how to pay off student loans fast

College Debt Hurting Your Credit? Here’s How to Pay off Student Loans Fast

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Currently, in the United States, more than 44 million borrowers owe over $1.5 trillion in student loan debt.

Are you part of this group? If so, you might feel that you’re stuck in a hole and will never find your way out.

If you’ve been wondering how to pay off student loans fast, keep reading. We’ve got lots of tips that can help.

Explained below are some great strategies that will help you pay off your student loan debt and get on with your life as soon as possible.

Why Pay Off Your Student Loans Early?

Some people have questions about whether or not they actually should try and pay their student loans off early. Isn’t it enough to just make the minimum monthly payment?

Technically, yes, you could continue making the minimum monthly payment. It’ll take you a really long time to pay off your loans if you take this approach, though.

There are many other benefits that come with paying off your student loans early, including the following:

  • Improve your credit score
  • Improve your debt-to-income ratio
  • Have more money in your bank account each month

When you pay off your student loans early, you also get to enjoy the peace of mind that comes with having less debt.

This is especially true since student loan debt is virtually inescapable. Even if you declare bankruptcy, you still have to pay back your student loans.

How to Pay Off Student Loans Fast

Okay, you can see the importance of paying off your student loans quickly. Here are some steps you can take to pay those loans off as soon as possible:

Pay More Than the Minimum

The easiest way to pay off your student loans quickly is to pay more than the minimum.

The more you pay each month, the faster the loan will be paid off and the less money you’ll have to pay in interest.

Even if you can’t afford to double your payments, you can still make a difference by paying just an extra $20 dollars per month!

Make Extra Payments Whenever Possible

If you can’t afford to pay extra every time your student loan payment is due, you can at least make a dent in your balance by making payments whenever you do find yourself with extra cash.

Whenever you get “bonus money,” put it toward your student loan payments. This includes things like tax returns, bonuses from work, and money that you receive as a gift.

Consider Refinancing

Another great step you can take if you want to pay your student loans off faster is to refinance them. Refinancing your loans allows you to combine all of them into one loan with a lower interest rate and lower monthly payment.

When you refinance, you get to avoid having to deal with multiple monthly payments and multiple student loan servicers. You can refinance both federal student loans and private student loans.

Consolidate Your Debt

Many people confuse refinancing with debt consolidation.

Both of these are viable approaches to paying off your student loans, but it’s important to understand the differences between them before you choose one over the other.

When you consolidate your debt, your interest rate does not get lower, nor does your monthly payment. This approach simply helps you organize your student loans so that you only have to make one payment instead of several.

Consider Starting a Side Hustle

If you’re having a hard time paying extra toward your student loan debt, you might want to consider starting a side hustle. This will allow you to earn extra money and put more money toward your debt each month.

There are lots of different ways that you can earn extra money these days. Try driving for Uber or Lyft or delivering food for GrubHub or DoorDash.

All of these side hustles let you earn money on your own terms, so they’re great for busy people or those with unpredictable schedules.

Talk to Your Employer

Sometimes, employers offer student loan forgiveness in exchange for volunteer work. They may also offer student loan repayment assistance as part of their benefits package. Check with your employer to see if this option is available to you.

Look for Interest Rate Deductions

Lots of student loan servicers will offer interest rate deductions in exchange for enrolling in automatic payments.

These deductions are relatively small — usually around 0.25 percent — but every little bit counts. It all adds up over time, and you can see some major savings later on.

Automatic payments are a good idea in general when it comes to paying back student loans (or any loan, for that matter). They give you peace of mind and eliminate the need to worry about keeping track of your payments.

Trim Your Budget

Look for ways to trim your budget, too. Most of us have various monthly expenses that we could stand to eliminate.

Track your monthly spending and check to see if you’re wasting money on eating out or buying coffee from your local Starbucks instead of making it at home.

Add up these purchases and you’ll be amazed at how much money you’re throwing away each month.

The average American spends $2,787 per year on food from restaurants and takeout joints — imagine if you put all that money toward paying off your student loans!

Get Out of Debt Today

Are you ready to be free from student loan debt?

It’s easy to feel overwhelmed by student loan debt, and you may feel as though you’ll never pay all of your loans off. That’s definitely not the case, though.

Follow these guidelines on how to pay off student loans fast and you’ll be well on your way to living a debt-free life.

Do you want to learn more about money management or getting out of debt? If so, we’ve got plenty of other resources just for you.

This article on nine ways to raise your credit score is a great starting point. It’ll teach you everything you need to know about paying off debts the right way.

what is the highest credit score

What is the Highest Credit Score and Does It Matter?

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If you’re applying for a new home, you may be worrying about your credit score more than ever. But if you check your credit score too much, will your credit go down?

Also is there such thing as perfect credit, and how do you get better credit? There are many factors that can affect your credit. Keep reading to learn more. 

What Is The Highest Credit Score?

The highest credit score in most consumer credit scoring models is 850. However, some other scoring models that are less used can go up to 900.

VantageScore is an older credit scoring model that used to go up to 990, but now it only hits 850. VantageScore was created with three major credit bureaus (Experian, Equifax, and TransUnion). 

Insurance companies, banks, and other lenders may even have their own credit scoring models. We don’t know exactly how many scoring models exist, or what the actual highest score is.  

However, if you have a high score, you’re going to get the best rates on products. So your credit score really does matter. Here’s how you can make your credit better. 

How Many People Get the Perfect 850?

We can’t tell how many people exactly have a perfect 850, but according to FICO, about one percent of Americans have a perfect score. So don’t obsess over a perfect 850, because actually a score around an 800 or higher (which is only 15 percent of the population) is considered the same as “perfect credit.” 

