Tag Archives: Credit Score

girl with credit card

Three Credit Cards: A Must For Every Person

There are many people that say don’t have credit cards, credit cards are bad, and similar statements that bear no wait. These people are either not in control of their spending, or do not know the value and need of having credit cards. ‎It is essential for everyone to have a few lines of credit under their name .

Having credit cards build your credit history. The longer you have a credit card, the longer history there will be on your credit report. A longer credit history will have a direct impact on your credit score. When applying for your first credit card make sure it’s a “no annual fee credit card”, this will ensure you can build credit history for years to come without paying any fees.

Car loans, leases, mortgages are also ways to build your credit history. However, the easiest way to build your credit history is with credit cards. Most people are able to get a credit card with little to no credit. ‎Month by month they build their credit history which will raise their credit score.

Credit cards are the easiest way to build a credit history. Credit cards are the easiest line of credit you can open. Having three credit cards is required to apply for a mortgage with many .

Your credit history and your credit score ‎are very important. In order to get your next credit card, car loan, lease or mortgage, you will need to have a good credit history. They work hand-in-hand.  In order to get a loan you need credit history, and once you have your loan it will build your credit history.

Mortgage companies require you to have three lines of credit under your social security number. Being an authorized user or a joint card holder on another person’s card will not be counted as a line of credit under your name. It is integral for everyone to open up a credit cards under their name as soon as they can, to begin building their credit history. The earlier the better.

Don’t listen to the foolish people that say having a credit card you will not to be in control of your finances. Most credit cards have programs that track your spending showing you where you spend your money, and how much money was spent in each category. ‎This is an amazing tool while budgeting to know what purchases need to be cut out.

Are scared that by having a credit card you will just swipe away and not keep track of your purchases? Get a credit card and don’t use it. This will enable you to have that open line of credit and build your credit history without putting you into hock.

Read these other hot topics!

Late Payment Removed From Your Credit Report (4 Ways)

Chip and PIN cards – Credit Cards Move To The Next Stage Fighting Fraud

Credit Inquiry: Hard Pull Vs Soft Pull

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

It is integral to have a few credit cards open to begin your credit history.

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dream house design, dream house

Breakdown Of Your Monthly Mortgage Payments

We discussed PITI Payments are. In short it is the total payments due on your mortgage.  To recap:

PITI Payments is the components of a mortgage payment.

PPrincipal is the money used to pay down the balance of the loan

IInterest is the charge you pay to the lender for the privilege of borrowing the money

TTaxes refer to the property taxes you pay as a homeowner

I – Insurance refers to both your property insurance and your private mortgage insurance  and homeowners association fees if applicable.

Just bought your house?

What does my mortgage bill look like?

Your mortgage bill will include all of these numbers. You will be making one payment to your bank and they will make the Taxes and Insurance payments for you.

How does that work?

What happens is your bank opens an escrow account for you. Every time that you make your monthly payments, it goes into escrow. Lets make up some numbers.

Mortgage $400,000 @ 4% will equal monthly to ~ $1,900 ($1,909.66, based off of $576.33 in principle and $1,333.33 in interest)

Taxes $12,000 will equal monthly to $1,000

Insurance $1,200 will equal monthly to $100

When your bill arrives all of these charges will be consolidated into one charge of $3,000. When you pay the bill the bank will keep $1,900 of the money and put the other $1,100 into your escrow account. Then would then pay the property taxes quarterly. so after 3 months of collecting your $1,000 taxes they would then ship off $3,000 to your county to cover the property taxes on your home.

The same is true with the insurance on the house. The bank collects the insurance payments from you, and then pays the insurance company the monthly premiums. This setup is great in my opinion. instead of needing to worry about every payment on the house, the bank takes care of it for you.

So, when you hear your friend saying he has a $3,000 mortgage you know that only $575 is actually going to pay off his house and building equity. Pretty depressing if you think about it!

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

PITI Payments is all the payments lumped together into one monthly obligation.

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Mortgages, Home Loans, Refinance, and Interest

We will begin a new series today on Home loans. We will cover many topics from what to look for in buying a house through the home buying experience all the way to refinancing years later.

Here are some of the topics we will discuss. Bookmark this page as we will link back to all these topics once they are written.

And many more topics. Stay tuned!

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

Stay tuned to learn more about buying a home.


