If you’re age 62 or older with lots of equity in your home, you probably already know that there are several ways to get at that money. One option is a reverse mortgage. Some financial advisers will tell you categorically that a reverse mortgage is a bad idea. But is it really? Is there a downside to a reverse mortgage? The income generated from a reverse mortgage can significantly bolster retirement income. Good deal, right? Before you sign papers to tap the equity in your home, you’ll want to understand what are the three types of reverse mortgages as well as the advantages and disadvantages of taking out this type of loan. What Is the Upside of a Reverse Mortgage?There are several advantages to taking out a reverse mortgage. A reverse mortgage provides a steady, tax-free stream of income with no monthly payments. If you collect Social Security or Medicare, that income will not affect your eligibility or your tax status. The loan doesn’t have to be repaid until the house changes ownership or occupancy, or the borrower dies. No matter what happens in the real estate market, you and your heirs will never have to make up the difference if the value of the home goes south. Reverse mortgages are also easy to get, since there are no income or credit score requirements. What Is the Downside to a Reverse Mortgage?The biggest downside of a reverse mortgage is its effect on equity. The interest compounds for many years and fees are charged on the proceeds, all of which can quickly erode your equity. You must have at least 50% equity in your home. Once the reverse mortgage ties up that equity, you are ineligible for other types of home equity loans in the future. If you enter a long-term care facility, you may be forced to sell. If you pass away, your surviving spouse or other heir may have to either sell the home or repay the loan. Should the house fall into disrepair, the loan will come due. Finally, the proceeds of the loan could affect your eligibility for Medicare and Supplemental Security Income. What Are the Three Types of Reverse Mortgages?You’ll also want to take a closer look at the three types of reverse mortgages to decide which, if any, of the options are right for you. Home Equity Conversion Reverse MortgageA home equity conversion reverse mortgage (HECM) is the most-common of the three. An HECM can be used for any purpose. The money can be paid in a lump sum, monthly payments or a line of credit. Loan proceeds are guaranteed, even if the lender goes out of business.
This is the only reverse mortgage insured by the federal government and only available through FHA-approved lenders. Consequently, the borrower must pay mortgage insurance. In addition to an upfront insurance payment that is generally 2% of your home’s appraised value, ongoing annual insurance premiums of .5% of the outstanding balance must be paid when the loan is due.
Before approval for the loan, you’ll be required to meet with a counselor from an independent government-approved agency. The counselor will explain the financial implications of the loan. Proprietary Reverse MortgageAlthough a proprietary reverse mortgage is not backed by the government, the benefits are basically the same as an HECM. However, if your home has a higher appraised value, this option could allow you to get a larger loan. As with the HECM, your private lender may require that you meet with a counselor. Single-Purpose Reverse MortgageSingle-purpose reverse mortgages are typically offered by state, local and nonprofit agencies and comprise the smallest percent of reverse mortgages. Unlike traditional reverse mortgages, single-purpose reverse mortgages can only be used for one type of expense, and the expense — typically property taxes or necessary home repairs — must be approved by the lender. Single-purpose reverse mortgages are the least-expensive type of reverse mortgage since they generally tap into only a small part of the equity in the home. The proceeds are paid in one lump sum. These are a good option for lower-income borrowers who may not qualify for other types of loans. The important thing to remember with any type of reverse mortgage is that it will erode the equity in your home with each passing year. Of course, the longer you live, the more advantageous the reverse mortgage will be for you — but no one knows how long they will live. You’ll want to carefully weigh the pros and cons with a financial advisor before making a decision. You may have better, less-expensive options. Let SmartCredit HelpWhether you’re applying for a single purpose reverse mortgage, an HECM or a traditional home equity loan, you’ll want to get the best deal possible. This means making sure your credit score is an accurate reflection of the hard work you put into maintaining your credit standing. SmartCredit helps you do just that. With SmartCredit, you’ll have access to unique credit management tools that allow you to take control of your future score with proprietary features that help you monitor and optimize your credit score, as well as time your loan application for optimal success. SmartCredit can give you the peace of mind you need, so you can make the right financial decision for your situation. Learn more today. References:
The post Are There Downsides to a Reverse Mortgage? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/29/what-are-the-3-types-of-reverse-mortgages/
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If you’ve ever applied for a loan or a line of credit, then you are likely to be familiar with credit monitoring services. You must be aware of the importance of your credit report and credit score, as well as the three major credit bureaus. In general, credit bureaus are responsible for gathering the credit information of consumers and using it to assess their overall financial responsibility. But how do credit bureaus collect your information, what do they do with it, and what’s the difference between the three major credit bureaus? In this article, we’ll discuss what credit bureaus are, how they collect data, and what the significant differences are between each of them. What Is a Credit Bureau?A credit bureau is an organization that collects and sells data concerning the credit history of individuals. They generally collect data like your credit card and loan balances, the number of credit cards you have, your payment history, any insolvency, as well as any other information pertaining to your credit. Nowadays, there are three major credit bureaus responsible for collecting