What is a Good Credit Score to Buy a House?

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If you’re thinking about buying a home, make sure all your financial ducks are in a row.

Perhaps the biggest item to focus on is your FICO credit score. This score will be used by lenders to determine your loan worthiness and the interest rate you get. The better your credit score, the lower your interest rate will be.

The impact your credit score has on your payments cannot be understated. Even a half-point difference in your loan rate can result in considerably higher payments.

For instance, a $250,000 loan with a 3.5% interest rate over 30 years will have a monthly payment of $1,123. That same loan with a 4% interest rate is $71 higher each month at $1,194. That’s an extra $25,560 over the course of the loan.

But what is a good score to buy a house? What does your score need to be to get good interest rates?

Read on, because today’s we’re covering everything you need to know about the credit score you’ll need to buy a house.

What Is the Minimum Credit Score You Need to Buy a House

The minimum credit score you’ll need isn’t a hard and fixed number. In fact, it will depend on a number of factors, and some of them are not even directly related to you.

Economic factors, for example, are an important variable that will factor into the kind of score you’ll need to qualify. During the Great Recession and for a period afterward, lenders enforced tight restrictions on borrowers. It was not uncommon for applicants with excellent credit scores of 720 and above to be turned away.

Fortunately, the real estate market has improved in recent years. Lenders have relaxed their lending requirements. As a result, the minimum credit score you’ll need to qualify is much lower than it was in 2008.

What credit score you need is really going to depend on the type of loan you apply for.

Here are a few basic guidelines to consider.

The average credit score you’ll need to qualify for a house is approximately 600.

If you apply for an FHA loan, you’ll be required to have a minimum credit score of at least 580. That is the lowest score you’ll be expected to maintain to buy a house.

Fannie Mae and Freddie Mac back conventional loans, and to qualify for those, you must have a credit score of 620 or above.

This should give you a general starting point to work from as you get ready to buy a home.

What Is the Ideal Credit Score for Good Loan Rates

Here’s a general credit rating chart that is practical for most uses.

  • Poor credit: 300-579
  • Fair credit: 580-669
  • Good credit: 670-739
  • Very good credit: 740-799
  • Exceptional credit: 800+

While some lenders have different score ranking models, they generally follow this guideline fairly closely.

Credit Score of 300-499

Scores in this range leave you with rather limited options. Unfortunately, you will not be able to qualify for any loans on your own.

The best option if you have a credit score below 500 is to have a family member or friend purchase the home and add you to the title. Once your credit has improved you can try to refinance the loan into your own name.

Credit Score of 500-579

Those with a FICO score between 500 and 579 can qualify for loans backed by the Federal Housing Administration (FHA). However, the FHA will require a 10% down payment. It’s also important to note that all outstanding collections and judgments must be paid in full before closing.

Credit Score of 580-619

As your score gets higher you’ll find more favorable terms. With a score of 580 and above, you can qualify for an FHA loan with only 3.5% down. 580 is a good starting goal for your credit score in order to buy a home without having to come up with 10% down payment or more.

Credit Score of 620-699

We’re starting to see more lending options at this point. Most lenders will consider you for a Department of Veterans Affairs (VA) backed loan with a credit score of at least 620. VA loans usually have outstanding interest rates and they do not require a down payment.

The United States Department of Agriculture (USDA) also backs loans for those with credit scores of 620 and above.

620 is also the entry point for most conventional loans, opening the door for you to many different mortgage loan options.

Credit Score of 700-739

Having a credit score of 700 and above will help you qualify for higher value homes which require “jumbo” loans. You’ll also qualify for much better interest rates.

Credit Score of 740-850

No matter the scoring system employed by most lenders, 740 is generally considered to be the crossover point from good to excellent credit.

Borrowers with excellent credit get the very best interest rates. They also pay up to two-thirds less on their private mortgage insurance (PMI), thereby lowering your monthly payment considerably.

How to Improve Your Credit Score

If your credit score needs a little work, don’t despair. The good news is you can raise your credit score fairly quickly. Stick to a credit repair process to help you purchase a home.

Get a free copy of your credit report and fix any mistakes which are bringing down your score.

Continue to make payments on time each month to gradually improve your credit score.

One of the best things you can do to quickly raise your score is to lower your debt-to-credit ratio to 30% or less if possible. In other words, if your total available credit is $5,000, make sure you don’t owe more than $1,500 total.

The Bottom Line

As a general guide, 580 is the lowest credit score you’ll need to qualify for an FHA loan to buy a house.

A credit score of 620 and above will open you up to more government-backed loans and conventional loans. FICO scores of 700-739 will yield much better interest rates while scores above 740 will lower your PMI and offer the lowest rates possible.

Credit scores are not the only factor which goes into qualifying for a home loan. Debt-to-income ratio, employment stability, and the down payment amount are also important loan qualification variables.

What a credit score does is signal to the lender how likely you are to pay back the loan and not default. When you have a higher score, you’re considered less risky as a borrower. When lenders consider you a safe risk, it makes it easier for them to qualify you and give you favorable interest rates.

If you found this article helpful, please check out our credit repair blogs.

what is a bad credit score

What is a Bad Credit Score?

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Having bad credit can impact everything from your interest rates to how much you pay for insurance premiums. Some employers even check your credit score and may be reluctant to hire you if you have a bad credit score.

You might be asking yourself “what is a bad credit score?” If you’re unsure whether your score is good or bad, keep reading to learn more about credit scores, how they are calculated, what’s good and what’s bad, and how you can start fixing your credit if you have a bad score.

What is a Credit Score and How is it Calculated?

Your credit score includes a number of different things that give lenders an idea of whether you’re a good candidate to lend to. Two of the most influential factors in your credit score are your payment history and the amount of your credit limit that you use.