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Why You Should Have More Then One Credit Card

Having credit cards is very important. I hate when people tell me they don’t have credit cards because all it does is make them debt. There is an easy solution, apply for the card and cut it up. Having a credit card is important even if you don’t use it. As a matter of fact your credit score likes when you have a low credit utilization. Get those credit cards!

Why is having credit cards so important?

Credit cards build a health relationship with your bank. Did you ever call a bank? They always say thank you for being with us. True, that is what their customer service department told them to say, but the bank knows you as a customer if you were to need their services at a later date.

Why should I get more then one?

I have 1 credit card, do I need more? The answer is yes. I was looking into mortgage options the other day, seeing the rates, costs and other factors that may affect home buying. One of the loan officers asked me if I have 3 lines of credit. He wanted to make sure that I had more then one credit card under my name. This is very important for getting a mortgage. You will need more then one credit card. (Too much utilization is no good, but credit is good). Besides, credit cards without annual fees are free. Why wouldn’t you get more then one?

Meeting with a Loan Officer

Image HT: The Nest

Read these other great topics!

Business Card Benefits: How A Business Card Impacts Your Credit Score

Credit Score: How To Fix A Poor Credit Score

FACO Credit Score FICO Score: What’s The Difference?

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary:

Have more then one credit card in you pocket, it will help you get a mortgage.


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Free Credit Monitoring From AllClear PRO service Via Home Depot and UPS!

Home depot, Target and UPS have all been “targets” (no pun intended) for identity theft. Crooks and cyber thief’s have hacked the system and stole thousands of credit card numbers. Identity theft is growing rampantly, and there is no better way to watch it then by using an identity theft service. Home Depot is offering a free service from AllClear PRO service to monitor your credit for a year.

Home Depot Link

UPS Link

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There is a 3 boxes to mark off

  • I believe I may have used a payment card at a Home Depot store after April, 1 2014
  • Full Name
  • Email Address

Once you get the email chances are there will be a link and a code to complete your subscription.

UPS has issued a press release as well offering the same service. Target has done the same thing back when they had their breach. Personally I did not benefit from the service. However, if it is free then take it. The form for UPS is the same as Home Depot.

Home Depot issued a press release here.

The Home Depot Provides Update on Breach Investigation
  • Breach confirmed
  • Investigation focused on April forward
  • No evidence of debit PIN numbers compromised
  • No customers liable for fraudulent charges
  • Customers offered free ID protection, including credit monitoring services


ATLANTASeptember 8, 2014 – The Home Depot®, the world’s largest home improvement retailer, today confirmed that its payment data systems have been breached, which could potentially impact customers using payment cards at its U.S. and Canadian stores. There is no evidence that the breach has impacted stores in Mexico or customers who shopped online at HomeDepot.com.

While the company continues to determine the full scope, scale and impact of the breach, there is no evidence that debit PIN numbers were compromised.

Home Depot’s investigation is focused on April forward, and the company has taken aggressive steps to address the malware and protect customer data. The Home Depot is offering free identity protection services, including credit monitoring, to any customer who used a payment card at a Home Depot store in 2014, from April on. Customers who wish to take advantage of these services can learn more at http://www.homedepot.comor by calling 1-800-HOMEDEPOT (800-466-3337).

“We apologize for the frustration and anxiety this causes our customers, and I want to thank them for their patience and support as we work through this issue,” said Frank Blake, chairman and CEO. “We owe it to our customers to alert them that we now have enough evidence to confirm that a breach has indeed occurred. It’s important to emphasize that no customers will be responsible for fraudulent charges to their accounts.”

The investigation began on Tuesday morning, September 2, immediately after the company received reports from its banking partners and law enforcement that criminals may have hacked its payment data systems.

Since then, the company’s internal IT security team has been working around the clock with leading IT security firms, its banking partners and the Secret Service to rapidly gather facts and provide information to customers.

Responding to the increasing threat of cyber-attacks on the retail industry, The Home Depot previously confirmed it will roll out EMV “Chip and PIN” to all U.S. stores by the end of this year, well in advance of the October 2015 deadline established by the payments industry.

The Home Depot is the world’s largest home improvement specialty retailer, with 2,266 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2013, The Home Depot had sales of $78.8 billion and earnings of $5.4 billion. The Company employs more than 300,000 associates. The Home Depot’s stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor’s 500 index.