So basically, people who get excellent credit, even if it isn’t a perfect credit score, will get the lowest interest rates, and best credit card offers. You won’t necessarily save any money with the perfect credit score, it’s more like bragging rights, like owning a Tesla or black card. 

How Are Credit Scores Calculated?

There isn’t really a formula for all credit scores, but there are two main scoring models. These models are FICO and VantageScore 3.0, which make scoring criteria publically known. 

Here are some things that factor your credit score. Factors like payment history and late payments. As well as your account balances and credit history. 

The credit accounts you have including new credit application are all taken into consideration. 

FICO for example measures credit weighs various factors. Your payment history plays about 35 percent of your score, the amount you owe factors 30 percent.

Your history takes about 15 percent. While 10 percent is given to new credit and credit used. 

How Can I Check My Credit Scores?

The Fair Credit Reporting Act says you are supposed to get a free credit report each year from each of the three credit bureaus. Credit card companies are the easiest way to get a free cred score. 

A mortgage lender must also show you your credit score during your application process under federal law. 

There are also many websites and services like Credit Karma, that will check your credit for you for free. These programs will also send you e-mails letting you know if someone is looking at your credit score and give you tips on ways to improve your credit. 

How Can I Get the Highest Credit Scores Possible?

While there is no magical formula for perfect credit, there are a few things that affect your credit. You want to make sure you’re making all of your payments on time. Late payments affect your credit. 

You also want to make sure you don’t have credit card debt, which goes hand in hand with late payments. Credit card debt affects your credit. So make sure you pay your credit card balance in full each month. 

Having multiple credit cards, and not maxing out those cards, is another way to improve your credit. Just make sure you always have a balance on these cards. Do not get rid of a credit card once you pay it off. 

You also want to have different credit accounts, such as revolving credit which includes ongoing loans and credit cards. There’s also installment loans like mortgages and car loans. 

Maintaining Good Credit 

Instead of focusing on perfect credit, make sure you maintain good credit. Some things that help keep good credit is making sure you don’t close old credit cards. Always keep a credit balance, and don’t close a credit card because you paid it off.

Also, manage your debt. There’s a chance you may have debt you weren’t even aware of. Get on top of that and make a plan to pay off that debt.

You also want to make sure you keep your credit card balances low. This means paying off as much as your credit card as you can each month, and not just the minimum.  

Also, limit how many new credit applications you apply for. Every time you apply for new credit, this affects your credit score.

Keep an eye out on your credit report. See what’s affecting your credit, and work on making that better. 

Do Perfect Credit Scores Matter?

Honestly, precision doesn’t matter as much as having reports that show you know how to manage your credit well. If you have a FICO score above 760, you’ll be able to qualify for the best credit card offers, best rewards, and lowest interest rates. 

There’s not a huge difference to lenders if you have a 780 or 800 credit score. People with excellent credit get the best terms, as long as there’s enough credit history and also income to back this up. 

The advantage of having a perfect credit score is protection if you miss a payment or if you have multiple inquiries about your credit. Its easier to avoid this if you properly manage your credit from the beginning. 

Improve Your Credit Today 

Now you know what is the highest credit score, realize it’s not important to have perfect credit, rather good consistent credit. Make sure you’re watching your credit score and doing everything in your power to improve it. 

While having an 850 credit score is nice, so is consistently having good credit. For more information on your credit and to find out if watching your credit is hurting your score, check out this article. 

dispute credit report

Credit Repair Masterclass: How to Dispute Your Credit Report to Remove Errors

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Did you recently receive your credit report? Did you find errors that require correcting?

Believe it or not, about 20% of Americans receive incorrect credit reports. What is far worse is that these errors tend to affect people’s credit score.

In the eyes of lenders, they look riskier than they really are.

If a lender qualifies you as a risk, you will likely have a hard time securing a loan. Thankfully, you have an opportunity to dispute credit report data. You have the chance to correct those errors and improve your credit standing.

Continue reading below if you want to learn how to dispute your credit report the right way.  

How to Dispute Credit Report Mistakes: The Step-by-Step Process

Yes, you can dispute errors on your credit report. However, it’s not as simple as filing a complaint. You need significant evidence to prove the error is on their part.

Don’t worry, we’ll guide you through the process:

1. Collate Your Evidence

Before you raise hell on the credit bureau, you must first gather evidence. Collect and collate all the key documents that will support your dispute. This is crucial since all the major credit bureaus will conduct an evaluation of your claim.

As for the documents, collect the ones that directly affect your dispute. If the issue involves identity theft, you should provide the bureau a copy of the police report.

If your dispute involves misreporting of your credit line information, you should prepare all your loan documents and credit card statements.

2. Get in Touch with the Credit Bureau

The next step is to contact the credit bureau. There are three major credit bureaus that furnish the reports: Equifax, Experian, and TransUnion.

Sometimes, you only one of the three reports contain errors. Sometimes, all three reports require correction.

Your goal is to file a dispute either by email or traditional mail. You also need to prepare a handwritten letter explaining the nature of the error. You should also state in the letter why you feel the credit report is inaccurate.

Follow these sample templates when writing a dispute letter.

Don’t forget to include all the documents you collected beforehand. If you are sending the documents by mail, make sure to use certified mail that comes with a return receipt.

3. Reach Out to the Furnisher

Though this is optional, you may also want to contact your lender. The furnisher is the one who sends your information to the credit bureau. The lender can be your bank, loan provider, or credit card company.

You have the option to contact the furnisher before you send your dispute to the credit bureau. If the error is a lapse on the part of the furnisher, you can easily resolve the error without going to the bureau.

But if the mistake is clearly related to identity theft, then you need to go to the credit bureau first.

