Three Easy Steps to Create Wealth

Do you think you have to earn a lot of money in order to be wealthy? Certainly, a high salary can help you get there faster but it is not the sole requirement to build your nest egg. Even individuals who are very wealthy follow a routine of living below their means. In fact, most of the wealth of people today is accumulated by hard work coupled with diligent saving. The road to creating your wealth begins with healthy spending habits. Here is how you can start today. 

Look Between the Lines

When was the last time you reviewed all bank transactions and every charge on your credit card statement? Making a habit of inspecting these on a regular basis will allow you to uncover any recurrent expenses that you might be able to reduce or eliminate. For example, you may have yearly subscriptions to magazines or services that you no longer utilize. Or if it has been more than six months since you last evaluated your cable service or car insurance, you can call the companies and ask for a better rate. Finally, consider the items you purchase at the grocery store. Do you end up throwing out food? Is your pantry full of expired products? Always make a list of only what you need and don’t deviate from it when you go grocery shopping.

Teach Your Mind New Tricks

Your salary is a constant number but the temptation to overspend on various possessions can affect you at any time. Peer pressure of owning the latest gadgets or fashion trends can be a major instigator to ruin your savings plans. However, you can adopt and practice some rules of thumb when it comes to spending in order to reduce overindulging. Such decision making shortcuts, also known as “heuristics,” can simplify your life and help you indulge less. One example of good heuristics is setting a dollar limit you spend on items you purchase regularly. When buying a purse, don’t pay more than $50 or opt to get that summer outfit for the same price instead. Another good habit is to skip that weekend trip to the mall altogether. If you don’t go, your wallet won’t become a victim of the latest sales. Finally, if budgeting every single dollar of your salary is too overwhelming, you can start by setting a reasonable limit for your impulse monthly purchases.

Baby Steps to Success

If you have not invested into a retirement account yet, do it yesterday. And if you have, commit to contributing $50 more per month. As an example, $50 a month in a retirement fund with 7% rate will become over $55,000 in 30 years. Reducing your insurance bills by having your policy evaluated every 6 months, canceling unused subscriptions and services, and avoiding Starbucks every once in a while are some easy ways to save that extra money. Practice makes better. The more you follow your good saving habits, the better you will feel, and the more motivated you will be to continue on the road to building your wealth.

How Do I Get Rid of Fraudulent Accounts Opened in My Name?

If an imposter has opened fraudulent credit accounts in your name, you will want to act fast to protect your identity and your credit record.

First, to deter thieves from opening more accounts in your name, place an initial 90-day fraud alert on your credit file. Call one of the three major credit reporting agencies, Experian, Equifax or TransUnion and inform them that a thief has compromised your credit accounts.

The credit reporting agency that you contact will contact the other credit reporting agencies and notify them of the fraud alert.

Once the fraud alert is in place, it tells lenders to take extra steps to verify that you are the one who is seeking the request for new credit.

It also entitles you to receive a free copy of your credit report from each of the three major credit reporting agencies. Review your credit reports carefully. And make note of every account that you do not recognize as your own.

File a Report

The Federal Trade Commission recommends filing a complaint with them, then printing a copy of the report and using that to file a police report with your local law enforcement.

The FTC calls that an identity theft affidavit, and says it can be a helpful document to use when you’re dealing with the companies where the fraudulent accounts were opened, as well as the credit reporting agencies.

Dispute Those Accounts

Next, contact the financial companies where a thief has opened fraudulent accounts in your name.  Speak to the fraud department, and inform them that you are a victim of identity theft. Follow up the phone call with a letter, sent certified mail with a return receipt. Keep a copy of the letter and the receipt for your files. You may be required to submit more than the identity theft affidavit; the lender will tell you what information you need to supply for this process.

Send a dispute letter to each of the credit reporting agencies informing them of the fraudulent accounts opened in your name. Request that the fraudulent accounts be removed from your credit file.

It is a good idea to send this letter by certified mail with a return receipt as well. Keep a copy of the letter and the receipt for your records.

In most instances, a credit reporting agency will investigate your complaint within 30 days.

Each credit report agency will forward information about the identity theft to the financial companies reporting the fraudulent accounts opened by the thief.

And once the financial company receives the notice from the credit reporting agency, it must investigate and report back to the credit reporting agency.

After an investigation is complete, a credit reporting agency must send you the results in writing.  And you will be notified if the fraudulent accounts have been removed from your credit report.

