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usalibertynews · 8 days

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If you're frequently denied credit or only qualify for loans with high interest rates, your credit score might be the issue. Fortunately, there are numerous strategies to help improve your score. As your score rises, you'll typically find it easier to obtain loans at more favorable rates. How to Increase Your Credit Score Improving your credit score requires time, patience, and financial discipline, according to Tom Quinn, vice president of strategic alliances at FICO. "There’s no quick fix for your FICO score, but focusing on behaviors that creditors value can make a significant difference," he says. In essence, while there isn’t a magic solution, the following steps can help you boost your score: Check Your Credit Reports and Dispute Errors Many people worry that checking their credit report will negatively impact their score, but this is a misconception, says Christina Roman, consumer education and advocacy manager at Experian. "Consumers should regularly check their credit reports," she advises. Reports from TransUnion and Equifax also contribute to your credit score. You can obtain a free credit report from each bureau at AnnualCreditReport.com. If you spot any errors, address them promptly, especially if they seem to be affecting your score. To dispute an error, contact both the credit bureau and the information provider with proof of the mistake. Avoid Missing Payments Your payment history accounts for 35% of your FICO score and is crucial for your VantageScore as well. While a slight delay might incur a fee, it won't immediately affect your score. However, payments more than 30 days overdue can be reported to credit bureaus, impacting your score. To maintain a good score, consistently pay your bills on time. Setting up payment reminders or automatic payments can help avoid late payments. Positive payment behavior over time will gradually improve your score. Lower Your Credit Utilization Rate Credit utilization refers to the ratio of your credit card balance to your credit limit. For example, if you have a $1,000 limit and a $100 balance, your utilization rate is 10%. Aim to keep this rate as close to 0% as possible, rather than the commonly advised 30%, says Roman. Reducing your balance or requesting a credit limit increase (while not using the new credit) can help. Paying down balances multiple times a month rather than in a single large payment can also be beneficial. Avoid closing old credit cards, as this can increase your utilization rate and lower your score. However, if overspending on a card is a problem, closing it might prevent further debt. Other Ways to Improve Your Credit Score Become an Authorized User: If you’re new to credit and a trusted friend or family member with excellent credit adds you as an authorized user, your score could improve significantly. Ensure the primary cardholder maintains good credit practices to avoid negative impacts. Take Out a Small Loan: Adding a new credit line can enhance your credit mix, an important factor in your score. Credit-builder loans, designed for those without a credit history, can be helpful. Use loans responsibly to build credit. Open a Secured Credit Card: A secured card requires a deposit to establish your credit limit. Payments are reported to credit bureaus, aiding in building or rebuilding your credit score. By following these strategies and maintaining financial responsibility, you can effectively improve your credit score over time.

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petnews2day · 2 years

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New credit score models could mean more people now qualify for home loans

New Post has been published on https://petnews2day.com/pet-industry-news/pet-financial-news/new-credit-score-models-could-mean-more-people-now-qualify-for-home-loans/

New credit score models could mean more people now qualify for home loans

WEST PALM BEACH, Fla. — During a time when affordable housing is hard to find in South Florida, two new lender credit models could mean millions more Americans now qualify for home and other loans.

“I feel like I’m forced into basically living in my car,” April Wade told WPTV in May.

WPTV has extensively reported on the South Florida housing crisis through its “Priced Out of Paradise” series.

“I’m just blessed that I have this to sleep in,” Katie Rister said in August, talking about her car. “Without this, I’d be on the street.”

Renters and hopeful home buyers have been feeling the pinch. The rising cost of housing is forcing a lot of people out of South Florida.

Now, more than 10 million people could qualify for mortgages thanks to upcoming changes to lender credit models.

The Federal Housing Finance Agency said it will now require mortgage lenders to incorporate credit scores from FICO and a new credit scoring agency VantageScore.

“Right now, our credit reports are a snapshot in real time,” Paul Oster, founder of credit management firm Better Qualified, said.

Alex Hagan/WPTV

Paul Oster, founder of credit management firm Better Qualified, speaks to WPTV consumer investigative reporter Jessica Bruno about a new requirement that could help more people qualify for home loans.

Oster said that could soon change because these new credit score models will incorporate things like a one-time rent or utility payment and cellphone payments that previously weren’t included in a person’s credit score.

“It’s going to go back 24 months to look at your credit card balances, what you’ve been doing for the past two years,” Oster said. “We’re hoping that it’s going to help some people that don’t have a lot of traditional credit accounts reporting on their credit reports.”

However, Oster said, a few things need to happen before this new plan comes to fruition.

SPECIAL SECTION: ‘Priced Out of Paradise’

“We’re just hoping that A, it really does pan out for the average consumer, and are the government agencies really going to require lenders to use these scoring models?” Oster said.

If they do, Oster said, even with mortgage rates at a two-decade high right now, this will still help a lot of people finance their next home.

“There are millions of people (who are) not even on the FICO score radar,” Oster said. “They don’t have a credit score because they haven’t used traditional banking accounts, but that should not, you know, discriminate against them in terms of, you know, buying a home.”

Oster told WPTV there is currently no deadline for the government to set requirements for lenders to use these new scoring models.

WPTV will be following this developing story.

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#Pet Financial News

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averythomas12 · 2 years

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mycreditfocussite1 · 4 years

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Understanding FICO As Well As Various Other Credit Score Models

Determining Which Products Are FICO® Scores

Any time you fill out an application for a bank loan, credit line, a rental home or apartment, etc., it's pretty much a guarantee your credit rating will be requested. The initial step in estimating when you will be accepted for credit or a loan is having a clear picture of what your FICO® status is (as this is the scoring product the majority of loan merchants and others depend upon).

In America, FICO® is known as a leading service provider of credit score rankings, with a precise process which spans from a minimal score of 300 to an optimum score of 850. Even though Fair Isaac & Co. (the corporation who came up with the FICO® scoring system) is not alone in providing scoring options (you will find numerous credit rating systems to select from), FICO® is definitely the most popular. There are lots of different scoring options, for instance VantageScore® (this model varies from 501 to 990, and was developed by the top credit reporting agencies), and the web began using an expression for these scores: "FAKO scores". FAKO scores are essentially those not produced by FICO®. To make things even more confusing, loan companies use their own credit ranking techniques as well. Although folks grumble about the process by which scores are typically measured, FICO®'s prevalence systematizes a things a bit. As long as FICO® remains the prominent credit ranking system, it will remain possible for individuals to calculate whether or not they may get authorized for a loan or credit.

Irrespective of whether you approve of this or not, your creditworthiness will be based upon your credit report, and nearly always your score. To be honest, your future financial stability is set, at some level by a mathematical formula. This is fairly upsetting for many. Then again, keep in mind that loan merchants undertake detailed formulas focusing on whom to give money to, utilizing many variables. Truthfully, a dadeschools of 720 will probably approve you for the greatest financial loan conditions; but a weak rating means paying more in interest payments. Even if an undesirable rating signifies you are more of a risk, this might not lead to absolute loss of services and products every time. The boost in "subprime" loan products is one result of this. In a way, analysis of credit ratings has started to become a bit more clear: beginning in 2011, any loan servicer that declines a credit request - or simply approves you for rates below the best offered - as a result of your credit history, must provide you with correspondence as well as a cost-free record of the report or score the lender utilized in their judgment.

What is the Typical FICO® Rating Today?

As per myFICO®, the mean U.S. score last year was 711. At the moment, approximately 40 percent of individuals have credit ratings of 750 or better; and around 40 percent of folks possess scores in the 699 and under range. Now, what does this suggest? First, there's lots of space to improve. The better your credit ranking, the more entitled you will be to the best loan product and credit interest rates, but only to some extent. Even though individuals chase after "bragging rights" for acquiring a score higher than 800, ordinarily, many banks will supply anyone having a 780 score the equivalent offers as a person maintaining an 820 rating. Clearly, attempting to boost your credit score is vital, however creating superior credit patterns are recommended over seeking perfection.

Now you are aware of just what the typical FICO® score is, you're probably pondering the method by which this score is determined. Fair Isaac's specific system remains unknown, and they are not publicizing the technique at this point. However, this is the method by which it functions: The three credit reporting agencies - Experian, Equifax, and TransUnion - amass your credit profile, and FICO® subsequently creates a score depending on the prior seven years of credit history in your reports.

The credit reporting agencies also can utilize an algorithm formula much like FICO®'s to create their own unique scores. These credit agency numbers aren't precisely the same as a FICO® score, and are generally termed by distinctive names (Experian's score is termed the "Experian/Fair Isaac Risk Model", Equifax's score is the "BEACON® Score", and TransUnion's score is termed "EMPIRICA®"). Nonetheless, all of them are essentially assessed just like as a FICO® score. Incidentally, those scores ought not to be correlated with the VantageScore®, which has been produced by Experian, Equifax, and TransUnion as another option besides the FICO®.

Precisely What Influences the FICO® Score?

As the information inside your credit file fluctuates (for instance, fresh things are included, other items in excess of seven years old disappear) so too will your credit scores. As a result, your rating will probably range drastically based on who's creating the scoring, and what formula is applied. To illustrate, even between the three credit reporting agencies, your score will differ a great deal. In the event that these types of variations in your scores appear, it is possibly due to the fact that information and facts in your credit file differs from the others, and/or there are actually some distinctions with the way the FICO® (or any other exclusive) formula is used.