For more information, contact:

Financial Community
Diane Dayhoff
Vice President of Investor Relations

News Media
Stephen Holmes
Director of Corporate Communications

Important Reminders:

  • Your identity protection is completely free. You will never be charged.
  • Review your credit card statements carefully and call your bank if you see any suspicious transactions.
  • Be aware of phone calls or emails that appear to offer you identity theft protection but are truly phishing schemes designed to steal your information. Always go directly to The Home Depot’s website or to the AllClear ID website for information rather than clicking on links in emails.
  • The information captured in this sign up process will not be used for any purpose other than providing you with protection.

For additional details or questions regarding this incident, please visit http://www.homedepot.com.

Other great articles to read:

Credit Score: What Makes Up Your Credit Score

Credit Score: How To Fix A Poor Credit Score

Credit Score: How To Improve A Low Credit Score

FACO Credit Score FICO Score: What’s The Difference?

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

Free Credit Monitoring From AllClear PRO service Via Home Depot and UPS!

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Credit Inquiry: Hard Pull Vs Soft Pull

A credit report is comprised of all your credit related accounts. These accounts include: credit cards, student loans, mortgages, car payments and others. It also includes outstanding debts, or unpaid bills. Those can include: doctor bills, utilities, credit cards and others. You want to avoid getting multiple hard credit pulls (inquires). That’s why people like doing 3BM, and App-O-Ramo’s. See more about this in our FAQ section or in our post: Hard Credit pulls and soft  Pulls

Some places take a hard Pull on your credit report, like a credit card application, morage or a car loan. Other places take a soft pull on your credit, like checking your credit score, or opening a utility account. Your library doesn’t take any credit pull.

Is it a Hard Pull or Soft Pull when I …

Apply for a Credit Card?


View my account on Credit Karma?


Apply For a Car Lease?


Apply For a Library Card?


Apply For a Mortgage?


View my FICO Score?


Apply For Checking Account?

Some banks (Citi) Have been reported to take a HARD PULL

Request a line of credit?


Open a Utility Account (Gas, Water or Electric)


Open a new Cell Phone Account?

Soft Pull

Why should you care about your credit score?

Your credit score plays a huge role in your finance history. Your score is dependent on 5 factors. Keeping all 5 of these factors will ensure a great credit score.

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Image HT: BetterCreditBlog

1) A Good Payment History – 35%

A good payment history plays the biggest factor of your score.


The reason is simple. The credit card issuer cares about getting their money back. If you can’t pay them back you are a risk. They don’t want to lend you money. Keeping a good payment history is also in regards to medical bills, car payments and utilities. If you have an outstanding balance on one of these your credit score will be negatively affected. Delinquencies, accounts in collection as well as late payments are also factored into this category.

2) Credit Utilization or Amounts Owed – 30%

Credit Utilization is how much of your credit line you are using. If you have one card with a $1000 credit line, and you spent $500, you have used 50% of your credit. The lower percentage of credit you are using, the better off you are. The total credit is calculated by all your cards credit line vs all purchases. If you have 5 cards with a credit line of $1000, and made the same $500 purchase, your CU (credit utilization) would drop to only 10%. Never go above 30%, and a credit utilization of under 9% are the best.


When someone is using a large portion of their credit, they are “dependent” on their credit. Banks don’t like that, especially if you are applying for a new card. It makes you look like a compulsive shopper, and a credit risk.

3) Age of Accounts 15%

The longer your cards are open the better. The age of accounts are calculated by means of an average. If you have one card for 5 years and applied for a new credit card today, the age of your cards has now fallen to 2.5 years (2 cards over 5 years and 0 years).  Always keep your no annual fee cards open, as they build your accounts age. Additionally never close your first card, as it is the start of your credit history and age. Apply for cards like the Chase Freedom which are great beginner cards. Read more…


A late payment on a card that you have for 5 years is better then if you only had the account for 1 year. The longer you have a credit history, the more the bank knows about you. When the banks see more information about you, they are grant credit quicker.

4) New Credit – 10%

FICO look at the amount of new accounts as well as credit inquiries on your report. Read here about credit inquiries.


Every credit inquiry you have is a request for more credit. The more credit inquiries i.e applications, limit raises etc. the worse off you are. The more requests for credit, the worse off you are. People try to make multiple credit applications into a consolidated one (3BM). This way you have less credit pulls on your account.

5) Types of Credit In Use – 10%

Not all credit was created equal. A credit card from a acclaimed bank holds more bearing then a Chain store card like Macy’s. FICO considers the debt/payment of these cards more informative towards your credit worthiness.


