There are some credit card users who strive to become credit superheroes! Below are five ways they are able to do so.

1. Take advantage of rewards.

Do not make exceptions. Pay your statement balances in full and on time, every month. As long as this is a habit, you can start seeking the most valuable rewards. Create a portfolio of different cards, each with elevated returns of your most frequent purchases.

2. Always ask if a fee can be waived.

Did you know that most card issuers will waive the occasional late and annual fees? Call the company and ask to speak to a representative who works in the member retention department and see if they will waive the fee to keep you from closing your account.

3. Ask to be reconsidered if you are rejected for a new card.

Smart cardholders seek the best cards with the most generous rewards. If you have opened several accounts recently, the card issuer may not approve you. However, most of this rejection happens by a computer. If you call and request to speak to a person and ask for a reconsideration, you may be able to persuade them to approve. How? You can offer to transfer some of your credit from an existing card, or maybe even cite other income that was not included in your initial application.

Do not forget to keep an eye on your credit score! Sites like creditkarma.com will help you keep track of how you are using your credit. They will also show you card offerings that you qualify for.

4. Keep track of your purchase deadlines.

As long as you pay your balances in full every month, think of a credit card as a free loan. If you are unable to meet the proper deadlines on a card, interest charges can pile on. One rule of thumb is to make a purchase within a day or two after a statement cycle closes to take advantage of the maximum amount of time to pay it off interest free.

5. Stop applying for more credit if applying for a big loan.

It doesn’t look good if you apply for a new credit card in the months leading to a large purchase. Also, try to keep all balances very low. Keep in mind that minimum payments factor into the debt-to-income ratio and can limit how much house you can afford. All unpaid balanced appear as debt on a credit report until the next statement is issued.

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Let’s say you commit to paying down your credit card by the end of the year. You start strong with steady payments for the first few months and soon you start to notice the dent you’re making. Everything is going great, until the day you see marketing for the release of a fancy new gadget you’ve had your sights on. Silently telling yourself you will pay it off next month, you charge it to your credit card. Next month shows it’s weary head and you realize you have forgotten to make a payment and now you’re facing a heavy late fee. 

Oops! What to do?

First, it’s best to see the overall picture. A behavioral change is a process, not an event. It happens in a series of stages. Change begins with merely thinking about wanting to do so, action steps follow to make it a reality, and maintenance will help maintain the ultimate goal.

Slip-ups happen and can happen at any point during a behavioral change. It’s important to tell yourself that this is normal and a part of the overall process. Don’t think of it as a failure, think of it as a misstep and focus on getting back on track.

Take action on a slip-up and work to minimize the damage. For instance, if you are dealing with a late fee, but have never been late you may be able to convince the creditor to waive it this once. 

Did you really need that fancy new gadget? Yes, it’s exciting to be current, but you most likely could have created a savings for it. Try to not give in to impulse buying. 

Always remember that that change is a process and missteps are normal, but correctable. Do not sabotage your long-term plan to pay off your credit. Turn a misstep into a learning experience, which in the end will help you reach those financial goals.

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In 2009, The Credit Card Act was passed making it difficult for college students who do not have their own source of income to qualify for credit. At first, many students are only authorized on their parent’s card. This is a great way to monitor what the child is doing. Giving them a small credit limit, such as $500, will avoid overspending. Every month when the bill comes in, the parent will see all of the activity and will give them a chance to coach their child going forward to avoid damaging the credit score. For instance, if the college student does overspend, it gives the parent a chance to discuss what happened and how to avoid this mistake in the future, when the dollar amount becomes larger.

Paying a credit card in full every month helps avoid interest charges. It also encourages a person to live with their means and spend only what they can afford. Parents should break down a credit statement for their child. Review all charges, check the interest rate, and understand any additional fees.

Spending is easier to track with a credit card, than if you are just using cash. When helping a college student live within their means, they often lose track of where their money is going. Careless decisions happen on things such as restaurants and clothes. Switching a child to credit helps monitor where they are spending and helps define what is necessary and what isn’t.