Based on FICO®, this shows how they read the details on your credit file to figure a precise score:

1. Payment History - 35% of your score. A large amount of importance is given to relatively new elements (the last 1 to 2 years). Reliable and on time payments will definitely boost your score. Past due payments, collections reports, and bankruptcy will certainly decrease your score.

2. Credit Consumption - 30% of your see more . The amount of money you've borrowed (like consumer debt, student education loans, a home loan, etc.) is significant, especially when matched against total credit readily available. A great way to improve your score rapidly may be to pay back debts, like those found on credit cards. Carrying a balance of 0-10% of your overall credit is best.

3. Credit History Span - 15% of your credit score. Scores benefit folks who have held credit for a long time. The longer the duration you sustain credit with the same credit card company, the more significantly your score can increase.

4. Credit History Depth - 10% of your credit score. Scores are typically the most optimum for individuals who appropriately handle a variety of kinds of credit (e.g., cards, auto loans, a home loan, and so forth.).

5. New Credit Requests - 10% of your credit score. A lot of credit requests might lower your credit rating (given that it could symbolize you are in need of money). Exceptions to this include auto/home finance loan applications made inside of a 45-day time period. The fewer applications for credit you submit, the better your score should be.

Remember, this is FICO®'s way of establishing your credit score, and alternative scoring products will probably do it other ways. To illustrate, VantageScore® implements a marginally different process.

See more information: https://mycreditfocus.com/

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studylifeusa · 5 years

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Moving to the USA? Learn why building credit is vital in the USA.

Most international students arrive in the U.S. with no credit history. This makes it very difficult to obtain a variety of essential services. In this article, we explain why it’s important to start building credit, and how to begin building yours upon arrival in the USA.

Students moving to the USA quickly learn that a U.S. credit score is vital for establishing themselves in the country.Without a local credit score or history, international students face a number of challenges, including getting approved for housing, credit cards, and difficulty buying, leasing or renting a vehicle or even getting a cell phone. If they are able to get approved, they typically end up paying high interest rates.

If you’re not familiar with the term “credit score,” it’s one that you will want to become familiar with during your time as an international student in the U.S. A credit score is a rating given to your financial background when assessed by a lender. When you’re applying to borrow money (like through a loan or credit card) the lender will most likely look at your credit score to see whether you are an eligible candidate.

Credit doesn’t transfer from one country to another.

As an expatriate relocating into the United States, you may not have official identification requirements like a social security number and a driver’s license. Without those essentials, it is almost impossible to establish credit.

Each country uses a different system for credit scoring, and credit does not transfer from country to country. Your credit score is what determines your creditworthiness to lenders. Since credit does not transfer from country-to-country, international students have a credit score of 0 when they first arrive in the U.S.To provide some perspective, the average American has a credit score between 600-700, and a good credit score is typically above 700.

Not having credit can make it hard to make much-needed purchases in your new country.

The chart below illustrates one example of how your credit score can affect an auto loan payment and insurance rates.

Your credit score is based on several factors.

Important transactions involve credit checks. Lenders require credit checks to obtain housing, car loans, home and auto insurance, and mobile phones. It is essential to understand what improves your overall credit score and to start building your score to give you better terms of those transactions.

In the United States, FICO®is the most common model for credit scoring, which was created by Fair Isaac & Company (FICO). Although there are competitor rating systems, this is the one you’re most likely to see during your time as an international student. A FICO®score is used to predict how reliable of a borrower you will be in terms of paying back the borrowed funds. However, typically if an individual does not have credit history that is at least six months old, they will not have a FICO®score. Additionally, different lenders will request your credit score from various sources depending on the system they use and whether they’ve adapted to the new FICO®system or use another company such as VantageScore.

When trying to build your credit there are five key factors1you need to know about that can impact your FICO®score:

1. Payment History (35%)refers to the repayments you have made on credit cards and loans in the past. Your credit score will take into consideration the speed and quantity of repayment on all the lines of credit you have taken out in the past to find the average.

2. Amount Owed (30%)The amount of your outstanding debt accounts for a large component of calculating your score. For example, does your credit card stay maxed out, or are you steadily paying it down?

3. Credit History Length (15%) The credit score will also take into consideration how long you have been building credit. If you start building credit responsibly when you are a student it will be reflected positively in your credit score. The sooner you start building your credit, the better.

4. New Credit (10%)Opening many new accounts in a short period of time suggests that you need additional forms of credit to make purchases. Using a few sources of credit wisely is better than having a large number that you can’t keep track of, or that are unnecessary.

5. Types of Credit in Use (10%)The different types of credit in your possession will be considered in your score, such as credit cards, loans and store cards. Having different forms of credit and using them responsibly can be beneficial in demonstrating how you manage your money in different areas.

Without a credit score, many establishments will not extend you credit, making it feel impossible to start building one.

So, how do you start building credit as an international student?

Open a bank account.

Check if the bank you work with in your home country has a U.S. branch near where you’re moving. If not, there are plenty of other options and your University might even have a bank on campus.

There are a couple of ways that you can build credit by using a bank account. Try opening both a checking and a saving account and regularly transfer money to your savings account if possible. This demonstrates that you’re responsible with your finances and you’re thinking long-term. It’s also a good idea to set up automatic or direct bill payments to ensure that your bills and expenses are paid on time. This is another way to demonstrate your financial responsibility, which helps build a strong credit score.

Pay utility bills.

If you are renting a property off campus you will most likely have to pay utility bills – gas, electric, phone, internet, etc. If you’re staying in on-campus accommodations you may not have all these utilities, but you will most likely need to apply for your own cell phone contract, which can also help you build credit. Making regular payments on all your utilities is another way to prove to lenders that you are responsible with your payments and will be a suitable applicant for a loan or credit option. For each of your utility bills you can request proof of your payments, which many credit providers will accept as supporting evidence of your payment background for your application.

Request store credit.

Store credit cards are used within that specific store. Just like a regular credit card, however, the store will charge you if you don’t make the payments on time. Additionally, although they’re usually easy to be approved for, store credit cards typically do not provide you with a credit limit as high as a traditional credit card. Therefore, it’s important to note that if you make minor purchases and don’t have a very high limit, your borrowed to available credit ratio could hurt your credit score.

How to get a credit card without a credit history or social security number.

Although having a credit card during your studies in the U.S. is important, it can be difficult to find a company that will allow you to open a credit card as a new international student- especially if you don’t have a Social Security Number (SSN) or credit history. However, there are some companies that will allow you to open a credit card as an international student without a SSN or credit history. Here’s how to start that process.

1. Apply for an Individual Taxpayer Identification Number (or ITIN)2

If you’re unable to get a Social Security number, you may still be able to apply for a credit card by using an Individual Taxpayer Identification Number, a tax-processing ID number assigned to individuals by the Internal Revenue Service.

Depending on the bank or credit card company, you can sometimes use an ITIN instead of a Social Security number when applying for a credit card. There are a few easy ways to apply for an ITIN.

By mail.

Through an IRS-authorized certified acceptance agentin the U.S. or abroad.

At a designated IRS taxpayer assistance center.

After applying you should hear back from the IRS within a few weeks if you qualify and your application is complete.

2. Choose banks that accept an ITIN or alternative identification3

Credit card issuers aren’t required to ask for a Social Security number on the card application, but many do anyway. The good news is that some issuers will accept an ITIN instead. Here’s a quick rundown of issuers and where their policy currently stands on this:

Capital One

Accepts ITIN or SSN only. Learn more.

SelfScore Classic MasterCard

Does not require a SSN or ITIN. Will request your passport, U.S. student visa, most recent Form I-20 and latest U.S. bank account statements. Available only to international students studying in the U.S. Learn more.

Deserve

No SSN required for International students. Credit limits up to $5,000, $0 annual fee & no foreign transaction fees and no security deposit or co-signer required. Learn more.

3. Consider a prepaid card

If you can’t yet get approved for a credit card but still want a safer and more convenient way to pay than cash, a prepaid card could be the answer to your prayers — or at least a good payment alternative in the meantime.

While they aren’t technically credit cards, prepaid cards offer a way to keep your money in one place and pay with plastic when that’s the best and easiest option. Prepaid cards can be used in the same ways you might use a traditional credit card — to pay bills online, dine out or book an airline ticket.

The only drawback is you generally can’t build credit with a prepaid card, because your payment history typically isn’t reported to the major credit bureaus.

Financing or leading a vehicle.

Being new to the U.S. can come with a number of challenges when it comes to building credit and getting around. That where we come in, however. IAS can help you start building credit and driving record when relocating to the U.S. Our exclusive vehicle financing and leasing programs view you as a privileged customer starting with a high credit rating and safe driving record, allowing you to get the car you need while also building your credit record and driving history.

Learn more and download our free guide about why it’s important for international students to start building their credit record and driving history in the USA.

You can also learn more about how IAS can provide vehicle financing, leasing and all-inclusive rentals with no credit history.

We are the vehicle experts for expats.