It may take a while to clean up your credit file once an identity thief strikes, and you may wish to place a second 90-day fraud alert on your credit file as you go through the removal process for each fraudulent account on your credit report.

Check Your Credit

One way to find out if there are fraudulent accounts in your name is to check your credit reports regularly. Pull your credit reports (you’re entitled to a free credit report from each of the three major credit reporting agencies once a year), then check the accounts to see that all listed belong to you.  If you see an account (or accounts) that do not belong to you, then it’s time to get to work on shoring up your credit and identity.

Monitoring your credit scores can also be a good way to catch identity fraud. If you monitor your scores regularly and you notice a large, unexpected change, it’s time to pull your credit reports.

How to Get a Secured Credit Card

If your credit is damaged, or if you never established credit at all, a secured credit card might be the thing for you. With a secured card, you put down a deposit, usually $200 to $500, which becomes your collateral. Manage the card responsibly and you’ll get the deposit back.

First: Learn Your Options

Before you shop for a secured card, find out your credit score to learn what you qualify for. Why? Well, rejection stings, for one thing.

But more importantly, knowing your credit score helps you determine which cards you’re more likely to qualify for. The better your credit, the more options you’ll have, including money-saving choices not available to those with credit scores lower than yours.

Not sure if your credit is good, bad or fair? That’s not unusual. Here are some tools to help you find out:

• Subscribe. Numerous banks and other companies sell credit scores as part of a subscription to a monitoring service sold to help guard against identity theft. Or you can shop for a credit monitoring service. This may be helpful if you want to monitor your progress with more than one credit reporting agency.

Compare Secured Cards

Just as if you’re buying a car, compare the features and costs of each card. Look at the fine print on each card, including:

• Credit reporting. Get a card that builds your credit by reporting to not one or two but all three of the major credit reporting agencies – Experian, Equifax and TransUnion.
• Graduation features. Will the card let you raise your credit limit over time, either by increasing the size of your down payment or by earning a higher limit through responsible use of the card?
• Annual fees. Unfortunately, you may not be able to avoid annual fees. Make sure you do your research and compare annual fees across cards to find the best deal.
• APR. The annual percentage rate shows the card’s interest rate on your unpaid balance. APR can vary for different services – cash vs. purchases, for example. It may change, too. You might, say, get a low introductory rate that bumps up after six months. Be aware of any potential changes so they don’t take you by surprise.
• Other fees. Avoid application fees, if possible. Some cards have them, others don’t. Watch for and compare the host of other possible fees, including fees for balance transfers, over-limit charges, late payments, cash advances and other costs.
• Rules. Do the tedious but important due diligence: Read and compare the detailed rules accompanying each card so you don’t get tripped up by incurring surprise fees and possibly further damaging your credit.

What Is a Good Credit-Building Timeframe?

Starting over or starting from scratch with your credit? Be patient.

Building up a brand-new credit history or re-establishing credit after some credit missteps (such as late payments) takes time.

Give yourself at least a year to see some progress with your credit.

Payment history accounts for 35% of a credit score and establishing or re-establishing your credit with a solid year of on-time payments on a credit account, such as a credit card or credit builder loan, is a good way to go.

Building Credit with a Credit Card

A secured credit card is a good credit-building option. With a secured card, you make a deposit with a lender and your deposit is used as a credit line.

Make sure to choose a secured card from a lender that reports to all three major credit reporting agencies — Equifax, Experian and TransUnion.

To build credit with a secured card, make a series of on-time monthly payments and use no more than 10% of your credit line. Stick to small purchases that you can pay off with ease each month.

After a year or more of on-time payments, reach out to your lender about applying for an unsecured credit card account.

Credit Builder Loans

Another credit building option is to apply for a credit builder loan from a credit union. These loans, which have terms of six to 18 months, are good alternatives to credit cards and good credit building tools in their own right.

With a credit builder loan, the money being borrowed is placed in a savings account.  And once you pay off a credit builder loan through a series of payments over the course of the six- to 18-month term, you will get access to the money in the savings account.

Loan amounts for credit builder loans can be small, just $500.  So there’s no need to borrow a lot of money to build a healthy credit record.

For maximum credit-building, choose a credit builder loan that reports to all three credit reporting agencies.

Credit Tips: What’s a Thin Credit File?

If you’ve just started building credit, there’s a good chance you have what’s called a “thin” credit file.

