credit score http://www.wisebread.com/taxonomy/term/8451/all en-US 9 Actions to Take When You're Denied a Credit Limit Increase http://www.wisebread.com/9-actions-to-take-when-youre-denied-a-credit-limit-increase <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-actions-to-take-when-youre-denied-a-credit-limit-increase" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_man_working_at_home_office_0.jpg" alt="Young man working at home office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Ready to make a big purchase just to have your credit limit increase denied? How rude! Don't worry: There are a few ways around this letdown with a little financial finagling. Here's what's to do. (See also: <a href="http://www.wisebread.com/4-questions-to-ask-before-getting-a-credit-increase?ref=seealso" target="_blank">4 Questions to Ask Before Getting a Credit Increase</a>)</p> <h2>1. Show the creditor you're serious about reducing your debt</h2> <p>In all likelihood, you're being denied a credit limit increase because you're a risk for the bank. Maybe 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>, which measures how much of your available credit you have already spent, is tipping too far into the no-no zone. Or perhaps you've been inconsistent with payments &mdash; and if that's the case, why should they invest even more money in you? It's nothing personal, of course; business is business. But now you have to prove to the creditor that you're serious about managing your money in a responsible and timely manner.</p> <p>&quot;Talk to the issuer to determine the reason for the denial and then work to make improvements, which would likely include paying down a portion of your balance,&quot; says Chantel Bonneau, a leading financial adviser for Northwestern Mutual. &quot;Also, overall, a good rule of thumb is to ask for increased credit when you <em>don't</em> need it, not when you do.&quot;</p> <p>Plus, some lenders just have rules. For example, certain card companies will only increase credit once per year. Others will automatically reject a credit limit increase if you've had any late payments in the last 6 months. If you get denied and have no idea why, ask. With the right information, you can proactively work on reversing the decision.</p> <h2>2. Cut back on your spending</h2> <p>You typically won't be denied a credit increase if you have enough money in the bank to justify a creditor taking the risk of lending you more. Show that you're serious about getting on the right track by cutting back on your overall spending.</p> <p>&quot;I recommend sitting down and looking at the areas where you spend more money than you really ought to,&quot; say Natasha Rachel Smith, personal finance expert at TopCashback.com. &quot;If you notice a pattern, consider cutting back or looking for a cheaper alternative. Cut down on spending and put more toward paying down debt or toward your savings.&quot;</p> <h2>3. Order your credit report and look for errors</h2> <p>If you feel like you're on top of your credit cards and consumer debt, and don't quite understand why you've been denied the increase, maybe there are other factors at work that you're unaware of. Order your free annual credit reports from the three major credit bureaus via <a href="https://www.annualcreditreport.com/index.action" target="_blank">AnnualCreditReport.com</a> to start investigating any potential errors or inaccuracies.</p> <p>Consider these questions when digging into your credit report:</p> <ul> <li> <p>Do you have late bills or other negative marks? If so, are they accurate?</p> </li> <li> <p>Does any activity appear fraudulent or unauthorized?</p> </li> </ul> <ul> <li> <p>What is your ratio of outstanding debt to income?</p> </li> </ul> <p>If anything seems amiss on paper, start the process of fixing the discrepancies by first writing a letter to the credit bureau detailing what you think is wrong. This is the best first step. Calls and emails aren't ideal here. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <h2>4. Fix the issues associated with your rejection</h2> <p>If you've been denied a credit limit increase, you'll usually receive a response explaining why you didn't get approved. Read over the explanation and take the necessary steps to fix the issues.</p> <p>&quot;Whether your credit score is too low or you're utilizing 30 percent or more of your credit line, you need to fix the issues before requesting a new credit limit increase,&quot; Smith explains. &quot;Be mindful that some banks might require that you wait a few weeks or months before requesting a limit hike, while others will let you make a new request at any time. Make sure to call your bank's customer service to ask about anything you're unsure about before trying again.&quot;</p> <h2>5. Get a human being on the phone</h2> <p>If you used an automated process to request the increase online, your next step is to talk to a human being and ask for one. (After screaming, &quot;Representative!&quot; into the phone a few times during the automated tutorial, of course.) This way, you can explain your situation over the phone and tell them why you need a limit increase. You may not get a better outcome, but it can't hurt to try.</p> <h2>6. Try increasing another card with which you may have better history</h2> <p>If you have multiple cards and you're better at paying down one more than another (hopefully the one with the highest interest), that's the card on which you should pursue the increase. If that's doesn't work, try another card. Maybe you don't have as much debt on that card, which could increase your chances of getting what you want. Keep all interest rates in mind, however &mdash; especially if you're making a big purchase that you may not be able to pay off quickly. You don't want to screw yourself in interest charges that'll leave you worse off than you were before.</p> <h2>7. Consider asking your boss for a raise</h2> <p>Being denied a credit limit increase could be the perfect time to ask for a raise. Has it been awhile since your last one? Are you overdue? Do you think your performance warrants a raise? It never hurts to ask. The more income you report, the more the credit issuer will favor you.</p> <h2>8. Think of other ways to earn extra income</h2> <p>If you're already struggling to pay debt, you need to bring in more income. There are plenty of ways to do that these days with all the side gigs available. Look into your options, including taking on a roommate, listing your space on Airbnb, driving for Uber or Lyft, dog sitting through Rover.com, or delivering groceries via Instacart. All are really easy ways to earn extra cash without putting a burden on your full-time job or responsibilities. Any extra money you make can go straight toward paying down debt to improve your credit score so you're not denied an increase in the future. (See also: <a href="http://www.wisebread.com/14-best-side-jobs-for-fast-cash?ref=seealso" target="_blank">14 Best Side Jobs For Fast Cash</a>)</p> <h2>9. Look into a 0% APR credit card</h2> <p>If you've been denied a credit limit increase due to your bad credit, it's unlikely you'll be approved for another credit card. But maybe you got denied because you made one late payment two months ago, in an otherwise stellar payment history. If that's the case, and you're ready for a big purchase, you might be approved for a new credit card that offers a <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?ref=internal" target="_blank">0% intro APR on purchases</a> during a promotional period. That gives the added benefit of some interest free time to pay off that big purchase.</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/9-actions-to-take-when-youre-denied-a-credit-limit-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-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-a-surprise-credit-limit-increase-can-harm-you">How a Surprise Credit Limit Increase Can Harm 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/4-questions-to-ask-before-getting-a-credit-increase">4 Questions to Ask Before Getting a Credit Increase</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/3-easy-ways-to-improve-your-credit-score-during-the-holidays">3 Easy Ways to Improve Your Credit Score During the Holidays</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/can-too-many-credit-cards-hurt-your-credit-score">Can Too Many Credit Cards 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/debunking-8-common-credit-score-myths">Debunking 8 Common Credit Score Myths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance balance transfers credit limits credit score credit utilization ratio extra income limit increase reducing debt Mon, 11 Dec 2017 09:00:07 +0000 Mikey Rox 2068671 at http://www.wisebread.com How to Bounce Back From a Bankruptcy http://www.wisebread.com/how-to-bounce-back-from-a-bankruptcy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-bounce-back-from-a-bankruptcy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_savings_protection.jpg" alt="Woman savings protection" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whether you've filed Chapter 7 or 11, bankruptcy is not ideal &mdash; but it's also not the end of the world. You've made some monetary missteps along the way, sure, but if you learn from those mistakes, you'll emerge from the ashes of financial ruin stronger than ever. Heed this advice on how to bounce back from bankruptcy and start your life anew. (See also: <a href="http://www.wisebread.com/11-steps-to-take-when-bankruptcy-is-your-only-option?ref=seealso" target="_blank">11 Steps to Take When Bankruptcy Is Your Only Option</a>)</p> <h2>Adopt this mantra: &quot;This is not the end, but a new beginning&quot;</h2> <p>Bankruptcy is not only financially devastating, but there are psychological effects to losing nearly everything. You may experience feelings of loss, shame, and anger as a result of filing for bankruptcy, but it's important to remember that this is only a <em>temporary</em> situation. It's also helpful if you look at it as a <em>solution</em>. This solution may have been a last-ditch effort &mdash; and it probably cost you much of what you've worked for thus far &mdash; but it's a solution nonetheless.</p> <p>This is not the end. Rather, it's a new beginning, and you'll get your life back on track faster if you get yourself in that mindset.</p> <h2>Obtain your full credit report to ensure everything is clear</h2> <p>Once your bankruptcy paperwork is filed and the proverbial wheels are in motion, it's your duty to double-check that all the I's have been dotted and T's crossed so you can start rebuilding your life. One of those starting points is making sure your credit report accurately reflects your bankruptcy status.</p> <p>Personal finance and banking expert Alex Gerard, founder of CardsMix, suggests requesting the annual free copy of your credit report from <a href="http://www.annualcreditreport.com" target="_blank">AnnualCreditReport.com</a> and cross-referencing your information from all three major credit bureaus &mdash; Equifax, Experian, and TransUnion &mdash; to ensure that everything is up to date and reported exactly the same.</p> <p>&quot;Check that all the accounts that were included in a bankruptcy are noted as having zero balance and are not in default/derogatory status,&quot; he says. &quot;For every account that is not correct on your credit report, file a dispute with all three credit agencies.&quot;</p> <p>The discrepancy &mdash; if there is one &mdash; may take some time to resolve, but it's necessary to do your due diligence so a technical error doesn't continue damaging your credit.</p> <h2>Recognize and accept where you went wrong with your money</h2> <p>A big part of the transition from bankruptcy to getting back on your feet is recognizing where you went wrong and accepting responsibility for what was in your control. Think of this stage as a self-induced rehabilitation program. The hardest part is admitting you had a problem and pinpointing where you went wrong, so you don't make the same mistakes again. It's also wise, if your spending was out of control, to identify your spending triggers so you can avoid those in the future and increase your chance of success.</p> <h2>Make amends with your previous financial habits and vow to change</h2> <p>What's done is done &mdash; you can't change the past. You are, however, in complete control of the future. Make amends with what went wrong that led to your bankruptcy and put those issues to bed; no reason to beat yourself up over it now. Instead, focus on the future and commit to changing those habits that put you in this predicament.</p> <h2>Get a new credit card to start reversing your circumstances</h2> <p>Getting a new credit card after you've just filed for bankruptcy might seem counterintuitive to rebuilding your financial foundation, but, in fact, you've probably never needed a credit card more than right now.</p> <p>Usually, options are limited to <a href="http://www.wisebread.com/a-secured-credit-card-can-repair-your-credit-score-heres-how-to-pick-the-best?ref=internal" target="_blank">secured credit cards</a> which require a security deposit, but there is an overlooked option to get a retail store card since many store cards are, in fact, bankruptcy-friendly. Their high APRs, low credit limits, and for store-use only limitations allow them to approve those with lower credit scores.</p> <p>Use this card to pay for expenses that you can turn around and pay back in full every month. The habit of paying in full and on time will gradually start to rebuild your credit.</p> <p>Be wary, however; fresh plastic in your hand doesn't mean it's time for a spending spree. That may be how you got into trouble in the first place, and you don't want to fall back into old habits. If you don't think you can handle the pressure of having a credit card in your pocket all the time, leave it at home in a safe place and use it sparingly with the intention of paying off the full balance each month. If you can't afford to pay in full whatever you're charging, do not use it. (See also: <a href="http://www.wisebread.com/best-credit-cards-to-rebuild-credit-after-bankruptcy?ref=seealso" target="_blank">Best Credit Cards to Rebuild Credit After Bankruptcy</a>)</p> <h2>Consider a credit builder loan</h2> <p>A credit builder loan, sometimes also called a &quot;fresh start&quot; loan, can be another smart way to boost your credit score after a bankruptcy. These small loans, usually offered by credit unions and community banks, approve borrowers' applications even if they have no or poor credit and can be for as little as $100. Often, the lender will deposit the loan amount into a locked savings account that can only be accessed by the borrower when the loan is repaid in full &mdash; which, in turn, protects both parties. If you pay the loan as agreed, a good report is sent to the credit bureaus.</p> <h2>Live on less to save more</h2> <p>Now it's time for some truth telling: If you've filed for bankruptcy, you're broke, and your lifestyle should reflect that. I'm not suggesting you live in a box under a bridge, but you will need to reevaluate your expenses and find ways to reduce your overall cost of living so you can start rebuilding your savings, emergency and retirement funds, and whatever other financial resources you've recently depleted. Taking the time to restructure your budget while simultaneously cutting the fat from it is a positive step forward, but there are many other <a href="http://www.wisebread.com/10-simple-ways-to-start-living-on-less-today" target="_blank">ways to start living on less</a>.