Your Credit Questions and Answers

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

  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

  A friend of mine used his debit card for everything.  He normally didn’t have any issues.  One day he forgot about a major bill that went through on his Debit Card.  It went through on a Friday and emptied his account.   He made seven or eight little purchases over the weekend.  Each purchase went through however the bank nailed him for $20 on each of the purchases.  The bank would not delete all of their charges.  He ended up with $100 in extra bank fees.   If the bank had just refused payment he would have checked and discovered his account was empty. Fees like this waste a lot of money.  If he used a credit card and paid it off every month he would not have had the overdraft debit card fees. Debit Card Fees I stop by a local pub regularly.  Several people the first thing they do after they walk in the door is go over to the ATM and get cash.  The ATM charges $4 for cash.  Many people will get $20 or $40 from the ATM.  A four dollar charge on a $20 withdrawal is huge.  The pub is f

  In the United States, there are three major credit reporting agencies (CRAs) - Equifax, Experian, and TransUnion - that collect and maintain information on your credit history. Each CRA uses a slightly different method to calculate your credit score, but they all consider similar factors, including: Payment history: This accounts for a large portion of your credit score and reflects whether you have made your payments on time. Late or missed payments can have a negative impact on your credit score. Credit utilization: This refers to the amount of credit you are using compared to the amount of credit available to you. Using a high percentage of your available credit can be a sign of financial strain and may hurt your credit score. Credit history length: A longer credit history can be a positive factor in your credit score, as it shows that you have a track record of managing credit responsibly. Credit mix: Having a diverse mix of credit accounts, such as a mortgage, a car loan, and a

This page links to all of the Articles in the Blog. Credit Basics What is Credit?   What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Why is your Credit Score Important? How are Credit Scores Calculated? Where to get your Credit Report/Score for Free Why are Credit Cards Important? Debit Card Advantages and Disadvantages Debit Card Debacle Debit Card Fees The Credit Card Minimum Payment Trap Student Loans and Debt Building Credit Building Credit with No Credit History What is a Secured Credit Card? Secure Credit card Special Note What is a Credit Builder Loan? What is an Authorized User? How do Airline Miles work?    How to choose a Bank or Credit Union Managing your Credit No Grace Period or Float for You Managing your Credit Cards with Auto pay Credit Card Cash Advances Zero Percent Credit Card Offers The Tenth/Twenty-fifth Credit Card Game OOPS I missed a Payment How the Minimum Credit Card Payment will Break You Credit Card Statement Dates Neve

For most people a Credit Card is their first experience with credit.  To develop a good credit history and a good credit score this is usually the first step.   Credit Cards also offer a convenient way to make purchases online or over the phone.  They can provide protection against fraudulent charges too.   Credit Cards can also offer purchase warranties, cash back, or points on certain purchases.  As the first step in building your credit score it is very important to always make the payment on time. You cannot rent a car if you do not have a credit card.   Credit cards are great for paying for unusual large expenses that may come up that you have not planned for.  However it is really expensive to allow your balance to grow and not be paid off monthly.

The Credit Card Minimum Payment Trap will often lock you into debt forever . The minimum payment is usually 1%, 2% or 3% of your balance plus interest and any outstanding fees.  The Credit Card will also have a minimum payment such as $45 or $35 when your balance gets that low. Do not get into this trap as over the long term it will cost you a lot of money.  Solving the Trap is easy. Pay off your credit card every month .   Credit Card Minimum Payment Trap Loan Examples Here are some excellent examples I have created using the Bankrate.com Credit Card Calculator. $6,000  Credit Card Loan Minimum Payment Trap Terms for this example: 18% interest  1% Minimum payment, $30 minimum payment. Your initial minimum payment $150, this will drop as you pay down the balance.  The first month you will pay $60 in principle and $90 in interest.  The second month $59.40 principle and $89.10 in interest. It will take 291 months (over 24 years) and you will pay $8,423 in interest  plus the $6000.  If

I use Credit Karma to get my Free Credit Report.  It is really easy to sign up.  They present the sections of my credit score clearly.  They have a few articles that give suggestions on building credit.  I get into my Credit Karma account about once a week.  It is easy quick and it will tell me if anything has changed.  I take a quick look at all of my account balances and check if any new accounts were opened---that would mean someone has hacked my identity.   My Changing Credit Score I have watched my score change with changes in my situation and credit card balances.  I have said this elsewhere, I have spent a lot of money on my cards for business.  The changes in balances on cards can make a significant change in my score.  Even with my overall credit card usage under 15% if one of my cards is at 70% it will bring down my score by 30-40 points.   Update My Credit Report March 2023. I recently spent $8,500 on one of my credit cards. I will pay it off when the payment is due. Howe

Why is your Credit Score Important? Your credit score is a measure of your creditworthiness and financial stability, based on the information contained in your credit report. It is used by lenders, landlords, and other organizations to assess your risk as a borrower or tenant.  A higher credit score can make it easier to qualify for loans, credit cards, and other financial products, and may also result in lower interest rates and fees. Your credit score is important because it can affect your ability to borrow money, rent an apartment, or even get a job. Your Credit Score is also used by insurance companies to determine your premiums and by utility companies to determine your deposit requirements. In short, your credit score can have a significant impact on your financial opportunities and well-being. It is important to build and maintain a good credit score by paying your bills on time, keeping your debt low, and protecting your personal information from identity theft. Who Can Access

  What is difference between your Credit Report, Fico Score, and your Credit Karma Score? Your Credit report is your history of borrowing that has been submitted to at least one of the three credit reporting agencies (Equifax, Experian, and Transunion).   I always just check my Credit report by using Credit Karma. You can do it every day if you want and it will not affect your score. Your FICO score is a number between 400 and 850 that is calculated using your reported history.  FICO stands for the Fair Issac Company that first came out with a numbering system to rate your credit worthiness.  There are lot of different credit rating systems that banks use to evaluate your credit.  The Vantage 3.0 scoring model is used by Credit Karma and many other services and will be close to your FICO score.   

What is Credit? Credit is your proven ability or inability to make payments over time and make your payments on time. What is your Credit Score? Your credit score is a number that comes from a formula applied to your credit history. This formula is used to estimate the likelyhood of you missing a payment in the next year. How Credit Scores are Calculated In the United States, there are three major credit reporting agencies (CRAs) - Equifax, Experian, and TransUnion - that collect and maintain information on your credit history.  There are a few different methods use to calculate your credit score, but they all consider similar factors, including: Payment history : This accounts for a large portion of your credit score and reflects whether you have made your payments on time. Late or missed payments can have a negative impact on your credit score. Credit utilization: This refers to the amount of credit you are using compared to the amount of credit available to you. Using a high percen