Choosing a credit card with rewards is a fun and encouraging way to help a college student be a responsible credit user. For instance, receiving cash rewards for things students need, like gas and groceries.

Creating the building blocks for a strong credit score while in college is a nice thing. Most students are ready to take on the responsibility of their own spending. Even if they’re not, a few mistakes early on will help them avoid larger ones in the future.

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When your credit score has become inflated due to a dispute, you may not be approved for a mortgage loan. The inflation is in essence, artificial and therefor creates an inaccurate representation of your credit. Lenders are able to require you to have the dispute resolved before you can be approved for a mortgage.

Is There a Way Around This?

An inaccuracy may take months to resolve and can dampen your chances when you are trying to buy or refinance a home. It heightens your interest rate and may delay your ability to close on a loan. 

Some disputes can be ignored by lenders, depending on the type of loan your applying for. This can be accomplished with a letter from the creditor or a police report. Of course, your credit score and the type of mortgage you are applying for factor in whether or not this can be done.

It comes down to the fact that credit disputes are not always black-and-white, because everyone’s financial history is unique. There is so much to consider when you are getting ready to apply for a mortgage, especially if you happen to be a first time buyer.

Are you currently working your way through a dispute, or have you checked your credit report for errors recently? Contact us today, free of charge, to clear yourself of credit mistakes.

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What “mistakes” are we talking about?

1. Missing payments and not paying your bills on time will create a downward spiral. Negative marks will appear on your report if you are at least thirty days past due and may stay there up to seven years. The later the payments, the more damaging it gets. The best way to fix this problem is to pay as soon as possible. If you do not have a history of late fees, you can call the credit card company and ask if they can wave it. There is no harm in trying. As long as you stay on top of your payments, positive information will start to eliminate the late fees.
2. High credit utilization, or using too much of your credit at once, is not a good idea. You should never use over 30% of your credit limit at a time. If you are, take note that it only takes one month for this to affect your report since that is how often credit card companies send balance updates to the three major credit bureaus.
3. It is not a terrible idea to apply for credit when you need it, however this will bring your credit score down a few points. Do not apply for more credit if you are waiting for your score to bounce back.
4. If you do not pay your debt by the agreed date, the lender will give up and charge your account off. This could drastically damage your credit score and stay on your credit report for seven years. It’s vital that you pay this debt off or negotiate a settlement, because there is a chance you could be sued over this issue.
5. If time goes by and you miss multiple payments, a creditor will send your debt to a debt collector. This will create a serious negative mark on your credit and will take years to eliminate. The best way to settle this issue is to create a payment plan with the collection agency. It will not eliminate the negative mark, but it will eliminate the possibility of being sued.
6. Applying for bankruptcy has different effects on your credit score, depending on which type you file for. For instance, Chapter 7 bankruptcy could stay on your report for ten years. It is important to re-establish credit if this is a decision you make. You will most likely not be able to apply for credit, but you may be able to take out a credit-builder loan.

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Let’s start with the basics. What do the number ranges mean?

The most common credit score models have a range from 300 to 850. The higher your score is, the better! If your score is 300, that’s bad and if you have 720 and up, that’s excellent. Recent data from April 2017, courtesy of Fair Isaac Corp., showed that the average FICO score was 700. See below chart for the whole breakdown.

Even if your credit score is below 500, you may still be approved for credit cards. Your interest rate will just be higher. Consequently, you may also pay more for insurance or have to put a deposit down for utilities. As your score increases, you will have improved credit options and pay less to use them. A person with a credit score 750 or higher are likely to get 0% on interest rates for credit and car financing.

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They are offered at many doctors and veterinarian offices across the country and could be offered to you when you are unable to pay the whole bill at once. The approval rate for these are high and you could even be approved while standing at the doctor’s office. If approved, you may have anywhere from six months to two years to pay back the sum interest-free. What a lot of people do not realize is that these cards use financing called deferred interest.

