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10 Things a good credit score can get you.
Your credit score is just a number, right? I mean, how important can it be to your finances?
You know what else is just a number? Your bank balance, the amount you owe in debt, how much income you earn, and even at what age you’ll retire!
In fact, your credit score is more important than ever for nearly every aspect of your finances.
To prove it, we’ll cover ten things that you’ll get with a good credit score:
So, you finally want to achieve the American Dream by owning your own home? Well, if you’re like most people, you’ll need to obtain a mortgage to buy that home, and a good credit score will vastly help you qualify. In fact, the higher your score, the more loan options will be available to you and the lower your interest rate generally will be. The good news is that there are loans, like those guaranteed by the FHA, that can help lower-credit borrowers, but a high FICO will definitely come in handy.
2. Lower credit card interest rates
The average credit card interest rate in the U.S. is now around 14.99%, but that climbs to a lofty 24.9% when we look at credit card holders with lower credit scores. We’re also spending a LOT on our credit cards again, as the U.S. balance is now approaching $1 trillion! Increase your credit score and you’ll start saving significant money on your credit cards, almost immediately.
3. Business, personal, school.
Are you starting a business? Taking out a personal loan from the bank? Or even applying for student loans (which is now higher than both credit card and auto debt in the U.S.)? If so, a great credit score will be a huge help along the way.
Even if you can’t afford to buy your own home, you’ll have to live somewhere, and that means renting. As part of the initial application, you better believe that landlords check credit score these days for prospective tenants.
5. Lower insurance premiums
A lot of people don’t realize this, but insurance carriers actually cross reference credit scores of their policyholders (along with plenty of other factors) and assign higher premiums to those with low scores.
6. A better budget
If your credit score could magically go from 550 to 750 (and it CAN – it’s just not magic), you’d realize some incredible savings across most line items on your monthly budget. Add it all up and that savings could come to $100, $250, or even $500 a month!
7. Favorable utility and cell phones
Yes, even your utility providers check your credit score now, as they look to avert defaults. If you’ve walked into a cell phone store and asked to open an account then you know that the AT&T, Verizon, and others check credit, too.
8. More savings + less debt
With that new and improved budget, things are finally turning around for you financially. With extra disposable income every month, you can now afford to put some aside for savings every month and, most importantly, start paying down your debt. That’s when you REALLY start realizing more money in your pocket.
9. Dream job
Wait, a good credit score can get me a job? Well, not necessarily, but a bad credit score can certainly ruin your chance of landing your dream position! In fact, more than half of all employers do credit checks on their applicants these days and some, like in financial services, definitely will want a clean credit history and solid score before inking you to a new employment contract.
10. Financial security
Lower credit card rates, becoming a homeowner, paying off debt, saving for emergencies, and landing a new job all mean one thing: you’ve finally broken through the frustration, hard times, and penny-pinching that your low credit score brought. Studies show that consumers with good credit scores have a net worth that’s roughly 12-times that of low-scorers, and that’s no accident!
Are you ready to get these ten things a good credit score will bring you? We’re prepared to help with a free credit report and consultation, so contact us today!
Another 10 facts about credit scores, credit reporting, and debt.
Do you think you have a pretty good grasp of the topic of credit scoring? When it comes to credit reporting and scores, what we don’t know can hurt us!
That’s because your credit score impacts so much in your life these days, from rent and homeownership to credit card approvals, interest rates on student and auto loans to even employment. But too often, we’re still in the dark when it comes to credit scores, credit reporting, and general financial knowledge about debt management.
As the nation’s leader in credit repair solutions, Nationwide Credit Clearing is committed to helping educate you about these important topics. This is part three of our ongoing series as we count up to 50 things you didn’t know about credit score, credit reporting, and debt.
Look for part one and part two here and contact us if you have any questions or credit issues at all!
1. A survey by the Consumer Federation of America (CFA) discovered that the majority of consumers (just over 50%) had no clue that their credit scores can be checked and monitored by anyone other than credit bureaus. Only 53% of respondents knew that electric utilities checked credit scores and only 68% knew that home insurers, cell phone companies, and landlords regularly do the same.