IAS helps you prepare and plan for your move by getting you behind the wheel so you can be productive and focus on what you are here for your studies. Our expertise in the automotive industry has helped over 50,000 foreign nationals get settled into their new countries, careers, schools, and internships with a vehicle that fits their needs. Our Product Specialists are expert consultants, trained to identify your needs and use their extensive knowledge of the automotive market to find the right vehicle for your lifestyle and budget.

Sources:

1. “What’s in my FICO® Scores”https://www.myfico.com/credit-education/whats-in-your-credit-score

2. “How do I apply for an ITIN?” https://www.irs.gov/credits-deductions/individuals/how-do-i-apply-for-an-itin

3. “How to apply for a credit card without a Social Security Number” https://www.creditkarma.com/advice/i/credit-card-without-a-social-security-number/

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usalibertynews · 8 days

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visawords · 4 years

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The Miracle Of Capital One Student Credit Card | capital one student credit card

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creditmonkey · 5 years

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International Credit Reporting: The United States vs. United Kingdom

While credit scoring systems in the United Kingdom and the United States are similar in many ways, there are some significant differences. While a credit score might seem like something that should easily travel with you across the pond, the frustrating truth is it doesn’t – meaning you have to start building credit from scratch if you immigrate. Why are credit systems different from country to country? According to Equifax UK: “This is partly due to having different data protection laws in different countries, and also the fact that agencies will hold information that relates to addresses in that particular country.” Here are some of the major differences – and similarities – between the UK and US credit systems. Table of Contents How lenders and bureaus identify youThe differences between credit bureausCredit scoring ranges and models usedHow lenders use your credit scoreWhether closing an account helps or hurtsThe impact of income and savings on creditHard vs soft credit inquiriesFinancial associates vs. cosigners

How lenders and bureaus identify you

In the UK, lenders and credit bureaus verify your identity by using the information from your electoral register. This register contains the personal information of everyone who is registered to vote in public elections. It includes your name and address, date of birth and an electoral number, and is used to determine what constituency you are in and where to send ballot cards. Unlike in the UK, you get no direct financial benefit from registering to vote in the US. Instead, lenders and credit bureaus use your Social Security Number (SSN) to identify you. A Social Security Number is a nine-digit number issued to US citizens, permanent residents and temporary residents. This number should never be shared with anyone and is a unique identifier that identifies you for cases of employment, credit access and monitoring, transactions with financial institutions and more. To find out more about Social Security Numbers and the role they play in building credit and filing taxes in the US, check out the blog on “Can You File Taxes Without a Social Security Number?”

The credit bureaus – same but different

The major bureaus in the United Kingdom are Experian, Equifax and TransUnion. The major bureaus in the United States are Experian, Equifax and TransUnion. Yes, they are the same companies operating on both sides of the pond. However, your UK credit history does not translate to the US, and vice versa. In both countries, these credit bureaus collect information about your credit history and credit behaviors, as well as personal information. However, that’s pretty much where the similarities stop. Among other things, how these bureaus interact with and provide information to lenders differs between the two countries. Perhaps the most noticeable difference when it comes to the interaction between lenders and credit bureaus? Credit scoring – how it’s used, how it varies, and the credit scoring ranges themselves.

Credit scoring ranges and models used

The best way to explain the difference in credit scoring and the models used, which could easily be a novel unto itself, is to break it down, country-by-country. Let’s start with a reminder about how your credit score works in the UK.

Credit scoring in the UK

In the UK, lenders often have their own credit scores based on their own models and don’t use the scores provided by the credit bureaus. The scores and ratings at the credit bureaus are, instead, almost strictly used for educating the consumer about their credit. According to Experian UK: “Each company may consider different information when working out your score, depending on their criteria and what data they have access to. They may also differ in how they see your information – for example, a certain record on your report could look negative to some companies and positive to others, depending on what they’re looking for in a customer. So, your score will probably vary between the different credit reference agencies and companies.” Nowhere is this variation more obvious than if you look at the scoring systems from bureau to bureau in the UK. “There’s no such thing as a universal credit score, each credit score is created by lenders or credit reference agencies as a way of measuring an individual’s creditworthiness. Scores from different sources will be calculated using different formulas and criteria. They will also be rated on different scales, e.g. 1 to 700 or 1 to 1000. This is why you might get 500 on one scale and 700 on another, even if the information provided is the same,” the Equifax UK website mentions in their post on understanding credit score ranges. Here’s a breakdown of the credit scoring ranges in the UK… Experian UK Credit Score Range: 0-999

Source Equifax UK Credit Score Range: 0-700

Source TransUnion UK Credit Rating Range: 1-5

Source It’s important to note though, that TransUnion recognizes a difference between your credit rating and your credit score. We’ll get to that in a minute. Difference between credit rating and credit scoring From there, the differences get even more pronounced, since, according to TransUnion UK, there’s also a difference between your credit rating and your credit score in the UK: “Don’t get your credit rating confused with your credit score. While they are similar, they’re not exactly the same and how your credit score is assessed by lenders is for them to determine, based on the information in your credit file.” The TransUnion credit rating system in the UK provides simply an indication of the type of credit risk you might pose to lenders, based on the following factors: How much you oweYour payment history (including late payments)The length of your credit historyBankruptcies and insolvenciesElectoral registry informationYour financial associates These elements are, for the most part, very similar to what goes into your US credit score, with a few minor differences. While credit bureaus in the UK share many differences, these bureaus do agree on a few things when it comes to maintaining a positive credit history and credit score, as evidenced by the following factors that impact your credit score on the Equifax site: Info on credit report (ie how much available credit you’re using)Payment history on credit accountsHard inquiries/when/how often you apply for creditPublic records (electoral register and county court judgments) US credit scoring ranges and models In the US, however, the credit score ranges are similar across credit reporting agencies, and your credit score does impact lending decisions. Here, credit scores range from 300-850 at each of the three major credit bureaus (Experian, Equifax and TransUnion), with the highest number being the best your score can get. Here’s an idea of what “good” looks like when it comes to U.S. credit scores, according to Experian.

While there are different types of scoring models used in the US (including various versions of the FICO score and the VantageScore), the FICO model is used by roughly 90% of lenders. The major scores however, all use the 300-850 scale. “The FICO Score helps lenders make accurate, reliable and fast credit risk decisions across the customer lifecycle. The credit risk score rank-orders consumers by how likely they are to pay their credit obligations as agreed. The most widely used, broad-based risk score; the FICO Score plays a critical role in billions of decisions each year,” credit expert Barry Paperno says. While some of the newer credit scoring models are starting to incorporate things like rent or utilities payments, in general, only certain accounts factor into your credit score in the US. These accounts typically include: Credit cards (secured and unsecured)Personal loansAuto loansMortgage loansCertain other loans Unlike in the UK, where utilities and rent are commonly taken into account when modeling your credit, these accounts do not typically report in the US. Even some loan products here(usually predatory in nature) do not report to the credit bureaus. It’s also important to keep in mind that lenders do not necessarily report to – or receive information from – all three credit bureaus. So if you have a question about whether or not your US credit account will report to the credit bureaus, and which of the bureaus it will report to specifically, be sure to ask. Ultimately, to gain access to the most competitive credit products in the US, it’s important to build credit at all three reporting bureaus. How do you do this? A good starting point is to understand the five factors that go into your US credit score. These vary slightly from score model to score model, but in general are found across all scoring models. Here they are in order of importance: Payment historyAmounts owedNew credit applications and hard inquiriesLength of credit historyTypes of credit used For more information on these five factors, check out “5 Components of a Credit Score.” For more on how to build credit in the US, be sure to check out our blog post on “5 Ways New Immigrants Can Build American Credit.”

How lenders use your credit score

In the US, the credit bureaus provide lenders with access to your credit score, though it’s up to the lender which bureau they pull your score from. While your credit score is not the only thing that determines a lender’s perception of your credit worthiness, it does have an impact. Unlike the UK, where each lender has their own separate scoring model, in the US, most lenders use some version of either the FICO score or VantageScore models, with roughly 90% of lenders using the FICO model. While the scoring range (300-850) is the same across the major bureaus, the specific scoring model could vary slightly, impacting that score from bureau to bureau and lender to lender.

Whether closing an account could help or hurt

In the UK, there’s a bit of a discrepancy between whether or not closing your accounts could help or hurt, depending on the lender. As mentioned previously in this post, what some lenders in the UK may view as a positive, others may view as a negative, so it depends on the lender. According to Equifax UK, “Close any unused credit accounts, as having a large overall credit limit may be viewed negatively by lenders.” TransUnion UK also recommends that you close down outdated credit cards and cancel old agreements. However, Experian UK urges the opposite: “Try to keep old, well-managed accounts. Credit scoring looks at the average age of your bank accounts, so try not to chop and change too much.” In the States, no matter which scoring model or bureau you’re looking at, the experts agree – keep your old accounts open where possible, since the length of your average credit history counts for 15% of your FICO credit score. Having a large overall credit limit, compared to the amount of credit you use, is also considered a positive in the States, even though having a large credit limit is sometimes viewed negatively in the UK.