Paying bills late can negatively impact your credit score. Accounts that are more than 30 days delinquent are typically reported to the credit bureaus and can ding your score. The later the payments are, the more significant the damage.

Your credit utilization also is important. Experts recommend that you should use no more than 30% of your available credit. People with the highest credit scores use much less than 30% of their available credit.

Other things that impact your credit score include the length of time you’ve had credit or your credit history. The longer the better.

Having a mix of different types of accounts is also beneficial. If you have both installment accounts, which are ones with a fixed number of equal payments, such as a mortgage or car payment, and credit card accounts, your score will generally be better.

The number of recent credit inquiries can also hurt you. If you have had numerous credit inquiries in the last year, your score might be lower.

What is a Bad Credit Score?

Now that you know what goes into your credit score, let’s talk good, fair, and bad credit scores. There are three major credit bureaus: Equifax, Experian, and TransUnion. These companies collect your credit information and record it and then sell it to lenders or others who are checking your credit.

To calculate your credit score, companies use the information from the credit bureaus to come up with a number, which is your credit score. Most creditors and lenders use the FICO scoring system, which takes data collected from the credit bureaus to generate a score.

The creditor or lender viewing your score is who determines how good or bad it is. The FICO score is simply that: a numerical score. Whoever is viewing that score decides how they will rank it and how it impacts their decisions.

Both FICO and the other company that calculates credit scores, VantageScore, have a lower limit of 300 and an upper limit of 850. Although these companies don’t issue a rating of good or bad, there are some general ranges used to categorize credit scores. For example:

  • 720 and above is excellent
  • 690 to 719 is good
  • 630-689 is fair
  • Anything below 629 is bad

If you find yourself in the bad credit score range, or even in the fair range, you are definitely going to feel the consequences of your less-than-stellar credit.

Consequences of Bad Credit

The obvious consequences of bad credit are that you are unable to get approved for loans, or if you do, your interest rate is going to be higher because the lender views you as a risky borrower.

Not only are your interest rates impacted, but you might also find that you are not able to open new credit lines. Your insurance premiums are often higher, as insurance companies view you as risky.

Utility providers and cell phone companies also might require you to put down a deposit in order to turn on your utilities or get a cell phone plan. Landlords also might check your credit, and could turn you down or require a higher security deposit.

You might even miss out on your dream job, as many employers check your credit as part of the background check process. If you have a lot of debt, you might be passed over for a government job, for example.

How Can I Fix My Credit?

So your credit is bad. Unfortunately, you are not alone. 20% of Americans have scores below 600. The good news is that if you have bad credit, all is not lost. There are steps you can take in order to fix your credit and you can start right away.

The most obvious way to improve your credit is to pay down your balances, stop using your cards or pay them off every month, and get any delinquent accounts into a positive status.

You should also try to pay off any small, lingering balances, as your credit score is impacted by how many cards have balances. Getting rid of these small amounts and then focusing on paying down the larger balances will help. If you continue to use credit cards, choose one or two of these cards that are great for rebuilding your credit to put the bulk of your purchases onto.

You should also make sure there are no mistakes on your credit report. If there are, you should address these with the credit bureaus ASAP to get them off of your credit report.

With some time and patience, it is possible to improve your credit score.

Your Next Steps

Now that you can answer the question “what is a bad credit score” you can get to work.

First things first, you need to check your credit score and pull your credit reports. You can pull your credit report for free each year from each of the three credit reporting bureaus. Check your report for any errors and map out how you are going to start paying down your debt.

You can also get your credit score for free. Many credit card companies or other lenders off this service at no charge to their borrowers. You can monitor it daily, weekly, or monthly, but keep in mind that it takes about 30 days for changes to hit your credit report, so any changes in your credit won’t show up immediately.

Learn more about your credit and how to build and repair it on our blog. Work towards having an excellent credit score and you can expect to get the best interest rates and offers from lenders.

does a car loan build credit

Does a Car Loan Build Credit? 3 Ways to Improve Your Credit Score When You Buy a Car

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Twenty-six million adults in America suffer from being “credit invisible”.

Invisible credit happens when you don’t have any documented credit history. Having invisible credit can be the same as having horrible credit.

You’ll be stuck in an endless cycle of rejection. Rejection for housing opportunities, loans, and even employment prospects.

Having poor credit doesn’t only affect you financially. Did you know that financial stress is also harmful to your health? Worrying about money can cause anxiety, depression and even heart attacks.

Taking action is the best way to overcome your financial fears. There are smart ways to build your credit while also improving your life. For example, have you ever wondered, “Does a car loan build credit?”.

The loud resounding answer is yes, and we would love to show you how. You can have the financial health you’ve always desired. Continue reading to learn the three ways a car loan can help improve your credit score.

Why Does a Car Loan Build Credit

There’s a lot of confusion around why taking out a loan can improve your credit. Many people view taking out a loan as being in debt. Yet, you have to throw away this type of fearful mentality to grow.

Instead of viewing a car loan as debt, see it as an investment. An investment that will provide you with transportation and better credit.

So, why does a car loan build credit? The answer lies in the on-time payments. Your payment history determines about 30 percent of your credit score.

You’re on time payments will prove to lenders that you are financially reliable. Paying on time helps create a positive payment history. Contrarily, delinquent payments will directly damage your credit score.

Credit Report and Credit Score

First, it’s important you understand that your credit score and credit report aren’t the same things.

One good way to tell the two apart is to think of the report card you received in school. Your grades are like your credit score while the report is a summary of your grades.

Credit Score

Your credit score tells companies how reliable you are a borrower. The score itself is a three digit number.