2. However, even you may be shocked to hear that 90% of home and auto insurance companies check credit scores to help determine your coverage options and also what premiums you’ll pay.
3. A 2016 survey conducted by VantageScore found that only 32% of Americans (less than one-third) had received a copy of their free credit report within the last year, and 16% hadn’t even received a free report within the last three years.
4. Not to pick on college students, but they still have a lot to learn – about their classroom subjects as well as about credit scoring. In fact, a study by Equifax found that only 45% of college kids have any idea what their credit score is! It seems the majority of college students check their credit when applying for a credit card (41%), a new debit card or bank loan (33%) compared to only 4% who request and receive a paid copy.
5. Not only is credit score a crucial factor when you want to apply for a new loan or a mortgage, but employers are screening their potential employees for credit score like never before. It’s estimated that 1 in 4 unemployed Americans have been subjected to a credit score check when they applied for a job, and 1 in 10 has been denied a job because of a bad score or something on their credit report!
6. Adding to the credit score confusion, 45% of respondents think that age is a factor in credit scoring, and 38% believe marital status plays into their credit score. (Do they believe single or married people get a score bump?)
7. On the other end of the spectrum, about 26 million people – or 14% of the adult U.S. population – has no credit score at all, called “credit invisible.” Some of them are immigrants who haven’t had the chance to establish credit lines in the U.S., while others are from low-income or unstable environments and never have taken out a credit card or loan.
8. We all know the Big Four credit card companies now (Visa, MasterCard, Discover, and Amex), but the first ever credit card that allowed a member to purchase anything they’d like and then pay it back over time was called BankAmericard. Issued in 1958, they changed their name to the more-familiar “Visa” in 1977.
In 1966, the Interbank Card Association bought the rights to “Master Charge” from the California Bank Association, which they renamed “MasterCard” in 1979.
9. Americans may be buying new cars, homes, and fancy electronics, but how are we paying for everything? Too often, the answer is with debt. In fact, 52% of Americans spend more money than they earn every single month, and 21% have regular monthly bills that are more than their take-home pay! 1 in 4 Americans have more debt than savings, and the average American spends $1.33 for every dollar they earn.
10. The American Bankers Association found that 44% of Americans surveyed thought that credit scores and credit reports were the exact same thing! That’s probably why a study by the National Foundation for Credit Counseling (NFCC) revealed that a significant portion of consumers thought that they didn’t need to know their credit score because they already had a copy of their credit report.
Online fraud is one of the fastest growing forms of crime, reaching epidemic proportions in a nexus of technology and cruel anonymity that defies international borders. The highest instance of fraud attempts is now aimed at businesses, violating their often-weak or nonexistent firewalls to access customer financial data, and using it with impunity.
The homebuying and mortgage process starts with your credit score.
Homeownership rates are near modern-era lows, but it’s not because people don’t want to buy. But surveys reveal that coming up with a down payment, qualifying for the mortgage, too much debt, and even credit score are holding them back from homeownership.
In fact, the majority of people who are planning to buy a house in the next 12 to 18 months are pretty confused about what credit score they need, and how to improve their score. However, this national survey found that only 45 percent of potential home buyers really understand what their credit score is measuring – their responsible management of debt and risk of defaulting on new loans.
Likewise, less than 50 percent of respondents could identify what their credit score affects in the mortgage process (such as interest rates, program guidelines, and the amount they qualify for.)
Their lack of clarity can actually hurt their score, further delaying or even canceling their plans to buy a home. For instance, 33 percent of consumers polled think that increasing income will help their credit score, and 28 percent believe that closing old accounts will do the same (not the case).
Even more concerning is that they’re unsure of where to even start with the knowledge, actions, and assistance to ready their credit for a home purchase. Only 22% of people polled thought that they should check their credit report in the three months leading up to their mortgage application!
