Credit Score Changing Every Month?

Does your credit score fluctuate every month?   Up a few points one month, down a few points the next… why won’t it stabilize?  If you’re like most Americans these days, you keep a pretty close eye on your credit score, but honestly, it’s just frustrating when it goes up five points one month, only to drop ten a month later!  What causes these monthly fluctuations?  And even more importantly, is it something that you should worry about?  

Here are the most common reasons why your score changes:

New Credit Inquiries:  Signed up for a new credit card lately?  Bought a car?  A house?  Anytime you take out, or in some cases, consider taking out a new line of credit, at least one credit inquiry is likely to hit your credit report.  And, while the effect is minimal, you’ll still see your score drop at least a point or two in most cases.  Fortunately, the effect is short lived, and most credit inquiries drop off after a year or so.

Closing a Line of Credit:  If you’ve just paid off a credit card bill that you’ve had for a long time, it can be really tempting to close that account, but try not to close older accounts unless you absolutely have to – closing just one long standing account will make your credit history shorter, and your credit score may drop a few points.

Missing a Payment:  Your payment history is a big factor in determining your credit score, and just one missed payment will likely hit your credit report fairly quickly, causing your score to noticeably drop.  Unfortunately, missed payments typically stay in your credit file for seven years, so the effect can be far reaching.

Credit Card Balances:  Since your credit card balances vary from month to month, it’s not uncommon for your credit score to go up (and down) a couple of points each month due to that variance.  Pay a card off and you’ll see your score go up.  Use one that you haven’t used in a while and you’ll see your score drop.  Even though this is a normal occurrence, keep in mind that your credit utilization is an important part of your score, so don’t let credit card balances get out of control.

Bankruptcy:  Even though most people know that filing bankruptcy will affect your credit score, many people are unprepared for the nosedive your score takes immediately after the filing hits your credit report.  Unfortunately, bankruptcy will stay on your report for 7-10 years, so consider all of your options carefully before you file.

Credit Mix:  Your credit mix typically accounts for about 10% of your score, so make sure you only apply for accounts that you intend to use.  Credit cards, installment loans, department store cards, auto loans, mortgages… all of these are a part of your credit mix.  Unbelievably, I know of several people whose credit score improved after buying a house simply because it changed their credit mix.

Credit History:  About 15% of your score has to do with the length of time you’ve had credit, so you may see your score tick up a few points a year simply because you’ve had credit a little longer than the month or year before.  But, you can also see that score tick down when you close an account (or open a new one), since your credit history is affected.

Identity Theft:  Although no one likes to even hear the words identity theft, in the event that your identity is stolen, you will likely see a dramatic effect on your credit score that can be difficult and costly to sort out.  Identity theft is perhaps THE most important reason to check your credit score on a regular basis, review individual accounts, and report anything unusual as soon as possible in order to minimize the damage done.

Did you know that up to 50% of us can’t tell you if there’s been a change in our credit reports?  Monitoring your credit takes only a few moments each month, and those little fluctuations can be frustrating, but just remember – minor fluctuations are normal, but keeping track of them is crucial.  A few points one month won’t make much difference, but a few points every month in the wrong direction could create significant problems for you in the future.

Using Credit Cards to Survive the Corona Virus Shutdowns

Over the past few days, as we’ve watched industry after industry getting hit by closures, slowdowns, and collateral damage because of worldwide efforts to stop the spread of COVID-19, we’ve also watched the economy tank in nearly every country.  We’ve heard of “temporary” shutdowns, pauses, and already, many, many layoffs.  And, while the government’s new economic relief package is supposed to help in cases where people lose their jobs, where they’re sick, or where they are taking care of someone who is, how long will it take for that “help” to actually funnel itself down to those of us who literally don’t have the money to miss work?  Days?  Weeks? Months?

credit cardsWhere does that leave you?  How do you pay the car payment?  The house payment?  Buy medicine?  Groceries?  How do you live day to day until the “relief” is made available or until the virus is contained?  And, since they’re only really talking about 2/3 of your normal salary, where do you get the extra third?  Your normal bills aren’t going to just magically drop by a third, are they?  So what do you do?

One thing that we’ve noticed in all this panic buying at the stores is that people are using credit cards to get those items that they’re buying that are out of the norm.  Is this a smart way to handle the extra expense that all of this self isolation is creating?  And what of the long term expenses?  Is it smart, if you are one of those affected by the crashing economy, to utilize credit cards to make ends meet?