The information compiled in your credit report creates your credit score. Usually, when you have a positive credit report you also have a positive credit score.

Credit Report

A credit report is a detailed document created by three major credit bureaus.

  • TransUnion
  • Experian
  • Equifax

Your credit report will summarize all your monthly payments. The report will give information on both your closed and your open accounts.

The summary also includes any companies who’ve looked at your credit. You’ll also be able to see any court-mandated settlements you owe.

First Know Your Credit Status

Before you rush over to the car dealership, you’ll need to know where you stand. Don’t start shopping for a new car until you know the condition of your credit.

There’s a lot of free websites you can visit to find out your exact credit score within minutes. If you are credit-invisible, prepare for a few small challenges in securing a loan. Lenders are more cautious when creating a loan for a first-time borrower.

But, this doesn’t mean you can’t find a good deal. Without any credit history, lenders may ask you to pay higher interest rates. It helps if you have a large down payment and a co-signer available for your car loan.

A large down payment, coupled with a cosigner, can help you secure the best financing.

How a Loan Appears on Your Credit Report

Credit reports have a lot of information and can be confusing to readers. Trying to read through the entire report will leave you with more questions than answers.

It helps if you know exactly where to look on your credit report for the information you need. First, locate the three reporting agencies (TransUnion, Experian, Equifax) on your report.

Next, locate where each agency lists your car loan. Once you’ve found the listing you can focus your attention on these two categories:

  • Type of account
  • Current Status

Being by looking at the type of account. Usually, your report will list your auto loan will as an installment account.

If you have a mortgage or student loan they will also appear as installment accounts. If you don’t have any installment accounts a car loan will help build your credit profile.

Next, you’ll want to review the account’s current status. It’s vital that your payments are always paid on time and in full. If you are diligent about making prompt payments your status will read as “current” or “paid as agreed”.

Initial Decrease in Credit Score

You may have wondered, “Does buying a car hurt your credit.” There are only two ways a car loan will hurt your credit score. The first is if you make late or delinquent payments.

The other way your score will go down is if you allow an excessive number of hard inquiries or credit checks. After you get your car loan, you may notice a slight decrease in your credit score.

When you’re shopping for a car loan lenders will be running credit checks on you. Usually, any hard inquiries that fall within the same 30 day period can count as one inquiry. Yet, this isn’t the case in all situations.

To be safe you should your car loan shopping to a minimum. Only allow a few agencies to run your credit making your choice.

Paying off Your Loan

Finally, it’s time for you to patiently watch your credit grow. Stay away from the temptation to quickly pay off your car loan early. Paying off your entire car loan will erase the debt on your credit report.

However, you’ll no longer be able to build credit by making on-time payments. Instead, you should wait and continue to make small scheduled payments. Once you’ve paid your loan off in full you’ll need to establish another way to build your credit.

You could take out another loan or start regularly using and paying off credit cards.

Empower Yourself to Grow Financially

Now you know the answer to the question “Why does a car loan build credit?”.

Credit Repair Answers wants to help you with all of your credit questions. We offer free information on everything credit related. Visit our blog today to find more articles related to credit.

You can also contact us today with any questions you may have. Stop stressing over finances and start taking action today.

whats a good credit score

What is a Good Credit Score?

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While nearly one-third of all Americans have a “bad” credit score, even they aren’t doomed to never being able to achieve their financial goals. Most of them might not even understand what’s a good credit score if they had one anyhow. If you’re looking to build a stronger financial foundation for your next large purchase or investment, you can bounce back from even a poor credit score.

Learn more about how to check your credit score and what it actually means below.

Checking Your Credit Score

There are a few ways to look at your credit score to decide whether or not you have good credit. You’re entitled to get to access your credit score for free from most of the major credit reporting agencies. While they’re not always updated on a daily basis, some are.

When you sign up, you’ll verify your personal information to ensure that you’re the right person to access your information.

Along with your credit score, you usually get information about what the elements are that are impacting your score. You’ll get recommendations on how to improve it and which credit cards are best for someone with your credit.

If you’ve taken care to always pay your bills on time and haven’t racked up too much credit card debt, you should be in good shape. Be aware that it takes years to build up good credit and if you’re young you’re going to struggle to see your credit climb for a while.

Since more than half of Americans have good credit, you could be one of the lucky ones if you play your cards right. Before you check out your score, be aware that you can always turn your credit score around. Don’t be discouraged if your score isn’t as good as you’d like it to be.

Understanding The Average

Across the country, there is a broad range of scores based on the people who have gotten themselves into debt and those who have been lucky not to. The average score in the country is 687, which is a fairly respectable number, higher than in previous years.

If you live in Minnesota, you might have a higher than average score, as the statewide average is 718. Some areas will be higher than others, however, just because a city or neighborhood is wealthy, that doesn’t equal good credit. People who live in an area that is very competitive could have lower scores because they’ve gone into debt to keep up with others.

These scores can help you attain better rates on financial products like loans and credit cards. If you have a high score, you’ll get a better mortgage rate than someone with a lower score. The bank knows that you’re financially responsible, so they’ll be willing to give you a lower rate, knowing they won’t have to chase you down.

Get To Know The Range

Broadly speaking, credit scores range from about 300 to as high as 850. To get a 300, you would have to have gone bankrupt and delinquent several times. You’d be lucky to be able to get any kind of credit card if you go that low.

However, if you have poor credit because of a few bad financial decisions, you could still climb your way up with some work. There are high-interest rate loans and credit cards available to people with weaker credit.

While there isn’t much of a difference between 800 and 850, you’ll find that the range between 650 and 700 contains a lot of variation. If you apply for a credit card in this credit range, you might get a wide variety of offers for interest rates. That’s because this is a tipping point for where people could end up tumbling downward or building strong credit on their way up.

