Credit Cards of the Future – Credit News

Credit cards have been used for over 60 years. Back in the 1950s, they completely revolutionized the way transactions took place, and the ease with which we could access our cash. Unfortunately, technology and the world have changed a lot since the 1950s, while credit card technology has barely advanced. This has resulted in an increasing number of security issues related to credit card fraud,

which is costing consumers and businesses billions of dollars every year. Fraudulent charges have forced consumers, through no fault of their own, to deal with debt management, credit repair, and other finance services to recover their credit score.

Technologies that will change the way credit cards are used

In response to these problems, a number of new technologies are on the horizon that will eventually be incorporated into credit cards throughout the United States. One of the most promising technologies is microchips embedded into each card. Microchips are much more secure than magnetic strips, and are already being used in Canada and Europe. Another promising series of technologies are offered by Dynamics, and include the cards that can hide a portion of the credit card number until it is needed and cards that can be linked to more than one account. Fewer cards means fewer accounts to keep track of, and these technologies promise to dramatically reduce the number of consumers who need to repair credit after someone tries to hack their accounts.

Why new credit card technologies have been delayed

While some might look at these new technologies and think that the most obvious credit tip would be to get a card with them integrated, the reality is not so simple. Many of these technologies are not yet available for the mass market. While Canada and countries in Europe have largely adopted microchipping, the United States has resisted for a number of reasons.

Perhaps most significantly, there has been a lot of resistance from businesses, which will be required to purchase all new merchant processing equipment, including back office equipment and cash registers. With the economy still fairly weak, asking businesses to take on additional expenses is a tough sell for legislators. Moreover, the value of the microchipping and other technologies are largely useless if they are not widespread and able to be utilized everyone traditional credit cards are.

However, with billions of dollars in credit card fraud every year, hopefully the tides will soon change, and we will be able to secure our personal assets with the credit cards of the future.

Bad Credit Aftermath – How Much it Can Cost You?

How Much Does A Bad Score Really Cost You?

Common sense will tell you that having a good credit score is much better than having a poor credit score, as far as loan approval and interest rates go. But do you really know how much a bad score can really cost you? You might be surprised.

Take a 30-year mortgage for example. Now take a good credit score (680-699), an excellent credit score (740+) and a poor credit score (620-639). Here’s a look at the breakdown of possible costs over the course of a hypothetical $200,000 home loan:

Excellent credit (4.025 percent): A likely monthly payment of $958, which equates to an $11,493 annual cost and a $344,798 lifetime cost.
Good credit (4.974 percent): A monthly cost of $1,070, annual cost of $12,846 and lifetime cost of $385,368.
Poor credit (5.418 percent): A monthly cost of $1,133, annual cost of $13,598 and lifetime cost of $407,950.

As you can see, having an excellent credit score can save you up to $113 per month and $40,591 over just having a “good” credit score over the course of a 30-year mortgage. And an excellent score can save you $175 per month and $63,173 over a “poor” credit score. Hence, taking measures to repair credit before financing such a significant purchase is crucial to your short- and long-term finances.

So just what are some credit tips to repair a poor score?

On-time payments
Keeping debt within 30 percent of your total credit allotment
Having a diversity of different credit
Having a lengthy credit history

As if having a favorable credit score wasn’t important enough, the above examples certainly place even more significance on the importance of credit repair and debt management if you’re in a financial bind. As the above examples show, a good credit score could mean the difference of tens of thousands of dollars over the course of a long-term loan. That’s a lot of money that you surely could put toward other purchases and a big incentive to take measures to improve your credit score today.

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Medical Collections – The Credit Score Killer

Making on-time payments, enacting a debt management strategy so that you don’t owe more than 30 percent of your total credit limit, and having a variety of different types of credit are all things that you can do to ensure a good, healthy credit score. But one common credit score killer is medical bills – and many times, your score could suffer due to a misunderstanding with your insurance or your doctor, potentially docking you big points for something that isn’t necessarily your fault. Other times, your score could suffer because you simply just can’t afford the cost.

In fact, medical bills that go to collections are treated the same way as any other type of bill that goes to collections in the FICO score formula. Analysts say that just one medical bill that has gone to collections could drop your credit score by 100 points, thereby forcing you to enact a lengthy credit repair strategy to bring the score back up over time.

