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The Smart Way to Rebuild Credit

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Even if you’re not the most organized person, you should have a plan for building a good credit score.  The good news is building credit isn’t complicated — you just need to know a few things to get started.

Know What You’re Dealing With

If you don’t know what’s broken, you’re going to struggle to fix it. If you want to improve your credit score, the first thing you need to do is look at your credit reports. You’re entitled to a free annual copy from each of the three major credit reporting agencies, and your scores will be based on the information in these reports.

Your credit report lists all sorts of information about you, from loans and credit accounts to report inquiries (when a third party requests your report) and collections accounts. It will show how much debt you have, your overall credit limit, the dates you opened accounts and if you’ve paid your bills on time — it’s a lot of information, which can be overwhelming, but everything is labeled pretty clearly.

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Identify Problems

Once you have your credit reports in hand, look for anything you don’t recognize. If you see an account listed that doesn’t belong to you, it could be a mix-up or a sign that someone is fraudulently using your personal information. Make sure your name is spelled correctly, that your address is right and all your payment history looks accurate. You should dispute anything that is incorrect by following the dispute directions on Experian, Equifax and TransUnion’s websites.

Assuming everything is accurate, look at what may be having a negative impact on your credit standing: Do you have late payments? Do you use a lot of your available credit? Did you apply for a lot of credit cards or loans within a 12-month period? These are all things that could lower your credit score. Your score may also be suffering if the average age of your credit accounts is less than seven years or if you only have one type of credit in your name, as opposed to a mix of loans and credit cards.

Set Goals and Track Progress

Once you’ve identified the issues, the path forward can be pretty simple: If you’re late on making payments, do whatever you can to set a streak of on-time ones. Automatic payments and calendar reminders are really helpful for that. If you notice you’re carrying a lot of debt in comparison to your available credit, try to pay it down and reduce your spending — keeping your credit utilization rate below 30% (or better yet, below 10%), will help raise your score.

The most effective strategy for improving your credit score is to watch it change over time. There are dozens of credit scoring models out there — some are used by lenders and others are educational — but they all give you an idea of where you stand. There are also tools available with a free Credit.com account that allow you to gauge your credit weaknesses in addition to comparing your score from month to month.

You’ll never know which score a lender will use to assess your credit risk ahead of when you apply, so the best thing you can do is pick a score or two that you can access regularly (ideally for free), and compare the same score periodically. Your Credit.com account will show you why your score improved or fell, but you can also get a pretty good idea of that by thinking back on what you’ve done since the last time you’ve checked your score.

Awareness makes a big difference in financial behavior. Watching your score drop if you’re late on a payment or seeing it spike after cutting your debt can be a great source of motivation as you go forward, and figuring it out requires minimal effort on your part, as long as you make a habit of checking your score.

More on Credit Reports and Credit Scores:

  • The Credit.com Credit Score Learning Center
  • What’s a Good Credit Score?
  • How to Get Your Free Annual Credit Report
  • How Do I Dispute an Error on My Credit Report?
  • What’s a Bad Credit Score?
  • How Credit Impacts Your Day-to-Day Life

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The post The Smart Way to Rebuild Credit appeared first on Credit.com.

Source: credit.com

Boost Your Credit Score: 8 Helpful Credit Monitoring Apps

Two smiling women look at credit monitoring apps on their cellphones.

Maintaining a healthy credit score requires a good bit of focus, determination and hard work. There’s a lot to keep up with: We need to pay our bills on time, reduce debt and maintain a low debt-to-credit ratio, among other requirements—all to ensure a top-notch credit score. We can use all the help we can get! To that end, here are eight credit monitoring apps that can help keep your credit building on track.

1. Credit.com

One of the only truly free credit monitoring apps—most others require you to have a paid subscription to their digital service in order to use the “free” app—the Credit.com mobile app allows you to access your entire credit profile, including your credit score and insight into how it compares to your peers. You’ll see where you currently stand, see how your score has changed—and why—and get credit information and money-saving tips tailored to your score.

Availability: Apple and Android

Cost: Free

2. myFICO

The myFICO app is free, but it requires an active myFICO account, which means it effectively costs $20 per month or more, depending on which features you want. With this app, though, you can view and monitor your FICO scores—the most widely used credit score—and credit reports. They also provide a FICO Score Simulator, which shows you how your score may be affected if you take certain actions.

Availability: Apple and Android

Cost: Free, but requires an active myFICO account

3. Lock & Alert from Equifax

Lock & Alert from Equifax lets you lock and unlock your Equifax credit report to protect against identity theft and fraud. You’ll get an alert any time your account is locked or unlocked so you know you’re the one in control. A credit lock is not as secure as a credit freeze, but it does offer some level of protection and is generally easier to turn on and off. This app works only for your Equifax credit report, so if you want to lock all three reports, you’ll have to work with TransUnion and Experian separately.

