Understanding the Importance of Knowing Your Credit Score

Do you realize the significance that your credit report score has on your ability to get credit approval or secure favorable loan terms? Its importance cannot be overstated. While it’s true that your credit rating will have no affect on your ability to buy dinner or a concert ticket, it most assuredly does have an affect on the big ticket items. The big ticket items that I speak of include auto financing, mortgages, business lines of credit, and even credit card applications.

What Is A Credit Score

Your credit score is a three digit number that is basically a numerical summarization of the information contained in your credit report. It is derived from the mathematical formulas that the three credit bureaus (Experian, Transunion, and Equifax) use. Each bureau collects their own information and has its own proprietary formula for scoring your credit. It is for this reason that you will often times see variations in scores amongst the three bureaus. They do not share information with each other.

Your credit score is an assessment of your credit risk. Accordingly, credit scores are rankings that fall somewhere in the range of 350 – 850. The higher the score, the better your chances are of getting credit approval with the most favorable rates. Generally speaking, a score of 720 and above is widely considered to be very good credit.

Click here now to get your Credit Report, Credit Score & FICO Score!

What Your Credit Score Means To You

So, how do the numbers break down, and what do they tell respective creditors about you? Most people fall in the 600-750 range. Any score above 650 is considered to be fair to good as far as credit risk goes. But be aware that just because your score is above 650, it does not automatically mean you will qualify for the best rates available. These decisions are made by the lending institutions that you are applying to, and are determined on a case by case basis, so there really are no hard and fast rules set forth.

If your score falls below 650, don’t panic. You may still yet qualify for credit with desirable rates. In these cases you may be asked to provide the respective creditor with more documentation. Remember, the lending institution’s primary concern is your ability to repay the loan, with interest, on time. That is why your payment history plays such a large role in determining your credit score.

Scores below 620 are considered ’subprime’. To creditors, subprime borrowers represent a much greater risk of paying late, or defaulting (not paying at all) on loans. Because of this, the borrowers choices are greatly limited. Even if they are approved for credit, the size of the loan will be limited, and higher interest rates will be charged. We have recently heard quite a bit about the dangers of making subprime mortgage loans with the collapse of the housing market.

The Cost Of Your Credit Score

So, with all this talk of credit scores, how does it really affect you where it counts the most, in the pocketbook. Depending on the size of the loan, interest rate differences of just a point or two can translate into a substantial amount of money over the life of a loan. In the case of many people’s biggest investment, their home, the difference of one or two interest rate points can mean tens of thousands of dollars over the life of the loan.

And the large discrepancies are not just seen in the mortgage market. For auto loans it can mean thousands of dollars. Now if that isn’t substantial, I don’t know what is. It really is in your best interest to do everything you can to strengthen your credit score. While it may not be the most exciting thing in the world, taking the necessary steps to improve your credit score is well worth the time and effort.

Top 5 Benefits Of A Gasoline Card

Gasoline is a necessity that is now in the same category as food, water and air.  Driving to school, the office and to miscellaneous trips throughout the day can really eat away at the money in your bank account. When you are forced to drive many places and many miles, the use of a gasoline credit card can be very beneficial.

A gasoline credit card is a credit card that provides you with a rebate or cash reward for your gasoline and gas station purchases.

Counting Down The Top 5 Benefits Of A Gasoline Card

  1. Quick and easy– You can save time from having to pay with cash or trying to remember your PIN to your Debit card. Slide, pump and go.
  1. Emergency expenses– If you are traveling out of town or out of state and a vehicle emergency occurs, your card can assist you in paying for towing or other needed purchases.
  1. Earn rewards/rebates– While you purchase gasoline or that morning cup of coffee you are earning cash back rewards or rebates for future use.
  1. Save money– By using your gas card you can prevent yourself from spending excessively out of your bank account. Using your gas card for gas only is helpful.
  1. Build good credit– By using your credit card wisely and making timely payments you build solid credit history.

A gasoline credit card can be helpful in building credit, emergency purchases and earning rewards. By taking the time to review credit cards online, you can find the card that best suits your needs and may be just what you need for your next trip to the gas station.

The Senate Weighs in on the Credit Card Holders Bill of Rights

The United States Senate is now doing their part in imposing restrictions on what credit card issuers can and cannot do with their customers. Sen. Chris Dodd (D – Connecticut ), chairman of the Senate Banking Committee, hopes that the legislation will pass this week. Pres. Obama, who supports the legislation, has already stated that he would like it on his desk by Memorial Day.

