Topics:Personal Finance Credit Score Credit Cards 101 Home and Credit Relationships and Finance Credit and Debt Credit Repair 101 Children and Finance Expert Advice Credit Repair Companies
August 21st, 2020
March 22nd, 2021
Building good credit can be difficult, and building good credit from scratch may seem like an even greater challenge. Most people start learning how to build credit when they are in high school or college, but some will avoid anything credit related out of fear or ignorance. Those who wait to build credit eventually realize that they should have started earlier in order to enjoy the benefits, like better mortgage or car loan rates. Although building credit may be difficult, it's definitely not impossible. We asked a few financial experts for tips on how to best build credit from scratch. Look into getting a secured credit card "Apply for a secured credit card. A secured card is backed by a cash deposit. If you place a $500 deposit for your card, you can charge up to that amount. A secured credit card can be a great way to build a positive payment history and works the same as a normal credit card. You can use your secured card to make regular purchases, and you’ll receive a statement to be paid by the due date. One key difference with a secured card is that if you fail to make payments, the card issuer may take your deposit." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com "Get a secured credit card. There are plenty of secured credit cards that don't require a credit check and help you build credit using a card with funds you've already put on the card." — Sarah Moe, Money Coach at Flauk Pay your bills on time "One way to build your credit from scratch is to pay your monthly bills on time. Some folks don't know this, but that helps you build a credit score." — David Bakke, Credit Expert at Money Crashers "The first step to building a good credit score is signing up for a credit card and making on-time payments every month. However, qualifying can get difficult when you may already have a low score. I would then recommend looking into alternative methods for building up your score, like reporting your on-time rent payments to a credit bureau through a credit tracking service or making sure to consistently pay off a car or student loans that can also have an impact on your credit score." — Jason Hill, Financial Advisor and Founder of Client Focused Advisors "Paying any doctors' or utility bills in a timely manner is very important, as unpaid bills could be sent to collections which could seriously damage your credit score. To build your score fast, save enough money to pay off your credit card bill in one payment and keep a $0 balance, or at the very least, do not allow your balance to exceed 30 percent of your credit limit. If you don’t have a credit card, be sure to set a calendar reminder to mail in a check or pay over the phone with your debit card before your balance is due." — Jill Caponera, Consumer Savings Expert at Promocodes.com Be smart when you use credit cards “Look no farther than two to three credit cards. The trick is to only use them for occasional purchases already in your budget and keep the balance under 30 percent utilization. There is no need to take on large debt such as auto loans, to build credit. Credit cards will do it faster and with much less debt load!” — Carla Blair-Gamblian, Credit Expert at Veterans United Home Loans "Don't apply for too many cards right away because it will have a negative effect on your score. After you get the first one, wait eight months before applying for anything else." — Joyce Blue, Money Relationship Expert at Empowering You Life Enhancement Coaching LLC Consider getting a co-signer "If you have a responsible family member whom you trust, ask them to cosign on a small loan or unsecured credit card. With a co-signer, you are still legally required to make payments to your loan or credit card. If you fail to do so, however, the financial burden falls on your co-signer. This option is best if you have a consistent income and are confident you can make your payments on time. If not, it can negatively impact the credit score of both you and your co-signer." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com "Getting an auto loan or personal loan and making on-time payments could really help to jump start your credit, but getting such with no credit history in the first place could be tricky. Asking someone with good credit to co-sign your auto lease, for example, could be your answer for not only getting the lease approved but also getting a better deal on the monthly payments and interest rate. Keep in mind, if you are unable to make the lease payment, your co-signer will be on the hook for the expense, so be sure to have a stable job and an emergency fund saved that can be tapped to cover these payments should you lose your job." — Jill Caponera, Consumer Savings Expert at Promocodes.com Stay on top of credit reports "Always check your credit reports for errors and discrepancies and correct the issues immediately. This can make a huge impact on your credit in a short period of time." — Jeffrey Bumbales, Director of Marketing at Credibly Become an authorized user "Is there a member of your family whose credit is already well-established? Consider asking them to add you as an authorized user on one of their credit cards. As long as they continue to make purchases and repay their balance to maintain good credit, you’ll also reap the benefit of watching your credit score climb." — Ennie Lim, Co-founder and President of HoneyBee "As an authorized user, you get a credit card with your name on it through someone else’s account. You can use your card to make purchases, but you are not responsible for paying the balance. Legally, the primary account holder is the only one liable for charges to the account. This is a good option for teens and college students who don’t make a consistent income to keep up with payments, but still want to be proactive about building their credit." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com Key Takeaways: There are several steps you can take to build credit from scratch • Look into getting a secured credit card • Pay your bills on time • Be smart when you use credit cards • Consider getting a co-signer • Stay on top of credit reports • Become an authorized user The Bottom Line Clearly, credit is important in today's world. Your credit scores can either open doors for you or close them. If you have bad credit, you might want to consider looking into credit repair services. If you have no credit history, try doing your own research regarding good credit habits and follow the tips mentioned above to start your credit-building process.