A thin credit file can mean you are new to the credit world, but even someone who has had a mortgage for 30 years can have a thin file if they haven’t opened any other credit accounts or had any negative collection actions taken against them for unpaid bills.

You may have a thin credit file if you are young and just opened your first credit card account, new to this country and just learning how to establish credit in the American system or if you are an older person and you haven’t used credit in a very long time.

You also may have a thin credit file if you prefer not to borrow and use very few credit accounts.

Tips for Building Credit With a Thin File

To generate a credit score, the absolute minimum you need in your credit file is a credit account that has been open for six months and a credit account that has been reported to a major credit reporting agency.

The national credit reporting agencies are Experian, Equifax and TransUnion and if you have an account that is reported to one or more of these credit reporting agencies, you are on your way to establishing credit.

Choosing a credit card that is reported to all three credit reporting agencies is best for credit building, along with the credit building essentials that apply to everyone, even those with robust credit files.

• Because payment history accounts for 35% of your credit score, making on-time payments on a credit card  or loan account for a year or more will help you to establish a solid credit record.
• Don’t rush. Applying for too many credit accounts at once can hurt your credit. So wait to apply for new credit until your previous account or accounts have been established for a while.
• Keep your balances in check. Maxing out a credit card can do serious damage to your credit score, so aim to keep your balances to 35% of your limit (10% is even better).

Once you have one or two credit accounts with solid on-time payment histories, you may wish to apply for a car loan, a personal loan, a new credit card or even a mortgage to keep building a solid credit history.

Keep in mind that if you apply for a new credit account, it’s best to keep your previous credit cards open and active — even if it’s just making one purchase per month — to maintain your account age, another important credit score factor.

How to Use Credit Monitoring to Protect Your Child’s Identity

Identity thieves are targeting children 18 and younger, swiping their Social Security numbers and applying for credit accounts in their names and piling up charges.

An identity thief can wreck a child’s credit record long before the child is old enough to drive, apply for a job or fill out a college application, which is why identity thieves target children — they might be able to use a child’s identity for years unnoticed.

A stranger who accesses a child’s Social Security Number, a dishonest family member or a friend of the family with access to a child’s personal records may commit this crime.

Foster care children are particularly vulnerable to child identity theft because of the number of people who have access to their Social Security Numbers.

To protect your child, get in the habit of monitoring his or her credit report. Reach out to each of the three major credit reporting agencies, Equifax, Experian and TransUnion and request copies of your child’s credit records.

You will need to provide each credit reporting agency with your child’s name, address, date of birth, plus copies of your child’s birth certificate and Social Security card. You will also need to provide a copy of your driver’s license or other government-issued identification card and a utility bill showing you live at your current address.

To further guard your child’s identity, you may wish to sign up for a credit monitoring service.

The major credit bureaus offer their own credit monitoring services, along with many of the major financial institutions and credit card issuers.

Shop around and compare and contrast prices and credit monitoring services carefully.

If you’re worried about your own identity becoming compromised, you have a few more options than your child. You should monitor your financial accounts regularly, daily if possible. The earlier you can spot unauthorized charges, the faster you can alert your financial institution and fix the problem.

Monitoring your credit regularly is also important, a major drop in your credit score can also signal identity theft.

Top 10 Debt Collection Rights for Consumers

Feeling strapped for cash and falling behind on monthly bills is not a fun experience. Debt issues can be hard to manage. And a collection call from a persistent creditor can makes a challenging financial situation all the more stressful.

The good news? You’ve got rights, and lots of them — thanks to the Fair Debt Collection Practices Act. This federal law sets down a specific set of rules that third-party debt collectors must follow when contacting you about a debt. Debts covered under this law include auto loans, medical bills and credit card bills.

Before you do anything else, check your credit. Collection accounts can have a significant impact on your credit scores so it is important to know whether they are being reported, and how they are impacting your scores. 

Here are 10 important rules that a debt collector must follow when contacting you about an unpaid bill.

1. No Early Morning or Late Night Calls

A debt collector may not call you before 8am or after 9pm (in your time zone) unless you ask them to call you at a different time. Whatever debt you may owe, you still have the right to a quiet morning and a quiet evening.

2. No Calls at Work, Once You Request It

Debt collectors may not contact you at work if they know your employer disapproves of such calls. So make it clear to a debt collector straight away that calls at work are unacceptable.

