookies have gotten in trouble with debt and fees, while others simply miss out on important benefits. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-before-getting-your-first-credit-card-0?ref=seealso" target="_blank">What You Need to Know Before Getting Your First Credit Card</a>)</p> <p>If you are about to apply for your first credit card, or are already using it, be careful not to make these six common mistakes.</p> <h2>1. Failing to Read the &quot;Fine Print&quot;<strong> </strong></h2> <p>Getting a credit card is an important financial decision, and you need to read the details before choosing one. Thankfully, the most important terms and conditions of credit cards aren't even written in fine print anymore. By law, credit card offers must show all of the interest rates and fees in a standard format and in large print, in what's called the <a href="http://www.wisebread.com/decipher-credit-card-offers-with-the-schumer-box?ref=internal" target="_blank">Schumer Box</a>. And while you don't need to hire a lawyer to go over every single sentence, you should understand the interest rates being charged and all of the fees you could incur.</p> <h2>2. Applying for the First Offer Without Comparing Interest Rates<strong> </strong></h2> <p>When you are <a href="http://www.wisebread.com/10-questions-to-ask-before-accepting-a-credit-card-offer?ref=internal" target="_blank">considering a credit card offer</a>, you should take a close look at the standard APR (annual percentage rate) for purchases, and compare it to competing cards. Interest rates vary widely from card to card. If your account ever carries a balance (as more than 40% of all credit card accounts do), it's important to have the lowest possible interest rate. (See also: <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?ref=seealso" target="_blank">Best Low Interest Credit Cards</a>)</p> <h2>3. Signing Up for a Premium Rewards Card<strong> </strong></h2> <p>Just as you wouldn't want a novice driver to have an expensive luxury car, it's not a good idea for a first-time credit card user to have a <a href="http://www.wisebread.com/the-5-best-premium-credit-cards?ref=internal" target="_blank">premium rewards card</a> with a large annual fee. As a newbie user, you are unlikely to use all the benefits that account for the annual fee. It's better to look for a basic card that will let you build credit with <a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees?ref=internal" target="_blank">no annual fee</a>. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-college-students" target="_blank">Best Credit Cards for Students</a>)</p> <h2>4. Missing Payments<strong> </strong></h2> <p>The primary way that credit cards differ from debit and <a href="http://www.wisebread.com/5-best-prepaid-debit-cards?ref=internal" target="_blank">prepaid cards</a> is that you have to make a payment every month. If you fail to make at least the minimum payment on time, every month, then you will usually be faced with a much higher <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">penalty interest rate</a>, along with late fees. And when you repeatedly pay late, your <a href="http://www.wisebread.com/how-late-payments-affect-your-credit?ref=internal" target="_blank">credit will suffer severely</a>.</p> <p>On the other hand, you can quickly build excellent credit with a steady record of on-time payments. To make it easier to remember, sign up for email, phone, or text reminders of your due date. For even more assurance that you'll pay on time, sign up for auto-payments that clear your balance every month. Just be sure to look at your statements to make sure there are no fraudulent charges.</p> <h2>5. Making Just the Minimum Payment<strong> </strong></h2> <p>It can be tempting to pay just a little each month, but it will cost you dearly over time. The best way to use a credit card is to avoid interest charges by paying each month's statement balance in full and on time. But if you absolutely can't do that, then you should try to pay as much as possible, as early as possible. Most credit cards charge interest based on your average daily balance, so the sooner you can make a payment, and the more you can pay, the better. If you feel like you need a nudge to stay out of debt, you may consider a <a href="http://www.wisebread.com/no-limit-no-interest-whats-the-deal-with-charge-cards?ref=internal" target="_blank">charge card</a>, which has to be settled at the end of every month.</p> <h2>6. Missing Out on Benefits<strong> </strong></h2> <p>Besides being a convenient way to pay, most <a href="http://www.wisebread.com/4-surprising-reasons-to-always-use-your-credit-card?ref=internal" target="_blank">credit cards come with a lot of perks</a>, just for having the account. For example, you can receive <a href="http://www.wisebread.com/what-does-car-rental-insurance-really-cover-on-your-credit-card?ref=internal" target="_blank">free rental car insurance</a> with most credit cards, but only when you use your card to pay for the rental and decline the optional coverage that the rental company offers. Other perks featured with many credit cards include <a href="http://www.wisebread.com/how-free-extended-warranties-work-on-credit-cards?ref=internal" target="_blank">extended warranty coverage</a>, price protection, and purchase protection against theft and accidental damage. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso" target="_blank">Awesome Credit Card Perks You Didn't Know About</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Favoid-these-6-mistakes-newbies-make-with-their-first-credit-cards&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FAvoid%20These%206%20Mistakes%20Newbies%20Make%20With%20Their%20First%20Credit%20Cards.jpg&amp;description=Avoid%20These%206%20Mistakes%20Newbies%20Make%20With%20Their%20First%20Credit%20Cards" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Avoid%20These%206%20Mistakes%20Newbies%20Make%20With%20Their%20First%20Credit%20Cards.jpg" alt="Avoid These 6 Mistakes Newbies Make With Their First Credit Cards" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/avoid-these-6-mistakes-newbies-make-with-their-first-credit-cards">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off">What Happens When Your Credit Card Debt Is Charged Off?