The answer is not nearly as simple as you might think.  First off, how much credit do you have available?  You might want to take stock of your available credit first off.  Then, once you have that information, consider your circumstances.  Are you in an industry that will likely be affected long term?  If so, how will you pay back any of the charges that you create while we’re all in panic mode?  Will your job reappear?  Do you have savings to rely on?  Are the things that you’re using those cards for directly related to actually surviving the financial crisis created by this virus or are they something that you wouldn’t normally buy, but you’re only buying now because you’re in panic mode?

These questions and the answers are very personal to each and every one of us, but they are things that you MUST consider.  This virus will not last forever, but the financial decisions you make now will have an effect on your life long after this crisis has passed.  And those of us here at Fresh Start Card Offers want to make sure that everyone is using common sense as we navigate through a worldwide pandemic, something that has never happened in our lifetime, and will likely not happen again soon.

Remember this, if you remember nothing else. The choices you make right now will have long term financial consequences, so make them wisely.

Going on Vacation?

Are you planning a vacation this year?  Going to the mountains?  The beach?   Driving?  Flying?  Staying in a vacation rental?  Hotel?  Camping?  How are you planning to pay for things while you’re on vacation?

While it is really tempting to pay for everything in cash when you go on vacation, in reality, it’s just not a good idea.  Not only do you run the risk of losing you money if you use actual cash, but you also risk a lot more.  What happens if your cash is lost or, even worse, stolen?  What happens if you run out of money?  What happens if you’re cheated?  Maybe you check in to your rental, pay your bill up front like they all want you to, then find out that you’ve been had?  What happens if the rental is not what you paid for?  What happens if you have to leave early?  The list can go on and on and on.

And truthfully, using your debit card is possibly even worse than paying with cash.  Why?  Because your debit card is connected directly to your bank account.  And there is no place on earth where your debit or credit card information is more likely to be stolen than in an area that caters to tourism.  It’s a prime location for dishonest retail and restaurant employees to lift your information, it’s a prime location for pickpockets and scammers, and YOU are more likely to misplace or even lose your card when you’re in a strange place.  Even though you have a certain amount of protection against fraud, it can take as much as ten days to sort it out if you are a victim of fraud!  What would you do for ten days without any money?  The answer?  It’s pretty obvious.

Use a credit card to pay for everything that you possibly can while you are on vacation!  Not only are you better protected against fraud, theft, or loss, but you can even take advantage of some awards cards and get money back for all your purchases!   Not sure which card to use?

Take a look at these offers –


 

Do Your Credit Cards Work for You?

Do your credit cards actually work for you or against you? I know that sounds strange, but when you think about credit as a whole, your credit score either helps you or hurts you. Likewise, the credit cards you carry can either help or hurt you, too.

For example, your credit might be pretty good, but if you don’t have enough credit available, it can damage your credit score. You see, your credit score is calculated based on a number of variables, one of those being how much credit you have available. And if you don’t have enough, it can hurt your score. So, while you might be limiting your credit card use, if you’re still over the recommended 30% utilization, then you probably don’t have enough credit.

But how do you know if you have enough credit? One of the best ways is to look at how much credit other people in your credit range have. And that’s pretty easy to do with all of the free credit tools available these days. Almost every one of the free sites offers a comparison of your credit versus others in your credit range, all you have to do is log in and look. Then, once you’ve figured out whether you have the right amount of credit, you’ll want to take a look at the actual credit cards you have in your wallet.

Do they offer a decent interest rate for your credit score? If it’s been awhile since you’ve taken a look at your interest rates, or if your credit score has improved since you last looked, you might want to take a good hard look because you could be paying more interest than you should.

Do you have any rewards credit cards? Are the rewards that you’re getting the right rewards for you? Would a cash back card be better or should you get a travel rewards card? It all depends on your lifestyle. What works best for someone else may not be the best choice for you.

Remember, your credit should fit your needs, and it should work for you, improving your overall financial picture. Your credit should not hold you back, keeping you from doing or having the things that you want or need to make your life the best that it can be. So, if you haven’t examined your credit cards lately, there’s no better time than the present!

Have You Looked at Your Credit Cards Lately?

