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.

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.

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.

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.

Debt and Credit Card Management Tips

Credit card debt can put your financial health at risk. In order to manage your debt and your credit card use, you should gather all the pertinent information that you need. It is also helpful if you know all the options open to you. This way, you can make knowledgeable decisions and get relieved from credit card debt eventually.

If you are struggling with credit card debt, one of the things that can make it really difficult for you to make payments is the interest. When you carry a balance, you have to pay for high interest rates. This is also true for those who only pay the minimum payment. Fortunately, getting out of debt is possible. All you have to do is to be a responsible credit cardholder.

Here are some tips that might help you get rid of debt:

Reduce Your Debt

If you are in debt, it makes sense to stop any further use of your cards. However, it is not recommended that you close your accounts abruptly. Doing so will have a negative impact on your score. Instead of helping you out, it may only ruin your financial capacity even more. The best thing to do is to practice self-control. Don't go into more debt unless you have already made payments on your existing dues. This way, you will be able to slowly solve your debt problem.

Have a Budget

Having a budget and sticking strictly to it is a good means of reducing debt. Create your financial plan and stick to it as much as possible. List all the amounts you owe as well as other fees, such as interest rates, annual fees, minimum payments, credit limits, and many other fees associated with your card. Prioritize bills that have the highest interest rates then decide how much you can readily pay off each month. If you can, strive to pay off the full amount so that you will no longer incur interest rates. If not, make a payment that is higher than the monthly minimum payment. Once you are done making a full payment with that particular account, you can then go on to the next one.

The Waterfall Attack

List of all your debt and arrange them from highest to lowest. Start paying with the highest amount and the one with the highest interest rate. Focus paying on that until such time that you have made a full payment. Once this is done, you can then move on to the next on your list. Getting rid of debt through this process may take several years to accomplish but you will be able to reap its benefits if you are able to stick to your plans.

The Snowball Method

An alternative to the waterfall method is the snowballing your payments. Instead of paying off the card with the highest rate first, you will pay first the debt with the smallest balance instead. List your debts in ascending order in terms of balances. The trick here is to pay only the minimum on all your other debts except for the one with the smallest balance, which you will have to pay in full if you can. The beauty of this method is that it not only helps you eliminate debt in the long run; it motivates you to make more payments as well. Since you are paying off the debt that has the lowest balance, you can quickly witness your progress and this will encourage you to pay all of your debt.

Seek Professional Help

Credit card debt counseling is valuable especially for those with really huge debts to pay. The problem though is that this type of service is not always affordable. Nevertheless, you can find free debt counseling from many financial organizations. With the assistance of an expert credit analyst, you will know which debt release solution is the best for your situation.

6 Credit Card Services You Should Evade

Supplementary services on credit cards may sound appealing and even logical at times, but are they really worth having from financial standpoint?

Here are the six services that you should evade on your card.

Identity Theft Coverage

This service on your card is to prevent fraudulent charges after the card is stolen or used without your permission. It seems very attractive. However, this is not complimentary at all. As per the terms associated with the service, if the card is stolen, the cardholder has to pay maximum liability for fraudulent charges. This may be anything as per the charges norms concerned.

If you can use your card cautiously, you can avoid this service.

Missed Payment Insurance

This facility allows the issuer to put your credit card payments on hold for up to two years, if you lost your job or ran out of money. You will be charged for the outstanding balance on your card. However, this does not make any sense why you should take this service.

For example, are you sure if you ever be unemployed in future? Second thing, it is folly to believe you will not continue making payment for two years in future. Carrying outstanding balance never makes a good sense. Even your modest saving can help you pay off your balance. Hence, it is unwise and waste of money to have this service.

Credit Score Tracking

If you subscribe this service from your bank, you will be able to have 24/7 access to your credit score. This will surely help you stay updated with your credit score status. However, it is futile and waste of money. If you are getting monthly billing statement from the bank, you can know about your liabilities. Second thing, credit bureaus offer cost free access to know about credit scores. Apparently, you do not need to subscribe "credit score tracking" service when you can manage your needs with these cost free services.

Debt Consolidation

This service allows you reduce your monthly payment on your plastic money. However, you may end up accumulating more debts in due course of time. Thus, it would liable you pay hefty amounts plus charges to your bank. Debt consolidation may lower your monthly payment, it is unwise considering the consequence.

Credit Score Repair

Sometimes, credit card companies take advantage of cardholder's ignorance. This service exemplifies this well. It means, your bank will help you repair your credit score.

However, do not take this service as you can repair your credit score yourself. Just continue repaying outstanding balance on time to your bank and it will fix your credit score automatically.

Balance Transfer

This facility allows you transfer existing debt of one credit card to another one. However, the balance transfer process usually takes 7 to 10 working days. What if you miss the due date by the time your balance transfer is complete?

Therefore, if you can pay your outstanding balance in full before the teaser period expires, then do not take balance transfer service.

Golden Tips You Should Know About Credit Repair

Has your credit situation gotten to the point where it gives you many sleepless nights? The following golden tips are a helpful credit repair guide that will change your negative situation into a positive one.

Before you decide on a credit counseling agency, you should find out more about them. In spite the fact that some can be quite legitimate, others have motives that are less than kind. Even worst, some are just people trying to scam you. Consumers should always check to see if a credit counselor is reputable and trustworthy before deciding to use them.

The first step to maintaining or improving your credit score is to ensure that your bills are always paid on or before the due date. Setting up payment reminders is an effective way that can help you avoid missing a payment. There are indeed a lot of different ways to remind yourself to pay your bills. You can set up email reminders through your online banking or have text messages sent to you at specific time.

Avoid paying off high interest rates so that you do not have to pay too much. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. However, you signed a contract agreeing to pay off interests. If you want to sue creditors, you need to state your claim that the interest rates are too high.

If ever someone promises you to improve your score by changing your factual history, this is most likely a scam. The accurate negative information about your credit will stick around for seven years though it really seems unfair. If you can spot any error about the information, you should get it corrected as soon as possible..

If you are able to successfully negotiate a payment schedule for a debt, it is utmost important to request a copy of the agreement in writing. This is a great way to have documentation of the agreement if the creditor changes their mind or the company ownership gets changed. Once the debt is fully paid, you must get a statement verifying this from the creditor and send it to each of the major credit bureaus.

Also, make sure that you are never using more than 50% of your credit card's limit. Should you have a balance that is more than 50 percent, your credit score will drop. If you can afford, pay the balances on your cards; if not, do your best to pay as much as possible each month.

Your interest rate will be lower if your credit score looks good. By lowering your monthly payments, you will be able to reduce your debt more quickly. Getting better interest rates leads to an easily maintainable good credit score.

If your credit rating is too low to open up a regular credit card account, there are secured credit cards available. These types of credit cards normally require a good faith deposit to open a new account. Using this new credit card in a responsible manner will help to improve your good credit rating.

If you think it is hard to resist the temptation of credit, ask your creditors to lower your spending limits. However, you should do this when you are able to remain with a low balance, however. Do not lower the credit limit to the point where your current balance almost reaches the maximum.

When speaking with debt collectors, you should be honest about your current financial situation. They will be more apt to work with you and agree with you proposal if you are forthcoming with your current financial information. State clearly how much you are able to pay, and when you can pay it. Remember that they are usually open to negotiation.

From the above tips, you can see that your credit report does not need to be the cause of stress. Credit repair is possible and you do have the ability to fix your financial situation. You can greatly improve your credit record if you adhere to the tips within this article.