So what can you do to ensure that a bill doesn’t go to collections? Here’s a look at some credit tips:

Understand your insurance: Many medical bills go to collections because people can’t afford to pay them. One way to better plan and prepare for potential medical costs is to know and understand your insurance plan. For instance, does it cover wellness visits? What’s the deductible? Will you have to pay money out-of-pocket after you meet the deductible? Knowing all these things can better help you prepare in the event of a surgical procedure or emergency rather than take a “wait and see” approach for when the bill arrives.
Go on a payment plan: Surgeries, procedures and hospital stays can all add up. And many people can’t afford to pay the total bill in full right away. Check with the hospital to see if you can go on a payment plan to make regular installments toward the bill. Many hospitals won’t charge any interest as long as the balance is paid within a year or two. Others may allow you to finance bills.
Keep records: Be sure to retain all your medical bills and check your credit report regularly to watch for inaccuracies. It’s estimated that four out of every five credit reports have errors in them, so if your report doesn’t line up with your personal records, take action to have any discrepancies removed from your report. Otherwise, you could have to repair credit for nothing.

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Credit Scores and Car Insurance – Credit News

While credit scores and credit reports are most commonly associated with loan approvals, there’s more than just getting approved for a credit card, auto loan or mortgage that the little three-digit FICO score is used to calculate.

For instance, credit scores are also factored into things like auto insurance premiums. Yes, credit scores count for insurance too, which makes credit repair all the more important and quite the lesser known credit tip.

So just how is a credit score factored into an insurance premium? An insurance provider will typically base premium rates on an insurance score. And this insurance score takes into account your credit history in order to predict your likelihood of being involved in an accident or filing an insurance claim. Studies detail how credit history can be linked to risk and accident potential.

Here’s a closer look at a credit-based insurance score and why it’s important that you repair credit for more than just good interest rates on loans:

The higher your credit score – and thereby your credit-based insurance score – the greater the likelihood that you’ll qualify for low auto insurance premiums. Keep in mind that this premium also takes into consideration driving history and the amount of claims on your record.
If you have a low credit score, you’re more likely to pay more for your auto insurance premium, as you’ll likely have a lower overall credit-based insurance score.

If you have less than stellar credit, what can you do to improve it for auto insurance purposes? The same thing you would do to improve it for any other purpose:

Make sure payments are on time.
Open new credit lines in good standing.
Have a favorable credit history (i.e., no collections, missed payments, etc.)
Good debt management – try not to accrue more than 30 percent of your total credit line at once.

Yes, good credit is about more than just low interest rates on loans – it can also net you lower auto insurance premiums. So if your credit is lacking, take measures to get your finances in order today.

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Credit After Divorce – Managing Things After This Hard Time

When you get divorced, the person you thought was “the one” might not be the only thing you lose – your credit score could also suffer! Yes, financial problems have the potential to crop up during a divorce, especially if you’ve co-signed loans with your soon-to-be ex. Divorces can be messy enough, but yes, they can take a toll on your credit too!

With that being said, here’s a look at some ways to manage your FICO score through divorce, so you’re not stuck in a lengthy credit repair plan later:

Close or refinance all shared accounts: During a split, courts will divide shared debt through what’s called a divorce decree. But what the courts and lawyers won’t tell you is that these decrees don’t eliminate shared responsibility. For instance, if your ex is tasked with paying the auto loan and misses a payment – the late payment will show up late on your credit report too, hurting your score and staying with you for years! So along the lines of a credit tip, don’t take any chances and refinance any loans that were previously shared if you’re able to.
Cooperate with your ex: While you’re divorcing for one reason, it’s important to work with your ex on your finances for the sake of not having to repair credit down the line. Hence, along the lines of our first bullet point – not every loan can be refinanced quickly. So for loans that can’t, be sure that you strike a truce with your ex to ensure that payments are made. If they’re not they hurt both of your credit scores. Online accounts and automatic payments are ways to make this easier.
Credit monitoring: Divorces can get messy, and there’s no telling what your ex might do to your credit score as a means of revenge if they know of your social security number and financial details. That’s why signing on to a credit monitoring service is a good idea – it’ll immediately make you aware of any changes to your credit data, potentially permitting you to avoid implementing a big debt management plan later for the damages incurred.

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Co-Signing – Why to Never Do It

Credit isn’t exactly easy to come by these days. And if you happen to have a good credit score, there’s a chance that sooner or later you’ll be approached by a friend or family member and asked to co-sign on a loan or credit card for them. By doing so, the person with poor or limited credit is able to leverage your positive score for a better interest rate. But is credit a win for you, the co-signer, as well?

