These Are Smart Tips For Credit Reports – How to Spot Mistakes

How often do you check your credit report for accuracy? If it’s not at least twice a year, you could be one of the 40 million Americans that have material errors on your credit report. There are some warning signs you might experience without checking your credit score that might tell you that you have errors.

Errors with your identity details
Occasionally one or all of the three major credit bureaus will have incorrect identifying information on your credit reports. It could be as something as simple as an incorrect address. That’s a relatively simple error that won’t be difficult to fix on your own. However, sometimes your name could be associated with someone else’s credit profile. Make sure when you check your credit report you go through it with a fine tooth comb to ensure everything on it is accurate and all accounts belong to you.

Incorrect or misleading account details
From time to time a creditor will provide incorrect or misleading information about your credit accounts to the credit bureaus. But more seriously, they could be reporting an incorrect credit limit which would affect your utilization rate or the wrong dates for your mortgage loan. Sometimes something could claim open when it’s closed or that you’ve missed payments when you haven’t.

Mysterious accounts
If there are items on your credit report that don’t belong to you, you might be a victim of identity theft. In 2015, an estimated 17.6 million American’s were victims of identity theft. Did you know that two-thirds of identity theft victims reported a direct financial loss? The Bureau of Justice recommends taking preventative action like checking your credit report regularly for accuracy. While some people were able to recover funds through their banks or credit card companies, other saw much more serious events like stolen social security numbers and new accounts opened under their names.

What do you do if you spot errors?
My best advice to you is to work with a credit repair agency. The hassle of getting your details updated or more serious, getting incorrect, misleading or unverifiable information off your credit report can be a total headache.

Catalogue the errors well and then bring them to the agencies attention. The more prepared you are the better a credit repair agency can help. Getting mistakes removed is a difficult process but thankfully credit repair agencies can do most of the heavy lifting for you.

You Should Know – How the Amount of Debt You Have Affects Your Credit Score

If I said it once, I’ve said it a thousand times; credit card debt isn’t the enemy, your spending habits are.

Your credit utilization rate is the second highest factor in your total credit score calculation. It accounts for 30 percent of your total score. It’s only second to your payment history which is a whopping 35 percent of your total score. Knowing this, the two most important factors to keep your credit healthy is avoid overuse on your credit cards and to pay your bills on time.

Do I overuse my credit cards?

Your total amount of credit card debt should always be under 30 percent utilization. What does this look like? If your credit limit on your credit card is $1,000, your credit balance should never go over $300. Going over 30 percent utilization can have serious implications on your credit score. How much? From a personal experience, my credit score dropped over 30 points. I was at 32% utilization because of an emergency and when I was able to pay it down to 28 percent, my score was restored and went up 32 points.

If you’re in debt up to your eyeballs, it could affect more than just peace of mind and your credit score. It could actually cost you more money. Creditors may not lend to you if you’re consistently nearing your limit on your credit cards. You’re considered high-risk because you’re spending more than you make. If a creditor does lend money to you, you might be saddled with a high interest rate on you credit account.

How can I fix it?

Overuse of credit accounts is part of a larger problem than 30-ish points on your credit score. It’s a symptom of poor spending habits, which can be costly and frustrating as time goes on. Building debt has never served anyone. It’s imperative to start building healthy spending habits if you’ve noticed that you’re consistently going over 30 percent utilization.

The first thing you should do is pay down your debt to under 30 percent utilization. Make a plan, put together a budget, and stick to it. Make the distinction between wants versus needs.

Once your debt is under 30 percent utilization, make sure not to go over 30 percent. While it might be uncomfortable to change your spending habits, the long-term effects will give you more peace of mind, a higher credit score, and the ability to secure a healthier financial future.

 

You Should Know – How Closing a Credit Card Account Affects Your Credit Score

Do you remember the excitement surrounding your first credit card? You probably applied for a credit card when you went to college or maybe your parents offered some advice. Either way, you’ve had that card since your teens or early 20s and it’s probably not the greatest card in your wallet. It might have a high interest rate, no rewards or a lofty annual fee.

Once you starting building good credit you were likely offered better credit cards. Your interest rates are lower, you probably don’t have an annual fee or a it’s a low fee, and you probably have access to airline miles or cash back rewards. So, why keep the card that is no longer serving you?

