7 Ways to Build Your Credit Score

Who doesn’t want a higher credit score? The median American credit score is 723; if you don’t know yours, it’s time to find out so you can improve or repair your credit. And a major bonus: you’ll save money! Bad credit can make it difficult to get new credit, increase your interest rates, lengthen the time it takes to pay down debt, and prevent you from qualifying for insurance and housing.

With the amount of foreclosures, bankruptcies and ever-changing debt collection laws, it’s important to know how the FICO score works. So what exactly goes into your FICO credit score? Here’s the breakdown:

Timely Payment History (35%) – negative recordings, such as collections, late payments, bankruptcies, etc. will hurt you significantly here Debt(30%) – there are two main types here, the first being much more important. Revolving – this is unsecured debt, like credit and retail cards. Installment . . . → Read More: 7 Ways to Build Your Credit Score

How to Escape Out-of-Control Credit Card Spending

In today’s post-recession economy, credit is scarce. Potential homeowners and small business owners are finding it very difficult to secure lines of credit and other forms of bank lending. Many Americans who haven’t suffered through the difficult loss of a job or home have still suffered through wage freezes and other economic challenges, and this has resulted in many people fighting to pay the bills each month.

When it is difficult to make ends meet, one of the most common temptations is to begin financing our monthly expenses with a credit card. If you have built up an uncomfortably high level of credit card debt over the last few years, the good news is that it is never too late to fix the situation.

Although bankruptcy may be the only possible solution in some isolated extreme situations, normally a person can escape the trap of credit . . . → Read More: How to Escape Out-of-Control Credit Card Spending

How to Build Credit Without Credit Cards

I recently posted an article titled, “What Happens to Your Credit If You Cut Up Your Credit Cards?” From this post, we deduced that if you closed your accounts, your credit score would most likely go down, but not as much as one would think.

You may have a problem with spending, and you know that you should cut up your credit cards, but you are still nervous about what it might do to your score. If this is the case, I have the solution.

Let’s take a look at how your credit score is calculated, compliments of MyFICO.com.

If we would cut up our credit cards and close the accounts, two categories would weigh down on our score: “Amounts Owed” and “Length of Credit History”. Of course you will continue to pay your electric and heating bills, and this will help keep your score constant, but is there . . . → Read More: How to Build Credit Without Credit Cards

Is a Credit Score Really That Important?

Credit Scores are talked about by everyone these days. Parents give credit cards to their children so they can “build their credit” and qualify for loans later in life. It seems that everyone’s financial actions are based on this 3-digit number! But does that credit score really matter?

My wife and I are striving to live a life with no debt. We go grocery shopping and pay with cash. We purchase Christmas presents and pay with cash. Furniture — Cash. High-end electronics — Cash. Vehicles — Cash. You get the picture. We just don’t use our credit cards anymore (in fact, we cut them up!).

So, by living a life without the need for credit cards, I wonder, “Why should I care about my credit score?”

I wish I could say that I don’t have to, but I can’t.

Credit scores are obviously used for obtaining a home loan. If . . . → Read More: Is a Credit Score Really That Important?

What Happens to Your Credit If You Cut Up Your Credit Cards?

If you have been thinking lately about getting rid of those pesky credit cards that only tempt you into debt, you may have also wondered, “If I cut up these cards, will my credit score go down?”

My wife and I made the decision to cut up our credit cards in February of 2010. We were digging ourselves out of debt (and still are) and we decided that we no longer needed our credit card. In the event of an emergency, we had our emergency fund to pull from; and for all other expenses that might need a card, we had our handy-dandy debit cards!

I really didn’t think about the effect that this would have on my credit score at the time, but I have had a few readers pose the question.

As I researched the question, the simple answer to the question is, “Yes, if you cut up . . . → Read More: What Happens to Your Credit If You Cut Up Your Credit Cards?

How to Live Without Your Credit Card

If you are the type of person that needs to freeze your credit card in the middle of an ice block in order not to use it, this article is for you. Can you picture that? I think freezing the card is a hilarious idea, and usually provides comical relief when the card owner begins chopping the ice block with her stilettos so that she can buy…….more stilettos. The only problem is, once the card is thawed again, it is very likely that we’ll overspend for a few more months and then go through the whole cycle again.

Credit Cards are incredibly convenient. They are thin, light, and quick at the register. But since they are so convenient, we often overspend our means without even knowing it.

If you currently have a balance over $1,000 on your credit card, this post is for you. More than likely, an emergency occurred . . . → Read More: How to Live Without Your Credit Card

Losing Money With a Cash Rewards Credit Card

Bank of America, like most other banks, has recently introduced a new Cash Rewards card. The hook: 1% cash back on all purchases (2% in the first 12 months), 0% APR (in the first 15 billing cycles), and an extra 25% redemption bonus when you redeem $300 or more in cash back rewards.

I have actually been without a credit card for about 6 months now. My wife and I decided to do without it for a few months, and once we realized that we didn’t need it, we chopped it up and threw it in the garbage. It was just too much of a temptation to overspend. Plus, our debit card could do everything that our credit card did.

Even though we don’t have a credit card at the moment, we are still receiving the latest and greatest offers. And, to be quite honest, they are still tempting. I . . . → Read More: Losing Money With a Cash Rewards Credit Card