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-making-these-5-costly-credit-card-mistakes">Stop Making These 5 Costly Credit Card Mistakes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-all-of-the-benefits-of-your-credit-cards-and-none-of-the-costs">How to Get All of the Benefits of Your Credit Cards — and None of the Costs</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-that-wont-hurt-your-credit-score">5 Financial Mistakes That Won&#039;t Hurt Your Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budgeting charge cards credit mistakes credit score late payments minimum payments rewards cards spending Mon, 20 Feb 2017 10:30:32 +0000 Jason Steele 1892847 at http://www.wisebread.com 4 Reasons Credit Is Safer Than Debit http://www.wisebread.com/4-reasons-credit-is-safer-than-debit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-reasons-credit-is-safer-than-debit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-534335174.jpg" alt="Woman learning credit is safer than debit" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>A debit and credit card may look the same, but they offer very different services. One takes money directly out of your bank account at the point of purchase. The other sends you a bill at the end of the month to pay for your transactions. If you're a Millennial who grew up during the Great Recession or someone else who's struggled with debt, a debit card may be your first choice for payment.</p> <p>But overall, Americans increasingly prefer credit cards to debit cards. In 2016, credit cards for the first time surpassed debit cards as the favored payment method, according to the TSYS 2016 U.S. Consumer Payment Study. Forty percent of respondents chose credit cards as their most preferred payment type, compared to 35% who chose debit cards.</p> <p>That makes sense from a security perspective. While debit cards have the advantage of preventing you from going into debt, they don't compare to credit cards when it comes to safety. Here's why.</p> <h2>More Types of Credit Card Transactions Are Protected by Law<strong> </strong></h2> <p>Credit card users are much better protected by law. The <a href="https://www.ftc.gov/sites/default/files/fcb.pdf" target="_blank">Fair Credit Billing Act</a> (FCBA) allows you to dispute not only fraudulent charges on your account, but also charges that are the result of merchant error. You can even dispute authorized charges and temporarily withhold payments &mdash; without harm to your credit score &mdash; if you are unsatisfied with the goods or services you purchased and the merchant won't refund your money. (The goods must be worth $50 or more and have been bought within 100 miles of your home in order to qualify for this protection.)</p> <p>In contrast, debit cards are protected by the <a href="https://www.federalreserve.gov/boarddocs/supmanual/cch/efta.pdf" target="_blank">Electronic Fund Transfer Act</a>, which doesn't cover disputes on authorized charges to your debit card, just unauthorized charges. (See also: <a href="http://www.wisebread.com/why-millennials-should-embrace-credit-cards?ref=seealso" target="_blank">Why Millennials Should Embrace Credit Cards</a>)</p> <h2>Credit Cards Users Enjoy a More Generous Dispute Window</h2> <p>Legally, you've got more time to dispute a credit card charge than a debit card charge. The FCBA caps your liability at $50 as long as you dispute the transaction within 60 days of the date your billing statement was mailed to you. And there's no time limit for disputes if your credit card was included in a <a href="http://www.wisebread.com/heres-what-to-do-immediately-after-a-credit-card-breach?ref=internal" target="_blank">security breach</a>.</p> <p>With debit cards, your liability is also legally limited to $50, but only if you report the billing error <em>within two business days of the transaction</em>. The liability cap goes up to $500 if you report the mistake within 60 days, and you may not have any protections at all if you wait longer than that.</p> <h2>Fraudulent Credit Card Charges Don't Have an Immediate Impact<strong> </strong></h2> <p>Should a criminal make an unauthorized charge or a vendor accidentally charge you the wrong amount on your debit card, your bank account will be immediately affected until you can resolve the problem. That's not so for a credit card. An accidental or fraudulent charge on your credit card will affect your available credit until you dispute it, but unlike a charge made on your debit card, it won't affect your ability to pay bills from your bank account. (See also: <a href="http://www.wisebread.com/top-seven-reasons-why-i-use-my-credit-card-for-everything?ref=seealso" target="_blank">7 Reasons I Use My Credit Card for Everything</a>)</p> <h2>Credit Cards Protect Your Purchases Better Than Debit Cards<strong> </strong></h2> <p>Credit cards often come with one or all of the following <a href="http://www.wisebread.com/4-surprising-reasons-to-always-use-your-credit-card?ref=internal" target="_blank">protective benefits on purchases</a>.</p> <h3>Purchase Protection<strong> </strong></h3> <p>If your purchase is stolen or accidentally damaged, this benefit can replace or repair it, or reimburse you for its cost. Policies vary, but some cover you for up to $10,000. (See also: <a href="http://www.wisebread.com/how-credit-cards-protect-your-purchases-from-damage-or-theft?ref=seealso" target="_blank">How Credit Cards Protect Your Purchases From Damage or Theft</a>)</p> <h3>Extended Warranty<strong> </strong></h3> <p>Most credit cards offer an extended warranty policy that can add up to two years to the manufacturer's warranty of covered items. (See also: <a href="http://www.wisebread.com/how-free-extended-warranties-work-on-credit-cards?ref=seealso" target="_blank">How Free Extended Warranty Works on Credit Cards</a>)</p> <h3>Return Protection<strong> </strong></h3> <p>There are times when you want to return a purchase, but the retailer will not accept it. Credit cards that offer a return protection policy may issue you a refund if you contact them within 90 days of the purchase.