Monday, June 29, 2015

How To Build Your Credit With A Low Income

I know you face may look like Shaq when I tell you the answer to this question. The question being "Is it possible to build your credit score with a low income?" The answer is..... ABSOLUTELY!!! With credit scores and reports, one factor that has no affect on it is your personal income. That's right! Regardless of income, you can have a high or low credit score. Of course, it would seem easier to build credit with a higher income as you can afford the payments and such, but you can also build it with a lower income. Let me explain how.

1. Getting A Credit Card

Getting a Credit Card is the easiest way to build your credit score. Why? It's really quite simple. With a credit card, you can swipe the card for everyday purchases like gas, groceries, and lunch. I say everyday purchases because these are items that with or without a credit card, you would pay for anyway. With swiping the credit card for those items instead of cash, keeping a low balance, and making the payments every month in full, it's only a matter of time before your credit score rises! There are plenty of credit cards that are specifically for people who may not have the best credit due to a low income and a few late payments. To see which one is best for you, compare them here.

2. Becoming An Authorized User On Someone Elses Great Credit

Everyone knows that person in the family who has the great credit score. They didn't just wake up with great credit. They created healthy credit building habits such as: Paying bills on time, keeping low credit card balances, keeping accounts open, and maintaining multiple accounts with high limits. These types of people are going to keep doing what they have been doing as they know it helps keep their credit score high. If you know someone like this, call them ASAP and see if they are willing to add you to one of their credit cards as an Authorized User. This means that you will receive future payment history and all account changes on your credit report every month that the primary account holder does every month. Having a card of your own that is attached to this account is optional, but the key is not to focus on having a card attached. The key is make sure that they are practicing those good habits while you are on the account. This is increase your credit score like crazy and the best part is you never have to worry about paying the bill or anything. Be sure to choose the right family member or friend as their negative activity will show on your report as well. If they are late on a payment, go over their limit, or keep a high balance, your score will be affected negatively as well. Proceed with caution.

3. Getting A Retail Credit Card

Retail Credit Cards are really easy and simple to get approved for as well. The cashier will be sure to ask you at your local Target, Wal-Mart, JCP, Kohls, Best Buy, and every other business in your neighborhood. These credit cards are easy to get because they usually give you a discount on items you would normally purchase with our without a credit card. On top of that, these credit cards really don't require a lengthy credit history or high credit score. Be sure to keep the balance low and never go over the limit.

4. Get An Auto Loan or Personal Loan

This is an option to go but keep in mind, with a low income, your interest rate on these types of loans will be high. This means you will have high payments and more than likely pay double the amount of the loan over time. Why is this an option? Well, depending on your credit situation and whether you are in the market for an auto loan or personal loan, you will be able to quickly increase your credit score. I recommend refinancing as soon as you can once your score has increased to lower your interest rate and payment.

The Bottom Line

As you can see, there are a few ways to build a credit score with a low income. These steps are fairly easy to accomplish and will require some discipline once the account has been opened. Be sure to consult with a Certified FICO Professional if you have any questions. For more topics like this one, be sure to join our mailing list.

Calvin Russell Jr is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans. Contact us today to learn more or email us at info@gosimplypro.com.

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Friday, June 26, 2015

The Fastest Way To Increase A Super Low Credit Score: A Secured Credit Card

Many consumers are looking for the best and fastest way to increase their credit score. Some people think a small personal loan or auto loan would do the trick. That would work......only if the score was high enough to achieve that along with high monthly payments. The best and fastest way to increase a low credit score has always been a Secured Credit Card. Let me show you how.

What Exactly Is A Secured Credit Card?

Secured credit cards are cards that help you establish or rebuild your credit history. Unlike prepaid cards, secured credit cards give you a credit line, and your payment activity will be reported to the major credit bureaus. Please note: before any secured card can be activated, it MUST be funded with a security deposit equal to the credit line.

Why Do I Need To Give Security Deposit?

