credit rating https://www.wisebread.com/taxonomy/term/5857/all en-US 6 Credit Card Mistakes That Could Be Ruining Your Credit https://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-credit-card-mistakes-that-could-be-ruining-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/iStock-585795908.jpg" alt="Woman learning credit card mistakes that could be ruining her credit" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>It's difficult to overstate how important your credit record and credit score are. Not only will <a href="http://www.wisebread.com/what-is-a-good-credit-score-range?ref=internal" target="_blank">good credit</a> enable you be approved for the <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">most attractive credit cards</a>, it's vital for receiving the lowest rates on a car loan, a mortgage, and on home and auto insurance premiums. It can even make the difference in whether you get the apartment or job you want, since both landlords and employers often run credit checks on applicants. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Unfortunately, many credit card users are making big mistakes that are ruining their credit. Since it can take years for some of the most negative items to drop off your credit report, it's crucial to avoid making these mistakes in the first place. Here are six credit card mistakes that could be ruining your credit.</p> <h2>1. Paying Late<strong> </strong></h2> <p>The most important factor in your FICO score &mdash; the most popular credit score lenders use to evaluate you &mdash; is your payment history. It makes up 35% of your score. (See also: <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=seealso" target="_blank">5 Things with the Biggest Impact on Your Credit Score</a>)</p> <p>If you are using a credit card, your first priority should be to <em>always </em>pay your credit card bill on time. While one bill paid a few days late won't cause lasting damage to your credit score, paying late frequently will hurt more. On top of that you'll usually be subject to late fees.</p> <p>Thankfully, there are many tools to help you pay on time. Most credit card issuers offer automatic payments to ensure that you never pay late. You can also request a specific payment due date so you can arrange all your bills to be due at the same time each month. That way you can sit down and pay bills just once a month rather than keeping track of various bills as they come in. Additionally, you can sign up for payment reminders by email or text.</p> <h2>2. Paying Less Than the Minimum<strong> </strong></h2> <p>Paying just the minimum payment on your credit cards will <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=internal" target="_blank">hurt you financially</a>, but paying below that is even worse &mdash; much worse.</p> <p>To avoid being considered delinquent on a credit card account, you not only have to make your payments on time, but the payments must be <em>at least </em>the minimum amount required, which is stated on your bill. If your payment is below the minimum, it doesn't matter if it was on time. The payment will still be considered late, causing a hit to your credit score.</p> <h2>3. Failing to Pay<strong> </strong></h2> <p>Miss a payment for at least 60 days and your creditors start wondering if you're going to pay at all. That's why you'll start to see more serious consequences than a single lapse of a few days would cause. After two missed billing cycles an issuer can impose a high <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">penalty interest rate</a> on the account, on top of late fees. And while those charges alone are costly, your credit will also start to really suffer.</p> <p>A payment that's 90 days overdue is extremely damaging to your credit score and takes seven years to fall off your credit record. At 120 days late, your debt will likely be <a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off?ref=internal" target="_blank">charged off</a> and sold to collectors, which harms your credit score even more. (See also: <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time?ref=seealso" target="_blank">What to Do If You Can't Pay Your Bills on Time</a>)</p> <p>If you are unable to pay your credit card bill for any reason, you should reach out to your card issuer to let them know. You may be able to <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt" target="_blank">negotiate a debt repayment plan</a>.</p> <h2>4. Having High Balances<strong> </strong></h2> <p>After payment history, the second most important factor in your credit score is how much you owe. It accounts for 30% of your FICO score. Maxing out your credit cards, or coming close to it, hurts your credit score.</p> <p>Ideally you want your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> &mdash; the amount of debt you have divided by your total available credit &mdash; to be below 30%. The lower you can get it, the better off your credit score will be. The best way to lower it is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off your balances quickly</a>. (See also: <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off" target="_blank">5-Day Debt Reduction Plan: Pay It Off</a>)</p> <h2>5. Not Having Enough Credit Cards<strong> </strong></h2> <p>The other way to lower your credit utilization ratio is to increase the amount of available credit you have. If you have just one or two credit cards, and you are using up most of the credit lines available on them, you may benefit from having another card &mdash; but only if you can resist the temptation to ring up a bunch more debt on it. Remember, raising your credit line only to add more debt will drop your credit score.</p> <p>Pick a basic, <a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees?ref=internal" target="_blank">no-annual-fee card</a> and then use it once a month or so for a small purchase, such as a tank of gas, that you can pay off immediately. That will keep the account active without putting you in debt. (See also: <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?ref=seealso" target="_blank">7 Questions to Ask to Help Choose the Perfect Credit Card</a>)</p> <p>Similarly, you could request a credit line increase for the accounts you already have. If you've been paying on time, chances are you can get a credit limit increase by simply calling your issuer and asking.</p> <p>Just be aware that credit card issuers will pull your credit report before approving you for a new credit card, and usually for a credit line increase, too. This will result in a hard pull on your credit, which will ding your credit score. Even a few points could be important if you're about to apply for a mortgage, so wait to ask for new credit until after you've done that.</p> <h2>6. Canceling Your Oldest Credit Cards<strong> </strong></h2> <p>Closing any credit card will raise your credit utilization ratio, but closing your oldest accounts harms a different part of your credit score. Your length of credit history accounts for 15% of your FICO score. While an account in good standing will remain on your credit report for about 10 years after you've closed it, it will eventually be removed and hurt your score. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso" target="_blank">5 Times It's Okay to Close a Credit Card</a>)</p> <p>If you don't need to use a card, it may be better to put the card in a secure location, but keep the account open. If the account has an annual fee, you can ask to have the fee waived, or the account changed to a different card without the annual fee.</p> <p>Don't let these credit card mistakes ruin your credit. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-credit-card-mistakes-that-could-be-ruining-your-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg&amp;description=6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;<img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg" alt="6 Credit Card Mistakes That Could Be Ruining Your Credit" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="https://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/need-a-game-to-learn-to-manage-your-credit">Need a game to learn to manage your credit?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">How to Avoid Getting Your Credit Card Canceled</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="https://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score">5 Ways Life Is Amazing With an 800 Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/4-credit-report-mistakes-that-could-be-costing-you-big">4 Credit Report Mistakes That Could Be Costing You Big</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budgets credit credit rating credit report credit score money mistakes Tue, 21 Feb 2017 10:31:29 +0000 Jason Steele 1892848 at https://www.wisebread.com What Is a Good Credit Score and Why Is It Important? https://www.wisebread.com/what-is-a-good-credit-score-range <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-is-a-good-credit-score-range" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/iStock_000024983142_Large.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Credit scores can be confusing, especially with so many different models and algorithms available. Plus, it&rsquo;s easy to mess up your credit rating and end up with bad credit without even realizing you&rsquo;ve done anything. Here&rsquo;s what you need to know about credit scores and increasing your credit rating. (See also: <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=seealso">How to Rebuild Your Credit in 8 Simple Steps</a>)</p> <h2>How Important is a Good Credit Score?</h2> <p>Credit scores don&rsquo;t usually get the attention they deserve and we don&rsquo;t realize how important they are until we go to get a loan and realize we&rsquo;ve somehow ruined it. Because credit scores are one of the only ways for lenders to assess a borrower&rsquo;s risk and can mean the difference between not just qualifying for the loan, but also paying hundreds to thousands more in interest, it&rsquo;s important that you diligently work on keeping a clean credit file.</p> <p>The most crucial role that credit ratings play in finances is in the interest rate. If you have a poor or bad credit rating, you are going to pay a much higher interest rate than someone with an excellent rating, if you are approved at all. When it comes to settling down and buying a house, your credit score can become one of the most important numbers in the process. A good credit rating can help in other situations including:</p> <p><strong>Employment</strong>. Not all employers require credit checks, but if you are in finance or a position requiring that you handle the company&rsquo;s money, bad credit can end up hurting your chances of landing a new job. The idea behind checking credit for certain positions is that if you can&rsquo;t manage your own finances, you may have difficulty managing other people&rsquo;s money as well.</p> <p><strong>Lower Insurance Rates</strong>. Bad credit can cost you in other areas besides higher interest rates on loans and credit cards. It can also affect your insurance rates and cost you hundreds more than if you had a better credit score.</p> <p><strong>Qualifying for Rentals</strong>. If you have poor credit, it isn&rsquo;t just difficult to qualify for home mortgages. You may also be denied rental opportunities simply because your credit file shows that you may be at risk of not paying your rent.</p> <p><strong>Utilities</strong>. Unfortunately, you may not be able to get your utilities hooked up in your name with bad credit. Although this doesn&rsquo;t happen all the time, credit problems can prevent you from getting necessary utilities turned on in your new home.</p> <p>See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso2">15 Surprising Ways Bad Credit Can Hurt You</a></p> <h2>What Is a Good Credit Score Range?</h2> <p>Although generally &ldquo;good&rdquo; is sufficient for most things like kicking ability in kickball or rating the flavor of an apple pie, in the world of credit scores, it&rsquo;s not exactly ideal. A good credit score is often considered within the range of 700 to 749, but the goal if you want the best credit cards and lowest interest rates, is to strive for an &ldquo;excellent&rdquo; credit rating, which is 750 and higher, according to FICO and VantageScore.</p> <h2>What Is a Bad Credit Score?</h2> <p>On the other end of the credit scoring model are bad credit scores, which can make it difficult to qualify for credit cards or loans. Bad credit ratings are typically 600 or below. This, however, doesn&rsquo;t mean you are doomed never to have a credit card. There are lenders and credit card issuers that provide financial products for those in the &ldquo;bad credit&rdquo; range. However, in addition to high APRs, you can expect to pay extra fees that you won&rsquo;t find on higher-credit products. (See also: <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent?ref=seealso">Good, Bad, or Excellent: What Does Your Credit Score Mean?</a>)</p> <p>In short, the credit score range from bad credit to excellent credit is usually:</p> <p>Bad Credit &ndash; 600 and lower</p> <p>Poor Credit &ndash; 600 to 649</p> <p>Fair or Average Credit &ndash; 650 to 699</p> <p>Good Credit &ndash; 700 to 749</p> <p>Excellent Credit &ndash; 750 and higher</p> <h2>Where to Get Free Credit Scores</h2> <p>Many financial companies provide services which allow you to check and monitor your score for a monthly or annual fee of approximately $29.95 per month, depending on the scoring model. There are also a number of agencies and credit card issuers which offer this service free to its customers and cardmembers. You can get your credit score free with some of the following companies:</p> <p><a href="http://www.anrdoezrs.net/click-2822544-12336148-1455123184000"><strong>Credit Sesame</strong></a>. Score pulled from the TransUnion database.</p> <p><a href="http://www.dpbolvw.net/click-2822544-10809829-1284618439000"><strong>Credit Karma</strong></a>. VantageScores from the three major credit bureaus.</p> <p>There are also <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=internal"><strong>credit cards that offer free credit scores</strong></a> to their card holders.