Of course, when people start the process of buying a home, there are a lot of things to focus on: which neighborhood they want to live in, finding the perfect house, getting approved for a mortgage at a great interest rate, and then the all-consuming process of packing and moving. But before any of that happens, there is one more item that should lead off their checklist: taking care of their credit score.
So, keeping your credit score up to par has some very tangible benefits during the home buying process:
• Lower interest rates,
• A greater variety of loan programs available,
• Qualify for loans with less money down,
• Your offer on a house will be seen as more favorable if you have a high credit score, giving you more leverage. During multiple offer situations and bidding wars, the seller sometimes requests additional documentation like proof of the buyer’s credit score and funds.
• But, of course, saving money when you make your mortgage payment every month is the real benefit. Even a credit score increase of a few points may help you qualify for a lower interest rate, adding up to tens of thousands of dollars in savings over the life of your loan.
Consider these three scenarios, where three consumers who are buying a $400,000 home, with a $320,000 mortgage, qualify for interest rates of 4%, 4.5%, and 5%, respectively. Please note this is just an illustration for educational purposes.
Interest Rate: 4%
Monthly Payment: $1,527
Total of 360 Payments: $549,982.42
Total Interest Paid: $229,982.42
Interest Rate: 4.5%
Monthly Payment: $1,621
Total of 360 Payments: $583,701.48
Total Interest Paid: $263,701.48
Interest Rate: 5%
Monthly Payment: $1,717
Total of 360 Payments: $618,418.51
Total Interest Paid: $298,418.51
That means if your credit score was top notch and you qualified for a 4% interest rate (hypothetically), you’d save $190 a month compared to the 5%, and $94 compared to the 4.5% loan. That sounds nice, but doesn’t seem like big money, right?
But when you compare the long-term savings, the person with the 4% loan saves $68,418 in total payments over the life of the loan compared to the 5% loan, and $33,719 compared to the 4.5%
That’s some HUGE savings for just a very small interest rate difference. (For even more information how a good credit score will save you money, read this.
So, how do you make sure your credit score is ready for the home buying process? Here are some tips to make sure your credit score will be as high as possible when you’re ready to buy a home:
1. Always pay on time.
According to FICO, 96% of people with a FICO score of 785 or greater have no late payments on their credit reports, so be one of those people who have a spotless payment history if you want the perfect FICO. Since payment history is 35% of FICO’s scoring model, paying on time is crucial.
2. Check your credit report periodically.
It’s important to make sure that there are no errors on your credit file and everything is in order. These days, you also need to make sure that your identity hasn’t been stolen or compromised, which affects up to 1 in 8 Americans every year.
3. Spend less and pay down your balances.
FICO calculates a significant portion of your score by your credit utilization ratio – how much debt you keep to how much your total available balances are. A survey of those who had the top scores revealed their average credit card balances relative to their limits was just 7%.
FICO calculates 30% of their scoring model by the overall money you owe and how close you are to the limits on your credit cards and revolving debt, so low balances, and healthy ratios are the key to a top score.
4. Keep a good mix of credit.
Consumers with FICO scores above 760 have, on average, six accounts that are currently “paid as agreed” and an average of 3 accounts with a balance.
5. Keep well-seasoned accounts.
Most super scorers also have, on average, an account that’s 19 years old. The average age of their accounts is between 6 and 12 years old and they opened their most recent account 27 months ago or more. 15% of FICO’s scoring is calculated by the credit history.
6. Start early.
Don’t wait until you’re ready to start looking at houses or apply for a mortgage to start working on your credit. Get a copy of your credit report from Nationwide Credit Clearing six months before you’re ready to apply for a mortgage. That will give you plenty of time to pay down debt, close unwanted accounts, or dispute errors and inaccuracies in order to maximize your score – as well as working with Nationwide Credit Clearing to repair your score.
7. Do’s and Dont’s during the home buying process.
It’s important not to make big changes during the mortgage process, as it may trigger a red flag for lenders, who are trying to make decisions based on a static snapshot of your finances. Avoid big purchases on credit, moving large sums of money to and from bank accounts, and applying for any new credit or closing existing accounts.
