Thursday, July 26, 2012

Five Factors That Determine Your Credit Score

Credit scores are becoming increasingly important. While it was once only used for mortgages and car loans, it is now used by life insurance companies and even potential employers. In fact, 60% of employers perform credit checks on at least some of their job candidates. Maintaining a clean credit report and high credit score is increasingly important.

There are 5 factors that determine your credit score. Think of these factors in terms of what a person lending you money might want to know about your history with borrowing.

Payment history (35%) - Payment history refers to your ability to make payments on time. Your credit report shows bills that were 30, 60 and 90 days late. If you were 60 days late on a bill and then paid it, the fact that you paid late will still show on your credit report and affect your credit score. Making payments on time is the single most important thing you can do to increase your score and keep your report clean.

Outstanding debt (30%) - Outstanding debt is calculated as the percentage of available credit that is being used. For instance, if you have a $30,000 credit limit, and have $25,000 in debt, you may be viewed as overextended. Some experts recommend maintaining a debt balance of about 10% of your available credit, however the most important thing is to not overextend yourself. If you use your available credit wisely, your credit score will increase.

Length of credit history (15%) - The longer you have been using loans, the better for your score. Creditors want to know that you have been a good steward of your credit over time. This is also the reason to keep your oldest credit card. Remember that card you were issued in college (the one you signed up for to get a free pizza)? Unless the card has high fees, keep it active by using it once a month.

New credit (10%) - Opening several new credit accounts will hurt your credit score as this may indicate that you are suddenly a higher risk borrower. Try to open new credit accounts only when you need them. Instead, try to have the credit limits on your current accounts raised if you need additional wiggle room.

Types of credit (10%) - Having different types of credit accounts can help increase your credit score. Instead of having 3 credit cards and no other debt, creditors would rather see a mortgage payment, an installment personal loan and a credit card. This is most important when you don't have a long credit history. Over time, the importance of this factor goes down.

When you think about it, if you were loaning money to someone that you didn't know, aren't these the factors you would consider? A person's ability to make timely payments, responsible usage of credit, how long they have been using credit, if they are opening a lot of recent accounts, and their usage of various types of loans, would all be important to know. The most important thing to remember is to protect your credit history by paying attention to these 5 factors. It takes time and energy to protect and build a solid credit history. Plus, your future job may depend on it.

So what do you think? Have you ever been turned down for a job due to a blemish on your credit report? Has anyone ever told you of other factors that affect your credit score? Feel free to share by commenting.

Thursday, July 19, 2012

Black Visa Card: The Origins of Prestige

For some time, the Visa Black card has blazed its way across your television screen as scenes of unmitigated wealth and luxury followed closed behind. A black-clad model - actress Donna Feldman - would grace the screen, with multiple readily-identifiable toys of the rich and famous scattered about her, in various states of use. This card is obviously marketed for those who aren't financially faint-of-heart. The message is clear: in America, size matters (at least; more than anywhere else) - and only the middle class and above deserves to walk around with a big stick.

So what is this Black card from Visa, and what makes it so prestigious? After all, emblazoned right on the front of the card invitation is the outrageously exclusive claim that just the top one-percent of American residents are eligible to apply for and receive the card. This, however, stands in opposition to the many claims by surprised credit card offer receivers that they were invited by Visa Black to join their exclusive Rewards Program; although of course, applying doesn't mean you will get accepted. If you do, then prepare to join the ranks of a wannabe super-culture; because while the Visa Black Card is nice, it's certainly no AMEX Centurion by American Express.

As for the attractive physical appearance of the carbon exterior, this is so impressive as to have garnered its own special patent; it can't legally be employed by any other credit card company for financial gain - or simple publicity (same thing, actually). Basically, the black Visa card isn't comprised of the run-of-the-mill plastic your average charge card is made out of. Additionally, Visa's flagship into the luxury realm is flanked by a great rewards program; above and beyond the 1% cash-back on expenditures. Card-holders have reported receiving restaurant dinners for two, Nordstrom's items and other higher-end department stores.

As for the travel benefits that go with the Visa Black, the charge card is highly-regarded in nearly a hundred countries all around the planet, with hundreds of exclusive airport lounges that grant you access to lounges that are unavailable to others, or available to them only at a steep fee. A 24 hour concierge service can make that trip in a foreign place much more comfortable, by arming you with the knowledge to fully experience the city scene.

Do all these benefits come at some cost? Visa Black requires a $495 annual fee for the privilege of using their black card. This averages out to just under $42 monthly, which should be a drop in the bucket if you're making the suggested $100,000 per year to reasonably expect to be accepted by Visa Black. With the benefits and prizes the card offers, more people than you might expect have eagerly signed up for a chance to be like Donna Feldman.