credit information: Equifax, Experian, and TransUnion. Credit bureaus began as a way to assist lenders quickly gauge the reliability of a potential borrower. In the past, businesses relied on the “honor rule” when determining if an individual was responsible enough to pay back a loan. With the explosion of the Internet, however, credit agencies became much more necessary to ensure the prevention of fraud. Today, credit bureaus have streamlined and computerized the process by compiling all of the data they collect and translating it to a credit report and credit score. While each credit bureau calculates credit scores differently, and every lender has different credit score requirements, credit reports and credit scores allow for a universal measuring stick to judge prospective borrowers by. As of late, credit bureaus have also branched out to providing dozens of additional products to help individuals and businesses to monitor their credit, including identity protection, credit monitoring, and much more. How Do Credit Bureaus Collect and Use My Information?Credit bureaus mostly collect information from credit institutions where you currently have a connection, such as banks, credit card companies, and other loan suppliers. While credit bureaus don’t have access to these accounts, credit institutions share their credit information with the credit bureaus. Collection bureaus and debt collectors can also report to the credit bureaus if you have any delinquent accounts. Now that you know how credit bureaus collect your data, you’re probably wondering how they use your information. Credit bureaus use your information to make credit reports and credit scores. They then use your information in collaboration with potential lenders, landlords, and other companies for several reasons. Your credit report could be used in the following scenarios:
Credit bureaus also sell information for advertising purposes. For instance, if a creditor is looking for potential customers with poor credit that may need a credit card, the lender will contact a credit bureau to obtain a list of qualifying candidates. This is often why many consumers receive preapproved credit card notifications in the mail. While the collection of data may sound suspicious to some consumers, the good news is that you are protected by the Fair Credit Reporting Act (FCRA). The FCRA is a law that says consumers have the right to know what’s on their credit report as well as the right to dispute any mistakes that are reported. Additionally, it also lays out what is defined as a “permissible purpose ” and “impermissible purpose” for a creditor to retrieve your data, while also stating that they must have your consent to do so. What’s the Difference Between Each Credit Bureau?Now that you understand the basics of credit reporting, let’s take a look at what the differences are between each of the three major credit bureaus. EquifaxAlt Text: Equifax Equifax is a credit bureau that lists accounts from groupings of either “open” or “closed,” making it easy to view credit information. Additionally, Equifax breaks down credit reports into several sections:
ExperianSimilar to Equifax, Experian provides monthly data for every credit account, including the minimum payment due, payment amounts, and balances. To get a full scope of a borrower’s credit history, businesses often use a combination of Equifax and Experian to determine eligibility. Experian breaks down credit reports into several sections:
TransUnionSimilar to Experian, TransUnion is also a credit information aggregator that collects the information of more than one billion consumers worldwide. TransUnion uses multiple techniques for collecting data, such as banks, lenders, and other companies that send periodic updates regarding your credit accounts. They can also acquire this information from public records. TransUnion breaks down credit reports into several sections:
Monitor Your Credit with SmartCredit TodayYour credit is one of the most powerful tools you have as a consumer. Whether you use it to secure a low-interest loan or apply for a mortgage, your credit is responsible for opening several doors of opportunity in your life. Monitoring your credit is one of the best ways you can ensure that you are always in solid financial standing. With SmartCredit, you can now take a simple yet innovative approach to credit monitoring. Whether you’re recovering from identity fraud or trying to build up your credit, SmartCredit can provide you with all the tools you need in one easy-to-find location. From routinely checking your credit report to handling disputes or claims, SmartCredit puts your financial freedom at your fingertips. Apply with SmartCredit today to start monitoring and improving your credit instantly. The post Experian vs. Equifax vs. TransUnion: Who’s Who in Credit Monitoring appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/27/experian-vs-equifax-vs-transunion-whos-who-in-credit-monitoring/ Aside from monitoring your credit score every month, you should make sure to check your credit report at least twice a year for errors or signs of fraud. Fair warning though, a credit report is more difficult to understand than your credit score, which is just a simple number. If you don’t know how to interpret your credit report, you won’t understand the red flags to look for. In this article, we’ll discuss how to interpret credit scores and reports so that you can detect fraud and understand everything that makes up your credit report. Interpreting Your Credit ReportIn order to understand your credit report, it’s best to understand what a credit report is and why it matters. From there, we’ll discuss the different components of a credit report and how you can find yours and read it. What is a Credit Report?A credit report is a comprehensive statement of your credit history. It’s used by potential lenders to determine the level of risk you are. The lower risk lenders label you, the more likely you are to get a line of credit. A credit report tells lenders:
Why Does a Credit Report Matter?Your credit report works hand in hand with your credit score in determining the status of your debt. A credit score is a quick measure of how you handle debt, but a single number doesn’t tell a lender much about your spending habits or credit history. In contrast, the report digs deeper to help them determine why your score is what it is. There are consequences to having low credit scores and bad credit reports. Here’s why a credit report matters.
