Feed: Credit Score Place - AggScore: 45.3

How to Choose the Best Credit Card

The credit card companies float hundreds of credit cards with varied options and utility every year, but few are accepted and retained as the best credit card along with the existing trusted credit cards. In the past couple of years when most of the credit card companies stopped their incentive and reward point schemes, only Visa signature credit card maintained its 2 % discount on all purchase to its members. Members of Costco got dollarsignr1 cash back on every dollarsignr100 spending on American Express credit cards. The members enjoyed 3% reward on annual gas consumption and in restaurant expenses, 2% on travel and 1% on sundry purchases.

There are a few good credit cards available for small business but it will depend on the specific nature of the business. When you are in small business it is better to have one of the best business credit cards so that it can be used for business purposes only and your personal credit card is retained for personal expenses. Thus your flow of cash and maintenance of accounts remains clean, and that will help you in your credit rating.

The best credit card deals contain cash back, bonus, redeemable reward points, airlines discounts etc. Below let us analyze some of the best credit cards and their features.

1. Capital One Venture Rewards Credit Card: This credit card supports airline miles. It offers two miles on every one dollar purchase daily, bonus miles is ten thousand for every dollarsignr1000 spent in three months, no foreign transaction charges and the initial subscription is free.

2. Citi Platinum Select MasterCard: This credit card provides 0% Intro annual percentage rate or APR for balance transfer and purchase for 18 and 12 months respectively. Beyond that the APR will be charged at standard rates. The APR will chiefly depend on your credit scoring and creditworthiness. This credit card provides discounts on travel, purchases and gifts along with identity theft results. The main attraction is it does not have any annual fee or subscription charges.

3. BankAmericCard Cash Rewards Visa signature Card: In this card the consumer gets a dollarsignr50 statement credit within two months of starting the account upon dollarsignr100 retail purchase, 3% cash back for a period of six months on purchases at gas stations, drug stores and grocery shops. 25% bonus on dollarsignr300 or more cash reward redemption and many more.

4. Discover Card: In this card the annual percentage rate is 0% for 18 months and thereafter standard APR, 5% cash back bonus on restaurant expenses and purchases during holiday season, and no annual fee is levied.

There are many such cards with great offers but it is the decision of the consumer which credit card offer suits him/her and that is supposed to be the best credit card.

How Does the Average Credit Score Affect the Country’s Economy?

The present financial policy prevents human opinion in deciding the creditworthiness of a person. The credit score is derived by the statistics of transactions and the assets and financial liabilities of the individual. The average credit score of a person is derived from FICO’s statistical calculation and the score derived thereby affects millions of people who are in need of a loan.

The 2012 report of FICO has concluded the average credit score in America. The finding of FICO is largely approved in The US and is considered as the benchmark for deciding a person’s creditworthiness. Every year the country revises its financial policy and the interest rates that affect many people. It is primarily based on the country’s economic condition and its future implications. The economy of any country is dependent on the purchasing ability of consumers, which settles the growth and decline. In 2012 the unemployment in USA has adversely reflected in the average credit score.

The credit score as we know it is calculated by three different bureaus; Experian, Equifax and TransUnion by using statistical records. Each individual has three different score reports and all of them may not be similar to each other. This is because their source of collecting information varies, thus resulting in conflicting reports. The repayment schedules and duration of credit are some of the main factors that are taken into account. These bureaus have millions of credit reports of individuals, companies and other financial organizations and thus they are able to derive the almost accurate average credit score. From these, the average credit report of a state or region is available in their websites.

The average credit score in the US in 2010 was 672. This score is the national average credit score and it may differ with states and regions. Moreover the average credit score varies within 651 to 710. Realizing the down trend in economy of the country many business organization like the banks, real estate, and other financial institutions have reduced the lower limits on the credit scores of individuals. The average credit score is necessary to buy a home, and 720 score is fairly good enough to get you a loan. It is pertinent that with the recovery of the American economy and more job prospects, the average is contemplated to go up. An average credit score will definitely facilitate loan or borrowings but such score is not considered to be a “good” average credit score.

Federal Credit Reporting Act – The Consumers’ Rights

The Federal Credit Reporting Act, or otherwise known as FCRA, is a USA federal law regulating the institutions that collect credit information from consumers. This regulation acts as a measure of safety and fairness towards the accuracy and privacy related to the personal credit information that credit report agencies obtain from consumers. This law came into being in 1970 having its latest amendment in December 2003.

