Should I apply for another card?

New Credit Card – When to Apply?

Should You Apply for a New Credit Card?
Most of us are inundated with credit card offers every day. They come in your mailbox, on the splash page of your bank’s website, in your email and during transactions on sites like Amazon and eBay. And, with easy applications promising 30 second approval, it can be tempting to hit the button and sign up. But, savvy consumers need to know when to apply for that new card and when to pass it by.

First, Check the Terms

Is there an annual fee? Do they offer rewards that are better than any of your other cards? How’s the interest rate? If the card is not a better deal than anything you currently have, toss the solicitation in the trash. Plus, as a rule, you should never take a card with an annual fee unless there are rewards that far exceed the fee or if it is the only card you can qualify for. Any applications for new cards should be ones that lower your expenditures on fees and interest or benefit you in some other way.

Are you Working to Build Credit?

Having unused available credit increases your credit score over time. Utilization makes up about 30% of your credit score. As a rule, you should have enough available credit that you can keep your utilization under 30% (some experts say 10%) when using your card for routine purchases. While you are building credit, it is a good idea to periodically ask a current cardholder to increase your limit or to apply for an additional card.  Just don’t apply often and do not run up your balance too close to your current limits.

Will Any of Your Current Cards Make a Deal?

If you see a new card with a balance transfer offer that looks enticing, try calling the card where you have a balance. They may be willing to drop your interest rate or increase your limit to keep you active with them.

Can You Afford the Inquiry?

Recent inquiries make up 10% of your credit score. If you are planning to make a big purchase soon such as a house, keep your credit report free of credit card inquiries. Even a small dip in your credit score can push you to a deal with a higher interest rate, costing you thousands over the life of the loan. If you were borderline in the first place, it might make it impossible for you to qualify for a mortgage. While inquiries stay on your credit report for 2 years, FICO considers those from the last 12 months in considering your score. In the end, you should always consider how each credit device will benefit you in the long term. If it doesn’t raise your score or provide a measurable benefit beyond access to a little more money, you’re better off passing it by. For more credit tips and advice contact Key Credit Repair at 877-842-5215 or click here.

Bankruptcy - Can I Ever Buy A Home Again?

Bankruptcy – Can I Ever Buy A Home Again?

Check out our recent interview with Boston.com and real estate radio network host, Chris Devin. Nik Tsoukalis, President of Key Credit Repair discusses how someone may finance a home post personal bankruptcy. This is a MUST READ & WATCH!

Credit After Insolvency– Obtaining Authorized For A Home mortgage

After a past or current insolvency, many people want to hop on the road towards developing good credit report. To achieve this objective, some opt to buy a house. While a brand-new couch acquisition is an excellent way to restore credit and improve your credit history, acquiring a house after a recent bankruptcy could lead to greater rate of interest and fees.

Setting up Credit after Bankruptcy

An insolvency will remain on your credit rating record for 7 to ten years. During this moment, acquiring a brand-new house, automobile, or getting a charge card with a prime passion price will be complicated. You need to set up or rebuild your credit rating. When lenders evaluate your credit report application, your rating is a crucial identifying consider whether you are approved. If you have closed new charge account given that your insolvency, lending institutions can not precisely evaluate your creditworthiness.

There are several means to re-establish credit rating after a personal bankruptcy. If you can not get authorized for an unsecured credit report card, think about applying for a safeguarded card.

When Should You Obtain a Home Home mortgage Finance?

If possible, delay making an application for a new mortgage for anyway two years following your insolvency. This will certainly enable you sufficient time to rebuild your credit rating as well as increase your credit score. By doing this, you could qualify for much better or similar rates of interest.

Numerous lending institutions will approve a mortgage loan application eventually following a personal bankruptcy discharge. Sadly, the rate of interest on these finances are numerous points higher than present market rates. This rate increase will considerably increase your monthly mortgage settlement.

Ways to Get Approved for a Home Loan after Bankruptcy?

The good news is, it is feasible to obtain a home mortgage complying with a previous or recent bankruptcy. If you are obtaining a funding before re-establishing credit, call at least four sub prime lenders and get on-line quotes. While the prices you obtain will be high, you could consistently re-finance in 2 years for a much better price.

If you have developed brand-new credit accounts, regularly examine your credit rating record. Your credit report ranking will enhance substantially if you pay your creditors on time and stay away from late settlements. After two years, start getting in touch with home loan loan providers. Likewise, you must likewise get a number of quotes. To accelerate the procedure, apply through a home loan brokerage firm website. A single on-line application will generate a number of quotes from numerous various lending institutions.