Let’s talk about this for a second. Interest free sounds great, right? Of course it does! However, if you are unable to pay off the bill in full by the end of the discussed timeline, your interest will sky rocket. This goes into effect immediately, even if you only owe a little more money.

This all sounds like basic credit card lingo, but many people skip reading the bottom line, especially when they are presented with sudden high expenses. Just like other credit card accounts, medical credit could also effect your credit score. If you are in the market to be approved for a mortgage, or an auto loan, it is highly recommended that you do not open any new cards as this will lower your score.

This is a high risk financial situation and if that makes you nervous start with asking your doctor if they offer a payment plan. If this isn’t a possibility, do your homework and only consider medical credit if you are able to pay it off before the end of the deferred interest.

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FIVE RULES TO LIVE BY

1. Your payment history is 35% of your score. This shows how responsible you are when you borrow money. A big part of this is being able to pay your bills on time and even more importantly not having any red flags such as applying for bankruptcy.
2. You should only be using up to 30% or less of your credit.
3. If you have paid your bills consistently over a long period, this can be helpful. Older generations have the advantage here since someone with 10 years of punctual payments, may have an easier time being qualified for a loan then a person with only one year.
4. Do not open too many accounts. This shows that you are depending on borrowing to keep up with your expenses. It is better to open them slowly over time, then multiple accounts at once.
5. There are also different types of debts. Credit bureaus keep credit card accounts versus student loans, car loans and mortgages separate.

HOW TO ACT ON THOSE RULES

There are a few quick ways to raise your credit score mostly by focusing on the first two rules:

• Payment History
• Utilization

If you are able to pay off a large sum of debt at once, go for it! This helps your interest and will raise your credit utilization and is one of the fastest ways to raise your credit score. If times are hard for you financially, consider picking up a side job to help earn extra income to pay things off quicker.

You could also ask to raise your credit limit, which also helps your credit utilization ratio. If you have a decent credit history and are a long-standing costumer, chances are your credit card company will agree to it. If they decline this, the next best thing would be to open another credit card only if the new card comes with a generous credit limit.

A credit report error is fatal to what could be a decent credit score. An alarming 20% of credit reports contain errors. If you find one on yours, fix it as quick as possible and you will see an immediate boost. It is essential to review your credit report bi-annually to make sure everything on record is correct.

Becoming an authorized user on someone else’s credit account can help in a few ways. If the initial cardholder pays their bills on time, those payments will help your record. This credit limit will also be added to your existing limit and help decrease the credit utilization score. Most importantly, you do not have to actually use the card you issue yourself to, as long as you have partnered with a dependable person.

In the grand scheme of things, building credit takes time, but these few rules are an easy way to create a rapid boost.

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But how?

Let’s start at the beginning. What is skimming?

The simple definition is that it is a type of credit card theft where a person uses a small device to steal your credit or debit card information in an otherwise legitimate transaction. In most cases, you will not even realize the device is even there. Once you swipe your card, the thief is able to capture all of the details on the card’s magnetic strip. The thief then utilizes this data to make fraudulent charges either online or with a counterfeit credit card.

Where does something like this happen?

The most common places this could happen are at the gas pump, the ATM machine, a restaurant or bar, department stores, and call centers.

Gas stations are amongst the most popular spots for thieves to install a skimming device. Particularly because there are multiple card slots, all sitting outdoors, which are not always monitored by an attendant. A small electronic reader will be installed on an existing reader and the thieves return later to detach it and extract credit card information.

ATM machine skimming happens similarly to gas pumps. In addition, a miniature and undetectable camera device is placed near the ATM machine to record you typing in your PIN number.

Most of the time employees at restaurants and bars are honest, hardworking people. Keep your eyes open, because there are instances where an employee could steal your credit card information utilizing a small mobile device. If you feel unsure in a situation, simply close out a tab after each drink order, or use cash. Unless you know the employee personally it’s important to pat attention to what they are doing once they walk away with your card.