Getting Your Credit ReportEach major credit reporting agency allows you to get one free copy of your credit report every year. You can sign up with SmartCredit and conveniently request all three credit reports and see them side by side in one place, rather than from each bureau separately. Each agency will keep different details on file, so your report may differ from one to the next. Because of this, it’s advised to check all three and compare them. Reading Your Credit ReportOnce you have your credit report in hand, here are the things you can expect to see, and what you should take a closer look at. Identifying InformationThe identifying information sections include any personal information that’s used to identify you, including:
What You Should Look At: This may seem like the most basic section, but credit reporting agencies can make mistakes here, especially if someone else has the same name as you. It’s always important to check this information, including the Social Security Number to make sure everything they have on you is correct. The addresses listed should be all of the places you’ve lived. If you find an address where you’ve never lived, it’s best to contact the credit reporting agency to find out what went wrong. This is crucial because you never know if you’re being flagged for another John or Jane Doe’s bad credit, or if you’re the victim of fraud. Credit HistoryThe credit history section is the meat of the report. This section includes:
What You Should Look At: This section should be read and reread to make sure that everything listed is correct. Any accounts that are in collections should be taken care of immediately. You may find discrepancies that are affecting your credit score. Look for accounts that don’t seem familiar to you and check for any payments being marked as late when they weren’t. If you’ve closed any accounts, make sure that those accounts are reflected as closed. Conversely, you should also check that no lines of credit have been opened up in your name without your consent. This is a red flag and means that you could be a victim of identity theft. Public RecordsIf you’re lucky, the public records portion of your credit report should be blank. This is the area where financial activities like bankruptcy, tax liens, and judgments will be found. Records like these can stay on your credit report for as many as seven to ten years. What You Should Look At: You likely won’t find an error here because these reports are taken from the public record, but it’s worth looking at just in case they pulled someone else’s records by mistake. InquiriesThis section of the credit report lists every business that’s requested your credit report. You’ll see the two different types of inquiries: soft and hard. Soft inquiries are from organizations that want to send you promotional materials, like advertisements about new credit cards, or creditors checking your account. Hard inquiries come from companies when you apply for a credit card, loan, or mortgage. What You Should Look At: Hard inquiries can make your credit score drop a few points for a short while. If you haven’t applied for any credit cards or loans and see a hard inquiry on your report, make sure to get this cleared from your history ASAP, especially if you want to have a pristine credit report for when you do apply. Open AccountsWhen you check your credit report, you’ll see open accounts. An open account is a line of credit that’s been opened and never officially closed. If you have a department store credit card that’s been paid off, but you’ve forgotten about it, you’ll find it in this section. Even if you haven’t used a particular credit card for a long time and don’t plan to use it again, it will still show up as an open account on your report until the account is closed. The “U” on a Credit ReportThe letter “U” on your credit report stands for “unclassified.” This means that the account hasn’t been updated at the time the report was pulled. This can appear next to any account on your credit report and indicates that there could be a potential problem with the account, such as it is past due or in collections. Don’t panic, though. You may see a “U” if the account is new, and no payments have been made on it yet. In this case, it shouldn’t have a negative impact on your credit score, and shouldn’t be cause for concern. Who Sees Your Credit Report?There are several types of organizations that are authorized to request your credit report, including banks, creditors, lenders, insurance companies, landlords, collections agencies, employers, and the government. Take note that anyone who lacks this kind of authority cannot legally pull your personal information to access your report. Disputing Inaccuracies in Your Credit ReportIf you find any mistakes in your credit report, you’ll need to contact the agency showing the mistake. This is why it’s vitally important to compare reports from the three major reporting agencies. To dispute credit report inaccuracies, write a letter that lists the mistakes and present documentation to support your claim. For example, if you’ve closed a credit card, but it is showing up as open on your report, you’ll need to gather evidence to prove that the account has been closed. This should all be sent by certified mail. You can expect the agency to respond within 30 days. You may want to contact the agency ahead of time to find how to expedite this process. They may be able to help you on the phone or through their website. SmartCredit offers convenience with the action button that can submit dispute communications with one quick click. You may use this feature for customer disputes, claims, or anything that needs to be communicated directly to the source (i.e. creditor or bank reporting the situation) rather than the credit bureau. Rather than writing to the credit bureaus, the action button helps the customer save time, as they get to raise concerns to the source of the dispute directly*. Constant Vigilance!Part of being a responsible adult is monitoring your lines of credit and ensuring that you haven’t become the victim of identity theft. Now that you know the important things to look for, you can take more proactive steps to stay ahead. To learn more about your credit scores and reports, visit the SmartCredit website today!
