As things stand right now, there are millions of American consumers who have subprime credit scores, or bad credit. If you are one of those folks it may be tempting to believe that you have to simply deal with your low credit score, until it starts to improve over the years. There are, however, some steps that you can take to improve your credit score a little faster. One of those things is – believe it or not – getting a new credit card.

Most people know that they have to use lines of credit and make prompt payments to improve their credit scores. Some of these people also believe that they have to settle for whatever terms credit card companies offer them. In other words, people with bad credit often settle for bad credit cards. This is not the way that you should handle the process of rebuilding your credit score. Just because you’ve had credit problems in the past that does not mean you have to settle for a credit card with terrible terms.

Here are some things you should look for when opening a new credit card when your credit score is low:

Make sure it is a card that will improve your credit score!

People often get new lines of credit, use the credit properly and pay their bills on time and then they find that the account activity is not even being sent to the credit bureaus. That is like doing a lot of hard work and never getting any kind of payoff. Check with credit card issuers to make sure the card you apply for reports activity back to the major credit bureaus, like Equifax, Experian and TransUnion. You don’t want to spin your wheels on cards that won’t help you rebuild your score, so don’t waste your time applying for any credit card that doesn’t provide you with this perk.

Choose a Credit Card with Affordable Fees

Many times, people with bad credit wind up stuck with credit cards that charge expensive fees. The last thing you want to do is pay too much for the card you use regularly. Look for a credit card with no annual fees. If you cannot get one, then don’t pay more than $30 or so for a secured credit card. If you have bad credit, expect balance transfer fees to be between 3 and 5 percent. Don’t use a credit card for balance transfers if the cost is any more than 5 percent. And look out for “extra” fees. Some credit card companies try to hit consumers with maintenance fees, processing fees and other added costs that you simply shouldn’t have to pay.

Move from Secured to Unsecured

Many people with lower credit scores find that they have to start off the process of rebuilding their credit by opening secured lines of credit. This is sometimes a necessary evil, but if you have had a lot of problems with credit in the past, you may have to use a secured card for a while. Make sure, though, that the secured card you choose to open lets you graduate to an unsecured card in the future. When you open a secured credit card, you have to pay a deposit. The ideal credit card in this type of situation would allow you to open the account, check your credit activity for improvements over time and then to get your deposit back as you progress to an unsecured account. This can be a confusing process, so you may want to speak with a customer service representative to make sure this option is available to you.

Keep these tips in mind as you work toward building a higher credit score and a more promising financial future.

People have a habit of thinking that they are always smarter than that ‘other guy.’ Whether it is the coworker who supports a different professional sports team than you do, or that uncle of yours who has radical political views, we all seem to think that we usually know what’s best for other people. Let’s face it – getting up on a soapbox and looking down on others can often be a real rush for some people. This has become even more obvious in the Information Age, as everyone and their sister has a point of view about things that they are sure is more informed than yours.payday-loans-61

This all applies to payday loans. Many people seem to think that payday lenders are predators and that the people who take out loans from these lenders are ill informed and in need of rescuing. The lenders charge supposedly sky-high interest rates and “trap” their customers into a never ending cycle of debt. At least, that’s how the story gets told online time and time again. Oh, and those customers who take out payday loans?? They simply don’t know enough about finances to understand just how much they are screwing up by taking out payday loans, right?

This mindset is poisonous, judgmental and, as it turns out, not at all correct. Recent information that was released by the Consumer Financial Protection Bureau seems to reveal the truth about both payday lenders and their customers, and this truth is not at all what you’ve heard or read about in all of those online exposes or local news stories. In fact, it looks like payday lenders are providing very much needed financial services, and, contrary to popular belief, the people who take out payday loans are actually pretty financially savvy.

The CFPB recently analyzed the complaints that they have received over the past three years. When all of the data was laid out on the table, it appears that payday lending really isn’t a problem at all. In fact, only about one percent of the consumer complaints logged online had anything to do with payday loans. The vast majority of complaints were related to mainstream financial services, like mortgages and regular old credit cards. Debt collection was also factored in, and those three areas all added up to over 66 percent of the complaints that were officially logged to the CFPB. This data is backed up by data from the FTC that pretty much reveals the same stats.