</p> <h2>Redefine your worth</h2> <p>As I said in the beginning of this article, bankruptcy isn't the end. Millions of people have bounced back from bankruptcy to great success, and so can you. Dedicate yourself to becoming a success story instead of a victim of your own undoing and the rebuilding process won't be as arduous as it may seem. This is your life, after all &mdash; your one and only, for that matter &mdash; and you owe it to yourself and your family (if you have one) to be financially stable while practicing good money habits so you can live a happy life. You're worth at least that much.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-bounce-back-from-a-bankruptcy&amp;media=%20http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Bounce%2520Back%2520From%2520a%2520Bankruptcy.jpg&amp;description=How%20to%20Bounce%20Back%20From%20a%20Bankruptcy"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Bounce%20Back%20From%20a%20Bankruptcy.jpg" alt="How to Bounce Back From a Bankruptcy" 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/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/how-to-bounce-back-from-a-bankruptcy">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/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</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/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</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-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</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-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</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/reach-your-money-goals-faster-with-a-simple-naming-trick">Reach Your Money Goals Faster With a Simple Naming Trick</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bankruptcy budgeting chapter 11 chapter 7 credit builder loans credit history credit score rebuilding saving money Tue, 05 Dec 2017 10:00:06 +0000 Mikey Rox 2065223 at http://www.wisebread.com 9 Credit Card Notifications That Can Save You Money http://www.wisebread.com/9-credit-card-notifications-that-can-save-you-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-credit-card-notifications-that-can-save-you-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_businessman_shopping_in_the_city.jpg" alt="Young businessman shopping in the city" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When used properly, a credit card is a great way to overcome short-term cash crunches, build up your credit score, and even give you some rewards for your regular spending. But credit cards come with additional hassles that can trip up your financial goals. Forgetting a payment, overspending, or even identity theft can lead to a financial mess. The good news is that credit card companies these days want to help you avoid these problems as much as you do. Automated notifications from your credit card issuer can keep you on track. If you haven't already, turn these alerts on, stat!</p> <h2>1. Payment due reminder</h2> <p>The biggest component of your credit score is your payment history (35 percent of your score). It makes absolute sense: When evaluating your credit application for a mortgage or car loan, the first thing that any lender wants to know is whether or not you've paid your other accounts on time. A payment due reminder helps you to never miss a monthly payment, especially if you don't use auto-pay for your bill. Remember that a good track record on your monthly credit card payments will boost your score over time and help you avoid late fees and APR penalties.</p> <h2>2. Payment received</h2> <p>This alert confirms that your credit card company received your payment, giving you peace of mind. When rebuilding your credit score or trying to qualify for a loan, knowing that your payment is checked off for the month provides you a much needed sense of relief and accomplishment, which can help you keep working toward your financial goals.</p> <p>This can also help if you have an authorized user who is supposed to pay for their own charges, for example your teenager. (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> <h2>3. Single transaction</h2> <p>The second largest component of a credit score is the amounts owed on accounts (30 percent of your score). While owing money on your credit card doesn't necessarily lower your score, lenders like to see a lower <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization rate</a>. Credit reporting bureaus suggest keeping your credit utilization ratio below 30 percent to gain credit points faster.</p> <p>A single transaction notification alerts you if your account has been charged a single purchase amount that would put your account over that 30 percent threshold. If you already have a set monthly budget of credit card expenses, set this alert to remind yourself that you need to stop making additional charges and focus on reducing your card's current balance.</p> <h2>4. Approaching credit limit</h2> <p>Avoid going over your credit limit by knowing when your available credit is less than a certain amount. This alert is useful in a few different ways:</p> <p>While a credit card isn't ideal for emergency expenses, knowing how much of your balance is available can reassure you that you <em>could</em> cover a sudden emergency room visit or car breakdown if you had to. (See also: <a href="http://www.wisebread.com/how-to-use-a-credit-card-for-an-emergency-without-drowning-in-debt?ref=seealso" target="_blank">How to Use a Credit Card for an Emergency Without Drowning In Debt</a>)</p> <p>This helps you keep tabs on that 30 percent credit utilization ratio and work toward getting back on track.</p> <p>It can serve as a reminder that you've reached or exceeded your allotted monthly budget and can't spend for the rest of the month.</p> <h2>5. Daily usage</h2> <p>This alert watches for too many transactions and lets you know if the number goes over a set limit. A daily usage alert is a friendly nudge that keeps you in check and encourages you to watch your expenses more tightly. Perhaps it's time to make more payments in cash. Paying with cash increases the &quot;pain&quot; of making a payment, which in turn decreases your chances of overspending and can boost your satisfaction with your purchase.</p> <p>Receiving a daily usage alert too often can also serve as red flag that you may have to turn to more drastic measures to rein back credit card usage. (See also: <a href="http://www.wisebread.com/a-guaranteed-way-to-avoid-impulse-credit-card-purchases?ref=seealso" target="_blank">A Guaranteed Way to Avoid Impulse Credit Card Purchases</a>)</p> <h2>6. Suspicious activity</h2> <p>Data breaches are increasing every year. According to data from the Identity Theft Resource Center, the number of U.S. data breaches through June 30, 2017 recorded a half-year record of 791 and was on track to reach an all-time high of 1,500 by end of this year. Many of the targets of these breaches are companies holding your credit card information.</p> <p>Getting a notification about potentially fraudulent activity on your account is a great way to stop thieves in their tracks. Since some thieves first test your card with a small amount that is likely to go unnoticed, getting that notification of suspicious activity allows you to quickly take action and address the potential threat. (See also: <a href="http://www.wisebread.com/3-sneaky-ways-identity-thieves-can-access-your-data?ref=seealso" target="_blank">3 Sneaky Ways Identity Thieves Can Access Your Data</a>)</p> <h2>7. Weekly snapshot</h2> <p>If you don't use your credit card that often, a weekly snapshot alert may be sufficient. Check if your credit card issuer offers a notification that sends you a weekly summary of charges, payments, and other information. This way you'll stay on top of your credit card account regularly without having to think about it.</p> <h2>8. Online statement available</h2> <p>This alert lets you know as soon as your online statement is ready to view. It's a good habit to check your monthly credit card activity to ensure there are no erroneous charges.</p> <p>This notification is particularly useful for business owners who use their credit card statements for bookkeeping and reconciling financial statements. Whether you complete these task yourself or have an accountant, you'll know it's time to get working on crunching those numbers. (See also: <a href="http://www.wisebread.com/12-habits-of-highly-responsible-credit-card-users?ref=seealso" target="_blank">12 Habits of Highly Responsible Credit Card Users</a>)</p> <h2>9. Credit score changed</h2> <p>As stated at the beginning, proper use of a credit card is a means to build up your credit score. So, of course you'll want to know when your credit score changes. Many lenders offer their customers free credit scores, so if your credit card issuer does, consider signing up for a credit score update. Contact your credit card company and find out the process for setting up notifications. Depending on the company, you may be able to get alerts via email, text message, or in-app push notifications. Select the notifications that make the most sense to your unique financial situation and will help you achieve your financial goals.</p> <p>Just make sure that the reported credit score is the one that the lender of your mortgage, car loan, or other type of financing actually uses. (See also: <a href="http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing?ref=seealso" target="_blank">FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F9-credit-card-notifications-that-can-save-you-money&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F9%2520Credit%2520Card%2520Notifications%2520That%2520Can%2520Save%2520You%2520Money.jpg&amp;description=9%20Credit%20Card%20Notifications%20That%20Can%20Save%20You%20Money"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/9%20Credit%20Card%20Notifications%20That%20Can%20Save%20You%20Money.jpg" alt="9 Credit Card Notifications That Can Save You Money" 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/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/9-credit-card-notifications-that-can-save-you-money">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-17"> <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/pay-these-6-bills-first-when-money-is-tight">Pay These 6 Bills First When Money Is Tight</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-you-need-to-know-the-difference-between-secured-and-unsecured-debts">Why You Need to Know the Difference Between Secured and Unsecured Debts</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/6-moves-to-make-before-cutting-up-your-credit-card">6 Moves to Make Before Cutting Up Your Credit Card</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance alerts balance bills credit notifications credit score credit utilization fraud limits payment reminders security statements Thu, 30 Nov 2017 09:00:08 +0000 Damian Davila 2062570 at http://www.wisebread.com 6 Ways Life Is Better With Good Credit http://www.wisebread.com/6-ways-life-is-better-with-good-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-life-is-better-with-good-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/free_to_be_whatever_she_wants.jpg" alt="Free to be whatever she wants" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit scores and credit health can seem inconsequential when you're young. It may be obvious that &quot;good&quot; credit is better than &quot;bad&quot; credit, but it's easy to underestimate the difference a few hundred points in your FICO credit score can make.</p> <p>Once a young person gains their independence, however, the importance of credit may quickly become clear. Without decent credit, it may be difficult to reach many of life's important milestones. Plus, many of the transactions you make become a lot more expensive.</p> <p>A FICO credit score is the number often used as an indicator of your credit health. According to FICO, &quot;good&quot; credit is a FICO score of 670 to 739, &quot;very good&quot; credit is a score between 740 and 799, and any FICO score higher than that &mdash; up to 850 &mdash; is considered &quot;excellent.&quot; (See also: <a href="http://www.wisebread.com/what-is-a-good-credit-score-range?ref=seealso" target="_blank">What Is a Good Credit Score and Why Is It Important?</a>)</p> <p>While these numbers may not mean a lot at first glance, they could matter more than you think. Here are six ways good credit can make your life easier.</p> <h2>1. You could qualify to rent or buy a home</h2> <p>When you apply to rent an apartment or home, chances are your landlord will require a credit check. Many landlords view negative marks on your credit report &mdash; such as foreclosures or accounts in default &mdash; as signs that you may not pay your rent on time. If you have bad credit or no credit reporting to speak of, it may be difficult to rent an apartment without a co-signer. (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>The same is true when it comes to purchasing a home. Without good credit, you may not be able to be approved for a mortgage. You might qualify for certain FHA loans if you have poor or fair credit, but the terms may not be ideal.</p> <p>The bottom line: Building good credit makes life easier because it can help you buy or rent the place you want. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-raise-your-credit-score-this-year?ref=seealso" target="_blank">7 Ways to Raise Your Credit Score</a>)</p> <h2>2. You might have a leg up in your job search</h2> <p>When you apply for a new job, your employer has the option to pull an &quot;employer screening report&quot; that highlights the general health of your credit. This isn't a full credit report, but it can still show your employer how well you have handled credit and borrowing in the past. That behavior may be especially important for jobs that involve handling financial information for a company or its customers. (See also: <a href="http://www.wisebread.com/heres-how-your-credit-score-affects-your-job-search?ref=seealso" target="_blank">Here's How Your Credit Score Affects Your Job Search</a>)</p> <p>A potential employer won't see your actual FICO score, but they will see information such as bankruptcies, liens, and foreclosures. If you have poor credit and a potential employer checks, you could miss out on your dream job. On the flip side, having good credit means you have nothing to worry about. It could even give you an advantage over other job applicants.</p> <h2>3. You could qualify for lower interest rates</h2> <p>Want to buy a house with poor credit? Plan on forking over higher interest payments. According to the Experian blog, qualifying for the best mortgage rates typically requires very good to excellent credit. That means a score in the mid 700's or higher.</p> <p>If your score is lower, you could end up with higher interest rates, meaning you'll have to make higher monthly payments for your loan. This is true not only for housing, but for many other big purchases you make, including financed vehicles or even private student loans.</p> <p>Conversely, having good credit can help you qualify for loans with the lowest interest rates and best terms. This can help you save a significant amount of money over your lifetime. (See also: <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=seealso" target="_blank">How to Rebuild Your Credit in 8 Simple Steps</a>)</p> <h2>4. You may get the best rewards credit cards available</h2> <p>The <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal" target="_blank">best cash back credit cards</a> and <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">travel credit cards</a> make it easy to earn cash back, airline miles, hotel points, or flexible travel credit. Depending on how much you spend on credit cards every year, these points could add up to hundreds or even thousands of dollars in rewards that are &quot;free,&quot; provided you never carry a balance.