After a current or past personal bankruptcy, many folks really want to obtain on the course towards establishing great credit rating. While a brand-new residence investment is a good means to restore credit and also enhance your credit score, purchasing a house after a recent bankruptcy might result in greater interest prices as well as charges.

Bankruptcy – Can I Ever Buy A Home Again?

An insolvency will remain on your credit guide for 7 to ten years. If you have not opened brand-new credit accounts given that your insolvency, loan providers could not precisely evaluate your creditworthiness.

If you have set up new credit report accounts, frequently inspect your credit guide.

35% - Payment History

FICO vs “Other” Credit Score

When you first start learning about your credit ratings, the terminology can be confusing. What is a FICO score? Is it the same as a credit score? Read on to learn a bit more about credit scores and how they’re derived:

Your FICO Score

Your FICO score is a three digit number between 300 and 850. A higher score is better. It started selling its scoring system to businesses in the late 1950s. It is based on reports from Experian, Equifax and Transunion, the three major credit reporting bureaus. These bureaus keep track of credit lines, debts and your payment history.

This score is used by 90% of financial institutions when determining your credit-worthiness when you are seeking a car loan, mortgage, credit card or other credit.

Other Types of Credit Scores

FICO, however, is not the only credit score out there. Each of the three major credit bureaus have their own scoring systems. Equifax offers ScorePower, a branded version of the a credit score, as well as their own Equifax Credit Score. Experian offers a score they call the PLUSScore. The three credit bureaus also collectively offer the VantageScore, which is intended to be a competitor to FICO. While FICO is the most commonly used score, banks and other institutions will also often consult one of the above, as well, when making credit decisions.

There are also a number of credit scores offered now that do not use credit reporting data. Scorelogix offers the JSS Credit Score, which assesses credit risk based on job history, income and the impact of the economy. L2C uses a potential borrower’s history of utility payments to determine credit risk. Because the FICO score only shows how well someone has done in the past, many banks are complementing these scores with alternative credit scores to predict whether a borrower will be able to continue to make on-time payments.

Things That Affect Your Score

All of the credit scoring companies take into account the same factors when determining your score. These include:

  • the length of your credit history
  • current debt
  • your payment history
  • the types of credit you use
  • how recently you looked for new credit

Each of the credit scoring companies weight these items differently by a few percentage points. Because of this, your credit score will vary by institution.

How to Get Your Credit Scores

All consumers in the US are entitled to free credit reports from all three bureaus once a year. However, you are not guaranteed free access to your FICO and other credit scores. The company has partnered with credit card companies to offer free monthly FICO scores on credit card statements. You can also get your VantageScore free from CreditKarma. By using these tools, you can make better decisions about what sorts of credit you qualify for and pick the best instruments for you.

 

credit cards europe

Credit and Finance Around the World – 10 Things You May Not Know

  1. If you go to Europe, your favorite credit card may not work. In Norway, you need to enter a PIN for all credit card transactions. In other parts of Europe, cards are now implanted with EMV chips for security.
  2. Throughout the continent of Africa, merchants and ATM owners are held financially responsible for fraud. (In the US, the card issuer is the one that’s left, legally, holding the bag.) As a result, 77% of credit card systems on that continent require the extra security of EMV chips.
  3. In Kenya and Tansania, most minor financing transactions don’t go through a bank. They are handled with a mobile system called M-Pesa that is run by the countries’ two largest mobile phone carriers.
  4. Chances are that Americans lag people from other countries in financial literacy. The Organization for Economic Cooperation and Development has begun testing 15-year-olds to find out how much, on average, kids from each country know. The results of the financial literacy test won’t be out till later this year; however, US scores are currently below average in math, which tends to correlate with scores in financial literacy.
  5. In Scotland, Northern Ireland and Wales, math teachers are required to have units on financial literacy in their classes. England and Australia will be adding this requirement to their curriculum as well starting with the 2014 school year.
  6. A new US company, COIN, is recruiting customers for the launch of a digital credit card wallet. The new system will be a substitute for the eight or more cards most Americans carry every day.
  7. In Canada and Australia, the average consumer charges over $7,000 on credit cards every year. That’s almost double the average American’s charges of around $4,000. Canada has over 72 million credit cards in circulation, compared to 686 million in the US.
  8. Countries where people use credit cards less tend to have higher savings rates. In Germany and France, the average consumer charges just a few hundred dollars a year. The average savings rate in both countries is over 10% of income per year.
  9. About half of all Americans carry a balance on their credit cards. By contrast, over three-quarters of South Koreans pay off their balance in full every month.
  10. In many countries where credit card usage is low, even large transactions are handled in cash. For instance, expenses associated with a wedding in Turkey or Bahrain would be paid in cash, despite being thousands of dollars.