8. Consider getting help.
Before you even sit down with a mortgage broker or take a ride around town with a Realtor, home buyers would be wise to contact Nationwide Credit Clearing. With a complimentary free credit report and consultation, we can analyze your situation and give you an accurate assessment if your credit is home-buying worthy or needs some work.
Contact us today to get started – and happy home hunting!
Is your bad credit score hurting your children?
Your credit score has little or nothing to do with your children, you may think. After all, young ones aren’t even aware of what a credit score is for the most part, nor do they concern themselves with the level of your credit card debt or other boring “adult stuff.”
So, even if you’re maxed out on your cards with a sub-par score, it won’t affect them, right?
Wrong. In fact, numerous new studies point to the fact that there’s a direct link between how parents manage their credit, debt, and other money matters, and how children will do the same in the future. Even more important, you could actually be hurting your child in myriad ways if you’re behind on bills and keep a bad score.
“Sadly, your credit doesn’t just affect you, it also affects your kids,” says Michael Banks, founder of Fortunate Investor.
From missing out on private schooling, participation in sports, field trips, getting tutoring, and having a new computer for homework. Braces, trips to the doctor, and other medical needs may go unmet if parents have too much medical debt, not enough funds set aside, or don’t qualify for A+ insurance programs due to their credit scores.
College choices, and especially their choice of universities and later vocation, will be negatively impacted, and these kids will be forced to take on student loans, won’t have co-signers to help them with their first credit card or car loan, and take lower paying jobs out of desperation and need.
“Your children will need you at some point for financial help,” says Justin Lavelle, Chief Communications Officer for BeenVerified.com. “Don’t waste away your financial future and your child’s hopes and dreams because you have sloppy money habits.”
These kids-now-adults will also lack the accurate and unemotional knowledge about debt, savings, and investing. So, point blank, the environment at home around credit and debt matters.
Research also shows that children do pay attention to their family’s finances, but not in ways you may think. Information filters in not in dollar figures and statistics, but in stress levels, perceived anxieties, topics that are taboo, and suggestions about their place in the world or society.
Furthermore, children whose parents have high levels of debt and low credit scores (which is different than just parents on the low end of the wage-earning scale), miss vital opportunities in life that may hinder their potential development as adults.
There even could be developmental or behavioral implications to your high debt/low score burden.
New studies even reveal that children whose parents have certain kinds of financial debt are more apt to have behavioral problems. In a study of 9,000 children ages 5 to 14 conducted by the University of Wisconsin-Madison, researchers found that children of parents with high unsecured debt, such as credit cards or medical bills, were more likely to experience anxiety, emotional stress, aggression, and even depression.
“Growing up in an environment of constant financial worry can cause your children to ‘inherit’ those same concerns and carry them into their adulthood,” says Marc Johnston-Roche, founder of Annuities HQ.
However, it’s worth noting that there wasn’t such a correlation found between secured debt levels and children’s wellbeing. That’s because secured debt tends to go towards more positive and utilitarian purposes, such as getting a mortgage to buy a house, some student loan debt to pursue a degree, or taking out a business loan so the family can improve their financial situation.
Those findings are confirmed by a first-of-its-kind study by Dartmouth College which discovered that how parents handle their credit has socioemotional implications. In their research, children of parents with higher levels of unsecured debt (credit cards, payday loans, and medical debt), were more likely to suffer from “poor socioemotional well-being.”
“High levels of unsecured debt may create stress or anxiety for parents, which may hinder their ability to exhibit good parenting behaviors, and subsequently affect the wellbeing of their child or children,” the study reported.
But there is potentially good news for children when parents do manage their credit – and communicate positively about it. A landmark study conducted by North Carolina State University and the University of Texas concluded that parents who were more likely to sit down and talk with their kids about credit, debt, saving, spending, and earning, even from a young age, give their children a head start for the future.