4. Wait for a Response

After formally sending your dispute to the credit bureau, the waiting game begins. Upon receiving your dispute, the credit bureau has 30 days to look into your case. They will investigate the issue and verify the details with your furnisher.

After completing their investigation, the credit bureau also has five days to send you their findings. The same process also applies if you file your dispute directly to the furnisher. Give the entire process a maximum of 45 days.

Keep in mind that either the credit bureau or the furnisher can flag your dispute. If the bureau finds it frivolous, it will likely end its investigation. Expect to receive feedback in five days.

Generally, they flag disputes that have incorrect information. They also flag complaints that lack valuable information.

The good thing is you can resubmit your dispute. Make sure to complete the missing requirements before refiling your dispute.

5. Review the Findings

Upon receiving the results of the investigation, take ample time to review the findings. The credit bureau should provide you a detailed report. They should also give you a free copy of your credit report if there are any changes.

You can also expect the bureau to give you the name and contact details of the furnisher that gave them the incorrect report. Take note of the key details. The furnisher should instruct the bureau to correct or delete the incorrect information.

6. Keep Watch of any Updates

Lastly, you need to check your credit reports and see if the furnisher already applied the necessary corrections. Take note that updates tend to take some time before they appear.

But they should not take several months.

In such cases, it is best to get in touch with both the credit bureau and the furnisher regarding the updates.

Protecting Yourself

Not too long ago, hackers stole personal data of about 143 million Equifax clients.  A lot of bad things may happen if you fall into the ploys of these hackers. They can withdraw funds from your bank accounts.

They can also apply for credit loans using your name. In some cases, they can sell your personal information to other cybercriminals.

Let’s take a look at some simple tips that will help protect you from identity theft.

1. Beef Up on Passwords

Always use passwords. This applies not only to your financial accounts but also to your laptops and mobile devices. Always go for stronger passwords. Don’t use a single password for all of your accounts.

2. Don’t Give Out Your Info

If your bank or credit card company calls you and asks for your Social Security number or credit card PIN, better be wary. Chances are, these are fraudsters pretending to be legit.

Keep in mind that banks will never call you over the phone and ask for such details.

3. Review Your Credit Reports

Always make it a habit to review your previous credit reports. This will help you pinpoint any anomalous transactions under your name. This will buy you time to report the matter to your credit card company.

Learn More About Credit Repair

Now that you know how to dispute credit report data, it’s time to take your knowledge to the next level. We encourage you to check our other articles on credit repair.

Don’t stop here! Check our other guides for more financial aid. We discuss topics like credit repair systems and improving your credit score, among others.

Identity Theft? Take a Deep Breath & Follow These Steps

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Many people assume that they never have to worry about identity theft.

They assume people only want to steal the identities of those with great credit scores or bank accounts.

But here’s the truth…

In 2017, nearly 17 million people had their identity stolen. 

Many of them were just average Americans who worked regular jobs and weren’t bringing in high amounts of money.

Naturally, they never expected that they would be a victim of identity theft.

 

How Does Someone Pull Off Identity Theft?

There are quite a few ways that a person can pull off identity theft. Some simply jot down people’s personal information at the business where they work.

Some people take mail that was wrongfully delivered to them and use it to create false accounts in other people’s names.

There are even times when friends and family members will steal your identity to purchase something that they want or get utilities turned on in your name.

When you fall prey to identity theft, you need to act quickly to minimize the consequences.

These are the steps you should take…

 

Step One: Contact Your Bank and Creditors Right Away

The first thing you need to do when you notice you’ve been a victim of identity theft is contact your bank and your creditors right away.

You need to let them know what has happened, find out if any charges or accounts have been opened in your name that you aren’t aware of.

You also need to know if anyone has contacted your bank on your behalf.

Instruct your bank to put a hold on all of your accounts so that no account transactions go through.

Also, ensure that nothing can be charged to your credit cards by ordering a replacement as soon as possible.

The sooner your bank or credit card company aware of the situation – the more damage you prevent from happening.

 

Step Two: Check Your Credit Reports

Credit reports will have documentation of any new accounts that have been opened. You can go online to visit the Experian, Equifax, and TransUnion websites to get a copy.

Remember that the law states you are eligible to pull one free copy of your credit report annually.

If you already got a copy of your report once this year, you may have to pay a fee to get an updated copy.

Once you get your report you need to be able to look closely at everything that has been opened in your name.

You also want to make sure that there are no outstanding debts or loans that you don’t know about.

Each of the reports from the three credit bureaus will contain unique information so that’s why you need to get a copy of all three of them.

Check your reports again after 30 days, because it takes credit bureaus time to update your information after they are opened.

When it comes to identity theft, you don’t want to leave any stone unturned.

 

Step Three: Sign Up for Credit Monitoring

Experian and TransUnion offer you the ability to sign up for credit monitoring.

This allows you to be alerted of new credit inquiries, accounts, or debts.

You may have to pay a small fee for the services, but it will be well worth the cost if it allows you to prevent your credit from being ruined.

Websites like Credit Karma and Credit Sesame have free credit monitoring services that are a great help.

 

Step Four: Go to the Police

Once you have evidence of the identity theft through your credit reports or other information collected in the process of your investigation, file a police report.

And remember…

Even if you have an idea of who may have stolen your identity it is best to avoid any confrontation – which could be potentially dangerous.

The police are there to help.

The police will create a report that details why you believe you have been a victim of identity theft, what proof you have, and an investigation will be opened to try to determine what is really going on with your identity.

Never underestimate the seriousness of identity theft.

It doesn’t stop at opening accounts in your name.

Those who participate in identity theft can get into legal trouble, claim to be you and then you will be responsible for proving you did not do whatever crime they committed.