I want to fix my credit: where do I start?

fix crdit

Do you say to yourself or to friends, “I want to fix my credit,” but, you’re a little flummoxed on where to begin? You’re not alone. Until very recently, a lot of the mechanics of credit scores were kept hidden from the public view. But, more open credit reporting laws mean that it is far easier to find out what parts of your credit can use some improvement and what actions will have the largest effect.

Get Your Credit Report

The three credit reporting agencies are required to give you your credit report free on request once a year. If you’ve already accessed your report, you can still get it for a small fee. You can also access a less detailed version for free on sites like http://privacyguard.com

Check over your credit report, paying close attention to any negative marks. Look over all three reports, as different reports may reflect different information.

Challenge Inaccuracies, Fix Legitimate Bad Marks

Sometimes, items that should be shown as charged off during a bankruptcy will still appear on your report. In other cases, bills that you paid may still show as open. In still others, your credit report might reflect dollar amounts that are not accurate. Challenge the legitimacy of these marks; creditors must verify them within 30 days if they are to remain on your accounts.

For the debts that you legitimately owe, begin negotiating payment. You may be able to work out installments, or even having a partial payment count as paying the debt in full.

Start Applying for New Credit

As you work to resolve negative records, begin building positive ones. If you have bad credit, you will probably need to start the credit repair process with secured debt. Save money that you can use as a security deposit on a credit card or loan. By getting a card, you can begin showing potential creditors that you can be trusted with debt.

Pay On Time, All the Time

Starting with your new secured card, charge a small amount each month and pay it off in full every month. Don’t spend extra in order to use the card; instead, reallocate a bit of your monthly spending so that you use it. For instance, instead of reaching for your debt card at the grocery store, grab the credit card instead.

Then, pay each credit card bill that comes in on the same day every month. It’s best to pay in full so that you don’t wind up paying interest charges. If you think that you might have trouble remembering to pay, try automating the bill. Most credit card companies will allow you to set up automatic payments for either the minimum payment or the full statement balance.

After a period of time of responsible use, you will see the three digits in your credit rating start to climb, and you’ll be able to cross “fix my credit” off your personal to-do list.

For more information please fill out the form below for a free consultation or contact our office at 617-265-7900.

If you are a loan officer and you would like more information regarding our credit repair program for your clients please call 617-326-3685.

Fix Credit: How Do You Fix Credit Report Errors?

About four out of every five credit reports have errors on them. Most of these are minor inaccuracies, such as incorrect employers, which do not affect your credit score. However, sometimes credit reports will erroneously show debt that you have paid off as currently in default or even include accounts that are not yours. When you FIX CREDIT reports to remove these false marks, you can significantly improve your credit score.

First, Get Your Report

You can get your report for free once a year from AnnualCreditReport.com. Grab reports from all three reporting bureaus. Each bureau gathers information independently, so, you can wind up with different information in different reports.

Scan The Reports for Inconsistencies

Are there accounts showing as open and unpaid that you know you handled? Are there others that you don’t even recognize? Highlight everything that looks like it is incorrect. It can sometimes be difficult to tell which debt is what, as collection agencies will buy bad debts for pennies on the dollar.

However, many accounts that show up as a new debt to another agency could be incorrectly on your report. If, for instance, you had a debt discharged during a bankruptcy, it could have been sold anyway. Creditors often do not inform new agencies that a debt has been settled, and it can take time for the news to spread.

In other cases, you may find that certain debts show up twice. For instance, if your student loans are sold after you’ve removed them from default, make sure that the old accounts show up as being closed. If it still appears that those accounts are open, it can make your debt burden look twice as large as it actually is.

Request Removal of Bogus Accounts

Contact each of these creditors, in writing, to ask them to verify the account. By law, a creditor must verify that an account is valid within 30 days of the request. If they can’t prove that the debt is yours, the credit reporting agencies are required to remove it.

You can also dispute debts directly with the credit reporting agencies. Each has processes online for disputes. This will also give you the opportunity to follow up and make sure that errors are handled.

Keep Up the Maintenance

Request your report at least once a year to make sure that everything is accurate. It can help to tie your annual request to another important date such as your birthday or anniversary so you don’t forget. If you are in the middle of efforts to fix credit ratings so you can buy a house, you may want to look into a subscription account or a free service like CreditKarma so you can check more often.

Getting erroneous bad marks removed from your report can provide an almost instant boost to your credit scores. It’s worth the time and effort to make sure that your credit reports are correct.

Request a FREE credit repair consultation below….