How will closing the accounts affect my credit?

The important thing to remember is that when you make the decision to close a credit card account you’re reducing your credit utilization rate. Remember that credit utilization accounts for 30 percent of your total score calculation. You’ll need reduce your spending habits when you close a credit card account or you’re likely to go over the recommended 30 percent utilization rate causing your credit score to take a nose dive.

The average age of your credit accounts is another important factor for your credit score. This is two-fold. If you’re newer to credit, it’s best to keep old cards open because they remain on your credit for 10 years. That card, though rarely used, is actually helping your credit – especially if you have good payment history. Closing it could hurt your credit far worse than someone who has been building their credit for more than a decade.

So, what can I do?

If you have a high interest rate or a large annual fee, try negotiating with your credit card provider. Sometimes if you tell them you are considering cancelling the card due to high fees, etc, they may work with you. It costs them far more money to acquire a new customer than it would cost them to waive your annual fee or lower your interest rate.

Sometimes you have to close a card. If it’s costing you money because the credit card company won’t negotiate a waived or lower annual fee, it doesn’t make sense to keep it. Your credit might take a hit, but it will recover. You can’t however, recover lost funds due to annual fees for a card you don’t use.

Closing a credit account should not be taken lightly. Make sure to consider the factors listed above before you close your accounts.

 

Read This – 5 Factors That Affect Your Business Credit

What makes up your business credit score? What gives you the best chances of getting a loan? Here are a few factors that play into your business credit picture, and what you can do to make the most of them:

1. Payment History – Your payment history is an important part of your business credit profile, and is what your D&B Paydex score is based on. Many credit opportunities come with a minimum Paydex requirement. What you can do: always pay vendors EARLY. On time is “okay”, but paying early (as in before you receive the invoice) is best.

2. Credit Applications – Believe it or not, multiple applications for credit can be a red flag that will keep you from getting approved for a loan. Too many in a short period of time will make your company look desperate and be a sign to potential lenders that things are going downhill. What you can do: plan your use of credit accordingly, and keep applications to the minimum necessary to accomplish your goals.

3. Blanket UCC Filings – One thing that many people don’t realize is that they need to pay attention to the order in which they get certain types of loans, and what UCC filings the lenders will file. Some lenders may file a “blanket” UCC filing, which essentially says they have an interest in ALL of your assets. These blanket UCC filings will then take precedence over any subsequent ones, which drastically reduces your ability to get credit elsewhere. What you can do: plan your credit carefully, and negotiate UCC filings according to what your needs are. For example, if you need particular assets excluded from a UCC filing to use as security for another loan, explain that fact in advance to get those items excluded from any blanket filings, or, alternatively, get the loan or account with the more specific UCC filing first. Some experts recommend opening accounts with competing UCC filings at the same time, and negotiating the details with each party simultaneously.

4. Company Financials – With D&B, it’s important to make sure your financials in your credit file are up to date. If they are not, it could negatively reflect on your company when the lender is comparing the available data. What you can do: update your financials on your credit reports so that they reflect your current circumstances, and plan to do so periodically.

5. Company Legal Structure – The legal structure of your company (LLC versus INC versus Partnership, etc.) can also affect your business credit. Lenders are less likely to loan money to Sole Proprietorship’s and Partnerships than Corporations or Limited Liability Companies. What you can do: if you aren’t incorporated, you should be. The advantages span far past just your ability to get credit.

There are other factors that affect your ability to get credit, such as the amount of debt you already have, how heavily invested you are in your company, and even your personal credit can play a role in your approval or denial. Here we’ve covered five of them. In the end, the better the all-around picture you can paint, the better your chances of getting approved for loans will be.

The Ultimate 7 Ways to Raise Your Credit Score

A poor credit score can restrict you in numerous ways. It makes it difficult to make large purchases and to get the trust you deserve. While you could wait or just roll with it, there are options for you. We are going to cover 7 ways that you can raise your credit score.

1. Look Through Your Credit Report

Get your credit report. Look through it to see if there are any errors. If there are, report them immediately so that they do not drag down your rating. Continue to monitor your credit report to avoid anything that should not belong.

