Category Archives: Credit Scores and Building Credit

Create a credit monitoring plan

Build My Credit Score Step 1

Step One: Keep the Proper Credit Card Balance.

Did you know that your credit card balances on each credit card should always be lower than 30 percent of the limit? For instance, if you have a $10,000 spending limit on your Visa, keep your Visa credit card balance below $3,000 at all times, even if you pay your bill in full each month.

Girl with Card

The debt you carry on a credit card in proportion to the balance is called a “utilization rate,” and credit bureaus respond more favorably to people with low utilization rates. The lower the utilization rate, the better your score.

You must keep your credit card balance below 30 percent month-round. Maintaining a higher balance, but paying the bill below 30 percent at month’s end is not a sufficient strategy. Credit card companies want to know that you consistently live within your means, so you must always shoot for the 30 percent target.

What about your credit card balance on that card with no preset limit, such as an American Express card? Cards with no present spending limit usually work like this: The credit bureaus will take the highest balance you have ever had on your credit card and use this as your default balance. Let’s say that your highest balance was $8000. Credit bureaus would act as if $8000 were your limit, meaning your balance should never be more than $2400.

If your utilization rate is too high, you should do one or more of the following:

1.     Transfer fund among your credit cards so that each card has a 30 percent balance or less; and /or

2.     Pay off any debts that put your balance above 30 percent of the limit; and/or

3.     Ask your credit card company to increase your limit so that your balance is less than 30 percent; and/or

4.     Open another credit card account and transfer balances accordingly (but only after you learn about the right number of credit cards to carry).

Keeping the right credit card balance is one of the most important things you can do to increase your credit score, but keep reading the other steps that explain how to build credit.

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Build My Credit Score Step 2

Step Two: Have the right number of credit cards.

Credit bureaus give higher scores to people with at least three revolving accounts, which include major credit cards like Visa, MasterCard, American Express, and Discover cards.

Credit Cards

Preferably, you should have no more than five credit cards. Two is not enough, six it too many—three to five is just right.

Three things to keep in mind about opening credit cards:

  • Do not open retail store credit cards. Because you must limit the number of credit cards you carry to just three to five, do not waste one of them on a card you can only use in one store. You might be tempted to open a retail store credit card so you can save 15 percent on the day’s purchases, an offer many department stores make. Resist this temptation! The amount of money you will pay in interest will far exceed the one-time savings.
  • One of the many things you can do to recover from bad credit is to consider opening a secured credit card. Lenders that offer secured credit cards will require you to make a deposit that is equal to or more than your limit, thereby guaranteeing the bank that you will repay the loan. If you do not make your monthly payment, the deposit will be applied to your balance, and your credit score will drop.
  • If you must open new credit cards, open them all at once. A big part of the credit-scoring formula is the age of your accounts. Each time you open a new account, the average age is lowered. For this reason, open all the cards at once and get it over with! Though your score will initially drop, it will be better off in the long run.

If your credit score is below 550, you can apply for credit cards here.

If your credit score is between 550 and 719, apply for credit cards here.

If your credit score is above 720, apply for credit cards here.

If you have more than five credit card accounts, do not close them extra accounts. Most credit experts agree that once you have opened the excess accounts, the damage is done. In fact, closing these credit cards might hurt your score and will never help it.

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Build My Credit Score Step 3

Step Three: Make sure the credit bureaus are reporting your proper credit limit. 

When I first started learning about credit, I was shocked to learn that credit card companies often report the wrong credit limit to the credit bureaus—intentionally!

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This hurts your credit score because it causes your utilization rate to appear unnaturally high. Remember that your credit cards should never carry a balance that exceeds 30 percent of the limit. If your credit card company is reporting your limit as lower than it actually is, your utilization rate will appear too high.

Imagine that you have a $1500 balance on a credit card with a $5000 limit—a 30 percent utilization rate. But the credit card company reports your credit limit as only $3000. Now your utilization rate appears to be 50 percent. Having too high of a utilization rate is one of the reasons people have bad credit. .

Why do credit card companies fail to report correct credit limits? The theory is this: They do not want to lose their client base. If other companies see that you have a high credit limit and a positive credit score, they might solicit your business. By failing to report the correct credit limit, credit card companies keep your name off mailing lists and better retain your business.

And sometimes credit card companies don’t report any limit at all; when this happens, credit bureaus might report your limit as $0, meaning any balance you carry will make you appear to be over-the-limit, which is bad for your credit score!

If your credit limit is not listed on your credit report, or if it is inaccurate, contact your credit card company and ask it to correct the mistake immediately.

