The Finance Blogger


What is Credit Utilization

February 21st, 2018 ernie Posted in Credit Repair No Comments »

credit utilization Credit utilization is a relatively new term that was initiated because many consumers were being penalized for having many credit cards open. We have all found ourselves inundated with credit card applications, stores that offer significant discounts if you open an account with them. Then there are the special offers from the credit card companies themselves. Free debt transfers, low interest rates, travel points etc. The offers go on and on. We cannot help ourselves and end up with a significant number of credit cards. many cards have a $5000 credit limit or larger. Even if you just have 6 cards, that’s a potential $30,000 in debt that could be added to your debt load.

Many people were penalized for having so many credit cards and such large potential debt loads. Their credit scores were lowered due to the potential debt load even though they carried a nil balance and paid their balances in full each month. As a result credit utilization was added to our credit scores as another factor to determine the credit score.

Credit Utilization Defined

Let’s take our sic credit cards as defined early and assume that this person only carries an unpaid balance of $2000 on one of the cards. All of the others have a zero balance. He pays the minimum payment each month and has a good record of paying everything on time. His credit utilization  would be $2000 divided by $30,000 or 6.6% when expressed as a percentage.

Lenders look for a ratio under 30% which is amply met by this consumer. In previous days, most people would close credit card accounts to improve their credit score. Lets assume that this person closed five of his credit cards and just used the one that he has a balance on. His credit utilization would go to 40% and would be well above the objective that many lenders look for.

This consumer would have been better off to keep his five credit card accounts open and just not use them. His credit utilization would still be low and contribute favorably to his total credit score.

There are many other factors that contribute to a credit score. An obvious one is paying all of your monthly bills on time every month. Never have a late payment and repay all debt as quickly as possible.

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What impacts your Credit Score

July 21st, 2017 ernie Posted in Credit Repair No Comments »

If like many consumers, you are wondering what things can impact your credit score, this list will help you understand what you need to do to improve it. There is the obvious item – Payment History. If you are not good at paying your bills on time particularly your loans and credit cards, your credit score is going to suffer. This also includes utility bills as well as rent payments and tax bills. Pay them all on time and in full or negotiate ahead of time to make arrangements. Even if you speak to them ahead of time, there is no guarrantee that your credit score will not suffer. But there are items that will affect your credit score in addition to payment history.

What Impacts Your Credit Score

Credit Utilization – lets say you have three credit cards each with a $5000 limit. If they have a zero balance or less than 30%, then your credit score will not usually be impacted unless your late with payments.

Length of Credit History – New credit and younger people do not have much history that shows how well they manage credit. The longer you can demonstrate that you can manage credit, the better your score is going to be. fifteen years is much better than two years for example.

New Credit History – Open new accounts slowly. Someone who opens many accounts especially credit accounts over a short time period shows that they are highly reliant on credit and may be a higher risk. If you need new credit accounts do so over a period of time over several months.

Credit Mix – credit cards are considered higher risk than student loans, car loans that are secured and mortgages on your home. Lots of credit card debt or potential debt can lower your credit score.

If you want to improve your score and are not dealing with these issues properly, it is time to look at each area and make adjustments in your life. Fixing one or all of these can improve your credit score.

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How to Improve Your Credit Score

November 7th, 2016 ernie Posted in Credit Repair No Comments »

how to improve your credit score
Many people often turn to credit when times get tough. Unfortunately, just like your bank account, your credit score can suffer during uncertain economical times. First come the bills, then your income takes a hit and you take on more debt. If you are the type to spend more than your income, debt can only increase. There are time proven methods to avoid getting into debt and how to improve your credit score. Here are four ways to help you recover your score:

How to Improve Your Credit Score

Get a line of credit – It may seem counter intuitive when your credit score is already hurting. The easiest way to establish credit is to use credit wisely. If you have either no score or it’s very low, a store credit card may be the way to go as banks often approve applicants who applied through an organization rather than on their own. Just be careful of higher than normal interest rates. Typical store cards run at 29% compared to 19% for regular credit cards.

Always pay your bills on time – Think of your credit cards as tools to help you build or improve your credit score, in addition to the convenience they provide. Don’t make any purchases you won’t be able to pay for at the end of the month. Late  payments will negatively impact your credit score and cost a lot of money in interest charges. If you were unable to pay off the card in full on the due date, then at least pay the minimum amount. Paying on time is the number one indicator of a responsible buyer.

Don’t go over the limit on your credit card – Also, try to keep your balance as low as possible. One factor that influences credit score is utilization. This is the ratio of credit balance to credit limit. The higher the ratio, the more negatively it impacts your score.

Keep an eye on your credit report – Check your credit report for inaccuracies or signs of fraud. You can request a free copy of your report either by mail or online through a credit reporting agency. If you choose the mail route the report is free. However it doesn’t include your actual score, just the report itself. You can also obtain the online version of your report and your score, but a fee will be charged.