3. No Repeated or Continuous Calls

Debt collectors may not harass you by calling numerous times a day about an unpaid bill.

4. No Verbal Abuse

A debt collector may not use threatening or profane language when contacting you about a debt. A debt collector may not falsely imply that you have committed a crime by failing to pay a bill.

5. No Informing Friends, Neighbors, Co-Workers, or Family Members About a Debt

A debt collector may contact people that know you, but only to find out your address, your phone number, and where you work. In most cases, a debt collector may not tell anyone other than you or your attorney that you owe money.

6. No Collecting on a Debt Larger Than the Consumer Actually Owes

A debt collector may not demand more money from you than you actually owe.

7. No Dire Threats

A debt collector may not threaten to have you arrested if you do not pay your debt. Debt collectors may not threaten to sue you, unless they actually intend to file a lawsuit.

8. A Debt Collector Must Send Written Notice of a Debt

Within five days of contacting you, a debt collector must send you a written notice telling you the amount of money you owe and the name of the creditor. This notice also must explain what actions to take if you believe you do not owe the money.

9. A Debt Collector Must Honor a Written Request for No Further Contact

A debt collector must cease contact with you if you send a letter requesting that the debt collector do so. If you believe you do not owe the money, you may state this in your letter. Be aware that a legitimate debt will not go away simply because the collection calls stop. You could still be sued by the debt collector or your original creditor for the amount that you owe.

10. The Debt Collector Must Verify All Disputed Debts

Debt collectors must verify any debt that you dispute in writing prior to renewing collection calls. Once a debt collector sends you verification of the debt, collections activities may resume.

These are some of the most important consumer rights under the Fair Debt Collection Practices Act. Simply informing a debt collector that you are aware of these rights may curb any errant collection behavior.

If a debt collector breaks any of these rules when contacting you about a debt, feel free to report the debt collector to your state attorney general’s office, the Consumer Financial Protection Bureau and/or the Federal Trade Commission. Many states have their own collection laws and a debt collector who violates the federal Fair Debt Collection Practices Act may be violating state collection laws as well. Your state attorney general’s office will be able to inform of your rights.

The Consumer Action website from the Federal Citizen Information Center includes links to state and local consumer protection agencies around the country, including state attorney general offices.

You may also report any problems you encounter with a particular debt collector to the Federal Trade Commission by visiting ftc.gov or by calling 1-877-FTC-HELP (1-877-382-4357).

For help with handling collection calls, you may want to contact an attorney. Once you hire an attorney, a debt collection agency must contact your attorney and not you.

LawHelp.org connects low- and moderate-income people with free legal aid programs in their communities. And a consumer guide from the American Bar Association, provides a directory of legal resources available in each state.

You may be able to find an attorney experienced with debt collection through the National Association of Consumer Advocates. This non-profit association of attorneys and consumer advocates has members throughout the country.

Find Out Where You Stand

Remember the very first person who must stand up for your debt collection rights is you. So don’t let a debt collector intimidate you or harass you with unfair and illegal tactics. Dealing with a debt collector who plays by the rules may be a stressful experience as well. If you need specific assistance and advice, contact an attorney. 

How to Get Out of Debt: A Step-by-Step Guide to Financial Freedom

To get out of debt, you need a plan, and you need to execute that plan. But that can be easier said than done. It’s easy to become overwhelmed with all the steps you need to take. And it’s also easy to lose motivation if you don’t realize how much progress you’ve already made.

You’ll need to make all necessary adjustments to your budget along the way so you don’t overspend and slide back into debt. Plus, if you don’t have an emergency fund, consider setting some money aside in savings before you get started on your plan.

To help you get started — and then stay on track — we’ve created this simple get-out-of-debt checklist. Keep it someplace where you’ll see it often, and make it your goal to check a task off the list each day (or each week), depending on how quickly you want to become debt-free.

Get Prepared to Get Out of Debt

If you want to do this right, you want to make sure that you know where you stand before you start. You need to have a complete picture. Here’s what you need to do.

• Gather your most recent statements for all loans and credit cards.
• Get your free annual credit reports to check them for accuracy and to identify all debts.
• Get your free credit score at CreditCheckTotal.com to find out whether you can lower your rates.
• Check the National Student Data System to gather all student loan information.

Make A List

Having everything written out in front of you is really the key to success here. Plus, once you’ve written it all out, and it’s right there in black and white, it may not seem as insurmountable as it did before.

