Why Does Your Credit Score Experience Fluctuations?

download (30)Applying for a new credit card.

Most people think that when you have a new card, you can use it anyway and anywhere, but that may not be the case since all cards have limits depending on how you use it. A new credit card may have a lower score, but that is subjected to change with time.

Closing all past cards makes your credit history shorter, thereby influencing your score negatively.

Payment History.

Repayment of loans and debt must be satisfactory and timely. Missed payments may not be excused by the creditor or the lending bank, which then can be recorded on your credit file, and this can hinder so many things since it is usually on file for nearly seven years. Despite a clean slate, a small slip up can cause a lot.

Credit card balances.

Credit card balances vary on a monthly basis since the card is typically in use, frequently. The less the available balance is on the card, the greater the credit utilization.

Credit utilization= total amount of debt divided by the credit limit

Some individual have several credit cards with or without balances, closing the cards without balances decreases your credit utilization. However, it is never recommended to close down a credit card, even if it holds a 0 balance.

Bankruptcy.

It is what we all dread to experience in our lives; bankruptcy can cause a detrimental impact to your credit file. It’s always wise to seek an experienced attorney to help make an informed decision before filing for a Chapter 7 or Chapter 13 bankruptcy. The statute of limitations for a bankruptcy can range from 7-10 years.

Bulk purchases.

A third of the credit score is directly related to your total debts, thus encouraging large purchases or payments using your credit card to alter your credit score. This should not cause any alarm since it is normal.

Always check your credit score before purchasing in bulk just to avoid pulling down your score.

Type of credit account used.

Scores will consider your mix of credit cards, installment loans, department store accounts, mortgage loans, and more. Your credit mix normally accounts for around 10% of your credit score, therefore it’s important to apply for accounts for which you intend to use.

Identity theft.

By analyzing your credit report, you may potentially spot something unusual which may be causing the drastic change in your score, this can be a simple error which can be corrected. Identity theft can also cause the questionable information to appear on one’s report; this is a major offense which can be handled and addressed easily if an individual realizes this on time.

Length of credit history.

The length of time specific accounts have been established, including the time-frame between the oldest to the newest account. This makes up around 15% of your score and can drive down your score if one doesn’t use certain accounts for a long time, causing them to be inactive.

Time.

Despite having little or no activities using the credit card (as long as the credit card is not closed) the company might change some policies and cause a slight fluctuation in an individual’s credit score.

Half of the population today cannot identify whether or not there is a change in their credit report, but it is always ideal to sign up to a credit monitoring service to help receive updates regarding your credit.

Credit Monitoring services show why the change occurred, help stop identity theft in their tracks, and provide identity theft insurance in the event that you become victimized. Inquiring with a credit repair agency does not necessarily mean that something is wrong; you can go for advice on how to improve your credit scores and how some issues can affect your score either positively or negative, they all add value one way or the other.

 

Does This FICO Score Make Me Look Fat?

download (29)THE ANDROMEDA EFFECT

I’ve heard it and I know you have, pretty people always seem to get a break.

I want to believe the opposite is true, but sadly, ugly people are screwed out of some perks just for being, well, ugly.

THE SKINNY (NO PUN INTENDED)

EVERY experience I’ve had during a traffic stop, no matter my disposition, is tense and I’m approached as if the stop sign or turn signal I omitted meant something personal to the officer.

My omission is followed by a ticketing to warning ratio of several to none. Even after ticketing, I am remanded again, “watch your driving, ya hear?”

My girlfriend on the other hand, fits the Andromeda mold.

She seems immune to the ills of the ticketed masses.

In fact, these “confrontations” become more of a social delay, and result in the officer giving helpful tidbits, and a warning that almost seems care more about her safety from other driver’s careless habits.

Why the score matters

If you want to join the ranks of the faceless ugly masses, try having a low FICO score.

In reality, it only takes a slightly blemished, neglected score to feel the pain of financial rejection.

Like the type of score that comes from not caring much about the facts, turning a blind eye–all while still paying the bills.

Really. I’m not kidding you.

You’ll be screwing yourself out of a ton of unseen perks, and out of your own hard earned cash. They won’t even have the gall or decency to say it to your face.

From credit approvals, to rates, to paying more for just about everything, a poor credit score keeps you down like nothing else financially.

The same product will cost you more. Period.

For example, a $20,000 car will set you back $21,248.95 at 48 months and 4 percent.

The same at 12%? $25,280. That’s a $4,000 difference on the exact same $20,000 car, all because your credit has a mullet.

For a house? It gets downright ludicrous. A 200,000 house, financed for 30 years.

Pretty FICO: 3% interest, pays 103,554.90 in interest alone.

Ugly FICO: 6% interest (good luck even getting that), pays 231,676.38 in interest alone.

That’s 128,000 more in interest!!

Same house, same time. Ugly credit. Pay twice the interest.

Again, this isn’t even looking at really ugly, or even kind of ugly credit either.

It’s looking at slightly blemished credit. If that doesn’t scare you, it should.

You can extend this scenario to everything purchased on credit. That should shock you… even more than looking into the mirror each morning.

With a moderate interest credit card, say 15%, making the minimum payment, you can expect your original balance to DOUBLE in as little as 3-5 years. Still reading?

The good news, your FICO can be sexy… and they said you can’t fix ugly!

NOW, THE IMPORTANT STUFFWHAT DO THE NUMBERS MEAN?

800+

Exceptional, less than 1% of people in this range are likely to be seriously delinquent on payments in the future.

These people are WELL ABOVE the average US consumer’s score, and will experience easy access to credit, and RECEIVE THE BEST RATES from lenders.

