Can You Do a Balance Transfer From Someone Else’s Credit Card?

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Transferring someone else’s balance onto a card that you carry is possible, but not always wise. It can either be very helpful for the person you are transferring the balance for, or it can be very hurtful to you if you take on the responsibility of someone else’s debt by transferring the balance from their card onto yours. Here are a few pros and cons.

Benefits

Some of the things you can get out of a balance transfer from someone else’s credit card to yours is that they have a much better annual percentage rate. Their credit card interest will go down considerably with a credit card balance transfer. The fact that you have paid your bills on time and have a good credit score and credit history will also be advantageous to them in more ways than one, especially if they have had a bad credit history themselves.

If the person that has recently been added to your credit card has a good credit history and is responsible with their spending, it will be a great benefit for you as well. Their good spending habits will reflect on your credit report as well as theirs, because the card is originally under your name. It is important to know if someone can be of benefit to you in this way before you allow them to transfer the balance of their debt onto your credit card.

Fallbacks

The biggest risk you are taking when you allow someone to transfer their debt onto you credit card is if they spend on your card unwisely and build their debt problem back up to where it was before. A lot of the time, when people get in trouble with interest rates because they have bad spending habits, it is very difficult for them to change those habits in order for it not to happen again. The part that makes the situation even worse than it was before is that it is YOUR credit card, and YOU are going to suffer along with them.

If you have bad spending habits, this will rack up their debt and interest rates as well. Say you just got a brand new credit card with a great APR, but you have had some trouble paying your bills in the past. The people you allow on your credit card are going to want to know about this in order to decide whether or not they will really benefit from joining their balance with yours. Just like they can ruin good interest rates for you, you need to be certain that you will not leave them stuck with higher interest rates than they had on their first credit card.

Tips

You finally decide that it’s safe to do the transfer. Now what? Just like shopping for any other card with low interest rates, you need to be careful of what cards you settle for. Be sure to get one with a low fixed rate, and know how much it may increase, when, and why.

What is the Fair Credit Report Act?

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The Fair Credit Report Act is a law that protects and prohibits the distribution and use of your credit information. It protects you from the possibility of your credit history and other credit information getting into the wrong hands. It also prevents the wrong people from changing or manipulating your credit information.

There are several factors that allow your credit information to stay safe, but there are a few people who have access to it when it is necessary. Most of the time it is used to evaluate whether or not you are worthy of getting a loan or a contract similar to that. Here are a few examples:

1. Companies where you have credit can access your credit report so that they can monitor your credit. This way, they know whether or not you are capable of paying back what you owe on credit and how well you can make your payments on time. However, no one is allowed to give out your credit information in these situations except you.

2. Insurance companies are allowed to check your credit report for generally the same purpose. They need to know if you will be able to pay your insurance bills on time. By checking your credit report they can see your payment history and evaluate whether or not you can make the correct payments punctually.

3. Anyone who is allowing you to get credit from them. Whether you get credit by applying for a credit card or for a loan, those who will be your lenders are allowed access to your credit information. The very factor of your credit score and the details on your credit report determine whether or not you get credit in the first place. This allows credit lenders to find out how faithfully you will pay them back.

4. Your employer has the opportunity to look at your credit information, but in this case, it is only your consent that can grant them access to it. The previously mentioned cases may check your credit score whether you want them to or not, but possible employers, when considering you for a position, must have your permission before they see any of your credit information.

The Fair Credit Report Act also protects you from identity theft. Your credit information entails a lot of information about you, including important details like your social security number, date of birth, phone number, etc. Because it protects these details so intensely from getting into the wrong hands, it protects you from other dangers like identity theft.

The Fair Credit Report Act also gives you the right to take action on part of your credit information and request information about it. If you have a problem with your credit report, you have the right to dispute the mistake that you feel was made. If you want to know what your credit score is, you have the opportunity to request a free credit report once a year.

How Do I Write a Credit Dispute Letter?

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You have discovered a mistake on your credit report that you are absolutely sure that you had nothing to do with. You want to get it fixed, because it is doing damage to your credit score. But how exactly do you go about getting that repaired?

Writing a credit dispute letter should not have to be so difficult that you would rather have the mistake on your credit report rather than go through the hassle of having it fixed, but sometimes it may feel that way. A credit dispute letter, if done correctly and professionally the first time, will get you the change that you need on your report to gain well deserved points on your credit score. But is there anything that would possibly improve the format and the content of your credit dispute letter, therefore giving you greater chances of having the errors corrected, and having it done quickly?

In fact, there is hope. You deserve to have your credit report reflect the good credit spender you are. Here are a few tips on what kind of things you can do to draft and improve a credit dispute letter:

1. Get right to the point.

Being up front about your complaint is a factor that will get the correction made faster. Being blunt and completely clear will allow them to recognize the problem, find it, and fix it in a more timely manner than they would be able to if you give them only a vague description of your problem.