But, interestingly, the study also found that certain topics were often taboo or off-limits during family discussions about finances, like parental income, investments, and, yes, debt. They also found that parents were more likely to talk with their boys about investing and other matters than with their daughters – a concerning trend.
So, what’s the takeaway?
If you have a bad credit score, your children are statistically far more likely to have bad credit scores as they get older, too. And if you max out your credit cards and carry a lot of “bad” debt, you’ll likely pass that pattern on to your kids. No matter how well-intentioned you are, right now, you’re actually modeling what financial behavior should look like to your children – and they’re learning quickly.
You now have another compelling reason to clean up your credit and right your financial ship: keeping your children out of the same predicament.
Millions of Americans get a credit score boost because of new scoring rules. Will your score go up?
While millions of Americans just filed their taxes in hopes of a big refund, consumers may be getting some good financial news in another arena: their credit scores. That’s because the three major credit reporting bureaus – Experian, Equifax, and Transunion, just reported that they’ll start excluding tax liens from their credit scoring algorithms.
In a concerted effort to improve the accuracy and fairness of their scoring models in respect to public records, a significant number of Americans will see their credit scores jump, virtually overnight (the changes took place April 16.)
The push for reformatting the way judgments and tax liens are factored into credit scoring comes after a study from the Consumer Financial Protection Bureau revealed that incorrect, outdated, or otherwise erroneous information too-often showed up in credit files, sinking that person’s score. So, starting last July, the credit bureaus started their clean sweep of civil judgment data from credit reports, including some tax lien reporting. This April 16, they finished that job.
To be clear, the vast majority of Americans won’t see any difference if they check their credit score again. According to the IRS and other reports, between 93% and 94% of Americans do not have any sort of tax liens reporting on their credit. However, that still leaves about 12 to 14 million Americans that may have tax liens or other judgments affecting their credit score.
The number of people who see a credit score benefit could be even higher. Based on research by LexisNexis Risk Solutions, about 11% of our population will have a judgment or tax lien removed from their credit file.
No matter how you add it up, since the credit bureaus are reshuffling their credit scoring model and excluding tax liens from consideration, these “lucky” millions of consumers will enjoy that sizable score increase.
So, just how high might their scores increase with the new scoring changes?
The answer is “It depends,” of course, because credit scoring is based on a host of factors and individual circumstances (like payment history, status of other existing loans, how seasoned accounts are, and credit mix). While many consumers may see their FICO score up by about 10 points after the April 16 change, a whole lot more could see their score ascend even higher.
For instance, according to a study of 30 million credit files by credit scorer FICO:
• The majority of consumers will see an increase of about 1 to 19 points.
• But between 1 and 2 million consumers may see their scores skyrocket by 20 to 39 points.
• In the case of about 300,000 consumers, their credit scores could go up by as much as 60 points when multiple liens are removed – or more.
But, it’s important to remember that the vast majority of people won’t see any credit score increase at all, as they don’t have tax liens or judgments. Others point to the fact that the 92-93% of consumers who don’t have a tax lien are somehow unduly being penalized because they won’t see their score go up.
Likewise, various financial watchdog groups have gone on record that the changes won’t make a big impact for consumers, at all. According to Eric Ellman, senior vice president of the Consumer Data Industry Association, “Analyses conducted by the credit reporting agencies and credit score developers FICO and VantageScore show only modest credit scoring impacts.”
But wait, is it possible that the credit scoring changes not only make a minimal impact but even harm consumers? “Lenders and servicers have to hedge for that risk,” says Nick Larson, business development manager for aforementioned LexisNexis Risk Solutions. “Overall, consumers actually get hurt,” he goes on, pointing to the fact that banks, lenders, and creditors will have to adjust their guidelines and regulations accordingly (therefore hurting those who didn’t see a credit score increase from erasing tax liens) just to provide the status quo risk-gauging model.
No matter what the temporary impact may be, remember that the best way to maintain a great credit score over the long term – and save thousands on your credit cards, mortgages, loans, and more – is to make your payments on time, keep your balances low, and keep a good mix of seasoned, responsible accounts.