The date from the CFPB also disclosed that if people use overdraft protection – the mainstream financial alternative to payday or short term loans – and the APR terms used for payday loans were also used for those overdrafts that people would be much worse off. The APR on the typical overdraft protection fee would come in at an astonishing 1700 percent, while the average APR on a payday loan is only around 350 percent. The CFPB also noted that since people understand payday loan fees as flat, one time fees, rather than bloated APRs that they are better equipped to pay back their loans on time, without any misunderstanding.

We know that the websites and news organizations that love to beat up on payday lenders are not going to change their tactics any time soon. But knowing that even an organization like the CFPB understands that payday loans are not the scourge of the financial world, like so many people pretend that it is, goes a long way in helping to really understand how the payday lending industry compares to other types of financial service providers. And it’s nice to know that payday loan customers really are not the ignorant, helpless people that so many reporters from the mainstream news community like to make them out to be.

It is nice to have the bragging rights that come with having a high credit score, but there are other reasons you should do all that you can to improve your credit rating. Your credit score is an important aspect of your life, and one that can impact several areas of day-to-day living.credit-score (1)

It’s no secret that our credit scores are closely scrutinized for everything from applying for a new job to getting a new insurance policy. If your credit score is low, you may be suffering from the effects of bad credit without even being aware of it.

If you are on a mission to rebuild your credit score, it is important to be armed with the information you need to meet your goals. It all starts with pulling your credit report. But there’s more to your credit rebuilding master plan that you need to know about. Here are the things you need to do to take a day-by-day approach to improving your credit score.

Start off by Assessing the Situation

Once you have your credit report, take a look at the details to see if there are any errors. If you find errors, work with the credit reporting bureau and any creditors involved to get those issues resolved. You should also take a look at your credit score. If your FICO score is lower than 620, many creditors will consider you to have subprime credit. This means that immediate actions must be taken – and sometimes repeated – to improve your credit score. Don’t get discouraged if your credit score is lower than you thought, as there is no such thing as having a score so low that it cannot improve.

Open a Line of Credit

If you don’t have a credit card, getting one can be tricky. Thankfully, though, there are things that you can do to work toward opening your first credit card, or getting a new one if your credit score is low. Start off small by applying for a store or retail credit card. These types of cards are easier to qualify for and making timely payments improves your credit score, little by little, every month.

You may also want to apply for a small loan at your local bank branch. Be prepared to get turned down, but do your best to apply for a small loan. Your goal right now is to show that you are a responsible person and that you pay your bills on time every month. You can’t do that unless you are regularly paying on loans and/or lines of credit, so you will have to bite the bullet and see if you can qualify for small dollar loans or lines of credit to get the ball rolling in the right direction.

Avoid the Temptation to Have too Many Credit Cards

There are people who go overboard and end up opening too many lines of credit. Remember, your credit score is calculated via five different factors: payment history, total debt amount, length of time you have had credit, the types of credit you possess and recent credit card activity. Your payment history and total debt amount added together account for 65 percent of your credit score. Reducing your credit card balances and maintaining a spotless payment history will do a world of good when it comes to improving your credit score.

A great credit score doesn’t just happen overnight. You have to take matters into your own hands. Making smart financial decisions can take practice, but before too long it becomes a habit – something you do day in and day out. That habit will ultimately increase your credit score.

The Consumer Financial Protection Bureau (CFPB) officially commented on a proposal that will take direct action against No-Action Letters. The policy is designed to go after new financial products or financial services that promise to bring substantial benefits to consumers, but that are still a bit uncertain how regulatory or statutory provisions will be applied in the near future. The documents on this proposed policy are set to be released to the public on December 15, 2014.

Bringing up No-Action Letters reminds some of the SEC No-Action Letters which usually involve scenarios where the requester is not sure whether or not a particular financial service or product is in violation of existing federal security laws. In the letters that were released, SEC employees agreed not to ask for a legal action to be taken against the requester because of the facts that were presented. An alternative that exists is for SEC staff to draft a letter to bring clarity about a specific regulation or rule.

The CFPB No-Action Letters bare similarities to the SEC Letters. These letters would inform the business requesters that their staff is not going to recommend enforcement action due to specific aspects of a known legal requirement or policy. However, the CFPB No-Action Letters Policy is different from the SEC’s in that it only applies to financial products that are offered to the general consumer market, or for financial services which have no existing legal uncertainty.