Emergency Fund – Protect Your Credit

Emergency Fund For Rainy Day

When you have gone through all of the trouble of credit repair, you want to ensure that you do not wind up with bad credit again. But, in many cases, people do not wind up with bad credit because they are irresponsible. It is because they were unprepared to deal with surprise medical bills, expensive home repairs, last-minute vehicle replacements or other calamities. This is where a healthy emergency fund comes in.

How Much Should Be In Your Emergency Fund?

Add up all of your fixed expenses for a month, then multiply that number by three. That is how much you will need to have on-hand to keep yourself relatively stable should something interrupt your earnings for a three month period. Three months expenses is the most common recommendation for emergency funds; some experts recommend keeping six months expenses on-hand.

This fund isn’t just for loss of income. It is also for handling unexpected bills. For instance, after your home purchase, you will want to have extra cash available to deal with the inevitable emergency repairs every homeowner eventually faces.

But I Can’t Save That Much!

If you are not in the habit of saving, or if you are living close to the edge of your means, putting aside thousands of dollars can seem like an impossible feat. It can be a lot easier if you break the task down into smaller parts. Start by putting away just $10 a week until you have enough that you could pay your electric bill out of savings. Then, aim for two bills worth. It’s easier if you set up an automatic withdrawal so that you never see the money in your account.

You may be able to free up more money by going over your bills and seeing if there is anyplace you can cut back. Look at monthly membership fees like your gym or Netflix account and decide whether you can go with a cheaper plan. Or, eliminate one restaurant dinner a month and sock the money into savings instead.

When Can I Touch My Emergency Fund?

Set up firm criteria in advance so that you aren’t tempted to dip into your fund prematurely. The emergency fund is not for vacations, splurges, or even great deals that you would otherwise have to pass by. Set up a separate account for impulses so that you can keep your emergency fund secure.

The only times you should dip into your emergency fund is when you have little other choice. For instance, if your car needs expensive repairs, it is okay to use the fund for that. It is also okay to dip into the emergency fund to cover basic bills if you have been laid off from your job or have been out for an extended illness.

An emergency fund is a great tool for keeping your credit score high and your family secure. By keeping these funds on-hand and available, you can help ensure your family’s future stability.

For more information on how you should budget for a rainy day and how to protect your credit score click here to request a free consultation.

Common Credit Report Errors

Credit scores are a quick and handy shorthand that banks and other potential creditors use to assess their risk before loaning money. But, as is common with shorthand systems, they are also prone to a number of flaws that can negatively affect you, the consumer.There are actually a number of controversies surrounding the use of credit scores and credit reports. Some states have proposed legislation to give consumers more protection. Some of the issues with credit scores that can hurt consumers:

Possible Errors in Credit Reports

Experts estimate that 79% of all credit reports contain errors. While most of these are innocuous errors regarding employment or past addresses, others contain negative marks that can lower your credit score. And, when there is an error in your credit report, you are presumed guilty. You, or a credit repair specialist working on your behalf, must initialize investigations into erroneous reportings. In some cases, inaccurate data has stayed on credit reports long enough to begin legal action.

Non-Credit Uses of Credit Scores

Credit scores are not just used for assessing credit. They are also more and more commonly used when you are seeking employment. This has become even more common, and more damaging during the economic downturn. Many worthy applicants are turned away because economic hardships have left them with less than perfect credit histories. At least seven states have put laws into place banning employers from pulling applicants credit reports or limiting what information employers can see.

Further, there is little evidence that credit scores and credit reports are a good indicator of employment performance. Representatives from TransUnion admitted that they had no figures correlating credit score and worth as an employee. A study done by the New York Times failed to find any relation between the two.

Complexity of Credit Scoring Process

The truth is, no one knows exactly how the credit scoring agencies arrive at your credit score. The work involves complex computations that are largely kept secret to avoid gaming the system. Credit reporting agencies have shared the how each section is weighted; however, the exact figures are kept secret. This has led many consumer advocates to criticize credit reporting agencies for a lack of transparency.

Variations Between Different Agency’s Scores

The version of your credit score that you can access is not the same one seen by potential creditors. And, your score can vary depending on which credit scoring agency is used. According to a report from the Consumer Financial Protection Bureau, one in five people are getting credit score reports that are significantly different from what retailers see. This can cause many consumers to pay a higher interest rate than they should because they fail to shop for a better deal on credit card interest rates. In other cases, consumers inadvertently lower their own scores by applying for loans that are beyond what they can qualify for.

In the end, the best thing you can do is arm yourself with knowledge. As you work toward home purchase plans, stick with accepted best practices for credit health. By keeping your eye on your financial health, you can find your way through this complex and sometimes unfair system.

Click here to request a free consultation from one of our certified credit experts.