</p> <h2>FICO and Vantage: Types of Credit Scores and Scoring Models</h2> <p>Another point of confusion when discussing credit scores is which score you are measuring. The score used by most lending institutions is the FICO score, which means if you want to see what your card issuer is seeing, this might be the score to keep your eye on. However, there are those that use other scoring systems, and you may check and monitor those scores with any of the following agencies as well:</p> <p><strong>FICO score</strong>: Provided by FICO and also allows you to track and monitor your score with all three credit bureaus. <a href="https://shareasale.com/r.cfm?b=1111539&amp;u=255320&amp;m=41089&amp;urllink=&amp;afftrack=">MyFico.com</a> provides services for restoring your identity in the event it is stolen and detecting threats through identity theft monitoring as well.</p> <p><strong>VantageScore</strong>: This score is more often the free version offered by different financial services and is among the most popular scores as well. The VantageScore has some differences such as how it scores paid-off collections, alternative data like rent and utility payments, and how it rates how recently a credit account was used. This score was created by the credit bureaus, TransUnion, Equifax, and Experian.</p> <p>In addition to FICO and VantageScore, each credit bureau provides its own scoring model as well, which is one of the reasons they joined forces to create the Vantage scoring model in the first place. The scores for each bureau includes the following:</p> <p><strong>PLUS score</strong>: Experian&rsquo;s scoring model usually not used by any lenders. It ranges from 330 to 830.</p> <p><strong>TransRisk score</strong>: TransUnion&rsquo;s score based on its own credit reports. This score ranges from 100 to 900 and is used to predict risk.</p> <p><strong>Equifax score</strong>: The Equifax version ranges from 280 to 850 and like the PLUS score, isn&rsquo;t used by lenders but is designed for educational purposes only.</p> <p>The range of scores will vary depending on the scoring model, but as an example, may include FICO scores from 300-850, Experian scores from 330-830, Equifax and TransUnion from 300-850, and VantageScore 300-850. Although they are all different scoring models, they are close enough that no matter which one you prefer, you can get a general idea of what the lenders see when they check your creditworthiness. And, if you&rsquo;re working on increasing your score, you can monitor any of them and assume that if one increases, all of them will typically adjust in a similar manner. It&rsquo;s important to note that whether it&rsquo;s a loan, mortgage, or credit card, the FICO scoring model is the most widely used.</p> <h2>What Affects Your Credit Rating the Most?</h2> <p>Because credit scores are intended to gauge your risk and the ability to repay your loans and credit cards, it&rsquo;s important to make sure you pay on time and manage the accounts responsibly in order to maintain a positive credit rating. However, there are other factors involved in calculating your credit score, depending on the model you use. For example, FICO scores are calculated according to the following activities: (See also:<a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=seealso"> What Impacts Your Credit Score the Most?</a>)</p> <p>35% Payment History &ndash; the number of times you make late payments on your accounts.</p> <p>30% Amounts Owed &ndash; how much you owe. Could be an indication you are overextended.</p> <p>15% Length of Credit History &ndash; how old your accounts are and the last time you used certain accounts.</p> <p>10% Credit Mix in Use &ndash; whether you have a mix of different accounts like credit cards, retail, installment loans, and mortgage loans.</p> <p>10% New Credit &ndash; if you have a number of new accounts, it could indicate a higher risk.</p> <h2>How VantageScore is Calculated</h2> <p>In comparison, VantageScore 3.0 is calculated similarly with some minor differences, with more focus being placed on recent credit than payment history or credit utilization:</p> <p>30% Recent Credit &ndash; whether you have multiple new accounts.</p> <p>28% Payment History &ndash; late payments and payments made on time.</p> <p>23% Credit Utilization &ndash; how much credit you have versus what you owe.</p> <p>9% Credit Balances &ndash; how much you owe.</p> <p>9% Depth of Credit &ndash; your credit mix and length of your credit history.</p> <p>1% Amount of Available Credit &ndash; the total amount you have available among all credit accounts.</p> <p>Vantage Scores also include a letter grade which rates your likelihood of a charge off or paying your accounts on time. For example, 901 to 990 is considered an &ldquo;A&rdquo; grade, equal to 1 charge off for every 300 consumers who pay on time. The grades lower to &ldquo;F&rdquo;. which is 501 to 600 and equal to 1 charge off for every 1 consumer paying on time.</p> <h2>Increase Your Credit Score by Checking Your Credit Reports</h2> <p>One of the most shocking and frustrating things that can happen when you check your credit score is that you find it is lower than you expect. More shocking is if it happens to be due to an error on your credit report or a mistake that you didn&rsquo;t even know existed. This is just one of the many reasons it&rsquo;s important to regularly check your credit reports and address any errors or changes immediately. This is also one of the first places to start if you&rsquo;re going to begin your journey to improving your credit score. You can get your credit reports free in any of the following ways:</p> <ul> <li>One free per year from each bureau through annualcreditreport.com</li> <li>Denial of credit, insurance, or employment</li> <li>Unemployed and planning to look for a job within 60 days</li> <li>On welfare</li> <li>Inaccurate because of fraud or identity theft</li> </ul> <p>If you don&rsquo;t qualify for free credit reports, you&rsquo;re probably going to pay either a monthly or annual fee to access one, depending on the credit bureau. Because paying for credit reports from all three bureaus can become costly, it&rsquo;s best to set an alert or reminder to get your free reports online each year with annualcreditreport.com so you can check them all for any errors. You can then notify each bureau online of any errors or corrections that need to be made to your credit reports.</p> <h2>Ways to Increase Your Credit Score</h2> <p>Once you&rsquo;ve become aware of the importance of your credit score, you&rsquo;ll likely want to work on increasing it. While the most common ways to get your numbers up into the excellent credit score range involve making your payments on time, there are other ways to get the boost you&rsquo;re looking for if you want the best credit rating possible. Some of the easiest ways to increase your score include the following:</p> <ul> <li>Check credit reports for errors and submit corrections</li> <li>Catch up any late payments or missed payments</li> <li>Pay down balances so that you owe 30% or less of your total credit available</li> <li>Get a <a href="http://www.wisebread.com/what-are-secured-credit-cards?ref=internal">secured credit card</a> (if you have bad or no credit) to start a new, clean line</li> </ul> <p>See also:&nbsp;<a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso2">How to Increase Your Credit Score with Credit Cards</a></p> <p>If you have a number of problems on your credit reports, it&rsquo;s best to work on the ones damaging your credit the most, according to the percentages of the scoring calculations. For example, in most cases catching up late payments and missed payments can make the biggest difference in your credit rating. Once payments are caught up you can work on decreasing your credit utilization.