credit scores http://www.wisebread.com/taxonomy/term/9780/all en-US Is It Worth Paying for Your Credit Score? http://www.wisebread.com/is-it-worth-paying-for-your-credit-score <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-it-worth-paying-for-your-credit-score" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_woman_looking_her_financial_progress.jpg" alt="Young woman looking her financial progress" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For decades after credit scores emerged in the late 1950s, they were rarely seen by anyone but loan officers. Nowadays, offers of free and cheap credit scores are everywhere &mdash; from the online dashboard of your bank or credit card account, to self-help finance sites. Other sites charge as much as $20 for a credit score.</p> <p>Why would you pay $20 for something you could get for free? Is the free score as accurate as the $20 score? It turns out, the answers to those questions are not simple, but &mdash; spoiler alert &mdash; it is sometimes worth it to pay up.</p> <p>I tested the various credit scores available myself by visiting a number of free sites, checking the free scores offered by my bank and credit cards, and by purchasing three credit score products. Of my three checking accounts, two of them offered free credit scores. Of three credit card issuers I looked at, all of them offered free scores, although I sometimes had to dig around for them once signed into my account. I learned that different credit scoring systems can come up with a range of numbers based on the same credit history. While all my scores were pretty good, they were spread over a 39-point range, which put me in the top category on some score reports, but only the second-best on others.</p> <h2>Test results</h2> <p>My results are summarized in the chart below. The chart notes the website or other source where I got each score, the name of the particular score I got (more on that in a minute), the credit bureau that provided the information upon which each score was based, and the price for the score. All the scores are based on a range of 300-850 points, unless otherwise noted. (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><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5170/credit_scores_0.jpg" alt="" width="517" height="800" /></p> <p>I am just one person, with one set of credit cards and one mortgage. How can I have so many different credit scores? How can I even have different credit scores that say they are based on the credit report from the same bureau? Which score is correct? (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>What you're paying for</h2> <p>Barry Paperno, who worked in the credit industry for 40 years and now writes about credit in his blog, Speaking of Credit, explained that I was looking at least three different products, created by different companies. The free score offered by popular websites is usually the VantageScore, formulated by a software product co-created in 2006 by the three major credit bureaus, Experian, TransUnion, and Equifax.</p> <p>The $15.95 score was created by <a href="https://www.equifax.com/personal/products/credit/report-and-score/" target="_blank">Equifax</a> with its own proprietary scoring system. Both VantageScore and the proprietary scores offered by the individual credit bureaus are great for educational purposes; in other words, they'll tell you if you have generally good credit or bad credit. But most banks don't use them to make lending decisions, Paperno says.</p> <p>The scores I paid $19.95 each for are from <a href="https://www1.myfico.com/products/onetimereports" target="_blank">FICO</a>, the original credit score company and the one that most banks turn to when making mortgage decisions.</p> <p>Another small difference among the different scores may be how old they are. The free scores that my financial institutions and <a href="https://www.creditsesame.com/" target="_blank">Credit Sesame</a> gave me were between two weeks and two months old, while the ones I paid for were dated only a couple of days before I checked them, and the free scores I got from <a href="https://www.freecreditscore.com/" target="_blank">FreeCreditScore.com</a> and <a href="https://www.creditkarma.com/" target="_blank">Credit Karma</a> were dated the same day I checked them. (See also: <a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score?ref=seealso" target="_blank">4 Surprising Things Lenders Check Besides Your Credit Score</a>)</p> <p>To further complicate things, several weeks passed between when I paid for the myFICO scores and when I checked the free scores. myFICO, I found, doesn't update once you've paid, so those scores are now almost a month old. During the intervening time, I charged some large purchases, and my credit score declined by 10 points or more on some of the other score reports but you'd never know that looking at the myFICO scores.</p> <h2>Which score should you get?</h2> <p>None of these scores are fake or inaccurate. All work in similar ways, assessing how likely you are to repay debt by looking at your history and your current use of credit. All provide an accurate picture of how your credit stacks up compared to other consumers. Which one you should get depends on your purpose.</p> <h3>Credit score health check</h3> <p>If you just want to know whether you have good or bad credit, any score will do. In that case, you might as well get a free score from your bank or credit card issuer, or go to one of the free sites listed here.</p> <p>There is no apparent advantage to going to a credit score site rather than getting it from your own bank or credit card site. Different sites have different bells and whistles; some show you the history of your score, while others take information from your credit report to help explain your score.</p> <h3>Mortgage</h3> <p>The type of score you look at matters more if your goal is to get a new credit card, mortgage, or other type of loan. &quot;Then your goal is to get your score to a certain point so that your credit application will be accepted,&quot; says Paperno. &quot;Since the scores tend to differ, it becomes important to know what score the lender is likely to pull.&quot;</p> <p>If it's a mortgage lender, they're likely to pull older FICO scores from each credit bureau, namely the FICO 2, FICO 4, and FICO 5 scores, possibly along with others. When you purchase your FICO score from myFICO, you can get your FICO Score 8 from all three credit bureaus, as well as a number of industry-specific scores. So if you want a mortgage and you're not sure if your credit is good enough (760 is usually the cutoff to qualify for the best rates, Paperno says), it's a great idea to go this route.</p> <p>For a <a href="https://www1.myfico.com/products/onetimereports" target="_blank">one-off snapshot of your FICO scores</a>, go to myFICO.com and click on the Products tab at the top. You can buy one-time single-bureau credit reports (FICO Score 1B Report for $19.95) or three-bureau reports (FICO Score 3B Report for $59.85).</p> <p>Why pay more for scores from all three credit bureaus instead of just getting one? Since the credit report from each bureau could be slightly different (each may include some details but not others), it's best to avoid surprises by making sure that the credit score based on each report is in the same range.</p> <h3>Car loan</h3> <p>If you're getting a car loan, the lender might pull the industry-specific FICO Auto Score, which comes with the scores from myFICO. To know for sure, call the finance department at the dealership you're considering and ask which bureau they pull from or which scores they use.</p> <p>Next, go to myFICO.com, click on the Products tab at the top of the page, buy one or all three scores from myFICO, then click on &quot;View additional FICO score versions used in mortgage, auto and bank card decisions.&quot; There, you'll find your FICO Auto Score 8, optimized to reflect the credit behavior that auto lenders care most about, with an emphasis on how well you've paid off previous auto loans (mine was 779, four points higher than my FICO Score 8).</p> <h3>Credit card</h3> <p>There is also a FICO score customized for the credit card industry, FICO Bankcard Score, but Paperno said that it's not as popular with credit card lenders as the Auto Score is with car lenders. He says it's not worth paying money just to get a Bankcard score. Any free FICO Score 8 is good enough.</p> <h3>Personal loan</h3> <p>For personal loans, even a 50-point difference in your credit score could affect your interest rate by several percentage points, according to GoBankingRates.com. But many lenders will do a soft pull of your credit during a prequalification process.</p> <h2>How do you know which score you're getting?</h2> <p>Most of the time, if you're getting it for free you can assume you're looking at a VantageScore, but not always. Most websites will identify &mdash; sometimes in small print &mdash; the source of the score they're providing. I purchased my three-bureau FICO score report from myFICO.com for $59.85; Experian also offers a three-score and credit report package for $39.99.</p> <p>But is it possible to find a FICO score for free? Yes. I got an Experian-based FICO Score 8 at FreeCreditScore.com, a site owned by Experian. And my bank provided my Equifax-based FICO Bankcard score.</p> <p>If you want to follow Paperno's advice and check FICO scores from all three credit bureaus when you have an important borrowing decision ahead of you, you will have to pay to do so. I didn't find any way to get all three for free.</p> <h2>Why are your FICO Score and VantageScore different?</h2> <p>Now that I understand that both FICO and VantageScore give me an accurate picture of my credit, I still wonder how they can look at the same reports and come up with different numbers. In particular, my FICO scores are my lowest scores. Is it always that way?</p> <p>&quot;FICO tends to be a little stricter,&quot; Paperno says. Although both systems consider basically the same facts &mdash; late payments, how much credit you have available, how much debt you have, the age of your accounts, etc. &mdash; they might vary slightly in the details. For example, if you have an account that went to collections and you paid it off, VantageScore will drop that black mark from your record, but it will still influence most versions of the FICO Score.</p> <h2>Buyer beware</h2> <p>When searching for free credit scores, I came across a number of Google ads promising them, leading to websites I was unfamiliar with. I found that many such sites are owned by companies with some pretty unsatisfied customers, many who complain they were charged for ongoing credit monitoring services without their knowledge.</p> <p>Even with the big name companies, make sure when paying for a credit score that you know what you're signing up for. Many will at least ask you if you want to sign up for a paid monthly credit monitoring subscription. When I purchased the $1 <a href="https://www.transunion.com/personal-credit/affiliate-landing" target="_blank">TransUnion</a> score, I at first completely missed that I had also signed up for a weeklong free trial of a $19.95-per-month credit monitoring service. Fortunately, I canceled it in time to avoid billing. I didn't want to repeat that experience, so when I clicked on a $1 credit score offer from Experian and realized that buying it would sign me up for a free trial of their $14.99-per-month monitoring service, I didn't buy either.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"> <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/Is%20It%20Worth%20Paying%20for%20Your%20Credit%20Score_.jpg" alt="Is It Worth Paying for Your Credit Score?" 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/is-it-worth-paying-for-your-credit-score">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-read-a-credit-report">How to Read a Credit Report</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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing">FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?</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 credit bureaus credit scores Experian exquifax fico free transuinon vantage scores Thu, 12 Apr 2018 08:00:06 +0000 Carrie Kirby 2128970 at http://www.wisebread.com 9 Ways Expats Can Maintain Their Credit Scores http://www.wisebread.com/9-ways-expats-can-maintain-their-credit-scores <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-expats-can-maintain-their-credit-scores" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_vacation_travel_528477676.jpg" alt="Expats learning how to maintain their credit scores" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Moving abroad can feel like the ultimate fresh start. But one element of American life you should never jettison is your good credit. Your U.S. credit score may not mean much in a foreign land, but assuming that you are not relocating for the rest of your life, you'll need that credit score someday when you come back. Rather than letting your credit score fall out of good graces, here's how you can maintain it while living abroad:</p> <h2>1. Don't run away from debts or financial obligations</h2> <p>At the end of college, my boyfriend and I landed exciting jobs in Beijing. The only problem was that we had a yearlong lease on our college apartment with nine more months left on it. When we couldn't find a subletter, we ditched and hoped for the best.</p> <p>Bad idea. When the landlord stopped receiving rent checks, he threatened to report us to a collections agency and to the credit bureaus. We ended up negotiating a partial payment, and we learned a valuable lesson: You can't run away from what you owe.</p> <h2>2. Keep your credit cards open</h2> <p>You're off to live in the jungles of <em>Tropicanaland</em>, where the only currency accepted is the cowrie shell. So why would you need those plastic credit cards that have to be paid in U.S. dollars?</p> <p>Keep them &mdash; especially the ones you've held longest &mdash; because <a href="http://www.wisebread.com/why-the-age-of-your-credit-history-matters" target="_blank">the age of your credit accounts</a> is a factor in your credit rating. Imagine you had just one credit card. If you have had that card for 12 years, close it when moving abroad for three years, then come home and have to open a new account, your average account age just went from 12 to zero. That will hurt your credit score. If you keep it open while you're gone, you'll instead come home to an average account age of 15.