</p> <p>It's extremely rare to find a debit card that offers you any of these benefits. (See also: <a href="http://www.wisebread.com/credit-cards-vs-debit-cards-a-comprehensive-comparison?ref=seealso" target="_blank">Credit Cards vs. Debit Cards: A Comprehensive Comparison</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/4-reasons-credit-is-safer-than-debit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-free-extended-warranties-work-on-credit-cards">How Free Extended Warranties Work on Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-return-items-through-your-credit-card-if-the-store-refuses">How to Return Items Through Your Credit Card If the Store Refuses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about">14 Awesome Credit Card Perks You Didn&#039;t Know About</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-your-credit-card-will-save-you-money-while-holiday-shopping">11 Ways Your Credit Card Will Save You Money While Holiday Shopping</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-credit-cards-protect-your-purchases-from-damage-or-theft">How Credit Cards Protect Your Purchases From Damage or Theft</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Shopping credit card fraud credit card perks credit score debit card fraud purchase protection Warranty Mon, 13 Feb 2017 10:00:10 +0000 Jason Steele 1889312 at http://www.wisebread.com Why Your Credit Score Matters in Retirement http://www.wisebread.com/why-your-credit-score-matters-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-your-credit-score-matters-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_car_108348263.jpg" alt="Couple learning why credit score matters in retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've left the working world and are ready to enjoy your retirement years. So, you might be forgiven for thinking that your days of fretting over your FICO credit score are over.</p> <p>Guess what? They're not. Your three-digit credit score matters even in your retirement.</p> <p>Lenders of all kinds, not to mention credit card providers, rely on your FICO credit score to determine how well you've managed your credit in the past. Having a low score can hurt you financially, even after you've left the days of commuting to work behind you.</p> <h2>Why Scores Matter</h2> <p>Your FICO credit score &mdash; you have three, one each maintained by the credit bureaus of Experian, Equifax, and TransUnion &mdash; is a key number throughout your adult life. Lenders rely on these scores to determine if you can qualify for loans. And if your score is low, even if you do qualify, you'll pay higher interest rates.</p> <p>Generally, lenders consider a FICO credit score of 740 or higher to be an excellent one. Scores under 640 are generally considered weak by lenders, and will leave you with higher interest rates on the money you borrow.</p> <p>As you make your way through adulthood, lenders will check your scores as you apply for auto loans, mortgages, or credit cards.</p> <p>When you retire, the odds are high that you will no longer be applying for mortgage loans. However, this doesn't mean that credit scores will no longer play a key role in your financial life.</p> <h2>The Best Credit Cards</h2> <p>If you want to <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">qualify for the best credit cards</a>, including ones with the <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">most generous rewards programs</a>, you'll need a high FICO score. Financial institutions only pass out their best credit cards to those customers who've proven that they have a history of paying their bills on time.</p> <p>Having a high credit score is how you'll prove to banks that you are financially responsible. And if you want to qualify for the best credit scores during your retirement, you'll take steps to make sure that your credit score is strong in your 60s, 70s, 80s, and beyond.</p> <h2>A New Car</h2> <p>Maybe you plan to buy that dream car after retirement. If you can't pay for it in cash, you'll need an auto loan. And if you want to qualify for an auto loan with the lowest possible interest rate, you'll need a strong FICO credit score.</p> <p>Auto lenders will check your credit score when you apply for financing. So make sure that your score doesn't take a dip after retirement.</p> <h2>Auto Insurance Rates</h2> <p>If you buy a new car, you'll need auto insurance, too. Guess what? Auto insurers rely on a variation of your credit score to help set their rates. Again, you'll want the highest possible credit score if you expect to qualify for the most affordable auto insurance.</p> <p>Auto insurers use something called a credit-based insurance score to set rates. If this score is strong &mdash; and your driving history is good &mdash; you'll usually qualify for lower insurance rates. Your credit-based insurance score doesn't factor in your job or income. But it will rise if you pay bills such as your credit card payments and mortgage on time every month. It will fall if you miss payments, make payments 30 days or more late, have too much debt, or have accounts that have been sent to collections.</p> <h2>Refinancing to a Lower Monthly Payment</h2> <p>The goal is to enter retirement without having a monthly mortgage payment. That doesn't always happen, though. And if you are still paying off a mortgage loan when you enter your after-work years, you might want to someday refinance that home loan to one with a lower interest rate. Lowering your rate will give you a lower monthly payment. That extra cash each month could be important once you're living on a fixed income.