[et_pb_section admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”4_4″][et_pb_text admin_label=”5 Fascinating Things You (Probably) Didn’t Know About Credit Scores” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

5 Fascinating Things You (Probably) Didn’t Know About Credit Scores

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”You’ve heard the old adage” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

You’ve heard the old adage about how “knowledge is power,” and perhaps nothing demonstrates this saying more than when it comes to knowing about your credit information. Yes, the more you know about these details of your consumer history and you’re able to make better decisions when it comes to your future behavior.

[/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_image admin_label=”Image” src=”http://keycreditrepair.com/wp-content/uploads/2018/10/Things-You-Probably-Didn’t-Know-About-Credit-Scores.jpg” alt=”Things You Should Know (But Probably Don’t) About Your Credit Score” title_text=”Things You Should Know (But Probably Don’t) About Your Credit Score” show_in_lightbox=”off” url_new_window=”off” use_overlay=”off” animation=”off” sticky=”off” align=”left” force_fullwidth=”off” always_center_on_mobile=”on” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

[/et_pb_image][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Interesting Credit Score Facts” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

First and foremost, it’s important to know your credit score, but it’s never a bad idea to brush up on some of the more intricate details that shape your score.

Here’s a look at five things you probably didn’t know about credit scores:

5 Interesting Credit Score Facts

  1. The big 5: Do you know the five factors that go into calculating your credit score? You should! Payment history is the largest single factor, worth 35 percent of your score. It validates the importance of paying your bills on time. Credit utilization ratio is next, at 30 percent. For a good lender-friendly ratio, keep it at 30 percent or less. Length of credit history factors into 15 percent of the score, and new credit and your credit mix each account for 10 percent of the score.
  2. 700: That’s the credit score of the average U.S. adult. A score of 700 is considered to be in the “good” category. This “good” category applies to scores between 670 and 739.
  3. Do you know your score? If you don’t know your score, you aren’t alone. In fact, it’s estimated that three out of every five Americans don’t know what their credit score is. That’s 60 percent of the country, and there’s really no excuse for it based on how important that three-digit number is to your purchasing power and how easy it has become to access.
  4. Credit report doesn’t equal credit score: Up to 20 percent of all credit reports contain some sort of error. That’s why it’s a good idea to utilize your right to obtain a free annual credit report. But contrary to what many believe, checking your credit report doesn’t permit you access to your actual credit score. We know it seems odd, but that’s the way it works. To get your score, check your credit card statements, subscribe to a free credit check website or talk to your bank or credit union.
  5. Late payments can do terrible things to your score: As we noted above, payment history is the largest consideration factor when it comes to calculating a credit score. Noting this, it probably doesn’t surprise you that late or skipped payments don’t bode well for your score. But what you may be surprised to learn is just how hurtful they can be. In fact, a 30-day late payment could cause your credit score to dip an entire 100 points! The lesson: Pay your bills on time!

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]

What to Expect When You Max-Out Your Credit Card?
According to the Federal Reserve, the average household credit card debt is at approximately $16,000. Maxed our credit cards are an epidemic. With this much debt it isn’t surprising that many people are in danger of maxing out their credit cards. It’s a good idea to stay well below the limits imposed on a credit card. This leaves a little wiggle room if an unexpected emergency would come up. If you would happen to exceed the credit limit on your card, the following is what you could expect to happen.

Inability to Use the Card

The first and most obvious consequence of maxing out a credit card is that there isn’t any credit left to use if it’s really needed. At the very least, a person would need to pay a minimum balance in order to be able to use the card again. Once the limit has been passed, however, simply bringing the balance back down may be the least of the card holder’s worries.

A Drop in Your Credit Score

Maxing out a card can cause your credit score to drop. How much available credit an individual has is a big factor in determining a credit score. This is called a high credit utilization ratio. The utilization ratio is determined by the amount of credit that is available on your cards to the amount that you’re using. It’s always ideal to have a utilization number that is as low as possible. Whenever you attempt to take out a mortgage or apply for any other type of loan, the fact that you maxed out your credit card will appear on your credit report.