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Build My Credit Score Step 4

Step Four: Learn the difference between helpful and harmful installment loans.

Having a healthy mix of credit—including installment loans—is a great way to increase your credit score. The best credit scores have three to five revolving credit cards, an installment loan, and a mortgage.

Obviously, getting a mortgage is a big commitment, so you should only do this if you actually want to buy a house. But adding an installment loan to your credit report is easy; it doesn’t have to be as complicated as applying for a car loan. A lot of places—and not just car companies—sell products using installment loans. If you need furniture, a computer, or other household appliances, you might consider purchasing them through an installment loan.

But make sure you are applying for an installment loan, and not some other type of credit.  A lot of stores offer credit cards that help you finance the account—these are not the same things as installment loans. And other stores offer finance accounts, which are harmful installment loans. These accounts allow you to delay payment, or offer no interest until a later date. If you buy a piece of furniture using a loan that allows you to delay payments for six months, or pay no interest until the following year, you are likely applying for a harmful installment loan.

To make sure you are applying for a helpful installment loan, simply ask to speak to the credit representative. The sales associate likely will not know the difference, so get on the phone with the person representing the bank that is offering the loan because some types of loans will actually hurt your credit score!


Another option for adding an installment loan to your credit report is available for people who own their cars. Walk into your local bank or credit union and ask for a small installment loan on your existing car. The loan does not have to be large—try applying for a $1000 installment loan that you will pay off over six or twelve payments.

Keep in mind that you will pay interest on this loan, but if you pay the loan off quickly and keep it small, the interest will be nominal. If you have bad credit, this will quickly help you increase your credit score, which will pay dividends on future mortgages, installment loans and credit cards.

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Build My Credit Score Step 5

Step Five: Remove high-priority credit report errors.

Approximately 80 percent of people have credit report errors, a quarter of which are serious enough to cause a person to lose a job opportunity or loan.

The worst errors, those caused by identity theft, can be a nightmare to remove from your credit report. Even simple, honest errors can be challenging and time consuming.

Credit report errors can be simple, such as having the wrong address or name listed on your account. They can be more insidious, like credit limits that are not listed.

Credit report errors can also be signs of identity theft—investments you did not make or accounts you do not own.

People with accounts in collection often have duplicate collection notices reported for the same account.

Whatever the high priority error, identify it and correct it. By removing credit report errors, you could see your score jump 20, 50, or even 100 points!

Beware, however of spending too much time on this step. Errors that are older than two years are likely not hurting your credit score that much. As well, do not waste your time correcting low priority errors, such as a typo in the spelling of your street address. Faster, more efficient ways to increase your credit score are described in the other six steps I’ve outlined herein.

Here are the high priority credit report errors to be on the lookout for:

  • Information—such as names, Social Security numbers, or accounts—that does not belong to you. This is one of the highest priority credit report errors out there as it could indicate that you are a victim of identity theft.
  • Delinquent account information—such as a collections notice—that is listed more than once.
  • Credit limits that are incorrectly reported or not reported at all.
  • Incorrect delinquent information, especially if the information is less than two years old.

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Build My Credit Score Step 6

Address Credit Collection Head-on.

Did you know that each time you make a payment on a credit collections account, your credit score could be damaged?

It’s shocking but true.

When you are 30 days late on a bill, a creditor will report a late payment to the credit bureaus. This happens again at 60 days and again at 90 days. Once you are 120 days late, the bill will typically be turned over to a credit collections company. Each late payment causes your score to drop, and the collection causes it to drop even more.

It would make sense that once you paid the credit collections, your score would increase. But this isn’t the way the credit-scoring system works.

A collection notice will stay on your credit report for seven years from the date of last activity. So each payment on a collection account renews the seven-year time-frame and causes your score to drop again

If you have credit collections, your goal is not negotiate with the creditor to stop this from happening. You have several options:

  • Pay the balance in full in exchange for a letter of deletion. A letter of deletion is not the same thing as a letter of payment. A letter of payment is useless, but a letter of deletion actually tells the credit bureaus to remove an item from your credit report.
  • Make payments in exchange for a letter of deletion upon final payment.
  • If you cannot successfully negotiate for a letter of deletion, but you want to pay the balance, simply ask that the company stop reporting to the credit bureaus. This prevents your score from dropping further.

Regardless of which option you choose, you should consider negotiating to pay a smaller balance. As a reminder, a lot of creditors will allow you to settle for cents on the dollar. One of my clients was able to settle for 20 cents on the dollar!

