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Looking for credit cards? Loans? Credit tips?

Posted on September 11, 2007 | Filed Under Bill Collector Tips, Finance, Loans, Credit Cards

Regardless of the type of credit you are looking for from credit cards, mortgage loans, personal loans, bad credit, advice, or looking for calculators we have you covered as the credit professionals!

The Credit Specialists

Keeping Your Credit Afloat While You’re Away

Posted on July 7, 2007 | Filed Under Managing Credit

Credit card companies are developing increasingly sophisticated methods of detecting and stopping credit card fraud. For the most part, this works to your advantage, as you’ll be among the first to know if your credit card has been used in an abnormal way such as in another state or for a large purchase. When you’re on vacation, however, such security features can become an inconvenience. The best way to safeguard against an unnecessary hold on your credit card is to contact your credit card company beforehand, make sure you have a backup credit card, and double-check that you have your card’s international toll-free customer service number if you’re going overseas.

Additionally, you’ll want to make certain that your credit card was not copied while you were out of town by carefully monitoring your credit statements. It’s also helpful to check your credit history shortly after returning from a tripto make sure that no accounts have been opened in your name without your knowledge.

Advice You Need on Managing Credit Cards

Posted on July 3, 2007 | Filed Under Managing Credit

I’m trying to get my finances under control and would like to consolidate the 6 credit cards I currently have into 1 or 2 cards that have zero-balance transfer options plus lower interest rates.

What should I do with the cards I no longer want to use? I’ve heard that closing them can affect my FICO score.

How closing and opening credit cards affects your FICO® score is a common concern, so you’re smart to get the lowdown before doing something that could hurt your score. The short answer: we never recommend closing old or unused credit cards because this rarely helps your FICO score .

Here are some basic guidelines for credit cards that can stop you from unnecessarily dinging your FICO score:

* Only apply for credit if you need it and plan on using it.
* Don’t close the old cards that you’re not planning to use any longer.
* Only fill out an application for the credit card that meets your needs.
* Find out which actions help and hurt your FICO score. This free booklet is a great place to start!

Only apply for credit if you need it and plan on using it. No, saving 10% on your purchases at department stores doesn’t qualify as needing credit. Often, the initial 10% savings is far offset by the typically high-interest rates these cards charge. If you don’t pay the full balance off the first month, you could end up paying far more then the initial 10% savings. Opening unnecessary accounts can also backfire when you need to make a big purchase and find that your score has dropped causing you to no longer qualify for the best rates. There is no “golden number” of charge cards, but opening cards just to gain a small savings is usually a bad idea.

Don’t close the old cards that you’re not planning to use any longer. I know this may seem counter-intuitive, but there’s a fairly simple explanation. One of the most important factors in your FICO score is your balance to available credit ratio. Using all or most of your available credit can be a sign of looming financial stress. How does this ratio work? Let’s say you have $5,000 in available credit and are using $1,000, this is better than if you had $1,000 in available credit and are using $500. The ratio in the first case is only 20%, but the ratio in the second is 50%. Closing an unused credit card wipes away some of your available credit and causes this ratio to increase.

Only fill out an application for the credit card that meets your needs. Each time you apply for a credit card, a credit inquiry is added to your credit report. The credit-card companies do this to decide if you’re creditworthy, and if so, how much credit to extend to you and at what interest rate. Although these credit inquiries don’t usually significantly hurt your FICO score, they can lower it. Especially if you have many credit inquiries within a year. For that reason, consolidating your current balances to 1 card instead of 2 would be better. Credit inquiries can lower your score because people who are actively seeking credit have been proven to pose more risk to lenders than people who are not seeking credit. So, shop around for good deals, but only fill out an application for the right card! And don’t worry about checking your own FICO score – that type of inquiry has no effect on your FICO score.

Find out which actions help and hurt your FICO score. There’s no point in guessing when you can get this information for free! And taking advice from your local know-it-all can be a recipe for disaster. Take 10 minutes to read this short booklet called Understanding your FICO Score. Reading it will help you make sure that you keep up FICO healthy behavior!

Bad credit history? How to deal with it.