For more help or if you’d like a great credit score increase of your own, contact Nationwide Credit Clearing for a free report and consultation.
Tips to Improve Your Credit Score this Year!
It’s the beginning of a brand new year and we wonder,, have thought about your credit score yet? A New Year means new opportunities for you financially! For those of you seeking a more financially secured life, take these tips, read them, and begin to implement them into your daily routine.
- Keep your credit card balances low. The most effective way to improve your credit score is to pay down your revolving (credit card) debt. Your credit utilization ratio accounts for 30 percent of your credit score. While you may hear that paying debt down to 30% of the available balance is a good mark, an ideal credit utilization ratio is actually around 10% or lower.
- Pay your bills on time.
- Don’t allow outdated or inaccurate information to remain on your credit report. If you see something incorrect listed on your report, you should take actions to have it removed.
- Sending your payments in early may also help your credit score. Different creditors have different report dates when they send the information to the credit bureaus.
- Check your credit report annually. It’s important to make sure that there are no errors on your credit file. A significant number of credit reports do have these errors, which can lower your score. These days, you also need to make sure that your identity hasn’t been stolen or compromised, which affects up to 1 in 8 Americans every year.
- Don’t be tempted by new credit card offers or take on new debt. You can have these solicitations stopped being sent to you by “opting out” of these offers.
- Paying off a collection will NOT increase your score. It’s not the balance, but the fact that the account went into collection status is what is essentially hurting your score. But your score will increase if the collection agency is willing to delete the account off your credit report.
- Don’t go without credit. You only have a credit score if you have an active credit history. Some credit scoring systems cannot calculate a score if no balance is reported to the credit history within the last six months.
- If you want a high score, do not pay all your debt down to zero. FICO calculates a significant portion of your score by your credit utilization ratio, so it’s important to simply keep them all under 30% of their limit
- Request an increase to your credit line. Then make sure not to use the excess credit because this will improve your overall credit % usage
- Add missing accounts to your credit report. A perfect way to build your credit is to add positive accts that are not currently being reported. Unfortunately Cell phone companies, Internet providers, utility companies, and medical billers are not required to and often don’t bother reporting credit. But if you ask them to do so, they sometimes will post a new but well-seasoned, positive new trade line to your credit report.
- If you’ve missed payments and have an account in collections, they will often agree to erase any negative credit reporting for that account as long as you pay it off in full.
- Call Nationwide Credit Clearing if you have any questions in regards to your credit or want to see how you can improve it. We’re the nation’s leader in credit repair, with our clients enjoying a lifetime of financial freedom
Nationwide credit Clearing has been the leader in credit repair for over 20 years. We can help anyone in the United States increase their credit score. Give us a call today to find out how it all works!
“Home of the Free Credit Report & Consultation”
2336 N. Damen
Chicago, IL 60647
Toll Free: 877-334-3296
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How do Derogatory Items affect your Credit?
What are derogatory items?
Derogatory items are significantly damaging marks that show up on credit reports as a result of poorly managed credit scores or identity theft. Measures such as late/skipped payments can ultimately lead to the existence of derogatory marks on your reports. Each mark corresponding to a particular circumstance or outcome. Below are a few examples of several key derogatory items you should know about:
Charge-off: A charge-off is one of the worst marks a person can get on his or her credit report, as they happen when a lender determines that someone isn’t able (or unwilling) to pay off a debt they’ve been delinquent on for many months of payments. Although the lender determines the borrower is unable to pay, the lender is still able to legally demand payment entirely for as long as the state’s statute of limitations allow. It needs to be noted that it’s possible for charged-off financial debt to be settled for under its full worth, but credit reports will often note that the debt was not paid in full should this happen.
Collections: Sometimes debt goes to a collections bureau after a lender or service fails to receive payments. With this designation on your own credit report is quite severe; it is possible to work with a collections agency to make paying the money a bit easier. You can also negotiate conditions on your mark to disappear from your information completely once you make the agreed-upon payments.