This is a complicated subject, but removing a collection account is one of the fastest ways to increase a credit score. I suggest that you review 7 Steps to a 720 Credit Score for a complete explanation of credit collections.

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Build My Credit Score Step 7

Create a Credit Monitoring Plan

Once you have learned how to fix credit, be sure you maintain your high credit score through a credit monitoring plan. Though you can certainly hire a credit monitoring company, I suggest that you schedule time to monitor your own credit score.

1.     First, create a budget and live frugally!

2.     Second, use technology to keep your bills current and your accounts active.

3.     Third, review your credit card bills and bank statements monthly.

4.     Fourth, pull your credit report at least once every six months and review the seven steps.

Credit Monitoring Plan #1: Create a budget and live frugally.

To protect your credit, you must live within your means. Otherwise, you will not be able to pay your bills. If you have not created a budget, now is the time to do so. If you have already completed your budget, make a note to review your budget in six months. Finances change, people’s obligations change, and so must your budget. Reviewing your budget allows you to make adjustments and modify your behavior so that you can pay your bills on time.

Credit Monitoring Plan #2: Use Technology to Keep Your Bills Current and Your Accounts Active.

I once forgot to pay my car bill, and my score dropped thirty points over night. Don’t let this happen to you. My suggestion is that you automate every one of your regular payments. You can do this by setting up automatic payments either through your bank, or with the creditor directly.

When creating these automatic payments, be creative about how you can keep your credit cards active. Inactive accounts do nothing for your credit score, so my suggestion is that you use each of your credit cards to pay a bill monthly. For instance, you can use your Visa to pay your gym membership, your MasterCard to pay your car insurance, your American Express to pay your health insurance.  You can avoid paying interest on these by being strategic about the payment dates. For instance:

  • Pay your gym membership with your Visa on the first of every month.
  • Pay your Visa bill on the third of every month. This way, you do not pay interest on your gym membership.

Credit Monitoring Plan #3: Review Your Statements Monthly.

The third thing you should do is review your credit cards and bank statements monthly. Specially:

  • Look for signs you are a victim of identity theft.
  • Check the limits on your credit cards. If the limit has been lowered, remember to lower the balance to no more than 30 percent.

Credit Monitoring Plan #4: Pull Your Credit Report and Review This Article.

The final step of your credit monitoring plan is to pull your credit report every six months. Keep in mind that your credit score will not suffer if you pull your own credit report.

Be sure to pull your report from www.720ficoscore.com so that you get your FICO score and not your consumer score. When you pull your credit report, do a quick review of this article so that you can address any issues you might notice (or go we will be happy to pull credit for you.  Simply CLICK HERE to get started at no cost).

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How Do I Build My Credit Score Fast?

How Do I Build My Credit Score Fast?

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Learning how to build credit can mean the difference between qualifying for a loan with great interest rates and not qualifying for the loan at all. It can mean the difference between being approved for a rental and struggling to find a place to live! And with 60 percent of employers running credit checks, not knowing how to fix credit could cost you a job!

You can learn how to build credit by following seven simple steps:

Step One: Keep the proper credit card balance.

Credit Card

Did you know that your credit card balance affects your credit score? Having the wrong balance, even for a day, can cause your score to drop.

Step Two: Have the right number of credit cards.

Credit bureaus give higher scores to people with the right number of revolving credit cards (i.e., MasterCard, Visa, Discover, or American Express).

Step Three: Make sure the credit bureaus are reporting your proper credit limit

Credit card companies often report the wrong credit limit to the credit bureaus, which interferes with the balance-to-limit ratio (See Step One). Learn how to correct this error.

Step Four: Learn the difference between helpful and harmful installment loans.

A helpful installment loan is one of the fastest ways to boost your credit score, but finance account installment loans will cause your score to plummet.

Step Five: Remove high-priority credit report errors.

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Approximately 80 percent of all credit reports have at least one error, and those that occurred within the past two years can cause serious credit woes. By removing erroneous information from your report, you could see your score jump. But beware of spending too much time on this step. When learning how to build credit, make sure you know the difference between high priority and low priority errors.

Step Six: Address credit collections head-on.

Instead of waiting for a collection account to drop from your credit report, begin the process of negotiating to have it removed! And be sure you know the facts. For instance, did you know that each time you make a payment on a bill in collections, your credit score could be damaged?

Step Seven: Create a credit-monitoring plan.