When credit reports were first registered, their purpose was commonly and frequently served for showing how reliable an individual might be when applying for a new credit line or a loan.

In time, these credit reports started to be used also for closing insurance deals and getting a job that has to do more or less with finances. Thus an individual can nowadays face a decline when applying for such a job or be denied a certain form of insurance if his credit report presents negative points.

A credit reporting company is a business that deals with collecting, organizing and selling credit information to consumers. Three main agencies are there in USA that are known as major ones in credit reporting, such as Experian, Equifax, and TransUnion.

Once credit reporting agencies were established, there should have been a higher body to regulate their activity and to make sure that there is an accurate job they are doing. This is how FCRA was enacted – to protect consumers from being unfairly treated due to incomplete and/or false information introduced into their credit report.

Federal Credit Reporting Act

This law sees to it that consumers have the right to dispute any wrong information they may find on their credit report issuing a dispute to the respective credit bureaus. These agencies have a period of 30 days to either check the accuracy of their report or remove the errors existing in it.

Another right that the consumer can benefit under FCRA is the annual receiving of a free credit report from the credit reporting agencies. To get this free copy of your credit report you should submit a request and you can proceed in asking for another copy in case you are denied from a new credit that you want to make and the lender indicates the agency that has presented to them a negative credit report.

It is the negative credit report that has determined the lender to decline your request and as such the credit report agency must send you a copy and see according to what negative data you haven’t been approved for the loan.

The Federal Credit Reporting Act can also regulate the period of time under which negative information can be kept on an account. For instance, a delinquency can remain on a credit report for a period of 7 years, a bankruptcy for 10 years and in case there was a tax lien, the time is reduced to 7 years after this one is paid off.

Your Credit Score – What Affects It

Your Credit Score is one of the most important ratings you’ll have to worry about in your life. It determines how much you can borrow, what you can buy, and a variety of other things. With a higher credit score you’ll find many opportunities that weren’t available to you before, such as financing a new home, or buying that brand new car you’ve always dreamed of.

Why Strive for a High Credit Score?

Most importantly, you’ll qualify for lower interest rates, which will translate into real savings on any loan you take. Also, people trust you much more when they see you have a high credit score – a priceless asset.  In short, your credit score is not something you want to be low. Here are the top factors that are used to determine your credit score.

Your Payment History

Probably one of the most obvious factors in determining your credit score is how consistent you are with making your payments. When you pull out a loan, no matter how big or small it is, you need to be sure to pay on time every time. Doing this shows the credit bureaus that you’re someone worth trusting with a loan.

How Much You Owe

Another very important factor in determining your credit score is how much you currently owe compared to your total available credit. Your credit score tells creditors how likely it will be that you pay your debt back in full, and having your credit maxed out isn’t a good indicator that you’ll be paying any new debts off. Try to pay off your current outstanding debts and attempt to raise your credit limits to give you a better ratio.

Your Credits Age

Although not as important as the previous two factors, your credit’s age is defiantly a big indicator in how high your credit score is, mostly because it’s easier to see a person’s behavior patterns over an extended period of time, when if the person has had credit for a short amount of time you can’t really tell how the person reacts under pressure. Significant credit boosts have been given to people that were able to pay their bills in-full and on time even when they had lost their jobs, one of the positive benefits of a high credit score.

Credit Cards – A New Form of Payment

Ever had the temptation to buy that product now even though you can’t afford it for another 2 weeks? Well with credit cards you’ll be able to buy what you want now without having to wait for your next paycheck, with your credit limit as your spending limit. This small plastic card allows people to buy anything they want when they want, and they can be great for those who are able to pay the bills off at the end of the month. The problem comes in when people start letting their debt accrue and are faced with the huge interest rates that can come with credit card debt.

What Determines Your Credit Limit:

There are a few factors that determine your credit limit with your credit score being the main factor. A higher credit score not only guarantee you acceptance by the credit cards company, but it also means you’ll get a much higher credit limit than someone with a lower credit score. Your history with the company will also determine your credit limit. A credit card company is very unlikely to give you a high credit limit until you’ve used them for a few months.

How Interest Works with Credit Cards:

With almost all credit cards the interest is completely waived if the debt is completely paid off at the end of the month. If the debt accrued throughout the month isn’t paid off by the end of the month then interest begins to collect on the amount owed. Interest is usually extremely high on credit cards, usually between 10% and 20%.

