Why You Shouldn't Neglect Your Credit Score

With all the things you have to be concerned about in life, you’d think by the time you hit your 50s or 60s, you could stop worrying about having a good credit score. You may have bought and sold homes, paid off credit cards, successfully negotiated lease agreements, and paid off brand new cars in your day. You are a good credit risk — heck, I’d loan money to you. So why should you care about your credit score at this stage of the game? You might not even have plans to move and apply for a new mortgage. You might intend to drive your car for 250,000 miles, or until your wheels make their last turn. But sometimes life has other plans for us.Benjamin Franklin once said, “The only two certainties in life are death and taxes.” I would add “change when you least expect it” to his list. A change may involve taking out a loan or some other kind of credit check, so you need to be vigilant about keeping a very good or excellent score. According to BANCO FINANCIAL a “good” score is generally 720 or higher. Here are some times a great credit history and score could come in handy as you approach your golden years: 1800.442.1591

Frequently Asked Questions (FAQ)

How does my credit score affect me? Your credit score is an important indicator of your financial health. Lenders use your credit score as a major tool to determine: •Whether or not you are a good candidate for a loan. •What type of interest rate you will pay. While your credit score is a key determinant of your creditworthiness, lenders also examine the information on your credit report and your loan application. Regularly checking your credit report enables you to: •Be informed of the most up-to-date information in your credit history. •Correct any inaccuracies, thus ensuring that your credit data is a true depiction of your credit record and increasing your chances of receiving credit under the best possible terms. Why do I need all three credit scores? There are three national credit bureaus that collect information about you, and they obtain credit data independently. So while you might assume that your three credit reports and credit scores look exactly alike, they can actually differ significantly. When you upgrade to all three credit scores, you can easily evaluate and compare the differences.

ll Credit Repair Companies Are Not Created Equal

With thousands of credit repair companies conducting business opposite the country, anticipation the correct way may be tough and intimidating but it is needed that you take the time compulsory to not usually find a creditable, but moreover find that the knowledge, experience an skill ti give the time of service you designed the optimal results you deserve. Your preference should not be impulsive. Choosing a bad credit repair firm will leave you exposed and increase the luck that serve damage will be caused to your personal credit record but on the other hand, selecting a great credit repair firm has the prospective to be of the most appropriate financial decision of your life by dramatically cleaning up your personal credit record and enhancing your credit score.

Can You Buy a Car With a Credit Card? Are Times Changing?

Many dealers are coming around to a compromise on plastic, though: accepting a credit card for a down payment, often with a maximum of between $2,000 and $5,000, is more common. If you have the money in the bank and can immediately repay it to avoid interest charges (which are often high on reward cards), a credit card down payment could put a few dollars back in your pocket. You can use a cash-back credit card, or add miles or points to your account balance. American Express partners with TrueCar in a car-buying program that allows customers to put at least $2,000 of the car price on an American Express card, and there are programs for new and used cars. Mike Rabkin, owner of From Car to Finish, a new-vehicle negotiating service, said that’s what he did. “I charged $5,000 on my last car (the limit they allowed), and got 2% back in cash – so (I) earned $100 for doing it this way rather than with a check,” he said in an email. A possible caveat: If a charge of this size would bring your credit usage up to more than 30% of your credit limit, it could hurt your credit score. A solution? Pay off the purchase online immediately.

Parents: Think Hard Before Borrowing for, With Your Student

Finding the right balance of access to college and manageable debt is an exercise that many families practice right around this time of year -- when the tuition bill shows up. Even a great financial aid package can fall significantly short of the total bill, which means it's time for some tough decisions. Earlier this month, the Department of Education issued new, draft rules that, if adopted, will change the eligibility criteria for both graduate and Parent Direct PLUS loans. The Student Loan Ranger attended the meetings where the department worked with members of the financial aid and consumer advocate communities to develop a policy that both maintains access to higher education and helps protect borrowers from taking on more than they can handle.

FACTORS THAT AFFECT CREDIT SCORES

The 5 factors weighed to calculate your score are: 35% payment history; 30% amounts owed; 15% length of credit history; 10% new credit; 10% types of credit. An individual's age is not a factor, but length of credit is therefore young people are at a disadvantage. A few accounts of 5 years with no late payments score higher than 15 new accounts of no late payments.

Ways to boost your credit score

Focus on your score — not your income As a credit expert, I encounter hundreds of high-net-worth individuals who assume they have a great credit score because of their wealth. But your income has nothing to do with your credit score. If you have $7 million in the bank but are late on your credit card payments, your credit score will still be poor. Missing a payment will affect anyone’s credit score. So make all payments on time, no matter what. Keep a good balance-to-credit-limit ratio When you want your credit scores to be as high as possible — for example, when you are applying for a mortgage — keep your outstanding balance on each card below 10% of the credit limit for a few months prior. So, if your credit card has a charge limit of $1,500, keep your outstanding balance below $150. It’s also helpful to have a limited number of credit cards with outstanding balances. Do not close credit cards; just pay off the balances. Become an authorized user If done correctly, being added as an authorized user on someone else’s older credit card account can boost your credit score. Since the average age of credit accounts has an impact on scores, being placed on an old card can age your credit and add points. But you have to be careful. The individual should have a strong payment history and low credit card balances. In addition, some card issuers reward cardholders with extra cash, points or miles for adding an authorized user.

Building credit after paying off old debts

You have already done exactly the right thing in paying off your debt. Now you need to demonstrate that you have learned from your mistakes and can manage new debt. Getting a pre-paid card will not help rebuild credit because pre-paid cards are not reported to credit reporting companies and, therefore, are not part of your credit report. If you can’t qualify for a standard credit card, you should consider a secured card where you deposit funds in a savings account to guarantee that your charges on the card will be paid if you fail to pay as agreed. Apply with your bank or credit union for a secured card with a small credit limit that is reported to the national credit reporting companies. Use the card sparingly and pay off the balance each month. Over time you will build a history of positive credit management. Eventually, the negative account information will be deleted, leaving only the positive account details. Remember, you didn’t get into credit trouble overnight, and you can’t restore a great credit history overnight either. But you are definitely headed in the right direction. Time and patience are now your best allies.