Department stores are similar to restaurants and bars because the clerk doesn’t leave your sight during transactions. If you notice that they are spending too much time studying your card, they may be trying to remember your number.

If you order products over the phone, be aware of foreign call centers where the operators are paid very low. This puts you in a higher risk that the operator will use your credit card number for their own personal use.

How to Avoid Being Caught in a Skimming Incident

There isn’t an easy way to detect these devices, but it is good to know what to look for. Simply using your debit or credit card can put you at risk. It’s important to keep a close eye on your credit and bank transactions to make sure there is no fraudulent activity happening. Log on to your accounts at least once a week and if you do notice any suspicious activity, report it right away.

It’s these types of scams that can ultimately effect your credit score. Contact Vulling’s Law to learn more.

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Consumer protection laws in the United States have been formulated over the last 40 years to help protect you from predatory lending, set strict rules for debt collectors, and provide you with options when it comes time to dispute errors on your credit report. What steps can you take to dispute a mistake or inaccuracy you’ve found on your credit report?

Establish the Validity of Your Claims

Before you contact a creditor with any dispute about information on your credit report, you need to understand whether or not an item is actually wrong. A common example that leads to frustration in many people is the ding your credit score takes from a standard credit inquiry from a lender or other creditor.

In reality, credit reporting agencies are legally obligated to report any inquiries made regarding your credit. You can dispute those claims, but it is difficult to have them removed. Another common issue revolves around closed accounts. If you notice an account on your credit report you know to be closed, federal law permits that information to remain on your credit report for up to seven years. Ensure that it is listed as paid and make sure the rest is correct.

If you find that something is inaccurate, such as an account listed on your report that is in fact not yours, you can contact the credit reporting agency. Before you reach out to a credit reporting agency, make sure you have the proper documentation to back up your claims.

Never Settle for Verbal Assurances over the Phone

Assuming you have found an error on your report and called the credit reporting agency, it is important not to stop at that phone call. In order to protect your legal rights under federal consumer protection laws, it is important to send a written copy of your claim to the credit reporting agency. Once a written complaint is received, credit reporting agencies and creditors are legally obligated to investigate.

Dispute Errors Online or Via Mail

When you order your credit report online, you will have the option to dispute an error online or by mail. Like all other online applications, disputing an error on your credit report online is quick and convenient, but it may be difficult to include documentation to validate your claim. Again, it is critical that you establish a paper trail by submitting a formal, written claim to your creditor or credit reporting agency.

5 Common Mistakes to Avoid

As mentioned earlier, it is very easy to get upset and frustrated by inaccurate information on your credit report. If you submit a dispute without taking time to cool off and approach the process wisely, you risk making mistakes that will damage your ability to correct the error. When you dispute an item on your credit report, avoid these five mistakes:

• Dispute only with a creditor: Don’t limit your dispute to an individual lender, because if they ignore your claim or fail to rectify the situation, you won’t be able to correct the issue. The law requires you to send a dispute to the credit bureaus as well.
• Skip terms of agreement: If you buy your credit report online from one of the three credit bureaus, take the few extra minutes to read the terms of agreement. There is often a requirement that you mail an opt-out letter to the bureaus within 30-60 days to preserve your right to dispute claims in front of a jury, if necessary.
• Lose evidence: Never send lenders, creditors, or credit bureaus the original copies of any of your supporting evidence. You may need to submit it to multiple parties, so make copies and keep the originals for yourself.
• Not descriptive enough: Avoid being vague, and present all the information you can to support your case.
• Listening to debt collectors: Don’t allow debt collectors to pressure you into paying off debts you find suspect on your report. Exercise your rights under the law and avoid the pressure by asking the collectors to end all collection calls.

Disputing items on your credit report can be a time consuming task. If you’ve noticed errors, but find the process overwhelming, the legal experts at Vullings Law Group can help. Contact us to learn how we can help guide you through the process, from filing a dispute to following up with lenders and monitoring resolution of your claim.

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