Mobile alerts from your credit card issuer can do much more than alert you to possible fraud. You can use that information to help you improve your credit.
First, a word about how credit scores work. The two biggest factors are paying on time (35%) and the amount of credit you use relative to your credit limit (30%).
Millions of consumers could be lifted out of subprime status and get better loan terms if credit reports and scores were broadened to consider on-time utility and rent payments, according to a study released Wednesday by Experian.
If you’re trying to build credit for the first time or improve a credit score damaged by past financial problems, you may have heard advice about using a secured credit card. Using a secured card can be an effective way to establish a positive credit history, but it’s not a one-size-fits-all strategy. For some consumers, using a secured card can help their credit within as little as six months of opening the account — for others, notable improvement can take much longer.
Your credit report could contain material errors. These are mistakes that other people make but you ultimately to pay for — and left uncorrected, you may end up paying for those errors for years and years.
Sometimes doing what you think is the right thing can have consequences you never intended. Shane, one of our readers, wanted to be sure his credit was in top condition before applying for a loan. He checked his credit reports, noticed an inaccuracy, and he disputed it. And then he applied for a loan.
And now that dispute is keeping him from getting his loan approved, or at least delaying it.
The housing market is making a comeback in many parts of the country.
According to the U.S. Department of Commerce, sales of new houses increased by nearly 12% overall during 2014—the most since 2008—as interest rates remain at historic lows. RealtyTrac, a company that analyzes national housing data, also notes that 2015 marks the first wave of boomerang buyers—those who served their time in the damaged-credit diaspora after losing homes to foreclosure seven years before.
When it comes to getting a bill, no news isn’t always good news. While most of us would prefer to get fewer bills, not getting one for something you do indeed owe can be costly.
It can also be very damaging to your credit. One woman, for example, sent a heartfelt plea to her credit card company after she overlooked a $17 bill after the birth of her second child. She said the resulting late payments listed on her credit reports cost her thousands of dollars on her mortgage (due to the higher interest rate she had to pay because of her lower credit scores.) She’s not exaggerating: the average lifetime cost of debt for a typical person with excellent credit versus someone with bad credit can easily run into six figures.)
One big problems with credit scores is that consumers often find them very confusing. It’s not surprising — complex algorithms spit out numbers that don’t always make sense to the person being scored, and there are more scores than a person could ever hope to keep track of. Despite their issues, credit scores are useful tools and can enable consumers to better understand and leverage their financial situation to get the things they need. To best take advantage of the information presented in your credit scores, it helps to know the answers to some of the most common questions we get about credit scores.
There’s a lot of good that comes as a result of more banks and credit card issuers providing their customers with free credit scores, like more informed and credit-savvy consumers. At the same time, the increasing number of free scores is a little overwhelming, leaving consumers to wonder how to digest all the information.
If you are paying for a credit protection plan that will help you make payments if you become disabled or unemployed, you no doubt hope it will provide some peace of mind in the event you have to use it. But that peace of mind may be shattered when you learn that using it could result in an unexpected tax bill.
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