</p> <p>Another way that keeping your credit cards open benefits your credit score: It improves your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score" target="_blank">credit utilization ratio</a>, which calculates the percent of available credit that you're using. The higher this ratio, the more negatively it will impact your credit score. If your cards are paid off, and you leave them open, the amount of available credit you have increases &mdash; raising your credit score.</p> <h2>3. Find a way to use your credit cards periodically</h2> <p>The largest single factor for your credit score is whether you make payments on time. If you're not using your credit, you have no opportunity to demonstrate that you pay on time, which could hurt your score. Not only that, but a card issuer may close an account that sits dormant for years. There's no hard rule on when that might happen, but if you're going to be overseas for a very long time, it's a risk. (See also: <a href="http://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled?ref=seealso" target="_blank">How to Avoid Getting Your Credit Card Canceled</a>)</p> <p>To keep your payment track record going and to prevent an account from being considered inactive, find some regular expenses to set up on autopay. Maybe you still belong to a U.S. professional organization that you pay dues to, or want to support your favorite charity with an annual gift.</p> <p>In many, even most, countries, you could use your U.S. credit cards on local purchases. However, you might be paying foreign transaction fees or losing money due to the exchange rate. Also, if most of your income is earned abroad, it might be hard for you to pay for a lot of ongoing charges in U.S. dollars. Consult the card issuing bank and consider the exchange rate implications before deciding to use your credit cards abroad long term. (See also: <a href="http://www.wisebread.com/follow-these-5-credit-card-rules-when-traveling-abroad?ref=seealso" target="_blank">Follow These 5 Credit Card Rules When Traveling Abroad</a>)</p> <p>Of course, in order to pay for these charges, you'll probably also need to keep a U.S. checking account open and funded.</p> <h2>4. Establish online accounts</h2> <p>When I lived abroad, I had to rely on my mother to open my mail and make sure any charges got paid. This could get embarrassing, like the time my mom asked why I was spending hundreds at a place called &quot;Casino.&quot; I had to explain that this was really, truly the name of a French grocery store.</p> <p>Nowadays, if you are living in a location with unfettered internet access, you may be able to handle your business without stateside help. Before you go overseas, establish online access to your checking and credit accounts. This should allow you to not only pay your bills remotely, but also monitor your accounts for fees, fraud, and overdrafts &mdash; other potential causes of credit score damage. You can even choose to have your credit card bill paid out of your checking account automatically, if you're confident that the funds there will cover the bills.</p> <h2>5. Touch base with your banks and credit accounts before you move</h2> <p>It's always a good idea to inform banks and creditors when you're traveling, but even more so if you are moving away long term. They may have special hotlines for contacting them if you need help overseas. And knowing where you live could help your card issuer catch fraud more easily.</p> <h2>6. Maintain a U.S. address</h2> <p>Seasoned expats advise this for a number of credit-related reasons. Some banks, credit cards, and investment accounts might not be set up to do business with a foreign address. If for some reason you want to open a new account, you'll need a domestic address to do so.</p> <p>You can use a friend or relative's address or a mailbox service. Either way, make sure you are able to actually read any correspondence you get in a timely manner. That way, if a bank or credit account sends you a warning notice, you'll know right away and avoid credit-damaging mistakes. Fortunately, there are now services that will open and scan all mail for you, in case you don't have anyone you trust at home to do this.</p> <h2>7. Pay your taxes</h2> <p>If you don't pay money you owe to the U.S. Internal Revenue Service, you could end up with a tax lien sitting on your credit report for the next seven to 10 years &mdash; and good luck getting any credit in the U.S. while that is sitting there stinking things up.</p> <p>You may or may not owe taxes while you are living and working abroad, but you should still look into&nbsp;<a href="https://turbotax.intuit.com/tax-tips/irs-tax-return/does-everyone-need-to-file-an-income-tax-return/L7pluHkoW" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://turbotax.intuit.com/tax-tips/irs-tax-return/does-everyone-need-to-file-an-income-tax-return/L7pluHkoW&amp;source=gmail&amp;ust=1514074683386000&amp;usg=AFQjCNGERu7j_5a_3kBuVCza9HsJjRGCvw">whether you need to file a tax return</a>. You can claim a credit for any taxes you pay to a foreign government, which may eliminate your tax burden to the IRS. However, you'll still owe for any taxable U.S. investment gains or income such as rent payments on a U.S. property you own. It's especially important to report foreign bank and investment accounts to the IRS. Some expats advise hiring an accountant who specializes in Americans living abroad to file your tax return.</p> <h2>8. Expect to spend time shoring up credit when you return</h2> <p>If your only use of credit during a decade overseas was credit cards, you may have saved your credit profile from oblivion, but it still won't be as great as it might have been if you'd stayed home. That's because about 10 percent of your credit score is based on having a healthy mix of credit types: not just &quot;revolving accounts&quot; like credit cards, but also installment loans such as a car loan or a mortgage.</p> <p>Get back on the credit horse when you get home, and after making a series of on-time installment loan payments, you should see your score improve.</p> <h2>9. Be vigilant against identity theft</h2> <p>Being far away might make it easier to miss the warning signs of identity theft, such as bills arriving at your home addressed to someone else. So monitor those online statements and check your credit report regularly. You might even consider paying for a credit monitoring service. (See also: <a href="http://www.wisebread.com/dont-panic-do-this-if-your-identity-gets-stolen?ref=seealso" target="_blank">Don't Panic: Do This If Your Identity Gets Stolen</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"> <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%20Ways%20Expats%20Can%20Maintain%20Their%20Credit%20Scores.jpg" alt="9 Ways Expats Can Maintain Their Credit Scores" 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/9-ways-expats-can-maintain-their-credit-scores">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-claim-social-security-benefits-while-living-abroad">How to Claim Social Security Benefits While Living Abroad</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/debunking-8-common-credit-score-myths">Debunking 8 Common Credit Score Myths</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-countries-where-you-can-retire-for-1000-a-month">5 Countries Where You Can Retire for $1,000 a Month</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-5-things-with-the-biggest-impact-on-your-credit-score">The 5 Things With the Biggest Impact on 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/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Travel abroad accounts americans credit age credit history credit scores debt expatriates expats identity theft IRS payment history taxes Mon, 18 Sep 2017 08:30:10 +0000 Carrie Kirby 2021975 at http://www.wisebread.com 5 Myths About Credit Cards That Won't Go Away http://www.wisebread.com/5-myths-about-credit-cards-that-wont-go-away <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-myths-about-credit-cards-that-wont-go-away" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-637754848.jpg" alt="Woman learning myths about credit cards that won&#039;t go away" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>The idea of evaluating a person's creditworthiness goes back as early as 1899, when Equifax (originally called Retail Credit Company) would keep a list of consumers and a series of factors to determine their likelihood to pay back debts. However, credit cards didn't make an appearance until the 1950s, and the FICO score as we know it today wasn't introduced until 1989.</p> <p>Due to these timing differences, many U.S. consumers hold on to damaging myths about credit cards. Let's dispel five of these widely held but false beliefs and find out what to do to continue improving your credit score.</p> <h2>Myth #1: Closing unused cards is good for credit</h2> <p>Remember when United Colors of Benetton used to be all the rage and you shopped there all the time? Fast forward a decade; you don't shop there anymore, and you're thinking about shutting down that store credit card. Not so fast! Closing that old credit card may do more harm than good to your credit score.</p> <p>Your length of credit history contributes 15 percent of your FICO score. If that credit card is your oldest card, then closing it would bring down the average age of your accounts and hurt your score. This is particularly true when there is a gap of several years between your oldest and second-to-oldest card. Another point to consider is that when you close a credit card, you're reducing your amount of available credit. This drops 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 makes up 30 percent of your FICO score.</p> <p><strong>What to do:</strong> Keep those old credit cards open, especially when they are the oldest ones that you have. Just make sure that you're keeping on top of any applicable annual fees and they're not tempting you to spend beyond your means.</p> <h2>Myth #2: Holding a credit card balance is good for credit</h2> <p>The amount you owe lenders accounts for 30 percent of your FICO score. The smaller your credit utilization ratio (the amount of debt you hold compared to your total available credit), the better your score. This means if you can avoid carrying a balance, you should do so. However, responsible use of a credit card allows you to buy big ticket items, such as a kitchen appliance or laptop, that you can't pay off all at once. So, sometimes you will have to carry a credit card balance. When you do, credit lenders recommend that you keep your credit utilization ratio below 30 percent -- the lower, the better. Keeping a low credit utilization ratio demonstrates that you're more likely to be able repay your debts, positively affecting your credit score.</p> <p><strong>What to do:</strong> Pay back your credit card balance in full every month as much as possible. When you're not able to do so, then seek to maintain a debt-to-credit ratio below 30 percent across all your credit card debts. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>Myth #3: Paying the cellphone bill builds your score</h2> <p>Since some cellphone carriers may run a credit check to decide whether or not to approve you for financing, you may think that those cellphone carriers report your on-time payment history back to the credit bureaus. Payments to service companies, such as cellphone carriers, electricity providers, and natural gas providers, aren't reported back to the credit bureaus. (However, Experian does provide eligible renters the option to make their rent payments count toward their credit history.)</p> <p><strong>What to do:</strong> Don't sign up for a cellphone plan thinking you'll get a boost in your credit score. Do continue paying your cellphone bill (and all other bills!) regularly on-time. If your cellphone account were to be sent to collections, then the cellphone company would surely report that info to all credit bureaus.</p> <h2>Myth #4: Choosing a popular card will benefit you</h2> <p>A 2016 study of 20,206 credit card users by J.D. Power found that at least one in five credit card holders have a card which has fees or rewards not aligned with their actual purchase habits.</p> <p>In the hunt for bigger and better rewards, 20 percent of credit card holders end up with a card that doesn't match their needs and would be better served by a different rewards card, or even one without any without rewards at all and a lower interest rate. Here's an example from the study: One of the reasons that 44 percent of airline co-branded card holders appear to have the wrong card is that those individuals aren't spending at least the necessary $500 per month to gain enough rewards to cover the average annual fee of $75. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=seealso" target="_blank">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <p><strong>What to do:</strong> You don't just want to follow the crowd when choosing a credit card. Stack up your current credit card against others and figure whether or not it's time to find a new card more suitable to your lifestyle. Check out our guides on <a href="http://www.wisebread.com/how-rewards-credit-cards-really-work?ref=internal" target="_blank">how cash back cards really work</a> and choosing the <a href="http://www.wisebread.com/choose-the-best-travel-rewards-credit-card-with-this-guide?ref=internal" target="_blank">best travel rewards credit card</a> to find the card that fits your lifestyle.</p> <h2>Myth #5: Believing there's only one credit score</h2> <p>That <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal" target="_blank">free credit score</a> on your credit card statement may not be the same one used by a lending officer reviewing your application for a mortgage or car loan. Did you know that there more than 50 different types of FICO scores? Lenders have several options to choose from depending on their industry and preferred credit reporting agency.