Your Credit Questions and Answers

 The banks have excellent records on your account with them.  They track everything to build models to predict customer behavior and to predict your behavior.   Why Banks Track your Account Banks have a lot of data on your account.  They have the information from your credit report when you applied for credit, your application for credit, They also have the internal history of your account or accounts with them.  They know how long after the statement you make your payment.  They see the cycles in your spending.     Banks have statisticians to measure everything and to predict how good of a customer you are.   Should the bank offer you a new mortgage, credit card, zero percent loan, new checking account is all generated from the statistics derived from your credit file with them. Banks Cannot Access your Current Credit History Interesting but Banks do not have access to your current Credit History.  When you apply for credit they can access your credit history at the time of applicatio

 I have acquired a dozen or so credit cards through time.  Many of them I have had for several years.  My Credit Report showsI have never been late with a payment to them.  Check out how I got a late payment removed. I use Autopay to make sure all my cards and other loans are paid every month.  Most of the time I only use one or two of my credit cards.  However I pay Netflix on one, my phone on another, and small bills to keep my important cards active. My HELOC Debacle 790 to 580! I went from a 790 credit score to 580 with only one change in my credit history. I had three HELOCs.  I had three houses that were nearly paid off.   I put HELOCs on them for $100,000 each.  I owed a total of about $70,000 on the three houses.  I had autopay set up on all of the HELOCs. I get a call from myBanker.  He said I needed to come in and sign some papers.  I forgot and he called again a couple weeks later.  I stopped in and he was on vacation.  So I forgot to catch up with him. Four months later I

 I thought I had setup autopay on my Lowes Card.  I charged a couple little items.  I did not check my statement and it went to 60 days late.  I first saw it when I opened my Credit Karma account.  Ouch, I might have said something else, grin. 1.  I paid the missed payment I immediately went to Lowes and paid my account.  The next day I called the Lowes Credit Card phone number from the back of the card.  I very nicely talked to the customer service agent. I took responsibility for missing the payment. 2.  I used the Lowes Card some more I spent a little more money at Lowes on my Lowes card over the next few months and obviously paid on time.  3.  I waited to ask for the Missed Payment Removal After about 6 months I called up Lowe's Credit Card customer service.  I explain to the customer service person that I was looking at new cars and would there be any way they could possibly remove my missed payments. I was extremely nice. This is a necessity when dealing with customer service

  A HELOC is a Home Equity Line of Credit .  Any home or rental property that does not have a loan or mortgage against it can be used to get a HELOC. Normally a HELOC will be in first position on the property. How is a HELOC different from a Mortgage? A mortgage will have a monthly payment that pays down the debt on a ten, fifteen or thirty year schedule.  If you make extra payments on the mortgage you still have to make the scheduled monthly payment. You cannot borrow back the extra payment without getting a new mortgage.   The interest rate on my mortgages is usually locked in for the term of the loan.   The fees to get the mortgage were around $3,000.  There are no annual fees, just the interest on the mortgage. A HELOC will normally have a required monthly or quarterly payment of the interest on the balance owed.  The amount you owe on the HELOC can be changed up or down easily.   Let's say you have a $150,000 HELOC on a property and you only owe $20,000 on the loan.  You can c

 Let me first state I am not a financial advisor, realtor, or accountant.  What I am posting here is my opinion. The Benefits of Rental Real Estate Investing Leverage, Loan Pay Down, Cash Flow, Appreciation, Tax Benefits and Longevity. Leverage Leverage is the ability to borrow money.  If I went to a bank or credit union and wanted to borrow money to purchase or start a small business they would grin and suggest I find a rich uncle to finance it. Borrowing to buy rental or personal residential real estate is different.  There are many programs that will help you buy your first house, duplex, triplex or fourplex.  Sometimes if you plan to live in the property for twelve months you will be able to borrow as much as 95% of the value of the property.  It is usually fairly simple to purchase Rental real estate if you have 25% to put down. Loan Pay down From the very first payment part of the payment will start paying back the loan on the property.  Renter makes the payments after the Down P