Secured Credit Cards require a refundable security deposit because it is held as collateral for the account. Unsecured Credit Cards do not require one simply because the applicant applying for one has a higher credit score and history of paying lenders on time. The great news is that no interest is applied to the security deposit.

How Much Of A Security Deposit Will I Need?

It really depends on the card issuer and your credit worthiness. Most lenders have a ranking system that allows some consumers to pay 25% or 50% of the security deposit. Some lenders only allow 100% of limit to be fully applied from the security deposit. Average amount that is needed can be between $50-600 minimum.

How Fast Will This Increase My Score?

After receiving the card, swiping for small purchases, paying the balance in full or keeping the balance under 10% of the limit, and never being late on any monthly payments, your score will increase in less than 2-3 months. The longer you keep these good habits up, the more your score will increase over time.

Can I Still Be Declined For A Secured Credit Card?

Absolutely. As with any credit card, there are certain conditions that could cause your application for this credit card to be declined. For example—because a bank account is needed in order to fund your card, you will be declined if you don't have one.

How Can I Increase My Credit Line?

To increase your initial credit line, simply deposit more than your minimum required security deposit before your account is opened. You can raise your initial credit line by the amount of your additional deposit. You may also earn a credit line increase later based on your payment history and creditworthiness.

How Can I Find The Right Secured Credit Card For Me?

There are many Secured Credit Cards to choose from. I recommend seeing a list of them all at once and you can do that by clicking here.

The Bottom Line

As you can see, a Secured Credit Card is the fastest way to increase a super low credit score. This card is easy to get approved for and will give you an opportunity when other credit card companies won't because they don't offer this type of card. For more topics similar to this one, please join our mailing list.

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Wednesday, June 24, 2015

4 Reasons Why Your Credit Score Is Still In The 400-500 Range

Alright. Its time to stop sugar coating your credit score. For months you have been trying to figure out why your score is in the 400-500 range. You ask yourself "Is There Hope?" or "Can I at least get my score to 590 or 600. I am here to tell you YES! The only way to find the solution to a problem, is to first admit that you have a problem and to point out what the problem is. Here are the 4 reasons why your credit score is still in the 400-500 range.

1. Too Many Collections On Your Report

One of the biggest mistakes you make is simply letting an account go into "Collection" status. This is when you originally owe a company money for something, they try to get a hold of you by calling and such, but they are unsuccessful at doing so. At that point, they send your account and the balance due to a Collection Agency. This can decrease your score 15-45 points and sometimes more. This is the main reason you have a 400-500 credit score.

2. Too Many Late Payments

Payment History is the most important scoring factor in the algorithm for credit scoring. 35% of what makes your credit score comes from this alone! Because of this, credit reports show the last 48 payments to lenders to show whether you pay on-time, sometimes late, or always late. Most credit reports with multiple late payments are almost guaranteed to have a score in the low 500's to mid 400's. The only way to combat this is to make more on time payments.

3. 80%-90% Of The Accounts On Your Credit Report Are Closed With Open Balances

This normally happens right before the account goes into collections. Whether you closed the account or not, most financial institutions will close the account for you due to non-payment with an open balance due. This also creates another problem.......Shorter Credit Length History. This means that all of the positive and negative activity on this account will become an non factor in 7 years from the last activity date. A short credit history is not a good sign for lenders as it doesn't show that you can manage your credit over time.

4. Public Records

Public Records are the most devastating factors on a credit report. They can affect a credit score and report so much so that this information is open to the public for free......hence the name PUBLIC RECORD! These records consists of Civil Judgments, Child Support, Bankruptcy, & Tax Liens. This information is open to the public simply because most of the require a legal or government response to complete. These can hurt your score and report for years and as much as 80-100 point decrease. The only way to combat this is to pay the amount due and see if they are willing to remove them from your credit report.

The Bottom Line

You should now be able to put together a plan to increase your score and get out of the 400-500 score bracket. Of course, some credit reports are different than others but what remains a fact is that these four factors will decrease your score dramatically and more than likely give you a low credit score. For more topics like this or to learn how you can personally increase your credit score with a personalized Success Plan, please read below.