Reporting the situation to the police provides you with important paperwork that you can give to your creditors.

It also ensures that if anyone gets in trouble using your name there will be proof of the identity theft which could keep you from being held liable for the other person’s decisions.

 

Step Five: File a Fraud Alert with the Credit Bureaus

Once you have the police report, you need to contact the credit bureaus directly and provide them with the proof that your identity was stolen.

They will be able to open up an investigation and work with the police to ensure that any questionable activity is properly documented.

This can also ensure that you aren’t held liable for the charges or delinquencies the person creates while they are using your identity. This can save you a lot of irritation and money in the end.

 

Step Six: Fax Identity Theft Reports to Your Creditors

Last but not least, it is important to provide your creditors with proof that your identity was stolen.

Fax a copy of the police report to each of your creditors and advise them to issue out replacement cards, or put your account on hold temporarily.

It’s also a good idea to contact local utility companies and let them know about the situation. They can flag your name in their computer system so no new accounts can be opened in your name.

You also may want to tell your friends and family what happened and that you went to the police. If someone is guilty of stealing your identity, they may fess up to the crime if they think they could be facing serious punishment for it.

 

Sources

[1] Facts + Statistics: Identity theft and cybercrime | III. (n.d.). Retrieved from https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime

[2] Identity Theft | USAGov. (2019, February 14). Retrieved from https://www.usa.gov/identity-theft

credit monitoring

Will Credit Monitoring Hurt My Credit Score?

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Close to a third of Americans officially have bad credit. This is defined as a credit score that’s lower than 601.

Credit can be complicated. Many people believe that credit monitoring will hurt their credit score, and have no idea what their credit score actually is.

Read on to learn some of the most common misbeliefs around credit, and whether you should be monitoring your score.

How Does Credit Work?

When you apply for credit, lenders need to determine whether they can trust you to pay it back. Your credit score is a three-digit number that helps lenders make this decision. People with good credit scores are eligible for better interest rates and credit cards with better rewards.

Your financial habits impact this score. It goes up when you’re responsible with your credit, and it goes down when you’re not. Here are the components that make up your credit score:

Payment History

This is the largest component of your score. That’s why it’s so important to make sure you make your payments. If lenders can see that you have a negative payment history, they’ll assume you can’t meet your current obligations.

Late Payments

It’s easy to forget to make a payment on time- after all, life is busy. But if you’re late for a payment on a loan or credit card, your credit score will usually have a negative adjustment.

How much will this adjustment be? This often depends on just how late you are. Do yourself a favor and set up an automatic payment so you don’t need to remember to pay each month.

Debt Burden and Utilization

Lenders want to know how much debt you have, and the percentage of credit being utilized. This last factor is super important- you want to show that lenders trust you with credit, but you don’t really need it.

Generally, your utilization should be less than 30%. That’s why you should be careful when canceling credit cards. This can decrease the amount of credit available to you, increasing your utilization- even if you haven’t actually used more credit.

Length of Credit

The older your accounts, the better. If you’re considering canceling a card, try to avoid canceling your older credit cards so you can show a longer credit history.

Credit Searches

This is a credit adjustment based on any hard inquiries into your credit history. And this is why many people believe that credit monitoring will hurt their score.

Your credit score does adjust based on the number of inquiries, and will usually be adjusted within around 30 days so you have time to shop around. When you apply for credit, the lender will pull your credit history- and that impacts your rating.

Is Credit Monitoring Bad?

As mentioned above, your credit score is impacted when lenders check your credit history. This is what’s known as a hard inquiry or sometimes a ‘hard pull.’ And it costs you points.

This is because this type of inquiry is when someone is deciding whether they should extend credit to you. You can expect this inquiry to cost you anywhere from five to twenty points.

A soft inquiry (also known as a ‘soft pull’) is when you check your own score. However, this can also be performed by a creditor who’s considering preapproving you for a credit card or loan.

If you’re applying for several credit cards within a short time frame, you could see your credit score drop significantly. A hard inquiry will stay on your report for two years.

Here’s why you should monitor your score:

Check for Discrepancies

Monitoring your credit is the same as a soft inquiry, so it won’t impact your score. It’s actually a good idea to regularly monitor your score since you’ll easily be able to see if something is wrong.

If you see a massive change in your score, it could indicate that you’ve been a victim of identity theft or there has been a mistake in your report.

Predict Your Approvals

Before you apply for a credit card or loan, it’s a good idea to know if you have a high chance of approval. That way, you won’t waste time (or the hit to your score) on a hard inquiry for a product you don’t qualify for.

Monitor Easily

These days, it’s easier than ever to monitor your credit score. The three major credit reporting bureaus are TransUnion, Experian, and Equifax. By law, they’re all required to give you one free copy of your credit report each year.

There are also a number of services and apps which will give you updates each month, so you can see how your activities are impacting your score.

Need to Increase Your Score?

Have you recently checked your score? Maybe you’ve found that it’s lower than you thought it would be? Or maybe you were turned down for a credit card or loan?

Here are the best ways to increase your score:

Know Your Starting Point

Knowledge is power. That’s why it’s a good idea to make a list of everything you owe, and when your payments are due. Check your credit report to make sure everything lines up, and then you can create a strategy to increase your score.

Decrease Your Utilization

You can do this in two ways: First, apply for a credit limit increase. If you have a good payment history, you’re likely to be approved. The second option is to pay off as much as you can to get that utilization under 30%.

Create Good Habits

Maybe you need to set up a direct debit or automatic payment. Or perhaps you need to mark your payment due dates on your calendar. Make sure you’re always paying on time, and your credit score will begin to increase.

Wrapping Up

As you can see, credit monitoring is a smart way to take control of your finances. By regularly monitoring your credit, and using the above tips, you’ll be able to watch your credit score increase in 2019.