*Results and timing of results may vary depending upon your circumstances. The post Adulting 101: How to Interpret Your Credit Report appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/24/adulting-101-how-to-interpret-your-credit-report/ Banks and credit unions provide many of the same services. Both offer federal deposit insurance, so up to $250,000 per deposit or, per institution is protected. However, it is the differences between these two types of financial institutions that will lead you to a decision about where to put your money. When it comes to deciding between a bank vs. credit union, see which best serves your needs. It’s a matter of determining your priorities. Credit Union vs. BankThe basic difference between a bank and credit union is that the former operates on a for-profit basis, while the latter is a non-profit. Credit unions consist of members, and they are the ones who actually own and control the financial institution. Banks are owned by shareholders, and the primary aim of the bank is maximizing shareholder profits. Credit unions and banks offer many of the same financial products. These range from credit cards, mortgages, car loans, personal loans, savings and checking accounts and business accounts. Bank Advantages and DisadvantagesBanks, especially large ones, will have more branches than a credit union and offer more convenience. If you need more sophisticated financial services, such as those regarding trustees, a bank is more likely to provide assistance than a credit union. Banks tend to provide customers with the latest in technology, at least compared to their credit union rivals. Most customers will find a banks’ online and mobile tools more useful than those of a credit union. As long as you are 18 or older and a legal resident, you should prove able to open a bank account at any branch. Some smaller banks may require that you reside in the region. If rewards programs are important to you, banks offer better deals. For some customers, the lack of competitive rewards programs at credit unions makes the decision to go with a bank much easier. On the downside, banks will generally charge higher interest rates on loans, and higher transaction fees than credit unions. Interest rates on savings accounts, CDs, and similar investment vehicles are usually lower. Credit Union Advantages and DisadvantagesAs a member of a credit union, you can expect more in the way of personal service than with a bank. Because you are a member, and not just a customer, you have more of an investment in the institution. If you’re a saver, you will probably find a higher rate on savings and money market accounts. You should also find that credit unions offer lower interest rates than many banks. Free checking is a popular credit union perk. Unlike a bank, you cannot just open an account at a credit union. You must qualify for membership. The good news is that membership terms are flexible, and most applicants will meet the criteria. Credit union membership often revolves around a worksite, house of worship or denomination, or a particular community. Family members are generally eligible to join their relative’s credit unions. If you are ineligible to join one particular credit union, it is likely you are eligible for others based on membership requirements. One of the great advantages of credit unions is their commitment to member education. Credit unions pride themselves on providing financial literacy to members, on the theory that an educated customer is their best customer. It is part of the more personal touch for which credit unions are known. A major disadvantage is that relatively few credit unions use state-of-the-art apps and technology. They are generally a few years behind bank tech. You might find your online experiences less user-friendly than with a bank. If cutting edge tech is a necessity, go with a bank. Contact SmartCreditIf you’re not certain whether a bank or credit union is the right choice for your needs, SmartCredit can help you make the decision. We are in the financial literacy business, and our goal is for customers to achieve their best possible credit score. From there, they can find and secure the best loans available, no matter which type of financial institution is involved. Contact us to learn more today. References:
The post Banks vs. Credit Union – Which Is Right for You? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/22/bank-vs-credit-union-which-is-right-for-you/ So, what is the difference between interest rate and APR? And which one is more important? If you use credit products, you´ll want to understand these terms so that you can make informed decisions. What’s the Difference Between Interest Rate and APR?Interest is relatively straightforward. It’s what you pay on principal — in other words, the total amount borrowed. For example, let’s say you buy a sofa for $1,100. You charge the furniture on your credit card. In this case, $1,100 is the principal. For the privilege of using the bank’s money to purchase the sofa, you’ll pay interest on the principal amount of $1,100. APR, on the other hand, is the aforementioned interest rate plus any fees you may incur. Although your credit card company may charge fees, these are not the type of fees that are included in APR. You could, for instance, pay an annual fee of $75 or incur a $35 penalty for going over your limit. None of this is included. So, which fees are included in APR? Suppose you buy a new house and finance $200,000 on a 30-year mortgage at an interest rate of 4.25 percent. When you purchase your house, there are several fees added on. They may include, for example, discount points, origination charges, and any other fees that are paid out over the term of the loan. These charges are added to the amount that you borrow to purchase the home. If those fees are $6,000, your APR is 4.50 percent. This is the actual interest that you will pay over the next 30 years. Interest vs. APR on LoansAs mentioned, credit cards don’t have fees that are calculated in APR. Personal loans, however, do. Typically, these fees range between 1 to 8 percent, depending on your credit rating and loan term, among other things. With fees, a personal loan APR is higher than the interest rate. Here’s a comparison between two banks, both offering a $10,000 loan at 9% interest: Bank A:
Bank B:
The two loans have nearly identical APRs. Bank B has a lower monthly payment and, although the loan origination fee is higher, it’s included in the principal amount. So when you borrow $10,000 from Bank B, you´ll receive $10,000. Bank A charges the fee upfront, which has the net effect of reducing the initial amount of cash remaining. Which one is better? Well, with Bank B you´ll pay more than double the interest: $3018 vs. $1,448. Plus you´ll be in debt for two additional years. Where to Find APR on Existing DebtIf you don’t know what APR you’re paying, look for it on your statement. Or call your bank or mortgage company. It’s easy to find the APR on your credit card statement. By law, it’s in large 18-point font enclosed within a border known as the Schumer box. But be aware that the Schumer box doesn’t tell the whole story. If you see an asterisk, your interest rate will vary according to prime. Not to go too far into the weeds, but the prime rate is simply the rate charged to the most creditworthy customers and is based on the federal funds rate. Credit is complicated. Even though the Schumer box is intended to clarify things, it can still be confusing. Depending on the type of credit card, there may be three scores or a range shown there. In this case, your APR depends on your credit rating:
If your score is excellent, you should get the best APR. If your score is below 580 to 699, you´ll incur the highest rate shown. There will likely be several categories of APR shown, including a low or 0% introductory rate. The cash advance and penalty rates are the highest. Your purchase rate is what you typically pay on your day-to-day expenditures. Know Your Interest RatesAlways look at the APR on the credit products you use. Remember:
Your best APR is 0%. But if you can’t get that, pay off your credit cards in full each month. It’s one of the best ways to protect your credit rating and keep your financial plan on track. Another way to stay on top of your credit rating is to use a credit monitoring service like SmartCredit.com. With SmartCredit, you’ll have more control over your borrowing options and future score. References:
The post What’s the Difference Between Interest and APR? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/20/whats-the-difference-between-interest-and-apr/ We all want the best for our kids. One of the most valuable financial lessons you can teach your child is how to develop a great credit score. A high credit score can save someone tens of thousands of dollars over a lifetime – and alleviate many potential nightmares. By helping your child develop a good credit score, you can set them on a path to financial freedom and success. There are several things that you can do to help your child begin his adult life with an excellent credit score. Implement a few of these ideas and your child will be well on his way to a financially comfortable life. https://www.smartcredit.com/credit-scores.htm Help Your Child Sign Up for a Secured, Student, or Low-Limit Credit Card One of the best ways to help your child get started financially is by setting them up with a secured, student, or low-limit credit card. These cards are easier to acquire than traditional credit cards, and still assist in developing credit. Therefore, by helping your child setup a basic credit card, she can begin developing credit and learn how to handle her own debt. Co-Sign On Useful Loans Although your son doesn’t need a new sports car, he does need a car to get around. Furthermore, owning a home is often a much better financial decision then renting. Therefore, consider helping your child get those first loans by co-signing. You will want to make sure that the loan is a good decision, and one that you feel comfortable supporting, but backing your child’s first borrowing activities can help your child improve her credit and start life from a more financially stable position. Get more information here. Encourage Your Child to Keep Accounts Open One of the criteria used to calculate someone’s credit score is the length they have had financial accounts open. Therefore, when your child moves, or takes off to college, suggest that they may benefit from keeping a bank account or credit card active – provided there are no fees associated with the account. When lenders view successful and consistent payments extending back many years, they will feel more comfortable providing additional financing to your child – more confident that he or she is knowledgeable and capable of managing debt. Educate Your Child on How to Manage Finances This cannot be done too early – and, although it doesn’t directly affect someone’s credit score, it is essentially the long-term determiner of whether or not someone will maintain a high credit rating. From the moment you begin giving your child an allowance or paying them to do odd jobs around the house, start encouraging them to manage their money wisely. Show them the value of putting some into savings, some into giving, and splitting the rest between long-term goals and short-term purchases. If your child understands how budgeting and financial management works before they start developing a credit score, you can be confident that developing and maintaining an excellent smart credit rating is something they will be very capable of accomplishing. Original Source: https://blog.smartcredit.com/2014/06/14/help-child-develop-good-credit-score/ from https://smartcredit2.blogspot.com/2020/07/how-to-help-your-child-develop-good.html The most obvious benefit of a higher credit limit is increased spending power. With access to more credit, you can be more flexible in your spending and may even earn additional rewards like air miles or cashback from your credit card provider. But having a higher credit limit also comes with another important benefit: a lower credit utilization ratio. While your credit limit represents the amount of credit available to you, your credit utilization ratio shows the amount you use. For example, if you have a credit limit