With a good credit rating, you could get a better rate on your insurance or a better deal on a used car. With a bad rating, you might struggle to get some used car dealerships to talk to you at all.

Getting Good Credit

If you take a look at your credit score and you aren’t happy with what you see, don’t stress out about it. This is probably one of the first times you’ve taken a look at your credit, which means there’s likely time for you to fix your credit. Fixing your credit might sound like a challenge, but it’s simpler than it might seem.

For anyone who has yet to totally destroy their credit, there’s a lot of hope to improve it.

Start with a credit card that doesn’t charge you any major fees to use it. If you can qualify for a card, even one that requires a deposit and is secured, you’ll be taking a step in the right direction to good credit. By using a credit card and paying it off regularly, you’ll be able to build up credit and trust through a financial institution.

Avoid overspending once you get your credit card. While you’re given limits that you’re allowed to go up to, it’s dangerous territory. Unless you earn your credit card limit on a weekly basis from your job, you should keep it to under 30% of your limit. Essentially that’s how it’s calculated anyway.

Always pay your bill on time when it’s due and keep your bill down to zero. Late payments will not only result in fees, but it could lead to dings on your credit score, which is the whole reason you got the card. Build good habits with your card, not bad ones.

Knowing What’s a Good Credit Score is Easy

Once you’ve got a grasp on what’s a good credit score, you can size yourself up to compare to other people. It’s tough to have a less than stellar credit score and still get the things you want out of life, but with a little bit of work on your financial health, you can get there.

If you really want to get a grip on why you have a bad credit score, check out our guide here.

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What Happens to Your Credit Score When You Get Married?

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What happens to your credit score when you get married? If your partner has a good credit score, will that impact yours? And what if their credit score is bad?

It’s important to know these answers, if only because there’s a lot of misconceptions and downright false information out there about this topic.

Fortunately, most of the elevator talk you’ll hear on the subject is untrue.

In this article, we’ll take a look at what happens to your credit score when you get married, dispelling some of the major myths and misconceptions about the topic as we go.

Let’s dive in!

Credit Scores- What Is It?

Credit scores or ratings determine your ability to secure a loan from a lender, as well as the terms of that loan. For example, someone with a good credit score that regularly pays their debts will be offered a better interest rate or, possibly, more flexible repayment methods.

Someone with a poor credit score, on the other hand, will be offered higher interest rates, less flexibility, or could be denied a loan altogether.

When someone applies for credit (in the form of a credit card, a loan, or a mortgage, for example), lenders want to know who is most likely to pay off the loan. They want to know the risk they are undertaking by lending you money.

As such, they’ll order a credit report to see how much of a financial risk you are by lending you money.

They use the credit score to determine if, and how, they will offer you a loan. From there, it is your decision whether to accept the terms they offer. Good credit health is important because it can determine where you can live, how you get to work, and how you pay for college.

What’s A Good Credit Score?

FICO credit scores range between 300-850. While there is no “credit definition” for being good or bad, the higher your score, the better. If you’re scoring in the range of 300 to low 400s, you may have some work to do before you can secure a good loan from a vendor.

Keep in mind that you have to have credit to have a score. Sometimes, a lackluster score is more likely to get a loan approved than having no credit history at all. In most cases, you won’t have a registered FICO score until you’ve logged 6 months of credit.

Getting Married & Your Credit Score

If you are about to get married, it’s important to have a conversation about credit scores before you tie the knot. One study found that 33% of couples that divorce attributes it to problems with finances.

Not to scare you, but it it’s important to have these kinds of conversations before things are official so that you’re both on the same page and can set goals with your finances together.

Your Score Is Yours

The first major misconception is that your credit score will drop if your partner has a low one, or it will increase and “balance out” as a result of you getting married. This is not true. Everyone has their own credit score and the major bureaus don’t merge the two scores when a couple gets married.

It is important to keep in mind, however, that applying for a loan together as a married couple will factor in both of your scores.

So while your score won’t change from getting married, the chances of you getting things like a mortgage, student loans, or money from the bank for another reason could increase or decrease depending on your partner’s score.

If you know your spouse has a bad credit score, it’s not necessarily the end of the world. Sure, you may not be able to get a loan right away and interest rates on joint loans can be higher, but there are always ways to work your way back up.

It may take some time, but so does most things worth waiting for.

Changing Your Name Doesn’t Matter

Another misconception is that taking your partner’s last name will affect or wipe out your credit score history. This is also not the case.

What will happen is that your new name will be listed but your new name will also be listed as an alias with the major credit bureaus.

The good news is that you won’t be starting over. Do keep in mind, however, that due to your change in name, there could be a few inaccuracies on your report as the bureaus catch up with your new name.

Especially in your first year or two of marriage, you’ll want to be diligent about checking for these and reporting them right away.

On Joint Accounts & Loans

If you decide to apply for a joint account or joint loans, both of your credit scores will be factored in. Just because you have the highest credit score doesn’t necessarily mean you’ll be approved or offered better interest rates.

The same thing applies if yours are lower, too.

The banks will factor in both scores and make their decision based on both of your credit histories. They will check your three credit ratings through the FICO Credit Score system. 90% of top lenders that check your ratings will use FICO, so it’s important that you know and check these three scores on a regular basis.

Your Credit Score When You Get Married- Wrap-Up

While there is plenty of misinformation out there about credit scores and getting married, generally speaking, your score stays your own.

That isn’t to say it’s not important to have a conversation with your spouse about credit. After all, many marriages struggle when they don’t take care of (or keep an open line of communication) about their finances.