As you’re going through your receipts for filing your taxes, one of the things that you might want to consider looking at, along with everything else, are your credit card statements for the past year… How much are you paying for interest? How many annual fees do you pay? Has your credit changed? Do you have the available credit that you need to cover any emergencies that might crop up in the new year?

If you’re not sure of the answers to these questions, now is the best time to sit down and study those bills. Make a detailed list of each credit card that you have, showing the balance on the card, the interest rate that you’re being charged, any fees that you pay, any rewards that the card offers, and how much available credit that you have on each one.

Then, take a look at your credit score over the past year. Has it changed? Is your credit score better now than it was six months or even a year ago? If so, you might qualify for a better credit card, with a lower interest rate, more rewards, and a low or even no annual fee. If you don’t have a credit card, and your score has improved, now might be the best time to apply for a credit card. (If you can only get a secured card, you might want to consider using a little bit of your tax refund to get started with a secured card!)

Once you’ve listed all the details of your current credit, then you might want to consider upgrading one or more of your credit cards to a card with features that are more aligned with your needs and your current credit score.

Here are our best picks for credit cards to give you an idea of what’s out there:

Can’t Find the Right Credit Offer?

Sometimes, even after you’ve perused all the websites that you can find searching for the right credit card, the perfect loan, or even the right credit reporting / monitoring vendor, you still can’t find what you want.

What should you do?  Just take whatever offer you got in the mail?  Settle for less than you want or need?  Pay more interest?  More annual fees?

Absolutely not!

When you run out of options, we encourage you to let the experts help you to find just the right credit card, or personal loan, or whatever you need.  Use the tools that you’ll find online, get your free credit scores, let them “match” you to the best credit cards for your credit score.

Otherwise, you’ll pay way too much for far too little.

Credit Cards & Catalogs

Well, the season is here again! If your mailbox is like mine, every day it is stuffed with both catalogs and credit card offers.

Buy now! Pay later! 15 months interest free! Pre-approved! Save money on interest!

But before you fill those credit card applications out, you might just want to sit down at your computer and compare what exactly you would be getting when you sign up for that new credit card.

Are you getting the best possible interest rate for your credit score? Remember, most of those mailers are based at least partly on the demographics for your area, meaning that it’s not just your credit that is considered, but also that of your neighbors, and other people around you.

Are there hidden fees? Is the length of the balance transfer offer the best one available for your particular credit score range? Read the fine print carefully. Over the past few years, there has been an increase in the number of credit card companies charging a monthly usage fee as opposed to an annual fee, especially if you’re in the lower tiers of the credit score ranges. That monthly usage fee could apply even if you don’t carry a balance on your card.

Are you absolutely certain that the offer is legitimate? Sadly, some of the credit card offers that you receive in your mailbox could very well be identity theft scams masquerading as credit card offers. Before you fill out any application (mail-in or online), verify the source!

Here at Fresh Start Card Offers, ALL of our online applications link directly to the credit card, catalog, or loan provider, so you can be sure that your personal information is safe!

Interest Rates are Climbing!

If you’ve been watching the financial market lately, you’ve undoubtedly noticed that the Federal Reserve has raised the interest rate on federal funds once again.  It’s now at 1.75% to 2.00% and they’ve signaled that there are two more interest rate increases coming this year.

But, what does that mean to you?  And how will it affect your finances?  Even though you may not think so, this rate increase will most certainly hit your pocketbook in less than 30 days, and the next two rate hikes?  You will feel those almost immediately, too.

So, if you’re planning to buy a home, refinance the car, or take out a personal loan to pay off those credit cards, there is no time to waste.  Interest rates on that new home, car, or personal loan will almost certainly go up immediately, as will the rate on those credit cards that you’re paying on every month.

Personally, we’re looking at taking out a personal loan to pay off the credit cards, to save money on the credit card interest and pay them all off sooner, so we will do this sooner rather than later, as that extra .25% will affect both the personal loan rate AND the interest rate on the credit cards.  Plus, with two more increases expected this year, NOW is the time to lock in that fixed rate, regardless of what you’re planning to buy.

What about you?  Think a personal loan might be the right choice for you?  Take a look at these offers:

Should You Apply for Credit Cards Online?