2. If No Card, Get One

If you have no card, then get one. Part of increasing credit is actually having a credit card. Even if you have to attach your name to someone else’s account, if they allow it, make sure that you start building that credit.

3. Pay Down Any Current Balances

Before you start doing anything, pay down whatever balance you have. Paying down a current balance can keep you looking good to creditors. On top of that, it lessens the stress that you may have when dealing with credit cards. A lower overall balance is easier for you to manage.

4. Budget and Plan Use of Card

You should never use your card just whenever. Plan out the budget and use of your card so that you know how much and when to use. It keeps you on track, avoiding a bigger debt than you can handle and missed payments.

5. Pay On Time

Do not let your payment go over the listed date. In order for credit to help you, you have to pay on time every month. This should become part of your budget and use. When you pay on time, you build credit faster and you appear more trustworthy.

6. Increase Your Limit

Build trust with creditors by increasing your limit when you can. While they may increase the limit for you, you can do it yourself by contacting the credit card company. In most cases, if you pay on time and prove that you are trustworthy, they will offer an increase.

7. Pay Frequently

Some people assume that you have to pay once a month or only when the payment date appears. In reality, you should pay several times a month. By paying several times a month, and not having a large balance on your account, it looks better for you.

You Should Know – Top 5 Bad Credit Fixes

There are 5 common ways to fix your bad credit. Although some people may not be aware of them, these methods are nothing new and have been around for quite some time. The following is a list of the top 5 ways to fix your bad credit:

  1. Make Payments on Time
  2. Increase Available Credit
  3. Pick 1 credit card to focus on.
  4. Pick 1 thing you can live without.
  5. Stop using credit.

Why you should make credit card payments on time

There are many lenders (auto, mortgage and credit card companies) that access your credit history before making a financial decision on your behalf. One category that always gets a good looking over is your payment history, because it shows the lender how responsible you are with making your payments and making them on time. The good is if you have missed a payment here and there it is not a huge deal but if you miss payments a few cycles in a row that is not good. It is like when you are interviewing for a job and they call your last employer and they find out you were late quite a bit. On the other hand if you were late to work once every 2 months it won’t be mentioned. Same principal for making payments on time with your credit cards.

In addition, when you miss a payment you become subject to a few issues with credit card companies. First, your credit card will attach a late payment fee and in some cases they may give you a penalty interest rate. As if your life is not already hard enough, obviously there is a lot going on if you missed a payment. Then they add insult to injury with this punishment. Also you become subject to universal default where other credit cards can legally penalize you for missing a payment on a totally different card. This is not the make a bad choice and only the witnesses find out scenario, everybody finds out.

Why you need to increase your available credit

Your goal is to get out of debt and fix your credit score. You can begin working towards this by increasing your available credit. The amount of available credit is what makes so many people have bad credit scores. They have literally used up more than 70% of their available credit (for example your credit limit is $2,000 and you have $200 available). This hurts your score so much because it shows the lenders and/or credit card companies that you do not have enough cash and you need to rely on using your credit card. So, if you pay down your balance and increase your available credit, you send a different message to credit card companies. Eventually, your available credit increases in 2 ways: by you paying the balance down and the companies will usually extend your credit line while your paying down your balance and based on how long you have had the line of credit.

Why you need to pick 1 credit card to focus on

It happens all the time, people get motivated and do drastic things that are not helpful in the long run. For example you commit to losing weight and you exercise for 2 hours the first 2 days, but by day # 3 you are sore and exhausted so you stop working out. This happens with paying off credit cards. People get extra money and instead of paying off 1 card they make payments on 3 credit cards. Although they reduce the balance on all of them at the end of the day they still have 3 credit cards instead of the 2 they would have by focusing on 1 card at a time.

Why you need to pick 1 thing you can give live without

Getting out of debt is about sacrifices and not wasting money. Some people have to keep up with the latest trends and place themselves further in debt. I have done it too and then it hit me by iPhone 6s plus. I was buying new iPhone after new iPhone and then I realized I do not have 1 iPhone that is not in mint condition. They all can play the same games, display the same apps etc. so I am wasting money buying a new iPhone every release. I won’t buy the iPhone 7!