</p> <h2>Keep Your Excellent Credit Score</h2> <p>When you have increased your credit rating, you&rsquo;ll need to make sure you practice other tips for maintaining excellent credit. These tips for keeping a good credit score include paying every bill on time (set up reminders and alerts if needed), using credit only when you need to, limiting your new accounts, keeping old accounts open, and mixing up your types of credit with a combination of credit cards, loans, retail, and mortgage accounts. Also, make sure your credit mix includes revolving, installment, and open lines of credit.</p> <p>Improving or increasing your credit rating isn&rsquo;t an easy task, and it will take some time. However, as long as you know what you&rsquo;re working with, you&rsquo;ll be able to say you have a great credit score and qualify for the best rates available, in no time.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/christina-majaski">Christina Majaski</a> of <a href="https://www.wisebread.com/what-is-a-good-credit-score-range">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="https://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">How to Avoid Getting Your Credit Card Canceled</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="https://www.wisebread.com/fico-vs-fakes-are-you-getting-the-wrong-credit-score">FICO vs. Fakes: Are You Getting the Wrong 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="https://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-a-solid-credit-score-saves-you-money">How a Solid Credit Score Saves You Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/what-the-new-credit-card-formula-means-for-your-wallet">What the New Credit Card Formula Means for Your Wallet</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards credit rating credit score fico Fri, 20 May 2016 10:30:04 +0000 Christina Majaski 1711477 at https://www.wisebread.com 5 Ways Life Is Amazing With an 800 Credit Score https://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-life-is-amazing-with-an-800-credit-score" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/businesswoman-credit-card-Dollarphotoclub_33904935.jpg" alt="businesswoman credit card" title="businesswoman credit card" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You may think an 800+ credit score is out of reach given that only <a href="http://www.fico.com/en/blogs/risk-compliance/more-consumers-nearing-perfect-fico-scores-but-are-scores-improving/">18.3% of consumers</a>&nbsp;have scores that high &mdash; but it's possible if you know <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">how to manage your credit</a>.</p> <p>Credit scores range from 300 to 850, and although any score over 700 is considered good by many lending standards, an 800 credit score says a lot about the way you manage credit &mdash; you pay your bills on time, you probably don't have a lot of debt, and you're kind of a boss. And there's no denying the perks and privileges of a superb credit rating. So before you say a near-perfect credit score doesn't matter, here's why life is amazing with an 800 credit score and above. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>1. You'll Enjoy Easier, Faster Loan Approvals</h2> <p>It doesn't matter if you apply for a mortgage or an auto loan, an 800 credit score gets your foot in the door with lenders without much effort. People who belong to the 800 Club have demonstrated <a href="http://www.wisebread.com/12-habits-of-highly-responsible-credit-card-users">excellent credit habits</a> &mdash; and that's a little like having a permanent hall pass in high school. Since these people are less likely to default on their bills, they're a creditor's dream applicant and banks will vie for their business. As long as you have sufficient income, you can walk into practically any bank and get what you need.</p> <p>On the flip side, if you have bad credit, the bank might reject your application until you've made improvements to your score.</p> <h2>2. You'll Receive Better Credit Card Offers</h2> <p>You don't need perfect credit to get a credit card &mdash; when you're young they hand them out like candy (I learned that lesson the hard way) &mdash; but the higher your credit score, the more perks you'll get. Some people with low credit scores can only qualify for <a href="http://www.wisebread.com/the-5-best-secured-credit-cards">secured credit cards</a>, which require a security deposit. But as your credit score improves and you hit the 800 mark, you'll qualify for<a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit">&nbsp;some of the best credit cards</a> around. These might include features such as unique rewards programs, concierge service, and other <a href="http://www.wisebread.com/the-5-best-premium-credit-cards">high-end benefits</a> and unique perks &mdash; just for proving you know how to manage credit.</p> <h2>3. You Can Get Your Dream Job</h2> <p>Some employers include credit checks as part of the employment process. It isn't enough to have education and experience anymore; they want to make sure you know how to manage your personal finances before they trust you with the company's finances. This is especially common with government jobs and jobs in the finance industry.</p> <p>An 800+ credit score can push your application to the top of the pile. Let's say three people applying for a particular job have the same amount of education and experience, yet two people have a credit score in the 600s and one has an 800 score. If the employer feels each applicant is a good fit for the position but can only choose one, there's a good chance he'll select the person with the highest credit score.</p> <h2>4. You Might Qualify for 0% Interest</h2> <p>Not only does an 800 credit score practically guarantee you'll be approved for most loans, you'll also get a <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">low interest rate</a>. Some auto lenders occasionally offer 0% financing, but qualifying often requires a score 800 or higher. Zero interest financing is the same as paying cash, so you'll save money over the life of the loan.</p> <p>Even if your lender doesn't offer 0% interest, an 800 credit score means you'll qualify for the most favorable rates. This can lower your monthly payments and potentially increase buying power. And if you're looking to take advantage of a credit card with a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">0% introductory rate</a>, a near-perfect credit score puts these accounts within your reach.