Tim is an avid finance-nerd type, and is quite interested in the ongoing fascination with Visa Black card s and other high-end charge cards. A former finance coach for upper middle class families in a gated community in Manhattan, Tim lends his expertise online these days and in occasional seminars. He helps run a website on black card s and their ramifications in the credit sector with a friend from college.

Friday, July 13, 2012

Fix Your Credit While Avoiding Rip Off Credit Repair Companies

Bad credit can simply paralyze your life. You can't get a loan for the car you want and you may not even be able to get a simple credit card. To make things worse, there are people out there who will try to scam you by saying they will repair your credit problems, as long as you can scrap together the money to pay an upfront fee. Luckily, there are ways to check and make sure you are not about to be a victim.

Any company asking you to put down an upfront fee for their credit repair services is suspicious to begin with, especially if they do not tell you exactly what they are going to do for you beforehand. Some of these charlatans will just tell you to contest all of the negative accounts on your credit report, even the ones that are valid. This isn't ethical. Others will tell you that you should set up a fake credit alias to start bringing in some credit, but that is illegal.

Any credit repair service that promises to do something that you cannot do yourself, for free, is a fraud. Services that promise to contact creditors on your behalf can provide quicker results, particularly if they are attorneys. However, if they say they can magically make your credit problems disappear in, say, 90 days, for a fee, then you need to run.

The best way to repair your credit is to look at your report. A lot of times, there really are negative entries that should not be there. Take the time to contact the companies and contest them. Legitimate enterprises will comply, although it can take 30 to 90 days. Then, talk to some of your creditors and see if they will delete your entries if you pay in full. A deletion will instantly raise your credit score, while a paid in full account will raise it a little -- but the account stays on the report. If you can negotiate a deletion, then your score will go up more quickly.

Repairing credit takes a lot of time, especially if you are new to the process. You'll spend a lot of time on hold, and you'll spend a lot of time dealing with people who are not really interested in helping you unless you can pay everything up front. Having someone take care of this for you can save you some time and resolve things more quickly. It can definitely be worth the money, especially if you have someone who is respected in the industry.

You may hear that you have to wait 7 years to get negative items off your credit report. This is true, but a lot of the time if you have no negative items in the last six months, or especially a year, your credit report will improve substantially.

There are a lot of ways to help yourself out as far as a credit score does. Don't sign up with a firm of crooks; find a legitimate business to help you out.

Sunday, July 8, 2012

Credit Card Fraud: How to Protect Yourself

The alarming reality about credit card fraud is that thieves don't need to get your actual card to commit the crime. Once they gain access to your credit card information, they can start stealing your money. They can use the information to purchase online and even on the phone. Taking the necessary precautions is the best way to deter fraudulent acquisitions.

Keep an Eye on All Credit Card Transactions

When shopping at stores, make sure that you get your card back as swiftly as possible. Don't let it out of your sight as much as you can. When performing transactions over the phone, don't give out important credit card account details unless you are sure about the company's reputation. There are also some emails that request you to give out your credit card info. Don't respond to these tricks. These are considered as phishing scams.

Contact Your Creditor

If there is a suspicious purchase in your credit statement, make that call immediately. You can also communicate with the three major credit bureaus. They can place a fraud alert in your account so that no one will be able to access it. It is wise that you keep a record of all your creditors' contact information in case of emergencies.

Sign Up for a Monitoring Service for Credit Cards

Such services will actively check on your credit reports. You will instantly be informed if your account information has been changed or if a new account has been opened using your name.

Check Your Credit Card Bills

It is advised that you open your credit statements quickly as soon as you receive them. Examine the purchases you made and make sure that there are no questionable activities there. Treat your bills as if it is your checking account. Hence, you should reconcile it every month, on time and in full. You may also want to save your receipts so that you can compare your expenses with the purchases that are stated in your monthly bill.

Freeze Your Credit

This is a very effective solution against credit card fraud. This can help you prevent any business from accessing your credit except if they have already performed transactions with you. This seals your records so that new creditors cannot view your credit report. The problem with this is that it will be hard for you to seek a student loan or a mortgage. You need to unfreeze your credit records so you can use it again. This usually takes three days and there may be a small fee for the process.

What to Do In Case of Credit Fraud

Whether you lose your card or it has been stolen, the first thing to do is to contact your issuer. Most companies come with 24-hour customer service and they are eager to help you. The US law states that reporting theft or loss of credit card frees you of the responsibility to pay for illegal charges. You can also file a complaint with the Federal Trade Commission to maximize your protection against fraud.