Your Credit Questions and Answers

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 ...

I hate to pay fees. Little fees, big fees, they all irritate me. In the old days of checking accounts where local companies all accepted checks, banks used to charge $15 to $25 on bounced checks. In my area of Montana they made enough in Bad Check fees to pay all of their full time tellers.  A friend who was a banker told me this. Fees are a huge revenue source for banks. I try to avoid most bank fees. My checking account is does not have a monthly fee. My savings account does not have a yearly fee.   I do have an annual fee on my lines of credit, HELOCs, but I have not been able to talk my banker out of those fees. Debit Cards Fees will grow quickly if you don't pay attention. Debit card fees can vary depending on the bank or financial institution you use, as well as the type of account and the transaction type. Here are some common fees associated with debit card usage: ATM withdrawal fees : When you use an ATM that is not owned by your bank or financial institutio...

Begin a Debt Disaster Now! You start by getting a credit card. You get excited and see something you would like to buy. You don't have the money for it today. Let's say it's a new set of ski boots that cost $600 or a new video game console that cost $600. You promise yourself that you will pay it off in the next 3 months. You tell yourself, “I will just pay an extra $200 for the next three months and it will be paid off.” You get your credit card bill and you don't quite have the extra $200. This is how it starts. Your personal Credit Card Disaster is just starting. Next you get an offer for a screaming deal on a ski trip, Friends have an Air BNB rented and you can join the trip cheaply. You put it on your credit card. Listen to a Dave Ramsey podcast or radio broadcast sometime. The people calling in on his podcast or radio program have $20,000 to $380,000 in debt.  Usually a large portion of this debt will be credit cards.  They started with just $600 in unpaid c...

 How people steal your identity.   Your Name, Social Security Number, and Address are all that an identity thief needs to steal your identity.  If they have one of your passwords, phone number, or email that is just a bonus for them . One in One Hundred   If you know 100 people it is likely one of them will get their identity stolen this year.  It can take you years to get the problems you will have fixed if your Identity is stolen. There are a lot of black websites that will store your name, address, and Social Security number.  They might have your phone number and email address also.  Identity Thieves will continuously contact you any way they can to try to get you to sign into their fake website.  Often they will pretend to be your bank like Wells Fargo or Chase or Amazon to get your password.   Once they have access to any account they will try to steal from you.  Sometimes they will open up new accounts or other...

  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 ...

Three Steps to Identity Theft If someone attempts to steal my identity they will do at least these three things. They will: Get my Social Security Number Change my mailing address to their address Apply for a new credit card or loan with my name Closely Track New Credit Applications If the Thief has gotten my social security number and applied for new credit this will show up on my credit history. By closely tracking the credit applications made with my SS number I will know right away if my Identity is being stolen. Credit Karma Monitoring is Free With Credit Karma monitoring, any time new credit is applied for Credit Karma emails me with a notification. I check my credit and my email regularly. My Stolen Credit Card Monitoring If the thief has stolen my credit card number and used it I will get an email from my credit card company that my card was used. I have my credit cards set up so any charge creates an email to me. You can setup a separate email account just for credit card pu...

Recently I tried to use one of my Chase cards with a low credit limit to purchase an expensive item. My credit limit for the card was $4,000 and I tried to charge $8500. Chase declined the purchase.   Credit Card Customer Support  I called Chase Customer Support but the three digit number on the back of my card has rubbed off. I cannot read it. When I talked to Customer Service, I could not give them the three digit number on the back of my card.  Chase must have thought the card number had been stolen and temporarily closed all of my Chase Credit Cards. Support On Hold I called in over that weekend and was told I needed to talk to Loss Prevention.  Three times I was transferred to Loss Prevention and they never picked up the phone.  After twenty minutes or more I just gave up each time. Chase stopped usage of all four of my Chase cards for four days until my account got straightened out. I have a total of $35,000 credit available on the four different Cha...

Credit Karma is a free credit monitoring service that provides users with access to their Vantage 300 credit scores and credit reports.  In my opinion Credit Karma is awesome. Here's how Credit Karma works To sign up you will create an account and provide personal information, including your name, address, email, phone number, and the last four digits of your Social Security number. Credit reporting Credit Karma uses two of the three major credit bureaus, Equifax and TransUnion, to obtain users' credit reports. After you sign up they will update the credit reports every week.  If you check it more often CK will eventually update daily. Credit scoring Credit Karma uses the Vantage Score 3.0 credit score model, which is a credit scoring model developed by the three major credit bureaus. The score ranges from 300 to 850.  It is not the same as your FICO score but it will usually be close. Credit monitoring Credit Karma monitors your credit reports for changes, such as new ac...