</p> <h2>5. You Can Receive the Best Insurance Premiums</h2> <p>It might come as a surprise, but when you apply for some types of insurance, such as auto insurance or renter's insurance, some insurance providers will&nbsp;<a href="http://www.naic.org/documents/consumer_alert_credit_based_insurance_scores.htm">check your credit score</a>, using your rating to help determine the premium. (Unless you live in California where credit based rates for auto insurance are banned, and Hawaii and Massachusetts, where <a href="http://www.iii.org/issue-update/credit-scoring">credit-based insurance rates</a> for both homeowners and auto insurance are banned.) This may seem unfair and unnecessary, especially since we don't finance insurance. But the way you manage your credit cards and loans is a pretty good indicator of how you'll manage your insurance payments &mdash; and your overall riskiness. From an insurance company's standpoint, people with the highest credit scores are usually more responsible with their credit and money, and this level of responsibility justifies a cheaper premium.</p> <p><em>Do you have an 800 credit score or higher? How is your life easier because of it? Humblebrag about it in comments!</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-ways-life-is-amazing-with-an-800-credit-score&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%20Ways%20Life%20Is%20Amazing%20With%20an%20800%20Credit%20Score.jpg&amp;description=5%20Ways%20Life%20Is%20Amazing%20With%20an%20800%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></p> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Ways%20Life%20Is%20Amazing%20With%20an%20800%20Credit%20Score.jpg" alt="5 Ways Life Is Amazing With an 800 Credit Score" width="250" height="374" /></p> <div style="display: none;"> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Ways%20Life%20Is%20Amazing%20With%20an%20800%20Credit%20Score_0.jpg" alt="5 Ways Life Is Amazing With an 800 Credit Score" width="212" height="605" /></p> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="https://www.wisebread.com/5-ways-life-is-amazing-with-an-800-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-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="https://www.wisebread.com/4-credit-report-mistakes-that-could-be-costing-you-big">4 Credit Report Mistakes That Could Be Costing You Big</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="https://www.wisebread.com/6-ways-life-is-better-with-good-credit">6 Ways Life Is Better With Good Credit</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="https://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">6 Credit Card Mistakes That Could Be Ruining 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="https://www.wisebread.com/6-ways-good-credit-is-better-than-a-boyfriend">6 Ways Good Credit Is Better Than a Boyfriend</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="https://www.wisebread.com/save-70000-or-more-with-4-simple-credit-score-boosts">Save $70,000 (or More!) With 4 Simple Credit Score Boosts</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit credit rating credit score good credit Thu, 26 Feb 2015 14:00:04 +0000 Mikey Rox 1308810 at https://www.wisebread.com 5 Times You Should Never Use Your Company Credit Card https://www.wisebread.com/5-times-you-should-never-use-your-company-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-times-you-should-never-use-your-company-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/businessman-credit-card-83066408-small.jpg" alt="businessman credit card" title="businessman credit card" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Business purchases should be made on the business card and personal shopping should be done on your personal card &mdash; simple as that, right? Well, sure, but our professional and personal lives have become so entwined that there's an enormous amount of gray area when it comes to deciding what charges to make and avoid making on the company dime. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses?ref=seealso">Best Credit Cards for Small Businesses</a>)</p> <p>It's not always an easy decision to make, but it's an important one, as questionable charges to the company could put your livelihood in jeopardy. Fortunately, we've got your back. Read on for our guide of the top business card purchase no-no's that could put you in hot water.</p> <h2>1. Trips to the Strip Club, Pool Hall, or Pawn Shop</h2> <p>If you're swiping the company plastic at places frequented by people with poor credit, there's a chance that the card issuer will cut your credit limit, raise your interest rate, hike your fees, or cancel your card. That's because they'll think that you, too, are more at risk for falling short on your debts. That's exactly what happened to Kevin Johnson, founder of Johnson Media, when his credit card company informed him by letter that <a href="http://www.allbusiness.com/small-business-credit-card/16631804-1.html">the credit limit on his card had just been cut</a> from $10,800 to $3,300. &quot;In effect, the letter said I was shopping at places where people with bad credit shop, which means that I too am a greater risk,&quot; Johnson told All Business.</p> <p>In fact, <a href="http://www.federalreserve.gov/boarddocs/rptcongress/creditcard/2009/consumercreditreductions.pdf">credit card issuers rate the spending behavior</a> of 35 million cardholders each month, according to a 2010 survey by the Federal Reserve. It's a practice that's legal, though not necessarily ethical. CompuCredit, the company that marketed Visa and Mastercard to consumers in the subprime credit market, agreed to pay consumers $114 million in a settlement after the Federal Trade Commission filed suit against the credit card issuer in 2008 for deceptive marketing practices. Among the accusations was failure to properly disclose to cardholders that they could be <a href="http://www.ftc.gov/news-events/press-releases/2008/12/subprime-credit-card-marketer-provide-least-114-million-consumer">punished for purchases made at bars</a>, billiard halls, and tire retreading shops.</p> <h2>2. Splurges Your Small Business Can't Swallow</h2> <p>If you've got a small business card in your name, swipe with caution. Many of these cards have <a href="http://www.inc.com/guides/2010/08/how-to-responsibly-use-credit-cards-for-your-business.html">joint and several liability</a>, which means that the business and the individual making the charges are liable for all debts, according to a spokeswoman for American Express. So if your business can't cover the trip to London you booked on the company dime, it could very well come back to bite you. &quot;Any mistakes, missed payments, purchases exceeding your credit limit or simple mismanagement can be damning to not only your business rating but your personal credit score,&quot; writes Lou Dubois of Inc.com.