</p> <p>To qualify for a refinance, and for the lowest possible interest rate to make such a move financially worthwhile, you'll again need a high credit score. If your FICO credit score is 740 or higher, the odds are good that you'll qualify for an interest rate low enough to make refinancing a smart financial decision.</p> <p>The lesson here is obvious: You can't put worrying about credit scores behind you just because you've entered retirement. The best move is to continue taking the steps that help guarantee a strong credit score &mdash; paying your bills on time and keeping your credit card debt low &mdash; even after you've left the working world.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-your-credit-score-matters-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage">Make These 5 Money Moves Before Applying for a Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan">4 Reasons Why You&#039;re Too Old — Or Too Young — For a Mortgage Loan</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-the-new-credit-card-formula-means-for-your-wallet">What the New Credit Card Formula Means for Your Wallet</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-lenders-look-for-in-a-loan-application">5 Things Lenders Look For in a Loan Application</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement car insurance credit history credit score fico insurance rates mortgages new car refinancing Mon, 30 Jan 2017 10:00:08 +0000 Dan Rafter 1870059 at http://www.wisebread.com 5 After the Holidays Moves Your Credit Score Will Thank You For http://www.wisebread.com/5-after-the-holidays-moves-your-credit-score-will-thank-you-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-after-the-holidays-moves-your-credit-score-will-thank-you-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-619645214.jpg" alt="make these moves after the holidays to boost your credit score" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The fun part of the holidays is over. Now it's January, and your credit card bill has arrived. It's time for the dark side of the holiday season &mdash; paying for all that December cheer. If you shattered your holiday spending budget, don't panic: Now is the time to take the steps that will not only improve your finances, but boost your all-important credit score.</p> <p>Ready to put the overspending and impulse buying of the holidays behind you? Here are five post-holiday money moves that will give you a stronger credit score in 2017.</p> <h2>1. Pay on Time</h2> <p>You might not be able to pay off your entire holiday credit card bill at once. That's unfortunate, because credit card debt comes with high interest. But if you pay off a bit of the holiday debt every month on time, you will be helping your credit score.</p> <p>The three national credit bureaus of TransUnion, Equifax, and Experian track your on-time credit card payments. If you pay your credit card on time each month, your score will improve. If you are more than 30 days late on a payment, your score will plummet, usually by 100 points or more. And this missed payment will remain on your credit report for seven years.</p> <p>No one likes holiday debt. But look at it as a way to show the credit bureaus that you are responsible enough to make these payments on time. Doing so will do wonders for your credit score.</p> <h2>2. Do a Balance Transfer</h2> <p>Make a plan that will determine how long it will take you to pay down your current debt, and find a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">0% balance transfer credit card</a> that offers an intro APR for that amount of time. Some credit cards offer as much as 21 months at 0% financing. This can <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">save you hundreds to thousands</a> of dollars in interest, and help you pay off the debt faster. Do this only if you have a plan to pay off your debt completely within the intro period. (See also: <a href="http://www.wisebread.com/7-important-things-you-should-know-about-balance-transfer-cards?ref=seealso" target="_blank">What You Need to Know Before Doing a Balance Transfer</a>)</p> <h2>3. Don't Close Unused Credit Cards</h2> <p>If you do pay off a credit card, congratulations! That's a great feeling. But don't close that account, even if you never plan to use your card. Closing unused credit cards will hurt your credit score. That's because of something known as your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit-utilization ratio</a>. Your score will be higher if you are using less of your available credit. If you close a credit card, you will automatically be lowering the amount of credit available to you and increasing your credit-utilization ratio.</p> <h2>4. Order Your Credit Reports</h2> <p>TransUnion, Equifax, and Experian each keep a credit report on you. These reports list your open credit accounts, including credit cards, mortgages, student loans, and auto loans. They also list how much you owe on these accounts and whether you have made any late payments. The reports also list any bankruptcies that are up to seven or 10 years old, and any foreclosures that are up to seven years old.</p> <p>You can order one report from each of the three credit bureaus at no charge from AnnualCreditReport.com. Do it. Then check over your report for any potential mistakes. If you find errors, notify the offending bureau by email. Correcting mistakes can provide an immediate boost to your credit score. And even if you don't find any errors, it's always good to know exactly what kind of information the bureaus have about you.</p> <h2>5. Make a Household Budget</h2> <p>If you want to avoid overspending again next year, and avoid running up the kind of credit card debt that can hurt your credit score, draft a household budget <em>this</em> year. A budget doesn't have to be complicated to be effective. List your monthly revenues and your monthly expenses. Be honest about what you typically spend on items that can fluctuate each month, such as groceries, dining out, and entertainment.