</p> <p><strong>What to do:</strong> If you get a free credit score through your card, check with the card issuer whether or not that score is a FICO score and what type of FICO score it is. This will help you know whether or not you can do an apples-to-apples comparison with the one used by your lender. Also, inquire with your lender if they can give you a target range for your loan to be approved. (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> <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/5-myths-about-credit-cards-that-wont-go-away">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-carry-a-balance-heres-why-you-still-need-a-credit-card">Don&#039;t Carry a Balance? Here&#039;s Why You Still Need a Credit Card</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/the-5-best-credit-cards-with-annual-fees">Best Credit Cards With Annual Fees</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/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-smart-ways-to-meet-a-rewards-card-minimum-spending-requirement">5 Smart Ways to Meet a Rewards Card Minimum Spending Requirement</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/best-credit-cards-that-offer-free-credit-scores">Best Credit Cards That Offer Free Credit Scores</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards bills credit history credit scores credit utilization ratio debts fico miles myths rewards Tue, 21 Mar 2017 10:31:11 +0000 Damian Davila 1907103 at http://www.wisebread.com 6 Infuriating Ways You're Ruining Someone Else's Credit http://www.wisebread.com/6-infuriating-ways-youre-ruining-someone-elses-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-infuriating-ways-youre-ruining-someone-elses-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-522183293.jpg" alt="Woman learning ways her credit is being ruined by someone else" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Your credit score is one of the biggest deciding factors in your financial health. It influences whether you qualify for the best interest rates on mortgages or auto loans, it can impact your insurance rates, and it can even determine whether you land that dream job or not.</p> <p>Establishing good credit requires managing your credit accounts responsibly. But your own credit score isn't the only one that can suffer the consequences of poor credit management. In the same way money can ruin a friendship, your financial carelessness could ruin someone else's credit. Here's how.</p> <h2>1. Charging up someone else's credit card</h2> <p>Becoming an <a href="http://www.wisebread.com/what-you-need-to-know-about-adding-another-user-to-your-credit-card" target="_blank">authorized user</a> on someone else's credit card helps build your own credit history. You'll receive a credit card in your name, and you're allowed to make charges on the account. But even though your name is on the card and the account shows up on your credit report, only the primary account holder receives the statements. This person is ultimately responsible for any purchases you make with the card.</p> <p>If you're an authorized user, the mature thing to do is pay whatever you charge each month. If you don't or can't pay, this sets in motion a chain of events that could ruin the other person's credit.</p> <p>Any purchases you charge to the account can raise the primary account holder's balance and increase their credit utilization ratio beyond a healthy range (utilization ratio is the credit card balance compared to the credit limit). Ideally, credit utilization should never exceed 30 percent of a credit limit &mdash; the lower, the better. A high utilization ratio can lower credit scores.</p> <p>In addition, ringing up charges on someone's credit card and not paying what you owe could trigger payment problems. This can happen if the primary user doesn't have enough money for higher minimum payments. If they can't pay the credit card bill within 30 days, the credit card company could report the late payment to the credit bureaus. While a 30-day delinquency won't tank a credit score, if it's longer than that, the damage is more serious &mdash; at which point, you'd better run.</p> <h2>2. Defaulting on a co-signed loan</h2> <p>Maybe you're getting a car loan and need a co-signer. If you have no credit or bad credit, a co-signer can help you qualify for financing. But if you don't uphold your end of the bargain by making on-time payments (or if you stop paying altogether), your actions affect both of your scores.</p> <p>Co-signers become responsible for loan payments when a primary signer can no longer make payments to the lender (which is why I would never, ever cosign for anyone). If you default on a loan and your co-signer can't take over the loan payments, the delinquency appears on both of your credit reports and remains there for up to seven years. (See also: <a href="http://www.wisebread.com/is-it-ever-okay-to-cosign-a-loan?ref=seealso" target="_blank">Is It Ever Okay to Cosign a Loan?</a>)</p> <h2>3. Bailing on shared expenses</h2> <p>Skipping out on a shared or joint expense, like a lease or a mortgage, is another way to ruin someone else's credit. If you move out abruptly after getting into a fight with your roommate or partner, and you refuse to cough up your half for joint expenses, the other person must come up with the cash or else risk an eviction, breach of contract lawsuit, or foreclosure. All three scenarios can destroy both of your credit scores.</p> <p>A similar issue can occur if you bail on a joint utility bill. If the account goes unpaid, the utility company will send the information to a collections agency. Collection accounts remain on credit reports for up to seven years &mdash; but your friend's urge to punch you square in the nose will last a lifetime.</p> <h2>4. Pressuring friends to spend money</h2> <p>Financial peer pressure gets many people into trouble. Whether you realize it or not, you could be guilty of driving your friends to spend money they don't have. Of course, everyone is responsible for their own finances. But if you push a &quot;You only live once&quot; attitude on others, or if you constantly entice your friends to spend outside their budgets, they could succumb to the pressure and use credit to finance keeping up with you.</p> <h2>5. Ignoring a parking ticket in a borrowed car</h2> <p>Don't hide or ignore a parking ticket you get in someone else's car. Even if there's no way to identify the actual driver at the time of the violation, the parking ticket is tied to the owner's license plate and they will owe any fines you incur. If the parking ticket goes unpaid, a negative mark can appear on the car owner's credit report.</p> <h2>6. Blowing off library fines</h2> <p>On the off chance you go to the library and check out a book using someone else's library card, return the book on time and pay any late fines you owe. Some cities report these unpaid fines to collection agencies, which can cause a negative mark on the library cardholder's credit report. In all likelihood, it's just a few bucks we're talking about here, which makes the situation particularly annoying.</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/6-infuriating-ways-youre-ruining-someone-elses-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-improve-your-credit-score">How to Improve Your Credit Score</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/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt 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/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Negatively Affect Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-worth-paying-for-your-credit-score">Is It Worth Paying for 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/the-5-things-with-the-biggest-impact-on-your-credit-score">The 5 Things With the Biggest Impact on Your Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance authorized users bad credit cosign credit scores parking tickets peer pressure ruining credit shared expenses unpaid utilities Tue, 21 Mar 2017 10:00:17 +0000 Mikey Rox 1908844 at http://www.wisebread.com FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing? http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_reading_paperwork_471708004.jpg" alt="Woman learning if free credit scores are a real thing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Building up and maintaining a good credit score is a great step toward achieving your financial goals. An <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">excellent credit score</a> can open doors to better financing for your dream home or a more reliable set of wheels. When used properly, a credit card can help you start off, continue to improve, or even <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal" target="_blank">build back your credit history</a>. Your on-time monthly credit card payments count as 35% of your FICO credit score, after all.</p> <p>The traditional way to find out your credit score involves contacting one or all of the credit bureaus and paying for their service to provide your score. Thanks to FICO's Open Access initiative in November 2013, however, credit card users may be able to access their scores free, every month on their statements. More than 50 lenders, including American Express, Bank of America, Chase, and Capital One, <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal" target="_blank">offer their customers free credit scores</a>.</p> <p>It's important to note, though, that the score you get on your statements may not reflect the actual score your mortgage lender or car dealership is looking at when considering you for a loan.</p> <h2>Case Study of a Free Credit Score</h2> <p>I have accumulated a few credit cards over the years, and some of those cards offer me a free credit score. I've looked at the credit scores indicated on my latest statements from each of these cards, and the scores vary by up to 59 points.</p> <p>So, what's going on? Which of these credit scores can I trust?</p> <p>The problem is that these credit cards are all using different factors and ways to calculate the score. Some of these factors include:</p> <ul> <li>The date my credit information was pulled;<br /> &nbsp;</li> <li>The credit reporting agency they use; and<br /> &nbsp;</li> <li>The type of credit score they are reporting.</li> </ul> <p>Given these different factors, you can clearly see that not all free credit scores are alike. It's important to know what credit data you're getting to correctly evaluate your financial health.</p> <h2>3 Criteria to Analyze Your Free Credit Score</h2> <p>Based on these findings, let's review key questions that you should ask yourself about your free credit score from an existing card, or one from a card that you're planning to open.</p> <h3>1. Is It a FICO Score?</h3> <p>Not all credit cards offer the same free credit scores. Capital One offers free TransUnion VantageScore 3.0 scores to all of its cardholders and, since March 2016, to non-customers through its CreditWise credit monitoring service. CreditWise is available as a smartphone app and allows you to sign up for a new account within the app. (See also: <a href="http://www.wisebread.com/7-apps-that-monitor-your-credit-for-you?ref=seealso" target="_blank">7 Apps That Monitor Your Credit for You</a>)</p> <p>Different credit cards use different algorithms to calculate scores. Generally, a FICO credit score provides you a closer look to what your lenders would actually get when pulling your credit score on their own. Credit scores other than a FICO are considered &quot;equivalency scores&quot; or &quot;educational scores,&quot; and are often referred to as &quot;FAKO&quot; scores. While a FAKO score may give you a general idea of where you stand with lenders, it may not be accurate enough to tell you whether or not you'll get approved for a loan.</p> <h3>2. If It's a FICO Score, Which One Is It?</h3> <p>FICO has been in the credit score business for over 25 years and it has developed more than 50 types of credit scores! Most credit card companies offering a free FICO score provide the <a href="http://myfico.7eer.net/c/27771/178841/2185?u=http%3A%2F%2Fwww.myfico.com%2Fcredit-education%2Ffico-score-8-and-multiple-versions-of-fico-scores%2F" target="_blank">FICO Score 8</a>. The key differentiating factors of a FICO Score 8 are that this score:</p> <ul> <li>Gives a bigger weight to cards that have a balance close to the cards' limit;<br /> &nbsp;</li> <li>Is more forgiving than other FICO score versions to one-time late payments of at least 30 days;<br /> &nbsp;</li> <li>Provides a bigger penalty for numerous late payments;<br /> &nbsp;</li> <li>Reduces &quot;tradeline renting&quot; benefit (a credit repair practice in which individuals with poor credit are added as an authorized user to a stronger credit account); and<br /> &nbsp;</li> <li>Ignores collection accounts with an original balance under $100.</li> </ul> <h3>3. What FICO Score Will Your Lender Use?</h3> <p>Depending on their industry and preferred credit reporting bureau, lenders can use different scores. Here are some <a href="http://myfico.7eer.net/c/27771/178841/2185?u=http%3A%2F%2Fwww.myfico.com%2Fcredit-education%2Fcredit-score-versions%2F" target="_blank">examples provided by FICO</a>:</p> <p>&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202017-01-07%20at%202.47.52%20AM.png" width="605" height="277" alt="" /></p> <p>According to FICO, the FICO Score 8 provided for free by most credit card companies is most useful when applying for a credit card. For other purposes, your FICO Score 8 may not appropriately predict your likelihood of not paying as agreed in the future of a specific credit obligation.</p> <h2>The Bottom Line: Should You Sign Up for a Free Credit Score From Your Credit Card?</h2> <p>Yes, you should definitely sign up for that free credit score from your financial institution as long as it's a FICO score. The main reason is that the lowest price offering from FICO (9 FICO scores, including FICO Score 8, and Equifax credit report monitoring) is <a href="http://myfico.7eer.net/c/27771/218633/2185" target="_blank">$19.95 per month</a> or $219 per year. If your current card doesn't offer you a credit score or you're looking to take advantage of a balance transfer with a 0% promotional APR, here are Wise Bread's recommendations on <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal" target="_blank">best credit cards that offer credit scores</a>.</p> <p>Having access to your free FICO Score 8 will allow you to save money on credit monitoring fees until you get closer to the acceptable range that your lender is looking for. Once you're closer to your target score, find out from your lender what score they are using and consider signing up for the <a href="http://myfico.7eer.net/c/27771/93942/2185" target="_blank">myFICO score tracking service</a> that gives you access to that specific score (ask for score name and company that issues it). While this option may cost up to $29.95 per month for a couple of months, it will allow you to have a more accurate picture than your FICO Score 8 and prevent a hard pull from your lender. Remember that each hard pull on your credit history slightly brings down your credit score, so it's a good practice to minimize hard pulls.</p> <p>Of course, make sure to read the fine print on the service agreement with myFICO so you don't miss the deadline to prevent a charge for the next month.