Credit Counseling
Credit Counseling

Your Credit Score – Tips to Raise it

Unfortunately, credit is an important part of our life. Good credit is required for so many things, like applying for a car or home loan, applying for a credit card, and even some seemingly unrelated things, like getting a job. If your credit score is lower than average, you’ve probably already found out that life can be a lot harder for someone with a low score. Fortunately, there are plenty of ways to improve your credit score. Of course, there is no overnight fix, but here are a few ways to get started fixing your credit score.

Pay Everything On Time

This might be obvious to some, but it’s one of the most important steps to raising and maintaining a credit score. Whether you have bills from credit card companies, banks, or companies that provide anything else like power and water, every time you don’t pay them completely, your score drops a little. If you can’t pay every bill off completely, pay off as much as you can each time. This might also be a good time to talk to a debt counselor, as you may have more trouble than you realize.

Apply for Credit at the Same Time

If you do need to apply for credit, for example, a debt consolidation loan, try to complete all of the applications in a relatively short period of time. When the credit agencies notice that you’re applying for credit a large number of times, they assume that you’re applying for multiple lines of credit, which could drop your score. However, as long as the applications are within a shorter period of time, say a month or so, they are more likely to understand that you are simply applying for a single line of credit in multiple places.

Wait for Good Credit

This is not the most efficient way to raise your credit score, but it can be helpful to you. Credit agencies only consider activity within the last seven years. This means that even if you have terrible credit now, and you do nothing more than follow the rules of maintaining good credit, such as paying bills on time and keeping a reasonable debt-to-credit ratio, your score will go up by itself over time, and in seven years, you’ll have pristine credit.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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    Christian Credit Counselors, Credit Score, Debt

    Five Tips to Avoid Damaging Your Credit Score

    Your credit score not only determines your interest rates, but it could also determine your eligibility for that new job you have applied for. Like it or not, your credit score is an important number. Some of the most common questions our clients ask us are, how can they improve, build, and maintain their credit scores?

    Tips to Raise Your Credit Score

    • Pay your accounts on time. When you pay your bills 30 days late it could result in a negative credit reporting and could effective your score.
    • Borrow no more than you can comfortably pay back. Avoid maxing out your credit cards. Limit your utilization to no more than 30% of your available credit. Practice good spending habits by charging something simple like your gas and then paying off the whole balance at the end of the month. This will help you to develop good spending habits while building your credit.
    • Be cautious about co-signing or guaranteeing loans for others. By co-signing or guaranteeing a loan you are a joint account holder and equally responsible for funds owed. Your credit report will also be equally affected by negative reportings.
    • Do not apply for credit you do not need. We know that store retail accounts are tempting with their promotional offers, but when you read the fine print they often have high interest rates. If you choose to do one of those 0% deals for a year, make sure you can pay it off in the time allotted because after the expiration date the interest rate will shoot upwards of 20% which will end up being very costly.
    • Pull and review your credit report annually and dispute inaccurate information. You can pull your credit report from each bureau once per year for free at: annualcreditreport.com. By reviewing your credit report annually, you can catch any inaccurate reporting or suspected identity theft.

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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      Christian Credit Counselors, Credit, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt, Debt Settlement, Finance, Money Management, Personal Goals, Saving

      Credit Cards: Considering Credit History

      Considering Your Credit cONSUMER-cREDIT

      Do you have credit card accounts that you don’t use? Are you thinking about closing these unused accounts to clean off the slate? Read this article to learn more about the effects of closed accounts on your credit history.

      A Fair Isaac representative reported that closing accounts does not directly hurt one’s credit score, regardless of whether it was closed by the cardholder or the credit grantor. That’s the good news. The other side of the story, and there is always another side, is that closing accounts indirectly affects your credit history and therefore, your credit score.

      Closing Credit Card Accounts

      Closing unused credit card accounts can increase one’s credit utilization ratio. Credit utilization is a measurement of the difference between one’s available credit and the amount being used. This figure is calculated by taking the sum of your credit card balances and dividing that by the sum credit card limits. One’s credit utilization ratio directly affects credit scoring. Simply put, the higher one’s credit utilization ratio the lower his or her credit score.

      How does this come into play with regards to cancelling unused credit cards? The unused credit cards have low utilization since the entire credit limit is available. This offsets the higher utilization that one’s other credit cards may have. Thus, it reduces one’s overall credit utilization ratio boosting his or her credit score.

      Putting that into perspective, let’s say you have a credit card with a $5,000 credit limit and another card with the same. That’s $10,000 of total credit limit. Now let’s say you spend $2,500 on one card and some minor purchases on the other, which you have paid off. Your total balance, or debt, is $2,500, which equates to a credit utilization of 25%. If you were to close the card with no balance, your overall credit limit would decrease to $5,000, which would in turn increase your credit utilization ratio to 50%.