It will benefit the both of you to have the conversation early on so you know what you’re working with.

Fortunately, even when you get married, it won’t change your score. So all your hard work will not be erased just by getting married.

If you’d like to learn more, check out this article on building credit with a credit card. Our blog is full of useful tips for repairing your score.

Best Credit Cards for Rebuilding Your Credit

10 Best Credit Cards for Rebuilding Your Credit

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Having bad credit doesn’t mean the world is over. Every problem has a solution and that includes your financial situation.

Getting the right credit card is key to rebuilding your credit. Here are the best credit cards for rebuilding your credit.

Best Credit Cards for Rebuilding Your Credit

Finding the best credit card to rebuild your credit may seem impossible, but it’s not. Here are 10 cards that are easy to apply to, accept poor credit applicants, and are perfect for rebuilding your credit.

1. Capital One Secured Mastercard

This Capital One secured card is ideal if you’re looking for a card with a low deposit. Usually secured cards need you to make a deposit equal to your credit line, making you have to come up with the entire deposit upfront.

Luckily, this card gives you a credit limit of $200 for a deposit and depending on the state of your credit you only have to deposit $49, $99 or $200. This card also lets you make deposits in installments.

Another perk is if you make your first five payments on time, you might even be able to get a higher credit line without deposing any more money.

The only catch is if you have severely damaged credit like bankruptcy, you might not qualify. You need an active credit or savings account to apply.

2. OpenSky Secured Visa Credit Card

You can get this card without a credit check, which is perfect if you have bad credit. This also means if you have super damaged credit, you still might be able to qualify. However, you will still need to meet some income standards.

Another perk of this card that makes it stand apart from the rest, is you don’t need a bank account to apply for this card. You can make your deposit and pay your bills with a debit card, wire transfer, check or money order.

The only issue is there’s no opportunity to upgrade with an unsecured card like OpenSky Secured Visa Credit Card. This card is ideal for anyone looking to rebuild credit and want access to traditional banking services.

3. Discover it Secured

This card is our pick for rewards and upgrading. This actually might be the best credit card for people with bad credit. It comes with no annual fee but also rewards like 2% cashback on up to $1,000 worth of spending each quarter on restaurants and gas.

You also get 1% back on all other types spending. If you are responsible with your account for eight months, Discover will review your account and you might qualify for an upgrade.

This only drawback is your deposit needs to be paid with a bank account, so if you don’t have one, you won’t be able to apply to this account.

4. Digital Federal Credit Union Visa Platinum Secured Credit Card

We like this card because it offers low interest and low fees. The ongoing APR is 13.25%, which is about half the rate of most popular secured cards, and much better than you can get on other secured cards.

The annual fee is $0 and there is no balance transfer or cash advance fees. Like with most secured cards, you need to make a security deposit equal to your credit limit. But the good news is this card doesn’t put a cap on how much you can deposit and how high your limit can be.

The only downside is you need to be a member of the Digital Federal Credit Union. The good news is there are actually a bunch of ways you can become a member, and a lot of people do it, but it’s still a hoop to jump through for this card.

Basically, it’s best to pay your credit card bill in full every month, especially if you’re trying to build credit. But you also must carry a balance and this card is less expensive than other secured cards.

5. Credit One Bank Platinum Visa with Cash Back Rewards

We like this card because it has $0 fraud liability which can give you a peace of mind. You also can find out if you qualify in less than 60 seconds, so there’s no waiting.

This card gives you 1% cash back rewards through eligible purchases and automatically reviews for credit line increases so there’s the possibility that you could get even more credit.

You’re also able to choose your monthly payment due date with this card, so you can conveniently align it with when you get paid or not at the same time as other major bills.

Another perk is you can easily view updates in your credit score with free online access with this card, although terms do apply. You also have to option to get account updates with text and e-mail notifications so you’re always in the loop.

6. Capital One Secured Mastercard

This card has no annual fee but still gives you credit-building benefits if you’re responsible with your card. Different than a prepaid card, this card builds your credit bu regularly reporting to the three major credit bureaus.

You also get an initial $200 credit line after you make a security deposit of $49, $99 or $200. The amount of your deposit depends on your creditworthiness. In addition, you can gain access to a higher credit line after you first five monthly payments without paying an additional deposit.

This card offers online access by phone or mobile app so you can manage your account 24/7. Another perk is this credit card is accepted at millions of locations worldwide, making it ideal for travel.

7. Green Dot Prior Visa Gold Secured Credit Card

This card offers credit lines from $200 to up to $5,000 with a low 9.99% interest rate on purchases all without a penalty rate. There are no minimum credit score requirements, so this card is ideal if you have bad credit.

Since this card accepts all credit score types, it’s ideal if you’re looking to strengthen your credit. As long as you’re responsible with the card, as it reports to three national business bureaus.

Overall, this card has a super fast and easy application process. All you have to do is choose your credit line and open your personal savings deposit account to secure your line.

8. Indigo Platinum Mastercard

If you have a less than perfect credit history, even bankruptcy, you can still qualify for this card.

Once you choose your free custom card design and start responsibly using your card, your account history is reported to the three major U.S. credit bureaus. This will put you in the right direction to rebuild your credit.

The application process is painless, and you’ll find out quickly if you qualify. You can also access your account online or on your mobile phone 24/7. This card also protects you from fraud if it’s lost or stolen, and it’s accepted wherever Mastercard is accepted.

9. Milestone Gold Mastercard

This card offers a quick pre-qualification which doesn’t impact your credit score. You will also find out instantly if you qualify, and previous bankruptcy is accepted. If selected, you get a free custom card design and free online account access.

