Showing posts with label Credit Report. Show all posts
Showing posts with label Credit Report. Show all posts

Monday, March 1, 2021

10 Major Benefits of Using a Credit Card



A credit card is one of the most powerful financial tools that we have at our disposal and if used responsibly, it can provide many benefits in the long run. Today, we are going to look at top reasons why everyone should use a credit card for their expenditures

1. One-Time Bonuses


People with good credit scores can get their cards approved with added bonuses. You can avail of these bonuses by spending a certain amount in the first few months when your credit account is open. Other bonuses may include travel points, gift cards, and more.

2. Convert transactions into EMI


This is a great benefit that every credit card comes with. When you make a big purchase using your credit card, you don’t have to make full payment, you can easily convert that transaction into monthly installments, which gives you time to pay off the money over a period of time. This benefit allows you to fulfill your wishes without the burden of paying all the money at the same time.

3. Cash Back


The most significant benefit of using a credit card is cash-back. Whenever you use a credit card for making a purchase, you receive a percentage of total expenditure in the form of cashback. This allows you to save a lot of money in the long-run. 



If you are a platinum member, you might get cash-back offers up to 2% to 3%. So, before applying for a credit card, look at the list of partners that a financial institution is associated with.

4. Rewards Points


Another major benefit of using a credit card is the reward point system. The more you spend using your credit card, the more points you earn. These points can redeem to earn discounts, buy merchandise, groceries, and more. 

For example, if you get Citibank credit card, you can earn reward points when you spend money on fuel, restaurants, movies, and more. Contact your bank to learn more about the reward points.

5. Frequent-Flyer Miles


This point is for those who travel a lot. When you purchase your flight tickets using your credit card, you get flyer miles that can be used for either discounts or purchase tickets (if you have enough points). 

All major airlines have at least one bank that is partnered together and offer this benefit to their customers. So, make sure you check whether your credit card has this benefit or not.

6. Safety


Paying with your credit card is much safer than your debit card. When you use your debit card, the money is deducted from your account instantly. 

Similarly, if you lose your debit card, you are at major risk of losing your hard-earned money. But when you use a credit card, and you encounter any fraud, the bank will take it immediately. Plus, your money is also secured.

7. Grace Period


When you make a purchase using your debit card, your money is gone instantly. On the other hand, when you spend money using your credit card, your money remains in your account until your due date. 



This time between the end of the billing cycle and the due date is called the grace period. This allows you to repay your credit card while having the luxury of keeping your money in your account as well.

8. Insurance


Credit cards come with a number of customer protections that people are not aware not like insurance. Many banks offer insurance services to their customers who use their credit cards. This benefit is usually available to those who have a high credit limit.

9. Universal Acceptance


This is by far the main benefit of why everyone should have at least one credit card. All credit cards are accepted universally, this means if you are traveling, you can easily make payments in a foreign country using your credit card. 

You can rent a car, spend money on shopping, use to pay your hotel bills and more. You don’t have to worry about carrying the foreign currency with you all the time. Simply swipe your credit card and you are done.

10. Building Credit


A credit card helps you in building your credit score, which shows that you are responsible and can handle your finances. This is great for people who started working and looking to build their credit. When you spend money using your credit card and make timely and full payments, it impacts your credit score positively, which helps you in increasing your credit limit and enables you to apply for loans and more credit cards.

There are many other small benefits to why you should use a credit card, but these above-mentioned points are the main benefits that you get to enjoy when you use your credit card responsibly.


Monday, June 24, 2019

5 Easy Precautions You Can Take Against Identity Theft



Did you know that on average, victims of identity theft spend at least 600 hours trying to clear their name? In addition to repairing the financial damage that’s been done, victims also have to prove that they are who they say they are. How unnerving is that?

As horrible as it sounds, there is a bright side to identity theft. Although you can’t be 100 percent sure it will never happen to you, there are things you can to protect yourself.


Monitor Online Accounts


If your bank offers online banking, sign up for it. Frequently log in to make sure you have no unauthorized transactions. Also, make sure to keep your login information safe. Never write it down or save it in your phone. also, never enable automatic logins.


Order Annual Credit Reports


You’re eligible for a free credit report from all three major bureaus. However, there are also apps that allow you to check your credit as often as you like. Credit Karma gives you instant access to your credit report for free. 




Sign up and check your report once a month for anything that looks out of the ordinary. You’d be surprised how many unauthorized accounts slip through the cracks.

Memorize Your Social Security Number


If someone gets a hold of your social security number, your credit can be destroyed in an instant. Play it safe and memorize your social security number. Make sure you contact a criminal defense group if your identity is indeed stolen. 


 Furthermore, make sure to be mindful of your surroundings when giving your social security number to customer service representatives.

Opt Out of Pre-Approved Credit Card Offers


You know those pre-approved credit card offers you get in the mail from time to time? Do not accept them. Tear them into pieces and throw them away. Thieves are notorious for using these kinds of offers to obtain other people’s credit card information. You can also opt out them to ensure you never get the offers again.