      Considering Credit History

      Closing credit card accounts can also lower one’s credit score by reducing the credit history age. Credit age is essentially that. How old are your accounts? In the credit scoring world, the older the better. Age is one representation of stability. Since older is better when it comes to credit card accounts and credit scoring, if you’re thinking of closing old unused accounts, think again. These accounts can actually help your credit score. Keep in mind, however, the FICO score does take into account both closed and open accounts, and closed accounts can remain on a credit history report for up to a decade.

      Setting all that aside, if keeping credit card accounts open leaves an open door to more spending – close them! Better to be financially free of debt and its negative impact on your finances, which we all know can lead to increased stress. And, who needs that!?

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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        Careers

        Business Owners – Tips to being Your own Boss

        From Employee to Entrepreneur

        Thinking of starting your own business? Maybe you have a great idea that you think will be a total success, but before you quit your day job you must be aware of the risks and advantages of becoming an entrepreneur. For example, working for a company ensures a peace of mind that does not readily come with owning your own business. The decision-making, salary and flexibility also have their positives and negatives.

        Financial and other Decisions

        As the boss you would make every decision, therefore any result, good or bad, falls back on you. This can be very stressful and it can become very difficult to handle. But on the other hand, you have the freedom to make the choices you see fit instead of being told what to do. This may give you the independence you have been waiting for; and chances are, if you are looking to start your own business, you probably prefer being the one calling the shots.

        Paying You and Your Employees

        Your salary will vary depending on the kind of business you choose to start. You may decide to start a business where you are the only employee–a sole proprietorship. With this form of a business, you would reap all the benefits of your hard work. However, you may choose to open a business and hire some employees. This type of business can become very stressful because you no longer have the security of knowing yours is the only paycheck you have to pay.

        Now you have to worry about where the money will come to pay your employees, and depending on where your business is located, you may be required to provide health insurance for your employees. This will be especially stressful in the beginning stages when most of your money, if not all, is going to pay for expenses.

        Setting Your Schedule

        Many people that start their own business do it with the idea that they will be able to make their own schedule. While this is true, you must be aware that in the beginning stages of your business the hours will be very long and you must be prepared for emergencies that can occur at any time. It can be a very unpredictable schedule and you may start to miss the monotony of a 9 to 5 office job.

        Other risks include losing access to company health insurance; as an entrepreneur you would have to pay out-of-pocket or pray you are never sick or hurt. Also, you must deal with your clients/customers first-hand; you can no longer direct their call to your supervisor. You may think that being your own boss will outweigh any risk (and it might), but don’t forget you will have to answer to the bank that gave you your business loan, as well as the IRS and other creditors. If after weighing the pros and cons you decide you can manage these risks and believe that your product or service is worth it, we wish you the best!

        Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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          Christian Credit Counselors, Debit & Your Credit Score, Money Management

          Credit Reports – The Knowledge You need to Know

          Improving Your Credit Score

          The best way to improve your credit score is to improve your knowledge on credit reports.  There are three major credit bureaus that put together your credit report: Equifax, TransUnion, and Experian.  Although the information they gather is yours, you do not own it, these agencies own your information.  They have collected the information and they give you the right to view it.  You can view your credit report for free on www.anualcreditreport.com.  You can view one or all three, depending what you need it for.  Your credit score will be between 500 and 840, anything over 700 is a good score.

          How your score is tabulated is unknown, but what makes up your credit score is no secret.  Some of the items that are calculated into your credit score are employment, department store credit card(s), credit card(s), installment loan(s), collection item(s), and inquiries.

          Department Store Credit Card Accounts

          For department store credit card accounts they look at highest credit allowed, balance, and date opened.  The rating scale on this account is R1 to R9 with R9 being the worst.  The R stands for revolving, and it tracks how well you pay.  A similar scale is used for installment loans, I1 to I9, where I9 means the account is in collection.  On this scale, I7 means they took back the collateral.  For example, on a car loan I7 means the car was repossessed.  All accounts, department store credit cards, credit cards, installment loans, etc., have a twenty four month window.  If you fall behind and make a late payment on any account, you must make twenty three on time payments to get the late payment to drop off.  Inquiries made on your account have a very small effect.  If you are shopping for a new car, the inquiries made by the dealerships have no significant effect on your score.  However, if you have fifteen inquiries in one month it will cause a big impact because it appears you are desperate for credit and this raises a big flag.

          This information is sold to banks by the credit bureaus; this is how they make money.  With this information banks look at who is a credit risk, will pay over a long period of time, and earn them the most money.  For example, banks look at bankruptcy filers to offer them a credit card with high interest.  Also, the bank is attracted to those who recently purchased a home because most of them will make big purchases like furniture, home improvements, etc.