At the heart of the bill are restrictions against the credit card companies arbitrarily raising interest rates on account holders. It will also make it more difficult for cardholders under age 21 to get a credit card. Predictably, credit card issuers including banks and financial institutions are fighting the bill. Their argument is that it will make it harder for them to grant credit to responsible consumers.

The lobbyists for banks, the American Bankers Association, are warning Senators that at a time when Americans need credit the most they will not be able to get it. In a written statement they said that the bill would, “have a tremendous impact on the ability of consumers, small businesses, students and others to get credit at a time when our economy can least afford such constraints.”

Their argument seems to be getting little traction. In fact, Sen. Chuck Schumer of New York chastised the credit card industry for trying to exploit the recession. He stated that it was indefensible for credit card issuers to be charging such high interest rates at a time when interest rates are currently at record low levels. The bill is receiving bipartisan support. Both sides of the aisle are behind this legislation.

The real hot button issue at the core of this legislation is a concept that is known as “universal default”. Under universal default a credit card company will raise interest rates on the account holder’s past balances whenever the cardholder is late in paying that bill, or any others. The Senate bill would restrict raising interest rates unless the person is more than 60 days behind on paying their bill.

The lenders will not be banned from raising interest rates on future purchases if they believe the person is an increased credit risk. They would however, have to provide the cardholder with 45 days notice in a written explanation. They would also be obligated to review the terms of the account in six months time and then lower the rate again if the consumer has been paying responsibly durng that period of time.

The bill would also require that consumers under the age of 21 have a cosigner such as a parent or guardian, or proof that they have the financial means to pay for a credit card. There is also talk about a limit on how high of an interest rate lenders will be able to charge. Sen. Bernie Sanders of Vermont has stated that he will write an amendment to the bill that will cap interest rates at 15%.

The Best Credit Card Offers Revealed

Those credit card offers you get in the mail are going to be the best credit card offers usually reserved for the best customers. Those with sterling credit reports often are the only ones qualified for these offers and the rest of the world may be approved for something less inviting. Face it, if a person can’t get approved for the best offers, the company is willing to take them on as a customer, but at a higher price.

This mining for customers is perfectly legal, even telling a person they are pre-approved to apply for this card at that rate is not legally wrong. The best credit card offers also should contain a disclaimer that indicates that those not approved for the low-interest offer can be selected to receive a card at a higher interest rate. Possibly even an annual fee will be assessed if you take advantage of a lower offer.

Some of the best credit card offers come from the major card companies such as American Express, Bank of America and Capital One, while other card companies hold back on making great offers, instead offering cards to those who do not qualify for the lowest interest offers. These companies can make a fortune dealing with those who classified as a high risk as they can basically charge what they want and customers who do not qualify elsewhere have little choice if they want a credit card.

Living Without A Credit Card Can Be Inconvenient

Paying for the convenience of having a credit card can be expensive, but the alternative can be challenging. Renting a car, booking a motel room or airline flight can be difficult without a major credit card. Purchasing online with a branded debit card is becoming more accepted, however some companies still require a credit card for deposits.

Additionally, those living on their branded debit cards may find times when a few extra bucks until payday might be needed. Medical emergencies and trips to the doctor or pharmacy do not usually come around when the coffers are full and taking advantage of one of the best credit card offers may be a good idea. Check to make sure you don’t get charged extra for not using it, but one it arrives a small purchase and quick payoff can have a two-prong benefit. First, it keeps the card active and second, it gets reported to the credit bureau that you are a good credit risk.

Some of the best credit card offers will offer more than a temporary low interest rate and a temporary low rate on balance transfers from other cards. The rates should be available for as long as you maintain a good credit standing. There will usually be a grace period on purchases as well as on cash advances from the best offers available.

 

Money Conversion- Best Foreign Exchange Resources

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XE sites do display the value of the currencies with the respective country code and symbol. Money conversion values information can be collected from the currency newsletters with daily rates and analysis. The exchange information is received and updated through mobiles.

Currency trading or money conversion have become more comfortable and opting with popular internet sites trading in Foreign Exchanges. The free international money transfers and easy online quotes are other features provided by the exchange rate sites. The data is provided by the FX sites are accurate and reliable. Interesting aspect regarding Money conversion is the availability of the currency Encyclopedia. The unique feature of the XE Encyclopedia is that it offers currency rates, facts relating to world currencies, Forex news. The encyclopedia also gives the service information like money transfer and conversions, Currency Data feeds and many more.