The Possibility of a Penalty

Going beyond your credit limit may cause the company to charge an over-the-limit fee. Simply carrying a high balance could cause you to be pushed over the limit with finances charges. APR (annual percentage rate) is the percentage of interest charged on the amount that’s owed on the card. Your interest rate or penalties may be charged at the highest APR a credit card company can legally charge. That rate is currently 29.99 percent.

The Account May Be Closed

Credit card companies can close an account for many reasons and sometimes choose to do so if the limit has been passed. If your account has been closed it is advised to call the company as soon as possible. If they verify that the account has been closed because you’ve passed your limit you should make a payment as quickly as possible. If you’re able to make a payment so you’re no longer over the limit they may reinstate your card.

If you’ve gone over your credit limit, have incurred penalties, or even had a credit card account closed, there are things you can do to help fix your credit. Feel free to call our office at 617-265-7900 or schedule a free consultation.

Choosing your next credit card

When you are first rebuilding your credit, it can be tempting to jump at any card that will have you. But, after you’ve developed some positive credit history, you can afford to be choosier when it comes to credit card offers. Before you apply for that new piece of plastic, give some thought to all of the following regarding Choosing a new credit card.

1. The APR

The annual percentage rate is how much it will cost you in interest to carry a balance on the card. In many cases, it is a certain set percentage plus prime, which is variable. Try to get the lowest APR you can qualify for, even if you don’t plan to carry a balance on the account. If you are not approved for a low rate at first, you can also call back periodically and ask for a lower rate.

2. The credit limit

With a card that only has a limit of a thousand or so dollars, it’s easy to hit a high utilization rate quickly. This can drag down your credit score. Be careful about limits and try to keep your balance under 30% of what is available. If you feel you can safely manage more credit, ask your credit card company for a higher limit. They’ll have to run your credit again, but, they may extend a higher rate if you have a good history of payment.

3. Annual fees

This is where many cards, especially reward cards, get you. Some cards have fees as high as $100 per year. When possible, look for cards that carry no annual fees. If you are looking at a rewards card that has a sizable fee, do the math to figure out whether the incentives are enough to balance the annual cost. You should also know what fees are charged if you forget to make a payment or if you go over your limit.

4. Rewards and incentives

It’s fun to get paid to spend your own money. Look for cards that offer cash back or bonuses. Ideally, these cards should offer bonuses in categories that you use often and come with no fees. If your card is one that offers different cash back bonuses at different times of year, time your spending to make the most out of your new card. When looking at incentives, you should also assess the requirements. To get some bonuses, you have to put a certain amount of charges on the card within a set period of time.

5. Your spending habits

Look at past credit card bills and your monthly bank records to honestly assess how you spend money. Do you tend to overspend when you have access to new credit? And, do you have a good reason for applying for a new card? If you do not have a lot of financial discipline, it may be best to think twice about getting a new card if there’s not much benefit.

Credit can be a temptation, but, it can also be a handy tool. Access to credit cards can mean more control over when you and how you spend and can give you bonuses like cash back and airline miles. Need some help learning to manage credit wisely? Get in touch with us. At Key Credit Repair, we offer counseling and advice to help you make the most of your financial life.

Credit card balances.

[et_pb_section admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Should You Carry Credit Card Balances? – Credit Tip #1″ background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

Should You Carry Credit Card Balances? – Credit Tip #1

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_code admin_label=”Code”]<iframe src=”//www.youtube.com/embed/YQsdbUqHeQQ?list=UUZcRYk9iB7wXpWQZURllDUw” width=”560″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”></iframe>[/et_pb_code][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Should You Carry Credit Card Balances” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

Should You Carry Credit Card Balances? When does your credit card carrying balance begin to affect you adversely? If you are interested in improving your credit score, consider slimming down your balance on each of your credit cards. You do not want to max out your cards, as this will cause your credit to plummet. After all, a quarter of your credit score comes from your credit card utilization. The best practice is to keep the balance on your card lower than your amount of credit. Dropping your balance is one of the easiest and quickest ways to perform credit repair on your personal credit score.

For additional information feel free to contact our office at 617-265-7900 or schedule a free consultation below.

[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]