</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/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing">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/is-an-fha-home-loan-right-for-you">Is an FHA Home Loan Right for 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/is-it-worth-paying-for-your-credit-score">Is It Worth Paying for 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/best-credit-cards-that-offer-free-credit-scores">Best Credit Cards That Offer Free Credit Scores</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-things-lenders-look-for-in-a-loan-application">5 Things Lenders Look For in a Loan Application</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-terrible-things-foreclosure-does-to-your-credit">3 Terrible Things Foreclosure Does to Your Credit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards auto loans credit monitoring credit scores fico free lenders mortgages myfico Thu, 19 Jan 2017 11:00:10 +0000 Damian Davila 1870052 at http://www.wisebread.com Why Millennials Should Embrace Credit Cards http://www.wisebread.com/why-millennials-should-embrace-credit-cards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-millennials-should-embrace-credit-cards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/women_credit_card_92044311.jpg" alt="Learning why millennials should embrace credit cards" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Millennials are avoiding credit cards more than any other generation. Perhaps this is because they have witnessed their own parents <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">struggling with debt</a>, or they are already feeling overwhelmed by <a href="http://www.wisebread.com/should-you-refinance-your-student-loan?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">student loan repayments</a>. While debt is a good thing to avoid, especially if you don't want to live paycheck to paycheck for the rest of your life, credit cards aren&rsquo;t always the enemy. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">13 Awesome Credit Card Perks You Didn&rsquo;t Know About</a>)</p> <p>In fact, credit cards can actually be beneficial toward your financial goals. Here are just a few reasons why you should embrace credit cards, after all.</p> <p>See also: <a href="http://www.wisebread.com/4-surprising-reasons-to-always-use-your-credit-card?utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=cc_article">4 Surprising Reasons to Always Use Your Credit Card</a></p> <h2>Better Protection</h2> <p>If your credit card account information is stolen, and someone goes on a spending spree, you have some time to resolve it. Card charges you flag as fraudulent will be placed on hold while investigated, and you won&rsquo;t be responsible for their payment or even interest accrual. While fraudulent charges are a royal pain, the silver lining is that none of your actual money has been stolen from your bank account.</p> <p>This is not true if your debit card, PayPal, or Venmo account has been hacked, and funds are used without your permission. You would report the fraud to your bank, but those funds have already left your account. You&rsquo;d have to wait for the bank to resolve this. In the meantime, if you have bills to pay, you&rsquo;ll be left asking for an extension while your bank investigates.</p> <h2>Build Up Credit</h2> <p>Your credit score affects everything from your interest rate for a new vehicle, to whether or not you qualify to rent, and even your job, if your career requires a specific clearance. Even having zero credit can be very harmful for your finances. You will end up having to cosign your loan with somebody, or you could be hit with a high interest rate.</p> <p>You don&rsquo;t even have to use your credit card all the time to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">build a healthy credit score</a>. Instead, start with one credit card, spend $100&ndash;$200 a month on it, and pay it off each month. Look for a card that comes with <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">free credit score monitoring</a> so you can keep track of your score.</p> <h2>Get Free Money</h2> <p>Even if you aren&rsquo;t interested in the world of credit card rewards, it&rsquo;s simple to get cash back for your purchases. Some cards will offer a higher percentage of cash back for certain types of purchases, like <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">groceries</a>, <a href="http://www.wisebread.com/the-5-best-credit-cards-for-dining-out?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">dining</a>, or <a href="http://www.wisebread.com/5-best-gas-rewards-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">gas</a>. Others have a <a href="http://www.wisebread.com/best-credit-cards-that-offer-flat-rate-rewards-for-all-spending?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">flat rate cash back percentage</a> on all purchases, so you don&rsquo;t have to worry about bonus categories. Either way, you&rsquo;re getting money back on purchases you&rsquo;re already planning on making. (See also: <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best Cash Back Credit Cards</a>)</p> <h2>Get Free Travel</h2> <p>Collecting credit card <a href="http://www.wisebread.com/5-steps-to-getting-a-free-or-close-to-free-vacation-in-9-months-or-less-with-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">rewards points for travel</a> doesn&rsquo;t have to be complicated. Get points or miles for the purchases you make on your card, redeem them for statement credits toward travel purchases, or use the points to purchase travel. The best part about <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">travel rewards credit cards</a> is the <a href="http://www.wisebread.com/5-best-sign-up-bonuses-for-airline-miles-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">sign up bonuses</a> that you can collect when you get a new card. My husband and I <a href="http://www.wisebread.com/how-i-redeemed-a-12000-family-vacation-with-credit-card-rewards-in-2-months?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">earned a free trip</a> just by switching our regular spending to a new card for a few months. (See also: <a href="http://www.wisebread.com/how-travel-rewards-credit-cards-really-work?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">How Travel Rewards Credit Cards Really Work</a>)</p> <p>Take advantage of these promotions and bonus points to travel your dream destinations more affordably. Once you get married and have kids, it is harder to see the world.</p> <h2>Purchase Protection</h2> <p>Credit cards have an amazing number of protections in place. Purchase protection protects against theft and damage. Price protection allows you to get a difference on an item&rsquo;s price if it goes down shortly after you&rsquo;ve bought it. Extended warranty automatically extends the warranty on your item up to an additional year. Some even have return protection, which allows you to get a refund even if you&rsquo;ve been denied a return from the vendor.</p> <h2>Interest Free Financing</h2> <p>Many cards offer <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">0% intro APR on purchases for 6-18 months</a>. This means that you can pay off a large purchase over a year and half, with no interest. The important thing to remember though, is that you have to be committed to paying it off during that time. It&rsquo;s never wise to accrue credit card debt, pay interest, and live beyond your means. But getting an interest-free loan for 18 months if you are certain you can pay it off, is a great deal.</p> <h2>Car Rental</h2> <p>Most car rental vendors will require a credit card. Even better is that many <a href="http://www.wisebread.com/what-does-car-rental-insurance-really-cover-on-your-credit-card?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit cards also come with rental car insurance</a>, which will save you money on your rental.</p> <h2>Avoid Fees While Traveling</h2> <p>Instead of paying an exchange rate for cash when traveling abroad, use a <a href="http://www.wisebread.com/smarter-security-and-no-foreign-transaction-fees-the-best-credit-cards-to-use-while-on-vacation?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit card with no foreign transaction fees</a>. It has the benefit of being safer than carrying cash, and has built in fraud and purchase protections.</p> <h2>Benefiting From Credit Cards While Staying Out of Debt</h2> <p>Even with all of the benefits a credit card can bring, &ldquo;25% of Millennials describe credit cards as something that worsens their financial standing,&rdquo; according to one study. It is true that credit cards can dig you deep into debt and financial problems if you aren&rsquo;t careful. Here are three ways to reap the benefits without falling into debt.</p> <ul> <li><strong>Balance Credit Cards Like Checkbooks: </strong>Past generations used to balance their checkbooks by writing down every expense, making sure they knew how much was in their checking account at all times. Modern technology has made this practice archaic, but it still can be useful. Every time you spend money on your credit card, subtract it from your checking account either with the help of an app or pen and paper.<br /> &nbsp;</li> <li><strong>Use Credit Cards to Pay for Usual Bills: </strong>You can earn points without spending more than you already do each month. Pay your bills online through a credit card or use one solely for gas or groceries. Take advantage of cards that offer extra points for spending in a certain category.<br /> &nbsp;</li> <li><strong>Don&rsquo;t Let Credit Cards Change Your Spending Mentality: </strong>Credit cards can give us the false illusion that we have more money than we actually have to spend. Don&rsquo;t fall victim to this. Still stick to a strict budget and only splurge what you have set aside specifically for spending.</li> </ul> <p>It is great that Millennials are trying to avoid debt more than the other generations. However, avoiding debt does not mean you have to avoid credit cards. Use credit cards to your advantage to make your <a href="http://www.wisebread.com/best-credit-cards-for-everyday-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">everyday spending go a little further</a>. (See also: <a href="http://www.wisebread.com/how-to-save-an-extra-109486-a-year?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">How to Save an Extra $1,000 a Year</a>)</p> <p><em>What is your favorite credit card to use? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/why-millennials-should-embrace-credit-cards">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/top-seven-reasons-why-i-use-my-credit-card-for-everything">Top 7 Reasons Why I Use My Credit Card for Everything</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-flight-booking-hacks-to-save-you-hundreds">10 Flight Booking Hacks to Save You Hundreds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-reasons-why-i-prefer-credit-cards-over-cash">10 Reasons Why I Prefer Credit Cards Over Cash</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-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Negatively Affect 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/suze-orman-tells-us-to-pay-only-the-minimum-on-credit-cards-wait-what">Suze Orman Tells Us To Pay ONLY The Minimum On Credit Cards. Wait, What?!</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards car rentals credit cards credit scores financing fraud protection millennials travel warranties Thu, 21 Jul 2016 10:00:12 +0000 Ashley Eneriz 1753340 at http://www.wisebread.com 8 Things I Learned About Money After Getting Married http://www.wisebread.com/8-things-i-learned-about-money-after-getting-married <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-things-i-learned-about-money-after-getting-married" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_game_000017059049.jpg" alt="Learning things about money after getting married" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Marriage comes with its fair share of life lessons, and money is among the most prominent of these. Here's what I've <a href="http://www.wisebread.com/9-ways-getting-married-is-good-for-your-finances" target="_blank">learned about money while being married</a> &mdash; for better and worse.</p> <h2>1. Credit Scores and Debt Should Be Laid Bare While You're Still Dating</h2> <p>Money is a taboo subject, in general, and couples &mdash; especially new ones who are still navigating the muddy waters of a blossoming relationship &mdash; don't like to talk about the financial predicaments they may be in. But these conversations are necessary.</p> <p>My husband and I were sort of forced into the conversation as we bought our first home before we got married, but even if that's not on the horizon for you and your partner, it's still good to assess the <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly" target="_blank">credit score and debt</a> situation so you both know what you're dealing with. That's not to say that you should dump somebody because their financial standing isn't as great as you might have hoped it would be, but it's certainly a factor to consider as you plan your life together.</p> <h2>2. Discuss Future Financial and Investment Goals Before Saying &quot;I Do&quot;</h2> <p>Before I got married I had plans for my future, but those plans changed (at least a little) when I decided to get hitched. I adapted my strategy to accommodate my husband &mdash; but I didn't derail it altogether, and I don't recommend that you do either. It's about compromise &mdash; it's beneficial to discuss your specific plans and goals ahead of your nuptials. Your partner may not want to open that new business, or carry the potential financial burden that comes along with it. On the other hand, your spouse may be totally on board with how you've mapped out your financial future and/or investments, and vice-versa. But you won't know until you discuss it.</p> <p>Lay it all out on the table before getting anywhere near the altar so you each have a clear idea of where your relationship is headed financially (in theory, at least) once you're joined in holy &mdash; and legally binding &mdash; matrimony.</p> <h2>3. Schedule Uninterrupted Time to Discuss Your Finances in Depth</h2> <p>The only way my husband and I stay on the same page about our finances &mdash; and, specifically, the money that's coming in and going out on a constant basis &mdash; is to schedule time to discuss where we're at financially. We usually have a dinner date once a month where at least part of the conversation is about our budget, expenses, debt, and increases or decreases in expected income.</p> <p>We also have an annual meeting at the end of the year to discuss what we anticipate the next year's expenses to be, and how we plan to meet them. While it's not easy integrating another person into the mix financially &mdash; and it can sometimes be stressful for you if you've overspent or missed a bill and you don't want it to result in an argument &mdash; it's needed so that you can both stay on track and repair snags together.