740-799

Very Good, approximately less than 2% of people in this range are likely to be seriously delinquent on payments in the future.

These people are ABOVE the average US consumer’s score, and will experience relatively easy access to credit, and MAY QUALIFY FOR BETTER RATES from lenders.

670-739

Good, approximately 8% of people in this range are likely to be seriously delinquent on payments in the future.

These people represent the MEDIAN US consumer’s score, and will experience decent access to credit, and are considered “ACCEPTABLE BORROWERS” by lenders.

580-669

Fair, approximately 27% of people in this range are likely to be seriously delinquent on payments in the future.

These people are BELOW the average US consumer’s score. They are considered SUBPRIME borrowers, and obtaining credit may be DIFFICULT. If these borrowers are approved for a loan, IT WILL BE AT A MUCH HIGHER RATE.

579 and below

POOR, approximately 61% of people in this range are likely to be seriously delinquent on payments in the future.

This is considered poor credit. Most applications for credit will be DENIED. If you are approved for a credit card, it is likely to require a FEE and/or DEPOSIT. A score this low is usually a result of bankruptcy or other major credit problems.

WHAT AFFECTS YOUR SCORE?

35% – Payment History

30% – Amounts owed on credit and debt

15% – Length of Credit History (Don’t close old accounts!)

10% – New Credit (Don’t open new accounts!)

10% – Types of Credit Used.

WHAT DOESN’T AFFECT YOUR SCORE?

Income, length of employment, alimony or child support payments.

WHAT NEXT?

It’s time to check your credit score, make sure it’s accurate, find out how your financial picture is affecting your score, and more importantly, IMPROVE them. 85% of reports contain errors.

Make sure you’re monitoring your credit score and report with at least as much concern as you watch your weight, and then you’ll truly be looking out for number one.

Secure Credit Card Processing: Choose Your Service Provider Wisely

download (27)These days, e-commerce is on the rise and people are using different ways to provide their customers convenient and easy ways to shop. Credit card processing is the best way to take your online business forward. It not only helps your business to grow but also entice customers to buy products or services from your business.

If you want to expand your small business and aspire to become a business giant, it is crucial to find a trustworthy payment gateway for your credit card. If you fail to do online sales management, hit the brake and ask yourself – ‘What’s stopping to do it properly?’ May be you cannot manage your online sales because of the inefficiency of the service provider you have chosen. But, you still have time in your hand and it’s better to change your service provider before any mishap. When your service provider is genuine, it will ensure you secure credit card processing. All you have to do is to ask some simple questions while picking your service provider. Check out the questions you should ask.

What are their fees? The fees of the merchant services for website are inclusive of the application and set up fees, monthly statement fees, interchange fees, and early termination fee. Your service provider should clear all the doubts regarding the fees and check whether they have any hidden cost.

What are their types of accepted payment? If you are an owner of a retail business, you will want to ensure that your chosen payment processor accepts all kinds of cards such as Visa, MasterCard, etc so that none of your customer has to face any problem during the payment.

How long will they take to complete the entire process? Many service providers of online merchant accounts complete their job within a quick turnaround time. Ask them directly how long they will take for your account set up and for the installation of the equipment so that you can chalk out your plans. If you have selected the right service provider, they will assist you with patience in every step.

There are dozens of credit card processing companies, some of which includes major players. However, you have to be very critical while choosing your processor. Look for a company which provides solutions to low-risk and high-risk merchants. Moreover, companies that provides onshore and well as offshore services can be a good option to make a choice.

Paycron has been recognized for leveraging top-notch merchant services for customers. Different payment solutions are provided ensuring that the business, whatever the size, remains well connected.

 

The US Has A Borrowing Problem And Easy Money Is Making It Worse

download (28)What is it with all the borrowing these days – credit card debt, low down payment mortgages, car loans and leases, college tuition loans, and the revival of the $100,000 five-minute loan? It’s like the American Consumer is addicted to easy money. Now with interest rates at historic lows, and the FED considering negative interest rates like the EU and Japan there are investment groups taking advantage of those and then lending money here. It seems like every day I read about more offers for easy consumer credit, get some credit card offer in the mail, or am enticed by some marketing company or corporation to buy something on credit. Let’s talk.

You see, there were two troubling articles in the Wall Street Journal recently; “Subprime Auto Loans Flash Signs of Trouble,” by Serena Ng, published on March 14, 2016. Unfortunately that first article was buried in the paper, only one column and hardly noticed. The other article did make the front page of Section II, it was titled; “The Five-Minute, $100,000 Loan,” by Ruth Simon and this article discussed how shrinking application times is good for small business – but five-minutes? Hmm? How is that good for Small Companies?

We have well over a trillion dollars in student loans, much of which is in the rears over 90-days, and we have challenges with subprime auto-loans, and our real estate prices are rather toppy, and thank god we are in an election year, but what happens after that? When it comes to tuition loans 40% are in borderline default status, even if those loans are not easily discharged. On the Subprime Auto Loans, 12.5% are over 30-days in the rears.

Easy money and low interest rates seem to have consequences. We have businesses large and small borrowing, consumers borrowing, and our government borrowing – no one is saving, and to keep all this going what are most Central Banks doing?

More stimulus, ouch, and exactly how, here in the USA, are college students going to continue to borrow for tuition if those loans are continually in default, whose paying for that? If car loans collapse, auto makers cannot sell cars and that means layoffs, meaning more loans default. We seem to be running redline in debt, and I do not see a way out of this without growth, but if all the growth is fake, stimulated growth from easy money, then at some point the whole thing collapses, and it doesn’t take a rocket-scientist, or economist to see that.