          Managing Your Money

          There are some simple rules that will help you better manage your money and increase your credit score.  Prioritize your bills, and pay your bills immediately.  As stated by the President and CEO of Christian Credit Counselors, Greg McTaggart, “the longer you have that credit card, the more they make off of you.”  Think of your purchases.  Do not just focus on the present, focus on what you will need 4 to 8 years from now.  Poor planning leads to impulse buying, pre-schedule bills, balance check book, and have cushion for savings and emergencies.  To avoid fraudulent activity on your credit report, do not give out your information generously.  Check your report annually and dispute any irregularities with the credit bureau.

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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            Credit, Credit Cards, Credit Counseling

            Credit Education Month and Tools You Need

            Credit Education Month

            We all have credit cards, but who really pays attention to see if they are helping or hurting us. This month is Credit Education Month, which should give you an incentive to learn a little more about your credit. I know it can be confusing at times, and not all that interesting, but it is important to know and understand for your financial well-being.

            Your Credit Score

            The first thing I would advise is for you to find out your credit score if you don’t already know what it is. You are able to get one free each year from the 3 consumer credit reporting companies: Experian, Equifax, and Transunion. Take advantage of this! Once you receive the reports, go through each carefully to make sure there are no discrepancies. If there are, you will need to contact the credit reporting company to get it corrected.

            Once you know your credit score, you need to determine if it is good or not. Your credit score can range from 300-850, an the higher your score is the better. Go to MyFico for information on what is in your score and how you can improve it.

            Tracking Your Credit Report

            There are many tools available for you to track your credit report. Most offer a free 30 day trial, but if you opt for that, make sure you cancel before the 30 days so you don’t get charged for the next month. The monthly fee usually isn’t too outrageous, so if you do want to track your score, you can do so without paying much.

             

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              Credit Cards, Debit & Your Credit Score, Identity Theft

              Identity Theft Victims Must Do List

              A Must Do List for Identity Theft Victims

              If you’re a victim of identity theft, it’s essential to take certain steps as soon as possible, to start repairing the damage. At the same time, begin to keep a record of all conversations and copies of all correspondences. There are six things you should do right away:

              Fraud Alert

              Placing a fraud alert on your credit reports will prevent a thief from opening any additional accounts in your name. Although there are three credit reporting agencies, you only need to call one of them:

              Equifax 1-800-525-6285
              Experian 1-888-397-3742
              TransUnion 1-800-680-7289

              Review Your Credit Reports

              Request them from all three agencies and review them very carefully. Look for accounts you didn’t open, debt that isn’t yours, and inquiries from companies you haven’t contacted. Verify everything and begin the process of removing any fraudulent or inaccurate information.

              Close Tempered Accounts

              Call immediately and follow up with letters, including copies of your supporting documents. Also, send the letters by certified mail so you know they received it. Keep records of everything.

              Fraudulent Charges

              Dispute fraudulent charges on your credit card accounts or debit cards. Call the company to find out what their process is and where to send correspondence. Don’t send it to the billing address. Once it’s resolved, get it in writing.

              Federal Trade Commission

              File a complaint with the Federal Trade Commission. Go online at ftc.gov or call their hotline at 1-877-438-4338. The information will be used to help law enforcement officials track the criminals and stop them.

              Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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                Identity Theft

                Identity Theft and How It Works

                Identifying Identity Thieves

                According to the Federal Trade Commission, identity theft ranks number one on the list of top complaints, with credit card fraud being the most prevalent type. Criminals usually commit identity theft to get money, goods, or services, as well as to obtain documents such as false drivers’ licenses, birth certificates, social security numbers, or visas. It can be devastating for consumers because of the long-term damage it causes. Knowing how the thieves get your information will help you protect yourself.

                Identity thieves use a variety of methods to steal your personal information, including:

                · Looking in Dumpsters.

                They rummage through trash looking for bills or other papers with your personal information on it.

                · Skimming.

                They get credit/debit card numbers by using a special storage device when processing your card.

                · Phishing.

                They pretend to be financial institutions or companies and send spam or pop-up messages online to get you to reveal your personal information.

                · Changing Your Address.

                They divert your billing statements to another location by filling out a “change of address” form.

                · “Old-Fashioned” Stealing.

                They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records from their employers, or bribe employees who have access to this information.

                Common Types of Identity Theft

                · Credit card fraud 25%
                · Phone or Utilities fraud 16%
                · Bank fraud 16%
                · Employment-related fraud 14%
                · Government Documents or Benefits fraud 10%
                · Loan fraud 5%
                · Other 25%

                Security experts predict that these crimes will only increase as electronic transactions become more and more common.

                For more information, go to the Federal Trade Commission’s Identity Theft site at www.consumer.gov/idtheft .

                If you find you are struggling with credit card debt, please contact a credit counseling company today.

                Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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