</p> <p>Once you have these numbers, you can budget how much you want to spend throughout the year on gifts, decorations, and food for all of the big holidays, not just those that roll around each December. Armed with a budget, your odds of not overspending will increase.</p> <p>Now that the holiday season is over, it's time to change your charging habits. Only charge what you can pay off in full each month. If you want to charge a flat-screen TV, make sure you have enough money saved up to pay it off in full when your next credit card statement comes due.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-after-the-holidays-moves-your-credit-score-will-thank-you-for">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-you-shouldnt-freak-out-if-you-miss-a-payment-due-date">Here&#039;s Why You Shouldn&#039;t Freak Out If You Miss a Payment Due Date</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-credit-without-using-credit-cards">How to Build Credit Without Using Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-repair-mistakes-that-will-cost-you">8 Credit Repair Mistakes That Will Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-that-wont-hurt-your-credit-score">5 Financial Mistakes That Won&#039;t Hurt Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting back on track bills building credit credit history credit repair credit score debt repayment post holidays Thu, 22 Dec 2016 10:00:10 +0000 Dan Rafter 1859598 at http://www.wisebread.com 8 Money-Smart Things I Wish I'd Asked Santa For http://www.wisebread.com/8-money-smart-things-i-wish-id-asked-santa-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-smart-things-i-wish-id-asked-santa-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/santa_good_list_-499122032.jpg" alt="Asking Santa for items on Christmas list" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I spent a couple of decades asking Santa Claus for toys, clothes, and gadgets galore, but I don't have a single thing to show for it &mdash; I mean, besides a basement full of outdated stuff. Instead, I should've begged Ol' Saint Nick for these eight things that would have paid for themselves over and over again &mdash; so I could afford an even bigger basement full of outdated stuff. Take a look:</p> <h2>1. An Impenetrable Credit Score</h2> <p>When I turned 18 and the friendly lady at Discover Card called to ask if I'd like my very own credit card, I enthusiastically said yes. I generally consider that my very first adult mistake. Not that credit cards are bad, but they're the devil in the hands of a financially irresponsible college freshman. Because not only did I max the card out in less than six months, I was unaware that not paying the bill for five years thereafter would result in a disaster of a credit score when I entered the &quot;real world.&quot; If only Santa could have done me a solid by fortifying my credit score &mdash; against myself.</p> <h2>2. Everything Gold</h2> <p>In 2006, I asked Santa Claus for things like seat covers for my vehicle and a new digital camera because that's what materialistic 25-year-olds in major credit card debt ask for. Instead, I should've asked for straight-up gold bars. Heck, I would've been happy with a few flakes &mdash; like this guy who got away with <a href="http://www.nytimes.com/2016/12/04/nyregion/the-one-that-waddled-away-retracing-a-weighty-gold-theft.html">86 pounds of jeweler's &quot;bench sweeps&quot;</a> worth $1.6 million. Because 10 years ago, on Dec. 11, gold was valued at $625.81 per troy ounce. Flash forward a decade and the price has nearly doubled to between $1,100 and $1,200, depending on the day, and that's really just midrange. On Sept. 12, 2011, gold hit its 10-year high of $1,861.49 per troy ounce, which &mdash; if you were feeling lucky that day &mdash; raked in three times its original amount if you unloaded a few bricks.</p> <h2>3. EE Savings Bonds</h2> <p>Hardly anybody gives savings bonds as gifts anymore (well, except maybe your grandma) because what fun is a certificate that you have to hold on to for, like, ever to reap its benefits? But just because they're not as popular as they once were doesn't mean they're not still valuable &mdash; if you got in on them in the 1980s and '90s, that is. EE bonds issued in the 1980s had rates of return of 6% to 9% a year, compared to today's 0.1% annual fixed rate. Mathematically, if you have a $500 bond from June 1983, for instance, it reached full maturity in June 2013, with a value of $1,014.40. Santa, can you hear me?</p> <h2>4. Real Estate in Depressed Markets</h2> <p>Throughout my years living in major cities like Baltimore and NYC, I've heard legendary tales of beautiful row houses and brownstones in economically and socially depressed areas, like Federal Hill in Baltimore and Harlem in New York City, that sold for crazy-low prices like $1. The $1 price is probably a myth, but dilapidated properties have in fact gone for very affordable prices with agreements that buyers reside in their neighborhoods for a specified period of time. I personally know a few people who purchased homes in blighted areas for around $30,000 20 years ago and are now sitting pretty on $2+ million lots.</p> <h2>5. College Tuition</h2> <p>All I needed was a cool $100K, Santa. I would've paid my college tuition and room and board outright so I didn't have to make up for half that amount myself over the next 20 years after graduating. Alas, I'm halfway there, and I've paid two of three notes off, but if you could cut a check for the rest this year, I'd appreciate it.