</p> <h2>4. Keep Your Family Out of Your Finances &mdash; Period</h2> <p>In a perfect world, we'd all be rich and nobody would want for anything. That's not the case, however, and sometimes family and friends come knocking for a loan. My general rule is to not provide this type of financial support to anyone, as it rarely turns out well &mdash; and most people will tell you that. My husband, on the other hand, views this subject differently, and there's been at least one time where there was zero discussion about providing the loan to a family member, and I didn't find out about it until after the fact.</p> <p>I wasn't particularly bothered by the amount of the loan or to whom it went &mdash; it was his money and he could do what he wanted with it &mdash; but rather that I wasn't included in the conversation. Even though I wasn't contributing to this particular loan, it could have affected our ability to purchase or finance something we needed down the road, and I felt as if I had the right to be informed.</p> <h2>5. You're Morally and Legally Obligated to Help One Another Financially</h2> <p>Whether you like it or not, whatever happens to your spouse financially also, in a sense, happens to you. This could mean a moral obligation to get out of whatever money pickle you may have gotten into, or, worst-case scenario, it could be a legal obligation, like if you file joint taxes and owe the government money. The IRS debt may be the result of one or the other's financial status &mdash; like if you have taxes taken out automatically each pay period from employment, but your spouse is an entrepreneur (like I am) who pays estimated taxes &mdash; but legally you're both on the hook for the debt. Not being prepared for this situation, or how to handle it responsibly and fairly, can lead to resentment and loads of other issues that you're better off without.</p> <h2>6. Keeping Separate Accounts Can Help Maintain Some Independence</h2> <p>My husband and I keep a joint account for shared purchases, like vacations, but we've also always maintained our own separate checking and savings accounts. For some couples this may seem odd, but for us it's helped us keep a part of our individual independence intact. While we consult each other on major purchases, we don't have to ask one another if we can buy some of the smaller things or little luxuries that we want, which in turn helps us to avoid nitpicking each other about things we don't think the other one should be buying.</p> <p>I can only imagine how couples who co-mingle all their money argue about how many coffees or beers each is buying per week, the 19th pair of new shoes she's bought this year, or the new video game he brought home. The bottom line for us is that the bills get paid and we're still able to save; we're allowed to treat ourselves every now and then without having to ask permission or fear retribution.</p> <h2>7. Debt Can Destroy Your Relationship &mdash; If You Let It</h2> <p>A few years ago I discovered a substantial amount of debt that my husband racked up, and I was completely gutted over the situation. How, why, when, where? So many questions went through my mind, not the least of which was, how are we going to pay this off? I was lucky in that regard as my husband took full responsibility for it and promised to pay it off himself &mdash; and he has. But it may not work out like that for everyone.</p> <p>If your partner isn't capable of paying off the debt, you, in fact, may be responsible for it too if it's attached to a joint credit card or another joint account. When that happens, it will likely put a major strain on your relationship. Old debt is one thing, but new debt &mdash; that is, debt acquired singularly by one partner while you're in the relationship &mdash; has a much more damaging and lasting effect. We were able to get past this and get back on track, but it's not easy. It definitely puts stress on the marriage, which can further worsen an already rocky relationship.</p> <h2>8. Money Doesn't Buy Happiness</h2> <p>All the houses, nice cars, designer clothes, and luxury goods in the world will not make you happy in a relationship you don't want to be in. When you're sitting among all your beautiful things and you wonder why you seemingly have everything but still aren't satisfied, you need to look beyond the bling. There's a deeper issue for which you're trying to compensate. Talk about it; make decisions. Your mental health is worth more than what's in your bank account &mdash; always. Remember that.</p> <p><em>What has marriage taught you about money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-things-i-learned-about-money-after-getting-married">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/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea">3 Reasons Taking a Loan For Your Wedding Is a Bad Idea</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/6-reasons-average-people-should-consider-a-prenup">6 Reasons Average People Should Consider a Prenup</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-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family Lifestyle budget meetings compromises credit scores debt marriage money lessons relationships spouses Tue, 24 May 2016 09:30:21 +0000 Mikey Rox 1716048 at http://www.wisebread.com The 5 Things With the Biggest Impact on Your Credit Score http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-5-things-with-the-biggest-impact-on-your-credit-score" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_credit_card_000081290463.jpg" alt="Woman learning things that make biggest impact on her credit score" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know that your FICO credit score is a key number. Mortgage lenders will use it to determine whether you qualify for a home loan. They'll also use it to determine how high of an interest rate you'll pay on that loan.</p> <p>You should know, too, that lenders consider a FICO score of 740 or higher to be a strong one, and that scores under 640 are generally considered weak.</p> <p>But do you know exactly what makes up your all-important FICO credit score?</p> <p>It isn't surprising if you don't. Your credit score is made up of several factors, everything from how often you pay your bills on time to how much you owe on your credit cards.</p> <h2>1. Your Payment History</h2> <p>Nothing is more important to your FICO score than your payment history, and this is according to the team at Fair Isaac Corporation, the company that <em>created </em>the FICO score. According to the <a href="https://shareasale.com/r.cfm?b=1111539&amp;u=255320&amp;m=41089&amp;urllink=&amp;afftrack=">myFICO</a> website, your payment history makes up 35% of your credit score.</p> <p>Your FICO score will drop &mdash; often by 100 points or more &mdash; if you have late payments on your credit cards, retail accounts, car loans, and mortgage loans. Missed payments remain on your credit reports for seven years, but decrease in importance as time moves on.</p> <p>Your payment history also includes any bankruptcies &mdash; which stay on your credit reports for seven to 10 years &mdash; and foreclosures, which remain on your reports for seven years.</p> <p>If you have a good record of no missed payments on all or most of your credit accounts, your FICO score will tend to be higher, though other factors could negate your solid payment history.</p> <h2>2. The Amount You Owe</h2> <p>Owing a lot of money on credit cards and on loans can reduce your credit score. According to myFICO, the money you owe makes up 30% of your credit score.</p> <p>But owing a lot doesn't necessarily cause your credit score to plummet. What is more important is <em>how much of your available credit</em> you are using. Say you have $10,000 worth of available credit on your credit cards. If you are using $8,000 worth of this credit, your score will be lower than if you are only using $2,000 of it. That's why financial experts recommend that you never close an open credit card account, even if you've paid it off and are not using it. (See also: <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=seealso">This One Number Is the Key to Your Credit Score</a>)</p> <h2>3. Length of Your Credit History</h2> <p>How long you've been using credit is another important factor in your credit score, making up 15% of it, according to myFICO. In general, the longer your credit history, the better it is for your credit score.</p> <p>Your credit history includes the age of your oldest account, the age of your newest account, and the average age of all of your accounts. Your history also includes the length of time since you've used specific accounts.</p> <h2>4. Your Credit Mix</h2> <p>Your mix of credit cards, retail accounts, installment loans, and mortgage loans makes up 10% of your credit score. In general, it's better if you have a diverse mix of credit types. But, according to myFICO, your credit mix is rarely a key factor in calculating your credit score. This factor is most important for consumers who have more limited credit histories and less information on their credit reports.</p> <h2>5. New Credit</h2> <p>Your newest credit accounts &mdash; including credit cards, mortgage loans, and auto loans &mdash; make up 10% of your FICO score. The researchers at myFICO say that consumers who open several credit accounts in a short period of time are a greater risk to default on their loans or miss credit card payments. Because of this, the FICO scores of consumers who have opened too many new credit accounts could dip, especially if these consumers have a short credit history.</p> <p><em>How do you keep your credit score in top condition?</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <div align="center"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-5-things-with-the-biggest-impact-on-your-credit-score&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%205%20Things%20With%20the%20Biggest%20Impact%20on%20Your%20Credit%20Score%20(1).jpg&amp;description=The%205%20Things%20With%20the%20Biggest%20Impact%20on%20Your%20Credit%20Score" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <div align="center">&nbsp;</div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/The%205%20Things%20With%20the%20Biggest%20Impact%20on%20Your%20Credit%20Score%20%281%29.jpg" alt="The 5 Things With the Biggest Impact on Your Credit Score" 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/the-5-things-with-the-biggest-impact-on-your-credit-score">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-late-payments-affect-your-credit">How Late Payments Affect Your Credit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-you-shouldnt-freak-out-if-you-miss-a-payment-due-date">Here&#039;s Why You Shouldn&#039;t Freak Out If You Miss a Payment Due Date</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-your-credit-score-dropped-out-of-the-blue">5 Reasons Why Your Credit Score Dropped Out of the Blue</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/can-too-many-credit-cards-hurt-your-credit-score">Can Too Many Credit Cards Hurt Your Credit Score?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills credit scores FICO score late payments payment history Tue, 29 Mar 2016 10:00:13 +0000 Dan Rafter 1678006 at http://www.wisebread.com 3 Terrible Things Foreclosure Does to Your Credit http://www.wisebread.com/3-terrible-things-foreclosure-does-to-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-terrible-things-foreclosure-does-to-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house_foreclosure_sign_000016301916.jpg" alt="Learning what foreclosure does to your credit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're about to lose your home to foreclosure. Will it destroy your credit? Unfortunately, yes &mdash; your three-digit FICO credit score will plummet following, and leading up to, a foreclosure.</p> <p>There is hope, though. Even after a foreclosure, you <em>can </em>rebuild your credit score. You'll even be able to qualify for a mortgage loan again one day. Just be prepared to wait.</p> <p>&quot;If there is a bright side to foreclosure, it is that credit scores will recover with time and reestablishing a good payment history,&quot; said J.D. Crowe, president of Lawrenceville, Georgia-based Southeast Mortgage and president of the Mortgage Bankers Association of Georgia. &quot;The most important thing for people to know about a foreclosure absolutely, without question, is to always pay everything on time, especially a mortgage payment.&quot;</p> <h2>The Credit Score Drop</h2> <p>Lenders of all kinds rely heavily on your FICO credit score to determine whether they should approve you for a loan, and at what interest rate. If your FICO score is too low, lenders will hesitate to loan you money. When they do, they'll charge you higher interest rates to make up for the risk.</p> <p>Today, most lenders consider a FICO score of 740 or higher to be a good one, indicating a borrower with a history of paying bills on time and not running up too much credit card debt.</p> <p>How far will your FICO score drop if you suffer a foreclosure? There's no one single answer. The actual fall your score takes depends on what your score was before you went through foreclosure, how many missed mortgage payments you accumulated, and whether you had any other missed payments on your credit reports.</p> <p>In general, though, a foreclosure will drop your credit score by at least 100 points &mdash; usually more. And typically, consumers' credit scores have already taken a hit before foreclosure. That's because they usually miss several mortgage payments before lenders start the foreclosure process.</p> <p>Crowe estimates that depending on your individual circumstances, your FICO credit score will fall by 100 to 300 points. If you started with a solid 750 score, it could fall to the low 500s by the time your foreclosure closes.</p> <p>That foreclosure will remain on your credit report for seven years. This means that borrowers will see it every time they pull your credit during this period.</p> <h2>Waiting for Another Mortgage</h2> <p>Don't plan on applying for a new mortgage anytime soon after a foreclosure. First, your credit score will probably be too low. Secondly, mortgage lenders impose mandatory waiting periods for borrowers after a foreclosure.