Court Judgement: Judgements make reference to civil court rulings typically made against one person who owes money to someone else (similar to a lawsuit from a creditor or any other lawsuit regarding money). Since judgements are a case of public record, they could easily show up on credit reports.
Default: A default, particularly on certain kinds of loans (home, student, car), can create a serious problem on credit reports. Oftentimes, a default can be a precursor to several of the other items on this checklist, as it is one of the very first derogatory items that will show up on a past due individual’s credit report. For example, a default might appear onto your credit reports prior to the account being sent to collections. This is why it is extremely crucial to take non-payments seriously and address the problem that caused them right away.
Repossession: Repossession typically occurs when you default on a secured loan, i.e.. You presented something in collateral. If this occurs, everything you offered as collateral for this loan will be taken by way of the lender. This most frequently happens for mortgages and car loans, where the car or home you purchased with this loan is taken away. It’s worth noting that if the current amount of the repossessed item does not cover the entire remaining account balance on this loan, you might still be on the hook for future payments. These things are in no way an exhaustive list of derogatory marks; however they are several of the worst and most damaging, which is why you need to be aware of them.
How can I tell if my credit reports have derogatory marks?
The easiest way to find out if your credit reports include any derogatory marks would be to check your credit report & score. If you do not already know, federal law enables you to get one free copy of all the three of your credit reports – Equifax, Experian, and TransUnion – one time per year through most online services.
Can someone really improve their credit after receiving multiple derogatory marks?
If you do have any of the neg marks mentioned above, do not give up hope. While none of these issues is good for your credit, in time they will eventually just go away. Most derogatory items merely remain on your credit report for about 7 years, along with some having the potential to disappear even sooner. As your credit history grows, the weight that these items are specified also decreases, even if they are still physically found on your report. In addition, there is a whole lot that you can do to start building your credit again nearly immediately. Considering that most of these marks are the direct result of failed payments, working out a payment strategy to pay off any balances is a solid initial step toward restoring your own personal credit.
If you struggle with this, we encourage you to take a look at our top quality X5 Credit Repair system, exclusively from Nationwide Credit Clearing. If you or someone you know has derogatory items on their report, ones that should be disputed, please give us a call. We have been helping people for 28 years improve the quality of their lives simply by working with Nationwide Credit.
Money cannot buy happiness, but it sure makes living life a lot easier. Don’t Wait, Call Now!
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Chicago, IL 60647
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How Many Credit Cards Is Too Many?
You are at the register paying for a pair of new shoes at your favorite department store. The cashier asks if you would like to sign up their rewards program to save 10%. You are thinking who wouldn’t want to save 10%, of course you want to sign up. So you sign up for the stores credit card to get a discount on your purchase. Is that 10% off and a new credit card really benefiting you?
Stop and ask yourself if you really need another credit card. The more credit cards you have the greater chance you have of getting deeper into debt. It is important to remember that credit cards are not a form of supplemental income. The annual fees of the credit cards can also add up, so that 10% you saved will eventually cancel out.
Your credit score can also be negatively impacted by having too many credit cards. Which will in turn impact your ability to borrow money. Learn more about how a bad credit score can affect your life in our recent blog post (Little Known Causes for Bad Credit
In contrast, adding more cards can help your score by decreasing your credit utilization ratio (the amount of debt you carry compared to your available lines of credit). However, if you have a lot of credit cards with high limits and you go to a lender to take out a loan, the lender will take into consideration a situation where you ran those credit cards up and what your debt-to-income ratio would look like then.
So, how many credit cards is too many? There are people who are very successful using a single credit because it is easiest to manage one card. Having 3-5 cards is typically not a problem. But if you find all your credit card balances are increasing, that is a danger signal.
If it’s been a long time since you have checked your credit report, give us a shout here at Nationwide Credit Clearing. Our Initial Credit Report and Consultation is Free of Charge! Call Today!
“Home of the Free Credit Report & Consultation”
2336 N. Damen
Chicago, IL 60647
Toll Free: 877-334-3296
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