Neither credit system counts income or savings

“It’s worth noting that your Experian Credit Score won’t be affected by things like your income, savings, employment, or health expenses, because this information isn’t recorded on your credit report. However, companies may ask questions about these factors when you apply for credit, and may use these details when calculating their own version of your score,” Experian UK mentions in a consumer guide. The same holds true for credit scoring in the US. While individual lenders will factor in your debt-to-income ratio (the percentage of debt you have as opposed to how much money you make) when making lending decisions, this ratio does not play a role in determining your credit score. In the US, a general rule is to keep this debt-to-income ratio to below 30% if possible. Otherwise, lenders might view you as having too much debt to responsibly and reliably pay back what you owe them.

Hard vs. soft credit inquiries are the same

Whether you live in the US or the UK, hard and soft credit inquiries are the same in both. A hard credit inquiry happens whenever you apply for a new line of credit. In the States, the number of credit applications you complete within a given time period counts for 10% of your FICO credit score. Each time you have a hard inquiry on your credit report, it drops your credit score by at least a few points. In both countries, you must give your consent before a company can do a hard inquiry (sometimes known as a hard pull) on your credit. A soft inquiry happens when either you or a company reviews your credit score or report for educational purposes only, and not in order to make lending decisions. This type of inquiry does not impact your credit score.

Financial associates vs. cosigners - similar but different

In the UK, a financial associate means someone you share either a bank account or credit account with, whether that’s a spouse or someone else. According to Experian UK, a financial associate’s credit history doesn’t appear in your credit report, but lenders can view it when you apply for credit. This is because your financial associate’s circumstances may impact your ability to repay what you borrow. “Lenders could take a financial associate’s financial behaviour into account even if you’re applying for new credit on your own. If your associate has poor credit history, this could potentially impact your ability to obtain a new credit agreement,” Equifax UK writes. In the US, a cosigner is someone who specifically signs up for a loan with you. For example, you and your spouse take out a mortgage together, or your parent cosigns on a car loan with you that you might not qualify for on your own. In the case of a cosigner, only their behavior on your joint credit account impacts your personal credit, not their financial behavior in general. So while the account you have with them could impact your overall credit score and credit history, as long as your cosigner manages your joint account responsibly, their behavior on their other credit accounts will not impact a lender’s decision regarding whether or not to extend you credit. The similarity between financial associates and cosigners? In both cases, you’re entrusting someone else with power over your credit. So choose these people wisely.

Final thoughts

While credit systems in any country can seem confusing if you don’t understand their nuances, it’s important to understand how best to be financially successful in your new home. That way, you’re more able to take advantage of premium financial products and services, and be less susceptible to predatory or less favorable options. About the author Lauren Jackson is the Content Marketing Manager for Self Lender and editor of their blog. She has a background writing about tech, wellness, women’s issues, and now – personal finance. She's passionate about the intersection of business and social good and devoutly dedicated to budget travel. She believes you can have an amazing life – even if you don't have the best health or the most wealth. Read the full article

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un-enfant-immature · 5 years

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Amazon’s new rewards card targets those with bad credit

Amazon this morning announced the launch of Amazon Credit Builder, a new secured credit card offered in partnership with Synchrony Bank. As the name implies, the card is aimed at those who are looking to build their credit history — either to recover from bad credit or to establish new credit. Like other credit products Amazon has launched, the card’s big perk is cash back on Amazon.com purchases — in this case, 5% back on purchases if the cardholder is a Prime member.

The Credit Builder card also has no annual fee, offers special financing on purchases, and includes protection from unauthorized charges. As a secured card, Amazon Credit Builder requires that cardholders submit a refundable security deposit in order to get a line of credit from the bank. This funding isn’t available for purchases made with the card, but rather serves as a way to establish a credit limit.

The deposit can range from $100 to $1,000, says Amazon, and is submitted either by electronic transfer (ACH transfer on Amazon) or via mail.

To pay off purchases, the card is unique in that it allows customers to either choose to make 12 months of equal payments or 6/12/24-month 0% periods for select purchases.

Also a part of the product is the ability for cardholders to track their credit improvement over time as they use the card to make purchases on Amazon.com.

The cardholders receive access to their own personal TransUnion CreditView Dashboard, where they can view their VantageScore credit score for free, use a simulator to understand how different activities will impact that score, get fraud alerts, and access credit education to help them further improve their credit score.

Other financial education provided by Synchrony is also available.

Amazon says that Credit Builder customers may become eligible for an upgrade to the Amazon Store Card after as little as seven months after opening the Credit Builder account, at which time their initial security deposit would be refunded.

Typically, secured credit cards are offered to people looking to improve their credit — but it’s unusual for a retailer to provide their own secured card. For Amazon, however, offering credit to the under-banked or unbanked is another way of expanding its business to a broader market.

Like many online retailers today, Amazon believes that shopping online shouldn’t be a privilege only for the middle class and up. After all, e-commerce sites may often have better deals than brick-and-mortar stores, and the convenience of shopping online can help customers save both gas money and time — the latter a particular issue for those working multiple jobs to make ends meet.

To cater to the under-banked and low credit customers, Amazon already offers a low-cost version of Amazon Prime for those on government assistance programs in the U.S., including including Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC) and, as of last year, Medicaid.

More recently, it and other retailers like Walmart began participation in a USDA trial focused on allowing SNAP recipients to shop for groceries online.

While Amazon’s new card may make sense for those on a path to building better credit, it may be better for those who are looking to upgrade to the Amazon Store Card in the future, rather than simply repair their poor credit history.

The card, consumers should note, carries a high APR of 28.24% — higher than the average median APR for retail cards (25.64%).

“This is a solid option for people who are new to credit or rebuilding their credit after prior missteps, but there are some risks to be aware of,” notes Ted Rossman, Industry Analyst for CreditCards.com.

“It’s always important to pay your credit card bills in full, and that’s especially true with this card. The interest rate is very high – 28.24% – and if you fail to pay a 0% promotional offer in full by the time the term expires, you’ll be charged retroactive interest on the average daily balance going back all the way to the original purchase date,” he says.

However, Rossman concludes that when the card is used properly, the card could be useful in improving credit while receiving the cash back perk.

Customers can visit the Amazon Credit Builder page to sign up for the card.

#TechCrunch

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personalcoachingcenter · 5 years

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How to Cancel a Credit Card Without Dinging Your Credit Score

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How to Cancel a Credit Card Without Dinging Your Credit Score

You’ve heard the advice: Never cancel a credit card account or you could damage your credit scores. And while it is true that closing a credit card can be hard on your credit scores, that isn’t always the case.

Typically, it’s best to leave your credit cards open, even if you’re not using them. However, there are a few valid reasons why you may want to close a credit card account. Keep reading for a breakdown of how to cancel a card the right way.

Key Takeaways

Although it goes against general credit advice, in certain circumstances closing a credit card account is necessary.

A credit card can be canceled without harming your credit scores, if you know what you’re doing.

Closing a credit card will not shorten the age of your credit history.

Follow a checklist when canceling a credit card.

Canceling a Credit Card Without Harming Your Scores

There’s a reason why credit experts advise against closing unused credit cards. Beverly Harzog, credit card expert and consumer finance analyst for U.S. News & World Report, explains, “Canceling a credit card has the potential to reduce your score, not increase it.”

This potential score drop often occurs because closing a credit card can impact your credit utilization ratio. The ratio measures how much of your total available credit is being used, according to your credit reports. The more available credit you utilize (per your reports), the worse the impact will be on your scores. Here’s a simple example of how closing a $0 balance credit card could backfire.

Credit card number one has a $1,000 limit and a $1,000 balance.

Credit card number two 2 has a $1,000 limit and a $0 balance.

Your credit utilization on both cards combined is 50%. ($1,000 total balances + $2,000 in total limits = 50% utilization.)

Close credit card number two and your credit utilization jumps to 100%. ($1,000 total balances + $1,000 total limits = 100% utilization.)

You should aim to pay your credit card balances off in full every month. Doing so not only protects your credit scores; it can also save you a lot of money in interest.

Ideally, you should pay off all of your cards every month, but this is especially important before closing a credit card account. Provided all of your credit cards show $0 balances on your credit reports, you can close a card without hurting your scores.

By closing a credit card, you risk increasing your credit utilization ratio and harming your credit scores.

Reasons for Canceling a Credit Card

Canceling a credit card is usually a bad idea. Nevertheless, there are some circumstances in which a card cancellation could be in your best interest. Here are three.

Separation or Divorce

It’s best to close joint credit card accounts during a separation or divorce. As a joint card holder, you’ll be liable for any past or future charges made on the account. It’s not uncommon for an angry ex to run up excessive charges on a joint card out of spite.

If that happens—or even if routine spending occurs on a joint account after separation—the charges will be your responsibility as well. Your divorce decree might say your former spouse is responsible for the debt, but that won’t release you from your obligation in your lender’s eyes.

High Annual Fees

If your card issuer charges you a high annual fee for an account you don’t use, cancellation might be warranted. However, consider the following first.

If you receive benefits from the account that outweigh the annual fee, such as travel credits and perks, it might be well worth the cost. An annual fee on a credit card you don’t use or benefit from is another story.

Before you cancel the account, try calling your card issuer to ask for the annual fee to be waived. Be sure to mention that you’re considering closing your account. It doesn’t hurt to ask, and you might be pleasantly surprised.