of $3,000 and you currently owe $300, you have a credit utilization ratio of 10%. In terms of your credit score, the lower your utilization ratio the better – always aim to keep it below 30%. Increasing your limit could also make any future borrowing less expensive – as your credit score increases, you may be offered lower interest rates on loans and credit cards. Read on to learn how to increase your credit limit in a short amount of time. Request an Increase From Your Current ProviderThis might sound obvious, but the quickest and easiest way to increase your credit limit is to make a request to your current lender. Surprisingly, just 28% of people ask their credit card provider for an increase. You may be surprised by just how simple it can be to obtain a line increase – if you’re a good customer, they’ll want to keep you. In fact, almost 8 out of 10 Americans who asked their card provider for an increase in credit were approved. Apply OnlineLog on to your bank or credit account and scroll through the menu until you find the option for credit limit increase or credit line increase. You’ll likely be asked to update details of your salary and monthly outgoings, as well as the amount you wish to increase your credit limit by. Give Your Provider a CallThere may be a benefit to talking things through with your provider in that they can guide you through the process and point out options you weren’t aware of. Try the toll-free number printed on the back of your card or on the top of your statement. Be aware that, whether you call or apply online, there’s a chance the lender may do a “hard pull” credit inquiry that may impact your credit score, but they’re obligated to let you know before they do this. Other providers won’t do a full search, meaning there won’t be an impact on your score. Improve Your Credit Score and Boost Your LimitBefore offering you a higher credit line, lenders will often look at your credit score to ensure that you can be trusted not to default on payments. Despite the impact that having a decent credit score has on so many areas of life, almost 4 in 10 Americans don’t know how their credit score is determined. Keeping track of your credit score doesn’t need to be complicated – it can actually even be fun. SmartCredit can help you control your future credit score using easy to navigate tools. If you need to know what is hurting your score, look to SmartCredit’s ScoreBuilder* tool for a 120 day action plan to take back control of your finances. Transfer Your Credit Limit From Another CardSometimes, your lender may not be able to offer you an increased line of credit on your current card. This could be down to a number of factors, from too short an amount of time since your last increase to being on a secured credit card account that doesn’t allow increases. That doesn’t necessarily mean you can’t get more credit though. One strategy you could try is applying for an additional card with the same provider and subsequently transferring over a portion of your credit line to your new card. This can be done over the phone, but bear in mind that it could take up to several weeks to be transferred. Improve Your Chance of Being Offered an Automatic IncreasePlenty of credit card providers will offer you an increased credit line automatically after 6-12 months of responsible use. Don’t worry – these increases won’t damage your credit score because they require your explicit permission before processing the increase. To be offered an increase to your credit limit, you need to be using the card regularly rather than tucking it away at the back of your wallet for emergencies. This is because the frequent use generates bank fees for the provider – the more you spend, the more they earn. Prove that you’re a responsible borrower by ensuring that you make repayments on time in order to build a positive repayment history. As you can see, there are multiple ways that you can increase your credit limit. It doesn’t need to be complicated or a hassle, and, providing you manage your repayments effectively, it could actually lead to a healthier credit score overall. To learn more about how you can take control of your future credit score and increase your credit limit, contact SmartCredit today. *This feature unlocks if you have negative credit data. References:
The post 4 Ways to Increase Your Credit Limit in a Short Amount of Time appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/17/how-to-increase-credit-limit/ Credit cards are a virtual necessity of contemporary life. Without them, it’s difficult to rent a car, purchase an airline ticket or shop online. Yes, you can use a debit card for these purposes, but not if you don’t have enough money in your bank account to pay for the transaction. Credit cards may also provide enticing reward benefits. The Credit Card Approval ProcessHow long does it take to get a credit card? That depends on various factors. If your credit is good, you can apply online and should know whether you are approved shortly thereafter. The entire process only takes minutes. The process begins with filling out the application and providing your Social Security number. The lender then reviews your credit report. Along with this information, the lender evaluates other aspects of your financial life, such as your debt-to-income ratio. It is all a matter of meeting a lender’s underwriting standards. Applicants meeting these standards receive credit card approval, while those who do not meet the standards find out why via a notice in the mail. The notice will outline why the decision was made, based on your credit report and other elements. If approved, expect to receive your credit card in the mail within 10 days. If you need it more quickly, request expedited shipping, which comes with an additional fee. Some issuers may provide instant access to your credit card number, so you can use it for online purchases before receiving the physical card. Credit Card Application ConsiderationsBefore applying for a credit card, take time to consider the factors most likely to help you receive approval. Some strategizing can improve the odds of achieving your goal. First, check out the lender’s