Once you have learned how to build credit, be sure you maintain your high credit score. Create a budget, leverage advances in technology, pull your report regularly, and protect your marriage by learning when to have joint accounts and when to have separate accounts

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Credit Score Advantage

How many credit cards do you need to obtain higher credit scores?  


Source:   720creditscore.com   To instantly improve your credit go to  www.720creditscore.com

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One of my rules for building a great credit score is: Have three to five credit cards. If you don’t have three, the credit-scoring bureaus won’t know whether you can juggle several bills at one time, and they will assign you a poorer credit score as a result.

So what should you do if you don’t have at least three charge cards? Well, the obvious answer is: Apply for some, of course!

But for people with poor credit—people who have been through a bankruptcy or other financial meltdown—that might seem difficult. After all, won’t credit card companies turn you down due to your poor score?

They are far less likely to turn you down if you apply for credit cards that are matched to your credit score. Applying for a card that is targeted to people with your credit score will improve the likelihood that your application is approved.

Best Credit Cards for People With Credit Scores Below 550

If you need to rebuild your credit score, the best way to do this is to apply for new credit. Following are the secured credit cards we recommend you applying for. When used responsibly, these credit cards will help improve your credit score.
Secured credit cards are great for establishing or rebuilding your credit history. Unlike prepaid cards, secured credit cards give you a credit line, and your payment activity will be reported to the major consumer reporting agencies. Getting a secured card is easy! Funds you deposit at the bank are used as collateral for the credit card. You use the card like any credit card. You can rebuild your credit history by making on time monthly payments to all of your creditors and by keeping your balances low relative to the credit limit.

If your credit is down and you need to improve:  Apply here  or go to  www.720creditscore.com for more info.

  • Nationwide Program though not yet available in NY, IA, AR, or WI
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Good for Car Rental, Hotels; Anywhere Credit Cards are Accepted!
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $300 — $2,000 Submitted with Application
  • Just Pay Off Your Balance and Receive Your Deposit Back at Any Time
  • 24/7 Online Access to Your Account

Another great option:   The Secured Visa® from Merrick Bank

  • Build your credit – Performance is reported to all three major credit bureaus, unlike a prepaid card.
  • Credit line increases – automatic unsecured credit line increase reviews with no additional security deposit or fees.
  • No Processing or application fees.
  • You determine your credit line – up to $3,000
  • Easy funding options – We have several convenient options to easily submit your security deposits
  • Worldwide acceptance – Use it anywhere Visa is accepted.
  • Easy application – Click “Apply Now” to apply online today!

Lastly:  USAA Secured Platinum Card

  • It’s a real credit card – not a prepaid or debit card, that helps you build or improve your credit score.
  • When you apply – you’ll also be opening a USAA 2-year Certificate of Deposit (CD), an interest-earning deposit account that has a two-year term and a $250-minimum initial deposit.
  • Your CD is a security deposit – the money you put in upfront, from $250 to $5,000, is the card’s credit limit.
  • Earn interest on your CD – your deposit is guaranteed to grow. Plus the money is yours to keep as long as you don’t default on your payments.
  • Start building your credit – opening a CD lets you get a credit card even if you don’t have a credit history or have bad credit.
  • Before starting your application, USAA will ask you a few questions to establish your online access and eligibility with USAA.
  • If you are not eligible, USAA credit cards and other products may still be available.

Best Cards for People with Fair Credit  550 – 719

The following Credit Cards and Prepaid Debit Cards are for People with Fair Credit. Compare offers side by side and apply online for the card that is right for you. Apply for the Fair Credit credit card or prepaid debit card of your choice by completing a secure online application.

NFL Extra Points Credit Card

Earn 10,000 bonus points after $500 in purchases, redeemable for $100 cash back statement credit

  • No annual fee
  • All 32 teams or the NFL Shield card plastic are available
  • Earn 2 points per $1 spent on NFL or team purchases in-stadium and at the Pro Shop and 1 point per $1 on all other purchases
  • No limit to the points you can earn
  • Redeem points for VIP NFL experiences, game tickets or cash back statement credits on travel or any other purchase of $25 or more
  • 20% off every purchase at NFLShop.com – that’s $20 off every $100 you spend

Barclaycard® Rewards MasterCard® – Average Credit

Earn 2,500 points, equal to a $25 statement credit, after your first purchase or balance transfer

  • 0% Introductory APR for 6 months on purchases and balance transfers
  • No annual fee
  • Earn 2 points per $1 on gas, grocery, and utility purchases and 1 point per $1 everywhere else
  • Use the points you earn like cash to pay for almost any purchases you’ve made.
  • No blackout date, no redemption fees, no limit on the points you can earn and no complicated set up.
  • Reports to all 3 major credit bureaus monthly providing you the opportunity to rebuild your credit score
  • Complimentary FICO® Scores as a benefit to active cardmembers. Opt-in to have instant and convenient access to FICO® Scores from your Barclaycard online account.