With all of the “data breaches” making the news lately, nearly everyone worries about sharing personal information of any kind anywhere… so, it’s only normal to wonder if you should even apply for credit cards online?   Is it safe?  Are you putting your information at risk?  Perhaps you’re better off responding to some of those offers that pile up in your mailbox this time of year?  Maybe you should pick up an application at the bank or in the store instead?

The truth is, you’re just as safe applying online for credit cards as you are anywhere else.  In fact, you might be a little safer online.  Those offers and applications that you fill out and mail contain your information, too.  The difference is those are handwritten… and those handwritten pieces of paper are handled by so many people once you drop them in the nearest mailbox.  From the post office to the creditor themselves, you really have no idea what happens to those applications… someone has to enter your info into the computer, someone has to review your application, someone has to file it, shred it, or do something with it once it’s been entered into the system… it seems to me that if you put your own information into the computer to start with, it might actually be a little safer than that.  But, that’s just my thinking.

Still, it never hurts to follow a few basic rules when applying online for a credit card:

Know your credit score before you even start looking for credit cards!  Remember, the more credit cards you apply for, the more “inquiries” pop up on your credit report, and those inquiries can lower your credit score.  So, check your credit score, and then only look for credit cards that typically approve those with your credit level.  There is no sense in applying for a card that requires “Excellent” credit if your credit score is only “Fair.”

Have all of your options available before you actually apply for a credit card. Find a safe, secure site, like FreshStartCardOffers.com, and then carefully review every credit card offer to determine if it’s a card that you will actually benefit from having… What’s the interest rate?  Is there an annual fee?  Are there any rewards that come with the card (cash back, points, airline miles, etc.) or are there any hidden charges that aren’t immediately evident?

Once you’ve made your decision about the cards that interest you or that you feel confident that you will be approved for, it’s time to fill out the application.  Make sure that you have your personal information readily available so that you don’t have to stop and go look something up.  You’ll need your social security number, annual income, home address, employer’s name and address, etc.  Don’t risk getting halfway through an application, then have to stop and look something up, only to find that the website has “timed out” and you have to start over at the beginning – get it done right the first time.

Finally, after you’ve filled out the application in its entirety, it’s time to submit your application – some lenders will give you an instant decision while others will respond by letting you know that you either don’t qualify or they need more information.  Don’t get discouraged if you don’t immediately qualify.  The lender is required to send you a letter if you are rejected, or they may simply need information that is not readily available, or they may even have another option if you don’t qualify for the first one, like the Fingerhut Fresh Start program that is offered through the Fingerhut Credit Account issued by WebBank .  Be patient and answer any questions once you get their response.

Remember, good credit is a marathon, not a sprint!

 

 

Think You Don’t Need a Credit Card?

You know, I read an interesting study the other day about Millennials and credit, and in the study, it stated that Millennials utilize personal loans at a rate of 98% higher than the previous generation, and they open auto loans at a rate that’s 21% higher than the previous generation, but they also open far less credit card accounts, averaging two less credit cards than their parents.  At first glance, those credit card statistics sound pretty good, don’t they?  But does it really make sense not to have some credit readily available on credit cards?

While a personal loan looks good on paper, what with the lower interest rate and all, there are drawbacks that you might want to consider before you decide not to open any credit card accounts.

First and foremost, available credit on a credit card is instantly available. Unlike a personal loan, which can take a couple of days between the time you apply and the time the money is deposited into your bank account, the amount of available credit that you have on a credit card is available at all times, day or night, regardless of where you happen to be at the time (ever had an emergency when you’re on a road trip – a personal loan doesn’t work at 3:00 am when you’re 300 miles from home).

Secondly, with a credit card, you can actually pay the balance off every month if you so choose and never pay a penny’s worth of interest.  That’s not the case with a personal loan.  Even though the rate on a personal loan is usually substantially lower than a credit card, you’ll still pay interest on the principal every month.  Over time, even that lower interest rate will add up.

And finally, even though many personal loans are reported to the major credit bureaus, not every company does, and what’s reported won’t show available credit, so your credit score may be impacted by not having any readily available credit (that’s about 30% of your credit score).

So, what should you do if you’re trying to limit your reliance on credit cards?  The answer is pretty simple – get at least one good credit card, use it sparingly, and pay off the balance every month!  That way, you’ll have the benefit of instantly available credit when you need it, but you can opt to pay no interest at all just by paying the balance in full when it’s due.