Posts tagged: improve_your_credit_score

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.

Will Canceling Old Credit Cards Hurt My Credit Score?

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So you have had a couple of credit cards for several years, and you have finally paid them all back down to a reasonable amount. You are thinking maybe you should close them out so that you never have the chance to spend on them again. But what are the consequences? Will it really help or will it hurt your credit score? One of the biggest misconceptions about closing out credit card accounts is that you should close your oldest ones first. Not true! Closing the accounts that you have had for the longest amount of time will not improve your credit score. In fact, it will most likely make your credit score go down.

Why will my credit score suffer just because I close my old accounts?

Having credit cards for a long time, whether or not they are active, actually help your credit score because it shows that you have long and healthy credit history. If you close those credit card accounts, it will lower your debt-to-available-credit ratio, making it appear that you have a shorter credit history than you actually do. So shortening your credit history makes it look like you have less experience buying things on credit cards, which puts you at a higher risk of being undependable with your payments. If it appears that you may not make your payments in full or on time, your credit score will not be as high as it should be.

Won’t closing my old credit card accounts erase all the late payments I made?

Maybe you had late payments on a few of those old credit cards, and you think that if you close them out they will be forgotten. This is false. Negative records, such as late payments, can remain on your credit report for up to ten years, whether or not you have paid off and/or closed out those accounts. So whether you have had negative reports on those credit card accounts or not, it is best to keep those accounts open, and allow time to erase any mistakes you made on those credit card payments.

Should I keep my accounts open even if I’ve paid them off?

Yes! Even if you do not plan to use those accounts anymore, it is best to keep them open to prove that you have a long credit history. The longer you have your credit cards and the older the accounts get, the more benefit they are to you. If you feel that there is too much of a temptation to spend the credit that is on those accounts after they are paid off, perhaps you should consider closing out the newer and more recently opened accounts. If all you have are new credit cards, even if they do have low interest rates, your credit score will not be as high because it will look like you have not used credit cards for very long, and have less experience using them and paying the bills on them.

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.

Instant Approval On Student Credit Cards

Instant! This is a beautiful word that so many American’s love to hear. I know I love to hear it and I am sure that you do too. We like instant food, instant love, instant movies, instant money, and instant approval. This is really a loaded term as far as credit cards go. Many cards will give you instant approval as a method of showing their willingness to work quickly and help you in turn use that card quickly.

They know that many people get a credit card on impulse to buy products and not necessarily to improve your credit score. They want you to apply for credit cards with the notion that this isn’t going to take long and you are not going to have to go through a lot of hurdles to get there. Understand that there are still some things you will have to deal with.

One of the best things that you can do is don’t look for instant approval. Take your time to understand your APR, annual fees if you have any, grace periods, and any other noticeable items in the Terms and Conditions. There can be changes in the terms where the APR is 0% for a certain period, but that could increase in a heartbeat, so you want to know when that is going to happen. It might be more important for you to find out how easy it is to get a line of credit and not how fast you can get a line of credit, because that may be where your real problems are.

Easy Approval Student Credit Cards

The real question is how easy is it for you to get a credit card. Now if you don’t have a credit history, that is fine because companies know that you have to start somewhere and they would love to get your business initially so that you come back to them down the road as your income increases and especially for loans and business accounts. So they want to appeal to you to start off with. You can find cards that don’t have annual fees and that is good. Most rates are going to be 15% to 20% and that is pretty standard.

I suggest that you are safe with these cards because if you miss a payment then you can be murdered. Some interest rates can double up near 30%. This can be scary for any student just trying to make it by and I am sure that you don’t want your parents on your back about another issue, along with a creditor and a credit bureau which isn’t as forgiving.

Realize that you are going to have to give your social security number and they are going to do a credit check. This is in accordance with the Patriot Act and also they are going to do it obviously to know what your past is like with credit. This could help with getting a better rate if you have established a credit limit, but realize that it is going to take a several months to a year of good credit habits to impress a credit bureau.