15 or 30 Year Mortgage? – Mortgage Advice

As you move on with home purchase plans, you will discover that you have a wealth of choices when it comes to mortgages. Big bank or mortgage broker? Traditional or FHA? And finally, fifteen year or 30 year mortgage? Each has their advantages, and which will work for you will all depend on your personal financial situation.

Money Out of Pocket

A 15 year loan will mean a monthly payment that is hundreds of dollars higher than the one for a 30 year loan. But, you pay less over the life of the loan since the interest rate is lower and the term far shorter. Seems like an easy trade-off, right?

However, there is an opportunity cost that comes with those savings. A mortgage payment that high can prevent you from investing as much in other areas, such as putting money away for a child’s education or funding your retirement.

Also, depending on the interest rate on your loan, you could get a far better return on your money by investing than by paying off your mortgage as quickly as possible. Say, for instance, that you have a 3.5% mortgage rate. Historically, the stock market has grown an average of 10% a year. If a homeowner were to put those few hundred a month extra that a 15 year mortgage costs into investments instead, he or she could come out tens of thousands of dollars ahead by the time a 30 year mortgage was paid off.

Flexibility

Thirty year mortgages offer far more flexibility than 15 year loans. A 30 year loan gives you the freedom to pay it off faster, if you choose, by adding extra payments. If you have a life event such as an illness or job loss that make the higher payments unfeasible, you can simply return to your regular loan payment schedule.

With a 15 year loan, you are committed to higher payments every month. You could, theoretically, refinance the loan if you fall on hard times. But, the sorts of issues that would cause someone to need a lower mortgage payment, such as unemployment, or being financially over-extended, are red flags to lenders, and could prevent you from getting a new loan.

Interest Rate

Typically, you will find much lower interest rates on 15 year mortgages than on 30 year loans. This means that, even if you were to make extra payments on a 30 year loan, you will still spend thousands of dollars more over the life of the loan.

We advise those who are shopping for a mortgage to run many different scenarios to determine which loan is best for their needs. Do not just calculate the difference between payments on a 15 and 30 year loan. Consider your total discretionary income, and whether you have adequately prepared for college tuition and retirement. By taking your entire financial future into account when you are choosing a home loan, you can continue the healthy growth that started with the credit repair process.

For more information on how prepare your credit for a refinance or home purchase click here to request a free consultation.

Common Myths About Credit – Education

As credit scoring bureaus have become more open about what makes up your credit score, people have become more educated about maintaining good credit. However, there are still many myths that abound that can damage your score and get in the way of home purchase dreams. Don’t believe any of these dangerous myths:

 

Myth: You can buy a new credit identity.

Some fraudulent credit repair companies say that they can get you a brand news credit identity free from part credit mistakes. What you actually get when you deal with these companies is an Employer ID Number. It has nine digits, just like a Social Security Number, but it has a distinct purpose. Trying to use it instead of you SSN is fraud and can result in criminal charges.

Myth: You should close old accounts that you aren’t using.

Many people believe that old credit accounts can hurt their credit score because creditors fear that, with too much credit, you’ll get in over your head. Those old accounts, however, look good to potential new creditors. They show that you can be trusted with large amounts of credit without going on a spending binge. To make sure that old accounts stay open, make sure you make an occasional charge on the account. One of the best ways to do this is to put one of your monthly automatic withdrawals, such as a health club membership, on the card and sign up to have the bill automatically paid.

Myth: Reducing Your Limits Can Help Your Score

Like the old account myth above, this is an action that can actually hurt your credit. Potential creditors want to see low utilization of credit, as it signifies that you can be trusted.

Myth: You should always keep a balance on your cards.

The truth is, credit reporting companies have no way to know whether you are keeping a balance on your cards. Your credit card debt is reported once a month, usually when your statement goes out. Whether you pay in full each month or leave a bit unpaid won’t be noticed. Plus, credit scoring bureaus tend to give higher scores to those who use only a small portion of their available credit. Don’t carry a balance if you don’t have to and save yourself unnecessary interest payments.

Myth: Looking at your own credit score counts against you.

When you look at your own score, this is known as a soft pull. Credit reporting agencies are only concerned about hard pulls; that is, ones that indicate you are shopping for more credit. In reality, you should look at you scores from all three agencies at least once a year to ensure that everything is accurate. Make sure that you request the information directly from the three credit reporting bureaus. If you buy your score from a third party, this can appear to be a hard pull.

Being educated about what helps and what hurts your credit score can make you a more savvy consumer and open up new opportunities. As you work to improve your credit and accomplish dreams of owning a home, learn all you can and apply it to your financial health.