There are Many Assorted Credit Card Fees.  I work hard to avoid the fees.  I work hard for my money I don't like to waste it. Annual fee - this is a fee charged by some credit cards once a year just for having the card. Most Airline cards and many Premium cards will have an $80 to $500 annual fee. I have a United Airlines card and a premium Chase card that I pay an annual fee on. I have tried to get out of paying the fees on these by calling and asking with no success.  The only way I found would be to cancel the card. Interest rate - this is the percentage charged on the balance of the credit card that is not paid off in full each month. This is not an issue with me as I pay off my cards in full every month.   If I do need short-term money I use money from my HELOC.   Ask for a Zero Percent Offer If you are needing money and have a good credit history you may call your credit card and ask them if they have any Zero Percent offers for this card....

I use Credit Karma notifications to monitor my credit. I signed up for Credit Karma a long time ago. It is free. I am Monitoring my Credit to fight Identity Theft I gave them my name, address,  email, phone number, and social security number. They are able to contact two of the three credit bureaus, Equifax and Transunion, and check my credit history with them. They are able to check my credit with a soft credit check.  Credit Karma Notifications Once you have a Credit Karma account, you can set up notifications. This is very simple to do. Open Credit Karma go to the menu on the top right. Go down to "Communications and Monitoring". Scroll down. I authorized ID Monitoring, Account Monitoring, Credit Monitoring, and ignored the rest. I average checking Credit Karma every week or two. Credit Karma will email you with any significant changes to your credit score and any new credit applications on your account. Freezing Your Credit  If you do not plan on openi...

  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...

 The banks have excellent records on your account with them.  They track everything to build models to predict customer behavior and to predict your behavior.   Why Banks Track your Account Banks have a lot of data on your account.  They have the information from your credit report when you applied for credit, your application for credit, They also have the internal history of your account or accounts with them.  They know how long after the statement you make your payment.  They see the cycles in your spending.     Banks have statisticians to measure everything and to predict how good of a customer you are.   Should the bank offer you a new mortgage, credit card, zero percent loan, new checking account is all generated from the statistics derived from your credit file with them. Banks Cannot Access your Current Credit History Interesting but Banks do not have access to your current Credit History.  When you apply for cred...

 Here are a couple of Credit Card Safety measures that can solve your problems when your wallet or credit cards get stolen. 1.  Write down your Credit Card Bank phone number from the back of your card. 2.  Write down the Credit Card number and expiration date. 3.  Write down the three digit security code.  I add two numbers to the front of the three digits to confuse someone who may find this so they won't be able to use my card. 4.  I only carry two or three credit cards at a time.  I have a dozen or so credit cards however I do not carry all of them.  Most of them are at my office in my safe. Put this note card in a secure place away from your cards and wallet.  I have a small piece of paper with these numbers written on it.  I put clear tape over so the writing doesn't wipe off or get wet.  I put this into the owners manual of my car.  Nobody ever looks at the owners manual that is in my glove box.    You can fold ...

 Here is a simple tip to a  Quick Credit Score increase . Pay your credit cards before the statement date.   This may only add a few points but if your cards show a significant drop it will make a difference.  The amount you owe on the statement date is what the credit history shows and the percentages of available credit usage calculation. Build your Credit Fast Scrape together as much cash as possible and pay down your cards before the statement date .  Pay the most on your cards with the Highest Percentage usage. Overall Available Credit Usage The overall available credit usage is an important number.  However if one of your cards is near 100% of available credit used it will have an oversize impact on your score.  Individual Credit Card  Available Credit Usage   I used an interest free offer on one of my credit cards.  I borrowed 100% of the available credit on that one card.  My overall credit card usage was below 25%....

 What is Cosigning a Loan? When you cosign a loan for a friend you are telling the lender that if the person on the loan does not make the payments that you will.   If your friend does not have good credit there is probably a reason.  They have missed payments in the past.  They are also likely to miss payments in the future. If they miss a payment on the loan you cosigned it will show up as a missed payment on  your credit report and on their credit report.    You will not be notified that the payment has not been made until it is already late.  Then you will see it on your credit report as a missed payment.  Ouch. Rick W. and his Daughter A friend of mine, Rick, cosigned a car loan for his adult daughter (28 years old) and her husband.  His daughter and her husband both work and make good money but have bad credit.  My friend told them it was important to make the payments on time.   After a while he checked his credit...