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Thursday, June 18, 2015

How Do Credit Cards Work?

During my Credit Consultations with my clients, I always explain how credit cards work. For the most part, many of them have a general idea of they work or the basics. There is more to credit cards than people know and think. I know that there consumers out there that may not know exactly how credit cards work and I hope this will give more insight.

What Is A Credit Card?

A Credit Card is a card issued by a financial institution that allows you to make purchases and pay for them later by using a line of credit. Interest is charged based on the terms of your Card Agreement and only if you carry a balance beyond the due date of the billing cycle. Also, having a credit card in your own name is an important first step in building a good credit history, an asset for life.

How To Pay The Bill Each Month

Credit cards don't give you more money-even though you might feel like they do. What they do change is the way you pay for items you would normally buy anyway.

-Paying in full-

Lets you avoid interest charges on purchases by not carrying a balance forward to the next month. This will help save you money in the long run.

-Paying over time-

Lets you carry a balance from month to month. This is one of the main reasons people get a credit card. Sometimes you want or need to make a big purchase that you can’t pay off all at once.Keep in mind, going this route will most likely accrue interest charges on the amount that you carry over to the next month.

-Making The Minimum Payment Due Is Not A Suggestion-

Your monthly statement displays an amount labeled minimum payment due. This is not a recommended payment amount, but rather the absolute minimum you must pay and the date by which you must pay to keep your account current. If you do opt to carry a balance, it’s a good idea to minimize interest charges by paying off your balance as soon as possible. Consider doubling or tripling the minimum payment due, if you can, to pay off your balance faster. Paying more than the minimum payment due can save you a lot in interest charges.

Interest Charges and Fees

-Get to know your Annual Percentage Rate (APR)-
Credit companies charge a fee in exchange for letting you carry balances. These are called Interest Charges. You can avoid an Interest Charge on purchases if you pay your balance in full each month. However, if you pay less than the full balance, an Interest Charge will be added to your account. If you carry a balance from month to month, Interest Charges will add up. APR is the interest rate, calculated on a yearly basis, which you pay on balances. If you carry a balance, the APR is the best indicator of what credit costs. The higher the APR, the more you will pay. Some credit card companies offer lower introductory rates for a limited period of time. Afterwards, these rates usually go up. To calculate the rate each month, divide the APR by 12. For example, if the APR is 18%, the monthly interest rate on carrying a balance is 1.5%. Your APR may be tied to a specific rate of interest, such as the Prime Rate. This means your interest rate is "variable"—it could go up or down over time. A non-variable APR doesn't change the way a variable does. However, with advance notice from the card company or if you default on your payments, non-variable rates may still change at some point as permitted by law. Your rate may also change as described in your Card Agreement or upon written notice from the company.

Finding The Right Card For You

Choosing the best card for you depends on how you plan on using it and which benefits are the most important for you.Credit cards come with a wide array of rates, benefits and features. When shopping for a credit card, here are some things to consider:

Does it offer the best rate? Is there an annual fee?
Does it meet my spending needs?
Is it the right type of card for me?
Am I getting something back for spending on the card, such as cash-back or rewards?
Is the card widely accepted?
What features, services and security options are available?

Any good credit card should come with tools to help you manage your spending. E-mail/text message alerts, automatic bill payment and due date options are just some of the features available.

Read the fine print

Once you’ve selected a credit card, it’s important to read your Card Agreement carefully. It gives you key information about your account: the Annual Percentage Rate (APR), the monthly minimum payment formula, annual fee, if applicable, and your rights in billing disputes.If you don’t meet the terms of your Card Agreement, such as making a late payment or one that is not honored, all your APR's may automatically increase.

The Bottom Line
After reading this, it should be easier to understand how credit cards work. Hopefully this article provided more insight and confidence about credit cards as well. For more articles similar to this one, be sure to stay in the loop.