For more information about improving your financial health, check out some of our blog posts.

credit cards for bad credit

Don’t Let a Low Score Bring You Down: The Best Credit Cards for Bad Credit

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The bad news: you have bad credit. 

The good news: you can still get a credit card. 

About one-third of all Americans have a credit score that falls beneath 601. That’s why so many credit companies have made their cards available to those with lower scores.

When you have bad credit, you should look for a card that allows you to start building it back up again. Choosing one of our suggested credit cards can help you raise your credit score as long as you make the required payments. 

Here are some of the best credit cards for bad credit: 

Discover It Secured

You might not be able to obtain an unsecured credit card yet, but that shouldn’t stop you from getting a secured card with a lot of great features. The Discover It Secured card has many perks similar to an unsecured card. Plus, the security deposit is only $200, and you won’t even have an annual fee. 

One of the best parts about the Discover It card is that you’ll receive 5% cashback on different purchases. Cashback conditions change quarterly, but often include grocery stores, gas stations, restaurants and more. You’ll also benefit from 1% cashback on every purchase you make.  

Capital One Secured Mastercard

Easily rebuild your credit using a Capital One Secured Mastercard without having to pay an annual fee. Better yet, this credit card for bad credit only requires $49 down for $200 worth of credit. 

As long as you use the card responsibly, you might even get your deposit refunded along with a higher line of credit. All you have to do is make sure that you pay your bills in a timely manner. If you’re unsure about the status of your credit score, don’t forget to check it using Capital One’s Creditwise. 

OpenSky Secured Visa Credit Card

The OpenSky Secured Visa Credit Card is made specifically for people with poor credit, as they don’t even check your credit when you apply for their card. You choose your credit line by how much you put down on your refundable deposit–the amount can range from $200-$3,000. 

OpenSky also sends your credit report to each major credit bureau, allowing you to check it often. A phone notification from their app won’t let you forget your monthly minimum payment. 

Milestone Gold Mastercard

Have a previous bankruptcy? No problem.

The Milestone Gold Mastercard won’t exclude you. That’s what makes the Milestone Gold Mastercard one of the best credit cards for bad credit. 

Your annual fee is determined by a prequalification assessment. It won’t hurt your credit score and calculates your annual fee based off of it.

Your annual fee could be anywhere from $35-$75 for the first year. After that, it’ll increase to $99. Although you might also be required to pay an opening fee, you can be sure that it won’t be more than $75. 

Merrick Bank Double Your Line Visa

Apply for a Merrick Bank Double Your Line Visa and get prequalified in less than one minute. As the name of this card suggests, it allows you to double your line of credit. After making your minimum payment every month for seven months, your credit line will be raised automatically. 

You’ll also benefit from online management tools, as well as the ability to check your credit score. With $0 fraud liability, you’ll be safe from any unapproved transactions. 

AvantCard

When you’re searching for credit cards for people with bad credit, it’s important to choose wisely. That’s why you should consider the AvantCard.

The AvantCard is one of the most convenient bad credit credit cards. The application process is simple and doesn’t take long. Using an AvantCard to better your credit score is ideal–you won’t be hammered with hidden fees, and you’ll have protection from fraud. 

Total Visa Unsecured 

You’re probably reluctant to get another credit card after having an experience with bad credit. However, the Total Visa Unsecured can help you reestablish your credit score.

There may not be any fancy features on it, but this is one of the best cards for people with bad credit. Instead of spending frivolously, you can work on becoming more frugal and avoiding items you can’t afford. 

When you first get your card, your credit limit will be $300. This prevents you from using it on huge purchases. Try to charge about $100 every month, and make sure to pay all of it off–otherwise, you’ll be hit with a high APR. 

Green Dot Primor Visa Gold Secured

A Green Dot Primor Visa Gold Secured credit card can be your solution if you’re unable to obtain a credit card. You don’t have to have a good credit score to get this card–a person with any credit score is welcome to apply. Fortunately, there aren’t any application or processing charges either. 

You’ll be given a credit line ranging from $200-$5,000. With a low 9.99% interest rate and no penalty fees, you should be able to rebuild your credit in no time. 

Indigo Platinum Mastercard

The Indigo Platinum Mastercard is another one of the most helpful credit cards for poor credit. You won’t even be disqualified for bankruptcies or for a bad credit score. 

Quickly apply without it having an effect on your credit score. Not only is this card protected from fraud, but it can be used at 35 million areas around the world. 

Credit One Bank Unsecured Visa

Who doesn’t love getting cash back? With Credit One Bank Unsecured Visa, you can get 1% cashback on certain purchases including gas, internet services, cable TV, groceries and more. 

You’ll also have the ability to check your credit score status through their website. Once you’ve consistently paid back your bills, you’ll qualify for a credit line increase. Luckily, you also won’t be accountable for any unauthorized transactions.  

The Bottom Line: Credit Cards for Bad Credit

Don’t get discouraged by your credit score. You don’t have to keep getting rejected by multiple credit card companies. Instead, choose one of these credit cards for bad credit. 

These cards make it possible to slowly rebuild your credit. Soon, your score will be back up and you’ll no longer have to suffer from bad credit. 

Want to know some of the fastest ways to help boost your credit score? Check out our article for more tips. 

credit score dropped

Top 7 Reasons Why Your Credit Score Dropped

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A “good” credit score is anything over 700. A “great” score is anything over 800. Yet, the average credit score in the United States is just 687.

Having a decent credit score is important if you want to buy a house or car, apply for a loan, and more. But with so many factors going into determining your credit score, it can be tough to track down exactly why your credit score dropped or why it’s gone up.