Availability: Apple and Android

Cost: Free

4. Experian

The Experian mobile credit monitoring app lets you track your Experian credit report and FICO score, with an automatically updated credit report every 30 days. The app also comes with Experian Boost, which can help you boost your score. The app alerts you when changes to your report or score occur, and offers suggested credit cards based on your FICO score.

Availability: Apple and Android

Cost: Free, but some features require a paid Experian account

5. Lexington Law

If you’ve signed up for credit repair services with Lexington Law, you can use their free mobile app to keep track of your progress. In addition to providing access to your credit reports from all three credit bureaus and updates on ongoing disputes, the money manager feature, similar to Mint, helps you track your income, spending, budgets and debts.

Availability: Apple and Android

Cost: Free, but requires a paid Lexington Law account

6. TransUnion

The TransUnion mobile app allows you to refresh your credit score and credit report daily to see where you stand. It offers instant alerts if anything changes and offers Credit Lock Plus, which allows you to lock your TransUnion credit report to avoid identity theft and fraud. The Debt Analysis tool lets you calculate your debt-to-income ratio, and it allows you to view public records associated with your name.

Availability: Apple and Android

Cost: Free, but requires a paid TransUnion Credit Monitoring account

7. ScoreSense Scores To Go

ScoreSense offers credit scores and reports from all three credit bureaus and daily credit monitoring and alerts to changes on your reports. This app also provides creditor contact information so you can address errors on your report quickly and efficiently. Score tracking features let you review how your score changes over time and how it compares to your peers.

Availability: Apple and Android

Cost: Free, but requires a paid ScoreSense account

8. Self

Self helps you build—and track—your credit, making it great for people just establishing their credit profile or trying to rebuild damaged credit. Self offers one- and two-year loan terms, but instead of getting the money up front, the amount is deposited into a CD. You make regular payments for the term of the loan (at least $25 per month), and then get access to the money. There is no hard inquiry to open the account, but your payments are reported to all three credit bureaus, helping build your credit. Plus, while you are repaying your loan, you will have access to free credit monitoring and you VantageScore so you can track your progress.

Availability: Apple and Android

Cost: Free, but requires a Self loan repayment of at least $25 per month

Credit Monitoring Apps to Fit Your Needs

With so many different options, you’re sure to find a credit monitoring app that meets your needs. And don’t forget: you can always check your score for free using Credit.com’s free Credit Report Card.

The post Boost Your Credit Score: 8 Helpful Credit Monitoring Apps appeared first on Credit.com.

Source: credit.com

How to Use Your Cable Bill to Build Credit

Cable companies aren’t in the habit of reporting your payments to the credit bureaus, at least when it comes to your traditional credit reports. But if that’s something you want, there is a way to get those monthly bills to help your credit score.

Simply put, consider paying for cable with your credit card.

Unlike cable providers, credit card issuers do generally report to the major credit reporting agencies, so using your plastic to pay for a bill that you’re already in the habit of covering from month to month can help you build a payment history, the single biggest factor in establishing credit scores.

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Of course, for this strategy to work, you have to pay that credit card off on time and, ideally, in full. Otherwise, it will have the opposite effect on your score and you’ll wind up paying interest just to watch your favorite television shows.

To make sure you don’t miss a payment, sign up for alerts or, even, set your credit card bill to auto-pay. You could also pay the charge off via a linked debit card account as soon as it’s processed if you’re worried about winding up with a big balance (which could affect your credit utilization, another major factor of credit scores) at the end of the month.

A Few More Tips & Tricks

There’s a chance that your provider will charge a fee for paying by credit card, so be sure to check that there’s no extra charge before using this method. And, if you do set that credit card to auto-pay, monitor your monthly cable statements. You don’t want to miss a new fee or billing error and wind up paying more than you owe or intended.

Rewards credit cards can earn you some points, miles or cash back, so if you have one in your wallet, you might want to use that particular piece of plastic to pay your cable bill. If your credit is on the brink and you don’t have any credit cards, you can consider applying for (and then using) a secured credit card, which is designed specifically to help people build credit. (You can learn more about the best secured credit cards in America here.)

A Quick Reminder

Unpaid cable bills can damage your credit, even when they’re not being covered by a credit card. Accounts that go unpaid long enough can wind up in collections, which will hurt your scores. (You can see how any collections accounts may be affecting your credit by viewing your free credit score, updated every 14 days, on Credit.com.)

If your credit is in rough shape, due to an collection account or other payment history troubles, you may be able to improve your scores by paying delinquent accounts, addressing high credit card balances and disputing any errors that may be weighing them down. And remember, you can build good credit in the long term by making all loan payments on time, keeping debt levels low and adding to the mix of accounts you have, as your score and wallet can handle it.

More on Credit Reports & Credit Scores:

  • The Credit.com Credit Reports Learning Center
  • How to Get Your Free Annual Credit Report
  • How Credit Impacts Your Day-to-Day Life

Image: Ivanko_Brnjakovic

The post How to Use Your Cable Bill to Build Credit appeared first on Credit.com.

Source: credit.com