Credit Card Fraud:

As a consumer you’re always protected from fraudulent charges made on your card. In most cases the merchant is held responsible for making sure charges aren’t fraudulent, so if anyone steals and uses your credit cards you’ll be able to file a claim and be immediately refunded. This is why you’ll sometimes have to go through different security measures when using your credit cards to buy something online.

Credit Card Rates and the Impact on Users

Credit card rates vary from person to person depending on their credit rating. People having good credit rating are provided with low interest rates, whereas with low credit rating they are charged a higher rate of interest. Apart from interest rates there are various other charges that are levied. The charges of credit card rates vary according to companies and their stipulation on usage and repayment norms. However, currently the standard credit card rate for consumers is 16.86%, non-reward consumers is 15.25%, student credit card is 16.23%, business cards are 14.72%, reward credit card is highest at 17.55% and business reward card is 16.21%. These percentages are based on the current survey report from a site that aggregates rates from many credit card companies. The above credit card rates are presently considered to be on the higher side.

There have been recent changes to the existing rules for credit card usage, and that is that the penalty charges are controlled to check exorbitant charges, which were conveniently passed on to the users. There are several unwarranted credit card fees that are charged which comprise late payment, returned payment and overdraw of the credit limit. The penalty charge is typically dollarsignr25. Therefore this addition to the rules by the government relieves the users from paying more in penalties than what is the minimum payment or over draw of limit. That implies that if you have dollarsignr10 minimum payment due the penalty cannot be more than that amount, and similarly for the over draw of limit. A different penalty is not allowed for similar violation.

However, if the default or violation is regular then there is a possibility that the charges on the credit card could be higher. For example if you default in payment twice in six months then the credit card rate for the penalty amount could be dollarsignr35. Therefore it is crucial that you pay the dues regularly to avoid excessive credit card rates being charged to you. Incidentally, the credit card rates and interest charged thereon does not specify hikes in interest rates for violation of agreed regulations of the company. As such there could be a fixed credit card rate penalty on interest and shall prevail for all future purchases.

It is observed that several credit card rates vary from each other. This contains index or prime rate, which is supplemented to the margin decided by the company. The crux is even if the credit card company does not alter the margin, the credit card rate escalates according to the rise in index.

The Importance of Checking Your Credit Score

Many people think their credit score is something that’s easily manageable; something that they can check once using a free credit report and always know how good/bad it is based on their payment history. While you are the main one in control of your credit score there are outside sources that can do several things, whether they’re accidental or purposely, to alter your credit score, which are only observable when by checking your credit score.

You don’t want to neglect your credit score only to find out one day that your credit score isn’t high enough to finance that new high-priced item you were looking forward to buying. For this reason it’s extremely important for you to periodically check your credit score, and it’s actually easy since there are free credit reports available.

Here are two of the many things that can happen if you aren’t consistently checking your credit score.

Small Past Debts You’ve Forgotten About

Many people have empty credit cards that they have just for emergencies. These credit cards are hardly ever monitored because no charges are ever made on them. The problem with this is that whoever puts charges on this empty card, whether it’s you accidentally with a recurring monthly payment, or a thief, you may not know about it, and thus you won’t pay off the debt. After you’ve left your debt unpaid, no matter how small it may be, it will likely be reported to a credit bureau which will put a major dent in your credit score. This can easily be avoided by occasionally checking your credit score with a free credit report and acting on fixing the issue before it impacts your score.

Company Mistakes

From time to time companies will accidentally report you for not paying your bills when you really do. If this goes unchecked you may be unable to fix the problem after a certain period. With a free credit report done every once in a while you’ll be able to catch these little errors and report them; the mistakes are almost always fixed immediately and removed by checking your credit score.

Simple Ways to Increase your Credit Score

Many people do not realize what your credit score is, or even what it does. Some people realize that you do need credit in order to get by in today’s society, but they do not really know how it works. If you increase your credit score you’ll be able to get pretty much whenever you need when you need it but if your credit score is low you’ll be struggling. Getting a loan from a bank is easier to do when you have a high credit score because that shows the bank that you have a high potential to pay back the money that you borrow. If you have a low credit score it is hard to finance or get financing. There are many ways to raise your credit score that do not take much effort on your part, as long as you can follow through with it. Here are some simple suggestions that might help you raise your credit score so that you’ll be able to afford or get financing when you need it.