Another example is coffee, I learned that kcups are not economical they are just quick and convenient. I also learned that $2.50 for a venti at Starbucks every day is of $14.00 and a 32oz bag of Starbucks Dark Roast is 17.00 at BJs. Before I learned about BJs I was paying the 2.50 but I thought I was doing it right because I was using my cash back debit card! However, the Bjs bag is much more economical.

Why you should stop using credit cards

I increased my credit score (FICO score) tremendously a few years ago just by not using my credit cards for a few months. I recently wrote a blog about it because it was around this time a few years ago where I noticed the big bump in my credit score, I had finally joined the 700 club! Additionally, the interest on credit cards even if it is low is ridiculous. In my state we complain all the time about taxes on products, well credit card interests rates are a bit higher than taxes. Lastly, if you do not pay off entire balances by the end of promotional periods your balance nearly doubles.

Bonus #6 Hire a Credit Repair Agency

Here is a bonus the number 6 way to fix bad credit is to hire a credit repair agency. By law you are entitled to a free consultation from credit repair agencies. According to the Federal Trade Commission (FTC) the Credit Repair Organizations Act requires consumers of credit repair services to receive a copy of their legal rights and it protects customers from being charged prior to services being performed. The resources on this page will elaborate in more detail about this law.

Big Question – Can A Credit Union Help Build Or Rebuild Your Credit?

The most important way of upgrading or reconstructing your credit is establishing a new credit history. And, an excellent place to go for assistance is a Credit Union because they live by the philosophy of “People Helping People”. They are dedicated to their local communities and focus on improving the quality of life for their members.

They offer financial tools designed to reconstruct blemished credit scores. Credit Unions understand that having “less than perfect” credit makes it difficult to obtain a loan; so they want to help guide their members with get back on track” loan programs. Here are some ways that some credit unions nurture your finances back to health:

Loyalty Loan Programs: These loans will help with immediate needs and also help rebuild your credit. These loans reward the members with on-time payments with a lower interest rate and loan payment over the life of the loan.

• Ability to borrow with an unhealthy credit score

• Flexible qualifying guidelines

• Incentives to lower your loan interest rate and monthly payment

• Improves your overall credit rating and credit score

Credit Builder Loans: These loans are usually made by Credit Unions to help members build or rebuild their scores. This type of loan is approved for a small amount, normally not much more than $1,000. Instead of the member getting the loan amount like they would with a conventional loan, the money is placed into an interest-bearing account. The member makes payments monthly, and after a year or two, the loan is paid off and the money, plus interest is given to the member.

• No qualifications necessary, except a reliable source of income.

• Usually a 12-month term

• Member’s repayment behaviors are reported to the credit bureau

Free Credit Counseling: Many Credit Unions offer free financial counseling. Members that take advantage of this program eventually see increases in their scores which helps create a more financially healthy member.

Repair your credit with a secured credit card: A secured credit card can be a creditworthy tool for people with less than perfect histories. Most of the time, a savings account is used as collateral for the secured card. Secured credit cards are the first step for members who can’t qualify for a regular unsecured credit card. Just be aware that most credit unions don’t promote their unsecured card options, so make sure you ask.

The quickest way to build up a satisfactory score is to borrow and pay back the loan on time. It isn’t difficult, it just takes some discipline. Locate a Credit Union near you and check out what options they have to offer. Rebuilding or establishing new credit is easier with a Credit Union so start constructing a healthier credit history today!

Smart Way To Choose A Factoring Company

The success of any business relies on cash flow. As your business grows, you will find a need to speed up cash flow and this could mean getting some sort of financing. Banks have for the longest time being the saviors for most businesses, but the may not always fully accommodate the financial needs of your company. Account receivable factoring is the better alternative for your business financing. With the help of a factoring company, you will be able to obtain the capital that you need for the business.

Factoring is invoice financing that concentrates more on the business growth rather that cash flow challenge. The creditworthiness of the clients you have is what the factoring professionals focus on. By establishing solid payment history with your customers, factoring companies pay up front for invoice amounts. At a small factoring fee, you will receive the balance when the client has fully settled the invoice. There are so many advantages of factoring but to enjoy them you must start by choosing the best factoring company to work with.

Tip 1 – Think about service. The factoring company should offer professional friendly service. You should not only get guidance in setting up a process, but you should also have all your questions answered so you are able to make a good decision.