</p> <p>If you want to apply for a conventional mortgage loan &mdash; one not insured by the federal government &mdash; you'll have to wait at least seven years after a foreclosure. You might be able to qualify for a conventional loan after just three years if you can prove extenuating circumstances led to your foreclosure, such as a job loss, illness, or divorce. However, Crowe said that it is very rare for lenders to shorten the mandatory waiting period no matter what you list as the cause of your foreclosure.</p> <p>If you want to apply for a loan insured by the Federal Housing Administration, better known as an FHA loan, you'll have to wait three years from your foreclosure. However, if you can prove that a job loss led to your foreclosure, you will only have to wait one year to apply for a new FHA loan. You will have to prove, though, that the job loss reduced your regular income by at least 20%. You'll also have to provide documents showing that your income has since returned to its previous level or higher.</p> <p>You can apply for a loan insured by the U.S. Department of Veterans Affairs as soon as two years after your foreclosure. But you do have to meet the eligibility requirements to qualify for a VA loan.</p> <h2>Rebuilding Your Credit</h2> <p>Once your score has fallen, it's time to start rebuilding. You can do this by paying all of your bills on time and cutting down on credit card debt. Don't close any unused credit cards, though. Having available credit that you aren't using actually <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score">improves your credit score</a>.</p> <p>Over time, your score will slowly improve. And lenders will care less about your foreclosure as the years move on, as long as you don't make any other late or missed payments.</p> <p>Eventually, and usually before the seven-year wait for foreclosures to fall off your credit reports, you will again be able to qualify for auto loans, credit cards, and other loans as long as you show that you are now managing your finances responsibly and paying your bills on time.</p> <p>See also: <a href="http://www.wisebread.com/what-are-secured-credit-cards?ref=seealso">Sign Up for a Secured Credit Card to Raise Your Score</a></p> <p>&quot;If you have had a foreclosure, accept responsibility, pick yourself up, and move on with your life,&quot; Crowe said. &quot;It is not the end of the world. What you must do from this point forward is to pay every creditor on time.&quot;</p> <p><em>Have you gone through a foreclosure? What steps did you take to repair your credit?</em></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/3-terrible-things-foreclosure-does-to-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s 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/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse</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-whats-included-in-a-homes-closing-costs">Here&#039;s What&#039;s Included in a Home&#039;s Closing Costs</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-lenders-look-for-in-a-loan-application">5 Things Lenders Look For in a Loan Application</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-an-fha-home-loan-right-for-you">Is an FHA Home Loan Right for You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit reports credit scores FHA fico foreclosures loans mortgages Mon, 22 Feb 2016 10:30:22 +0000 Dan Rafter 1656523 at http://www.wisebread.com 8 Signs You've Crossed From "Healthy" Debt to "Problem" Debt http://www.wisebread.com/8-signs-youve-crossed-from-healthy-debt-to-problem-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-signs-youve-crossed-from-healthy-debt-to-problem-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_tied_up_000012430983.jpg" alt="Learning signs you&#039;ve crossed from healthy debt to problem debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We here at Wise Bread generally preach that all debt is bad &mdash; but there is such a thing as a healthy level of debt. Most people can get by with a modest amount of debt, especially if it's for constructive things like college or a mortgage, which can help you build wealth long term. Debt becomes a problem, however, when it reaches a certain magnitude or is wrapped up in credit cards or other unnecessary, high-interest loans.</p> <p>Here are some signs your debt level has crossed from healthy to problematic.</p> <h2>1. Your Debt-to-Equity Ratio Is Holding You Back</h2> <p>Lenders, especially those offering mortgage loans, will often evaluate loan candidates based on a measure of debt versus income. People with a higher ratio of debt to equity are often denied the ability to borrow more. It's very difficult to get a mortgage loan if your debt-to-equity ratio is above 40%, and many lenders shy away from anything above 30%. People with high ratios are considered less likely to have the ability to repay money they owe. If you find that banks and other lenders are turning you down, it's time to reduce your debt load.</p> <h2>2. Your Debt Is Not in Student Loans or a Mortgage</h2> <p>It's debatable whether there is such a thing as &quot;good&quot; debt, but at the very least, student loans and mortgages can play a role in building wealth over the long term. Credit cards, however, are often what you use to buy &quot;stuff&quot; &mdash; clothes, gadgets, and other items that accumulate in your life and don't build any real value. If you have a <a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money">mountain of debt</a>, and most of it is the result of consumer spending, it's time to recognize that you have a problem.</p> <h2>3. Your Credit Score Is Sinking</h2> <p>Having <em>some </em>amount of debt isn't going to kill your credit score. In fact, it can help it, as long as you've consistently shown you can pay in full. But there's a point at which debt can be too high for credit bureaus to view positively. Order a copy of your credit report &mdash; you can get a copy from each bureau for free once a year &mdash; and check your score. A score above 700 means you're doing well. But lower scores could negatively impact the interest rate if you borrow for a home, a car, or other need. A score that's too low could make it impossible for you to borrow at all. (See also:&nbsp;<a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score?ref=seealso">10 Surprising Ways to Negatively Affect Your Credit Score</a>)</p> <h2>4. You're Maxing Out Those Credit Cards</h2> <p>When you are finding yourself increasingly in the hole due to credit card borrowing, that's a bad sign. Interest rates on credit cards are often very high, so if you can't pay off the balance in full each month, your debt problem only grows. Credit cards have borrowing limits, and you should rarely come close to hitting them. If you're hitting those limits &mdash; or even worse, opening new credit cards to allow for more spending &mdash; that's a sign that your debt problem is severe.</p> <h2>5. You're Not Paying on Time</h2> <p>You can have debt and maintain a solid credit score, as long as you pay your bills when they are due. People see their credit scores decline when they begin paying bills late. <a href="http://www.tkqlhce.com/click-2822544-10809829-1284618439000?sid=lemke-1658760">Credit Karma</a> reports that for people with with fair to excellent credit scores (600 or above), the on-time payment rate was more than 95%. But that dipped to 75% for those with scores between 500 and 599, and 60% for those with scores under 500.</p> <h2>6. You've Considered Ignoring Important Bills</h2> <p>I once had a friend who was struggling with debt to the point that he would consider pushing back or even blowing off payment of his rent, utilities, and other key bills. His feeling was that as long as he wasn't evicted and the lights stayed on, he'd be able to manage. But this is living on the edge and a sign your debt level is absolutely unhealthy.</p> <h2>7. You Have No Emergency Fund</h2> <p>If debt has you stretched so thin that you can't save anything for a rainy day, that's a problem. You may feel like you're getting by okay, but all it takes is one dead heat pump, one surprise medical emergency, or a blown car engine for you to face true financial hardship.</p> <h2>8. It's Hurting Your Relationships</h2> <p>Couples argue about money frequently, even when they're financially stable and have money in the bank. But the carriage of heavy debt can lead to serious strain between your loved ones. If you're constantly arguing about the level of debt that you have, it's not healthy and bears paying down.</p> <p><em>Do you recognize yourself in any of these signs of unhealthy debt?</em></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/8-signs-youve-crossed-from-healthy-debt-to-problem-debt">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/5-loan-options-for-those-with-good-credit">5 Loan Options for Those With Good 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/6-times-when-its-okay-to-take-a-loan">6 Times When It&#039;s Okay to Take a 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/7-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</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-it-ever-okay-to-cosign-a-loan">Is It Ever Okay to Cosign a 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/5-surefire-signs-you-have-too-much-debt">5 Surefire Signs You Have Too Much Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management borrowing credit scores emergency funds equity loans overspending Fri, 19 Feb 2016 10:30:30 +0000 Tim Lemke 1658760 at http://www.wisebread.com Is an FHA Home Loan Right for You? http://www.wisebread.com/is-an-fha-home-loan-right-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-an-fha-home-loan-right-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_house_000023047862.jpg" alt="Couple learning if an FHA home loan is right for them" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're ready to buy a home, and you know that you can afford the monthly payments that come with a mortgage loan. But there's one challenge: You don't have enough money for a large down payment.</p> <p>Don't despair: An FHA loan can help. These mortgages insured by the U.S. Department of Housing and Urban Development's Federal Housing Administration require more affordable down payments, which could make getting the home of your dreams an easier financial task. And borrowers can qualify for FHA loans even with lower credit scores. FHA loans, though, do come with some additional fees, which might impact the overall cost of the mortgage. (See also:&nbsp;<a href="http://www.wisebread.com/heres-why-your-parents-could-buy-a-home-while-you-still-rent">Here's Why Your Parents Could Buy a Home While You Still Rent</a>)</p> <p>Still interested? Read on to learn whether an FHA loan is for you.</p> <h2>When FHA Loans Make Sense</h2> <p>You can technically qualify for an FHA loan even if your FICO credit score is as low as 500. However, that doesn't mean that you won't struggle to find a lender to work with you. The FHA doesn't actually originate loans &mdash; it only insures them &mdash; so, you'll still have to work with a private lender to get an FHA mortgage. And many of these lenders (despite the willingness of the FHA to insure borrowers with such low scores) won't provide mortgage money to borrowers whose scores are too close to 500.</p> <p>Still, FHA loans are a good option for borrowers with credit scores that are below, say, 700. Today's lenders consider FICO scores of 740 or higher to be ideal. They'll reserve their lowest interest rates for borrowers with strong credit. And if your score is below 640, you'll find that only a smaller number of lenders will be willing to work with you. These lenders might recommend that you apply for an FHA loan if your score is too low.</p> <p>FHA loans aren't just a good option for borrowers with weak credit, though. They're also a good choice for borrowers who don't have a lot of money for a down payment. If your FICO credit score is at least 580, you can qualify for an FHA loan that requires a down payment of just 3.5% of your home's purchase price.</p> <p>For a home costing $180,000, that 3.5% down payment comes out to a manageable $6,300.</p> <p>If your FICO credit score is at least 500, you can technically qualify for an FHA loan that requires a down payment of 10% of your home's final purchase price, which is still better than the 20% down payment that some conventional lenders will require.</p> <h2>The Downsides of an FHA Loan</h2> <p>There is a downside to FHA loans: They come with higher fees than conventional loans.</p> <h3>Extra Up Front Costs</h3> <p>If you take out an FHA loan, you'll have to pay two types of mortgage-insurance premiums. The first is an upfront premium of 1.75% of your total mortgage loan. If you take out a loan for $175,000, that comes out to $3,062.75 (you'll have to pay this premium when you take out the mortgage). You can either do this in one lump sum as a closing cost, or you can include it in your loan amount &mdash; turning, say, that $175,000 loan into $178,062.75 &mdash; and pay it off with each of your monthly payments.</p> <h3>Mortgage Insurance</h3> <p>An FHA loan also comes with an annual mortgage insurance premium that you'll have to pay each year. This annual fee depends on the length of your loan and the size of your down payment.</p> <p>If you are taking out a 15-year loan and you put down less than 10% of your home's purchase price, your annual mortgage insurance premium will be 0.7% of your outstanding loan balance. If you put down 10% or more on a 15-year loan, your annual premium will be 0.45% of your loan balance.</p> <p>If you take out a 30-year loan with a down payment of less than 5%, your annual mortgage insurance premium will be 0.85% of your loan's balance. If you put down more than 5% on a 30-year mortgage, that premium will be 0.8% of your balance.</p> <p>So, if you put down 3.5% initially on a 30-year FHA loan and your loan's outstanding balance is $180,000, you'd pay $1,530 that year in mortgage insurance premiums. Again, you would pay that amount off in small amounts with each monthly mortgage payment.</p> <p>Unlike conventional loans, you'll never be able to cancel the mortgage insurance premium. With conventional mortgages, you can cancel your mortgage insurance payments once your loan's balance is 80% or less than your home's market value.</p> <p>So when you're deciding whether an FHA loan is right for you, you'll have to weigh whether the extra yearly fees are worth the convenience of those low down payments and looser credit requirements. For many borrowers who otherwise can't afford the dream of homeownership, the answer may be yes. But if saving a larger down payment for a traditional mortgage <em>is</em> feasible, it's likely to result in lower overall costs.</p> <p><em>Did you buy a home with an FHA loan? What was the process like for you?