</p> <p>The thing is, you will not be able to qualify for the best rewards credit cards if your credit is poor or even average. Card issuers typically only approve people with good or excellent credit for the credit cards with the juiciest rewards and best perks. (See also: <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=seealso" target="_blank">5 Best Credit Cards for People with Excellent Credit</a>)</p> <h2>5. You can get better insurance rates</h2> <p>While poor credit won't stop you from driving, it can force you to pay a lot more for auto insurance. A recent Consumer Reports study highlighted how this works and why.</p> <p>Besides looking at your driving record, auto insurance companies use a special credit score derived from your credit record to determine how risky you may be to insure. If you have poor credit, they may assume you're more likely to get in an accident and file a claim, even if you've never filed a claim in the past.</p> <p>Unfortunately, even having just &quot;good&quot; credit can cause you to pay more for insurance than those with excellent credit. As Consumer Reports showed in its report, the average driver with &quot;good&quot; credit paid $214 more for insurance per year than a similar driver with &quot;excellent&quot; credit.</p> <p>The bottom line: The best insurance rates go to those with the best credit. This is yet another way having stellar credit can help you save money.</p> <h2>6. You may enjoy more autonomy in life</h2> <p>One of the worst parts about having poor credit is the fact you're constantly beholden to others. You may need a co-signer to rent an apartment, buy a car, or finance a home, for example. If you can't find a co-signer for a car or home and can't qualify on your own, you may wind up living in less than desirable conditions or relying on less convenient means of transportation to get to work.</p> <p>But, good credit offers a way out. With a FICO score that's considered very good or excellent, you can start living life on your own terms. Good credit makes it easier to borrow money affordably for nearly any goal, and all without outside help.</p> <p>Good credit won't make you happy, but it can make life easier. It can also help you save money, which can absolutely make your life better. When you're not spending extra money on car insurance and interest payments, you may be able to afford more of what you truly want in life.</p> <p>Poor credit may not seem like a big deal, but it could stand in the way of what you want somewhere down the line. If you know your credit needs work, the best plan of action is to take steps to improve it now. With some time and planning, you could be on your way to better credit &mdash; and a better life. (See also: <a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score?ref=seealso" target="_blank">5 Ways Life Is Amazing With an 800 Credit Score</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-ways-life-is-better-with-good-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Ways%2520Life%2520Is%2520Better%2520With%2520Good%2520Credit.jpg&amp;description=6%20Ways%20Life%20Is%20Better%20With%20Good%20Credit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20Life%20Is%20Better%20With%20Good%20Credit.jpg" alt="6 Ways Life Is Better With Good Credit" width="250" height="374" /></p> <h2 style="text-align: center;">&nbsp;</h2> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/holly-johnson">Holly Johnson</a> of <a href="http://www.wisebread.com/6-ways-life-is-better-with-good-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/how-to-bounce-back-from-a-bankruptcy">How to Bounce Back From a Bankruptcy</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/5-ways-life-is-amazing-with-an-800-credit-score">5 Ways Life Is Amazing With an 800 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/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</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/is-an-all-cash-diet-right-for-you">Is an All-Cash Diet Right for You?</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/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit score good credit improve your life personal finance tips saving money Mon, 27 Nov 2017 09:30:05 +0000 Holly Johnson 2057736 at http://www.wisebread.com How Small Business Credit Cards Affect Your Personal Credit http://www.wisebread.com/how-small-business-credit-cards-affect-your-personal-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-small-business-credit-cards-affect-your-personal-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/florist_holding_a_credit_card_in_her_flower_shop.jpg" alt="Florist holding a credit card in her flower shop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're looking for a new credit card, then you&rsquo;ve probably noticed that many cards are offered in both personal and small business versions. <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?ref=internal" target="_blank">Business credit cards</a> can offer rewards and benefits more suited to the needs of small companies, but how does their use affect your personal credit?</p> <h2>Business credit card basics</h2> <p>When you apply for a small business credit card, the card issuer will check your personal credit report and credit score to see if you qualify for a new account. It doesn&rsquo;t matter whether you supply an Employer Identification Number (EIN) or a Social Security Number, your personal credit information will be checked, since nearly all small business credit cards require your personal guarantee of repayment. This means that even if your business dissolves, gets sold, or goes into bankruptcy, you&rsquo;re still responsible for paying off the credit card debt. The credit card may have your business name on it, but as part of the application, you agree to be personally responsible for it. (See also: <a href="http://www.wisebread.com/5-ways-to-build-business-credit-when-youre-self-employed?ref=seealso" target="_blank">5 Ways to Build Business Credit When You&rsquo;re Self-Employed</a>)</p> <h2>How applying for a business credit card affects your credit</h2> <p>When you apply for any new credit card, it has several effects on your credit. To grasp these, it helps to understand the <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=internal" target="_blank">five main factors that go into your FICO score</a> &mdash; the most commonly used personal credit score. These factors are:</p> <ol> <li> <p><strong> Payment history (35 percent of the total credit score):</strong> On-time payments are the most important part of your credit score. (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> </li> </ol> <ol start="2"> <li> <p><strong> Credit utilization (30 percent of the total score):</strong> It&rsquo;s best to 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 ratio</a> &mdash; the amount you owe compared to how much total credit you have available &mdash; as low as possible.</p> </li> </ol> <ol start="3"> <li> <p><strong> Length of credit history (15 percent of the total score):</strong> The higher the average age of your accounts, the better. (See also: <a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters?ref=seealso" target="_blank">Why the Age of Your Credit History Matters</a>)</p> </li> </ol> <ol start="4"> <li> <p><strong> New credit: (10 percent of the total score):</strong> Opening <a href="http://www.wisebread.com/can-too-many-credit-cards-hurt-your-credit-score?ref=internal" target="_blank">too many credit lines</a> at once could suggest you&rsquo;re having financial trouble.</p> </li> </ol> <ol start="5"> <li> <p><strong> Credit mix: (10 percent of the total score):</strong> Lenders like to see that you can handle a variety of debt types, such as installment loans and credit cards. (See also: <a href="http://www.wisebread.com/how-credit-inquiries-affect-your-credit-score?ref=seealso" target="_blank">How Credit Inquiries Affect Your Credit Score</a>)</p> </li> </ol> <p>When you apply for a new card, it affects the new credit part of your score because the application will result in a new inquiry on your credit report &mdash; a so-called hard inquiry. Applying for a single line of credit will have very little effect on your credit score, but applying for multiple new lines of credit in a short period of time could cause a small, temporary drop in your score.</p> <h2>How business credit cards may affect your personal credit differently</h2> <p>In most ways, a small business credit card will affect your credit just like a personal credit card. However, some credit card issuers only report your business credit card account if it&rsquo;s delinquent and don&rsquo;t report balance and payment information at all. Therefore, your use of business credit card accounts may or may not affect your credit one way or another. (See also: <a href="http://www.wisebread.com/when-you-should-get-a-business-credit-card-over-a-consumer-card?ref=seealso" target="_blank">When to Get a Business Credit Card Over a Consumer Card</a>)</p> <p>Assuming you have a card that does report regularly to your personal credit, once approved, the new account will affect the credit history part of your score. It will lower the average age of your lines of credit, which on its own might cause a small drop in your score, especially if you have a very limited credit history.</p> <p>Your monthly balances and payment for this new account will appear on your credit report as well. So long as you make your payments on time, this new account will help build your credit history, which is good for your credit score.</p> <p>Finally, having a new line of credit may or may not help to reduce your credit utilization ratio. A card with a large credit limit (and business cards tend to have higher limits than personal cards) raises your amount of available credit. But in order to keep your utilization ratio low, you have to keep your balances low. If you quickly max out the new card, you could actually hurt your credit utilization ratio.</p> <p>If you get a business credit card that doesn&rsquo;t report to your personal credit, then the small dip in your credit from the hard inquiry will bounce back and nothing else will happen to your credit, unless you default on the business credit card. Then it will appear on your credit report as a loan in default.</p> <p>The only way to know for sure if your business credit card accounts are reporting your balance and payment information is to look at a copy of your credit report. You can obtain a free credit report each year from each of the three major consumer credit bureaus by going to AnnualCreditReport.com.</p> <h2>How business credit cards affect your business credit report</h2> <p>In addition to possibly affecting your personal credit report, your small business credit card may also affect your business credit reports. Your issuer may report your balance and payment information to companies that compile credit reports on small businesses. The main business credit reporting agencies are Dun &amp; Bradstreet, Experian, and Equifax. For many small businesses, having a strong business credit report is vital to securing future lines of credit and favorable payment terms from suppliers. It&rsquo;ll also benefit you to be able to get funding without a personal guarantee, which can only happen by building a strong business credit history first.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-small-business-credit-cards-affect-your-personal-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520Small%2520Business%2520Credit%2520Cards%2520Affect%2520Your%2520Personal%2520Credit.jpg&amp;description=How%20Small%20Business%20Credit%20Cards%20Affect%20Your%20Personal%20Credit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20Small%20Business%20Credit%20Cards%20Affect%20Your%20Personal%20Credit.jpg" alt="How Small Business Credit Cards Affect Your Personal 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/how-small-business-credit-cards-affect-your-personal-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-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/5-ways-to-build-business-credit-when-youre-self-employed">5 Ways to Build Business Credit When You&#039;re Self-Employed</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-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business 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/the-5-best-credit-cards-for-small-businesses">Best Credit Cards for Small Businesses</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/this-one-ratio-is-the-key-to-a-good-credit-score">This One Ratio Is the Key to a Good 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-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Entrepreneurship business owner credit cards credit score personal credit small business Tue, 21 Nov 2017 09:30:10 +0000 Jason Steele 2057716 at http://www.wisebread.com 3 Easy Ways to Improve Your Credit Score During the Holidays http://www.wisebread.com/3-easy-ways-to-improve-your-credit-score-during-the-holidays <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-easy-ways-to-improve-your-credit-score-during-the-holidays" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/beautiful_woman_shopping_online_for_christmas.jpg" alt="Beautiful woman shopping online for Christmas" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whether you're stuffing yourself with delicious turkey, putting up decorations, or just enjoying a well-deserved break, you're probably not thinking about your credit score much during the holidays. But even though it may not be fun, monitoring your credit score this time of year can help bring you closer to your financial New Year's resolutions or goals. Here are a few ways to give your credit score a much-needed boost during this holiday season.</p> <h2>Plan to make more purchases with cash</h2> <p>It's a myth that most people do their holiday shopping with credit cards. In 2016, Experian's Holiday Spending Survey found that 55 percent of respondents selected cash as their planned method of payment for holiday gifts. Spending with cash instead of credit cards is a smart move to prevent the potential debt cycle that the holidays can bring. Paying with cash instead of plastic will help 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 ratio</a> low. This ratio compares total credit available to you with the amount of credit you have used. A low ratio means you do not use very much of your credit. Remember that your credit utilization ratio accounts for 30 percent of your credit score.</p> <h2>Apply for a credit card with a low APR</h2> <p>While cash is king, 47 percent of respondents were still planning to use credit cards for their holiday shopping last year. If you're planning on pulling out plastic for this holiday shopping season, you may want to pay a visit to your local credit union before you start swiping.</p> <p>According to data from the National Credit Union Administration, the average interest rate of a regular credit card from a credit union was 11.61 percent as of September 2017. At the same time, cards from banks came with an average rate of 12.96 percent. (See also: <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?ref=seealso" target="_blank">Best Low Interest Rate Credit Cards</a>)</p> <p>Let's assume that you were to spend $1,000 with a credit card and pay it all back in three months. With a 12.96 percent APR, you would have to make three monthly payments of $341. That's $23 in interest payments for that $1000. Another way to avoid interest charges on your holiday spending is to get a <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?ref=internal" target="_blank">card that offers 0% APR on purchases</a> for a promotional period.</p> <p>By paying less interest, you're more likely to make payments on time (which accounts for 35 percent of your credit score) and owe less to credit card lenders overall (which accounts for 30 percent of your credit score).