Your Credit Questions and Answers

 What is a Secured Credit Card? A secured credit card is a type of credit card that requires a cash deposit to be made when you open the account.  The deposit acts as collateral for the account, and the amount of the deposit is usually equal to the card's credit limit.   Secured credit cards are reported to the three major credit bureaus, so responsible making payments on time will help improve credit scores over time. Using a Secured Credit Card For most people a Secured Credit Card is used to start their credit journey or to start rebuilding their credit after a significant Credit problem. You must pay your Secured Credit Card bill on time.  Even though you made a $500 or $1,000 deposit to get your Card you must pay your regular bill on time.   Remember you will be rated by the Secured Credit Card Issuer on whether or not you make your payments within the allowed payment time. Normally you will have Twenty One to Thirty days to pay your bill from the...

The most common reasons for a credit score drop is a missed payment, a new line of credit, a credit card removed, or an increased use of your credit.    A missed payment will have a significant and lasting effect on your credit score.  I had an 810 credit score and I missed a payment on my Lowes card.  I did not realize I had a bill with them.  The bill was under $50. I realized I had not made the payment when it showed up as a negative on my Credit Karma credit score.  It dropped my well aged with over 800 credit score by over 90 points.  Check this article on how I was able to get the Lowes negative removed.???** A new line of credit like a new credit card will lower your credit score.  Depending on how much credit history you have, a new line of credit will lower your score by ten to thirty points.  Increasing your debt with a major purchase on your credit card or a new car loan, will also lower your credit score.  A friend of mine ...

The reason not to cancel a credit card is because the average age of your credit is important.  If you do not have a loan like a house payment that you have paid for several years your oldest credit history account is probably a credit card.   If the average age of all of your credit cards is less than six or seven years your score will not be able to build an over 800 Credit Score . I have acquired a lot of credit cards through the years.  Many of them after I get the bonus I will quit using.  It usually takes a year or two for the company to delete that credit card account.  Long Term Credit Cards  However I have four cards that I have had for over ten years.  I make sure I use them some so they do not get cancelled.  A few times a year is enough to keep the cards active. How to Keep Credit Active If you do not have a home loan it is a good idea to keep a good credit score to have at least two old credit cards active.  You do not need ...

  I am about to have my last birthday of my 7th decade.  I know, a strange way to say I am turning 69. I was 33 years old with a problem. I had no idea how credit worked. I had a couple of credit cards which I usually paid on time.  At 28 I had purchased my first house with owner financing.  The woman I bought my first house from did not check my credit as I made a significant down payment.   At 33 years old I was applying to purchase my second house and I was going to rent out my first house. We applied for a home loan from a bank, however my wife at the time had missed a payment on her credit card and I had missed a payment on my credit card. The Bank required an explanation as to why we had missed payments.  I thought it was silly as neither of our missed payments were for more than $25.  My income at the time was significantly more than needed to easily make the payments and other than a small loan on the first house we were debt free.   ...

  Debit card fees will vary depending on the bank or financial institution you use. Here are some common debit card fees : ATM withdrawal fees : When you use an ATM that is not owned by your bank or financial institution, you may be charged a fee by both the ATM owner and your bank. This fee typically ranges from $2 to $5 per transaction. Foreign transaction fees: If you use your debit card to make purchases or withdraw money in a foreign country, you may be charged a fee by your bank or financial institution. This fee is typically a percentage of the transaction amount, ranging from 1% to 3%. Replacement card fees: If you lose your debit card or it gets stolen, you may be charged a fee to replace it. This fee can range from $5 to $25 depending on your bank or financial institution. Overdraft fees: If you spend more money than you have in your account, you may be charged an overdraft fee. This fee can be as high as $35 per transaction.  Ouch. Balance Check Fee:  Some A...

To earn an 800 Plus credit score you must have at least Three Different Credit Sources , No Missed Payments in the last 7 years, Less than a 10% Credit Utilization , and an Average Credit History of at least 6 years.       An 800 Plus credit score is considered excellent and what most people would like to accomplish.   A perfect FICO or Vantage 300 Credit Score is an 850. The worst is a 300.  800 Plus Credit Score Requirements The requirements for an 800+ score are rarely stated but here's what I have found: You must have at least three sources of credit, up to five will have a positive affect. An example  might be  two credit cards, two car loans and a mortgage or two credit cards and a personal line of credit. You cannot have any thirty day late or MIssed Payments in your credit history in the last 7 years. I have been able to get some missed payments removed. Check out How I removed a Missed Payment. You cannot have any Collections ...

Always Be Nice to Customer Service Customer Service Agents are able to help you if you're nice to them and hurt you if you're not. I was never taught how to deal with Customer Service.  However my Mother always taught me to be a Gentleman. Customer Service on the Phone I am always extremely nice and courteous to customer service. They have a very tough job because so many people yell at them and treat them horribly.  So many customers, especially of banks or credit cards, make a mistake but won't accept responsibility for their mistake. The customers want to blame the bank for the missed payment.  My dog ate my statement so I didn’t pay my bill. My rule of thumb is always be extremely nice to customer service. They're just doing their job and it is a tough one. They can certainly help if you are nice to them. Customer Service Tracks You Many Customer Service agents are able to make notes on your account. If you are particularly mean during an interaction they will ...