There’s also zero liability for unauthorized charges on your card, and it’s accepted at over 35 million locations nationwide.

10. AvantCard

Despite its name, there’s nothing avant-garde about AvantCard. It’s application process is fast and easy. The card might periodically review your account for credit line increases.

This card will help strengthen your credit as long as you use it responsibly. There are no hidden fees, you can use it online, there’s no liability but unauthorized charges.

Rebuild Your Credit Today

Now that you know the 10 best credit cards for rebuilding your credit, get your card today. Most have quick and easy application processes, so what are you waiting for?

For more information and insight on credit repair, check out our blog.

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Student Loans and Credit: 7 Steps For Improving Your Credit Score

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Given that the majority of Americans are currently in debt, if you’re struggling with improving your credit score, you’re not alone. Student loans are one of the most commonly held types of debt and it can follow you for decades after graduation. The relationship between student loans and credit scores aren’t perfectly interlaced, lapses in payment will drag your score down.

Here are 5 tips for improving your credit score when you’ve got student loans on your back.

1. Stop Taking Out For Life Expenses

Whether you’re still in school or trying to make it through debt after, you need to start putting up some limits on what you’ll take out loans for. Even if we’re just talking about credit card expenses, you need to start paying for more of your everyday life expenses with cash on hand.

If you’re taking out more debt to pay for your day to day living, that cup of coffee or those groceries are going to cost you 20% more than the sticker price. Unless that sounds appealing to you, you need to take a break from taking out loans for things you can afford.

Going further into debt will only make your credit score even harder to up into a healthy place. Your first step is to change the behaviors that will get you further into debt.

If you’re unable to pay for your rent, bills, and living expenses, you need to make adjustments rather than taking out loans. Even small and steady payments can help to improve your credit score while small and steady increases to debt will have a much more damaging effect.

2. Budget

Your budget is your roadmap to getting yourself out of debt. Without a map, all of the resources in the world could be misspent, misallocated, and misdirected away from improving your financial health.

If you’re spending hundreds a month eating out or buying things you don’t need while your debt grows, you’re misdirecting your funds. You need to start by doing a triage of what you have versus what you need.

Track your spending carefully for an entire month. Every coffee, every movie night, every utility, and your monthly expenses should be accounted for. Add everything up for a month and repeat the pattern for two more months if you want to be sure about your figures.

Then track how much you make from week to week. If you have side gigs, add them to your total income until you get a monthly figure. Then subtract your total spending and cross your fingers that you get a positive number.

If you do, then it’s time to start paring back so you can increase how much you’re contributing to paying off debt. If you come up with a negative number or uncomfortably close to it, see where you could be cutting back on expenses.

3. Consolidate Your Debt

Consolidating your debt is the best thing you can do if paying off your debt immediately isn’t an option. If you’ve got a mix of different debts and loans from a variety of lenders and paying a variety of high-interest fees, juggling your payments can be a mess.

Trying to decide whether to pay off the smaller debt with the high-interest rate versus the slightly higher debt with the slightly lower interest rate is a struggle. Calculating which will cost you more, in the long run, doesn’t have to be a headache. You can find a financial services company to consolidate your debt so you can pay one monthly fee and one smaller interest rate.

While debt consolidation is available to most people with debt, not everyone takes advantage of it the way that they could be. When you’re in the soup of juggling repayment, earning income, and avoiding further debt, consolidation can take some of the weight off your shoulders.

4. Repayment Plan

Regardless of whether you took money out from a financial institution or you’re with the federal student loan program, there are lots of payment plans available.

If you’re simply not making enough money to pay your debt right now, you might qualify for a deferment. While you will likely accrue interest during this period, at least you won’t get into trouble for not paying enough on your loans.

You could also apply for an income-based repayment plan. Income-based repayment is catered to your financial situation and doesn’t demand that you pay back more than you can afford. Again, your interest growth might not change, at least you’ll be cutting down on your debt little by little, at a pace that suits your situation.

Every lending institution offers its own repayment plan, aimed at keeping you on track while ensuring the institution gets their money back.

5. Start Paying Off High-Interest Private Loans

Student loan interest rates vary based on the types of loans you get. Loans that go directly to your academic institution usually have lower interest rates than loans that you use for living expenses.

The ones that have the highest interest rates should be paid off first. They will cost you the most, the longer that they’re open. Choose low hanging fruit and take care of those. If you can’t consolidate your loans, pay them off in an order that will get them off your back fastest.

The sooner you pay off your loans, the more you can devote your extra money to saving for retirement and for the things you want the most in life.

The Relationship Between Your Student Loans and Credit Score is Complicated

Many people have student loans and a credit score that appears healthy. So long as you pay your student loans diligently and don’t take out more than you need, you can get access to good credit cards and mortgages. Management of your finances will take some effort but student loans aren’t a death sentence for your credit.

To ensure you stay on the path to repairing your credit, follow our guide for success.

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How to Rebuild Credit After a Divorce

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It’s hard enough to talk about divorce. But it’s even more difficult to talk about what to do about money after marriage.

Money issues after divorce are a more excruciating issue than many married couples realize. The statistics are downright scary, particularly for women. Women married to men see a 20 percent drop in their income when their marriages end. At the same time, studies show that men’s income grows over 30 percent after divorce.

Sadly, the poverty rate among separated women is three times higher than that of men at 27 percent.

Then you factor in the cost of divorce, which can range from an amicable split at $250 to well over $100,00 for the most contentious breakups. The unfortunate reality is that money management in the aftermath of divorce is hard, but it’s also a time of renewal.

You have the opportunity to begin again.

While you begin your new life as a separated or divorced person, it is critical to do your best to take control of your finances so that you can rebuild credit. We’ve put together a guide to rebuilding your credit – and your financial life – after divorce.