2. Use proof of the error.

Get as many files as you can from outside sources that prove to the creditors that there has been a mistake made, such as court files or documentation of your payments. Having a sort of map or proof of what the problem is and where things went wrong will speed the process up and give you a better chance of getting the problem fixed with few questions asked.

3. State how it should be.

Do not just show them where the problem is and expect them to know how you want them to change it. Make sure that you tell them why it is an error, and how you know it should be instead.

4. Communicate clearly.

You need to be able to make your letter completely black and white, with no gray areas that creditors may not understand. State that there is a problem, state the problem, state a possible solution, provide documentation, and end it. Simplicity and clarity will allow for the letter to be easily read and more quickly responded to.

Nobody wants their credit score to suffer for some mistake that they didn’t even make. Having a good credit score is something worth fighting for. You should not be cheated out of the credit score you have, and writing a clear credit dispute letter can allow you to get the needed changes made to uphold that right.

Top 3 Myths About Paying Off Your Credit Cards

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So you have finally paid off all your credit cards. It took you a long time, and for a while it didn’t look like you were going to get it done, but you are finally at the point where you are debt free. It’s a great feeling, isn’t it? So you sit back in your easy chair, patting yourself on the back…but what happens now? Will this add or take away any points from your credit score?

Would it be better to just close your account so that you won’t be tempted to get into debt again? Since you paid off your debt, will your late payments and other negative records be forgotten on your credit report? Maybe you should know a little bit more about what is fact when it comes to paying off your credit cards, and what is fiction.

Myth: Your Credit Score Will Improve by At Least 50 Points Because You’re out of Debt

Fact: Some would like you to believe that just because you paid off your debt, your credit score is going to improve enormously… fifty points is the most popular belief. But because of the complex formula that is used to calculate your credit score, it is difficult to say just how many points exactly will be added to your score. Even if it isn’t fifty points, your credit score will, in actuality, improve.

Myth: Negative Records Will Be Taken from Your Credit Report Once You Pay Them Off

Fact: Whether or not you pay your credit accounts off on time or even early, your late payments and other negative records could stay on your credit report for up to ten years. Paying off your accounts early will improve your credit score, but it will not take away the mistakes you’ve made that hurt it. Eventually those mistakes will be erased from your credit report. It is just better to not make a late payment in the first place, keeping your credit report clean.

Myth: Your Credit Score Will Get Better If You Close Your Old Credit Card Accounts

Fact: The longer you have an account, the better. Having an old account, whether it is active or not, is good for your credit score because it shows that you have a long credit history. This is beneficial especially if you’ve paid all your bills for that account on time. Closing an old account can lower your score because it can make your credit history look shorter. If any accounts should be closed, it is best if you pay off and close the newer accounts rather than the old ones.
Getting out of debt is a big relief, but knowing how to pay off your credit cards can be beneficial when it comes to keeping a high credit score. The key things to remember are that it’s best to pay them off, but keep the old ones open, and pay the requirements on time so you can avoid negative records on your report.

Secured Credit Cards for Business

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This is an account from a business owner that I spoke to that gave me some tips on how he was able to get a secure credit card for his business so he could rebuild his credit. He was concerned because he had heard how important credit was for starting a business, but he wanted to create financial independence. This is his experience with secured credit cards for business:

I was going to buy media for my internet marketing business, but I was nervous because I had several occurrences where I had destroyed my credit. Some of these reasons were my fault and others were circumstances that I couldn’t control. I had gone through a bad divorce that had taken a toll on my credit.

So now I knew what I had to accomplish with my business, but I was scared of where to go to find a card that would accept me. I had some funds to help me get my business going, but I realized that I was going to need to leverage on a grander scale. It was going to require more leveraging and being able to exercise what little credit I had.

I realized that this was going to take some good credit history to replace previous mistakes. I knew that there was going to be forgiveness, but I had to prove myself to credit bureaus. I realized that a prepaid credit was a decent option. I searched around and found a company that offered secured credit cards for business. This company seemed legitimate and wasn’t requiring me to pay an arm and a leg with fees and phone minutes to sign up.

I was even more pleased as they asked me for my credit report to find out how my credit history was. This was assuring to me because it showed that they were serious about what they offered and I found out they would report often to credit bureaus about my new established history.

This became a dream come true because I could leave a larger deposit and receive a larger credit limit. I started using the line of credit often and made payments on time. Some times I would make more than one payment a month. It didn’t take long for my credit to be flipped around. Now my credit is well over 700 after being in the pits and I am able to get unsecured credit cards in a matter of months. I am going to try to build my credit more so I can get larger limits. I used to be scared about credit cards after I had bad experiences. Now I have been able to turn it around into my favor and use it to better my life.

Secured credit cards for business can be so beneficial for people with struggling credit. I like to think of it as almost paper trading, or maybe trading on a contract that is only 5 dollars. It is a conservative way to exercise your ability to use credit correctly. After a while you will learn how to use it wisely and be able to adjust it to become one of your strengths and not your weakness.