Too Much Temptation

Some people find the temptation of using credit cards too much to resist. And while this might be a valid reason to close a card for some, there are other alternatives you can try to curb overspending without sacrificing your credit scores.

For example, you could remove your credit cards from your wallet and store them in a safe place. By not having your cards readily available, you may find the temptation easier to resist.

Cancellation Checklist

When canceling a credit card, here are six simple tips to help you navigate the process.

Redeem unused rewards on your account before you call to cancel.

Ideally, pay off all of your credit card accounts to $0 before canceling any card. At the very least minimize your balances as much as possible.

Call your credit card issuer to cancel and confirm that your balance on the account is $0.

Mail a certified letter to your card issuer to cancel the account. In it ask for a letter confirming your $0 balance and closed account status to be mailed to you in return.

Check your three credit reports 30 to 45 days after cancellation to make sure that (a) the account reports as closed by cardholder and (b) your balance is $0.

Dispute any incorrect information on your reports with the three credit bureaus.

Closing a Credit Card Won’t Shorten Your Age of Credit

You may have heard that closing a credit card causes you to “lose credit” for the age of the account. and hurts your age of credit (worth 15% of your FICO score). That is a myth.

Credit expert John Ulzheimer, formerly of FICO and Equifax, confirms that closing a credit card will not remove it from your credit reports. Furthermore, Ulzheimer states, “As long as the credit card remains on your report, you will still get the value of the age of the account in both the FICO and VantageScore branding credit scoring models. The only way to lose the value of the age of the card is if it’s removed from your reports.”

A closed account will remain on your reports for up to seven years (if negative) or around 10 years (if positive). As long as the account is on your reports, it will be factored into your average age of credit. FICO itself confirms that “the FICO Score considers the age of both open and closed accounts.”

The Bottom Line

Don’t close a credit card account without a good reason. Having a lot of credit cards won’t necessarily hurt your credit scores significantly if you handle them responsibly. However, if you need to cancel a card, do your best to reduce all your credit card balances first (preferably to $0), so you can either minimize or totally avoid any credit score damage.

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robertfuscocom · 4 years

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How Healthy is Your Credit Score?

Your credit score is one of the most critical numbers in your financial life. Whether you’re applying for a new credit card, personal loan, or a mortgage, it is vital to know your credit score so that you have the proper insight into what type of credit you qualify for and what interest rates you can anticipate. But what exactly is your credit score, and what does it consist of?

Below, we’ll discuss all the ins and outs of your credit and what you need to know about your credit score.

What is a Credit Score?

A credit score is a three-digit number, ranging from 300 to 850, that serves as an evaluation of your credit history and estimates how likely you are to repay borrowed money.

When determining your credit score, many different things are considered, such as payment history and duration of credit history, from your present and past credit reports, which we will discuss shortly.

While a low credit score may not prevent you from being eligible for credit, you may be forced to pay higher interest rates or place a considerably more substantial amount of money on deposit.

In some instances, you might also need to pay more for car insurance or put down more significant deposits on utilities. Landlords may also use your credit score to determine whether or not you are a suitable renter.

A high credit score, on the other hand, can grant you access to many more types of credit products. Additionally, you are also eligible for reduced interest rates and lower deposits.

Borrowers with credit scores above 750 also frequently have many financial possibilities, including the chance to qualify for 0% financing on automobiles, as well as credit cards with 0% introductory interest rates.

What are the Credit Score Ranges?

While each creditor has its own set of criteria for what constitutes a good credit score, the general guidelines can be found below:

Excellent Credit: 720-850

Good Credit: 690-719

Fair Credit: 630-689

Poor Credit: 629 or below

The most commonly used credit score model is the VantageScore. Although all three credit bureaus use VantageScore, each bureau looks at different factors, so a consumer’s score can vary depending on which credit bureau supplied the data.

Where Does the Information from a Credit Score Come From?

The three major credit reporting agencies – Equifax, Experian, and TransUnion – provide the information on your credit account. These agencies use the information to create the credit score, which is then provided to lenders when evaluating loan applicants.

So what does a credit score consist of? Let’s take a look.

Payment History

Payment history accounts for 35% of most credit scores. A history of missed or late payments lowers your credit rating more than any other factor. When determining your score, creditors look at how recently you missed a payment or were late on a payment, as well as the number of accounts that have previously been overdue.

For a good credit score, you need to have as clean a payment history as possible with no or few late payments.

Charge Utilization Ratio

Credit utilization is responsible for 30% of most credit scores. Your credit utilization ratio is the amount of credit that you’ve used, divided by your total available credit limit

For example, if you have multiple credit cards with a combined credit limit of $8,000 and a balance of $3,000, then your credit utilization ratio is 37.5%.

To have a good credit score, your credit utilization ratio should be roughly 30% or less. Most experts recommend 10%.

Credit Age

Credit age is used to calculate 15% of most credit scores and refers to how long you’ve used credit. More accurately, credit age is the age of the oldest account, latest accounts, and average ages of all accounts on your credit file.

For a good credit score, you should have at least one account in your credit file that’s at least six months old.

Account Mix

Account mix makes up 10% of most credit scores and refers to how many credit accounts you have. Account mix can consist of things such as mortgages, car loans, or personal loans. Revolving accounts such as credit cards and lines of credit are also considered.

For a good credit score, most lenders prefer borrowers who have a diverse combination of accounts in their credit history.

Credit Inquiries

Credit inquiries, classified into hard and soft, are used to determine 10% of most credit scores.

Hard inquiries occur when a creditor looks at your credit report because you have applied for a line of credit and can reduce your credit score by 5 to 10 points for as much as two years.

Soft inquiries, which refer to instances where you or a lender check your credit score, however, don’t affect your credit score.

While this category only accounts for 10% of your credit score, try to minimize credit inquiries as much as possible.

How Can I Improve My Credit Score?

Now that you have a better understanding as to what makes up your credit score, let’s take a look at a few ways you can start improving your credit score today.

Pay Your Bills On Time

Payment history is the most potent factor for your credit score, which is why you should always stay on top of your monthly payments. If you have a difficult time remembering to make payments, create a calendar reminder on your phone or opt to enroll in automatic payments.

If you have a SmartCredit account, you will also receive alerts for upcoming payments before they are due. This will help you avoid hits to your credit score from late payments.

Regularly Monitor Your Credit Score

Identity theft and reporting errors can quickly derail your credit score. Be sure to check your credit report throughout the year to ensure no unusual or fraudulent activity is occurring.

If you catch anything inaccurate on your report, follow the proper measures to dispute the error as soon as possible.

Consider Your Credit Mix

Lastly, credit scores take into account your ability to manage different kinds of credit. If you think your credit combination needs to diversify, consider taking on a low-interest rate loan that you know you will be able to pay on time.

Be Strategic About New Debt

While it’s smart to have a healthy mix of credit, too many hard inquiries over time may indicate that you are taking on more debt than you can manage, which can negatively affect your credit score.

However, provided that you continue to show that you’re a responsible borrower, your score should return to normal over time.

View Your Credit Score with SmartCredit Today

As you can see, credit scores are a quick way for lenders to predict consumer credit risk and credit behavior. Considering the importance of your credit score, it’s vital that you do everything you can to keep it in good standing.

If you want to take back control of your credit score, contact SmartCredit today to see where your credit stands. Find out what proactive steps you can take to start improving your credit score right away with SmartCredit.

The post How Healthy is Your Credit Score? appeared first on SmartCredit Blog.

from https://blog.smartcredit.com/2020/09/15/how-healthy-is-your-credit-score/

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colineppscom · 4 years

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How Healthy is Your Credit Score?

Below, we’ll discuss all the ins and outs of your credit and what you need to know about your credit score.

What is a Credit Score?

A credit score is a three-digit number, ranging from 300 to 850, that serves as an evaluation of your credit history and estimates how likely you are to repay borrowed money.

While a low credit score may not prevent you from being eligible for credit, you may be forced to pay higher interest rates or place a considerably more substantial amount of money on deposit.

A high credit score, on the other hand, can grant you access to many more types of credit products. Additionally, you are also eligible for reduced interest rates and lower deposits.

What are the Credit Score Ranges?

While each creditor has its own set of criteria for what constitutes a good credit score, the general guidelines can be found below:

Excellent Credit: 720-850

Good Credit: 690-719

Fair Credit: 630-689

Poor Credit: 629 or below

Where Does the Information from a Credit Score Come From?

So what does a credit score consist of? Let’s take a look.

Payment History

For a good credit score, you need to have as clean a payment history as possible with no or few late payments.

Charge Utilization Ratio

Credit utilization is responsible for 30% of most credit scores. Your credit utilization ratio is the amount of credit that you’ve used, divided by your total available credit limit

For example, if you have multiple credit cards with a combined credit limit of $8,000 and a balance of $3,000, then your credit utilization ratio is 37.5%.

To have a good credit score, your credit utilization ratio should be roughly 30% or less. Most experts recommend 10%.

Credit Age

For a good credit score, you should have at least one account in your credit file that’s at least six months old.

Account Mix

For a good credit score, most lenders prefer borrowers who have a diverse combination of accounts in their credit history.