• Make a list of all your debts: name of creditor, interest rate, balance, minimum monthly payment.
• Also list the three-year payment for each debt, as found on credit card statements.
• Remember to include loans not listed on your credit reports (e.g. family loans, medical bills).

Lower Your Rates

Paying high interest rates on existing debt causes your debt to really mount up, and makes paying it off much more difficult. If possible, you want to lower those interest rates. Here’s what to do:

• Based on your credit, you may qualify for much better interest rates on credit cards.
• Check out student loan consolidation and Income-based Repayment at StudentLoans.gov.
• Call your card issuers to ask for lower rates on credit card balances.
• Consider a consolidation loan and/or balance transfers to pay off high-rate credit cards.
• Find out if you can refinance a high-rate auto loan.

Get Your Number

Once you know what your total payoff number is, you’ll have a real, complete goal to work towards.

• Total the three-year pay-off amount for all your credit cards.
• Add the monthly payments for all other debts.
• Write down the result: Your Total Monthly Payment.

Plan Your Strategy

There are plenty of ways to attack this problem and you’ll likely approach this using a variety of tools and methods. Plan your strategy carefully.

• Determine if you can afford to pay the Total Monthly Payment until your debt is paid off.
• If not doable, contact a credit counseling agency and/or bankruptcy attorney for advice.
• If doable, decide which debt to pay off first (highest rate or lowest balance?) — “target debt.”
• Set up “auto pay” for required minimum for all debts except target debt.
• Pay as much as possible toward target debt until paid off.
• Choose new target debt and pay extra toward that one, and so on.

Monitor & Adjust

Once your plan is set, don’t get too comfortable. You’ll need to track your behavior closely to make sure you’re making progress, and you’ll want to make adjustments when necessary.

• Monitor your credit score each month to see if your credit score improves (over time it should).
• As your credit score improves, reconsider consolidation loan or balance transfers to save money on remaining debts.
• Stick with your plan until your debt is paid off.

Celebrate Your Debt-Free Date!

6 reasons you can be rejected with an excellent credit score

These days, our credit scores are everywhere. Many banks now print credit scores on your monthly credit card statement. Companies like CreditCheckTotal give credit scores for free. Americans increasingly understand how their score is calculated and how to improve it. However, just because you have a good credit score doesn't mean you will be approved for credit. I spent nearly 15 years working in banking. During that time, I used to decide who we would approve and who we would reject. Despite what the scoring experts like to imply, simply knowing your score is not enough to know your odds of approval. Here are six reasons why you can have an excellent score, but still get rejected.

1. What Credit Score Are They Using, Anyway?

I often hear people talk about their "credit score," as if they only had one score. There are hundreds of scores in the market. Fair Isaac Corporation developed the original FICO score. However, there are multiple versions of the generic FICO score (the most widely used is Version 8). There are also FICO scores specifically for automobiles and bankcards. To complicate the picture even further, the score depends upon the data from the credit bureau. And there are three credit bureaus. You can see an inventory of just FICO's scores on its website.

The VantageScore, an alternative to FICO, has become increasingly popular. Most websites that give a free credit score are actually providing the Vantage Score. You can see a list of places where your official FICO is available for free here.

But it gets worse. Most banks do not make their decision using one of these generic scores. Instead, they have a team of statisticians that help them build custom application scores. Often, every product and acquisition channel has its own score. For example, there could be a credit score for "applications from the internet for cash back credit cards." Risk managers at banks (and I used to be one) would always want to prove that their custom scorecards were better than the generic versions.

Banks have a score cutoff. If you are one point below that cutoff, you will be rejected. Just because you have a good score from one of the free sites does not mean you will have a good score on the bank's custom score. That is why your free score should be considered a guide. It will help you understand if you generally have good credit, but it is no guarantee you'll be approved.

2. Minimum Income And A Job

When you apply for credit, you will be completing an application. All of that application data is used in the credit decision. It can be a variable in the custom score. Or, it can be used for a fatal cutoff, which means a reason for automatic rejection.

A typical fatal cutoff relates to income and employment. Many lenders will reject you if you are unemployed. In addition, they may reject you if your income is below the minimum set by the lender. Even if you are just $1 short of the minimum, you could be rejected, regardless of your score.