</p> <h2>6. A Trust Fund</h2> <p>My financial woes would be nonexistent if I had asked Santa for a generous trust fund at an early age. Then I'd be just like the rest of my friends who were lucky enough to be related to someone filthy rich &mdash; free of debt with plenty of time to take selfies on a beach and dedicate my life's work to my own liver replacement.</p> <h2>7. Guaranteed Employment</h2> <p>There's nothing more stressful than job hunting, and I'm thankful that I haven't had to do that in a while since I'm self-employed. But self-employment isn't easy, either. I'm responsible for my own income instead of enjoying that twice monthly direct deposit for just showing up at my desk five days a week. Still, even that's on shaky ground if you don't mind your Ps and Qs &mdash; a friend of mine was recently laid off two weeks before Christmas &mdash; so this year I'd like to ask the big guy to make sure everybody can get (or keep) the job they really love for a happy and prosperous 2017.</p> <h2>8. Winning Lottery Numbers</h2> <p>I rarely play the lottery, but I do spend a few bucks when Mega Millions is, like $300 million, because, hey, somebody has to win. If that ever happens, my friends, you'll never hear from me again. Ev-er. Send me those winning numbers, Santa!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-money-smart-things-i-wish-id-asked-santa-for">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-prepare-for-a-home-purchase-in-2010">How to Prepare for a Home Purchase in 2010</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-places-to-stash-your-money-besides-a-savings-account">10 Places to Stash Your Money Besides a Savings Account</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-big-of-a-house-do-you-really-need">How Big of a House Do You Really Need?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-invest-in-the-stock-market">Why invest in the stock market?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bouncing-back-when-theres-no-bounce-left">Bouncing Back When There&#039;s No &quot;Bounce&quot; Left</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living credit score employment gold personal finance real estate santa savings bonds trust funds tuition winning the lottery wishlist Fri, 16 Dec 2016 11:00:09 +0000 Mikey Rox 1853793 at http://www.wisebread.com Why You Shouldn't Panic If Your Credit Score Drops http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-shouldnt-panic-if-your-credit-score-drops" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shocked_bills_183361464.jpg" alt="Woman learning not to panic after a credit score drop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit scores matter &mdash; in a big way. Mortgage lenders rely on these numbers to determine who qualifies for home loans and at what interest rates. You'll struggle to <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal">qualify for the best credit cards</a> if your score is too low. And getting an auto loan? A low score will leave you again with higher interest rates, if you can find financing at all.</p> <p>So what if your credit score takes a fall? First, don't panic. Second, it's time to take the steps necessary to <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=internal">boost your score</a>.</p> <h2>How Scores Work</h2> <p>Before panicking over a credit score drop, it's important to learn how scores work.</p> <p>The most important credit score is your FICO credit score. Generally, lenders consider a FICO score of 740 or more to be in the top range. But if your score is under 640, you'll struggle to qualify for mortgage or auto loans. And when you do qualify, you'll pay high interest rates because lenders view you as a risky borrower.</p> <p>Your credit score is a quick representation of how well you've handled your credit in the past. If you have a history of mailing in credit card payments late, your score will fall. If you've missed payments on your auto loan in the recent past, your score will, again, take a tumble. A large amount of credit card debt could hurt your score, too. (See also: <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=seealso">The Most Important Ratio That Determines Your Credit Score</a>)</p> <p>If you instead have a history of paying your bills on time and have a manageable amount of credit card debt, you should have a solid FICO credit score.</p> <h2>Checking Your Score</h2> <p>You can order one free copy of each of your three credit reports &mdash; maintained by the national credit bureaus of TransUnion, Experian, and Equifax &mdash; each year from AnnualCreditReport.com. This report will list your credit card, auto, mortgage, and other open accounts. It will also list any of your missed or late payments from the last seven years.</p> <p>This is important information to have: It can tell you quickly why your credit score might be lower than you thought. A single missed or late payment can drop your credit score by more than 100 points.</p> <p>But a credit report doesn't list your credit score. To get your score, you'll usually have to pay. You can spend about $15 to order your FICO credit score from Experian, Equifax, or TransUnion. Each of the scores from these credit bureaus might be slightly different, but they should all be fairly similar.</p> <p>Your credit card provider might <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal">provide your credit score</a> with each bill it sends you, too. A growing number of card providers are doing this. Be careful, though: This score might not be your official FICO score, but instead an alternative score. These alternative scores do generally sync up with what your actual FICO score might be, but it's best to order your FICO score if you want to see the same credit score that mortgage and auto lenders will see.</p> <h2>If Your Score Has Dropped</h2> <p>What if your score has taken a fall since the last time you reviewed it? What if it's much lower than you expected?</p> <p>Again, this is not the time to panic. It's the time to act.