 I helped a friend who did some work for me.  He had no idea what a credit history or credit score was.  He was a 50 year old handyman that worked for cash.  I explained how credit works. We signed him up for Credit Karma on my computer.  He had a 570 credit score.   We found he had ony  one negative on his report.  Verizon had an unpaid bill of $120 from three years previous.  They had not turned it over to collections. He had no other credit history. We went to Verizon and asked if they would remove the negative and open an account for his phone.  They immediately removed the negative and opened up a Verizon account for him. I put him as an authorized user on a twelve year old credit card of mine. Within two weeks his score jumped to 760.  He had just my credit card on his account and it was 12 years old.  He also now had credit at Verizon however it did not show on his credit report.  The negative from Verizon...

  Credit Card Churning is a strategy in which individuals open new credit card accounts to receive credit card sign-up bonuses and cashback rewards. The goal is to receive cashback bonus rewards. This is also referred to as Credit Card Hacking. Sometimes the churner will close the account before the next years annual fee is going to be billed. The process involves applying for a new credit card, meeting the minimum spending requirements to earn the bonus, and then closing the account before the annual fee is due or after the reward is received. Effective Credit Card Churning To engage in credit card churning effectively, it is essential to have a good credit score, as credit card issuers only offer sign-up bonuses to customers with excellent credit scores. Organization is Important It is a good idea to be organized and disciplined in managing your credit card accounts to ensure you meet the minimum spending requirements, pay your bills on time, and avoid accruing debt. Credit C...

A hard inquiry is when you apply for a loan and the Bank, Credit Union, or lender checks your credit. A Hard Inquiry only happens when you apply for credit and sign an authorization for a credit check .  A Soft Inquiry is when You check your credit score.  This can be done through a company like Credit Karma or some of the credit card companies that are offering a free credit check. Discover and Chase both offer free credit checks.   How Often Can I do a Soft Inquiry? You can do a Soft Inquiry every day or as often as you want with Credit Karma or many of the Online Free Credit Check websites. You can also do a free  Soft Inquiry  once a year through each of the three credit bureaus. With Discover you don't need to have a Discover card to do a Soft Inquiry.  To get a free credit check. You will have to give your social security number and register with Discover.  A Hard Inquiry Credit Check When you make a hard inquiry for credit, meaning apply...

Delayed Gratification and Credit go hand in hand.  Delayed Gratification is waiting until you can truly afford something before buying it. Delayed gratification is beneficial when it comes to managing credit. Do not be tempted to use credit to purchase items you cannot afford. Buying things you want with credit but do not need will get you into carrying debt on your credit card.   This can lead to high levels of debt and financial stress. By practicing delayed gratification, you can develop the habit of only using credit for necessary purchases and paying off the balance in full each month. This can help you avoid high interest charges and improve your credit score, which can ultimately lead to better financial opportunities in the future. Additionally, delaying gratification can help you avoid overspending and impulse purchases, which can lead to unnecessary debt and financial difficulties.  Take the time to consider your financial goals and priorities, you will ...

Number One in looking for a Bank vs Credit Union would be they must offer a truly free checking account. I hate to pay bank fees.  I have a long term relationship with a bank and I do not have a monthly fee for my checking account.  However if I was looking for a new Bank or Credit Union I would probably go with a large Credit Union in my area.  The line between banks and Credit Unions has blurred in recent years. Originally Credit Unions had very limited memberships, work related usually.  Now most have open memberships.  Credit Unions are owned by the members vs Banks are owned by their shareholders.  Your Bank vs Credit Union Location It is really handy to have your bank or credit union close to either where you live or where you work.  While you may only go there once a month or once a week, if it is way out of your way to get there you will not like it. No Fee Checking Credit Unions usually have no fee checking however many banks are starting to o...

Even though you have sent the Secured Credit Card an advance equal to your credit limit you still have to make the payment on time.  If you are late with your payment to this card it will get reported to the credit bureaus as a Late Payment. You have 21 days after the statement prints (this is the statement date) to make the payment.  The mail will take a few days to get to you so from the day you receive the statement you will not have 21 days.  Do not wait to make payments on your credit cards.  A friend of mine always waited until the last day to make her house payment and credit card payments.  Then she was frantic to make it to the bank.  Sometimes she forgot.   Yup she ended up with bad credit. Be sure the Secured card you get is reported to the credit bureau.  If you get your secured card from your local Credit Union or one of the major banks like Chase, Wells Fargo, Capital One they will most likely report to the Credit Bureau.  ...

This page links to all of the Articles in the Blog. Credit Basics What is Credit?   What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Why is your Credit Score Important? How are Credit Scores Calculated? Where to get your Credit Report/Score for Free Why are Credit Cards Important? Debit Card Advantages and Disadvantages Debit Card Debacle Debit Card Fees The Credit Card Minimum Payment Trap Student Loans and Debt Building Credit Building Credit with No Credit History What is a Secured Credit Card? Secure Credit card Special Note What is a Credit Builder Loan? What is an Authorized User? How do Airline Miles work?    How to choose a Bank or Credit Union Managing your Credit No Grace Period or Float for You Managing your Credit Cards with Auto pay Credit Card Cash Advances Zero Percent Credit Card Offers The Tenth/Twenty-fifth Credit Card Game OOPS I missed a Payment How the Minimum Credit Card Payment will Break You Credit Card Statem...