Credit Inquiries

Credit inquiries, classified into hard and soft, are used to determine 10% of most credit scores.

Hard inquiries occur when a creditor looks at your credit report because you have applied for a line of credit and can reduce your credit score by 5 to 10 points for as much as two years.

Soft inquiries, which refer to instances where you or a lender check your credit score, however, don’t affect your credit score.

While this category only accounts for 10% of your credit score, try to minimize credit inquiries as much as possible.

How Can I Improve My Credit Score?

Now that you have a better understanding as to what makes up your credit score, let’s take a look at a few ways you can start improving your credit score today.

Pay Your Bills On Time

If you have a SmartCredit account, you will also receive alerts for upcoming payments before they are due. This will help you avoid hits to your credit score from late payments.

Regularly Monitor Your Credit Score

Identity theft and reporting errors can quickly derail your credit score. Be sure to check your credit report throughout the year to ensure no unusual or fraudulent activity is occurring.

If you catch anything inaccurate on your report, follow the proper measures to dispute the error as soon as possible.

Consider Your Credit Mix

Be Strategic About New Debt

While it’s smart to have a healthy mix of credit, too many hard inquiries over time may indicate that you are taking on more debt than you can manage, which can negatively affect your credit score.

However, provided that you continue to show that you’re a responsible borrower, your score should return to normal over time.

View Your Credit Score with SmartCredit Today

The post How Healthy is Your Credit Score? appeared first on SmartCredit Blog.

from SmartCredit Blog https://blog.smartcredit.com/2020/09/15/how-healthy-is-your-credit-score/ source https://smartcredit1.tumblr.com/post/629318164730232832

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cassh24sg · 3 years

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How to get a credit card with no credit

CNN –

CNN Underscored checks financial products like credit cards and bank accounts based on their total value. We may receive a commission through the LendingTree partner network when you apply for a card and are approved, but our reporting is always independent and objective.

Credit building can seem impossible when you are just starting out, and this is especially true when you have no credit at all. That’s because credit card issuers and lenders, by and large, shy away from consumers with no credit history because they cannot assess your creditworthiness and have no idea how to handle credit if you had access to it.

Fortunately, there are some unique credit card products aimed at consumers with limited credit history or no credit history at all. So, if you don’t have a credit history but want to get a credit card, it is time to learn more about your options. Let’s see how to get a credit card with no credit history and what other steps you can take to build credit over time.

For the latest list of the best credit cards for those with no credit history, click here.

Not having a credit history is different from having bad credit. Bad credit means you have had a history of credit abuse, while a lack of credit history means you never had access to credit, so your credit report will not include any credit movements. Without information about your credit reports, lenders will not know enough about you to assess your creditworthiness.

Also, having no credit history doesn’t mean you have a zero credit score. This is an important difference as a zero credit rating is not even possible based on the most popular credit rating systems. If you don’t have a credit history then you simply don’t have a credit history.

However, once you start using credit, the credit bureaus have information that they can use to calculate a credit score for you. The most widely used type of credit score is the FICO score, which ranges from 300 to 850, with higher scores being far superior:

Exceptional: 800 and higher

Very good: 740 to 799

Good: 670 to 739

Mass: 580 to 669

Bad: 579 and lower

If you’re not sure whether you have a credit history or a credit score, you can find out for free on AnnualCreditReport.com, which provides a free report once a year from each of the three major credit bureaus. This is the only official website that offers free credit reports. So make sure you use the correct link when requesting a report.

After reviewing your credit report, if you have information about it, you can determine whether there is enough data to calculate a credit score for you. While there is no official creditworthiness website as there is for credit reports, luckily there are many ways you can do a credit check for free.

You can start by signing up with a credit monitoring service that offers a free credit score or a program that offers free credit tracking tools. For example, Capital One’s CreditWise gives consumers a free look at their TransUnion VantageScore 3.0, and you don’t have to be a customer to use it.

Connected: How can you check your credit score for free?

Without any credit history, you are only eligible for a select few types of credit cards. The first is a secured credit card, which is a credit card that requires a cash deposit as security.

When you apply for a secured credit card, your initial deposit is typically $ 200 or more and the money you put on deposit will be used to secure your line of credit. This also means that your initial credit limit is usually low. In fact, a $ 200 deposit usually means an initial line of credit of $ 200, a deposit of $ 500 means an initial credit limit of $ 500, and so on.

iStock

Even people without a credit history have options for obtaining a credit card.

The good news is, with a secured credit card, you will get your deposit back if you close your account in good condition (i.e. you have paid back any funds used up to that point). This applies regardless of whether you close your credit card account with a balance of USD 0 or upgrade your card to an unsecured option from the same issuer.

There are also some unsecured card options for those with no credit history, which means you don’t have to deposit any cash, but they are few and far between. Unsecured credit cards for those with no credit history usually come with low credit limits and potential fees, although this is not always the case. However, if you don’t have a credit history and are looking for an unsecured credit card, make sure you choose one that doesn’t come with high fees.

Check to see if you qualify for one of these credit cards for those with no credit history.

Before applying for a credit card without a credit history, there are a few key questions you need to ask yourself:

Have I checked my credit report and score? Don’t assume that you don’t have a credit history without taking the time to check it out. It is possible that you have information about your credit report from financial institutions that you have worked with in the past and that you have a credit rating as a result.

Am I willing to leave a cash deposit as security? A secured credit card is often the easiest way to start building a loan, although you will have to put up with collateral. If you don’t have a lot of cash to spare, look for secure card options that only allow you to deposit $ 49.

Am I ready to take construction loans seriously? Before getting a credit card, make sure that you are ready to prove your creditworthiness. This usually means that you are able and willing not to hit your credit card limit and pay your credit card bill on time and ideally in full each month.

Another way to build your credit score is to make someone else with an existing credit card – such as a family member – an authorized user for their account. This means your account will appear on your credit report and you will benefit from their good credit history.

However, if that person abuses their credit, the resulting negative mark may appear on your report as well. So make sure you choose a person who will be responsible for their own credit.

Save money with these credit card offers for those with no credit history.

Without any credit history, your credit card options are limited and, frankly, not that great. However, it is important to know that some credit card offers are exceptionally better than others for those without credit. When comparing all of your options, here are some pitfalls to avoid:

fees: Avoid credit cards that charge registration fees, monthly maintenance fees, or high annual fees. There are many secured credit cards with no annual fee as well as unsecured credit cards that you may be eligible for and that do not have an annual fee.

High annual percentage rateCredit cards for bad or no credit usually have much higher interest rates or annual percentage rates. Choosing a card with a high APR may be fine, but you should strive to pay off your credit card balance in full each month so that you can avoid interest charges altogether.

Yourself: Make sure you are ready to avoid serious credit mistakes in the first place. Most importantly, you have to pay your credit card bills early or on time each month. Also, avoid exhausting your available credit.

Compare available credit card offers for those with limited credit history.

iStock

A new credit card can help you build a credit history and open the doors to new credit options.

Whether you choose a secured credit card or an unsecured credit card, you want to know how best to use your card to your advantage so that you can start building a credit history. Your first step is to know and understand the factors that go into determining your creditworthiness. Here are the factors used by the credit reporting agencies to calculate a FICO credit score:

Payment history: 35%

Amounts owed: 30%

Loan History Duration: 15%

New credit: 10%

Credit mix: 10%

As you can see, your payment history is the largest part of your credit score at 35%. So the most important thing you can do is pay your credit card bill early or on time each month. No exceptions!

The second most important factor is the amount you owe in relation to your credit limit – this is 30% of your creditworthiness. In general, it’s best to use 10% or less of your available credit at any given time, but no more than 30% if you want good credit.

This means that you won’t have more than $ 50 to $ 150 in debt if you have a credit card limit of $ 500, and only $ 20 to 60 in debt if your credit limit is $ 200. Since your first credit card is likely to have a low credit limit, you should take extra care to keep your balance very low or $ 0 for the best results.

The next factor – the length of your credit history – is one that you can only improve on over time. New loan is based on how many lines of credit you have applied for in the recent past, and you can do well in this category by avoiding opening too many new accounts at once.

After all, your credit mix is another factor that can take care of itself over time. Once you have a credit history and good credit score, you can expand the range of credit products you need to include revolving accounts, installment loans, and maybe even a mortgage or car loan.

In the end, it can feel like a chicken-and-egg situation – how can you get a credit card to build your credit history when lenders don’t give you a credit card with no credit? History? But by strategically using secured credit cards, unsecured cards, and maybe even an authorized user account owned by a friend or family member, you can be on the right track and soon you will have a solid credit history and many more credit options to choose from.

Learn about the best credit cards you can get with no credit history.

Check out CNN Underscored’s list The best credit cards in 2021.

Get the latest in personal finance offers, news and advice at CNN Underscored Money.

source https://www.cassh24sg.com/2021/06/29/how-to-get-a-credit-card-with-no-credit/

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smartcredit1 · 4 years

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How Healthy is Your Credit Score?

Below, we’ll discuss all the ins and outs of your credit and what you need to know about your credit score.

What is a Credit Score?

A credit score is a three-digit number, ranging from 300 to 850, that serves as an evaluation of your credit history and estimates how likely you are to repay borrowed money.