 Here are a couple of Credit Card Safety measures that can solve your problems when your wallet or credit cards get stolen. 1.  Write down your Credit Card Bank phone number from the back of your card. 2.  Write down the Credit Card number and expiration date. 3.  Write down the three digit security code.  I add two numbers to the front of the three digits to confuse someone who may find this so they won't be able to use my card. 4.  I only carry two or three credit cards at a time.  I have a dozen or so credit cards however I do not carry all of them.  Most of them are at my office in my safe. Put this note card in a secure place away from your cards and wallet.  I have a small piece of paper with these numbers written on it.  I put clear tape over so the writing doesn't wipe off or get wet.  I put this into the owners manual of my car.  Nobody ever looks at the owners manual that is in my glove box.    You can fold it up and put it in a gum package.  You can put it next to yo

 Here is a simple tip to a  Quick Credit Score increase . Pay your credit cards before the statement date.   This may only add a few points but if your cards show a significant drop it will make a difference.  The amount you owe on the statement date is what the credit history shows and the percentages of available credit usage calculation. Build your Credit Fast Scrape together as much cash as possible and pay down your cards before the statement date .  Pay the most on your cards with the Highest Percentage usage. Overall Available Credit Usage The overall available credit usage is an important number.  However if one of your cards is near 100% of available credit used it will have an oversize impact on your score.  Individual Credit Card  Available Credit Usage   I used an interest free offer on one of my credit cards.  I borrowed 100% of the available credit on that one card.  My overall credit card usage was below 25%.  I had several cards with zero balance.  This one card with 10

 What is Cosigning a Loan? When you cosign a loan for a friend you are telling the lender that if the person on the loan does not make the payments that you will.   If your friend does not have good credit there is probably a reason.  They have missed payments in the past.  They are also likely to miss payments in the future. If they miss a payment on the loan you cosigned it will show up as a missed payment on  your credit report and on their credit report.    You will not be notified that the payment has not been made until it is already late.  Then you will see it on your credit report as a missed payment.  Ouch. Rick W. and his Daughter A friend of mine, Rick, cosigned a car loan for his adult daughter (28 years old) and her husband.  His daughter and her husband both work and make good money but have bad credit.  My friend told them it was important to make the payments on time.   After a while he checked his credit and they had one late payment.  They lived right next door and

Student Loan Debt has been a disaster for many people. High debt load. If you are borrowing $10,000 to $20,000 per year to go to college you will have a large debt if you graduate. Dropping out of College Student Loans Dropping out of College. If you do not finish your degree you will still have to repay all the money you borrowed. The education you received may not increase your potential job earnings. Difficulty finding employment. If you cannot find a high paying job in your field you will still have to repay your loans. Many degrees have a very small market for people in that field. Degrees with No Available Jobs When I was in college a lot of people would major in Forestry. At that time the US Forest Service and BLM were the main employers for people with a Forestry degree. The Forest Service was not hiring full time employees, only summer temporary help. So you could spend four years to get a degree to get a summer job that was available to people with or without a degr

 What is Carrying a Balance on a Credit Card? Any time you do not completely pay off your credit card you will have a Carry over Balance .  We all have the goal of paying off our credit card completely   Sometimes it is not possible and there is a balance left on our card after we have made our monthly payment. Carrying a balance will cause the bank to charge you interest. Usually credit card interest is very high, between 18 and 25 percent interest per year.  You will not get Float or a Grace Period if you purchase an item on your Credit Card with a Carried Balance .   You will be charged interest on your purchase from the day of the charge until you pay your bill.   Put your Regular Charges on a Paid Off Credit Card Then pay off that card every month.  If you charge an item on your Paid Off Credit Card and you will get float until the next statement date and a grace period of up to 21 days.  If you are carrying a balance on one of your cards you can pay less interest by not using tha