If you’ve ever found yourself wondering, “why did my credit score go down,” keep reading to learn 7 common explanations.

1. You Missed a Payment

Making your credit card payment a day or two late won’t have an effect on your credit score.

But if you let that bill go unpaid for more than 30 days, the credit card provider will report your late payment to one or more of the major credit reporting agencies. Once this happens, your credit score is likely to drop.

The best way to avoid this is by always making sure to pay your credit card bills on time. If you do miss a payment, try to get it paid as soon as possible.

While paying more than 30 days late will hurt your credit score, paying it 60 or 90 days late will cause even more damage. Your credit card agency may also choose to report your debt to a debt collection agency. This will also be reflected on your credit score.

2. Your Debt to Credit Ratio Changed

Your credit utilization is the ratio of your credit line and your current debt.

For instance, if you had a credit card with a $4,000 credit line and you had $2,000 in debt, your credit utilization would be 50 percent because you are using half of your available credit.

Your credit utilization rate has a big effect on your credit score. In fact, it makes up a whopping 30 percent of your credit score.

Experts recommend keeping your credit utilization rate between 20 and 30 percent. Using more than 30 percent of your available credit on any given card can hurt your credit score.

3. An Old Mistake Aged Out

Sometimes a sudden and unexplained change in your credit score isn’t negative. A rise in your credit score can be equally perplexing. Even if you’re happy about the change, you may still wonder what caused it.

One reason your credit score may rise when you aren’t expecting it is when an old mistake you made finally ages out of your report.

Mistakes on your credit score, like missed payments, foreclosure, or bankruptcy, only stay on your credit report for a set number of years, depending on the type of debt.

You may have long forgotten about the mistake, but you will notice when your score rises a few points out of nowhere.

4. You’ve Applied for a Loan, Mortgage, or Credit Card

When you buy a home or car, apply for a loan, or even fill out an application for a new credit card, the loan or credit provider you’re applying to will run a credit score report. This report helps them decide whether or not to lend to you, as well as how much to offer.

Unfortunately, when this report is run, your credit score will drop a point or two, or even more.

You can’t avoid this drop unless you can avoid applying for loans or new credit cards. One small drop you can avoid is the drop you cause by checking your own credit score on certain credit score providers. Check to see whether or not checking your score in a particular place will have an impact on your score before you run the report.

5. You Got Rid of an Old Card

Getting rid of a credit card might sound like a smart move, especially if you’ve struggled with misusing cards in the past.

But getting rid of a credit card also means lowering your overall credit utilization rate. As we mentioned before, this can cause your credit score to drop.

Another problem with getting rid of an old credit card is that it can shorten the average length of your credit history.

How long you’ve had credit cards, loans, and other credit is a significant factor in determining your credit score. If you get rid of a card that you’ve had a while and keep newer cards, you’ll be shortening your credit history, which can cause a score drop.

6. Your Limit Got Lowered

Another way that your credit utilization rate can increase without you spending a dime is if your credit card line is reduced.

This can happen for a number of reasons. The most common is that you’ve missed a few payments.

When your credit line is decreased and you don’t make a big payment on your account, your credit utilization ratio will rise and so will your credit score.

7. The FICO Formula Changed

If you’re certain that none of the above reasons are to blame and you’re still wondering, “why did my credit score go down,” it could be that it isn’t your fault at all.

FICO uses a formula to determine a person’s credit score. They are constantly seeking to perfect that formula. That means that from time to time, the formula is changed in order to make credit scores a more accurate reflection of a person’s credit risk.

If you see a small jump or drop in your credit score that can’t be easily explained by another cause, it could be that the FICO formula changed.

Figuring Out Why Your Credit Score Dropped

From applying for loans and new credit cards to your limit getting lowered, there are a ton of reasons why your score may go down.

Now that you’ve learned a few of the most common reasons why your credit score dropped, it’s time to start working on tactics for bringing it up.

Check out this article next to learn the fastest way to improve your credit score.

do debit cards affect a credit score

Do Debit Cards Affect a Credit Score? Here’s All of Your Questions Answered

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When it comes to financial literacy, many Americans are struggling to keep up.

Millions of Americans have at least one credit card. But, the majority of these people are clueless when it comes to using these cards effectively.

Many of these people are also unaware of how to use their debit card properly. They might even find themselves asking questions like, “do debit cards affect a credit score?”

If you’re guilty of asking questions like this, keep reading. Explained below is everything you need to know about whether or not your use of a debit card can influence your credit score. 

Debit Cards Vs. Credit Cards

First things first, let’s clarify the difference between a debit card and a credit card.

In order to get a credit card, a lender has to approve you for a specific credit limit. 

Whenever you use your credit card, you’re borrowing against that credit limit. You will also have to pay interest on your credit card balance if you do not make your payments on time or do not make complete payments.

A debit card, on the other hand, takes money out of your checking account whenever you use it. With a debit card, you’re spending money you already have. With a credit card, you’re borrowing money from your bank or credit union.

Do Debit Cards Affect a Credit Score?

The short answer to this question is, “no, they do not.” There are lots of factors that affect your credit score, but your debit card usage is not one of them.

Because you’re using the money you already have when you swipe your debit card, those purchase do not affect your credit report. Essentially, you’re not building credit when you’re simply spending your own money.

Which Factors Do Affect Your Credit Score?

So, debit cards don’t play a part in raising or lower your credit score. But, which factors do have an influence? 

There are lots of things that can raise or lower your credit score, including the following:

Payment History

Your payment history has a major effect on your credit score. If you’re not making credit card payments on time, or if you’re skipping them altogether, you’re going to have a hard time improving your score.