While a low credit score may not prevent you from being eligible for credit, you may be forced to pay higher interest rates or place a considerably more substantial amount of money on deposit.

A high credit score, on the other hand, can grant you access to many more types of credit products. Additionally, you are also eligible for reduced interest rates and lower deposits.

What are the Credit Score Ranges?

While each creditor has its own set of criteria for what constitutes a good credit score, the general guidelines can be found below:

Excellent Credit: 720-850

Good Credit: 690-719

Fair Credit: 630-689

Poor Credit: 629 or below

Where Does the Information from a Credit Score Come From?

So what does a credit score consist of? Let’s take a look.

Payment History

For a good credit score, you need to have as clean a payment history as possible with no or few late payments.

Charge Utilization Ratio

Credit utilization is responsible for 30% of most credit scores. Your credit utilization ratio is the amount of credit that you’ve used, divided by your total available credit limit

For example, if you have multiple credit cards with a combined credit limit of $8,000 and a balance of $3,000, then your credit utilization ratio is 37.5%.

To have a good credit score, your credit utilization ratio should be roughly 30% or less. Most experts recommend 10%.

Credit Age

For a good credit score, you should have at least one account in your credit file that’s at least six months old.

Account Mix

For a good credit score, most lenders prefer borrowers who have a diverse combination of accounts in their credit history.

Credit Inquiries

Credit inquiries, classified into hard and soft, are used to determine 10% of most credit scores.

Hard inquiries occur when a creditor looks at your credit report because you have applied for a line of credit and can reduce your credit score by 5 to 10 points for as much as two years.

Soft inquiries, which refer to instances where you or a lender check your credit score, however, don’t affect your credit score.

While this category only accounts for 10% of your credit score, try to minimize credit inquiries as much as possible.

How Can I Improve My Credit Score?

Now that you have a better understanding as to what makes up your credit score, let’s take a look at a few ways you can start improving your credit score today.

Pay Your Bills On Time

If you have a SmartCredit account, you will also receive alerts for upcoming payments before they are due. This will help you avoid hits to your credit score from late payments.

Regularly Monitor Your Credit Score

Identity theft and reporting errors can quickly derail your credit score. Be sure to check your credit report throughout the year to ensure no unusual or fraudulent activity is occurring.

If you catch anything inaccurate on your report, follow the proper measures to dispute the error as soon as possible.

Consider Your Credit Mix

Be Strategic About New Debt

While it’s smart to have a healthy mix of credit, too many hard inquiries over time may indicate that you are taking on more debt than you can manage, which can negatively affect your credit score.

However, provided that you continue to show that you’re a responsible borrower, your score should return to normal over time.

View Your Credit Score with SmartCredit Today

The post How Healthy is Your Credit Score? appeared first on SmartCredit Blog.

from SmartCredit Blog https://blog.smartcredit.com/2020/09/15/how-healthy-is-your-credit-score/

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financialthreesixfive-blog · 6 years

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What Is an Excellent Credit Report?

A lot of credit history-- consisting of the FICO rating and VantageScore 3.0-- operate within the variety of 300 to 850, and a great credit history is usually one that is 700 or above. Within that variety, there are various categories, from bad to outstanding. Even these numbers and varieties aren't set

in stone. Once again, that's due to the fact that lenders all have their own definition of what is thought about a great credit report. One lending institution that is aiming to authorize more customers might approve applicants with credit rating of 680 or higher. Another may be more selective and just authorize those with scores of 750

or greater. Or both loan providers might use credit to anybody with a score of at least 650, however charge consumers with scores listed below 700 a higher rate of interest! How Do I Rate? A great credit history is

what each of us desires. A credit rating is one of the most essential identifying aspects when it comes

toborrowing loan-- and getting a low rate when you do. However attempting to determine a specific number that implies your credit rating is"excellent"can be challenging. There are lots of various credit

ratings that loan providers use when attempting to decide whether to give you a loan. What one lending institution might see as a"good"score may fall under another lender's "reasonable" credit classification.( Not to discuss, you may score differently from

design to design.)Thankfully, there are broad guidelines of thumb that can assist somebody figure out whether their credit rating are good or not. Let's simplify. Requirement Credit Repair Work Assist? Lexington Law can help you get rid of unfavorable products on your credit reports For a FREE credit assessment What do Charge Card Companies Try To Find? Your credit scores are certainly one of the primary things that

credit business look for before

extending credit since they are excellent risk indicators. Credit card business will likewise take a close look at how lots of reported delinquencies youhave, how numerous hard inquiries were included to your credit file, your overall credit card usage rate, your yearly earnings, and the health of your credit history. While numerous things aspect into their decision, if you have an outstanding credit rating than your chances of being authorized are much greater than someone with a much lower credit report. If you have never had a credit card prior to however desire to get one to begin to construct and establish credit, then you should have a look at some of the best charge card for beginners. What is a FICO Rating? You have a FICO Credit History from each of the 3 significant credit bureaus: Equifax, Experian, and Transunion. Each of these credit rating is based upon various information that each of the credit bureaus has for you. And as discussed above, this offered

details may effectively differ from bureau to bureau. The Fair Isaac Corporation is who has actually created FICO credit rating and subsequently, these ratings are used by over 90%of lenders when it pertains to supplying you with a loan. They are also utilized when they approve the interest rates, regular monthly payments, and terms of each loan, and whether you are

authorized or not. All the information contained in consumer credit reports is then compared to find patterns, and the resulting FICO credit report is entirely identified by what is found on an individual's specific credit file. This info is what will then help estimate the level of future danger there may be if a loan provider encompasses you the offer of a loan or any other type of credit. Because the FICO credit report can just be figured out by info discovered in the person's credit file, it is vital to examine your credit reports each year to find any errors or disparities to guarantee that everything is precise and up to date. Click on this link to get more information about how you can acquire your complimentary annual credit reports. As a consumer, you are entitled to one free credit file disclosure from the three major credit bureaus every twelve months. What is a VantageScore? A VantageScore is a credit history design that emerged over a years earlier and was a joint venture between Experian, Transunion, and Equifax. The VantageScore design is utilized in contrast and takes on the Fair Isaac Corporations(

FICO )scoring design. When

determining if you are a great prospect for a loan or credit line, a loan provider will look at your credit rating. Many loan providers use FICO scores, but some lenders are starting to look at VantageScores as well to even more identify your future monetary risk if they were to extend an offer of credit to

you. Both of these scoring designs, however, utilize much of the same information such as the consumer's payment history, the length and kind of credit they have, the quantity of their credit usage, and how numerous recent difficult questions they have on their credit file. If the degree of your credit history is not lengthy, then you may want to start closely monitoring your VantageScore since a FICO Score will require a minimum of 6 months of credit history as well as a minimum of one reported account within the last 6 months. The Credit Rating Range Scale There are various credit report readily available to lenders, and they each develop their own credit rating range. Why is that important? Because if you get your credit report, you need to understand the credit history range you are taking a look at so you understand where your number suits. Here are the credit rating ranges utilized by significant credit report models: With all of the scores

noted above, the greater the number, then the

lower the risk. With that being stated, consumers with higher scores are most likely to get approved for credit than those with lower scores. Additionally, they likewise tend to get the very best rate of interest when they do. And they are more likely to get discount rates on insurance. What is considered a"high"score depends on what kind of score is being utilized. If your FICO rating is 840, for example, you're just

10 points shy of the highest score possible, and your credit is"super-prime." However if you have an 840 VantageScore 2.0, it's not as incredible since you're 150 points far from the highest possible rating. What's Your Rating? Don't assume your credit history is great(or isn't )even if you have always paid your costs on time (or have not. )The only way to understand whether you have an excellent credit report is to examine.

You can get your credit history totally free at Credit.com. This is a really totally free credit history-- no payment details is asked for which implies no credit card is needed. In addition to the number, you'll also see a breakdown of the factors that impact your rating

, and you will then get suggestions for making your credit as strong as possible. What Can I Get With A Great Credit History? A few of the

best charge card-- from benefits cards to 0%balance transfer offers-- go to consumers with strong credit scores. You'lldiscover excellent credit cards for excellent credit here. A good credit rating can likewise get you a lower rate of interest when you obtain. That implies you will pay less over time. For example, if you're purchasing a$ 300,000 house with a 30-year

set home mortgage, and you have good credit, then you might

end up paying more than$90,000 less for that home over the life of the loan than if you had bad credit. So, in the end, it actually pays to understand your credit history and find what is affecting your credit ratingand discover methods to make them as strong as possible.

How Do I Get a Great Credit Report? To ensure your credit remains "great"in the long-lasting, it can assist to choose one credit rating and monitor your development over-time. It also assists to pay attention to whatever is being pointed out as a"threat aspect"-- for example, state, the amount of financial obligation you're carrying is expensive-- instead of a specific three-digit number. Dealing with whatever is weighing down

a single score will likely reinforce your standing throughout ratings. That's because, while the exact credit report ranges may differ, most designs are based on the exact same 5 categories: So, to build a great credit report and even reconstruct credit, you'll require to make all of your loan payments on time, keep the amount of debt you owe below at least 30 %and preferably 10 %of your total credit line (s). You must likewise keep credit accounts for the long run, add a mix of accounts ( installment loans versus revolving loans, for circumstances) over time and handle how frequently you get new credit in a brief timeframe. Elements of a Credit Score and the Weight They Bring Lots of elements are involved when it pertains to identifying what a great credit history is or not. Late payments, tough queries, and low balance and collections can all be detrimental to the general health of your credit rating. It is essential to comprehend the significant weight these components bring. The Significance of Late Payments If you find that you have a pretty prolonged history of late and missed out on payments, then your scores on each scoring model will be adversely affected by your inability to make payments on time.