</em></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/is-an-fha-home-loan-right-for-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing">FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?</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-whats-included-in-a-homes-closing-costs">Here&#039;s What&#039;s Included in a Home&#039;s Closing Costs</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-terrible-things-foreclosure-does-to-your-credit">3 Terrible Things Foreclosure Does to Your Credit</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-things-lenders-look-for-in-a-loan-application">5 Things Lenders Look For in a Loan Application</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-long-does-it-really-take-to-close-on-a-house">How Long Does It Really Take to Close on a House?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit scores fha loans fico insurance lenders mortgages Mon, 11 Jan 2016 14:00:03 +0000 Dan Rafter 1634308 at http://www.wisebread.com Best Credit Cards That Offer Free Credit Scores http://www.wisebread.com/best-credit-cards-that-offer-free-credit-scores <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-credit-cards-that-offer-free-credit-scores" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit-score_000032762958.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Do you know what your credit score is? Your credit score is the entirety of your credit history condensed into a single number that lenders (and sometimes potential employers, landlords, and others) will use to approve or deny you and determine your interest rate. And if you've been struggling to <a href="http://www.wisebread.com/a-secured-credit-card-can-repair-your-credit-score-heres-how-to-pick-the-best">build or rebuild your credit</a>, it can help tremendously to learn your credit score each month.</p> <p>Thankfully, there are credit cards that will offer customers their credit score each month at no additional charge. This started after the Consumer Financial Protection Bureau encouraged card issuers to do so. Some card issuers began offering credit scores last year, while others have just gotten around to it. Below are the best cards that currently offer free credit scores, and more are expected to join.</p> <h2>Discover it&reg; Miles</h2> <p><img style="float:right;margin:0 5px 5px 10px;" class="img-exempt" src="http://www.lduhtrp.net/image-2822544-13216112-1516840259000" alt="" width="154" height="97" border="0" /><a style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;" target=" rel=" href="http://ct.wisebread.com/click.php?pg=34&amp;pid=67&amp;pp=1&amp;uv=xcardbutton"><img alt="" class="img-exempt img-button" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a></p> <p>One of the benefits the <a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=67&amp;pp=1&amp;uv=xname">Discover it&reg; Miles</a> card offers is access to your free Credit Scorecard with your FICO&reg; Credit Score. You also earn 1.5x miles for each dollar you spend, with no caps or limitations. And, for new cardmembers, Discover will match the miles earned at the end of the first year. There is a 0% introductory APR for 14 months on purchases, and 10.99% on balance transfers for 14 months. After the intro period, the APR is variable at 13.49% - 24.49%. There is no annual fee or foreign transaction fee. <a href="https://www.discovercard.com/application/terms?srcCde=KXD4">See rates and fees.</a></p> <p><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=67&amp;pp=1&amp;uv=xend"><strong>Click here to learn more and apply for the Discover it&reg; Miles card today!</strong></a></p> <h2>Chase Slate&reg;</h2> <p><img src="http://imgsynergy.com/product_creatives/4470d7d236c1b456ae7828402033efb2.png" class="img-exempt" style="float:right;margin:0 5px 5px 10px;" alt="" width="154" height="97" border="0" /><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=39&amp;pp=1&amp;;uv=xcardbutton" rel="nofollow" title="Chase Slate&reg;" alt="Chase Slate&reg;" target="_blank" style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" class="img-exempt img-button" alt="" /></a>The <a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=39&amp;pp=1&amp;uv=xname" rel="nofollow" target="_blank">Chase Slate&reg;</a> card comes with a monthly FICO score and Credit Dashboard for free. The dashboard helps you monitor your credit health by including the reasons behind your score, a summary of your credit report information, and tips on managing your credit. Plus, this card boasts the only introductory offer with 0% APR and no balance transfer fees. New cardholders receive 15 months of introductory 0% APR financing on both new purchases and balance transfers, with no fee for transfers completed within 60 days of account opening. The APR after the intro period is 16.49% - 25.24% variable, depending on your credit. There is no annual fee.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=39&amp;pp=1&amp;uv=xend" rel="nofollow" target="_blank">Click here to learn more and apply for the Chase Slate&reg; card today!</a></strong></p> <h2>Citi&reg; Double Cash Card - 18 month BT offer</h2> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u784/CitiDoubleCash.jpg" alt="" class="img-exempt" style="float:right;margin:0 5px 5px 10px;" width="154" height="97" border="0" /><a href=" http://ct.wisebread.com/click.php?pg=34&amp;pid=47&amp;pp=2&amp;uv=xcardbutton" target=" rel=" style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" class="img-exempt img-button" alt="" /></a>Citi offers a free FICO score to their cardholders that is based on your credit history as recorded by Equifax. The <a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=47&amp;pp=2&amp;uv=xname" target="_blank" rel="nofollow">Citi Double Cash Card - 18 month BT offer</a> from our partner Citi is one of their most popular cards and is one that rewards you for paying off your purchases with additional cash back. Cardholders earn 1% unlimited cash back on every purchase, then earn an additional 1% back when those purchases are paid. There are no caps and no category restrictions. New cardholders get 0% intro APR on balance transfers for 18 months. After that the variable APR will be 14.99%-24.99%*, depending on your creditworthiness. There is no annual fee.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=47&amp;pp=2&amp;uv=xend" target="_blank" rel="nofollow">Click here to learn more and apply for the Citi&reg; Double Cash Card - 18 month BT offer today!</a></strong></p> <h2>Capital One&reg; Quicksilver&reg; Cash Rewards Credit Card</h2> <p><img src="http://imgsynergy.com/product_creatives/04dd974af0d2b6d56328b1784af4e507.png" class="img-exempt" style="float:right;margin:0 5px 5px 10px;" alt="" width="154" height="97" border="0" /><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=27&amp;pp=4&amp;uv=xcardbutton" target=" rel=" style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" class="img-exempt img-button" alt="" /></a>Another popular card is the <a rel="nofollow" target="_blank" href="http://ct.wisebread.com/click.php?pg=34&amp;pid=27&amp;pp=4&amp;uv=xname">Capital One&reg; Quicksilver&reg; Cash Rewards Credit Card</a>, which offers unlimited 1.5% cash back on every purchase. It includes a 0% intro APR on purchases for 9 months, and a variable APR of 14.49%-24.49% after that. Balance transfers also have a 0% intro APR for 9 months (which will also have a variable APR of 14.49%-24.49% apply thereafter), and a 3% fee will be applied to each balance transferred. New cardholders can earn a one time $150 cash bonus after spending $500 on purchases within 3 months from account opening. There is no annual fee.</p> <p><strong><a rel="nofollow" target="_blank" href="http://ct.wisebread.com/click.php?pg=34&amp;pid=27&amp;pp=4&amp;uv=xend">Click here to learn more and apply for the Capital One&reg; Quicksilver&reg; Cash Rewards Credit Card today!</a></strong></p> <h2>Barclaycard Ring&trade; Mastercard&reg;</h2> <p><img src="http://imgsynergy.com/product_creatives/20106907485b37e9de3a0243310387b6.png" alt="" class="img-exempt" style="float:right;margin:0 5px 5px 10px;" width="154" height="97" border="0" /><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=23&amp;pp=5&amp;uv=xcardbutton" rel="nofollow" title="Barclaycard Ring&trade; MasterCard&reg;" alt="Barclaycard&reg; Ring MasterCard&reg;" target="_blank" style="border:none;float:right;clear:right;margin: 0 5px 5px 10px;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" class="img-exempt img-button" alt="" /></a>The <a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=23&amp;pp=5&amp;uv=xname" rel="nofollow" target="_blank">Barclaycard Ring&trade; Mastercard&reg;</a> is a unique card that offers benefits through crowdsourcing. Cardholders propose ideas and vote for the things they want for the card. In addition to offering a&nbsp; free FICO score every month, it also features a Giveback&trade; program where members may receive a percentage of the company's profits. The variable APR for purchases and balance transfers is 10.49%. There is no balance transfer fee or annual fee.</p> <p><strong><a href="http://ct.wisebread.com/click.php?pg=34&amp;pid=23&amp;pp=5&amp;uv=xend" rel="nofollow" target="_blank">Click here to learn more and apply for the Barclaycard Ring&trade; Mastercard&reg; today!</a></strong></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/best-credit-cards-that-offer-free-credit-scores">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/the-best-0-balance-transfer-credit-cards">The Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees">The Best Credit Cards with No Balance Transfer Fees</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/fico-or-fako-are-free-credit-scores-from-credit-cards-the-real-thing">FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-credit-cards-to-wipe-out-holiday-debt">The Best Credit Cards to Wipe Out Holiday Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management best credit cards credit scores fico Sun, 28 Jun 2015 17:34:23 +0000 Jason Steele 1472453 at http://www.wisebread.com Are You a Credit Invisible? Get Seen by Building Your Score http://www.wisebread.com/are-you-a-credit-invisible-get-seen-by-building-your-score <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-a-credit-invisible-get-seen-by-building-your-score" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit_score_tablet_000027514776.jpg" alt="How to build a credit score if you don&#039;t have one" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you a &quot;credit invisible?&quot; The Consumer Financial Protection Bureau defines credit invisibles as those adults whose credit histories are so limited that they don't have three-digit credit scores. According to the bureau, 26 million U.S. adults <a href="http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf">have no credit histories</a> with national reporting agencies TransUnion, Experian, and Equifax and, because of this, no FICO credit score.</p> <p>That's a huge problem. Lenders today rely heavily on three-digit <a href="http://www.wisebread.com/4-reasons-your-credit-score-may-improve-soon">credit scores</a> to determine which consumers are good lending risks. They also use these scores to determine the interest rates they charge on auto and mortgage loans. Consumers without credit scores, then, will struggle to <a href="http://www.wisebread.com/what-are-secured-credit-cards?ref=internal">qualify for credit cards</a>, home loans, auto loans, and personal loans. And even if they do qualify for credit, they'll pay far higher interest rates.</p> <h2>Why Credit Matters</h2> <p>Having a high credit score can even have an impact on what job you land and where you live. A growing number of employers are analyzing the credit of job applicants. And many apartment landlords do the same before deciding whether to rent to prospective tenants.</p> <p>&quot;Not having a credit score absolutely impacts your qualify of life,&quot; said Steve Joung, founder and chief executive officer of Chicago-based apartment rental agency Pangea Properties. &quot;If you have better credit, you can rent a nicer apartment. You can get in a neighborhood that is closer to transportation and to your job. Your apartment building might have more amenities that bring you happiness. The quality, condition, and location of where you live is a big factor in your overall happiness and satisfaction.&quot;</p> <p>Consumers build credit histories by paying bills such as mortgage, auto, or student loan payments on time. They also <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=internal">build a credit history</a> by making regular credit card payments. Those consumers who don't have student loans, auto loans, home loans, or credit cards? They might not generate any credit history.</p> <p>Many consumers are surprised to learn that several payments they make are not reported to the credit bureaus. Payments to medical providers, utilities, and cell-phone companies are not reported, and don't help consumers build a credit history. Up until recently, none of the three credit bureaus tracked on-time rent payments, either. That is starting to change, with Experian and TransUnion now giving landlords and renters the chance to report their monthly payments.</p> <p>Consumers who don't have enough credit history won't have credit reports that are full enough to generate a three-digit credit score. They will struggle to qualify for any loan or credit program.</p> <h2>How to Build Credit</h2> <p>There is hope, though. Rod Griffin, director of public education with Experian, says that consumers can start building their credit in small ways. One such way is to <a href="http://www.wisebread.com/a-secured-credit-card-can-repair-your-credit-score-heres-how-to-pick-the-best?ref=internal">apply for a secured credit card</a> at their bank or credit union. (<a href="http://www.wisebread.com/the-5-best-secured-credit-cards?ref=seealso">See our favorite secured credit cards</a>)</p> <p>A secured card operates like a traditional credit card except for one big difference: The credit limit is tied to the amount of money the card's holder has in a savings account. But card holders can't spend more than their limit.</p> <p>Secured accounts are a way for financial institutions to offer credit to consumers who lack a credit history while also protecting themselves: Consumers can't charge more than they can afford. These credit cards are limited. But those who make their payments on time each month will steadily begin to build a credit history.</p> <p>Consumers can also ask a family member who has a high credit score to co-sign for them on an auto or personal loan. This gives consumers without credit histories the chance to show that they can make loan payments on time.