Best Credit Cards for People With Credit Scores 720 or Higher

If your credit score is 720 or higher, you will qualify for the best terms and lowest interest rates out there. Of course, some credit cards will have a lower interest rate but come with fees. Others might have higher interest rates but offer great rewards points and low (or no) fees.

NFL Extra Points Credit Card   or  go to www.720creditscore.com for more info

Earn 10,000 bonus points after $500 in purchases, redeemable for $100 cash back statement credit

  • No annual fee
  • All 32 teams or the NFL Shield card plastic are available
  • Earn 2 points per $1 spent on NFL or team purchases in-stadium and at the Pro Shop and 1 point per $1 on all other purchases
  • No limit to the points you can earn
  • Redeem points for VIP NFL experiences, game tickets or cash back statement credits on travel or any other purchase of $25 or more
  • 20% off every purchase at NFLShop.com – that’s $20 off every $100 you spend
  • 0% Introductory APR for 12 months on purchases and balance transfers
  • 10,000 Bonus Points after spending $1,000 on qualifying transactions in the first 90 days of account opening – enough for up to $100 cash back
  • Earn 2 points per $1 on gas, grocery, and utility purchases
  • Earn 1 point per $1 everywhere else
  • Use the points you earn like cash to pay for almost any purchases you’ve made.
  • No blackout date, no redemption fees, no limit on the points you can earn and no complicated set up.
  • Complimentary FICO® Scores as a benefit to active cardmembers. Opt-in to have instant and convenient access to FICO® Scores from your Barclaycard online account.
  • This offer is for customers with Excellent Credit
  • Earn 5,000 bonus points after your first purchase
  • Earn 5X points on Priceline.com purchases
  • Earn 1 point on everything else
  • Plus, earn an additional 5,000 bonus points after spending $1,000 on qualifying transactions in the first 90 days of account opening
  • Your points can act like cash – Redeem points for statement credits against purchases made on your account
  • No limit to the number of points you can earn
  • Please see terms and conditions for complete details
Check each potential card for APR,  Annual Fees and Required credit needed.

Wish for Prosperity or just plain better credit — this is a fun exercise  2014 WISH MACHINE

Contributors to this Blog:

720creditscore.com 

720 or higher credit scores–key to Jumbo loans

Ok, so this blog will be a little boring but if you are in the market to purchase a home or a car listen up!

This information comes to us via 720creditscore.com so take a look:

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I Called Todd!  Now I’m at 720

Which is better for your FICO score: Paying off your credit cards, or paying off your mortgage?

Most people say they would pay off their mortgage to increase their credit score the fastest. But when it comes to FICO scores, eliminating charge card debt is far more powerful than eliminating mortgages and car loans.

And if you think about it, it makes sense. When assigning a credit score, the scoring bureaus assess risk by asking one question: How likely will this borrower default in the next two years?

Most people prioritize their mortgage payments; they would rather skip a few meals than lose their home. So having a balance on your mortgage isn’t really that risky. But people aren’t quite as responsible with their Visas and MasterCards. In fact, even the most financially responsible people make a few bad decisions when it comes to the allure of credit card spending.

So keeping a low balance (or no balance at all) on your credit cards is a far better indicator of your financial situation, and your ability to pay upcoming bills.

The moral of the story: If you want to increase your FICO score, get your credit card balances under control!

Get Approved

Anyone looking to get approved for a loan, whether it is a SEC 184 Native American Dream loan or a jumbo loan that empowers buyers, the process is simple.  Please click on the “GET PRE-APPROVED” tab and we will be happy to help.
Oftentimes, we find that buyers in the market for a home are hesitant to find out what their credit scores are and see if they qualify.  The process is actually quite simple and painless.
If your credit needs a lot of work, we can always run it through the 2014 WISH MACHINE  check it out in action.  Our job is to give you information necessary to improve your credit.
If you are simply looking for a vehicle to add some extra monthly income to your current paycheck we have that covered as well–Empower Network is the vehicle for so many, including me.  Take a look
My life doesn’t change whether you get pre-approved or not, I will still drive the same car and live in the same house but you life can change depending on the credit.
If you already have impeccable credit and looking for a Jumbo loan, we are jumbo loan specialists.