Tip 2 – Check out the terms of the service. The terms you get from your factoring company should actually be tailored to meet your specific needs. Make sure you are aware of contract length, fees, notice period and concentration among other important factoring elements. The least you can do is to make sure that you are most comfortable with the terms of service.

Tip 3 – Understand the factoring services and products the company has for you. They may vary from one factor to another. Depending on the company that you settle for you could get bad credit protection, funding options, credit control, dedicated client manager, customer credit checks and online account management. Find out what services and products your company has to offer and how important they are to your business and the process to make a good decision. It is best that you make comparisons between the best factoring companies before making a final decision so you choose the best one for you.

Tip 4 – Think about concentration. It is very important to remember that there are factoring companies that restrict the funding level they provide against your customers. Before signing the agreement, therefore always check to confirm that your customers will be able to access appropriate funding levels as needed.

Tip 5 – Check out the factoring fees. Most companies charge a monthly fee depending the funding option that you settle for. In most cases the percentage will be determined by the invoices that have been submitted for funding during that month. Some may have a monthly minimum and this is an option that may not work for you if you run a business that goes with seasonal patterns.

This Are Best Solutions for Those With Poor Credit

Those searching for a personal loan for poor credit have a few options to explore. Three of the most popular are credit cards, home equity loans and personal loans for poor credit. The obtained monies can be used for many reasons to include purchasing jewelry or upgrading a business. The type that’s best will depend on the intentions for use and personal financial state.

Here’s a bit about each type to help anyone make an informed decision when they decide to pursue a personal loan for poor credit.

Personal Loans

One can get a personal loan from most banks. As stated before, they can be used for most anything and are based on the ability to present proof of income as well as assets. Those assets have to bet worth the amount the person is borrowing. It’s a quick process for application when these things are present and accounted for and the applicant will find out within a few days tops if they are approved.

The main downfall is that interest rates are typically high around an average of 12%. The time limit for repayment varies but they’re usually no more than two years. Due to this, any very large amounts are not recommended to be financed this way as many have trouble paying them back in two years.

Credit Cards

Credit cards are another option when consumers are searching for a type of personal loan for poor credit. They are the same thing as securing a loan as they are also repaid later. The cards are easy to use because they are widely accepted for payment on most everything.

They are simple to apply for and can be upwards of $10,000. The application is reviewed fast, usually no more than two weeks. There are also those that are reviewed over the phone and approved in only minutes. It all depends on the card company. Terms vary greatly, so it’s important for whomever is applying to really look over all the fine print.

Within this print, there will be many things to take note of. At the top of the list are interest rate, yearly fees, overage fees and more. It’s been proven that debts pile up more quickly using credit cards than other types of loans because they are so available and easy to swipe at any retailer. For someone looking to a personal loan for bad credit, this may be an unwise decision and end up hurting credit not repair it.

Home Equity Line

The home equity line of credit is a smart decision. It allows homeowners the ability to borrow against the value of their home. It’s easy to figure how much someone can get. All they have to do is take the home’s market value against what is still owed on it. Many choose to not do this if they are planning on selling in the near future. However, if they are planning on staying there for the long haul it’s a great option.

Like other personal loans for poor credit the money can be utilized for whatever they please. Often they’re used for home improvements, consolidating debt and so much more. The interest rates are low to average and can be repaid over the course of up to 20 years in some circumstances. There aren’t many downsides to a home equity loan of credit; in some cases the interest is a tax deduction. That’s hard to beat!

The main negative to this type of personal loan for poor credit is that the person taking it on can sometimes get in a worse situation in regards to their mortgage. If there are two sources of income and they are well above the bills being paid each month the individual can probably repay the loan with ease. Otherwise, it may not be of any benefit. Especially of the consumer ends up losing a job or suddenly is unable to work. Plus, rates sometimes fluctuate.

This Is For You – How to Really Use Your Credit Cards

Credit cards are a double edge sword. People are addicted to the plastic crack. They buy stuff they don’t need to impress people they don’t like. Plastic money has Americans hooked. Advertisements for cards are everywhere. How bad is it? According to some statistics the average American household has over $15,000 in credit card debt.