</p> <p>Griffin said that to earn a FICO score &mdash; the most important of the credit scores &mdash; people must typically have a credit history that is at least six months old. There are other scores, such as the VantageScore from Experian, that take less time. Experian can issue consumers VantageScores as soon as three months after they first build a credit history.</p> <p><em>How did you build up your credit history?</em></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/are-you-a-credit-invisible-get-seen-by-building-your-score">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt 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-reasons-your-credit-score-may-improve-soon">4 Reasons Your Credit Score May Improve Soon</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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-improve-your-credit-score">How to Improve 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/never-borrow-money-for-these-5-buys">Never Borrow Money for These 5 Buys</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance building credit credit history credit scores loans Fri, 12 Jun 2015 13:00:11 +0000 Dan Rafter 1451204 at http://www.wisebread.com 4 Reasons Your Credit Score May Improve Soon http://www.wisebread.com/4-reasons-your-credit-score-may-improve-soon <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-reasons-your-credit-score-may-improve-soon" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_with_calculator_000010107304.jpg" alt="Man whose credit score is improving" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>About 45 million U.S. adults have no credit scores, according to a study released in early May by the Consumer Financial Protection Bureau. This is a big deal. Lenders rely on three-digit <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">credit scores</a> to determine who gets credit and at what interest rate. Consumers without credit scores will struggle to qualify for a mortgage loan, auto loan, or even a credit card.</p> <p>There is good news on the way: It might soon be easier for consumers to build a credit score. That's because the national credit bureaus are beginning to count additional forms of payment as part of consumers' credit histories.</p> <h2>Rental History Can Build Credit</h2> <p>Consumers typically build a positive credit history &mdash; and a strong credit score &mdash; by paying their credit cards, mortgage loans, student loans, and auto loans on time. But historically, the credit bureaus didn't track on-time rent, utility, cable, or cell-phone payments. Consumers who never missed a rent or utility payment, then, often found themselves with no credit because they weren't paying off mortgage loans, credit cards or auto loans.</p> <p>The national credit bureaus, though, are making changes. Experian and TransUnion &mdash; two of the three national bureaus, with Equifax being the third &mdash; are now collecting on-time rent payment data as part of their credit profiles. Consumers who always pay their apartment rents on time now have the opportunity to build a credit score from these two credit bureaus.</p> <p>Both bureaus are working with RentTrac, a service that allows tenants across the nation to pay their apartment rents online. Renters who pay through RentTrac can then have their payment data sent to TransUnion and Equifax.</p> <p>This is a big move for consumers. Emily Christiansen, director of Experian's RentBureau, said that the credit bureau recently conducted a study of the impact of adding rental information. A total of 11% of the study participants did not have a credit score before Experian began counting on-time rent payments. Once Experian did start collecting this information? Nearly 97% of this group gained enough of a payment history to build a credit score.</p> <p>Christiansen also said that participants who already had a credit score saw their scores rise by an average of 29 points.</p> <p>That, too, is important. Lenders consider a FICO credit score of 740 or higher to be an excellent score. Consumers with the highest scores qualify for the greatest number of loan programs and the lowest interest rates.</p> <p>&quot;Consumers are often surprised that these other payments are not reported,&quot; Christiansen said. &quot;It seems like such a no-brainer that this information should be reported.&quot;</p> <h2>More Changes to Come?</h2> <p>The bureaus still do not count on-time utility, cable, and cell-phone payments. On-time payments to doctors and hospitals aren't counted, either. But Christiansen said that there is growing support for counting at least some of these payments.</p> <p>&quot;We are in strong support of full-file reporting,&quot; she said. &quot;We don't want to just have the times when consumers don't pay their utility bills to show up in their credit reports. We also want the times they do pay them on time to show up.&quot;</p> <p>This is an important point. Paying your doctor bill on time won't help your credit score. But not paying it might hurt it. If your medical provider sends a collection agency after you for non-payment, that will cause your credit score to drop.</p> <p>The lesson? Pay all your bills on time, even if doing so won't boost your three-digit score.</p> <p>&quot;The face of credit is changing,&quot; Christiansen said. &quot;What will be included in your credit report is changing. That is exciting. I am very optimistic that we will continue to see more types of payment information included in the reports.&quot;</p> <p><em>Have you seen your credit score increase due to these changes?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-reasons-your-credit-score-may-improve-soon">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/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt 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/are-you-a-credit-invisible-get-seen-by-building-your-score">Are You a Credit Invisible? Get Seen by Building Your Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-improve-your-credit-score">How to Improve 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/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> </ul> </div> </div> </div> </div><br/></br> Personal Finance building credit credit history credit scores paying bills renting Tue, 02 Jun 2015 11:00:10 +0000 Dan Rafter 1442293 at http://www.wisebread.com When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse http://www.wisebread.com/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_home_improvement_000043083204.jpg" alt="Woman applying for mortgage loan without her spouse" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You and your spouse or partner are ready to apply for a mortgage loan. It makes sense to apply for the loan jointly, right? That way, your lender can use your combined incomes when determining how much <a href="http://www.wisebread.com/mortgage-application-declined-here-s-how-to-respond">mortgage</a> money it can lend you.</p> <p>Surprisingly, this isn't always the right approach.</p> <p>If the three-digit credit score of your spouse or partner is too low, it might make sense to apply for a mortgage loan on your own &mdash; as long as your income alone is high enough to let you qualify.</p> <p>That's because it doesn't matter how high your credit score is if your spouse's is low. Your lender will look at your spouse's score, and not yours, when deciding if you and your partner qualify for a home loan.</p> <p>&quot;If one spouse has a low credit score, and that credit score is so low that the couple will either have to pay a higher interest rate or might not qualify for every loan product out there, then it might be time to consider dropping that spouse from the loan application,&quot; says Eric Rotner, vice president of mortgage banking at the Scottsdale, Arizona office of Commerce Home Mortgage. &quot;If a score is below a certain point, it can really limit your options.&quot;</p> <h2>How Credit Scores Work</h2> <p>Lenders rely heavily on credit scores today, using them to determine the interest rates they charge borrowers and whether they'll even approve their clients for a mortgage loan. Lenders consider a FICO score of 740 or higher to be a strong one, and will usually reserve their lowest interest rates for borrowers with such scores.</p> <p>Borrowers whose scores are too low &mdash; say under 640 on the FICO scale &mdash; will struggle to qualify for mortgage loans without having to pay higher interest rates. They might not be able to qualify for any loan at all, depending on how low their score is.</p> <h2>Which Score Counts?</h2> <p>When couples apply for a mortgage loan together, lenders don't consider all scores. Instead, they focus on the borrower who has the lowest credit score.</p> <p>Every borrower has three FICO credit scores &mdash; one each compiled by the three national credit bureaus, TransUnion, Experian, and Equifax. Each of these scores can be slightly different. When couples apply for a mortgage loan, lenders will only consider the lowest middle credit score between the applicants.</p> <p>Say you have credit scores of 740, 780, and 760 from the three credit bureaus. Your spouse has scores of 640, 620, and 610. Your lender will use that 620 score only when determining how likely you are to make your loan payments on time. Many lenders will consider a score of 620 to be too risky, and won't approve your loan application. Others will approve you, but only at a high interest rate.</p> <p>In such a case, it might make sense to drop a spouse from the loan application.</p> <p>But there are other factors to consider.</p> <p>&quot;If you are the sole breadwinner, and your spouse's credit score is low, it usually makes sense to apply in your name only for the mortgage loan,&quot; said Mike Kinane, senior vice president of consumer lending at the Mt. Laurel, New Jersey office of TD Bank. &quot;But your income will need to be enough to support the mortgage you are looking for.&quot;</p> <p>That's the tricky part: If you drop a spouse from a loan application, you won't be penalized for that spouse's weak credit score. But you also can't use that spouse's income. You might need to apply for a smaller mortgage loan, which usually means buying a smaller home, too.</p> <h2>Other Times to Drop a Spouse</h2> <p>There are other times when it makes sense for one spouse to sit out the loan application process.</p> <p>If one spouse has too much debt and not enough income, it can be smart to leave that spouse out of the loan process. Lenders typically want your total monthly debts &mdash; including your estimated new monthly mortgage payment &mdash; to equal no more than 43% of your gross monthly income. If your spouse's debt is high enough to throw this ratio out of whack, applying alone might be the wise choice.</p> <p>Spouses or partners with past foreclosures, bankruptcies, or short sales on their credit reports might stay away from the loan application, too. Those negative judgments could make it more difficult to qualify for a loan.</p> <p>Again, it comes down to simple math: Does the benefit of skipping your partner's low credit score, high debt levels, and negative judgments outweigh the negative of not being able to use that spouse's income?</p> <p>&quot;The $64,000 question is whether the spouse with the bad credit score is the breadwinner for the couple,&quot; says David Reiss, professor of law with Brooklyn Law School in Brooklyn, New York.&nbsp;&quot;The best case scenario would be a couple where the breadwinner is also the one with the good credit score.&nbsp;Dropping the other spouse from the application is likely a no-brainer in that circumstance.&nbsp;And of course, there will be a gray area for a couple where both spouses bring in a significant share of the income. In that case, the couple should definitely shop around for lenders that can work with them.&quot;</p> <h2>You and Your Spouse Can Still Own Your Home Together</h2> <p>Spouses or partners might worry that not having their names on the mortgage loan application means that they don't have an equal ownership stake in the home.</p> <p>Fortunately, that's not true.</p> <p>Rotner says that couples just have to put both names on the home's title. If they do that, both will have equal ownership of the home, no matter whose names are on the mortgage loan.</p> <p>&quot;Title expresses ownership in a property,&quot; Rotner says. &quot;Being on the mortgage loan expresses a financial obligation to the property. There is a difference.&quot;</p> <p>Partners might have one other concern about being left off the mortgage loan: It will be more difficult for them to boost their weak credit scores.</p> <p>Every time consumers make their mortgage loan payments on time, it helps their credit scores. But partners whose names aren't on the mortgage loan won't see any benefit from on-time payments, even if their income is helping to pay the mortgage bill each month.</p> <p>&quot;That is a valid concern,&quot; Rotner said. &quot;But what is the trade-off? You either get to buy a home that you couldn't otherwise buy or you get a 700 credit score. What is more important?&quot;</p> <p><em>Are you and your spouse both on the mortgage? What about the title?</em></p> <div class="bankrateWidget" app="ratetables" kind="tabbed" template="standard" pkey="yxx5914ebb" tabs="mortgage" rowsperpage="4" fontfamily="Overpass" mtgheadertext="Best Mortgage Loan Rates" mtgloanamount="$200,000" mtgdefaultloantype="refinance" pid="kawb">&nbsp;</div> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"> <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/When%20It%20Makes%20Sense%20to%20Apply%20for%20a%20Mortgage%20Loan%20Without%20Your%20Spouse.jpg" alt="When It Makes Sense to Apply for a Mortgage Loan Without Your Spouse" 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/when-it-makes-sense-to-apply-for-a-mortgage-loan-without-your-spouse">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/3-terrible-things-foreclosure-does-to-your-credit">3 Terrible Things Foreclosure Does to 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/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</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/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</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-ways-to-qualify-for-a-mortgage-with-a-small-downpayment">5 Ways to Qualify for a Mortgage With a Small Downpayment</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-whats-included-in-a-homes-closing-costs">Here&#039;s What&#039;s Included in a Home&#039;s Closing Costs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit scores loans mortgages spouse Mon, 25 May 2015 11:00:16 +0000 Dan Rafter 1429779 at http://www.wisebread.com