The answer: Not necessarily. While you agreeing to be a co-signer is likely done with nothing but good intentions, the outcome could turn out to be far from favorable for you. We’re talking a decreased credit score, collection agencies coming after you and even potential lawsuits. Here’s a closer look at why you should think twice about co-signing on a loan:

Lower credit limit: Like we said in the opening, credit is limited these days. So if you co-sign on a loan, you’re debt ratio might get too high. Not only is this unfavorable for your financial situation – after all, you’re responsible for the debt – but it can lower your overall score, resulting in credit repair to get your score back up to what it was.
Missed payment: Is the person you’re co-signing for reliable? We ask because if the person misses a payment, the collection agency can come after you for it. It’s not what a lot of people have in mind when they agree to co-sign, but unfortunately it becomes a common reality.
Lawsuits: As a co-signer, you’re just as responsible for the debt as the other signee. So if the other signee defaults on the loan payment, you could potentially be sued for the amount owed.

Simply put, if we’re offering credit tips, we’d advise you to co-sign with caution. If you’re approached by a reliable person who has a limited credit history or finances or you are trying to help out your child with his or her first car loan, that’s one thing. But if you’re approached by someone you know is shady and unreliable, that’s a whole different story. So co-sign with caution – because if you’re not aware of the consequences, you could end up on a lengthy quest to repair credit and enact a debt management plan to cover for someone else’s blunder.

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Why a Collection Agency Won't Remove a Record After It Has Been Paid

Paid Collections – Why Are They Still on My Report?

Are you one of many Americans who have collection accounts on your credit report? If so, you unquestionably want it to just go away. This is a pivotal part of credit repair but raising your credit score back up to a favorable status is much easier said than done. That’s because according to U.S. law, collection accounts can be reported in your credit history for seven-and-a-half years from the original date you fall behind on payments.

Yikes!

Seven-and-a-half years. That’s a long time a bad record can weigh down your FICO score. Even worse, it’s possible that you can settle your debt with a collection agency and the record will still weigh down your credit score. Why? Because collection agencies are required to report information that is both accurate and complete and that includes this negative aspect of your credit history.

So now that you know why collection agencies won’t wipe a record clean, even after you’ve settled your debt, you might be wondering if there’s anything you can do? I mean, 7.5 years is a long time to wait out a bad record.

The good news is that there are some things you can do to wipe bad records from your report early, thereby allowing you to advance and repair credit. The bad news is these things are not sure-fire. Here’s a look at a few credit tips for working with collection agencies on this matter:

First, pull your credit history so you know what’s being reported. There’s a chance you might find an inaccuracy within the report, which can lead to a favorable outcome, as collection agencies aren’t legally allowed to report inaccurate or incomplete information.
Negotiate a “pay for removal” debt management deal: If you haven’t settled any debt yet, contact the collection agency and see if they will remove your record should you settle the debt. Many will likely respond and say that they’re unable to remove the record, as credit reporting agencies frown upon this policy. But it’s worth a shot.
Build new, positive credit: Part of your credit score is based on any new credit you’re building. So if you’re striking out with getting records removed from your credit report, it may just be best to cut your losses and focus on building new credit. As time goes on, these negative records will have less of an impact on your overall score, as long as your finances and credit history are headed in the right direction.

For more information on how to repair your credit after a collection you can Sign Up for $0 Today.

maximize your fico with different tradelines

Different Types of Credit – How to Maximize Your Score?

There are five main factors that make up a FICO credit score – payment history, amounts owed, credit history length, new credit and types of credit used.

While the “types of credit” category only factors for about 10 percent of your overall FICO score, it can mean the difference between a good score and a great score, so it’s a category not to overlook if you’re on a mission of credit repair.

First, it’s important to note that there are two main types of finance loans: revolving and installment. Installment loans consist of things like auto loans and student loans — money that is loaned with the expectation that it will be paid back in a relatively short period of time. Revolving loans, which are things like credit cards and bank cards, involve debt that is accrued and, ideally, paid off on a monthly basis (i.e. debt management).

For the best possible credit score, it’s recommended that consumers try to establish a good balance between installment and revolving loans. But here’s a credit tip — there’s one other type of loan that can greatly aid your credit score for the better in the long-term: a mortgage.

When you’re first approved for your mortgage, it’s likely that your credit will take a hit in the near-term. But a mortgage is good for your credit score in the long run for two big reasons. One, it qualifies as a type of credit used. And two, if you make on-time mortgage payments, it will reflect well in the payment history portion of your credit score, which makes up 35 percent of your FICO score.