</p> <p>However, the most important thing is you make a commit to pay off your holiday purchases, so that you're not still paying for it when the holidays roll around again.</p> <h2>Consolidate high-interest credit cards</h2> <p>Trying to reach the recommended 30 percent credit utilization ratio can feel like an overwhelming task when the majority of your monthly payment goes to cover high interest. One way to overcome this is to explore your options of consolidating balances of other cards with a personal line of credit or other type of financing.</p> <p>Credit unions also beat national banks with lower rates for personal lines of credit. As of September 2017, a 36-month unsecured fixed rate loan came with an average interest rate of 9.20 percent at credit unions and 10.04 percent at banks. And during the holiday season, credit unions tend to offer even lower rates.</p> <p>You could also do a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=internal" target="_blank">balance transfer to consolidate high-interest credit card debt</a>. To make this work, you'd need to open a new credit card offering a promotional introductory rate on balance transfers. You may have to pay a fee to transfer your balance (typically around 3 percent), and you'll want to repay your debt before the promotional APR window closes (typically between six and 21 months) and the rate increases. However, having a year or so to tackle credit card debt at a much lower interest rate can save you a great deal of money if you're diligent. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=seealso?ref=seealso" target="_blank">The Best 0% Balance Transfer Credit Cards</a>)</p> <p>Being able to consolidate your balances allows you slay your debt monsters faster, which will certainly make your holidays a little brighter &mdash; and improve your credit score. Remember that the longer you carry a balance on high-interest credit cards and loans, the more interest you'll rack up on your debt, and the longer that your credit score will remain low. (See also: <a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money?ref=seealso" target="_blank">5 Tricks to Consolidating Your Debt and Saving Money</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F3-easy-ways-to-improve-your-credit-score-during-the-holidays&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F3%2520Easy%2520Ways%2520to%2520Improve%2520Your%2520Credit%2520Score%2520During%2520the%2520Holidays.jpg&amp;description=5%20Affordable%20Vacations%20to%20Please%20Every%20Age%20Group"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/3%20Easy%20Ways%20to%20Improve%20Your%20Credit%20Score%20During%20the%20Holidays.jpg" alt="3 Easy Ways to Improve Your Credit Score During the Holidays" 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/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/3-easy-ways-to-improve-your-credit-score-during-the-holidays">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/10-money-goals-you-should-set-for-the-holidays">10 Money Goals You Should Set for the Holidays</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-things-you-need-to-know-before-taking-out-a-personal-loan">10 Things You Need to Know Before Taking Out a Personal 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/why-some-economists-say-you-should-give-cash-instead-of-gifts">Why Some Economists Say You Should Give Cash Instead of Gifts</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/9-actions-to-take-when-youre-denied-a-credit-limit-increase">9 Actions to Take When You&#039;re Denied a Credit Limit Increase</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/6-smart-financial-gifts-to-give-your-kids-this-year">6 Smart Financial Gifts to Give Your Kids This Year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance APR balance transfers cash consolidating debt credit score credit unions Holidays interest rates personal line of credit repayment shopping Fri, 17 Nov 2017 10:00:06 +0000 Damian Davila 2055198 at http://www.wisebread.com How a Surprise Credit Limit Increase Can Harm You http://www.wisebread.com/how-a-surprise-credit-limit-increase-can-harm-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-a-surprise-credit-limit-increase-can-harm-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_credit_card_637329676.jpg" alt="Learning how a surprise credit limit increase can harm you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The email can catch you by surprise: You get a message from a bank telling you that your credit limit has increased. Banks routinely check the financial health of their credit card customers. When these customers have a good credit score and a history of paying their bills on time, they might decide to raise their credit limit by $5,000, $10,000, or more.</p> <p>You might welcome a surprise boost in your credit limit, but you should also be wary of this: An increase in your credit limit can cause problems if you're not careful.</p> <h2>Don't add to your debt</h2> <p>Do you spend more with your credit cards than you can technically afford? Are you unable to pay off your balance in full each month? If so, an increase in your credit limit has potential to make things worse.</p> <p>Credit card debt is some of the worst debt to carry because it comes with such high interest rates &mdash; sometimes as high as 20 percent or more. If you carry a balance on such cards from month to month, the amount you owe can soar solely because of this interest.</p> <p>Here's an example: Say you are carrying a balance of $8,000 on your credit card at an interest rate of 17 percent. Now, say that your minimum monthly payment is 4 percent of that balance. If you only make this minimum payment each month, it will take you over 12 years to pay off your balance. The total interest you will pay during this time is a bit more than $4,272 &mdash; and that assumes that you won't be using that credit card to make any additional purchases.</p> <p>If a credit limit increase inspires you to spend even further beyond what you can't pay off each month, you'll simply be increasing the time it takes to pay off your credit card debt. The smart move after receiving a limit increase is to set your own personal charging limit. Even if your card's credit limit is $20,000, resolve not to charge more than $500 a month if that's all you can afford to pay off when your card's payment date arrives. Don't add to the mountain of high-interest credit card debt you're already struggling to pay off. (See also: <a href="http://www.wisebread.com/how-to-pay-less-interest-on-your-credit-card-debt?ref=seealso" target="_blank">How to Pay Less Interest on Your Credit Card Debt</a>)</p> <h2>Monitor your credit utilization ratio</h2> <p>If a higher credit limit encourages you to spend more, you might also be hurting your credit score, even if you pay your credit card bill on time each month. This has to do with 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 credit score will fall if you use up too much of the credit available to you. It will rise if you are using less of it.</p> <p>Getting a credit limit increase would seem to help your credit utilization ratio. After all, if you have more credit available to you, you will automatically be using less of it the day that credit limit increase kicks in. But if that credit limit increase inspires to you to go on a charging binge, you could quickly use up your credit increase in new purchases. That, in turn, will hurt your credit utilization ratio and your credit score.</p> <p>Again, the key is to set personal limits and stick to them. Determine a reasonable amount of money you can charge each month and don't charge more than that.</p> <h2>Don't cancel that card</h2> <p>If you're worried that you can't handle a credit limit increase, don't cancel your credit card. This will automatically increase your credit utilization ratio and damage your credit score. Once you close a card, the amount of credit available to you will automatically drop without you even charging another cent.</p> <p>You can call your credit card issuer to request that your credit limit be reduced, but that might be a risky strategy. Remember, having a higher credit limit is good for your credit score, as long as you don't swallow it up by charging too much. By removing that increase, you won't get the credit score boost that can come with higher credit limit.</p> <p>Instead, stick to that personal charging limit you've set, no matter how much available credit you have. Maxing out your credit cards is a bad financial strategy, no matter how high your credit limits.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-a-surprise-credit-limit-increase-can-harm-you&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520a%2520Surprise%2520Credit%2520Limit%2520Increase%2520Can%2520Harm%2520You.jpg&amp;description=How%20a%20Surprise%20Credit%20Limit%20Increase%20Can%20Harm%20You"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20a%20Surprise%20Credit%20Limit%20Increase%20Can%20Harm%20You.jpg" alt="How a Surprise Credit Limit Increase Can Harm You" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-a-surprise-credit-limit-increase-can-harm-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-4"> <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/debunking-8-common-credit-score-myths">Debunking 8 Common Credit Score Myths</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/9-actions-to-take-when-youre-denied-a-credit-limit-increase">9 Actions to Take When You&#039;re Denied a Credit Limit Increase</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/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-simple-money-milestones-anyone-can-hit">6 Simple Money Milestones Anyone Can Hit</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/3-easy-ways-to-improve-your-credit-score-during-the-holidays">3 Easy Ways to Improve Your Credit Score During the Holidays</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit limit credit score credit utilization ratio debt interest rates limit increase overspending Thu, 16 Nov 2017 10:00:06 +0000 Dan Rafter 2055071 at http://www.wisebread.com 6 Simple Money Milestones Anyone Can Hit http://www.wisebread.com/6-simple-money-milestones-anyone-can-hit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-simple-money-milestones-anyone-can-hit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_599767404.jpg" alt="Woman hitting money milestones" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Achieving financial freedom is really about setting big goals and going after them. But these goals can sometimes seem overwhelming. Saving enough for retirement, a new home, or a college degree is a big task. Eliminating debt can also feel impossible.</p> <p>That's why it helps to set smaller, more manageable goals and work from there. You won't save all of your retirement nest egg or pay off all of your credit cards tomorrow, but there are steps you can take to build your confidence and get you on your way. Here are some achievable financial milestones that you can go after.</p> <h2>1. Open a retirement account</h2> <p>Just <em>open</em> the account. You don't even have to invest more than the minimum: Simply take that first step and open your 401(k) or individual retirement account. By checking this off your list, you have removed a big mental hurdle from investing, and you may even begin getting matching contributions from your employer even if you are not contributing much yourself.</p> <p>With the accounts open, you'll be able to begin putting more sizable chunks of money aside and buying stocks and mutual funds when you feel you are ready. But if your accounts aren't open to begin with, you might talk yourself out of getting started. (See also: <a href="http://www.wisebread.com/5-retirement-accounts-you-dont-need-a-ton-of-money-to-open?ref=seealso" target="_blank">5 Retirement Accounts You Don't Need a Ton of Money to Open</a>)</p> <h2>2. Be independent</h2> <p>Do you still rely on your parents or other friends and family for financial help? Do they assist you with rent payments, credit card bills, and other expenses? Getting help from others isn't a bad thing, but there comes a time when a young person must learn how to maintain financial independence.</p> <p>This means being able to live on your own, pay your bills, and avoid debt without seeking &quot;loans&quot; from the Bank of Mom and Dad. This is not always easy, especially in an era when many young people have student loan debt &mdash; but this should be a goal for anyone in their 20s. (See also: <a href="http://www.wisebread.com/11-money-habits-that-make-you-look-financially-immature?ref=seealso" target="_blank">11 Money Habits That Make You Look Financially Immature</a>)</p> <h2>3. Reduce your credit card debt</h2> <p>Ideally, you want to pay off the whole credit card balance as soon as possible. But for some of us, we just want to keep the balance from growing. Sometimes, we're stuck in a spiral of making minimum payments, while interest charges are adding to the debt. You may not be able to get rid of your credit card balance overnight, but you can take a big step toward that goal by simply reducing the balance the next time your bill is due.</p> <p>This will mean paying substantially more than the minimum required to make a real dent into the principal. If you can do this once, you'll prove to yourself it's possible to reduce your debt burden and eventually get rid of it entirely. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>4. Get your credit score over 700</h2> <p>Many people have trouble getting ahead financially because they are saddled with a bad credit score. A low credit score makes it hard to get favorable rates on loans, and can lead to a spiral of debt that's hard to escape. The good news is that you can fix your credit score over time by making the right financial choices, and your bad finances of the past don't have to burden you forever.</p> <p>A credit score of 700 is considered &quot;good&quot; by most credit bureaus. To get there, you need to pay your bills on time and try to pay off all balances in full. If you have missed payments, get current as soon as possible. You don't want to close your credit cards after paying them off, as this can lower your percentage of available credit and ding your credit score. But you should avoid the temptation to open new cards, as that only increases your potential for adding debt. Your credit score may take time to rise, but hitting 700 is achievable if you make the right moves. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>5. Earn $1,000 in passive income</h2> <p>One of the great ways to give yourself some financial breathing room is to get revenue from sources that don't require a lot of work. This could mean purchasing dividend stocks, in which companies pay out portions of their earnings each quarter to shareholders. It might mean buying and renting out properties, licensing your creative works, or building a website that generates some ad revenue. Passive income may require some work and expense up front, but could provide you with a solid amount of extra cash without extra effort over time.</p> <p>Try to earn a spare $1,000 in the next year. Then try and boost that figure. Before you know it, proceeds from these passive sources could be a significant total of your overall income. (See also: <a href="http://www.wisebread.com/5-ways-to-make-passive-income-online?ref=seealso" target="_blank">5 Ways to Make Passive Income Online</a>)</p> <h2>6. Save $100 in a month</h2> <p>When your income is barely covering your living expenses, it may seem impossible to save even a few bucks a month, let alone $100. But most people should be able to hit that $100 milestone by taking a good look at their spending.