</p> <p>First, try to determine <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score?ref=internal">why your score might have fallen</a>. Some reasons are obvious: If you forgot to pay your auto loan earlier this year or if you sent in a credit card payment more than 30 days late, your score could dip by 100 points or more. But smaller dips &mdash; ranging from 10 to 60 points or so &mdash; can be the result of less obvious financial missteps.</p> <p>Did you close a credit card lately? You might think that's a smart financial move. After all, once you've paid off a credit card account, you don't want to run up its balance again. By closing it, that can't happen.</p> <p>But closing a credit card can ruin something called your <em>credit utilization ratio</em>. This ratio measures how much of your available credit you are using at any one time. Using too much of your available credit can cause your FICO score to fall. Closing an open credit card account can immediately weaken this ratio. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso">5 Times It's Okay to Close a Credit Card</a>)</p> <p>Here's an example: Say you have three credit cards all with an available credit limit of $3,000. This gives you a total available credit of $9,000. Say you also have $3,000 worth of credit card debt. You are now using 33% of your available credit.</p> <p>If you close one of those cards, you'll immediately lower the amount of credit available to you by $3,000, from $9,000 to $6,000. If you have the same $3,000 of credit card debt, you are now using 50% of your available credit, for a significantly higher credit utilization ratio.</p> <p>Another reason for a sudden fall in your FICO credit score: Have you been applying for several new credit cards? If you are, your score can fall. Every time you apply for a new form of credit, something called an <em>inquiry </em>is filed on your credit report. Each inquiry can cause your credit score to fall by a small amount, maybe one to five points. If you make several inquiries for new credit at the same time, this can cause a bigger drop to your score.</p> <p>The good news is that inquiries don't always hurt your score by much. Say you are ready to apply for a mortgage loan and you are shopping around with different mortgage lenders. Each of these lenders will run a credit check on you. Each of the inquiries that these lenders make, though, will be counted as just one total inquiry. That's because you are applying for one mortgage loan, not several new credit cards.</p> <h2>Fixing a Drop</h2> <p>Once you determine why your credit score has fallen, it's time to fix the problem.</p> <p>Realize, though, that if your score has fallen significantly from a missed or late payment, it will take time to recover. Pay your bills on time and cut back on your credit card debt. Do this for a long enough period of time &mdash; several months, maybe a year or longer &mdash; and your FICO credit score will steadily improve. (See also: <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=seealso">How to Improve Your Credit Score Quickly</a>)</p> <p>If your score has fallen by a smaller amount, say 10 to 50 points, your recovery period will be shorter. Often, these drops will fix themselves. Pay down a good chunk of your credit card debt &mdash; without closing any credit card accounts &mdash; and your score should improve. Keep paying your bills on time every month, and, again, your score will rise.</p> <p>There are no quick fixes for drops in your credit score. But there are also no scores that can't be rebuilt. All it requires is patience, a willingness to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal">pay down large amounts of credit card debt</a> and a vow to pay all of your bills on time every month.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-you-shouldnt-panic-if-your-credit-score-drops">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters">Why the Age of Your Credit History Matters</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-revolving-debt-helps-you">5 Surprising Ways Revolving Debt Helps You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-credit-scores-and-reports-are-not-the-same">Here&#039;s Why Credit Scores and Reports Are Not the Same</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending">How to Protect Yourself From Predatory Lending</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit history credit score FICO score interest rates loans qualifying Thu, 15 Dec 2016 10:00:09 +0000 Dan Rafter 1852821 at http://www.wisebread.com 7 Apps That Monitor Your Credit for You http://www.wisebread.com/7-apps-that-monitor-your-credit-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-apps-that-monitor-your-credit-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-512432890.jpg" alt="use these free apps to monitor your credit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The <a href="http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-continues-climb-will-level/">average FICO credit score</a> of U.S. consumers is 695, according to the latest data from the FICO company. If you think this number is encouraging, you'll also be glad to hear that 54.7% of Americans are able to score at least a 700!</p> <p>This data proves that it's very possible to improve your credit score. There's no excuse these days for not monitoring your credit. Credit score monitoring? There are apps for that! Let's review some of the best free and easy to use apps available for giving your credit score a boost.</p> <h2>1. Credit Karma</h2> <p>Claiming that you can sign up for a new account within two minutes, <a href="http://www.kqzyfj.com/click-2822544-10817209-1462225929000">Credit Karma</a>'s app offers free credit score tracking. Your score and list of reports are updated weekly. Credit Karma offers a credit report card, which breaks down every factor contributing to your credit score health, such as open credit utilization rate and average age of open credit lines, and helps you understand how your actions affect your credit score.