Engagement rings can be a symbol of promise, love, and in many cases, money. The average amount Americans spent on an engagement ring in 2016 was approximately $6,163, according to theknot.com. Although finding and purchasing the perfect engagement ring is important, it shouldn’t be a reason for your credit score to drop. Here are a few ways to purchase an engagement ring without taking a financial hit. Make a Budget Before shopping for an engagement ring, create a budget, and stick to it. Only look at rings that will help you stay within budget. If you go over budget, have a backup plan for additional financing. Choose Your Financing Carefully Although most jewelry stores will offer financing options, credit card financing is also an option. There are ways to make the credit card financing process a bit easier. Know your credit scoreTo finance a purchase as large as an engagement ring with a credit card, it is crucial to know what your credit score is and how the purchase will affect it. This can determine when you will pay it off and how long it will take you to do so. If your score will be negatively affected, then this might not be a good financing option for you. Repair score if necessaryIf you have major dings on your credit history, you'll want to repair it before adding an engagement ring purchase to the mix. Using a credit repair company may help you do this faster. Resources like bestcompany.com have a list of ranked and reviewed credit repair companies that can help you choose the right company for your situation. Open a new credit card account According to a lexingtonlaw.com article, the average American household is $16,748 deep in credit card debt. To avoid accumulating further debt, especially thousands of dollars from an engagement ring, moneyunder30.com recommends that people should consider opening a new credit card account. This could provide you an option for a lower interest rate and various sign-up bonuses. Learn about Credit Card Financing With credit card financing, there are a few things that you should be cautious about. It may be difficult for you to get a new credit card account if you have poor credit. Although this can be fixed by a credit repair company, it might take more time than expected to open the account and get the physical card in hand. If you're on a deadline to purchase a ring, this may not be the best option for you. If you do choose to finance your purchase with a credit card, make sure you aren’t late on payments. This can damage your credit history and cost you even more money in late fees and interest. Think Ahead You can avoid relying on your credit card when purchasing an engagement ring. A usatoday.com article suggests that people upgrade their engagement rings later rather than purchasing something they can’t afford at the time. This allows for greater financial flexibility and assures that you buy within your means. Don't Take on Too Much Stress Like every big purchase, buying an engagement ring can be stressful. However, remember that you have options. You can choose where you get the ring, how much you spend, and how you want to finance your purchase. Consider your options carefully and choose the one that will allow you to start the next stage of your life stress-free. After all, it’s good to keep in mind that the ring is not the only thing that matters.
Guest Blog Post from Guest Contributor at CreditRepair.com Being a member of the United States Military means making many sacrifices. Service members certainly deserve a debt of gratitude from their fellow Americans, as well as from the institutions with which they do business. It isn't uncommon for businesses to offer military discounts and perks—and credit cards are no exception. Depending on the credit card companies you’re doing business with, there are some benefits and rewards available to military men and women and their families. Of course, not all cards are created equally. Some cards are better suited for military personnel than for non-military consumers. These cards offer certain rewards and options military members may need in case of deployments or other circumstances. Taking advantage of these benefits can help ensure that you maintain a good credit score during your military service and deployment. The Role of the SCRA The Servicemembers Civil Relief Act (SCRA) provides credit benefits to those who are entering a branch of the military, or who are called into active duty or deployed in the military. The SCRA assists those in the military by placing restrictions on the amount of interest and fees credit card issuers can charge and on the terms to which they can hold active duty service members. For example, the SCRA prohibits lenders from charging more than 6 percent interest on debts incurred prior to active service. It’s important to note, however, that SCRA rules don't apply to debts incurred after entering active duty. While all creditors are bound by the SCRA guidelines, some go above and beyond, offering additional benefits to military service members. Take a look at five of the best credit card options currently available to service women and men. 1. USAA Preferred Cash Rewards Visa Signature® Card This card is a good choice for military members and their families. There is no annual fee, and it also extends the SCRA reduced interest rate period beyond the time of military service. USAA also offers a 4 percent APR on any balances that still exist one year after active duty has ended. Furthermore, USAA will rebate any finance charges accrued while on a “qualified military campaign.” Cardholders get 1.5 percent cash back and the card offers competitive travel benefits—most notably, zero fees for foreign transactions. The USAA Preferred Cash Rewards Visa Signature Card is open to members and families of retired or active military. 