Low APR Credit Cards – Tips On What To Look For

Low APR credit cards are cards that carry a lower interest rate than most other types of credit cards. The APR stands for annual percentage rate and is still calculated the same way as with other types of credit cards which makes it easy to compare different offers if you are planning to apply for a low interest rate credit card.

Low rate credit cards are beneficial to people that carry a credit card balance from month to month because they will save a significant amount on finance charges. Although Low APR cards are better than traditional credit cards, it can be harder to qualify for one, especially if you have poor credit.

There are many places you can go to find credit cards with a low interest rate and many things you should consider when choosing the offer that best suits your financial needs.

Of course, the biggest consideration when looking for a low APR credit card is the interest rate. Most cards have a lower interest rate for an introductory period. Many banks and credit card issuers offer 0% interest for a limited time and although this rate can apply to all purchases, sometimes they only apply to charges from balance transfers.

The introductory period is best used to consolidate other credit cards that charge a higher rate onto a single  credit card. This will help you to reduce your finance charges and will allow you to pay off your balance more quickly.

Some low APR credit cards charge a fee for balance transfers and others do not. Sometimes you can get these fees waved so it is best to find out all the terms before you apply to make sure you will not be charged.

Low annual percentage rate cards can have interest rates after the introductory period that are up to 10 percentage points (or more) lower than traditional credit cards. They are a great way of saving on finance charges for people who carry a monthly balance on their credit cards or have debt that they want to pay down faster. Because of the reduced interest rate, people with poor credit scores may not be eligible for some of these offers.

There are also other factors to consider before you apply for a low APR credit card. These types of cards may offer other advantages and incentives such as cash back, discounts, and rewards. If they do not, you can still use a card that does for purchases that you will pay off immediately and then use the card with the lower interest rates for purchases that you will carry over.

Even if you do get a low APR credit card to help consolidate your credit card debt, you should not necessarily close your old credit card accounts. Maintaining credit accounts for a long period will reflect well on your credit rating as well as having a low debt to credit line ratio.

There are many different low APR credit cards available on the market. You should carefully consider the rate and terms of every offer that interests you before you apply to make sure it is the best card to meet your financial needs.

Low and Middle Income Americans Relying More and More on Their Credit Cards to Pay for Their Basic Living Expenses

A new survey commissioned by the advocacy group Demos revealed some interesting and somewhat frightening information. The general consensus has always been that people with substantial credit card debt are living beyond their means and spending frivolously. Well, it turns out that that’s not always the case.

Many low and middle income Americans have in increasing numbers turned to their credit cards just to pay for their basic living expenses such as rent and mortgages, groceries and utility bills. Hardly lavish spending wouldn’t you say? The survey found that more than one third of respondents have turned to their credit cards to pay for these basic living needs… food and shelter.

Over the past 12 months people that responded to the survey have used their credit cards to make on average five months worth of payments. The survey also found that one out of every two households use their credit cards to pay for out-of-pocket medical expenses.

The average credit card debt of those surveyed was $9827. The average interest rate of their credit cards was 14.8%. And for a truly frightening number… nearly 25% of those surveyed said they are paying in excess of 20% interest on their credit cards.

It was also reported that the respondents have been in credit card debt for an average of 5.1 years. And of course, that number is only going to grow.

While the recession has most certainly made things worse, people using their credit cards to pay for their basic living expenses is not a new phenomenon.

As José Garcia, the associate director of research for Demos stated, “One of the biggest myths about the rising credit card debt is that it is a result of frivolous spending.”

Well now we know better.

The bottom line is that we number one, have got to be more responsible with our use of credit and number two, we need this damn recession to end.

Learn How an Instant Credit Report Can Help You Get a Mortgage

If you are contemplating buying a home, you should first order up an instant credit report so that you can see exactly where you stand with regards to your credit history.

Get a 3 in 1 credit report so you can see your credit history as it is reported by the three credit bureaus, TransUnion, Equifax and Experian.

The reason you need to get your report from all three bureaus is because the bureaus each compile their own reports and the information can be different.

By ordering your 3 in 1 credit report online you will know almost immediately what your credit history is, and how it affects your all important credit score.

