|
|
| www.1001TopWords.com |
|
|
Top 5 Credit Misconceptions
We have all heard the rumors?from neighbors, relatives or friends. There are a wide variety of myths floating around about what you should and shouldn't do to improve your credit reports and credit scores. The buck stops here! Phelps Creek Financial Coaching has exposed these urban legends to provide you with the truth about credit... 1. Your score will drop if you check your credit - Fortunately, this one is definitely not true.Checking your own report and score is counted as a "soft inquiry" and doesn't harm your credit at all. Only "hard inquiries" from a lender or creditor, made when you apply for credit, can bring your credit score down a few points. Worried about damaging your credit while shopping around for a loan? Multiple inquiries for the same purpose within a short amount of time (a few weeks) are grouped together into a less damaging period of inquiry. 2. Closing old accounts will improve your credit score - To close or not to close, that is the question. Many people advocate closing old and inactive accounts as a way for improving your credit. In most cases, closing accounts will actually have the opposite effect. Canceling old credit accounts can lower yourcredit score by making your credit history appear shorter. Think twice before closing the oldest account on your credit report. If you want to reduce your levels of available credit, ask for your credit limits to be reduced or close newer accounts instead. 3. Once you pay off a negative record, it is removed from your credit report - Negative records such as collection accounts, bankruptcies and charge-offs will remain on your credit report for 7-10 years after they are first posted. Paying off the account before the end of the set term doesn't remove it from your credit report, but will cause the account to be marked as "paid." It is still a good idea to pay your debts, it can improve yourcredit score, but the major improvement will come when the record expires. 4. Being a co-signer doesn't make you responsible for the account - When you open a joint account, co-sign on a loan or become an authorized user on someone's credit card, you are taking on legal responsibility for the account. Any activity on these shared accounts, good or bad, will show up on both people's credit reports. If you co-sign for a friend's auto loan and they don't make the payments, your credit profile will be hurt by their actions and visa versa. The only way to stop this double reporting is to refinance the loan or to have the creditor officially remove you from the account. 5. Paying off a debt will add 50 points to your credit score - Yourcredit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how many points you can gain by changing one factor. For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all. There is no magical way to improve your credit score, just keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report. Good financial behavior and time are the two most important factors on your credit score. Cindy S. Morus (www.phelps-creek.com) is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer and Get Clients NOW!? licensee. Contact her at 541-387-2995 or cmorus@phelps-creek.com She is also the publisher and editor of "Financial Fitness", an internet gazette dedicated to helping people improve their financial fitness no matter what decisions were made in the past.
|
|
|
|
RELATED ARTICLES
A No-Brainer Way Of Getting Credit And Credit Cards What Is Your Credit Rating Now? Useful Tips on Borrowing Money Here are some useful tips on borrowing money. Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy. Before you approach your banker for a loan, it is a good idea to understand as much as you can about the factors the bank will evaluate when they consider making you a loan. Let's start by exploring some of the key points your banker will review: Your Credit Score Credit scores: all lenders use credit scores to determine interest rates and credit limits. Pitfalls of the Credit Industry The credit industry if rife with pitfalls. If you have ever owned a credit card you probably already have learned this the hard way. If you have not owned a credit card previously you should definitely learn all you can about these convenient little suckers (literally) before you commit to any contract. How To Get a Low Interest Credit Card Consumers often have the first credit card that they ever applied for, never really analizing how the interest rate affects their payments, but many other options exist and can help consumers decrease their payments and achieve financial stability.With interest rates on some credit cards rising to over 23%, even low balance credit card debt can be crippling. One of the first research elements a prospective borrower should look at is the interest rate on transferred debt. This interest rate is often lower than the usual interest rate for the credit card, and can be an especially good deal for borrowers who have debt already. Another element to consider is the interest rate on new purchases ? this rate will be the main concern in the years to come, as this new credit card will probably become the most heavily used. Borrowers often worry about annual fees, but these are often temporary. Getting a credit card with low interest rates will save a borrower significant sums, usually much more than the annual fee. Plus, once good credit is established, the annual fee may later be waived. Another interest rate will usually apply, as well ? the rate for cash advances. Cash advances are usually limited to a couple hundred dollars, but credit card companies often insist that when paying back the balance, the credit portion must be paid back first, then the portion that the cash advance applies to. So if you are going to keep a balance on your credit card, be aware that cash advance interest rates are higher than the regular interest rates. Cash advances can be incredibly helpful in emergencies, though, when a credit card cannot be used.Visa and MasterCard are by far the most commonly accepted credit cards, so less commonly used cards such as American Express and Discover often offer special rates for new customers. These rates are worth attention, even if you think that you may not be able to use the card as easily as your previous credit cards, because transferring the balance to these new cards to obtain the lower interest rate may significantly lower your payments. While your AmEx or Discover Card may not be accepted as often, they can be a good tool to achieving your financial goals. Even less commonly used are credit cards that are