Credit Utilization

Your credit utilization is the amount of money you’ve charged relative to your credit limit. For example, if you have a $10,000 credit limit and you’ve charged $1,000, your credit utilization ratio is 10 percent.

Generally speaking, it’s a good idea to keep your credit utilization as low as possible — below thirty percent is ideal.

The Length of Your Credit History

How long have you been using credit cards or borrowing money from your bank or credit union? The longer your credit history, the better your credit score.

This is why it’s difficult for individuals who are new to credit to have high credit scores.

Credit Mix

The term “credit mix” refers to the different types of credit on your credit report. For example, you might have two credit cards, a mortgage loan, and an auto loan.

Generally speaking, if you have a diverse credit mix (and you’re making all your payments on time), you’ll have a higher credit score.

Lack of a Credit Balance

Using your credit cards too much can be problematic, but so can using them too little. If you never use your credit cards, you don’t have an opportunity to pay them off.

This, in turn, hinders your ability to build credit.

Your credit cards may even be canceled if you don’t use them often enough — and, this definitely isn’t good for your credit score.

How to Improve Your Credit Score

You might be relieved or disappointed to learn that your debit card usage does not impact your credit score.

While you won’t boost or lower your credit score with your debit card, there are lots of other steps you can take to get that score up.

Some specific strategies you can utilize include:

Get a Secured Credit Card

A secured credit card is kind of like a credit card with training wheels. The training wheels, in this case, are a security deposit that you pay before you can use your card. This security deposit acts as your credit limit.

Keep Your Credit Balance Low

Try to pay your credit card balance off in full each month. There’s no benefit associated with leaving a balance on your credit card — you’ll likely just end up paying more money in interest if you do this.

If you can’t pay your entire credit card balance, at least pay off the majority of it to keep it as low as possible.

Make Your Payments on Time

It’s also important to make sure you’re paying your credit card bills and making your loan payments on time. If you have a hard time with this, set reminders on your phone or set up automatic payments.

Monitor Your Credit Report

Keep in mind that you can get a free copy of your credit report from each of the three credit bureaus (Experian, TransUnion, and Equifax). Take advantage of this opportunity and make sure there aren’t any errors that are affecting your credit score.

Be Selective with the Accounts You Close

Generally speaking, it’s not a good idea to close credit accounts, especially old accounts. But, if you have cards that you rarely use (especially cards that have a high annual fee), you might want to close them so you don’t get penalized for inactivity. 

Looking for More Tips to Improve Your Credit Score?

Clearly, the answer to the question, “do debit cards affect a credit score?” is a resounding, “yes.”

As you can see, there are lots of things you can do to use your debit card to boost your credit score.

Do you want to learn more about how to improve your credit score?

Start by checking out the credit repair section of our website today. It’s full of tons of tips and tricks to help you manage your finances effectively.

student loan default rehabilitation

Student Loan Default Rehabilitation: How to Rebuild Your Credit After Defaulting

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Buy 2023, up to 40% of Americans paying back student loans may have defaulted.

That adds up to a whopping $560 billion in debt that never gets paid off.

So if you’ve defaulted on your student loans, you’re in good company. And if you want to rebuild your credit score, it’s not a walk in the park, but it is definitely possible.

In this article, we’ll take a look at student loan default rehabilitation, and how you can get your credit score back into the acceptable range.

Don’t let unpaid student debt become a lifelong burden.

Student Loan Default Rehabilitation 101: Get Your Loans in Order

This is the very first step in getting your credit score back into the range that will allow you to take out credit cards or purchase big-ticket items.

After you’ve defaulted on your loans, you’ll need to rehabilitate them, but that doesn’t necessarily mean you’ll pay back everything you owe. Work with your loan provider to rehabilitate your loans in a matter of 9 to 12 months, or whatever you agree on together.

Sometimes, they’ll even allow you to use a lower monthly fee than you would have been paying before. The trick to this one is that you have to get everything paid on time. Otherwise, you run the risk of more problems. But, if you can get all of your rehabilitated loans paid off on time, you’re golden!

Use Income Based Repayments

Student Loans can be financially crushing, but they don’t have to be. Instead, use income-based repayments. Doing this allows you to pay what you can afford.

With federal student loans, you can let them know how much you make each month, how many people live in your house and what other things you’re responsible for. For instance, if you have four children, your repayments will be less than if you only have one, taking the care for that child into account.

This way, you can keep your monthly repayments in a range you can actually afford.

One reason many people shy away from this method is that you’re often simply paying off the interest of the student loans and not being able to pay off the principle.

While in the long-run, it’s not the best idea, it does work in the short-term to help you avoid default. And it helps keep your credit score in the clear so that you can purchase a home or car or other larger items.

Get Your Other Debts Down

Pay off your student loans first. They are the utmost priority in this case.

But once you’ve gotten your loans out of default, you should work on your other debt. Having too much debt can adversely affect your credit score as well, and it’s not something you necessarily want to deal with.

Your debt should be at 30% of your overall credit available. For example, if you have a line of credit of $1,000, your outstanding credit should be no more than $300.

This helps keeps things more manageable, and keeps your credit score as high as possible.

Getting Credit Cards

Getting a credit card might sound like a red flag because it could possibly put you in more debt. However, it can actually help you rehabilitate your credit score if you use them responsibly.

Don’t get a credit card and go hog wild.

Instead, get a credit card and buy things you can afford, and pay them off immediately.

If you do have a bad credit score, you won’t be able to get any credit card out there. You’ll need to either get a high-interest credit card or a secured credit card. And you’ll need to do it the smart way.

If you decide on a high-interest credit card, you’ll need to be sure you pay off your purchases the moment you buy them. We’re talking purchasing it on Amazon and then sliding the money into onto your credit card account immediately afterward.