No matter how vigilant you are, there’s always the risk of identity theft. Even a disgruntled waiter can snap a photo of your credit card and go on a shopping spree. Play it safe and stay on top of your finances and purchases. 


If something doesn’t look right or you don’t remember giving that aforementioned waiter a tip, act upon it. The sooner you identify an issue, the sooner you can rectify it.


Sunday, March 25, 2018

5 Common Credit Score Myths to Consider



When it comes to credit scores and credit reports, the so-called “conventional wisdom” is full of common myths and flat-out inaccuracies. The fact is, some of the most common misconceptions can actually hurt your score. With that said, here are five common credit score myths to consider.

Myth: Improve Your Score by Closing Unused Credit Cards


Many consumers believe their credit scores will improve if they close unused credit cards. The truth is, closing an unused account could hurt your score. Credit scoring models place a big emphasis on your credit utilization ratio. 


This is the ratio between the amount of available credit to you and the total credit you actually use. If you have a low credit utilization ratio, you will have a higher score. 




If you close an unused credit card, that reduces a portion of your available credit, which can increase your credit utilization ratio and lower your credit score.

Myth: There’s Only One Universal Credit Score


The truth is, there is a wide array of credit scoring models that issue countless credit scores. However, the most recognized credit score is the one issued by FICO. For example, most mortgage lenders will use your FICO score to determine your creditworthiness. 


By contrast, if you are looking for a bad credit auto loan, a lender might use the VantageScore 3.0 credit scoring model. The point is, there is not one score that applies to every consumer.

Myth: Income Determines Credit Scores


Your income has nothing to do with your credit score. Most credit scoring models do not consider your income when issuing a credit score. What does impact your score is your payment history, credit utilization ratio, age of credit and credit inquiries. 


However, if you earn plenty of income, a credit score may not matter much in terms of your buying power.

Myth: The Federal Government Runs Credit Bureaus


Although there are laws that regulate how the three major reporting agencies, TransUnion, Experian and Equifax report credit, the federal government has nothing to do with the day-to-day operations of the reporting agencies. 
FICO is also an independent company that has no ties to the government.

Myth: The Credit Bureaus Report Good and Bad Credit


This myth really confuses many consumers. In truth, the credit bureaus make no determination that your credit is either good or bad. The bureaus merely compile credit information provided to them by lending institutions. From there, other lenders will use the information in your credit report to determine your level of creditworthiness.

There are many other common misconceptions in the world of credit reports, so it is vital that you do your homework before applying for your next loan or credit card. Arm yourself with the facts, and do not believe everything you hear or see about credit scores and credit reports.


Thursday, July 6, 2017

An Easy Guide to Understanding Your Credit Report



Credit is a major driving force in today’s economy, giving people the purchasing power that they need to buy a home, start a family, and build a career. 

Landlords, employers, utility companies and more use credit reports when deciding whether an individual is responsible and reliable. A good credit score can open the door to better deals and lower interest rates, but unfortunately, many of us have a less than perfect credit score.

This July, around 12 million people can expect to see a slight bump in credit scores as credit reporting agencies nationwide wipe tax liens and civil judgments from their records. 

However, much of those affected should only expect to experience an improvement of 20 points or less. If you’re looking to improve your credit even further, it’s important first to understand the basics of how credit reporting works.


Finding and Checking Your Credit Report


Keeping an eye on your credit report can help you to stay on top of your finances and improve your overall fiscal health. An unusual credit report can also give you an early indication of fraud or theft, allowing you to nip the problem in the bud. 





Ideally, you should check your credit report on a monthly basis to ensure that all of the information is up-to-date and accurate. A mistake in your report could adversely affect your overall score. You may have to pay a small fee to check your report, or you may be able to access your credit scores for free through your bank.


What the Numbers Mean


FICO scores created by the Fair Isaac Corporation, are one of the most popular measures used by banks and lenders to assess the risk of doing business with a particular person. 

Lenders may also check your VantageScore, which is a measure developed by three major credit bureaus, including Equifax, Experian, or Transunion. Scores are influenced by a number of factors, including:
  • Late payments
  • Credit utilization rate, or the amount of credit you use versus how much credit you have available
  • Number and age of credit accounts
  • The types of credit you use

If you keep your account active and pay back your debts on time and in full, you can build up your credit score and enjoy access to lower rates on insurance plans, business loans, mortgages, and more. Credit scores can range anywhere between 0 and 850, with higher scores indicating fiscal responsibility.

Excellent Credit: 720 to 850


Consistently responsible borrowers with a score in this range can get some of the best interest rates when making a purchase. Most lenders require a FICO credit score of over 740 for a low interest rate on a mortgage.

Good Credit: 690 to 720

When most, but not all payments are made on time, a borrower is considered to be fairly reliable. People with credit scores in this range tend to get decent interest rates from banks and lenders.