Rebuild Credit: The Most Important Rule

As you rebuild credit and the rest of your new financial life, the one rule that matters most is using an income to pay your bills on time.

Almost everyone going through a divorce needs to build new skills. Living on one income instead of two or even on a brand new income means re-learning to budget. The nooks and crannies of your previous checkbook that felt so familiar no longer apply.

In some cases, you may need to learn how to take care of the bills. While paying bills today is less time-consuming thanks to features like auto-pay and paperless billing, you may still need to re-orient yourself if your partner always took care of this part of housekeeping.

In other words, don’t worry right now about credit building techniques just yet. Start by covering your bases each month and move on when you’re ready.

Pay Off Joint Debts and Close Your Accounts

Even after a divorce, you may still find yourself financially attached to your spouse. If you have joint debts, like a joint credit card account or loan, then those debts remain even when the marriage falls away.

Paying off these debts needs to be a high priority. You can’t rebuild your credit as a single person when you still owe debts as a married person.

Moreover, your ex-spouse’s financial decisions – like whether they pay the bill on time or at all – continue to affect your credit score even when your divorce is finalized.

If the debts are substantial and primarily belong to one person, consider restructuring the debt. Options like consolidation, refinancing, and balance transfers assign authority over the debt so one of you can move on.

If possible, sort out these joint debt issues during your divorce proceedings. The judge will assign someone responsible for the debt, and you can use it as a precedent during a restructure.

Finally, don’t forget to close joint accounts including credit card accounts and checking accounts. Future charges and missed payments would impact your credit score even if it were your ex-partner who was responsible for the debt.

How to Build Your Credit

With your joint debts behind you, you’re now ready to embark on your next journey: creating a financial life of your own. A new financial life also means building credit.

If you changed your name after you got married and intend to change it back post-divorce, file the relevant paperwork before opening new accounts or doing much else.

Check Your Credit Report

To start the work, pull your credit reports from all three credit bureaus. Read every single line to ensure every account noted is yours alone. Don’t forget to look for errors or other issues that pop up, which is an integral part of regular credit maintenance no matter the season of life you find yourself in.

Next, create a spreadsheet of all your accounts. Include the institutions, account numbers, and dollar amounts for everything related to your finances including assets and debts.

With a new name and an understanding of your finances, you’re ready to take the next step: opening new accounts.

Get a New Checking Account

Get yourself a new checking account in your name first. Talk to your bank and your current credit card companies to open accounts in your name without your former spouse’s details. If not, seek out new banks and lenders.

Choose your new relationships carefully. Avoid applying for too many new accounts or cards. If you recently completed a divorce, it’s likely your credit already took a hit. Even closing joint accounts damages your sore, even if it is not a significant hit.

Consider Bad Credit Options

If you are unsure of where you stand, consider trying a secured credit card.

Secured credit cards operate similarly to unsecured cards, but they require you to prepay the card before using it.

Secured credit cards are not only suitable for those repairing or rebuilding their credit, but they are also safer. You’re less likely to run into credit card trouble in the months ahead, which helps you over the long term.

Make New Plans

Building up your credit after divorce works much the same way as it did before and during your marriage. Paying your bills on time, avoiding more debt than you need, and maintaining a good relationship with your creditors and banks earns your credit back slowly but surely.

Looking for more information on managing your money and how to rebuild credit? We offer resources for improving financial literacy no matter where you are in life.

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Marrying Someone with Bad Credit: How Your Partner Can Affect Your Credit Score

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Did you know that money worries are the biggest reason for marriages ending in divorce?

Many financial-savvy people work hard to build up a great credit score.

There are many reasons to ensure that you have a great credit score, from taking out a mortgage to negotiating your interest rates with banks.

Despite the advantages of a great credit score, around 30 percent of people have a poor credit score.

It’s just themselves who are negatively affected by a poor credit rating. Marrying someone with bad credit can harm you financially too. It seems that for some people “love conquers all”. According to a survey, around 20 percent of people would marry someone with a poor credit score.

It’s important to know what you’re getting into by if you marry someone with bad credit. Keep reading to discover more about the implications for putting love before money.

Do Credit Scores Merge Together?

Many newly married couples believe that tying the knot means a brand new credit record is created that brings together both people’s credit score.

In other words, it is assumed that credit ratings average out between the poor and great credit score. Thus forming an okay credit score.

This is absolutely wrong! Your credit scores do not merge together when you marry.

This is because your credit score is always attached to your Social Security number, which doesn’t change when you get married.

Once you’re married, your credit score doesn’t change and remains separate to your partner’s record. In fact, there is absolutely no recognition of marriage as far as your personal credit score is concerned.

When Does Your Partner’s Bad Credit Impact You?

Even though your credit score rating doesn’t merge together, you could still be affected by your partner’s poor credit rating.

In the following cases, you could find that you are negatively impacted because of your partner’s bad credit.

Apply for a Loan

Married couples often choose to apply for a loan together.

This could be a mortgage or another bank loan. Most lenders request the credit score of both partners. Both people are responsible for the loan repayments and therefore your documents will be considered separately, as well as, together.

If one member of the couple has a poor credit score, you could find that your loan application is denied. However, even if it is approved by the lender, you’ll probably have to pay a higher interest rate as a result of the poor credit score.

Apply for Rental Contract

If you can’t afford to buy your own property yet, you might choose to take out a rental contract instead. The property owner will also want to see your documents and credit score.

You could find that your application is also rejected because the property owner does not trust you as reliable tenants.

Add Your Partner to Your Account

Many couples choose to add the individual with the poor credit score to the bank account to the individual with the great credit score. Your account details will be displayed on your partner’s credit record.