When identifying your rating, each scoring model will take a better take a look at

how recently you have missed out on a payment or were late, how many accounts were late, and how lots of total payments on each account were missing out on or late. The FICO scoring model will treat each late payment the exact same and will carry the exact same weight. However, the VantageScore design will take a look at each late payment in a different way which implies they may have

a a lot more considerable

effect on your credit. A Lot Of Credit Inquiries Not many people understand the weight that difficult inquiries bring on a credit rating. Having too numerous tough inquiries in a fairly short period of time can hinder your credit rating, and you will be punished for numerous tough inquiries on your credit file. When shopping for an automobile loan or home loan, it's normal for consumers to go shopping around to discover the finest rates.

Depending upon the scoring model being used, there is a 14-45-day span for these types of questions that groups them into just one questions. The idea behind this is to offer customers time to go shopping around, without taking an extreme hit to their ratings. FICO rating models enable thirty days, while others permit 45 days. On the other hand

, the VantageScore design utilizes only a fourteen-day span. You can constantly ask a loan provider which credit history design they're

using when getting a loan. Debt-to-Income Ratio The Debt-to-Income Ratio is yet another component that loan providers will look at when determining if you are an ideal candidate for a credit account or not.

A person's debt-to-income ratio is calculated by dividing the overall repeating month-to-month financial obligation they have by their gross regular monthly income, and in doing so, they will reach a percentage. You desire the portion of your debt-to-income ratio to be lower. Otherwise, a lending institution may look at a high number and instantly think you will be unable to effectively make any more month-to-month payments. You can then be thought about a higher credit risk for them. You will likewise desire to continue to pay close attention to your credit utilization. Like the debt-to-income ratio portion, you do not want your credit usage number to be above 30

%. Our totally free debt-to-income calculator can assist you discover out where you currently stand. What If I Discover a Disparity on My Credit Report? To ensure that you have the finest credit ratings possible, you need to thoroughly inspect over the details of your individual credit history to determine if there are any inaccuracies. If you see anything that is not correct, then you should dispute the mistake. The credit bureaus Experian, Equifax, and Transunion are needed to examine any conflicts that are submitted due to the Fair Credit Reporting Act. Nevertheless, if the reporting firms are too quick with the investigation, then the mistakes may still be on the credit report, and the unfavorable information may still check out as precise. When challenging any mistakes on your credit

report, always remember to provide specific information regarding why you feel the negative information on your credit report is inaccurate and consist of any proof you might

have that assists to show the error. Always make copies

of all the information you send it with your disagreement as well, so you have it for your own records. You can send out a letter by licensed mail with a return invoice demand, so you can document when the dispute was sent out and when it was gotten. Send out all your details to the reporting firm that you are asking to investigate the item on the credit report. Making copies of what you send out is likewise a great defense for if they state you never sent adequate evidence to support your claim. If you follow all the guidance and info as laid out in this post, you will have a strong structure of understanding to construct from when it concerns obtaining and keeping a good credit rating

and securing a healthy financial future.

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creditscore1me-blog · 6 years

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Recognizing FICO As Well As Various Other Credit Score Models

Deciding Which Products Are FICO® Scores

Whenever you complete an application for a bank loan, credit line, a rental house or flat, etc., it is pretty much a guarantee that your credit score is going to be asked. Step one in estimating if you'll be approved for credit or a loan is having a very clear image of exactly what your FICO® standing is (as that is actually the scoring merchandise nearly all loan retailers and others rely upon).

In America, FICO® is popularly called a top service provider of credit rating positions, using an exact procedure which spans from a minimum score of 300 to a optimum score of 850. Though Fair Isaac & Co. (the company who developed all the FICO® scoring system) isn't alone in supplying scoring alternatives (you may discover numerous credit score systems to pick from), FICO® is unquestionably the hottest. There are tons of different scoring alternatives, for example VantageScore® (this version changes from 501 to 990, also was designed by the best credit reporting bureaus ), and also the net started using a saying for all these scores:"FAKO scores". FAKO scores are basically those not created by FICO®. To make matters even more perplexing, loan businesses use their own credit rating techniques too. Although people grumble about the procedure in which scores are generally measured, FICO®'s incidence systematizes a things somewhat. So long as FICO® stays the outstanding credit standing system, it is going to stay possible for people to compute whether they may get approved to get financing or credit.

Irrespective of if you approve of the or not, your creditworthiness is going to be depending upon your own credit report, and almost always your own score. In all honesty, your future fiscal equilibrium is put, at some degree with a mathematical formula. This is quite upsetting for all. Then again, remember that loan retailers undertake detailed formulations focusing on whom to give money to, using many factors. Truthfully, a"credit score" of 720 will likely approve you to your best monetary loan requirements; but a poor score implies paying more in interest payments. Even when an undesirable evaluation signifies you're more of a hazard, this may not lead to complete loss of products and services each moment. The increase in"subprime" loan goods is 1 consequence of the. In ways, investigation of credit ratings has begun to turn into a little more clear: starting in 2011, any loan servicer that reduces a charge request - or just approves you for charges under the best provided - as a consequence of your credit rating, has to offer you correspondence in addition to a free listing of this score or report the creditor used in their ruling.

What's the Typical FICO® Rating Today?

According to myFICO®, the average U.S. score last season was 711. Right now, roughly 40 percent of people have credit ratings of 750 or greater; and approximately 40 percent of people possess scores from the 699 and below scope. But what does this indicate? To begin with, there is plenty of room to improve. The higher your credit standing, the more eligible you'll be to the very best loan product and charge rates of interest, but only to some degree. Though people chase following"bragging rights" for obtaining a score greater than 800, generally, many banks will furnish anyone using a 780 score the identical offers as a individual keeping an 820 score. Certainly, trying to enhance your credit rating is essential, nevertheless creating superior credit patterns are advised over buying perfection.

Now you're conscious of what the normal FICO® score is, you are probably pondering how which this score is set. Fair Isaac's unique system remains unidentified, and they aren't publicizing the procedure at this time. Nonetheless, this is the way where it works: The three credit reporting bureaus - Experian, Equifax, and TransUnion - collect your own credit card, and FICO® then makes a score based on the previous seven decades of credit history on your accounts.

The credit reporting bureaus can also use an algorithm formulation similar to FICO®'s to make their very own distinct scores. These credit bureau amounts are not exactly the same as a FICO® score, and are usually termed by identifying names (Experian's score is termed the"Experian/Fair Isaac Risk Model", Equifax's score will be your"BEACON® Score", and TransUnion's score is termed"EMPIRICA®"). Nonetheless, they all are basically assessed just like a FICO® score. Incidentally, these scores shouldn't to be connected with the VantageScore®, that was generated by Experian, Equifax, and TransUnion as yet another alternative besides the FICO®.

What Influences the FICO® Score?

As the data within your credit report changes (as an example, new things are contained, additional things in excess of seven years old evaporate ) so also will your credit ratings. Because of this, your score will likely vary drastically based on who is producing the grading, and what formula is used. To exemplify, even involving the 3 credit reporting bureaus, your score will probably differ a fantastic deal. In case these kinds of variations on your scores seem, it's possibly because of the simple fact that facts and information on your credit file is different from others, or you can find in fact some distinctions with how the FICO® (or some other exclusive) formulation is used.

According to FICO®, this reveals how they browse the details on your own credit file to figure an exact score:

1. Payment History - 35% of your score. A great deal of significance is given to comparatively new components (the previous 1 to 2 years). Reliable and on time payments will surely improve your score. Past due payments, collections accounts, and insolvency will surely reduce your score.

2. Credit Consumption - 30 percent of your credit rating. The sum of money you have borrowed (like customer debt, student loans, a mortgage, etc.) is important, particularly when matched against overall credit easily available. A fantastic way to boost your score quickly is to repay debts, such as those found on credit cards. Reaching a balance of 0-10percent of your total credit is greatest.

3. Credit History Span - 15 percent of your credit rating. Scores benefit individuals who've held credit for quite a very long moment. The longer the length you maintain credit with the exact same credit card business, the greater significantly your score will grow.

4. Credit History Depth - 10 percent of your credit rating. Scores are usually the most optimal for people who appropriately deal with an assortment of forms of charge (e.g., cards, automobile loans, a mortgage, etc.) .

5. New Credit Requests - 10 percent of your credit rating. A good deal of credit requests may decrease your credit score (since it might signify you're in need of cash ). Exceptions to this include auto/home fund loan applications made within a 45-day period of time. The fewer programs for credit you submit, the greater your score ought to be.

Bear in mind, this is FICO®'s method of setting your credit rating, and other scoring goods will likely do it apart. To exemplify, VantageScore® implements a somewhat different procedure.

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