Q: What’s the “shopping cart trick”?
Q: What’s the difference between a charge, secured, and credit card?
Q: What’s the point of my FICO score?
A: Your FICO score can help you get lower interest rates on personal, home, and auto loans. The higher your score, the less interest you will be subject to paying over the course of your loan, saving you money that could go towards the principal balance.
Q: I don’t want to pay for this account anymore, can I let it go to collections?
A: Allowing an account to go to collections does not resolve the fact that it was initially owned by you and does not help you long term when trying to obtain new credit. This hindrance needs to be handled HEAD ON. Call the creditor and ask for ways to resolve the debt in good faith. AVOID collections if possible.
Q: I have so many accounts, I don’t know where to start to get out of debt?
A: Work on the accounts that have higher interest rates, they are the ones you are paying more on interest than principle when you submit a monthly payment. Then work your way to the lower rates. It’s a great feeling to pay off accounts, that is the feeling of financial freedom!
Q: Where is the best place to put my money?
A: Centralize your savings into high-yield savings accounts so that you can gain interest back at a higher rate. Credit Unions are known for having better rates than commercial banks.
Q: I don’t have any credit, is that bad?
A: It can be good and bad. No credit is better than bad credit. If you have some help to lift you off the ground in the right direction, then it’s great! You’ll see a high score fast (fastest I have seen is a 730 in 2 weeks). However, poor management even for a new account can have a negative impact for you starting out. The good thing is, it can always be repaired.
Q: How high can my FICO score go?
A: It depends on if it’s industry specific or in general. It typically ranges between 300-850. However if it is industry specific, it can be as broad as 250-900. Most importantly, just know that the higher it is, the better.
Q: How can I build credit without piggybacking on someone else’s creditor(s)?
A: There are many ways to build your credit on your own whether you have no credit or you are trying to re-establish credit. One option is taking out cash collateral towards a secured card with a reputable company that will report to the three bureaus. The Con to this is also finding a “lender” that can guarantee your collateral return after 12 months or earlier for maintaining an account with them.
Another option is www.selflender.com (you can visit the site for more info on how the process works). I like the option of Self Lender because there is no credit score required to join and you can unlock the collateral money after a period of time + the interest it accumulated, like a savings account. It also reports to the bureaus showing that you have a trade line!
Finally, if you have the money to try this one, it may be your best option. Websites like BoostMyScore.net offer tradelines that you can buy, being sold by people who have established credit from years to decades. The prices vary, you can find what fits your budget and make it work for you! More specific information is available on the site on how to buy a tradeline or even sell your own established tradeline.
Q: How long until I see results?
A: To see the results that you want, depends on the goals you are trying to reach, what your current situation is, and how much work will have to be done to get you where you need to be. Results can start to show as early as 30 days from the date of receival for disputes to the reporting agencies. Some situations may take longer than others if creditors and debts need to be validated or if settlements need to be created to resolve certain accounts.
Do not wait until you are in need of good credit to start inquiring about how to repair it. Try to start as early as possible because it can be a timely process, depending on the circumstance, to resolve matters on your credit profile.
Q; Should I file for bankruptcy?
A: Bankruptcy is a turning point that people consider when credit card expenses and other lines of credit or collections accounts become too much to handle. Filing for Chapter 13 bankruptcy allows you to keep all of your property, but you would have to pay your unsecured creditors (like credit card companies) an amount equal to the value of your nonexempt assets. This step is typically recommended after all options have been exhausted in repairing your credit profile yourself or through a delegated company or representative. (We offer form preparation assistance if you need help as well.)
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