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Sunday, June 14, 2015

How To Achieve A 700 Credit Score

Everyone always wants to know how to achieve the prestigious 850 and 800 scores, but we forget that in order to get to that score bracket, you must first achieve the 700 bracket. Both brackets are very similar, but I will show from experience what most 700 score holders have on their credit reports.

1. They Always Check Their Credit Scores & Reports

Most 700 score holders know what their credit score is and they check it often. Whether they check it through Myfico or Credit Karma, they have an estimate of where their score is. This is very important as they know that to maintain a 700 score, you must make 98% of your payments on time with all of your accounts on your credit report.

2. They Do Not Have Collections On Their Credit Reports

Virtually all 700 score credit reports do not have collections on them. Collections can decrease a credit score as much as 40-50 points and the higher 700 score you are, it can possibly decrease more. Since all of the accounts are paid on time every month, there is never a reason for a collection to pop up.

3. They Average 30% Or Lower Utilization On Their Credit Cards

Utilization is calculated by taking the Balance and dividing it by the limit. For example: Lets say you have a credit card limit of $900 and your balance on that card is $500. Your utilization would be 56%. This utilization is mostly in the range of 30% or less for most 700 score holders.

4. They Average A Credit Length History Of 3-7 Years

There are many ways to achieve a 700 score bracket but an average 700 score holder has had their accounts opened for an average of 3-7 years. Keep in mind, these accounts are always paid on time as well. This is a major factor as over time, most consumers close accounts because of non-usage or late payments. 700 Score Holders know that in order to stay in that bracket and above, you must not close accounts as this resets your credit length history.

5. They Average 3-5 Open Accounts With A Good Mix
Most 700 credit score holders average 3-5 open accounts of different types. This means a mix of Credit Cards, Auto Loans, Personal Loans, & Department Store Credit Cards. Keep in mind, this is only an average and there are gray areas as the FICO algorithm doesn't look for everything to be a certain way, just close enough as every report is slightly different.

The Bottom Line
Now you know the recipe for success in achieving the 700 score bracket. Of course, these are averages of most 700 score holders. With so many factors that can affect and increase a score, there is no set way. But, following these habits and steps will put you on the path for success towards achieving the 700 score bracket. For more information or to read more topics similar to this one, please read below.

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Friday, June 12, 2015

Does Being Married Affect Your Credit Score?

Many married couples think that certain activities affect their credit score. I have seen this time and time again in which married couples are afraid to make certain financial moves because of a few misconceptions. Let's go over a few of them.

1. Do Accounts Merge Together When You Get Married?

Not at all. Account holders are separate and remain separate when marriage takes place. This is a common misconception because usually one of spouses make a last name change to the same as the other spouse. Both spouses are only together on accounts when they sign as joint account holders.

2. Do Student Loans Combine After Marriage?

Not at all. These are separate accounts as well.

3. Is It Best To Become Authorized Users On All Accounts?

Absolutely. Becoming authorized users on the spouses accounts will help increase credit scores on both reports. That is of course if the payments are made on time the utilization is at 30% or lower. This also to ensure that both partners have established credit histories and both are eligible to have accounts their name. Most credit card companies don't charge to add authorized users. Be sure to check your credit card agreement before adding your spouse otherwise you may accrue an additional fee.

4. How Does Co-Signing Affect Married Couples?

The same as a non-married couple or any joint applicant. Once both parties are on a loan agreement, they both will receive a positive or negative impact on their scores depending on how timely the payments are made.

5. What If There Are Joint Accounts & We Separate Or Divorce?

If this unfortunate event takes place, be sure to discuss payment plans and options as the loan payments will impact the credit score on both reports. In rare cases can the courts separate the loans. Keep in mind, refinances can always take place or if there is an auto or home loan, they can always be sold for a lost, gain, or $0 balance.

6. Does Co-Signing For An Auto Loan Keep The Other Spouse From Getting Approved For Another Auto Loan?

This is very common question and the answer is.....Not at all! Since there are two applicants on one loan, the other applicant can apply to have another auto loan separately. The only problem that may present itself is the debt to income level. This means that the applicant must be able to afford both payments as that is how the bank determines the approval. In most cases, spouses usually co-sign for each other even if it is not needed.