</p> <h2>3. Meetings That Are More Pleasure Than Work</h2> <p>If talk of Sunday night football is more entree than icebreaker, you should pay for meals with clients, co-workers, and the like out of your own pocket &mdash; even when business is briefly discussed. Why? Well, for starters, the Internal Revenue Service is particularly watchful for people who attempt to bundle business and personal expenses. And you don't want the IRS coming after your company for a purchase you made. Case in point: The agency once rejected a deduction of tickets to a baseball game because the <a href="http://www.entrepreneur.com/article/219432">volume levels at a ballpark don't allow for a comprehensive business discussion</a>.</p> <h2>4. Personal Shopping &mdash; Even When It's Low-Cost</h2> <p>The risk of being caught by your boss isn't the only reason you should never charge personal expenses to your business card. &quot;When an employee has been trusted to be an authorized cardholder of a business or corporate credit card, the employee is agreeing only to use the card for business use,&quot; writes Jason Steele of The Credit Card Solution Program. &quot;Using such a card for personal use, with the expectation that the employer will pay for non-business transactions, is tantamount to fraud.&quot;</p> <h2>5. To Get an Upgrade</h2> <p>Upgrades on rental cars, hotel rooms, and plane tickets are on most companies' list of prohibited charges. It's not that your boss wants to deny you extra legroom on your flight to Dallas. Rather, she just doesn't want to foot the bill for it. &quot;It's for personal, not for business,&quot; Capital One spokesperson Sukhi Sahni says of upgrades of all sorts. So if you're on a business trip and want a hotel room with a kitchenette, charge the basic room to the company and pay for the upgrade out of pocket.</p> <p><em>What have you used a business credit card for that turned out to be a mistake? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="https://www.wisebread.com/5-times-you-should-never-use-your-company-credit-card">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="https://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">How to Avoid Getting Your Credit Card Canceled</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="https://www.wisebread.com/what-is-a-good-credit-score-range">What Is a Good Credit Score and Why Is It Important?</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="https://www.wisebread.com/credit-card-fraud-and-how-to-avoid-it">Credit Card Fraud and How to Avoid It</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="https://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">6 Credit Card Mistakes That Could Be Ruining Your Credit</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="https://www.wisebread.com/will-new-chip-and-pin-credit-cards-stop-identity-theft">Will New Chip-and-PIN Credit Cards Stop Identity Theft?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards company credit card credit card fraud credit rating Tue, 04 Nov 2014 21:00:14 +0000 Brittany Lyte 1250692 at https://www.wisebread.com 3 Ways To Build Good Business Credit With Bad Personal Credit https://www.wisebread.com/small-business/3-ways-to-build-good-business-credit-with-bad-personal-credit <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/3-ways-to-build-good-business-credit-with-bad-personal-credit" target="_blank">http://www.openforum.com/articles/3-ways-to-build-good-business-credit-with-bad-...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/3-ways-to-build-good-business-credit-with-bad-personal-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/iStock_000003640474Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="187" /></a> </div> </div> </div> <p>Starting a business requires start-up capital, but creditors need to be persuaded that they&rsquo;re taking a worthwhile risk. By some estimates, less than 10 percent of new small businesses are approved for loans from banks or other commercial lenders. A poor personal credit history is a common stumbling block for entrepreneurs, but it&rsquo;s not the only factor. Lenders and credit bureaus can perform more than 2,000 checks on a potential borrower and the business before making a loan determination.</p> <p>On a more uplifting note, bad credit doesn&rsquo;t mean you can&rsquo;t succeed in business and. It may make you more conscientious of your spending patterns moving forward. And it's never too late to start working on building good business credit.</p> <h3>Act Like a Legitimate Business</h3> <p>Legally separate yourself from the business to shield personal assets. Forming a corporation or limited liability company (LLC) disentangles personal debts from business debts.</p> <p>Other steps include:</p> <ul> <li>Obtain an EIN (the business equivalent of a Social Security number) from the IRS, along with a DUNS business credit profile number from Dun &amp; Bradstreet;</li> <li>Establish a physical address and separate phone line and bank accounts for the business, prepare a professional business plan, and acquire a business license;</li> <li>Perhaps most important, maintain impeccable financial records, such as income and balance sheets, and tax return documents.</li> </ul> <p>Creditors are looking for signs that a business is viable and profitable and getting all your ducks in a row suggests that you're a serious business person.</p> <h3>Get a Handle on Your Personal Credit</h3> <p>The right business structure won&rsquo;t solve all of your problems, especially if you&rsquo;re applying for larger loans. Business owners must stay on top of their personal credit scores even more than the average consumer to avoid higher interest and insurance rates. Most banks won&rsquo;t deal with a business owner with a FICO score below 640 and some won&rsquo;t look at you if you&rsquo;re under 680. That includes loans backed by the U.S. Small Business Administration.</p> <p>Get in the habit of pulling your free personal credit report from one of the three credit reporting agencies every few months at <a target="_blank" href="http://www.annualcreditreport.com/">annualcreditreport.com</a> and dispute any inaccuracies. This report is really a statement to lending institutions of your ability to honor your debts, but it also reflects your total amount of available credit, the length of time you&rsquo;ve had a credit profile and the number of inquiries on your credit report.</p> <p>While making timely payments and waiting for your personal credit to improve (which can take months), the types of loans available to your business may be limited to the &ldquo;4 F&rsquo;s &ndash; founders, friends, family, and fools,&rdquo; says David Gass, founder of Business Credit Services, Inc., a credit consulting firm headquartered in Wilmington, DE. Other options include peer-to-peer lending networks, equipment financing, or accounts receivable factoring, which don&rsquo;t rely as heavily on personal credit history. If a business partner has superior personal credit, encourage him or her to sign for the loan. Some lenders, however, will run credit checks on all partners with at least a 15 percent ownership stake in the business, says Gass, who has written extensively <a target="_blank" href="http://www.bcscredit.com/business-credit-news/small-business-loan-for-people-with-bad-credit/">about personal credit and small business loans</a>.