Many people do not realize that every time you apply for a loan and a lender looks at your credit score, it goes down. It may only go down by a couple of points but when you factor in the amount of times a lender looks at your credit score when you’re applying for a home mortgage, that’s more points than you really want to lose. If you want to be able to increase your credit score you should be able to get one free credit score printout per year, and that will not affect your score negatively. Bring this piece of paper in every time somebody wants to check your credit so that they do not keep on lowering your score.

Another thing that you can do in order to increase your credit score is to start taking out small loans. If you take out a short term loan and pay it back before it matures they will report this positive activity to the credit bureaus. Paying back the short term loan before it finally matures can raise your credit score, but you’re going to have to do it several times. A short term loan for dollarsignr1000 or more will raise your credit score by about 20 points each time you pay it off before it matures. In order to raise your credit score by the amount that you wanted to you’re going to have to take out this loan for at least a year. Keep on getting the same loan and paying it back before it matures and you’ll be surprised on how high your credit score will go.

Believe it or not, paying off your regular monthly bills or having a checking account will also increase your credit score. Many banks will report to the credit bureaus if you have a checking account with activity. The more money that you deposit into your checking account and the more activity you use your checks can increase your credit score over time. All you have to do is maintain a positive balance in your checking account in order for this to take effect.

What to Look for in Your Credit Report

For anyone that has credit it’s very important to check your credit report often. Many different things that are completely out of your control (as well as in your control) can affect your credit score, and it’s up to you to regularly obtain a credit report to fix any issues before they grow. There are many different things to look for, but here are the most common issues you’ll want to be looking for when you check your credit report.

Personal Information:

Make sure that all the information on the credit report is to the right person (you). To do this you’ll want to make sure that all the personal information on the items such as address, name, and even suffix are correct. If the information on your credit score report isn’t correct then there’s a good chance that your files got mixed up with someone else and you need to contact the major credit bureaus immediately. Note that address changes that haven’t made by you are a strong sign of identity theft and should be investigated.

Checking the Accounts on the Report:

You’ll want to make sure all the accounts on your credit report are your accounts. There are several things you can do to check to make sure no fraudulent accounts are being made under your personal information. Check things like monthly payments, account creation, and credit limits. If any fraudulent accounts are showing up on your credit report contact credit bureaus immediately, and launch an investigation; you’re most likely an identity-theft victim if you’re seeing these fraudulent accounts on your credit score report.

Scan Recent Inquiries:

In this part of your credit report you’ll be able to see who has requested information on your credit score recently. If you’re seeing too many credit report requests then it’d be smart to call the authorities to make sure you’re not an identity theft victim since a large amount of inquiries usually leads to mass fraudulent account creations, which are guaranteed to hurt your credit score.

Reacting to Increased Credit Card Rates

Interest rates are always changing, and credit card rates aren’t an exception. Quite frequently you’ll find that your credit card carrier decides to change interest rates out of the blue and sometimes for no reason. To many people this seems unjust and just plain wrong, while others don’t mind all that much. Whatever the case may be with you, here are a few possible courses of action to take when you’re informed that your credit card rates will be going up.

Opting Out

If you’re unsatisfied with the credit card rates increase you can simply opt-out. By doing this your credit card account will be closed and you’ll be able to pay the rest of your due balance at the previous interest rate you were paying.
Negotiate with the Company
You can negotiate with credit card companies for just about anything, and this isn’t any different. If the increased credit card rate came upon you because of a mistake on your part then you may be able to get the rate reduced by haggling and reasoning. If you always make payments on time you can also make the argument that you’re a very responsible loyal customer and so shouldn’t be subjected to the increase.

Pay your Existing Balance Off

The interest rate won’t affect you too much if a majority of your outstanding balance has already been paid off. As soon as you hear of the interest rate increase do your best to cut your spending and put as much money as you can towards paying your balance before your credit card rates goes up.

Transferring the Debt to a Different Credit Card

If you don’t want to pay the increased credit card rates then you can transfer the debt from your current credit card to another credit card with a lower interest rate. Keep in mind that there are oftentimes fees that go along with using another credit card to pay off your current outstanding debt, and you also have to make sure you have enough available credit to do so. Sometimes these fees are more than what you’d be saving, so do a little research before choosing this option.