</p> <p>Begin by tracking your spending in a detailed way, making a note of where every dollar goes. Then categorize your spending. You might have a category for eating out, and another for gas or kids' activities. By examining your spending this way, you will likely find areas where you can cut costs. You may have to make some hard choices, but they will be worthwhile. A few dollars here and there can add up to $100 or more. And $100 a month can add up to thousands of dollars over time.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-simple-money-milestones-anyone-can-hit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Simple%2520Money%2520Milestones%2520Anyone%2520Can%2520Hit.jpg&amp;description=6%20Simple%20Money%20Milestones%20Anyone%20Can%20Hit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Simple%20Money%20Milestones%20Anyone%20Can%20Hit.jpg" alt="6 Simple Money Milestones Anyone Can Hit" 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/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-simple-money-milestones-anyone-can-hit">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/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</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/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</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-surprise-credit-limit-increase-can-harm-you">How a Surprise Credit Limit Increase Can Harm 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-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</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/9-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit score debt financial independence goals money milestones passive income retirement saving Wed, 15 Nov 2017 10:00:06 +0000 Tim Lemke 2054445 at http://www.wisebread.com 5 Ways to Build Business Credit When You're Self-Employed http://www.wisebread.com/5-ways-to-build-business-credit-when-youre-self-employed <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-build-business-credit-when-youre-self-employed" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/businesswoman_paying_online.jpg" alt="Businesswoman paying online" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's hard to beat the freedoms of being self-employed. But with the joys of being your own boss and creating your own schedule come some trade-offs. One trade-off can be unsteady income.</p> <p>Even if you are very careful about your finances, it's possible that a great business opportunity will present itself that you simply don't have the cash for. If you've built good business credit and have access to a business credit card or line of credit, it will be easier to jump on those opportunities.</p> <p>Building good business credit can seem like a mysterious process if you've never done it before. Here's how to get started. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?ref=seealso" target="_blank">Best Credit Cards for Small Businesses</a>)</p> <h2>1. Establish strong personal credit first</h2> <p>The vast majority of small business credit cards require you to personally guarantee the charges you make &mdash; even if the card is issued in your business's name. That means if the business fails, you will still be responsible for the debt.</p> <p>Because you ultimately will be the one who pays the balance, expect lenders to pay attention to your personal credit when you seek business credit. Under the Fair Credit Reporting Act, when you apply for business credit, a lender has the right to look at your personal credit profile to evaluate whether to issue it to you.</p> <p>To make sure you have a full array of options when it comes to business credit cards, make sure you are paying your personal cards on time and not maxing them out. 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; that is, using a large percentage of the credit available to you &mdash; can cause your credit score to drop. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>2. Run your business like a business</h2> <p>If you want to get business credit in the future, keep good financial records by using accounting software such as FreshBooks, QuickBooks or Xero. Using software designed for this is much easier than using spreadsheets and reduces the chance that you'll make mistakes.</p> <p>Many accounting software programs have a &quot;reports&quot; function that allows you to create a profit and loss (P&amp;L) statement with the click of a button. A P&amp;L statement shows all of your sales and expenses for a set period, such as a year. To get a business line of credit with your bank, you will very likely have to produce one of these statements, so this feature is a huge timesaver. (See also: <a href="http://www.wisebread.com/5-free-accounting-tools-for-freelancers?ref=seealso" target="_blank">5 Free Accounting Tools for Freelancers</a>)</p> <h2>3. Keep your business finances separate</h2> <p>Before you try to open a line of credit with your bank or apply for business credit cards, open a business checking account. This will show lenders you are serious about running your business.</p> <p>Maintaining a business checking account also gives you an opportunity to develop a relationship with your banker. If money is flowing into your account regularly, you are maintaining more than the minimum balance, and you are handling the account responsibly (i.e., the checks you write are clearing), chances are that your banker will begin to offer you products such as a business credit card and possibly a line of credit.</p> <p>Don't use your business checking account to pay your personal bills. You need to establish separation between your business and personal finances and keep accurate records.</p> <p>To open a business checking account, you will generally need a federal Employer Identification Number (EIN). You can <a href="https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online" target="_blank">apply for one online</a> through the IRS.</p> <h2>4. Use your business credit card strategically</h2> <p>If you don't have strong personal credit, you may still be able to get a business credit card. There are some higher-interest cards designed for people with a &quot;fair&quot; credit score.</p> <p>While paying higher interest isn't ideal, if you use the card responsibly, you'll be able to improve your credit profile and should qualify for better deals in the future.</p> <p>Once you get a business credit card, use it regularly to make business purchases and pay the bill on time &mdash; ideally in full &mdash; to build a history of using it responsibly. Don't use the card for personal spending. If you connect this card to your accounting software, it will be easy to enter your business expenses, saving you a lot of time.</p> <h2>5. Monitor your business credit report</h2> <p>How do you know if you are actually building good business credit once you make these efforts? Use the free searches on <a href="http://sbcr.experian.com/pdp.aspx?pg=sample&amp;hdr=pp&amp;link=5502&amp;offercode=sbcredit&amp;intcmp=EXPSBsmbusicrd_marquee" target="_blank">Experian</a>, <a href="https://sb.econsumer.equifax.com/bizdirect/companySearch.ehtml?advancedSearch=true" target="_blank">Equifax</a>, or <a href="https://businesscredit.dnb.com/" target="_blank">D&amp;B</a> to see if your business's credit is being tracked. (You will have to pay to get the actual report).</p> <p>There's a different system for business credit card scores than for personal ones. Business credit scores go from 0 or 1 to 100. Each of the major credit bureaus uses its own formula, but factors such as how long you've been in business, your credit utilization, and the lines of credit you have opened in the last six months are likely to affect your score.</p> <p>If you find your business isn't on the radar screen of the major credit bureaus and you have already gotten your EIN, try <a href="http://fedgov.dnb.com/webform/displayHomePage.do;jsessionid=81407B1F03F2BDB123DD47D19158B75F" target="_blank">applying for a free D-U-N-S number</a> with Dun &amp; Bradstreet, which should get the ball rolling.</p> <p>All of these steps take some work and can't be done overnight, so start early &mdash; ideally a few months before you think you'll need business credit. It'll pay off. Having strong business credit is a valuable asset that you'll greatly appreciate if you ever get into a cash crunch.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-ways-to-build-business-credit-when-youre-self-employed&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Ways%2520to%2520Build%2520Business%2520Credit%2520When%2520You%2527re%2520Self-Employed.jpg&amp;description=5%20Ways%20to%20Build%20Business%20Credit%20When%20You're%20Self-Employed"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Ways%20to%20Build%20Business%20Credit%20When%20You%27re%20Self-Employed.jpg" alt="5 Ways to Build Business Credit When You're Self-Employed" 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/elaine-pofeldt">Elaine Pofeldt</a> of <a href="http://www.wisebread.com/5-ways-to-build-business-credit-when-youre-self-employed">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-small-business-credit-cards-affect-your-personal-credit">How Small Business Credit Cards Affect Your Personal 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/5-reasons-building-credit-in-college-helps-you-win-at-life">5 Reasons Building Credit in College Helps You Win at Life</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-grow-your-solo-business-without-hiring-employees">How to Grow Your Solo Business Without Hiring Employees</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-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</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/should-you-always-dispute-mistakes-on-your-credit-report">Should You Always Dispute Mistakes on Your Credit Report?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Entrepreneurship building credit business line of credit business owner credit reports credit score freelance lending self-employment small business Tue, 07 Nov 2017 08:30:20 +0000 Elaine Pofeldt 2045797 at http://www.wisebread.com 10 Things You Need to Know Before Taking Out a Personal Loan http://www.wisebread.com/10-things-you-need-to-know-before-taking-out-a-personal-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-things-you-need-to-know-before-taking-out-a-personal-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hand_giving_and_hand_receiving_money.jpg" alt="Hand giving and hand receiving money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I recently called my bank to ask about fees for using my debit card on an upcoming international trip. I laughed when the banker followed up by asking, &quot;Are you interested in taking out a personal loan for spending money on your vacation?&quot;</p> <p>There are plenty of good reasons to take out a personal loan, but going on vacation isn't one of them. A personal loan is, in essence, an unsecured loan that you get on the basis of your credit and income &mdash; unlike a mortgage loan or home equity line of credit, which uses your home as collateral. Personal loans have advantages and disadvantages compared to secured loans, so whether you go for one of these when you're in need of cash depends on your individual situation.</p> <p>Here's what you should consider before getting a personal loan.</p> <h2>1. The interest rate may be higher than you expect</h2> <p>When you hear about interest rates in the media, they're often talking about the 30-year fixed rate for a standard mortgage, which has been around 4 percent or lower for a long time now. But a personal loan's interest rate will probably be at least twice that. The reason for the difference: When you refinance your home or take out a home equity line of credit, you're promising to relinquish your home if you can't pay back the debt. That's a bigger risk for you, and less of a risk for the bank, compared to a personal loan. In return, banks give you a low interest rate on secured loans. (See also: <a href="http://www.wisebread.com/the-different-types-of-loans-a-primer?ref=seealso" target="_blank">The Different Types of Loans: A Primer</a>)</p> <h2>2. Your credit score matters more for personal loans</h2> <p>With no collateral, all the lender has to go on is your personal creditworthiness. You can expect the available interest rates to increase steeply if your credit is average or poor, going up as high as 36 percent APR.</p> <h2>3. A personal loan is not a long-term solution</h2> <p>While the typical mortgage is paid off over decades, personal loan terms are typically limited to seven years or less. This can be a good thing, because you should never borrow money for longer than you really need to. But it also means that if you are trying to borrow a lot of money, like for a major home remodel, the payments might be too high for you to keep up with on a personal loan.</p> <h2>4. Banks aren't the only option</h2> <p>As nonprofits, credit unions often offer lower rates and fees than banks for the same personal loan products. Then there are the crop of new &quot;marketplace lenders,&quot; such as SoFi and Prosper, which promise easy, quick online loan approval and good rates, especially to folks with the best credit. This nascent industry has had some bumps in the road, but it's still an avenue worth looking into. (See also: <a href="http://www.wisebread.com/best-lenders-for-personal-loans?ref=seealso" target="_blank">Best Lenders for Personal Loans</a>)</p> <h2>5. Personal loans can be a lifesaver when you need cash quickly</h2> <p>When an urgent financial need rears its head &mdash; a leaky roof, an emergency medical bill, or, heaven forbid, an unexpected funeral &mdash; many people turn to credit cards or payday lenders for help. These lenders can be punishingly expensive, but they may seem attractive because in such situations you just don't have time to sit down and apply for a home equity line of credit or look at refinancing your mortgage.</p> <p>You can get the funds from a personal loan within two weeks of applying online, making it just a little slower than the alternatives and potentially much more affordable. (See also: <a href="http://www.wisebread.com/5-times-personal-loans-may-be-better-than-credit-cards?ref=seealso" target="_blank">5 Times Personal Loans May Be Better Than Credit Cards</a>)</p> <h2>6. Personal loans can save you a lot on debt you already have</h2> <p>One of the most common uses for a personal loan is to <a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money?ref=iternal" target="_blank">consolidate existing debt</a>, like credit card balances, student loans, and car loans. You may be able to get a lower interest rate than you were paying on your other debts, and you also have the organizational benefit of having only one bill to pay each month. However, when transferring one kind of loan to another, you should ...</p> <h2>7. &hellip; Be aware of what you may be giving up</h2> <p>Some marketplace lenders heavily market the idea of refinancing student loan debt into personal loans. But before you make a decision like that, you should compare your old loan and new loan carefully, the Consumer Financial Protection Bureau warned in a 2016 release.</p> <p>&quot;[I]n some cases consumers could lose important loan-specific protections by refinancing an existing debt. Specifically, consumers should know that they may sign away certain federal benefits, such as income-driven repayment for federal student loans or service member benefits,&quot; the CFPB said. (See also: <a href="http://www.wisebread.com/8-valuable-rights-you-might-lose-when-you-refinance-student-loans?ref=seealso" target="_blank">8 Valuable Rights You Might Lose When You Refinance Student Loans</a>)</p> <h2>8. You might be better off with a different type of loan</h2> <p>If you're trying to get a better rate on credit card debt while you pay it off, before you commit to a personal loan, shop around to see what else is out there. You may be able to transfer your balance to a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">card with a promotional 0 percent interest rate</a>. Another potentially better deal could be <a href="http://www.wisebread.com/this-is-when-you-should-borrow-from-your-retirement-account?ref=internal" target="_blank">taking money out of your retirement account</a> for a short time, especially if you have a Roth IRA. Just make sure to pay back whatever you borrow.