The Bottom Line

As you can see, there are a few ways marriage can affect your credit score and report. Be sure to talk about which route you and your spouse would like to go before making a financial decision. The first step is to make sure you know where you and your spouse stand with your credit score and report. There are many resources like MyFico and Credit Karma that can help with this. For more topics similar to this one, be sure to follow us via social media.

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Wednesday, June 10, 2015

3 Tips To Getting An Apartment With A Low Credit Score

Trying to get an apartment with a low credit score can be a tough task to complete. First, you have to find a landlord willing to accept a low credit score. Then second, you would hope that the neighborhood is worth your while and with affordable rent. Either way, you must yourself in the landlord's shoes and ask yourself, "Would you rent to yourself?" At the end of the day, or month for that matter, the only thing of importance is paying the rent on time. How can you show the landlord this before getting approved? Let me show you.

Tip #1: Get Your Credit Score

I know, I know. Why would you get your credit score when you already know how bad it is! That's the point. You see, what may be bad to you could be exactly what a landlord will accept. You can get your score for free through Credit Karma or pay for the exact score the landlord will see through MyFico. Either way, you will know where you stand and doing this will help you sort out apartments that your score may be too far out of reach for.

Tip #2: Show Me.....I Mean, The Landlord The Money

Landlords are very flexible. They understand that a great tenant will soon move away or buy a home some day. They also understand that bad tenants, good credit or not, can be a difficult task to deal with. That is where you come in. During the interview process, whether over the phone or in person, spend a lot of time talking about how much money you make, how you budget your money, and the most important part, show the landlord that you are willing to put a bigger security deposit down. When prospective tenants put up more cash for the security deposit than originally asked for, the put themselves in a better position in obtaining the apartment. I have seen some tenants tell the landlord that if they are ever late, that will sign a document that would automatically fork over the entire security deposit. That may not be best for you, but if your score is low enough and you like the apartment enough, you will do just about anything to get it. Keep in mind, the point of doing this is get the apartment and pay the rent on time.

Another way of doing this is showing the landlord your check stubs, W2, Tax Forms, Savings Accounts, or Bank Statements. Doing this will show that you are not your credit score and that things happen. Keep in mind that the largest monthly expense most people pay for is their living expense. With that being said, you must show that you can afford it on a monthly basis. You can also offer to pay a few months upfront if you can afford to it. You must be creative. Landlords love upfront money!

Learn How To Increase Your Credit Score By Paying Your Rent Each Month!

Tip #3: Have Your Previous Landlord Help You

Good landlords understand that people must move on in life. Of course, they would like to inform future landlords about bad tenants. But what most people are not aware of is that they are also willing to show other landlords how great a tenant can be. You can ask your landlord to write a letter of recommendation on your behalf, they can create a tally of all of your on-time rent payments, you can also ask them if they know of any other landlords with more upscale apartments or apartments in a different area.

The Bottom Line

Hopefully you can breathe a little easier now that you know the tips. I have seen these tactics work time and time again as landlords are people to and they do understand that people make mistakes. They just want to make sure that they are choosing the right person to pay them on time and keep from causing a ruckus. For more information on topics such as this one, be sure to keep up with my latest post and free tips.

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Saturday, June 6, 2015

Did You Know That You Don't Have To Carry A Credit Card Balance To Build Or Increase Your Credit Score?

That's right! All you have to do is pay off your balance in full when the bill is due. You also can avoid interest on this as well as there is a 0 balance. If you do decide to carry a balance, be sure to keep the balance under 30% utilization (balance/limit). 780+ FICO Score Holders average 0%-7% utilization. To find the right card for you, click here or the banner below.