2. PenFed Power Cash Rewards Visa Signature® Card The Pentagon Federal Credit Union (PenFed) was created in 1935 to offer financial services to members of the military, defense industry employees, and their families. The credit union offers several credit cards, but its PenFed Power Cash Rewards Visa Signature Card offers no annual fee and unlimited 2 percent cash back on all purchases for current and former military members. PenFed also offers a $100 bonus statement credit for cardholders who spend $1,500 on the card in the first 90 days. It also offers no foreign transaction fees. 3. American Express Platinum® Card While the American Express Platinum Card doesn’t exclusively target military personnel, AMEX will waive the $550 annual fee for its Platinum Card for active duty service members. And the travel rewards are pretty compelling, too. Cardholders receive 5X Membership Rewards points for flights booked directly with airlines or with American Express Travel, 5X points on eligible hotels booked with American Express Travel, and one point for each dollar spent on other eligible purchases. AMEX Platinum cardholders can also get hotel and airport lounge perks. 4. Navy Federal Credit Union Platinum MasterCard® Navy Federal Credit Union offers its services to all military branches and employees of the Department of Defense and their families. While this Platinum card doesn’t offer a slew of rewards, it is a good option for those who carry balances on their credit cards. The card offers an APR that is consistently 1 percent lower than most other cards that cater to military service members. The card also offers no annual fee, no balance transfer fees, and a zero-liability policy for unauthorized purchases. 5. Capital One QuicksilverOne® Cash Rewards Credit Card This card is tailored to military service members with less than perfect credit. It offers many of the same perks afforded to those with good credit scores, including 1.5 percent unlimited cashback on purchases. The card has no foreign transaction fees, and its annual fee of $39 is waived during active duty. Like other cards, its interest rate is capped at 4 percent during active duty. Credit limits are increased once timely payments have been made for five months. Unlike other cards geared at military service members, Capital One QuickSilver One extends SCRA benefits beyond just traditional military members to include those in the National Guard, for example. As a member of the military, there are excellent credit card benefits available to you and your family. These cards can ensure that you pay the lowest interest rates and maintain a good credit standing during your time of active service. This peace of mind can be of great benefit to both you and your family. If you are a current or past member of the military, it’s important to review your credit report to make sure all of your credit accounts are in good standing. Keeping tabs on your credit will allow you to quickly identify any errors or fraudulent account activity that has occurred during your service or deployment so you can initiate any necessary credit disputes. Maintaining good credit can be difficult at times, so it's good to keep in mind that there are many credit repair options that can give you a second chance at having good credit.
Guest Post by CreditRepair.com We live in a world of credit, with millions and millions of new credit cards being issued each year—providing consumers with instant financial flexibility and convenience. If you’re like most of us, you’ve amassed a wallet full of cards, some of which have become your go-to tools for daily necessities. Others, not so much. Maybe a department store card you signed up for but found you didn’t use that often, or a higher-interest card you might applied for during a time of financial need, that now sits idle in a dresser drawer or deep in your filing cabinet. While those cards are essentially in a holding pattern, ready when needed, smart consumers need to be aware of the potential for scammers and fraud artists to take advantage of their half-forgotten status and do some serious damage to your credit. The Forgotten Card It’s hard enough nowadays keeping on top of your active financial obligations, including bank loans, internet and utility bills, or even student loan payments, and scammers are hoping that your slightly overwhelmed status will mean an inactive card might not get the attention it deserves. While physical security is still important (do keep the cards in a safe place, and neer keep documentation of PIN numbers for cash advances in the same place, in case that all falls into the wrong hands), your best defense is vigilance. And while your inactive credit card may not even warrant a monthly statement from the issuing company—enough months of a zero balance and the news starts to get stale after a while—it’s important to keep an eye on those idle resources. If that means occasionally logging onto a credit card website or signing up for spending alerts, it’s probably worth the five minutes it takes to log on and make yourself aware if there’s any unauthorized usage. Don’t Shred Those Cards . . . Yet You may believe that chopping up an unused card is also a good preventative measure, but that may not be the best strategy for fixing your credit. While excessive balances can certainly drag down your score, credit bureaus (the companies that measure and track your credit usage, your credit history, and your credit inquiries, use the age of credit card as a positive factor. An older card, even one not carrying a balance, is proof that you’ve been careful in your credit usage. Even better, a small, occasional purchase, paid off immediately, demonstrates that the card is still active, which can be an additional credit-building gesture. Another key strategy is active credit monitoring. Your credit report can give you an accurate picture of larger trends in your credit usage, and will let you know if an inactive card is suddenly active again, which may be a sign of a data breach. It can also let you know if a credit company or department store has decided to cancel the card due to inactivity, which occasionally occurs. Whatever you do, remember that your credit resources are valuable and that it’s vitally important to be aware of the cards you do have and how they’re being used.