website. Most banks, credit unions and others in the credit card industry will reveal the general standards necessary for approval. That includes acceptable credit scores. Consumers can check their credit reports for free annually from each of the major credit reporting agencies: Equifax, Experian and TransUnion. Examine your report closely to ensure it is accurate. If there are mistakes in the report, such as an outstanding bill you have paid, contact the credit reporting agency in writing and include copies of documents proving your assertion. The credit reporting agency must investigate such items within 30 days. To make it easier for you to access your credit report and identify actionable steps you can take to increase your score, the SmartCredit system is an all-in-one tool that consolidates everything for you. If your credit score may cause possible rejection for a credit card, work on achieving your future credit score before submitting an application. Credit Card vs. Personal LoanWhen time is of the essence, you might consider seeking a personal loan rather than waiting for credit card approval. In both cases, the lender offers funds at a specific rate. A monthly payment schedule is involved. The key difference is that a personal loan is a lump sum amount with a relatively low interest rate and is repaid over a predetermined amount of time, while a credit card is a revolving type of credit. The credit card holder can access funds up to their credit limit as long as the account is in good standing. You might want a personal loan to pay off any kind of debt. If a personal loan is unsecured, there is no collateral attached to it. A secured personal loan does have collateral attached, but that also means the interest rate is somewhat lower. Collateral may include motor vehicles, real estate and other assets. Fail to pay back the loan, and the bank may seize the collateral. Credit scores are critical to both credit card approval and personal loans, but a lender can make a faster decision when it comes to a personal loan. It is possible that you could receive the funds within a day or so of submitting your application. If you already have a credit card and want to make a major purchase, you might end up paying more for it than with a personal loan if you have a high-interest–rate card and keep a balance. Doing the math to determine whether a credit card or personal loan makes the best choice in your situation is critical. Contact SmartCreditBefore applying for a credit card, you want to achieve your future credit score. SmartCredit can help you get the loan you want, with the lowest interest rate, monthly obligation and down payment. We provide essential tools for our customers that help you take steps toward achieving your credit and personal goals. For more information, contact SmartCredit today and find out how to control your future credit score. References:
The post How Long Does It Take to Get Approved for a Credit Card? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/15/how-long-does-it-take-to-get-approved-for-a-credit-card/
You. Taking charge of your financial life begins with knowing your net worth. Of course, the higher that value, the better off you are. The straight forward way of calculating your net worth is the sum of your assets minus the total of your liabilities but is that the whole picture? Even though this accounting net worth value is beneficial to plan successfully and build your financial future, it does not reflect the most significant asset of all, and that is you. On the regular, you pay your bills on time, you manage to keep your credit card debt within the recommended ratio to the total limit, and you earn a comfortable living. So what, someone might say? The reality is, you have built a strong credit history that is priceless because it defines you and only you, yet that is often taken for granted by many. You are your most valuable asset. visit this link. May I please speak to John Smith? Although your name is most likely uncommon, you are equally susceptible to having your most important asset, your identity, damaged and destroyed. Every year around 8.9 million people become victims of identity theft. When your personal information is stolen and used without your consent, you can find yourself with drained bank accounts, racked up credit card bills for accounts you never opened, and you can even be served with medical charges on your insurance for treatments you never received. How identity theft happens. Let’s be honest, most of us think we are invincible. However, identity thieves are more creative than ever, figuring out new ways of getting their hands on your precious personal information. If you do not shred every piece of mail, bill, or statement that you throw away, you become an easy prey for the dumpster divers. Another common tactic used by these criminals is the change of address or stealing your mail directly. In addition, they can pose as someone who has a legitimate legal right to your information such as a landlord or a potential employer and open the door to stealing your identity that way. If you think about it, you should really be asking yourself how identity thieves are not able to easily get personal information about you. www.smartcredit.com/credit-report.htm What you can do to protect yourself. There are several things you can incorporate in your routine to shield your most valuable asset. Make sure that you safeguard your trash by shredding all documents and protect your mail by only using secured mailboxes. Do not carry your social security card, PIN, and other passwords in your wallet. Opt in for paperless statements for your credit cards and other lines of credit and set activity online alerts for them. Never share sensitive information. Check your credit report at least once a year to monitor inquiries and any new accounts opened. Finally, the only way that offers a constant peace of mind that your identity will not be harmed is still enrolling in a credit monitoring and identity theft service. The cost of this small investment cannot be compared to the value of you or to the possible painful headaches and monetary damages that it can prevent.