</p> <h3>Take Advantage of Trade Credit</h3> <p>Trade credit, or business-to-business credit, is the single largest source of lending in the world and can be a valuable resource when furnishing an office or dealing with suppliers or vendors. Just be sure to pay it back on time and in full, encouraging the creditor to report a positive payment history to the business credit bureaus. While personal credit scores range from 300 to 850, business credit scores are on a scale of 0 to 100, with 75 or more considered an excellent rating.</p> <p>If the business can operate over the Internet, payment processor PayPal doesn&rsquo;t require a credit check and usually offers better transaction rates than high-risk merchant services.</p> <p>After the business has built up some trade credit, you may approach a local lender for a small business loan. But don&rsquo;t reach for the moon right out of the gate. Given the uncertain economic climate, Gass says, banks are applying more scrutiny to prior bankruptcies or tax liens, particularly on loans greater than $250,000. Over time, as you maintain a reliable payment history, your business credit rating will improve.<i><br /> </i></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/margie-fishman">Margie Fishman</a> of <a href="https://www.wisebread.com/small-business/3-ways-to-build-good-business-credit-with-bad-personal-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-unexpected-benefits-of-secured-credit-cards">5 Unexpected Benefits of Secured 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="https://www.wisebread.com/cant-get-a-bank-loan-8-other-ways-to-finance-your-business">Can&#039;t Get A Bank Loan? 8 Other Ways To Finance Your Business</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="https://www.wisebread.com/how-to-get-a-credit-card-when-you-have-bad-credit">How to Get a Credit Card When You Have Bad 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="https://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score">5 Ways Life Is Amazing With an 800 Credit Score</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center bad credit building credit business credit business loans credit credit rating financing funding small business Fri, 17 Jun 2011 21:09:14 +0000 Margie Fishman 571064 at https://www.wisebread.com How to Avoid Getting Your Credit Card Canceled https://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-avoid-getting-your-credit-card-canceled" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/6847230925_5934663426_z.jpg" alt="canceled credit cards" title="canceled credit cards" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Some people like to have their credit card available for emergencies &mdash; either at home or while traveling abroad. Be careful: that card might not be available to you, just when you need it the most. This article explores the various reasons why your credit card could be canceled on you, along with some tips to help avoid having your own credit card canceled &mdash; possibly without notice.</p> <p><strong>I speak from experience: while traveling in Australia, I found out &mdash; the hard way, in the throes of an emergency &mdash; that my credit card had been canceled without notice, months prior.</strong></p> <p>I&rsquo;m still here to tell the story though, so my emergency was not life-threatening. But I can&rsquo;t possibly express the various shades of red I saw when I found out what had happened, and spent countless hours and days on overseas phone calls trying &mdash; unsuccessfully &mdash; to reinstate the card and rectify the situation.</p> <h2>True Horror Stories</h2> <p>A woman is vacationing in <st1:place>Europe</st1:place> when she discovers that her <a title="Credit Card Rewards Programs" href="http://www.wisebread.com/credit-card-rewards-programs">reward miles credit card</a> is on the fritz. She is stranded and spends hundreds of dollars in cell phone calls to the credit card company and the banks, trying to get out of this bind. There is no retribution granted from the credit card company who had canceled her card outright. To make matters worse, she loses out on the free companion ticket she had just earned with her rewards.</p> <p>How about the person who finds that the gas pump won&rsquo;t take their card? Nothing is amiss: they are in their home town, use their card regularly and responsibly, and maintain an excellent credit score too. But their credit card is also canceled, without notice. The reason cited? &ldquo;Something&rdquo; on their credit report was amiss. However with a spotless credit record, the real suspected reason is that their account wasn&rsquo;t profitable enough for the credit card company to keep them on board.</p> <h2>What Gives? Reasons Credit Card Companies Will Cancel Cards</h2> <p>With the ability to change the terms and conditions at any time, credit card companies can cut loose card holders who aren&rsquo;t making them money, especially the ones who pose additional risk or are a financial drain to the company. And when times get tough financially, credit card companies tighten their belts along with everybody else. Here are some specific reasons why the credit card company could cancel your credit card.</p> <h3>Non-Use</h3> <p>This is the most prevalent of reasons why your card will be canceled, and also the most avoidable. <strong>Charge something to the card every few months (even something very small), pay it off right away, and you can largely avoid this pitfall.</strong></p> <p>Don&rsquo;t settle for a phone call to the credit card company. I had a special note put in my file that I was abroad and would only use the card rarely, in an emergency. The customer service rep I spoke to said that would not be a problem. Two months later, the card was canceled. My suspicion was that my card got canceled by an automated system and not a human being, so the preemptive phone calls and special notes in the file were worthless.</p> <h3>Your Credit Score Dropped</h3> <p>If your credit score has taken a hit, your credit card account could be flagged. (See also: <a title="How to Rebuild Your Credit in 8 Simple Steps" href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a>)</p> <h3>Your Debt Increased</h3> <p>If you just took on a large amount of debt such that your credit utilization ratio is teetering, the credit card company can make sure you don&rsquo;t get in over your head &mdash; by canceling your card and eliminating the chance. (Ironically, this further increases your credit utilization ratio.)</p> <h3>Your Credit Increased</h3> <p>If you just applied for a line of credit or other credit vehicle that increases the overall credit available to you beyond a threshold that the credit company is comfortable with (regardless of whether you actually use that credit), they&rsquo;ll take themselves out of your equation.</p> <h3>Market Conditions</h3> <p>Anything from house values dropping, to unemployment rising can affect your ability to hang on to that credit card.