Posts tagged: improve_your_credit

Will Your Credit Score Improve if You’re an Authorized User On a Credit Card Account?

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Maybe your credit score is kind of lacking a high number, and you wish to do something about it. In fact, you want to know everything you could possibly do to help it get back into the high range as soon as possible. But how do you do that?

One way you could help improve your credit score is by signing as an authorized user on a credit card along with someone else. Though the good credit they currently have will not reflect yours, the fact that they will keep paying their bills on time will reflect on your score and make it improve. That is, only if you do not use that credit card account unwisely yourself.

If you were to sign with someone on a credit card, it is important that both of you agree to have good credit behavior. If you sign on with someone who is great with credit cards and has an awesome score, their good habits will reflect back onto your credit score simply because you share the same account. But if you use that credit card in a bad way, it will not only make your credit score even worse, but it will decrease theirs as well.

Being an authorized user allows you to gain a better credit score, but when it all comes down to it, you are not responsible for the debt. So, really, if you messed the credit card account up for the person you are signed up with, it is their responsibility, not necessarily yours, to pay the debt. Still, no intelligent credit card holder with a good credit score would allow someone who would inevitably ruin their credit and drag them into debt to be an authorized user of their credit card account, so you have to be trustworthy and try to break your bad credit habits.

You will not want to stay on these accounts any longer than you have to, especially if you are applying for a home loan. Though it improves your score, it can decrease your chances of getting approved for a home loan. So when you are signed on as an authorized user of someone else’s account, stay on only as long as it takes to improve your score enough to be on your own again.

One bad thing about being an authorized user on someone else’s account is that you put yourself at risk of being joined with someone who may not have the greatest credit history either, and who may not use the credit wisely. This will end up costing you even more of your credit score and leave you in a worse predicament than you were in to begin with. This is all usually determined by your judgement of the person who you are planning to share the account with, so you must be careful of who you associate your credit score with.


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.


Best Credit Card Deals For Student Credit Cards

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There are a lot of options for you to take a look at. The best credit card deals are going to depend on what you are looking for and what type of credit history that you have. Obviously the best deals are for those that have a higher credit score. If you are in the 700′s or 800′s then you are going to be just fine. I don’t think you will have to worry about high interest rates and if your credit is that high then you probably don’t even care about rates anyways because you are probably very effective in paying all of your bills on time.

So before I discuss anything about credit cards, make sure that you are willing to find out where your credit is and take a look at what you can do to improve your credit score. You can make multiple payments a month and contact any creditors that you owe to pay off debt. Then you can make sure that you have a checking and savings account open. Have a couple credit card accounts that you keep in good standing. Don’t take on a lot of other debt if you can and then it will just take time of good payments that will help you to improve your credit.

So after you have improved your credit then I would look at a major credit card issuer like Visa, MasterCard, or Discover. I have seen a lot of Orchard Bank Credit Cards for students and also a lot Capital One for people with poor credit and looking for lower limits. If you are looking for lower interest rates then I would say that Capital One is good card. A lot of cards will offer very low introductory rates. Be aware that this could change in a heartbeat. So it is important that you are able to check out the terms and conditions to see what is required from you and what obligations the company has. Many only need 15 days to notify you that they are going to change the interest rate.

I suggest that after you have figured out where your credit is, decide what is important to you. You might want a higher credit limit and you are willing to sacrifice your interest rate to get it or maybe a limit might not matter, you just want to get a good interest rate. Many of them will be around 15%. If you can find one lower then that for more than just an introductory rate then you will be doing well.


Credit Cards After Refinancing Student Loans

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This is a sticky process. Many have gone through a consolidation process of refinancing your student loans to try to decrease your interest on the student loans. So now you are looking for ways to improve your credit and you want to find out how to get a credit card because you have heard that a credit card is going to help you out of your financial bind. Well this can be true. There are some options that you can look at. First make sure that you are in the clear from your refinancing process so that you can apply for credit cards. Whenever you go through a refinancing, you probably can’t get a new line of credit or use the current ones you have too extensively.

One of the first steps you should take is to find out where your credit is at and what type of cards companies can offer you based on your credit, income, and any other debts you may have. It is important that no matter what happens with your credit card situation, you are able to be consistent on paying off your student loans. This is fundamental for any person looking to keep their credit. One late payment can put you in the dog house, while six solid payments in a row can begin to help your credit improve.

The Appropriate Credit Cards While Paying Off Student Loans

So when you have found out where your credit score is at and you have finished the consolidation process for your student loans then you can start looking at cards. Depending on where your credit is, you might have to start off with a secured credit card before moving forward with an unsecured credit card. This is fine because whatever type of credit card you have, you need to pay your bills on time and spend wisely with your new card.

If you are struggling to find the right card and you just want to improve your credit then you should start by opening a checking and savings account if you don’t have one and make sure to pay your normal bills on time like rent, utilities, car payments, etc. If you can do this, then this will be a good first sign for any creditor. Next you need to look at store cards as options. These are just some examples other than using the student loan itself. Don’t put yourself in a difficult situation where you are going to have to worry about consolidating your credit cards a year after doing the same with your student loans.