But this won’t necessarily impact the existing credit record of your partner. There are several factors that contribute to a poor credit rating. Simply including someone with a great record on your account is unlikely to be enough to alter the poor score.

An alternative approach is to include your partner as a joint account owner. This could also boost your partner’s credit score. However, you could also risk damaging your own credit record by doing this.

Co-Signing Risks

Many individuals with a great credit score choose to co-sign for their partner. If you do this, you are responsible for the payment of any unpaid debts that your partner owes.

It’s important that you’re in a financial position to pay for any of these payments. Otherwise, you could also incur harm to your credit score.

What to do When Marrying Someone With Bad Credit?

It’s not all doom and gloom if you’re marrying someone with bad credit. There are many things you can do to make the most of a bad situation.

Keep Your Finances Separate

It’s important to keep your finances separate from your partner’s until they’ve fixed their credit record and paid any debts.

Most importantly, don’t add your spouse to your accounts or create a joint account yet.

Talk About Money

While it’s not the most romantic topic to talk to your new husband or wife about, it’s really important to make sure you’re both clear about your financial circumstances.

You can create a household budget together to make sure neither of you overspends on your monthly expenses. Always make sure you’re on the same page with any joint financial decisions.

Marrying Someone with a Poor Credit Record

Marrying someone with bad credit can undo all the hard work you’ve put into making sure you have a great credit score.

You could struggle to get a mortgage together to buy a home. You might find that you have higher interest rates when you take out a bank loan.

But it doesn’t have to be this way. It’s important to know what you’re getting into by if you marry someone with bad credit. This way you can talk about your finances with your spouse to come to the best solution for both of you.

Do you want to find out more about credit repair game plans? Check out our blog on how to start the credit score repair process.

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A Guide to How to Build Credit with a Credit Card

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With about 80% of Americans currently carrying some form of debt, we know that building good credit can be a serious challenge.

One tool that you might not have realized can help you to boost your credit score and look great in the eyes of lenders?

Credit cards.

In this post, we’ll tell you the basics of understanding how to build credit with a credit card.

From understanding what a credit score is to mastering using a credit card to build credit, by the end, you’ll be ready to find the right card for you.

Read on to learn how to become a credit master.

What Is a Credit Score?

Before we talk about how to use a credit card to build credit, let’s take the time to clearly define what a credit score is.

Shockingly, 60% of Americans don’t even know their credit scores, let alone how to improve them.

In a nutshell, this number tells banks the overall likeliness that you’ll be able to repay any debt that you put on a credit card or take out in a loan.

Credit bureaus generate your credit reports based on information like how frequently you make payments, the amount of those payments, and whether or not you make them on time.

They’ll also take a look at your number of accounts. In some cases, they may look at the number of inquiries that have been made on your credit report, as well as the percentage of your overall credit limit that you’re currently using.

Be aware that most people actually have more than one credit score, and each score has a different method of calculation. In general, Equifax, TransUnion, and Experian are the most popular credit bureaus within the United States.

Unfortunately, about 45 million Americans don’t currently have a credit score.

This will make it fairly impossible for you to get approved for things like a loan for paying for college, buying a home, or even a new credit card.

The good news?

You can build credit with credit cards, even if you don’t currently have one.

Let’s talk about how to make that happen right now.

Why Using Credit Cards to Build Credit Is Smart

We understand that you certainly may have reservations about using a credit card to build credit.

However, doing so offers you several unique advantages.

First of all, look for a card that doesn’t have an annual fee. This means that, especially if you’re carrying a balance, you won’t have to worry about any extra charges that make it harder to pay off.

Also, be aware that you don’t even have to carry a balance on a card in order to build up your credit. So, if you can, make small purchases that you can easily pay for by the time your next statement is due.

You’ll also be able to buy more than you would have relying on your checking and savings accounts alone.

This is especially helpful if you have larger purchases coming up that you know you can pay for over time, but just not within a single payment.

Plus, most credit cards also offer excellent fraud and loss protection. Of course, if you’re carrying cash, you’re out of luck in the event of a robbery or a dropped wallet.

Finally, credit card companies offer awesome point programs in order to convince more people to sign up for them. This might give you great deals on flights, eating out, and a whole lot more.

Look for a card with a rewards program that most closely benefits your overall lifestyle. We also suggest meeting with an in-branch representative at your local bank.

They’ll be able to help you to find and get approved for the right card for your financial situation.

How to Build Credit with a Credit Card

Once you’ve chosen and have been approved for your credit card, it’s time to start using it to improve your credit!

First of all, always do everything that you can to make payments on time.

If possible, we strongly suggest that you set up automatic and recurring payments each month. This is especially key as many companies will charge you a late fee!

Always keep your balances as low as you can. In general, try to keep your balance at or below 30% of your available credit limit in order to improve your overall credit score.

Do everything possible to prevent yourself from maxing out your balance. This looks fairly terrible on your credit report.

Finally, if possible, keep it to one credit card at the beginning.

The more credit cards that you have, the more likely your credit report will be negatively impacted. The more cards that you have, the lower your average credit report will be.

So, focus on finding the right card, not on using tons of different cards to cash in on rewards that you don’t really need.

How to Build Credit with a Credit Card: Wrapping Up

We hope that this post has helped you to understand that building credit with credit cards is a smart move and not the bad idea that it’s often made out to be.

In fact, it’s the perfect way to give banks and lenders a better idea of your overall financial situation and responsibility.

Just remember to keep as low of a balance as possible and to make payments on time.

Looking for more information on how to build credit with a credit card?

We can help.

Be sure to keep checking back with our website and blogs for more tips on how to improve your financial literacy.