Friday, June 5, 2015

How To Finance A Car With A 600 Credit Score Or Lower

Financing a car can be time consuming. First, you must find a car you like, look for a reasonable price to pay, and decide where you will do business. But the longest part of the process is being at the dealership. Whether you are doing back and forth on a price, going through their selection of cars, or the dreadful finance office. For some consumers, financing a vehicle is not a problem. They know they will get the lowest interest rate possible. While other consumers, play the waiting, hoping, and wishing game for a bank to finance them. Since over 94% of consumers finance their vehicles, this is a major piece to the puzzle. Waiting on the bank to finance a person with a credit score of 600 or lower can take hours and sometimes overnight! Don't worry though as I will show you how to finance a car with a 600 credit score or lower.

First: Get Your Credit Reports
The biggest mistake I have seen in 4 years in the automotive business is consumers not knowing their credit score. Or worse, they have an idea they that they may have a low score but set unrealistic car goals to achieve. 90% of top lenders use FICO® Scores With that said, consumers should know where they stand before they step foot in dealership. If you want to see what score the dealership will see and send to the banks, I recommend you get your personal FICO score and reports as soon as possible. Click the banner below to obtain yours.

Second: Understand You Will Pay A Double Digit Interest

With a 600 credit score or lower, you must be prepared to pay a double digit interest. Consumers always seemed to be shocked when they see that the interest rate is 12-24% when they have late payments, collections, civil judgments, child support, missed payments, and etc on their credit report. I always say an interest rate with an approval is better than not being approved. Consumers must also understand that lower interest rates are earned through on time payments.

Third: Keep The Vehicle For Less Than 36 Months (3 Years)

With a high interest auto loan, consumers should try to get a lower interest rate by doing one of a few things.

1. Refinance The Car For A Lower Rate With Remainder Of Term

2. Refinance The Car For A Lower Rate With Extended Term

3. Trade The Car In

Assuming the consumer has made their payments on time for some time, the credit score should be higher which will get the increase the chances of the consumer to lower rate depending on where their new credit score is.

Fourth: Bring Proof & Documentation

Before going to the dealership, be sure to grab proof and documentation as the bank will need it. You should bring: Proof of Income by 2 check stubs within 30-45 days, Self-Employed should bring 3 previous months bank statements along with the previous years 1099, Proof of address by utility bill or phone bill, 3-6 references, & proof of full coverage insurance. You will need all of these documents as the banks will want to know who you are and where their car will be at all times.

Fifth: Be Prepared To Put A Down Payment On The Car

Notice I said, "prepared to put a down payment" as a down payment may not be needed. Here is a fact for you to consider. Over 80% of consumers with 720 or higher credit scores put a down payment on the vehicle financed. Why is that? So the they can finance less and have a lower payment. This is perfect for someone with a 600 score or lower as this shows the bank more of a commitment from the buyer and puts the bank in a better equity position if the consumer defaults on the auto loan. A good down payment would $500-$1000 as this amount is very common.

Sixth: Understand The Choice Of Vehicles

Consumers with a 600 score or lower should only look at vehicles under $18,000 or lower as the payments with double digit interest rates can around $430 or higher. Most lenders won't feel comfortable financing more than 18k-20k for a car. Anything more and the lenders will decline the application or expect a higher down payment.

Seventh: Wait 6-12 Months & Consult With A Certified Credit Consultant

Getting a car with double digit interest rate may not be the route you want to go at the moment and that's alright. While you wait, its important to take this time and learn how to improve your credit score and report. One of the easiest way is to open a new credit card account, keep a low balance or no balance at all, & make your payments on time each and every month. You can find the right credit card for your credit score by clicking the banner below. You can also schedule an appointment to talk with a Certified FICO Professional like myself and learn exactly what you need to do and see results in less than 3 months. For more information, visit my website.

The Bottom Line

As you can see, financing a car with a 600 credit score or lower isn't that difficult as long as you are prepared for whats ahead and know what to expect. Of course, these steps wont guarantee a bank approval as everyone has a different credit situation and debt balances but, this will most definitely increase your chances in getting approved for a car loan. For more information on this topic or to schedule a consultation about how you can improve your credit score and reports, please visit my website or other outlets such as:

To learn more about how Calvin can help you raise your credit score quickly contact info@gosimplypro.com.

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