</p> <h2>9. Watch out for fees and extras</h2> <p>Some lenders will try to throw in an insurance policy or other extra expenses as you close the loan. You may or may not want an insurance policy to make sure that your survivors aren't stuck with your loan if tragedy strikes, but that's a separate financial decision that you should undertake with research, not just because you're under the impression that it's required for your loan. (If the lender says it is, walk away.)</p> <p>Also, ask the lender if they use the &quot;pre-compute&quot; method to calculate interest, or if they have prepayment penalties &mdash; you should avoid these, because both will punish you if you're able to pay the loan back ahead of schedule.</p> <h2>10. Never get a personal loan to fund certain expenses</h2> <p>One of the nice things about a personal loan is that unlike a car loan or mortgage, you don't have to justify your purchase to the lender. However, there are things you should know better than to borrow for &mdash; whether it's with a credit card, a home equity line of credit, or a personal loan.</p> <p>Don't take out a personal loan to buy an engagement ring; why would you want to start out your relationship with a pile of debt? While some lenders may advertise a personal loan as a &quot;travel loan,&quot; that's another bad idea; once the vacation is over, you have nothing that you could sell to pay off the loan if you need to. Do I need to tell you that you shouldn't take out a personal loan for gambling money? I didn't think so. (See also: <a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys?ref=seealso" target="_blank">Never Borrow Money for These 5 Buys</a>)</p> <p>A more complex question is whether it's OK to use a personal loan for a down payment on a home. The whole point of requiring a buyer to make a down payment is to show that they can afford the home and to help them feel invested in the purchase. So your mortgage lender may not like it if you try to fund the down payment with a personal loan. At the very least, with this method, you'll need to get the loan several months in advance of the purchase. But even then, proceed with caution; adding debt in the form of a personal loan could affect your chances of getting approved for the mortgage at all. (See also: <a href="http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application?ref=seealso" target="_blank">5 Money Moves That Will Ruin Your Mortgage Application</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F10-things-you-need-to-know-before-taking-out-a-personal-loan&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F10%2520Things%2520You%2520Need%2520to%2520Know%2520Before%2520Taking%2520Out%2520a%2520Personal%2520Loan.jpg&amp;description=10%20Things%20You%20Need%20to%20Know%20Before%20Taking%20Out%20a%20Personal%20Loan"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/10%20Things%20You%20Need%20to%20Know%20Before%20Taking%20Out%20a%20Personal%20Loan.jpg" alt="10 Things You Need to Know Before Taking Out a Personal Loan" 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/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/10-things-you-need-to-know-before-taking-out-a-personal-loan">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-5"> <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/3-easy-ways-to-improve-your-credit-score-during-the-holidays">3 Easy Ways to Improve Your Credit Score During the Holidays</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/how-a-surprise-credit-limit-increase-can-harm-you">How a Surprise Credit Limit Increase Can Harm 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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-debt-settlement-can-make-your-debt-worse">Here&#039;s How Debt Settlement Can Make Your Debt Worse</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Banking APR balance transfer credit score fees interest rates lenders personal loans unsecured loan Fri, 20 Oct 2017 08:30:10 +0000 Carrie Kirby 2037745 at http://www.wisebread.com How to Determine If Your Finances Are Ready for a Big Purchase http://www.wisebread.com/how-to-determine-if-your-finances-are-ready-for-a-big-purchase <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-determine-if-your-finances-are-ready-for-a-big-purchase" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/businesswoman_with_piggybank.jpg" alt="Businesswoman with piggybank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Maybe you're ready to make an offer on that dream home down the street. Maybe you're eying a new car for that long commute to work. Or, maybe you just want to plunk down a few thousand dollars on a fancy vacation or the latest gadget. How do you know that you're financially ready to make such a large purchase?</p> <p>Whatever it is that you want to buy won't bring you any joy if you can't actually afford it. Here are some questions you need to ask yourself to make sure you're financially ready to commit to a big purchase.</p> <h2>Do you already pay all your bills on time?</h2> <p>If you're taking out a loan for a large purchase such as a house or car, first look at how you pay the rest of your bills. Do you routinely pay your credit card bill three weeks late? How about your utilities or cellphone bill?</p> <p>If that's the case, you're not ready for the financial responsibility of another large monthly payment. If you're already struggling to pay your bills on time, adding another even larger bill to your financial responsibilities will only put you at a higher risk of accumulating debt.</p> <p>You can hurt your credit score doing this, too. If you're late on the monthly payments for a house or car by 30 days or more, your score will tumble &mdash; usually by 100 points or more. If you struggle enough to pay those big payments on time, you might even lose the house or car altogether.</p> <p>Protect yourself financially by holding off on that big purchase until you've already developed the habit of paying all your other monthly bills on time. (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> <h2>How much wiggle room is left in your budget?</h2> <p>Before making any big purchase, it's important to check your household budget. Make sure you have the ability to make the monthly payments comfortably while leaving enough money to cover your other monthly expenses.</p> <p>And if you don't have a budget, you absolutely need to make one. How else will you know if you can afford your new purchase to begin with? Making a budget isn't as intimidating as it sounds. First, list all your recurring expenses each month. Then estimate how much you spend each month on discretionary and non-fixed expenses such as entertainment, groceries, and eating out. Finally, list your monthly income. The difference is how much you can afford to spend on new purchases and save each month. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso" target="_blank">Build a Better Budget in 5 Minutes Flat</a>)</p> <h2>How strong is your credit?</h2> <p>Before taking out a loan for a new car, home, or other big purchase, make sure to check your credit. Lenders rely on your credit score to determine if you qualify for loans and, if you do, how high of an interest rate they'll charge. Lenders consider credit scores of 740 or higher to be strong ones. Generally, the lower your credit score, the higher your interest rate on loans. The higher the interest rate, the more paying off that big purchase will cost you over time.</p> <p>You can check your credit reports &mdash; a list of your outstanding loans, how much you owe on credit cards, and whether you have any late payments or other financial blemishes in your past &mdash; by visiting AnnualCreditReport.com. At this site, you can order one free copy of each of your three credit reports (from Experian, Equifax, and TransUnion) every year. It's important to make sure that there are no errors on your credit reports and that the bureaus don't have any late payments or other financial black marks listed against you. These reports, though, don't contain your credit score. You can order your score for a small fee from any of the bureaus.</p> <p>Before making a purchase big enough to warrant a loan, you might want to check your credit score to determine if you'll be saddled with high interest rates. A score under 640 will almost always leave you with a sky-high rate. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?Ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>How much credit card debt do you have?</h2> <p>Credit card debt is among the worst kind of debt to have. Interest rates can be as high as 16 percent, 18 percent, or even higher. If you carry a balance on your cards each month, your credit card debt grows quickly.</p> <p>If you are struggling to pay down your credit cards, resist the temptation to spend big on electronics, furniture, or other items. Instead, devote that money to paying down your debt. And if you can only make that big purchase by putting it on one of your credit cards, <em>don't</em> pull the trigger. You will only dig yourself deeper into a hole. (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>Can you cover the maintenance expenses?</h2> <p>Sometimes buying an expensive item is only the start of how much you'll actually pay for it in the long run. Many big-ticket items come with high yearly maintenance expenses. Consider a house, for example: Sure, you'll spend a lot of money upfront to buy one. But you can also expect to spend 1 percent of your home's purchase price on maintenance each year. (See also: <a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect?ref=seealso" target="_blank">10 Hidden Housing Costs New Homeowners Don't Expect</a>)</p> <p>If you can't afford to maintain your big purchase, hold off until you can create more wiggle room in your budget.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-determine-if-your-finances-are-ready-for-a-big-purchase&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Determine%2520If%2520Your%2520Finances%2520Are%2520Ready%2520for%2520a%2520Big%2520Purchase.jpg&amp;description=How%20to%20Determine%20If%20Your%20Finances%20Are%20Ready%20for%20a%20Big%20Purchase"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Determine%20If%20Your%20Finances%20Are%20Ready%20for%20a%20Big%20Purchase.jpg" alt="How to Determine If Your Finances Are Ready for a Big Purchase" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-determine-if-your-finances-are-ready-for-a-big-purchase">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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-bounce-back-from-a-bankruptcy">How to Bounce Back From a Bankruptcy</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/6-simple-money-milestones-anyone-can-hit">6 Simple Money Milestones Anyone Can Hit</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-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</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-a-surprise-credit-limit-increase-can-harm-you">How a Surprise Credit Limit Increase Can Harm You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance affordability big purchases budgeting credit score debt financial readiness maintenance Wed, 18 Oct 2017 09:00:06 +0000 Dan Rafter 2037388 at http://www.wisebread.com Credit Challenged? How Alternative Credit Data Can Help Those With Little or No Credit http://www.wisebread.com/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_woman_working_at_her_office.jpg" alt="Young Woman Working at her office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you've got no credit file, or a very thin one, you know how hard it can be to get a credit card or loan. Without a credit record, you can't get a credit score, and lenders can't easily judge how much of a credit risk you are.</p> <p>Don't give up. Lenders are slowly beginning to consider other kinds of information when making credit decisions. That may help you get approved for credit, even without a traditional credit score. But it's important to also understand how this so-called alternative data is used, and the implications for your privacy.</p> <h2>What is alternative data?</h2> <p>Traditional credit data relies on information about how you've used credit or debt in the past. It is compiled by the three major credit bureaus: Equifax, Experian, and TransUnion. That data is then used by the major scoring companies, FICO and VantageScore, to build your credit scores. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <p>Maybe you haven't had experience with credit, or you had a negative experience that doesn't tell the whole story of how you would behave now with a new loan. Alternative data providers look at how reliably you've paid rent, utility bills, or rent-to-own agreements. They dig up nonpayment information, too.</p> <p>For instance, LexisNexis Risk Solutions gathers publicly available documents that show your professional licenses, evidence of college attendance, ownership of assets such as a home or boat, felony convictions, and your address stability. &quot;Address stability is the concept that if you're living in the same address for a period of time, you're more stable than if you're bouncing around four times a year,&quot; says Ankush Tewari, senior director of credit risk assessment at LexisNexis Risk Solutions. &quot;Multiple client studies have shown that people who move frequently are riskier than people who have a stable address history.&quot;</p> <p>LexisNexis Risk Solutions says the data it collects all has some proven ability to predict creditworthiness. By adding this sort of data to regular credit bureau data, it can help score about 40 million consumers who don't have a regular credit score. The company has paired with FICO and credit bureau Equifax to create an alternative credit score called the FICO Score XD. It's only for people whose credit files are so thin they can't get a regular credit score, and it relies on payment data from a consumer's utility, phone, and other bills.</p> <p>According to FICO, the new score should allow lenders to score more than half of all previously unscorable applicants. It's found that more than a third of those people turn out to have a FICO Score XD of at least 620, the cutoff point many lenders use for even considering a credit application. That means more people should be getting approved for credit. The trouble is, the product is so new, FICO has not revealed how many lenders are using it.</p> <p>TransUnion has had a similar scoring model called CreditVision Link since 2015, which incorporates a trended look at traditional credit data (how you've performed over time) with non-credit-related data collected from consumers' banking accounts, payday lending histories, and property, deed, and tax records. TransUnion told The New York Times that about 100 companies &mdash; primarily auto lenders and online lenders, but also an increasing number of credit card issuers &mdash; are using or testing the score. They're usually able to approve about 20 percent more applicants than they could before.</p> <h2>How alternative data can help you</h2> <p>The driving force behind the use of alternative data is lenders' desire to reach new customers who are creditworthy but can't show it through traditional means. &quot;Lenders tell us, 'We don't need help declining more people. We need help growing our business but without increasing our credit risk,'&quot; says LexisNexis's Tewari.