store specific, such as gas cards or department store cards, but these cards can offer incredible deals on interest rates. They rely on the fact that consumers will often switch their spending patterns to the new gas station or store, and this increased revenue makes up for the lower interest rates. A slight change in your habits, such as consistently using the new credit card at the new gas station, can lower payments and improve credit scores.Researching new credit cards can seem daunting, but by comparing the four main factors, which are the regular interest rate, the rate on transferred balance, the rate on cash advances, and the annual fee, you can reduce your credit card payments significantly. The Hazards Of Your First Credit Card You probably don't need me to tell you credit cards are easy to get a hold of; at least, that is so in the US and UK. How many weeks pass without a glossy brochure promoting a credit card popping through your letter box? And that's just your mail; the tv advertising budgets for credit card promotion are enormous, with some famous faces often adorning your screen, smiling beautifully as they tempt you. How does anyone resist that promotional onslaught, coupled with the peer pressure, and the "have now, pay later" culture in which we live? Well, the fact is, few people do resist. If you are credit worthy and have no credit card, you are something of a rarity. 5 Things Your Credit Card Company Keeps Quiet About Credit Cards can bankrupt you if you let them run away from you. The various Credit Cards companies are in it for profit so they will not generally alert you to things you can do to save yourself money. Free Credit Report ? Watch Out for Scams Many people may still not be aware of an amendment to the Fair Credit Reporting Act (FCRA) that Congress passed last year. This amendment allows U.S. citizens to receive a copy of their credit report, for free, once per year. The plan is being rolled out slowly in order to avoid swamping the system, but people living in the West and Midwest can receive their credit reports now, and everyone will be able to obtain a free credit report by September of this year. Those seeking a copy of their credit report should watch out, however, as not everyone who promises a "free" credit report is actually delivering one. Bad Checks, Bounced Checks, & NSF Checks Negotiable instruments like checks and drafts have become an indispensable part of any business transaction today. As a result, it has become increasingly important to safeguard a business against financial losses arising from the receipt of fraudulent or bad checks. Preventing Credit Card Mess Credit card debts problem is extremely common today. It is usually the first sign of longer term financial troubles. How to manage your credit cards so that you will never fall into credit card mess? There are four pillars in preventing credit card debts problem. Can Credit Search Entries Affect Your Ability to get Approved for a New Loan in the UK? About Search Entries: Student Credit Cards 101 If you're a college student, you probably already have a credit card. If not, you may have plans to get one or more soon. So why should you read on? Finding and Applying for the Right Credit Card Offer Online Anywhere you go online nowadays, you will see a multitude of ads for credit cards. Some offer low interest rate for an introductory period, or bonus frequent flyer miles while others offer real discounts on new vehicles and equipment. Trying to find one that suits your needs and lifestyle can be a little overwhelming. Read and Understand Your Credit Card Statement Have you ever looked at your credit card statement and ended up just scratching your head in frustration? Well join the club! But don't take any comfort in the fact that you have plenty of company, because lack of knowledge can cost you?.right on your credit report, and once there can stay with you a while. Rewards Cards: Are They Worth It? Virtually all consumers will have a credit card at some point in their lives. Is this an understatement? Probably, as most consumers carry multiple credit cards. Selecting a credit card should not be something taken lightly; card companies are constantly looking for new consumers, but only after wisely comparing offers should you select a provider. Pick a company that will give to you a reasonable rate and one that incentivizes their program with some type of reward for using their card. Four Tips How Homeowners Can Rebuild Their Life After a Foreclosure Let's face it, if you are facing the possibilities of losing your home due to a foreclosure and you think that you may never be able to purchase another home anytime soon. Keep reading. Annual Credit Report and Free Annual Credit Report Getting an annual credit report review has been the advice of many financial managers as they guided their customers to be aware of all information on credit reports. Would the idea of a free annual credit report be good news? Consumers are thrilled with the new federal mandate that demands the three major national credit bureaus offer a free annual credit report to anyone requesting copies of their personal credit reports. An annual credit report is available from each of these bureaus. Protect Yourself Against Identity Theft Identity theft is when someone uses, without permission, your personal information in order to commit any frauds or crimes. Identity theft is a felony that is becoming more and more common. That is because some of us are not very careful with personal information, making the job easier for those trying to steel our identity. We should always be careful with information like Social Security number, credit card number, birth date, employment information, driver's license number, etc., because if they enter into the wrong hands the consequences can be very serious. People that have experienced identity theft spend months trying to repair what others have damaged, and in the meantime they cannot get a loan or lose a job opportunity or, sometimes, they can get arrested for something they didn't do. SuperCharged Secret 4, Credit Card Utopia YOU SCRATCH MY BACK, AND I'LL BUY SOME MORE BEER! It Is In Your Best Interest To Do The Math On Your Credit Card Interest If you begin foaming at the mouth once a month when you receive your credit card statement, join the millions of Americans that are foaming along with you. There is a growing outrage at the seemingly endless journey towards eliminating the balance on your credit card and that is due primarily to the extravagant interest rates charged by credit card companies.
|
| © Athifea Distribution LLC - 2013 |