You can also do a secure credit card. This allows you to put down a deposit, or collateral, because your credit score is still subprime. Because many credit card companies won’t trust you to pay back your credit card fees due to your bad credit score, you’ll use the fee you paid as your credit.

This way, you won’t have to worry about paying the credit card back, and you’ll build your credit score.

Consolidate

Consolidating loans is a great way to pay them off. Instead of having several little fires burning you’re racing to put out, you can put all of your loans together for one “big fire.”

This way, you’ll only make one monthly payment instead of several, and you’ll be able to see exactly how much you owe, instead of having to search several accounts to do so.

You can consolidate loans by taking out another loan to pay off your student loans and pay them back via the loan, or you can work with the federal loans provider to consolidate. 

Getting Back on Track

Student loan default rehabilitation may seem difficult, but don’t worry, it’s not impossible. With a bit of know-how and a whole lot of faith and gumption, you’ll be able to finally get to where you want to be credit-wise. Your student loans don’t have to hold you back forever.

If you’re still looking for tips on how to improve your credit score after your student loans, go here. We’ve got lots of ways to help you become financially savvy and take control of your future. Student debt doesn’t have to control you.

how long does it take to rebuild credit

Rate of Repair: How Long Does It Take to Rebuild Credit?

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Do you have a bad credit score? When you’re dealing with bad credit or lots of debt, it’s easy to feel as though it’ll never get better.

Don’t lose hope, though. Lots of people have rebuilt their credit after making mistakes, and you can, too. 

Now, you might be wondering, “how long does it take to rebuild credit?”

There’s no one-size-fits-all answer to this question. The amount of time it takes to rebuild your credit depends on a lot of factors.

Read on to learn more about the credit rebuilding process. This information will help you figure out how long it’ll take you to rebuild your credit.

Factors That Influence Your Credit Score

Before getting into the amount of time it takes to rebuild your credit, it’s important to understand the various factors that influence your credit score.

Many people are unaware of all the different factors that can raise and lower their scores. But, once you’re aware of these, you can identify the problems that are affecting your score and start making changes to rebuild your credit.

 Some factors that have the greatest influence on your credit score include:

  • Whether or not you’ve been making credit card and loan payments on time
  • Errors on your credit report
  • The amount of money you’re paying off with each payment (are you making just the minimum payment or paying off the full balance?)
  • The number of open credit lines you have (this includes mortgages, credit cards, and student loans)
  • Your credit utilization ratio (this is the amount you’ve borrowed from your available credit)

Frequent late payments, credit report errors, paying only the minimum payment, having several open lines of credit, and having a high credit utilization ratio can all have a negative impact on your credit score.

So, How Long Does It Take to Rebuild Credit?

Okay, you understand that there are lots of factors that influence your credit. But, how long will it take you to address these issues and boost your score?

Generally speaking, it takes about a year to recover and rebuild your credit. Keep in mind, though, that everyone has a different definition of what it means to rebuild their credit.

For example, if you currently have a bad credit score and want to work your way up to an excellent one, it’s going to take some time. We’re talking about raising your score several hundred points, after all. But, if you’re just trying to raise your credit score from “poor” to “fair,” you’ll be able to raise it more quickly.

Your credit history matters, too. If minor mistakes have been affecting your score, they can be rectified more easily. More serious mistakes, though, will take longer to erase and will have a negative impact on your credit score for a longer period of time.

Remember to be patient. It took a while for your credit score to get to the point it is now. It will take a while for you to bring it back up, too.

Tips to Rebuild Credit Faster

If you want to speed up the process of rebuilding your credit, you might want to try implementing some of these strategies:

Review Your Credit Report

Start by obtaining a copy of your credit report. You can get a free copy from each of the three credit bureaus.

Evaluate your credit report and look for any errors that are negatively impacting your score. Incorrect personal information, old debts, or unauthorized accounts or credit checks can all have an effect on your score.

If you notice any errors, reach out to the credit bureaus and work on getting them fixed.

Look for other factors that could be influencing your score, too. This includes late payments or accounts that have gone to collections. Once you figure out all the things that are hurting your credit score, you can start working on changing them.

Catch up on Late Payments

Late payments can have a serious effect on your credit score.

If you have a hard time keeping track of when your payments are due, try setting alarms on your phone or writing the due dates down on your calendar.

If this doesn’t work, consider setting up automatic payments. That way, you won’t have to worry about paying your credit card bills and loan payments on time.

Of course, you’ll need to make sure you have money in the bank at all times. If the payments can’t go through because of insufficient funds, you’re only going to end up with more credit damage.

Avoid Adding to Your Debt

While you’re working on rebuilding your credit, it’s a good idea to avoid taking on additional debt.

Don’t open any new credit accounts or apply for any new loans. Avoid using your credit cards, too.

Instead, focus solely on paying down your debt and paying off those remaining credit balances.

Consider Using a Secured Credit Card

If you don’t want to add to your debt but want another way to continue building your credit, you might also want to apply for a secured credit card. 

With a secured card, you’ll pay a security deposit that will act as your line of credit.

Thanks to the security deposit, you’re almost always guaranteed to be approved for a secured credit card. They’re also less expensive for people who have bad credit, and they’re identical to unsecured cards on a credit report.

As long as you don’t max out your spending limit and pay the monthly bills on time, this will help you build up your credit more quickly and with very little risk.

Looking for More Credit Rebuilding Advice?

You now have a more detailed answer to the question, “how long does it take to rebuild credit?” But, you probably still have questions about how you should go about rebuilding your credit.

If you’re not sure how to go about improving your credit score, check out the credit repair section of our website today.

You’ll have access to tons of great articles that will help you boost your credit score and gain financial freedom once and for all.