</p> <p>That should mean good news for consumers who have been responsible with their finances but who haven't had a chance to build credit or have stumbled along the way. Alternative data may help increase your chances of being approved for a loan or credit card. &quot;It allows consumers to show that, while they may not be in a position to get a mortgage or a car payment, or they have no desire to get a credit card, they are still taking care of everyday financial responsibilities,&quot; says Kim Cole, community engagement manager for Navicore Solutions, a nonprofit credit counseling agency in Manalapin, New Jersey.</p> <p>A new company called FS Card is using alternative data to offer a credit card called Build Card to people who would otherwise have been rejected for a credit card. Build Card's target market is consumers with credit scores of 620 or below, meaning their credit is considered subprime. In the past, the only kind of card these consumers probably would have been able to get is a secured card, which requires a deposit of several hundred dollars upfront.</p> <p>Build Card asks applicants to agree to let the company use alternative data to assess their risk. In addition to traditional credit data, Build Card looks at payday loan information to determine whether an applicant is creditworthy. &quot;We're looking for an inflection point that shows the consumer has changed and is able to take on regular credit,&quot; says Marla Blow, CEO of FS Card. Typically this means they've been able to close out a payday loan. &quot;We're looking at the top 15&ndash;20 percent of payday loan users,&quot; she says.</p> <p>If the applicant is approved, they'll be given a regular credit card &mdash; no security deposit required. Granted, there is a $53 upfront fee, APRs are 25&ndash;29 percent, and the initial credit limit is only $500. But it's a step up from a payday loan. And if you do well with the initial credit limit, you can eventually have it increased to $750.</p> <h2>Concerns about privacy and transparency</h2> <p>One of the biggest concerns with alternative data is that people don't know it's being collected and used. Not everyone wants their financial history and other information rounded up and made available to financial institutions. And, as with any organization that collects personal information, there is always the chance that a data breach could happen. It's one thing if information that was already publicly available is stolen, but it may be more worrisome if you've voluntarily shared payment information that then gets disclosed in a breach.</p> <p>Beyond privacy and security, there are concerns about transparency. If you don't know what information lenders might look at when they're making lending decisions, you can't shape your behavior appropriately. For instance, maybe if you knew that bank overdrafts not only cost you money, but could also cause a lender to frown on your credit card application someday, you would be even more careful about not overdrawing. That's why some consumer advocates say you should first be asked whether you want to opt in to the collection and use of this sort of data.</p> <p>Consumer groups also worry about the accessibility of information that's being collected. &quot;People need to have access to data collected about them,&quot; says Linda Sherry, director of national priorities at Consumer Action. &quot;They need to be able to verify that it's accurate and to put notes on it to say what's happened in their life to justify why these things are happening to them.&quot;</p> <p>You already have those rights when it comes to data on your traditional credit report. The Fair Credit Reporting Act (FCRA) gives you the right to access your credit reports and if you find an error, it says the credit bureau must investigate and so must the bank or credit card issuer who furnished the data. The FCRA also requires creditors and employers to notify you if they've rejected you based on information in your credit report. That way, you can check the information and dispute it if it's incorrect.</p> <p>LexisNexis says you also have those same rights with the alternative data it collects. If you are, say, turned down for a loan because you've got a lien or judgment, you should be notified of that and given the chance to dispute any inaccuracies in the reporting. &quot;Alternative data must be compliant with the FCRA, which requires consumers have access to data that's used in credit decisions,&quot; says Tewari, who adds that his company allows consumers unlimited free access to the data it has on file. You can request it at any time, and as many times as you like. &quot;They have the ability to review it and correct it if there's an error,&quot; he says.</p> <h2>What you can do</h2> <p>While data collectors and lenders are in the driver's seat when it comes to the use of alternative data, there are still some things you can do to build your credit.</p> <h3>1. Pay all of your bills on time</h3> <p>This is always important, but even more so in times when companies are collecting information about how you pay all kinds of bills. Keeping on top of payments could help you build credit that you'll need in the future. Avoid overdrafts on your checking account, too, as this is a costly behavior that could also mar your alternative credit profile.</p> <h3>2. Check your traditional credit report and dispute any errors</h3> <p>&quot;If someone has been denied by the big lenders, that's a wake-up call that they need to go into their credit report, figure out why they're being denied, clean up the credit report as much as they can, and get back on track with a good credit history,&quot; says Consumer Action's Sherry. &quot;That's the best way to show yourself as someone that lenders will trust.&quot;</p> <h3>3. Get a secured card</h3> <p>This is the traditional way to go, and it works. Save up $300, use it as a deposit on a secured credit card, get a $300 credit line, then only make a small purchase with it a few times a year. At the end of a year &mdash; maybe sooner &mdash; you should have built enough credit to get a regular credit card. (See also: <a href="http://www.wisebread.com/the-5-best-secured-credit-cards?ref=seealso" target="_blank">The Best Secured Credit Cards</a>)</p> <h3>4. Ask your lender to look at FICO Score XD</h3> <p>Since this scoring model is fairly new, you likely won't see any immediate results if you request a lender review it. Banks have to pay to get access to this scoring model. But eventually if lenders see enough demand from consumers, they will begin to adopt it. It certainly can't hurt to ask.</p> <h3>5. Consider providing your own alternative data</h3> <p>If you're applying for a loan, it may help to present letters of good standing from your landlord, utility providers, or other monthly services that you pay on time.</p> <h3>6. Don't worry &mdash; yet &mdash; about modifying your behavior to fit the FICO Score XD model</h3> <p>For instance, if you really need to change addresses for the second time in a year, don't hold back just because it might affect your alternative credit score. A whole host of factors goes into most lenders' credit decisions, so no one factor is given too much weight.</p> <h3>7. Monitor your alternative credit record</h3> <p>This is not as easy as monitoring your traditional credit record, but if you're interested you can find out who's collecting your financial details by consulting the Consumer Financial Protection Bureau's list of <a href="http://files.consumerfinance.gov/f/201604_cfpb_list-of-consumer-reporting-companies.pdf" target="_blank">42 consumer reporting companies</a>. You'll have to check with each company's website to find out how to get your free annual report.</p> <h3>8. Correct mistakes if they arise</h3> <p>If you get a note that you've been denied credit due to a piece of alternative data, ask who furnished the information, and make sure it's accurate. You have the same right to dispute errors in alternative data as you do with traditional information on your credit report.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fcredit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FCredit%2520Challenged-%2520How%2520Alternative%2520Credit%2520Data%2520Can%2520Help%2520Those%2520With%2520Little%2520or%2520No%2520Credit%2520%25282%2529_0.jpg&amp;description=Credit%20Challenged%3F%20How%20Alternative%20Credit%20Data%20Can%20Help%20Those%20With%20Little%20or%20No%20Credit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Credit%20Challenged-%20How%20Alternative%20Credit%20Data%20Can%20Help%20Those%20With%20Little%20or%20No%20Credit%20%282%29_0.jpg" alt="Credit Challenged? How Alternative Credit Data Can Help Those With Little or No 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/yasmin-ghahremani">Yasmin Ghahremani</a> of <a href="http://www.wisebread.com/credit-challenged-how-alternative-credit-data-can-help-those-with-little-or-no-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-6"> <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-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-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/6-times-you-should-never-take-a-loan">6 Times You Should Never Take a Loan</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-three-interest-rates">The Three Interest Rates</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-bounce-back-from-a-bankruptcy">How to Bounce Back From a Bankruptcy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking alternative credit data borrowing credit history credit score lending privacy Tue, 10 Oct 2017 09:00:06 +0000 Yasmin Ghahremani 2033790 at http://www.wisebread.com Weak Credit? You Can Still Get a Mortgage Despite Tough Lending Standards http://www.wisebread.com/weak-credit-you-can-still-get-a-mortgage-despite-tough-lending-standards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/weak-credit-you-can-still-get-a-mortgage-despite-tough-lending-standards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_young_family_0.jpg" alt="Happy young family" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Talk to anyone who bought a house in the mid-2000s and they'll probably relate a painless, smooth process. It was a period of easy lending. Whether a borrower had bad credit, good credit, or no credit (am I starting to sound like a used-car salesman?), mortgage lenders handed out no-money down mortgages like they were going out of style &mdash; even qualifying some borrowers without verifying their income and assets. As we know, these loose lending standards helped cause the housing bubble to burst which led to the financial crisis.</p> <p>More than a decade later, mortgage lending standards have tightened, with lenders putting a lot of emphasis on creditworthiness. This isn't an issue for borrowers with good credit. But if your credit score isn't up to snuff, you may have to delay your homeownership dreams.</p> <p><a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast" target="_blank">Repairing a low credit score</a> is obvious fix in this situation. This involves paying your bills on time, correcting errors on your credit report, and keeping your debt to a minimum. But what if you're in the process of repairing your credit? It takes time to build a low credit score back up. So while your payment history for the past six to 12 months might be excellent, your credit score could still struggle.</p> <p>No worries. If your recent credit activity demonstrates a pattern of responsibility, it is possible to get a mortgage with weak credit &mdash; even with strict lending requirements.</p> <h2>Learn about FHA home loans</h2> <p>Conventional home loans are a popular choice because they require as little as 5 percent down and include temporary mortgage insurance. Lenders charge private mortgage insurance (PMI) when conventional borrowers put down less than 20 percent (and then cancel premiums once the property has 20 percent equity). The downside of a conventional loan is that lenders typically require a minimum 620 credit score.</p> <p>A 620 credit score is lower than the loan's previous minimum of 680. Even so, you could find yourself several points shy of the minimum guideline. If that's the case, check out FHA home loans insured by the Federal Housing Administration.</p> <p>This is an affordable alternative to a conventional loan, particularly if you have a weak credit score. Whereas a conventional loan requires a 620 credit score, an FHA loan allows for much lower credit scores &mdash; as low as 500 to 580. This is ideal if you've made a few credit mistakes in the past, yet you're on track to improve your credit score.</p> <p>Anyone can apply for an FHA loan, but it's certainly a fitting solution if you've filed for bankruptcy or experienced a past foreclosure. Currently, borrowers are eligible for an FHA home loan one year after a Chapter 13 bankruptcy, two years after a Chapter 7 bankruptcy, three years after a foreclosure, and three years after a short sale (one year in cases of extenuating circumstances, such as a job loss or illness). (See also: <a href="http://www.wisebread.com/is-an-fha-home-loan-right-for-you?Ref=seealso" target="_blank">Is an FHA Home Loan Right for You?</a>)</p> <h2>Prepare for a higher down payment</h2> <p>Be prepared to fork over a larger down payment if you're buying with weak credit. Even though 20 percent down payments are no longer required by lenders, an FHA home loan does require a minimum 3.5 percent down &mdash; but only if your credit score is 580 or higher. If you apply for an FHA loan with a credit score between 500 and 579, your mortgage lender will require a minimum 10 percent down.</p> <h2>Choose a portfolio lender</h2> <p>Using a portfolio lender is another option with a low credit score. Because many banks sell their mortgages to investors, they have to ensure these loans meet the requirements set forth by Fannie Mae and Freddie Mac, the government-sponsored entities that buy most of the home mortgages in the U.S. This limits the number of bad credit score loans approved by mortgage lenders.</p> <p>But if a mortgage lender or bank doesn't sell a percentage of its loans, they have the freedom and flexibility to approve riskier loan applicants &mdash; but only if the borrower has compensating factors to offset weak credit like a higher down payment, high income, or substantial assets. These loans are known as portfolio loans because the lender retains the loan as part of its own investment.</p> <h2>Expect a higher interest rate</h2> <p>Even though some mortgage lenders and loan programs accommodate weak credit, there's no escaping a higher mortgage rate. A low credit score and higher rates go hand-in-hand. Because the size of a borrower's down payment and credit affects mortgage rates, people with the lowest credit scores usually pay the highest rates. A higher rate increases borrowing costs and monthly payments, which makes homeownership more expensive in the long run.</p> <p>Of course, as your credit score improves, so does the opportunity to refinance your mortgage loan. If you refinance down the road and snag a lower rate, you'll reduce the amount you pay in interest and potentially lower your mortgage payment.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fweak-credit-you-can-still-get-a-mortgage-despite-tough-lending-standards&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWeak%2520Credit-%2520You%2520Can%2520Still%2520Get%2520a%2520Mortgage%2520Despite%2520Tough%2520Lending%2520Standards.jpg&amp;description=Weak%20Credit%3F%20You%20Can%20Still%20Get%20a%20Mortgage%20Despite%20Tough%20Lending%20Standards"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Weak%20Credit-%20You%20Can%20Still%20Get%20a%20Mortgage%20Despite%20Tough%20Lending%20Standards.jpg" alt="Weak Credit? You Can Still Get a Mortgage Despite Tough Lending Standards" 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/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/weak-credit-you-can-still-get-a-mortgage-despite-tough-lending-standards">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-7"> <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/do-you-really-need-a-20-percent-down-payment-for-a-house">Do You Really Need a 20 Percent Down Payment for a House?