3. Debt Burden

Banks and credit card companies want to know if you can afford to make monthly payments on time. A typical tool utilized by banks is a debt burden. In general, banks will look at the total monthly payments on your credit report. That would include your mortgage payment, auto payment, credit card payments and any other monthly payments. You would then divide that monthly payment by your gross salary. In general, if that figure is above 50%, you will most likely be rejected. If it is below 40%, you have a good chance of approval.

However, every bank sets their own rule. They can decide what debt to include in the payment. They can also decide if unused credit cards should be included or excluded. Some banks have both front-end (excluding mortgage) and back-end (including mortgage) ratios.

And banks can change this ratio over time, depending upon the performance of their portfolios.

4. Major Derogatory Items

Most negative information disappears from your credit report in 7 years. And the older the item, the less impact it has on your score. However, some lenders have specific rules. For example, a lender may decide to reject anyone with a prior bankruptcy, even if it was six years ago. Other lenders may reject anyone with a collection item, or a missed payment in the last 12 months.

So, even though your score may have recovered, some banks may still want to avoid you. In other words, they believe that this negative information is more important than the generic score does.

5. Rapid Acceleration Of Debt

Lenders want to avoid customers who are heading towards bankruptcy. Trying to build a model that identifies potential bankruptcies in advance is a big part of the analytical work completed by risk managers. The most common indicator of someone trying to take on more debt is a credit inquiry, which is included in FICO and VantageScores. However, a bank or credit card company may want to have even tougher rules. For example, they could reject you if you applied for credit more than five times in the last six months, regardless of your score.

In addition, they could try to measure how quickly your total debt has increased. If they see rapid acceleration in debt, you could be rejected.

6. You Just Have Too Much Debt

Some banks get nervous at certain levels of debt. Even if you have an excellent credit score and an excellent debt burden, they do not want to add to the unsecured debt balance. This policy is often called the Maximum Unsecured Exposure rule, and it puts a cap on the total amount the banks are willing to lend.

So, What Should I Do Now?

Credit scores used to live in a black box. Now we have a lot more information. Just remember that the credit score range is much more important than the actual number. If you are above 750 on either FICO or your Vantage Score, you are highly likely to do well on any custom score. If your score is below 600, you are highly likely to be rejected. However, obsessing over ten points is not productive.

How Interest Rates Work

Financing big purchases with a credit card, home loan or auto loan can be an efficient way to manage your budget.

Here’s a look at how interest rates are calculated for each type of financing.

Credit Card Interest Rates

Wondering how much carrying a balance on a credit card will cost you?  Take a close look at the card’s annual percentage rate, the yearly interest rate charged on a credit card.

Many credit card issuers use a daily periodic rate to calculate interest charges on a credit card account whenever you carry a balance.

The formula for the daily periodic rate (DPR) is a simple one. It’s the APR on your credit card for new purchases divided by 365.

Your average daily balance and the number of days in your card’s billing cycle are other important factors in determining your monthly finance charge. The monthly finance charge is the amount you pay for carrying a balance on a credit card each month.

If your credit is good, opting for a card with a 0% interest rate for several months is a good way to finance a large purchase.  You won’t pay finance charges but you may be charged a balance transfer fee of 3 or 4%.  Budget carefully and make sure you are able to pay off the full amount before the introductory period ends and the card’s much higher APR takes effect.

Home Loan Interest Rates

When shopping for a mortgage, check out the loan’s APR – which includes the interest rate plus certain fees.  You’ll find this information, which indicates that amount of interest you will pay over the full length of the home loan, in any ad describing the loan’s terms and in paperwork given to you by a lender.

You will be charged an origination fee on a mortgage and possibly other fees, like mortgage insurance. These fees can be paid separately, upfront, or they can be rolled into your home loan.

Make sure you understand how fees are handled with your home loan and how they may be factored into your monthly mortgage payment.

Auto Loan Interest Rates

Most auto loans use a simple interest formula when calculating your monthly car payment.  With a simple interest loan, your loan’s interest rate is only applied to the principal amount that you borrowed for your car loan. Paying ahead on your principal payments will help to lower the financing costs of an auto loan.

Making your payments on time, as agreed, every time, is a great way to build and maintain good credit because your payment history has the biggest influence over your credit scores. That’s why it’s important to understand how much you’ll be paying, and whether it’s within your budget to do so. If you want to know how your payment history is affecting your credit scores. You can also get a plan to build your credit based on your individual needs.