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.

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.

01.06.2014

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.