</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-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</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-mortgage-details-you-should-know-before-you-sign">5 Mortgage Details You Should Know Before You Sign</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-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bad credit buying a home credit score down payments equity fha loan home loans homeownership interest rates mortgages portfolio lenders Thu, 05 Oct 2017 08:30:11 +0000 Mikey Rox 2030975 at http://www.wisebread.com What Does Your Junk Mail Say About You? http://www.wisebread.com/what-does-your-junk-mail-say-about-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-does-your-junk-mail-say-about-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/businesswoman_reading_a_letter_at_office.jpg" alt="Businesswoman reading a letter at office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Since it costs money to produce and mail marketing materials, most of the junk mail you receive does not end up in your mailbox by accident. Marketing companies target customers with junk mail based on information that leads them to believe you would be a good candidate for their offers. The companies that send junk mail use information such as credit history, credit card balances, mortgage information, and public records to find targets for their marketing materials. They also buy lists of potential customers that have recently purchased a certain type of item or signed up for a catalog in a product category.</p> <p>What does the type of junk mail you receive say about you?</p> <h2>You have high net worth</h2> <p>If the information available to marketers such as home value in your neighborhood or length of your credit history indicates that you have significant net worth or may be nearing retirement, you may get offers related to investment and retirement planning offers, invitations to free dinner events to learn about investment services, and offers to subscribe to investment newsletters.</p> <h2>You have good credit</h2> <p>People with good credit scores tend to get the best credit offers. If you have a high credit score, you might receive offers for rewards and travel credit cards, preapproved credit card offers with favorable terms, and balance transfer offers with low fees. (See also: <a href="http://www.wisebread.com/10-questions-to-ask-before-accepting-a-credit-card-offer?ref=seealso" target="_blank">10 Questions to Ask Before Accepting a Credit Card Offer</a>)</p> <h2>You have poor credit or high debt</h2> <p>Credit offers with the least favorable terms are targeted to those with lower credit scores, since these people are more likely to take an offer with worse terms. Those with poor credit will typically get applications for credit cards with low &quot;teaser&quot; interest rates that go up, debt consolidation offers, and applications for credit cards with high interest rates, and high annual fees, as well.</p> <h2>You shop a lot</h2> <p>Many types of mail order purchases, online purchases, and orders from TV infomercials will get your name on catalog mailing lists that will be used to try to sell you related things, or even unrelated things.</p> <h2>You live in a good neighborhood</h2> <p>Some types of junk mail are sent to all residences in particular neighborhoods that are seen to be a good fit for what they are selling. You'll see lawn care and pest control services, high-end security alarm installation, and house cleaning deals addressed to you.</p> <h2>You're fixing up your house</h2> <p>Once you request information about one home improvement item, you'll likely start to get other offers as well, such as big ticket home improvement installations for doors, windows, siding, roofing, remodeling, and coupons from home improvement stores.</p> <h2>You bought a new car</h2> <p>If you buy a car from a dealer, your name can end up on a variety of mailing lists. Based on the date you purchased your car, you can get junk mail anticipating your next car purchase three or four years later. You'll get extended warranty offers, invitations for test drives, and contests you can enter if you stop by the car dealership.</p> <h2>You're an athlete or sports fan</h2> <p>If you buy sporting equipment by mail order or at a sporting goods store with delivery, your name and address can start to circulate on marketing lists for sporting goods, or fishing, hunting, and camping products.</p> <p>Or if you order tickets to watch your favorite sports team in action or sign up for a fan club, marketing companies will try to sell you other items related to your team, such as fan merchandise or event ticket offers.</p> <h2>You're a globe-trotter</h2> <p>Frequent travelers are a classic target for marketing via junk mail. If you're often seeing the world, once you get home you'll find vacation package offers, hotel club invitations, and frequent flyer program info in your mailbox. (See also: <a href="http://www.wisebread.com/the-best-credit-card-perks-beyond-points-and-miles?ref=seealso" target="_blank">The Best Travel Credit Card Perks Beyond Points and Miles</a>)</p> <h2>What are the best junk mail offers?</h2> <p>While most junk mail really is junk &mdash; either promotions for stuff you don't need, or offers that aren't a good deal anyway &mdash; sometimes the market research behind the junk mail works out, and you get an offer for a product you need at a price that makes sense, such as:</p> <ul> <li> <p>Credit card offers</p> </li> <li> <p>Balance transfer offers</p> </li> <li> <p>Loyalty programs</p> </li> <li> <p>Bank bonus offers</p> </li> <li> <p>Coupons for products that you buy regularly</p> </li> </ul> <h2>Can you sell your junk mail?</h2> <p>There is a lot of information that can be gleaned by studying junk mail, so much so that you can actually get paid to send in your junk mail for analysis. A company called Small Business Knowledge Center (<a href="http://www.sbkcenter.com/consumer.html" target="_blank">SBKC</a>) processes junk mail to identify marketing strategies and provide competitive intelligence to their corporate clients. (See also: <a href="http://www.wisebread.com/heres-how-to-earn-170-a-year-with-your-junk-mail?ref=seealso" target="_blank">Here's How to Earn $170 a Year With Your Junk Mail</a>)</p> <h2>How to get less junk mail</h2> <p>Many people don't find value in getting junk mail and would prefer not to waste the paper used to print it, or the time dealing with it. There are some actions you can take to cut down the amount of junk mail you receive.</p> <h3>OptOutPrescreen</h3> <p><a href="https://www.optoutprescreen.com/?rf=t" target="_blank">OptOutPrescreen</a> allows you to opt out of preapproved credit card offers. You will be asked to provide your social security number, but after you opt out, your name will not be reported in lists provided by the credit reporting companies to credit card marketers.</p> <h3>DMAchoice</h3> <p><a href="https://dmachoice.thedma.org/index.php" target="_blank">DMAchoice</a> is a service run by the Data &amp; Marketing Association (DMA) that allows you to cut down on the amount of direct mailings and catalogs you get. You can use their online tools to select which types of marketing materials you would like to receive &mdash; and which you don't want.</p> <h3>Catalog Choice</h3> <p>If you are plagued by too many catalogs filling your mailbox, <a href="https://www.catalogchoice.org/" target="_blank">Catalog Choice</a> is another resource to opt out of unwanted mailings. They will send opt out requests to merchants on your behalf for specific catalogs that you no longer want to get.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhat-does-your-junk-mail-say-about-you&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520Does%2520Your%2520Junk%2520Mail%2520Say%2520About%2520You-.jpg&amp;description=What%20Does%20Your%20Junk%20Mail%20Say%20About%20You%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/What%20Does%20Your%20Junk%20Mail%20Say%20About%20You-.jpg" alt="What Does Your Junk Mail Say About You?" 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/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/what-does-your-junk-mail-say-about-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-8"> <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/5-after-the-holidays-moves-your-credit-score-will-thank-you-for">5 After the Holidays Moves Your Credit Score Will Thank You For</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/debit-or-credit-which-one-should-you-choose-at-the-checkout">Debit Or Credit? Which One Should You Choose At The Checkout?</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-common-budget-mistakes-you-can-fix-right-now">5 Common Budget Mistakes You Can Fix Right Now</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-mental-biases-that-are-keeping-you-poor">5 Mental Biases That Are Keeping You Poor</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-late-payments-affect-your-credit">How Late Payments Affect Your Credit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Consumer Affairs bills credit score junk mail mail paperwork shopping habits spending habits Wed, 04 Oct 2017 08:30:11 +0000 Dr Penny Pincher 2030769 at http://www.wisebread.com 7 Things Your Credit Report Does NOT Include http://www.wisebread.com/7-things-your-credit-report-does-not-include <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-things-your-credit-report-does-not-include" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-629305628_0.jpg" alt="these things don&#039;t show up in your credit reports" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Ordering your credit reports every year and studying them carefully is a smart way to get a window into your financial well-being. But while credit reports contain a wealth of information about your history with money, they don't tell you <em>everything </em>about your financial health.</p> <p>In fact, there is plenty of financial information you won't find in any of your credit reports.</p> <h2>1. Your credit score</h2> <p>Your credit score is a key financial number. It gives lenders a snapshot of how responsible you've been with your finances. If you have thousands of dollars of credit card debt and you routinely pay bills late, your credit score will be low. If you pay your bills on time and you are using a smaller percentage of your available credit, your score will be high.</p> <p>Unfortunately, your credit report does not contain your credit score. To obtain your score, you'll have to pay one of the three national credit bureaus for it. Your credit card provider might also list a credit score on your monthly statements. This score might not be your official FICO credit score &mdash; the one most lenders rely on when deciding whether to lend you money. It can still give you a general idea of where you stand, though, and is worth keeping track of. (See also: <a href="http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing?ref=seealso" target="_blank">FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?</a>)</p> <h2>2. Your payments to utility companies</h2> <p>You pay your gas and electric bills on time every month. You might think that this key indicator of your financial responsibility would be listed on your credit report. Unfortunately, it's not. Utilities don't report payments to the credit bureaus.</p> <p>This means that your on-time payments to utility providers don't help your credit score. Late payments aren't reported, either. But be careful: If you're far enough behind on your payments that a utility sends your account to collections, that will show up on your credit report. And that black mark will give lenders reason to hesitate when deciding whether you qualify for a loan. An account in collections can also send your credit score plummeting by 100 points or more. (See also: <a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it" target="_blank">Account in Collections? Here's How to Fix It</a>)</p> <h2>3. Your rent payments</h2> <p>Paying your rent on time probably won't help your credit score, either. That's because most landlords still don't report rent payments to the credit bureaus, meaning that these payments don't show up on your credit report.</p> <p>There are services today, though, that landlords can use to report rent payments to the bureaus. Most landlords don't use these services yet, but the fact that they are available could be a sign that rent information will become more common on credit reports in the future.</p> <h2>4. Medical bills</h2> <p>The payments you make to doctors, dentists, and other medical professionals don't show up on your credit reports, either. Again, this is because doctors don't report payment information to the credit bureaus.</p> <p>Paying these bills late, though, could show up on your credit report if your medical providers send your account to a collections agency.</p> <h2>5. Your salary</h2> <p>You'd think the money you earn would be a key indicator of your financial health, and it is. But it's not an indicator of how likely you are to pay your bills on time and manage your credit. Because of this, it doesn't show up on your credit reports.</p> <h2>6. A job loss</h2> <p>Your credit reports do provide some basic employment information, with some listing your past and most recent employers. But if you've just lost your job, that information won't be included in your report. Your reports never mention whether you are still employed, and they don't list how long you've worked with any one company.</p> <h2>7. Your spouse's credit history</h2> <p>Your credit reports list financial information about you and you alone. If you're married, your spouse's history of paying bills and running up debt won't show up.</p> <p>However, if you and your spouse both have your names on a loan or credit card, that debt will show up on both of your credit reports. So will late payments you made on these accounts, even if paying the bills was your spouse's responsibility and not yours.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-things-your-credit-report-does-not-include&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Things%2520Your%2520Credit%2520Report%2520Does%2520NOT%2520Include.jpg&amp;description=7%20Things%20Your%20Credit%20Report%20Does%20NOT%20Include"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Things%20Your%20Credit%20Report%20Does%20NOT%20Include.jpg" alt="7 Things Your Credit Report Does NOT Include" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/7-things-your-credit-report-does-not-include">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-9"> <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-how-often-your-credit-score-gets-calculated">Here&#039;s How Often Your Credit Score Gets Calculated</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/7-apps-that-monitor-your-credit-for-you">7 Apps That Monitor Your Credit for You</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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight">Pay These 6 Bills First When Money Is Tight</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-your-credit-after-the-equifax-breach">How to Protect Your Credit After the Equifax Breach</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills collections credit history credit reports credit score Equifax Experian income payments rent TransUnion utilities Fri, 22 Sep 2017 08:30:11 +0000 Dan Rafter 2024892 at http://www.wisebread.com