By limiting the CFPB No-Action Letter Policy to only consumer-related products and services, the Bureau is able to remain consistent with how it interprets that Title X of the famous Dodd-Frank Consumer Protection Act of 2010, which provides governance for the CFPB, is intended to be helpful to consumers and to provide all consumers with access to transparent, fair, innovative financial markets. Additionally, the CFPB is bound to a statutory mandate that promises to promote and facilitate innovation and access in the market for consumer financial services and products.

To meet this goal, the CFPB created an innovative project called “Project Catalyst” in the fall of 2012. This project will support financial innovators that create consumer friendly financial products and services. The No-Action Letter Policy is quite simply the most recent module of Project Catalyst to be put into action.

Consumer friendly financial products and services can get assistance from the CFPB No-Action Letters. Recent consumer spending in the U.S. led to recent financial difficulties, although more complex financial institutions and high dollar deals greatly increased the financial woes of recent years. Quite a bit of effort has been put in to deal with more sophisticated financial businesses during the financial recovery that has been underway for the past few years. And while all of this has been underway, less attention has been focused on underbanked, unbanked and very low income communities around the country; not to mention consumers who may currently use traditional bank accounts but also use non-traditional payment methods too.

Not too long ago, the CFPB began to take steps to bring these sectors to the attention of the rest of the country when it began in inquiry into mobile financial solutions. The Bureau found that nearly 90 percent of United States consumers own cell phones and that this growing trend has led to a whole plethora of new mobile payment solutions that allow unbanked and underbanked households to take more control of their individual finances. We will all have to keep our eyes open to see whether or not these new mobile payment solutions continue to warrant scrutiny from the CFPB and to see how the No-Action Letters pan out for new financial services that are launched in the months and years to come.

Protecting yourself from identity theft is one of the most important things that you can do for yourself and for your future. There are many ways in which your identity can be stolen, and many ways you can protect yourself. In order to protect yourself properly from identity theft, you need to know how people steal other’s identities.

The first way that thieves steal other’s identity is that they steal your wallet or purse. The people who do this are very skilled at taken your purse or wallet without you even knowing. This is why you must be extra careful and always pay attention to where your wallet and purse are. Some ways to try to avoid this would be to put your wallet in your front pocket when walking in a crowded area; this will make it so it is more noticeable if someone tries to take it. Always hold on to your purse, do not just let it hang on your shoulder, someone can come up and rip it right off your shoulder and take off if you do not have a hold of it as well.Identity_opener

More and more identity thieves are using technology to steal your information. One way that they can do this is they call or send an email pretending to be your credit card company or bank. They will ask for your personal information. Be very careful with this; do not give out any personal information by email. If they call you asking for your information ask if you can call right back, tell them you are in the middle of something and you will call back. This way if they are trying to steal your identity they will hang up, or when you call the company or bank you will know that it either was someone trying to steal your information or your actual credit card company or bank that had called.

Another low tech way in which thieves try to steal your identity is by stealing your mail. They will steal mail that will have personal information in it so they can get the information. This means that you need to know when you expect any and all bills or items of mail with any personal information in it. If you know when this mail should show up and it does not then a red flag will be thrown up and you will know that something is wrong. If the mail that you are waiting on does not show by a couple of days after it should have been there then you need to contact the company and find out when they sent it and what to do next. If you can pay your bills online instead of getting them in the mail then you have a better chance of not having someone to steal your bill from your mailbox.

If you are getting rid of anything that has any bit of personal information on it then you need to make sure that you are shredding the paper. Believe it or not identity thieves will go through your trash to find anything with personal information on it. The only defense is to shred anything that has any little bit of information on it.

There are so many ways that identity thieves will try to steal your identity. You have to take precautions to make sure that you are protected. Protecting your identity protects your financial future. When your identity is stolen it can take years to get back to where you were prior to it being stolen. There is no such thing as being too careful when it comes to protecting your identity.

budget

budget (Photo credit: Backdoor Survival)

No one wants to spend more money on anything than they have to, but without realizing it Americans all over are wasting money every day. Their intentions may be good, or they may not be thinking at all. Here are some tips to help you realize what does waste your money so you can stop wasting your money.