</p> <h3>Anything Else</h3> <p>Credit card companies like to keep their game faces on, and won&rsquo;t always reveal the true reason why they are canceling your credit card. That&rsquo;s probably how our friend above had their card canceled due to &ldquo;something&rdquo; on the credit report, despite their spotless credit record. Ultimately, it boils down to their bottom line. Hey &mdash; that&rsquo;s business. <strong>Let's face it: owning a credit card is a privilege, not a right. </strong></p> <h2>Your Rights</h2> <p>Credit card companies are required to give you 45 days notice for making significant material changes to the terms &mdash; such as a change in interest rates.</p> <p>However,<strong> canceling cards isn&rsquo;t actually considered a significant material change</strong>, and cancellation without notice is still allowed.</p> <h2>How It Affects Your Credit Score</h2> <p>More than an inconvenience, the cancellation of your credit card can negatively impact your <a title="5 Things You Need to Know About Credit Scores" href="http://www.wisebread.com/5-things-you-need-to-know-about-credit-scores">credit score</a> in a few ways.</p> <h3>Increase in Credit Utilization Ratio</h3> <p>If your credit card is canceled and you are carrying debt elsewhere, then that debt becomes a larger percentage of the overall credit available to you, thus increasing your credit utilization ratio. This <a title="10 Surprising Ways to Negatively Affect Your Credit Score" href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">decreases your credit score</a>.</p> <h3>Decrease in Credit Longevity</h3> <p>Longevity of your credit vehicles is important; 15% of your credit score<span style=""> </span>is attributed to longevity. If you have a credit card that is 10 years old and others that are only a few years old, the cancelation of your 10 year old card will have a more detrimental effect on your credit score than the cancelation of one of the newer ones.</p> <h2>How to Prevent Cancelation</h2> <p>Once your credit card is canceled, talking your way into having it re-activated requires a minor miracle. So knowing what we&rsquo;re up against, here are a few preventative measures you can take to increase the chances that you aren&rsquo;t stranded at the gas pump (or in a distant land), idle plastic in hand.</p> <h3>Use it or Lose it</h3> <p>Avoid cancelation due to inactivity by using the card every couple of months. The size of the purchase is irrelevant, and you can pay it off immediately too.</p> <h3>Pay Attention to Ratios</h3> <p>Maintaining a credit utilization ratio below 25% will keep your credit score high.</p> <h3>Focus on Longevity</h3> <p>If you have multiple credit cards, pay special attention to the ones you have had for a long time. Losing them will be the most detrimental to your credit score.</p> <p><em>Please note that you can do everything right and still end up a victim of credit card cancelation. But hopefully these preventative measures will keep you out of the spotlight and off the top of their cancelation list.</em></p> <h2>What to Do if Your Credit Card Is Canceled</h2> <p>If the deed has already been done and you&rsquo;re looking for retribution, here are a few things you can do.</p> <h3>Check Your Credit Report</h3> <p>Order a copy of your credit report from one of the big three credit bureaus (<a href="http://www.equifax.com/home/en_us">Equifax</a>, <a href="http://www.transunion.com/">TransUnion</a>, and <a href="http://www.experian.com/">Experian</a>). You are entitled to <a href="https://www.annualcreditreport.com/cra/index.jsp">one free report</a> from <em>each</em> of the bureaus every year. You can also use a free service like <a title="Get Free Credit Score Monitoring With Credit Karma" href="http://www.jdoqocy.com/click-2822544-10809829-1284618439000?sid=dunn-4976">Credit Karma</a>. Make sure there aren&rsquo;t any incorrect postings in there that have affected your credit score through no fault of your own.</p> <h3>Call Them</h3> <p>Nothing is lost (save for some time and possibly a chunk of your patience) by trying to call the credit card company. Who knows &mdash; they might take a look at your account and decide you&rsquo;re worth keeping after all. <a title="Lower Your Credit Card Interest Immediately" href="http://www.wisebread.com/lower-your-credit-card-interest-rate-and-reduce-your-phone-bill-immediately-and-easily">You never know what you can get unless you ask</a>. <i>(A word of advice: be polite and friendly, and ask for the manager if you aren&rsquo;t getting anywhere)</i>.</p> <p>I&rsquo;ve typically used one <a title="Why I Use My Credit Card for Everything" href="http://www.wisebread.com/top-seven-reasons-why-i-use-my-credit-card-for-everything">credit card for all my expenses</a>, keeping a second card in reserve for emergencies or when my regular card isn&rsquo;t accepted. (When <a href="http://www.theprofessionalhobo.com">living abroad</a>, credit cards aren&rsquo;t infallible to dodgy local systems or tricky time zone glitches.)</p> <p>But just because I&rsquo;ve fallen victim to having a card canceled without notice (leaving me in the lurch no less), I&rsquo;m not going to eschew the conveniences and benefits of credit cards that I&rsquo;ve become accustomed to. To do so would be to shoot my own foot based on principle and anger, and I&rsquo;m not into self-mutilation. Instead, I&rsquo;ll make sure to use my backup card regularly and continue to pay the balance off each month. I&rsquo;ll pay closer attention to the <a href="http://www.wisebread.com/credit-card-fees-hidden-and-otherwise">rules and fees</a>, and be sure to stay on the same game page as the credit card companies from now on.</p> <p>For more articles about credit cards, please see our <a href="http://www.wisebread.com/credit-card-guide">Ultimate Credit Card Guide</a>.</p> <p><em>Have any of you experienced a canceled card without notice? Were you able to get it reinstated?</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%2Fhow-to-avoid-getting-your-credit-card-canceled&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%20to%20Avoid%20Getting%20Your%20Credit%20Card%20Canceled.jpg&amp;description=How%20to%20Avoid%20Getting%20Your%20Credit%20Card%20Canceled" 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="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Avoid%20Getting%20Your%20Credit%20Card%20Canceled.jpg" alt="How to Avoid Getting Your Credit Card Canceled" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="https://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">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="https://www.wisebread.com/what-is-a-good-credit-score-range">What Is a Good Credit Score and Why Is It Important?</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="https://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">6 Credit Card Mistakes That Could Be Ruining Your Credit</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="https://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">How to Use Credit Cards 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="https://www.wisebread.com/heres-what-the-successful-use-of-secured-credit-cards-looks-like">Here&#039;s What the Successful Use of Secured Credit Cards Looks Like</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards credit card cancellation credit rating credit score Mon, 01 Feb 2010 17:00:01 +0000 Nora Dunn 4976 at https://www.wisebread.com