Problematic Credit: 650 to 690

Credit that dips below 700 begins to raise a red flag for any agency checking a credit report. Borrowers may be denied future credit if they have a history of making late or short payments.

Poor Credit: 350 to 650

A poor score can be the result of anything from bad spending habits to bankruptcy. Lenders will often deny credit to anyone with a score in this range.

No Credit: 0 to 349

People who have no credit history will have a score of zero. Opening a credit account allows individuals to start building their credit up so that in the future, they can make large purchases such as a house or car.


Improving Your Score


If your score is in the low range, over time, you can work to build your credit up again. It’s a good idea to start the process as soon as possible since you never know when you might have to borrow money, move apartments, or switch insurance plans.


How to Improve Your Credit Utilization Rate


Your credit rate indicates how much you’re spending compared to how much credit you have available. Lenders look for a low ratio, meaning that borrowers use less than the amount available to them. By paying off your debts and reducing your spending patterns, you can improve your credit utilization rate, and thus your score.


How to Get a Late Payment Removed from Your Credit Report


If you have a good history with your creditor, then you may be wondering how to get a late payment removed from your credit report. In some cases, it might be as simple as calling them up and requesting that a late payment gets removed as an act of goodwill. 

You may also be able to get it removed by agreeing to set up an automatic payment schedule in the future. If a creditor refuses to remove a late payment, you may be able to dispute the issue or hire the help of a professional credit repair agency.

Many people focus too heavily on the past when it comes to matters related to credit. While it’s true that you can’t change any historic mistakes (such as late payments) that you’ve had problems with, there’s a lot you can do to improve your credit score in the future. 

Knowledge is key, so begin by finding out your current score and then work on the ways described here to start improving your rating bit by bit.


Thursday, February 11, 2016

How To Score With FICO



When it comes to getting a loan for a new car, new home, or new business, you've got to be fully prepared. This preparation involves many things, but the biggest issue at hand is having a credit rating that will enable a bank or lender to judge you as an acceptable prospect for a major loan. 

If you don't have a good enough score to back up your claims, you'll quickly find yourself rejected and out of luck. So, before you even think of applying for a loan, it's an excellent idea to know exactly what you need for a good credit score. 

What Exactly Is Your FICO Score?


FICO is an acronym that stands for Fair Isaac Score, the company that created this credit scoring system. This is the system by which your credit score will ultimately be calculated. Banks and lenders will use your FICO score as the primary means of judging whether or not you are a good risk for a loan. 

If your score is anywhere from average to high, you'll have a good chance of securing a loan. If your score is less than average, you're going to have to do some serious repair work before you can even think about getting a loan in the near future.

 

How Is Your FICO Score Calculated?


The components that go into measuring your ultimate FICO score can be broken down in the following manner:

  • Your payment history will count for 35 percent of your score. This includes all of the payments you have made via the medium of credit, as well as a complete record of whether you have made all of these payments in a timely manner.
  • 30 percent of your FICO score will be determined by the amount of money you still owe via the medium of credit.
  • 15 percent of your score will come from the length of your credit history. A person with a long history of paying by credit in a timely fashion will have an advantage over someone who has a bad credit history, or very little credit history.
  • 10 percent of your score comes from what is termed "credit mix in use." This term covers the mix you may have of credit cards, credit accounts from retail stores, any loans you may be paying off via installment plans, whether or not you are currently paying off a mortgage loan, and any open accounts you may have with a finance company. 

The final 10 percent of your score will come from whether or not you are considered "new credit", i.e., whether you have a very recent and limited credit history, or whether you have taken out credit with a variety of sources in a very short and recent amount of time.

What Is In Your Credit Report?


The best way to get an accurate look at your FICO score and overall state of credit is to apply to receive your credit report. This credit report will consist of the following items:

  • All of your basic information (name, address, Social Security number, date of birth, employment history).
  • Trade lines. These are all of your credit accounts, including a full history of when you opened your account, your credit history, all of your outstanding payments, your maximum line of credit, etc. 
  • Credit inquiries. A complete list of everyone who has accessed your credit report within the past two years. You authorize this inquiry when you apply for a loan.
  • Public Record and Collections. Credit reporting agencies are authorized to collect information from state and county courts concerning bankruptcy proceedings, property foreclosures, wage attachments, settlements of lawsuits, foreclosures, liens, and other related matters.


Get Your Credit Report Today


If you have any doubts about the accuracy or the overall strength of your credit, it's an excellent idea to obtain your free credit report today. The sooner you do so, the sooner you can settle all doubt on the issue and get a realistic, accurate assessment of your credit. 

This way, if there are any areas that you care to dispute, you can do so in a timely manner. If there are other areas that are accurate, but definitely cast your credit in a bad light, you can work to improve them before applying for a major loan.

You can apply to observe your credit report today. It will give you a complete look at all of the above listed components that make up your FICO score. The sooner you have this information, the sooner you can make all of the necessary adjustments in order to render your score as strong as possible. 

Getting your credit report is the first step toward positioning yourself for success in all of your future financial and business pursuits.


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