Original Source: https://blog.smartcredit.com/2014/06/17/what-is-your-identity-worth/
from https://smartcredit2.blogspot.com/2020/07/what-is-your-identity-worth.html If the credit card you have is not the credit card you want, you have probably wondered about acquiring a second card. Over time, everyone’s financial needs change. Perhaps your current credit card offers little in the way of benefits, or you still have a secured card on which you have built your credit history. You might wonder, “How long should I wait to apply for another credit card?” The answer depends on your financial situation and your credit score. Generally, it does not make sense to apply for another credit card, even if it may offer lower interest rates and more rewards, if your credit score has not increased. Multiple Credit Card AdvantagesThere are definite advantages to having more than one credit card. If you qualify, you could receive a lower APR. Your second card might offer rewards such as cash-back bonuses or points you can redeem for merchandise or services, such as airline miles or hotel rooms. If your credit cards are from different lenders, and one provides a zero- or low-interest balance transfer offer, you can transfer the balance from your other card, then use the card from which you transferred the balance for your everyday transactions. That way, the card to which you transferred the balance becomes a form of separate loan, and you are not paying interest on other transactions. A balance transfer option is a good reason to obtain a second card, but it is a good idea to wait until you have had your initial card at least a year before applying for another one. Of course, a second card can prove a lifesaver if your first card is lost or stolen. Just make sure to keep the cards separately, rather than putting both in your wallet, so you do not lose them at the same time. Having more than one card and using them responsibly can improve your credit score. This is an advantage if you eventually intend to purchase a car or home. The best way to do that is to make sure your balance is always significantly below your credit limit on any card. When to Wait to Apply for Another Credit CardFor every time there is a season, and you want to ensure it is the right season to apply for another credit card. It is wise to put your credit card applications on hold if you intend to apply for a mortgage or another type of loan, since a new credit card lessens the length of your credit history — a prime factor in the mortgage lending decision process. The added amount of credit could also mean you would no longer qualify for the best mortgage or loan rate. Of course, if you experience issues paying your current credit card bill, it is unwise to seek an additional line of credit. The last thing you want to do is dig yourself into a deep debt hole. Once you have paid down or paid off your balance, and managing the credit card bill is no longer a struggle, you might consider applying for another credit card. How Often Can You Apply for a Credit Card?Applying too often for credit cards will backfire, even if your credit score is good. That’s because every time you request a new credit card, the lender pulls a hard inquiry on your credit report. This is the type of inquiry that lands on your credit report and can affect your credit score. Numerous hard inquiries are red flags to lenders. Such inquiries indicate the applicant is not using credit responsibly. Some lenders may restrict how often an applicant can receive a credit card. While these restrictions vary, they are usually generous. An example is Chase’s limit of five cards within two years, although few people need that many cards that often. Contact SmartCreditIf you’re thinking about applying for another credit card, SmartCredit can help you achieve your future credit score so you qualify for the card you want. Our gamified system allows consumers to control their future credit scores via our proprietary tools. SmartCredit lets you control this score in actionable and measurable ways. You will find that you qualify for lower interest rates and other benefits. Contact SmartCredit today and start achieving your future credit score.
References: The post How Long Should You Wait to Apply for Another Credit Card? appeared first on SmartCredit Blog. from https://blog.smartcredit.com/2020/07/13/how-long-should-you-wait-to-apply-for-another-credit-card/ |
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