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How To Fix My Bad Credit Score Fast

June 21st, 2016 ernie Posted in Credit Repair No Comments »

How To Fix My Bad Credit Score FastMaintaining good credit is a continuous activity that must be paid attention to each and every day. There are the big things such as making sure that you never miss a payment on anything. But there are a lot of other activities that each consumer needs to think about if they want to maintain their credit score. If your credit score is already bad, then there are some things that you can do to fix it quickly depending on your situation. If you can fix your credit score fast then you will be able to borrow money easier and at much lower cost for both interest rates and fee’s.

How To Fix My Bad Credit Score Fast

The following is a list of actions you can take to improve your credit score. Apply those that fit your situation:

  • Pay all bills, rent, utilities, loans and credit card payments on time all of the time.
  • Over due accounts should be address immediately, talk to the lender to find a solution that does not impact your credit score.
  • Keep your monthly debt payments to less than 35% of your monthly gross income.
  • Reduce the number of credit cards you have to no more than 3 and no more than a total of $15,000 in total debt
  • Consolidate your loans and debt into one low interest payment
  • Never default on a loan of any kind, always repay the loan.

These are the big ones. Pay attention to these items all of the time and you will be well on the way to fixing your credit score.

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Credit Repair Loan for $1000 Debt in San Diego

April 21st, 2016 ernie Posted in Credit Repair No Comments »

Credit Repair Loan 1000 Debt San DiegoLots of people allow their credit ratings to drop to low levels due to failure to meet monthly payments on utility bills, credit card payments, car loans and even the mortgage on their homes. Some readers have asked if a credit repair loan 1000 debt San Diego will help them repair their credit. Actually if this small amount would help them, they really just need a loan to get them through the next week to buy groceries, pay a few bills etc until they get paid.

Credit Repair Loan 1000 Debt San Diego

The only way to repair credit is to borrow money and then meet the obligations of that loan every month. never miss a payment and pay it of fin full. If you have existing debt, you must repay that debt in the time frame specified by the loan agreement.

If you need to borrow money to help do this, to consolidate debt then do it, but only if the interest rate and terms are a good deal and better than what you are currently paying. A high interest loan with lots of fees is just going to make your life worse and probably more in debt. A loan company that helps people is the only way to proceed. Take it from us a credit repair loan $1000 debt San Diego is probably not going to do it for you.

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Low Interest Rate Credit Cards

December 21st, 2012 ernie Posted in Credit Repair 1 Comment »

Low Interest Rate Credit CardsMany banks have started offering low interest rate credit cards that offer a lot of advantages over the traditional credit card. These cards can be very attractive to consumers who traditionally carry a balance on their credit cards and are paying interest in that balance. While most credit cards will typically carry a rate of 18% or higher on unpaid balances, low interest rate credit cards will be much lower with some around the 11 or 12% range. This can translate into a significant savings for many people on a monthly basis when they are carrying a balance on their credit cards. You are still better off to arrange for a low interest rate personal loan, however in the absence of a loan, low interest rate credit cards can save you money.

What are the Advantages of a Low Interest Rate Credit Card

The advantages vary from bank to bank, however several that we looked at include the following in their sales pitch on their web sites:

  • Low interest rate of 11.99% compared to 18% or higher with a regular credit card
  • Common carrier accident insurance
  • Discounts for car rentals and some locations
  • Checks to use with your credit card to transfer debt from other places
  • Emergency card replacement if lost outside of your country
  • Emergency cash advance if your card is lost
  • Acceptance world wide
  • Accumulation of points that can be used to purchase travel, hotels and selected products

Some cards will charge a fee for using these cards on an annual basis. Several that we looked at charged $29 a year for their credit card. In effect this makes up for the reduced that you might otherwise pay and is an additional cost to customers that pay their balances in full on a regular basis.

Is a Low Interest Rate Credit Card Right for You

These cards certainly can save consumers a lot of money if you routinely carry a balance on your credit card from month to month. Depending on the balance that you carry you can easily save several hundred dollars a year which pays for the annual fee and makes sense for those consumers. This is really a personal loan with a revolving line of credit with credit card advantages. They are very flexible and convenient to carry and use as a personal loan tool.

On the other hand, if you do not carry a balance from month to month, then the annual fee is an added expense that you will pay for. This then becomes the price you pay for the other advantages that come with the card. Examine the fine print carefully to make sure you understand the details and exactly what you receive when you use these cards.

For example if you rent vehicles often, then the 20% savings can add up quickly to pay for the annual fee. Same thing applies to common carrier accident insurance. Take a close look at all of the advantages of each card and select the one that makes the most sense for your life style and travel needs.

Other Credit Card Products

There are so many different credit card products available on the market that it is sometimes difficult to determine, which one makes the most sense for your situation. With each card that is offered, you really have to take the time to assess whether these products and their specific advantages vs. cost is going to actually save you money while providing the convenience of a credit card.

Many people are attracted to cards that build points that can be used to purchase travel such as airfare, hotels, and car rentals. Some even have catalogs that offer a variety of goods that can be purchased with these cards. This is a great way to recover some of the cost of an annual fee if one is charged.

Take the time to look at each one and them, make your decision. Low interest rate credit cards are great products, but they might not be the best product for you based on your life style. For more information about credit cards and how to deal with credit situations, click here.

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