</p> <p>Keep in mind that Credit Karma shows you a <a href="https://www.creditkarma.com/credit-scores">Vantage 3.0 credit score</a>, which isn't the same as a <a href="http://www.wisebread.com/fico-vs-fakes-are-you-getting-the-wrong-credit-score">FICO credit score</a>. The app allows you to track your credit score from TransUnion and Equifax (two of three main credit reporting bureaus, the third one is Experian). To learn more details about Credit Karma, take a look at <a href="http://www.wisebread.com/get-free-credit-score-monitoring-with-credit-karma">our review</a>.</p> <h2>2. Mint: Money Manager, Budget and Personal Finance</h2> <p>Besides being a <a href="http://www.wisebread.com/6-free-debt-management-tools">free debt management tool</a>, Mint offers a free credit monitoring app that provides an easy-to-understand summary of how you can improve your credit score. The credit score provided under any of these apps is the Equifax Credit Score, which is a proprietary credit model developed by Equifax.</p> <p>By connecting your bank accounts, credit cards, and investments accounts to your Mint account, you'll have a comprehensive picture of all of your finances, too.</p> <h2>3. Credit Sesame</h2> <p><a href="http://www.dpbolvw.net/click-2822544-12336153-1455123184000">Credit Sesame</a>'s app offers you a peek into your Experian National Equivalency Score (ENES). While the FICO credit score ranges from 300 to 850, the ENES ranges from 360 to 840.</p> <p>By using this alternate credit scoring model, Credit Sesame is able to perform a &quot;soft&quot; pull on your credit history and show you how much you owe, what your current interest rates are, and what your credit score is.</p> <p>Additionally, Credit Sesame offers you some refinancing options in partnership with Lending Club to pay off higher-interest debt. To help you understand whether or not this would be a good fit for you, Wise Bread took a <a href="http://www.wisebread.com/lower-interest-rates-with-credit-sesame-and-lending-club">closer look at Credit Sesame' services</a> and the steps of the loan process application process through Lending Club.</p> <h2>4. Credit.com</h2> <p>Credit.com is another option to access your Experian National Equivalency Score and Vantage 3.0 credit score at no cost. You'll receive a grade, ranging from A+ to F, for each one of the five factors affecting your credit score: payment history, debt usage, credit age, account mix, and number of inquiries.</p> <p>Through its visual aids and specific action items, this app allow you to spot credit blunders and understand how to fix them.</p> <h2>5. Experian</h2> <p>Since so many of these apps use the credit rating model from <a href="http://www.experian.com/consumer-products/credit-monitoring.html">Experian</a>, you may be wondering if you can just go straight to the source. Yes, you can! Through the app you'll monitor changes to your Experian credit profile and have the option to sign up for push notifications directly on your device whenever a change takes place. Your free Experian credit report is updated every 30 days.</p> <h2>6. TransUnion</h2> <p>The credit reporting bureau allows you to <a href="https://www.transunion.com/credit-monitoring">check your TransUnion credit report</a> from your smartphone. Similar to the FICO credit score, the <a href="http://www.tkqlhce.com/click-2822544-12771108-1480442728000">TransUnion</a> credit score ranges from 300 to 850. Still, remember that the FICO and TransUnion credit score aren't the same.</p> <h2>7. CreditWise</h2> <p>CreditWise offers free credit monitoring services from Capital One. You don't need to be a Capital One customer to sign up for a new account. If you're an existing user of the Capital One CreditTracker service, you can use your existing username and password that you use at the CapitalOne.com site. Every week, this app will provide your TransUnion credit score. A differentiating factor of CreditWise is its credit simulator, which allows you to simulate ways to improve your TransUnion credit score.</p> <h2>The Bottom Line: Know Your Score!</h2> <p>FICO maintains a total of 28 different FICO scores, which are widely used by issuers of home, auto, and credit card loans. Remember that each one of these apps offers a free snapshot of a credit score based on a separate model and that snapshot is only for educational purposes. If you want to get the actual FICO credit score, you'll have to pay <a href="http://www.myfico.com/products/credit-score-monitoring-products/">at least $19.95 per month</a>.</p> <p>While the advice provided by any of these services can be valuable to improve your credit score, your potential lender may be working with a very different score than the one gleaned from an app. If you're working toward meeting the requirements for a mortgage or auto loan, ask your lender what credit score she's using. That way, you'll choose the app that can provide a more accurate estimate.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-apps-that-monitor-your-credit-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/once-bitten-twice-shy-what-is-credit-security-worth-to-you">Once Bitten Twice Shy: What is Credit Security Worth to You?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-the-new-credit-card-formula-means-for-your-wallet">What the New Credit Card Formula Means for Your Wallet</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-that-wont-hurt-your-credit-score">5 Financial Mistakes That Won&#039;t Hurt Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-apps-that-actually-pay-you-to-shop">8 Apps That Actually Pay You to Shop</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-best-couponing-apps">The 10 Best Couponing Apps</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Technology apps credit karma credit monitoring credit score Equifax Experian fico mint smartphones TransUnion Tue, 06 Dec 2016 12:00:17 +0000 Damian Davila 1848172 at http://www.wisebread.com