Archive for the ‘Credit’ Category

Your Free Credit Scores May Not Be Free

You have heard the ole saying that “there is no such thing as a free lunch”, well the same could be said for credit scores.  I am sure you have heard those annoying commercials 3 free scores and more.

You may get a number from these services, but usually you will first have to fill in a form and give them your personal information.  That means you’ll start receiving calls or emails from these companies trying to sell you on something else, like some type of monitoring service, or they automatically enroll you in their service where you get charged a monthly premium.  The free score may not be free after all, watch for the fine print to see what they are really offering.

Credit Report 3 1 – The Key to Better Rates: Improve Your Credit Score

Whether you accept the idea or not, your credit score and credit report are key elements when applying for new loans, or credit cards. Your credit score is computed using the information found on your credit report 3 1. Once you have debt under control, it’s time to tackle the credit rating/scoring game. 

Credit scores were created to assist banks and businesses to help make financial decisions about you. A mathematical calculation is used based on your credit report data.  The end result is a numerical rating. FICO scores vary from a low of 300 to a high of 850. Lenders consider a score of 760 and above as ideal.   

Credit Utilization – What is it?

Credit utilization is simply your total balances divided by total credit limits: 

Revolving Debt Balances / Credit Limits = credit utilization 

This calculation is how creditors determine your revolving credit utilization. The credit utilization percentage tells them how much of your available credit you are currently using. You want this number to as low as it can be. 

Why is this important? 

Approximately 30% of your FICO credit score is based on amount of debt. The higher your credit utilization percentage, the lower your score will be. 

What you can do: 

How to use pre paid cards

Pre paid cards are funded from using money from your checking or saving accounts, i.e. you have to deposit money into the account before you can use the card.  Consequently, these cards do not report to the major credit bureaus and, generally speaking, there is no impact on your credit history. 

If you have ever been turned down for a credit card then you may want to consider using a pre paid card, (or secured card). These cards can be used in place of credit cards for things such as making hotel, airline reservations etc.