 An Over limit fee on your credit card is when you charge more on your credit card than your credit limit on the card. This is a totally bogus fee.  The bank the credit card is from has the choice to accept the charge or not.  If they are certain you will pay them back they will allow your charge that is above your limit to go through.   The Bank will add a nice little Over Limit fee.  This has happened to me several times. How to get out of your Over Limit Fee. I pay my bill in full without paying the fee.  I then call the bank up and tell them they need to delete the Over Limit Fee.  I am very nice, but firm on the phone.  They will try to resist.  I mention that they had the option of refusing the charge and that if I ever go over my limit to refuse the charge.   If they refuse to delete the fee I ask to speak to a supervisor.  As soon as the supervisor comes on I say "I hope you can help me with this."   With the supervisor I mention that I have several other credit card

There are several ways to earn airline miles on your credit card : 1.  Sign up for a co-branded airline miles credit card: Many airlines offer their own branded credit cards that earn miles for every purchase you make. All of the airlines have partnered with a bank to offer an airline miles credit card.  For every dollar spent on the card you will receive between one and two points.  These cards may also offer sign-up bonuses, which can give you a large number of credit card airline miles upfront. 2.  Purchase your normal expenses on your airline miles card.  Usually you will get one point per dollar spent on the card.   3.  Use your credit card to purchase reimbursed business expenses from your employer.  A friend of mine was on the road four days a week for work.  He put all of his expenses on his airline cards and then was reimbursed by his company.  He used his airline miles for his vacations and as gifts for friends and relatives.  He generated a lot of points. 4.  There are a few

Delayed Gratification and Credit go hand in hand.  Delayed Gratification is waiting until you can truly afford something before buying it. Delayed gratification is beneficial when it comes to managing credit. Do not be tempted to use credit to purchase items you cannot afford. Buying things you want with credit but do not need will get you into carrying debt on your credit card.   This can lead to high levels of debt and financial stress. By practicing delayed gratification, you can develop the habit of only using credit for necessary purchases and paying off the balance in full each month. This can help you avoid high interest charges and improve your credit score, which can ultimately lead to better financial opportunities in the future. Additionally, delaying gratification can help you avoid overspending and impulse purchases, which can lead to unnecessary debt and financial difficulties.  Take the time to consider your financial goals and priorities, you will make more better de

Number One in looking for a Bank vs Credit Union would be they must offer a truly free checking account. I hate to pay bank fees.  I have a long term relationship with a bank and I do not have a monthly fee for my checking account.  However if I was looking for a new Bank or Credit Union I would probably go with a large Credit Union in my area.  The line between banks and Credit Unions has blurred in recent years. Originally Credit Unions had very limited memberships, work related usually.  Now most have open memberships.  Credit Unions are owned by the members vs Banks are owned by their shareholders.  Your Bank vs Credit Union Location It is really handy to have your bank or credit union close to either where you live or where you work.  While you may only go there once a month or once a week, if it is way out of your way to get there you will not like it. No Fee Checking Credit Unions usually have no fee checking however many banks are starting to offer no fee checking also.    Cred

  Debit Card Horror Story A friend was at a local pub.  She purchased a drink and the bar kept her debit card “Open” and also kept the card at the bar.  She hung out with a group of us around the pool table.  She had a couple of drinks and about four hours later she went to pay her tab and leave.  They could not find her card.  The bartender  looked all over and it was not where they keep the customer’s cards.    The Bar gave her Debit Card to Someone Else My friend then went into her checking account that the debit card was linked to and found that in the past four hours she had bought burgers at Five Guys, stuff at Target, and drinks at another bar.  All the while she was sitting with us. She called her bank but the bank is not open except business hours and she could not shut off her debit card without talking to a customer service agent.  She did not have the emergency number of the bank because it was on her card. Her bank holds the customer responsible for the first $300 of unau