Posted on June 30, 2007 | Filed Under Credit Repair Tips

A few years ago I fell on some hard times and missed a bunch of payments to my creditors before finally declaring for bankruptcy. Now I’m dedicated to getting my financial life back on track and have paid all my bills on time for almost three years now!

Can you tell me how long my bad history will remain on my credit report? Do different types of information remain longer than others? Is there anything I can do to remove these old items from my credit report any quicker?

The fact that you’ve been paying all of your bills on time for nearly three years is a huge step in the right direction. Your recent good payment history won’t make your past payment history disappear, but it has laid a strong foundation for a better credit history going forward. Keep it up!

Different items on your credit report remain for different lengths of time. Make sure to check your credit report so you’ll know when the items on your report were originally listed – then you’ll know when they should be removed by the credit bureau. In general, here’s how long some common negative items can remain on credit reports:

* late payments – up to 7 years from the time the late payment was reported
* collections (where a creditor has turned over your delinquent account to a collection agency) – up to 7 years from the time the debt was first assigned to a collection agency
* judgments (where a court made a ruling against you regarding a debt) – up to 7 years from the date the court filed the ruling
* tax liens – if you pay them off, they can remain for up to 7 years from the date paid. If you don’t pay them, they can remain indefinitely!
* bankruptcies – Chapter 7 bankruptcies can remain for up to 10 years from the date filed. Completed Chapter 13 bankruptcies can remain for 7 years from the date filed.

Unfortunately, if the negative items on your credit report are valid, there’s nothing you can do to remove them. And don’t be scammed by credit repair companies claiming to make your credit problems disappear – no one can remove a legitimate negative item from your credit report . But if you continue to pay all of your bills on time and manage your credit wisely, the impact of these past negative items will begin to have less of an impact on your FICO® score. Eventually, they will fall off of your credit report completely and have no impact on your score. The key to improving your score is to continue to use your credit responsibly.

Going forward, here are some things you can do to ensure your financial well-being. First, check your credit report at least once a year and make sure the information listed there is correct. By law, everyone is entitled to receive one free credit report from each of the three major credit bureaus every 12 months. You can get these free credit reports at www.annualcreditreport.com. Second, before applying for credit, check your FICO score. Since you may not have a great score, it’s even more important that you know the rates you should expect from creditors before signing on the dotted line. Last, make smart choices regarding your credit and FICO score – this free booklet can guide you.

Remember, it may take a while to completely put your credit problems behind you. The fact that you’ve been serious about taking control of your credit is important - continuing to use your credit responsibly is essential to restoring your credit.

Is it better to pay off your collections?

Posted on June 27, 2007 | Filed Under Credit Repair Tips

Collections can affect more than just your FICO® score. You might have debt collectors harassing you and making you feel like this is a financial burden that will never go away. But even debt collectors have to play by rules, and if you feel like you’re being bullied or harassed, find out your rights at the Federal Trade Commission’s web site.

The fact that you have collections listed on your credit report will almost certainly lower your FICO score. Your score weighs collections on your credit report according to when the collection occurred. Generally, the more recent the collection, the more it’s going to hurt your FICO score. At myFICO we always recommend paying off your legitimate debts, and paying off old collections won’t hurt your FICO score.

Often, it’s nice to hear how other people are dealing with similar situations – there have been quite a few discussions about collections on the FICO Forums.

Is it better to pay off your collections? As far as your FICO score is concerned, two things are considered; has a collections appeared on your credit report, and when it was reported. So whether or not you pay your collections off is really a personal decision. But let me ask you this: if you won the lottery tomorrow, would you pay off your collections? Your answer probably reflects your personal feelings on debt and financial obligations. Something else to keep in mind is that every lender uses its own criteria when evaluating loan decisions. Some lenders may want to see that you are paying off collections before approving your loan. So, paying off collections could very well improve your credit-worthiness in the eyes of a lender.

Since your collections are 2 and 3 years old, your FICO score will consider them for several more years - typically, collections remain on your credit report for 7 years. The best things you can do in the mean time are to continually pay all your bills on time and be responsible for your credit. Take a look at this free booklet to help you understand how collections are calculated into your FICO score and what else your score considers. I hope this answers your question and good luck getting and staying FICO healthy!

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