Your credit score is basically a summation of the contents of your credit report broken down into a mathematical formula that then yields a three digit number.

The range is 350-850. As a rule of thumb, a credit score of 720 or higher is considered to be very good and is looked upon quite favorably by creditors.

Click here now to get your Credit Report, Credit Score & FICO Score!

If your credit score is below the magic 720 level, fear not, there is no need to panic. There are several ways that you can improve your credit score in a relatively short period of time.

When we talk about a big ticket debt item like a mortgage, improved interest rates can add up to tens of thousands of dollars in savings over the life of the loan.

With that said, you can see why it is so vitally important to know exactly what information your credit report contains.

Be prepared and avoid unpleasant surprises. Order your instant credit report before you apply for a mortgage. You’ll be glad you did.

There are 5 key components that make up your credit report. Making improvements in just one of these areas will have a positive affect on your credit score. Generally speaking, these components are:

* Bill paying history – 35 percent of your total score
* Current debt vs. available credit – 30 percent
* Length of your established credit history – 15 percent
* New credit applications – 10 percent
* Current outstanding loans and lines of credit – 10 percent

If you have the discipline, and are dedicated to taking the necessary steps, such as paying your bills on time and reducing your level of debt, you will see your credit score gradually improve.

It won’t happen overnight, but you will see your credit score start to rise in a few months. That is the advantage of having an instant credit report. It allows you to see exactly where you stand as far as credit-worthiness goes.

Having the opportunity to see your credit report also allows you to check for errors and inaccurate information.

Locating and fixing reporting errors can have a profound affect on your credit score so you most definitely want to file a dispute claim, if and when errant information is discovered. The payoff is a better credit score, which translates into better mortgage rates.

Issuers Raising Rates Ahead of Consumer Protections

Well, I don’t know about you but I got mine last week. I’m talking about a letter from my credit card company telling me that they are going to raise my interest rates. Millions of these letters in fact have gone out as the credit card issuers raise interest rates as the first of the consumer protections kick in this week.

The first provision of the Credit Card Accountability Responsibility and Disclosure Act (CARD) that was passed earlier this year goes into effect on August 20, 2009. That provision states that the credit card companies must send out their bills at least 21 days in advance of the due date.

Currently the credit card issuers are required to send out their bills 14 days prior to the due date. The extra 7 days is designed to give those cardholders that carry a balance from month to month more notice and hopefully it will mean fewer will get hit by late fees due to the post office not delivering their bills promptly.

The second provision, that will go into effect this week, will require that credit card companies give their customers 45 days notice prior to raising their interest rates. Currently credit card issuers are only required to give their customers 15 days notice before they can raise their rates.

All of the provisions of the act will fully go into effect by February 2010. The reason so many people are seeing hikes in their interest rates now is because the credit card companies want to get ahead of the new laws. No surprise there at all.

The only questions that remain are why didn’t the provisions go into effect immediately? Why such a long lag-time between when the bill is signed and when it actually goes into effect? Could it have been a deal worked out between Congress and the lobbyists of the credit card companies in which the credit card companies were given time to raise rates before the reforms went into effect? Just asking.

How Small Businesses Use Their Credit Cards

A survey was done recently to find out how small business use their credit cards. This survey reported among other primary uses 22 percent of the users used their credit cards for record keeping purposes while 20 percent used them because they are convenient. 18 percent of those surveyed liked the rewards earned with the purchases they made and 10 percent used them for short-term cash flow.

Others sited all of the above were extremely valuable in the operating of a small business. The surveys main finding is most small business owners tend to pay the balance in full at the end of each month. This information implies that owners of small businesses are not likely to make a purchase they are unable to pay off at the end of the month.

It has also been noted by Visa the surge in the use of credit cards for tax payment and tax preparations by the business owner. Visa also noted the tax preparations and other tax payment transaction are 3 times larger than the dollar amount on other purchases.

It is understandable for a small business to use a credit card to make tax payments because of a large account receivable customer base. They may experience a shortage of cash flow while waiting to get paid.

It has also been noted more and more entrepreneurs are starting their businesses with credit cards. Experts say, Self-financing your small business with credit cards is a faster path to success. An entrepreneur will avoid unscrupulous moneylenders who would attempt to take a controlling share of the company’s interest.

Read the fine print and compare the features and benefits of the various small business credit cards to find which one best suits your needs.