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 ...

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...

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...

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...

 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...

 I have acquired a dozen or so credit cards through time.  Many of them I have had for several years.  My Credit Report showsI have never been late with a payment to them.  Check out how I got a late payment removed. I use Autopay to make sure all my cards and other loans are paid every month.  Most of the time I only use one or two of my credit cards.  However I pay Netflix on one, my phone on another, and small bills to keep my important cards active. My HELOC Debacle 790 to 580! I went from a 790 credit score to 580 with only one change in my credit history. I had three HELOCs.  I had three houses that were nearly paid off.   I put HELOCs on them for $100,000 each.  I owed a total of about $70,000 on the three houses.  I had autopay set up on all of the HELOCs. I get a call from myBanker.  He said I needed to come in and sign some papers.  I forgot and he called again a couple weeks later.  I stopped in and he wa...

 I thought I had setup autopay on my Lowes Card.  I charged a couple little items.  I did not check my statement and it went to 60 days late.  I first saw it when I opened my Credit Karma account.  Ouch, I might have said something else, grin. 1.  I paid the missed payment I immediately went to Lowes and paid my account.  The next day I called the Lowes Credit Card phone number from the back of the card.  I very nicely talked to the customer service agent. I took responsibility for missing the payment. 2.  I used the Lowes Card some more I spent a little more money at Lowes on my Lowes card over the next few months and obviously paid on time.  3.  I waited to ask for the Missed Payment Removal After about 6 months I called up Lowe's Credit Card customer service.  I explain to the customer service person that I was looking at new cars and would there be any way they could possibly remove my missed payments. I was extremely nice....

 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...

  Should I just close the account?  Will the late payment continue to show on my account? When I did not know better that is what I would have done.  The problem is your late payments will stay on your credit history for seven years on your account if you close the account.  It is unlikely you will be able to get the late payment taken off if you no longer have a business relationship with the company you were late with the payment.   ****My OOPs:  I had a Credit Card with Lowes that I did not have set up on autopay.  I missed a payment as I forgot I had charged something on it.  I owed them around $100.  I missed a payment and it showed up on my credit report.  Before the missed payment I was at 780.  The missed payment lowered me to 725.  I did not panic.  I paid the bill as soon as I realized I missed the payment.  I did not try to eliminate the late payment fee. My goal is to get the late payment removed, I ...

The Credit Card Minimum Payment Trap will often lock you into debt forever . The minimum payment is usually 1%, 2% or 3% of your balance plus interest and any outstanding fees.  The Credit Card will also have a minimum payment such as $45 or $35 when your balance gets that low. Do not get into this trap as over the long term it will cost you a lot of money.  Solving the Trap is easy. Pay off your credit card every month .   Credit Card Minimum Payment Trap Loan Examples Here are some excellent examples I have created using the Bankrate.com Credit Card Calculator. $6,000  Credit Card Loan Minimum Payment Trap Terms for this example: 18% interest  1% Minimum payment, $30 minimum payment. Your initial minimum payment $150, this will drop as you pay down the balance.  The first month you will pay $60 in principle and $90 in interest.  The second month $59.40 principle and $89.10 in interest. It will take 291 months (over 24 years) and you will pay $...

 There are several fine print qualifiers on the Zero Percent Credit Card Offers.  With good credit in time you will get a lot of these offers. With a brand new card with a Zero Percent Offer you will be able to write a check or charge items on your card to start the Zero Percent Offer.     Usually there will be a t hree percent origination fee if you choose to write a check.  Sometimes if you charge the amount you are going to get the Zero Percent loan on you will not have to pay the three percent fee.  Three percent is not Zero Interest but what can you do? Small Business Using Zero Percent Credit Card Offers When I owned a small business, several times I used these Zero Percent Offers to buy inventory.  I had set up auto-pay so the payments were always made on time.  I also kept the offer from the credit card company in a file.  I would write down the date I received the offer and the date I used it.  I would track the terms of th...