With all this being said, it’s also worth mentioning that just because you have a variety of installment, revolving and real estate loans to your name doesn’t mean you’ll have a pristine credit score. Like we mentioned above, on-time payments are key. And it’s also key that you don’t have any unpaid loans that are taken on by collection agencies, as it’s hard to repair credit when you have something that could stay on your record — and influence it in a negative way — for up to 7.5 years.

So while diversifying your credit is important, it’s important not to overlook other factors that go into the makeup of your overall score as well.

Different Types of Credit Scores – Credit Tips

When it comes to your credit score, you’re likely already familiar with your FICO score. It is, after all, the most common type of score that creditors check before approving you for a home loan, car loan, etc. But there’s more than just the FICO score that creditors may check when it comes to looking up your finance history. Vantage and PLUS scores are two in particular that come to mind.

So what are the key differentiators between FICO, Vantage, and PLUS? Here’s a closer look at the different types of credit scores:

FICO

The FICO credit score, which ranges from 300 to 850, is made up of five main categories:

Payment history, 35 percent
Amounts owed, 30 percent
Length of credit history, 15 percent
New credit, 10 percent
Types of credit, 10 percent

As you can see from the FICO score makeup, the single most important thing is credit history – so here’s a credit tip – pay your bills on time. It’s why making on-time payments is such a crucial piece of credit repair. Debt and debt management is the next most important thing and the score is, rounded out by how diverse your credit is, new lines of credit you’ve opened, and how long your credit history is.

Vantage

Unlike the FICO score, the Vantage score essentially judges you on your last 2 years of credit and delivers your score in a range from 501 to 990. Unlike the FICO score, which takes into account 5 components of your credit history, Vantage measures you on 6 categories. Here’s a look at what they are and how significantly they weigh into your overall score:

Payment history, 32 percent
Utilization, 23 percent
Balances, 15 percent
Depth of credit, 13 percent
Recent credit, 10 percent
Available credit, 7 percent

Many of the categories of the different types of credit scores are similar to FICO, and there’s the “payment history” category, which takes tops in importance on its own. But the Vantage score includes a separate “Utilization” category, which measures debt-to-credit ratio, and “Balances.” In FICO, those two categories are somewhat grouped together. So while on-time payments are also important to repair credit with the Vantage score, there’s almost a greater emphasis on debt-to-credit ratio and debt.

PLUS Score

The score is measured between 330 and 830. It’s considered more of an “educational” score rather than one that’s used by lenders, but it’s nevertheless still a score. It’s a scoring system developed by Experian. Here’s a look at the breakdown:

Payment history, 31 percent
Credit usage, 30 percent
Age of accounts, 15 percent
Account types, 14 percent
Inquiries, 10 percent

Cash or Credit – Key Credit Repair Tips and Advice

In order to avoid debt and overspending, many Americans have moved away from credit cards and loans and instead save up cash for purchases. The thinking behind this practice is that they’ll never have to embark on any credit repair or debt management mission, as paying with cash only ensures that they’re never spending beyond their means.

Paying only with cash also ensures that consumers are paying the lowest possible price for items, as they can avoid interest rates that can make large purchases even larger in the long run.

But is paying cash for everything all the time really the right way to go about your finances? While it certainly carries some benefits, one area where this practice can hurt you is how it pertains to your credit score.

Yes, your FICO score, that three digit number that’s essential for getting approved for loans and credit cards and also for cell phone plans, employment opportunities and more. Building credit is important for a variety of reasons, and while many people may be scared off by falling into debt and having to repair credit, a favorable credit score can help you with more than just home and auto loans and credit cards.

Here’s a look at some other reasons why paying cash for everything may not be the best financial strategy:

Your FICO score is composed of five factors: payment history, amounts owed, length of credit history, new credit and types of credit used. If you pay cash for everything, you won’t have a credit report. And while many people are OK with this, there’s the chance of being denied for a credit line in the event of an emergency or being turned away for a job or cell phone plan. Like we mentioned earlier, your credit score is important these days for more than just loan approval and favorable interest rates.
You can have a credit card and be responsible. One argument for paying cash over credit is that you’ll never have to worry about spending getting out of control. But there’s another way to use a credit card and keep spending within means — by being responsible. Here’s a great credit tip to build your score and keep debt down: Make payments on time. Not only does this save on interest, but it’s also the most heavily weighed aspect of your credit score.

So while many are spurning credit cards altogether and opting for a cash-only approach, it’s possible to have the best of both worlds, so your credit score as well as your finances don’t suffer.