I do not advocate that everyone should have a credit card. If you can not control your cash you definitely can not control your plastic spending. I teach Financial Peace University classes and we strictly preach debt freedom and get rid of your cards. Why? Because most people will spend when they carry a credit card. Furthermore those same people will not pay off their current charges and carry a balance. Thus putting them back into credit card debt.

There is a myth that you need credit. That is a lie. You don’t need credit to survive. It does make it easier to travel, rent cars, and book hotels. But the truth is you can do that with a debit card. The buy now pay later syndrome is why so many people are in debt. This is how people get trapped and are on the path to financial disaster.

Only The Responsible and Disciplined

I use my cards everyday. But I pay off my balance every month. Paying interest is stupid. I still think that most people should not own or use a credit card unless they are responsible and disciplined to pay it off every month. As I mentioned earlier if you can’t control your cash you will do worst with credit cards.

Hear me out again. Paying interest on things you buy is just stupid. If you can’t pay off the balance do not buy the darn thing. Do you really need it anyway? Is that new big screen necessary now. Or is happy hour that important? Think before you pull it out. Better yet leave it at home.

Not For Emergencies

They shouldn’t be used for emergencies. This is an excuse that people use because they are not financially ready. What are emergencies? The tire blew out, the air conditioner doesn’t work, kids need new shoes, you are hungry, and broke. You pull out your plastic to pay for these things and then you start to rack up that balance. You fail to pay the balance and the next month another “emergency” pops up. If you don’t have an emergency fund then you are setting yourself up for failure.

Here are 4.5 Ways to Really Use Your Credit Cards:

1. To Make That $$$

Wealthy people use cards to expand their businesses. They use it to make that $$$. Here is the key! They pay off their balances at the end of the month. They generate income with their cards and then pay it off. They hate paying interest. I am an affiliate marketer and I use my credit cards for marketing and I pay the balance every month.

There is a daily limit on your debit card usage. But not with credit cards and I don’t need limits on my spending. My credit cards help me make money. If your plastic can help you increase your income then by all means use it.

2. Not for Personal Use

If you can’t pay the balance by the end of the statement do not buy it. If you couldn’t buy it with cash then don’t get it. I know you will pay it off later. If that was true there wouldn’t be all this credit card debt floating around. Don’t even carry it with you. Just having it will give you an urge to buy stuff. Stuff is what kills people financially.

Broke people pay fees and interest rates because they can’t afford to buy with cash. That is the consequences of not having enough money to buy what you want. Fees and interest add up. You are just giving money away when you can’t pay it off before the statement date.

Here is a trick I use. I always have a monthly budget. I know where every dollar is going. I take that budget and put it on my credit card. In fact I create a positive balance on my cards. Then I stick to my budget and I am never owing a balance. Why do I do this? You will see when you read #4.

3. Your Personal Bookkeeper

This is why I use my credit cards for every purchase. I get a statement at the end of the month, quarter, and year. I see where my money went and they add graphs too. I download the statements to my Quick Books software and give the year-end statements to my tax guy. Boom accounting is done.

4. Perks, Privileges, Rewards, and Points

The icing on the cake is all the perks, privileges, rewards, and points you get by using your cards. I am a cash back guy and I will get a lot of cash back this year (which I save to my investment accounts). My business credit cards gives me all the perks. I get points, miles, discounted VIP event tickets, and I don’t have to pay exchange rate fees when I travel around the world.

I get travel insurance, rental car insurances which saves me $$$ on rental cars, and much more. Plus all this stuff is free when you pay your balance off. When you use your credit cards correctly you can cash in on the benefits

4.5 To Start Your Business

I caution you to not use your credit cards to start your business. Especially if you are a newbie with no experience in the field you are about to enter. The risk is too great. Now I used my credit cards to invest into my business. That was around $20k. That was a huge gamble. But I had 4 years of experience when I took the plunge.

I also kept my day job to help make the monthly payments. I created multiply streams of income to pay off the balances faster. Those balances are at $0 now but I had to rise, grind, and shine. It took some time but my business is successful. If your business fails you still have to pay those credit cards.

Bottomline

Most people should stay away from credit cards because they can’t control their cash and credit cards will make it worst. Only use it if you can afford to pay off the balance every month. Remember paying interest and fees is stupid. Don’t be stupid. It’s a great accounting tool and the perks are worth the discipline and responsibility.