One thing that many people do not think about is that sticking with current providers for certain things can waste your money. Many people will stick with their current service providers for their cell phones, cable, or internet companies simply because it is easier. Others will stick with them because they think that if they do they will get discounts for loyalty. This is not always true. Search around look for the best deal that you can find. Why pay more than you have to.

Not unplugging electronics is a waste of money. This is something that many people simply do not think about. Many people think about turning them off, but not about unplugging them. It is true that turning them off will help keep you from wasting money, but unplugging them will help you keep from wasting even more. Even if the electronic device is off, if it is plugged in it is still using some electricity costing you money.

Paying ATM fees are a total waste of money. These can range anywhere from two dollars to three or four dollars. Think about how many times you get money out of an ATM. Know where all your bank’s locations are or where there are free ATMs. Do not pay for ATM fees unless you are desperate and do not have another choice. ATM fees add up to quite a bit over a year. Spend a month tracking how many times you use an ATM and think about if you paid a fee every time compared to getting your money for free every time.

Couponing is a great way to save money. However if you are couponing just for the sake of couponing then you are wasting money. If you are using a coupon on something you would not normally buy just because there is a coupon for it, then you are again wasting your money. Do not use coupons unless they are for something that you actually use and normally would buy. Otherwise the coupon is actually costing you money.

Saving money is something that almost everyone wants to do. If you are trying to save money do not forget to think about ways that you are wasting money. You have to watch out for anything that wastes your money because sometimes they are not very obvious, we simply let them slip past our money saving radar and then we waste money. Make sure you pay attention to anything and everything so you can stop wasting your money.

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There are many myths out there when it comes to credit scores. You have most likely heard at least some of them. No one really knows where they came from, but we do know they are myths. If you are unsure of what is a credit score myth and what is a credit score fact you should continue reading so you know fact from fiction.

One credit score myth is that you should never close a credit account. This is a myth because it is not always the case. There are times when this is what you want to do. Typically if you want to get a loan in the near future you do not want to close a credit account. However, if you have plenty of credit accounts, and you see no need for a loan in your future there is nothing wrong with closing one.

Credit Rating

Credit Rating (Photo credit: Match Financial)

Having tons of credit cards means you will not be able to get a loan is one myth that people think is true. At one point in time it was somewhat true. The fear was that you would go out and run up huge bills on those credit cards only to default and wind up in over your head. What has been noticed however, is that those who have been able to handle many credit cards for some time without issue will not just go out overnight and max out all of their cards. They have shown their responsibility by not keeping them maxed out, thus they are more trustworthy than once thought.

Another myth is that you do not need to worry about your credit score. This one is absolutely crazy! Of course you need to worry about your credit score! You credit score will determine what your loan rates will be or even if you can get a loan. Your credit score is very important and you need to pay attention to it. Remember the higher your credit score the better off you will be.

One rather strange myth is that you have to be in debt to have a good credit score. This is so not true. The thought behind this is that if you have a debt and are making your payments on time every month your credit score will go up. While that is true, you do not have to be in debt to have a good credit score. Say you have a credit card and make a purchase with it and then immediately pay it off. You do not have debt but it did help you build up your credit score.

Do not believe all that you hear when it comes to your credit. If you are unsure of something do your own research. You have the ability to find out for yourself if something is a myth or if it is a fact. The more you learn the better you will be able to separate credit score fact from fiction.

Christmas in the post-War United States

Christmas in the post-War United States (Photo credit: Wikipedia)

In the early part of November, you start to work out a budget for your holiday spending. When you have kids, they are going to give you lists of items that you want. When you put together a budget, you realize that there are some items that you can get, and some items that you can’t get. When you finally get to the stores after Thanksgiving, you take the lists, and your budget, with you to the store. When you leave the store, you realize that you ended up getting your kids all of the items on your list and completely skipped over that budget that you were supposed to be following. As much as you might know that you need to stick to a budget, you also know that you want to see your children as happy as possible. If this means spending more than you might like to on everyone on their list, you are going to end up doing it.

This could lead to some financial Holiday woe’s once the season passes. While you may love the smiles that your children have when they open presents on Christmas morning, you probably won’t have that same feeling when you open up your credit card bills in January. With all of this in mind, you want to make sure that you take a look at what some of your options to keep everything on track while your finances catch up. If you have to take out a payday loan to stay on track, you need to consider it.