Credit cards that let you swipe anywhere are called “Revolving Accounts”. They have the most weight in “Types of Credit”, since they are user defined. They show better debt management skills. Student loans, car payments and mortgages are called “Installment Loans”. An installment loan is a loan that is repaid over time, and has a set dollar amount. Therefore they do not give as good credit as a  credit card that has no set payments.

What doesn’t have an affect on your score?

Marital status, Age, Receipt of public assistance, Income, pension, Occupation, Employment history, Student, Race, Age, Rental agreements, Participation in a credit counseling program, Money in the bank.

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary:

Only a Hard Pull affects your credit, like a new credit card application, a soft inquiry – like a new cell phone account,  doesn’t.

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Business Credit Cards: Facts And Myths

With the rumor of the 70k Chase Ink card only 5 days away, we wanted to educate our readership regarding the benefits of a business credit card. There is much talk about the benefits of the business credit cards, but not everything you hear is true. Let’s discuss some of the Facts and Myths.

Advertising Disclosure: Some of the links in this post may contain an affiliate commission.

Image HT Zlien

“You need an EIN in order to obtain a business credit card”


A business credit card can be opened under a social security number. Look at the image below, it is a screen shot from the Chase INK Plus application.

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There is a small question mark next to Tax Identification Number. If you hover your mouse over that question mark it will state “If you do not have a EIN then you can enter your social security number here”. You are able to use your social security number and NOT a EIN.

“Business Credit Cards don’t affect your credit”


One of the most important parts of your credit report is your CREDIT UTILIZATION. What percentage of your credit you are using. For example if you have $10,000 credit line and you spent $5,000 you have used 50% of your credit. Credit used on Business cards do not reflected on your personal credit score.

Business cards can play an important role on your credit report. Getting a business card can reduce your credit utilization. Business cards are also harder to get then personal cards.

“Business Credit Cards Are harder to get approved”


The banks are looking to make sure the business are valid business. Many credit cards out there are targeted for “Fair” or “Good” credit. Business credit cards require Excellent credit. Only apply for a business credit card if you have excellent credit.“Business Credit Cards Get Higher Credit limits”


Although in reality it makes sense that business need larger credit lines there is no conclusive data to this effect. Credit limits are reflected on each individuals spending habits. A new business can receive a small credit limit of only $10,000, where a 50 year old man can have a $50,000 credit limit on his personal card.

Read more about Business Cards here.

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary:

Getting a business card requires excellent credit, not necessarily will you receive a higher credit line and you can apply using a social security number.

Did you have a business credit card question that you were unsure if it was a fact or myth, ask us in the comments!

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Business Card Benefits: How A Business Card Impacts Your Credit Score

Recently there has been a bang in Business credit card signup offers. There was a 150k Targeted Platinum Card, as wells as a 100k offer. Currently there is a 40k American Express Platinum card offer. There has also been, as well as still available the  Chase Ink cards, now at 60k instead of 50k. The question everyone has is, “how does a business card effect my credit score”?

Can I get a business card without a EIN number?

Yes. You are able to use your social security number instead, just  indicate that it is a sole proprietorship.

Do I need to own a business to get a Business Credit Card?

This borders a fine line of ethics. Some say if you don’t have a business then you cannot open a business card. Others maintain that as long as you are doing business then you can open a business card. They go further and say that even selling a few items on eBay would be a valid business.

We maintain that applying for a business credit card without operating a business is fraud. We do not advise to open a business credit card if you do not have one.

Business cards have a very big benefit over personal cards. A business cards spending doesn’t get reported to the credit bureau. Your credit utilization will be lower.

What are the benefits of a Business Credit Card?

  1. Many business cards offers employee cards. This gives a separate card number for each card holder. Tracking employee spending is a breeze. In your account, there will be a separate tab for each employee.
  2. Keep your personal and business expense separate. When you have only one  credit card all of your purchases get mixed together. Having an exclusive card for business purchases separates it.
  3.   Organized financial statements. Banks tend to give out quarterly notices, and reports.
  4. Business card have extra bonuses in categorizes that consumer cards never have. Some examples are the 5X in office stores, or on advertising.
  5. Extra signup bonuses!

Is that all?

NO! The biggest benefit is the effect, or lack of effect on your credit score. The credit utilization on a business card doesn’t effect your personal score. You want to keep your credit utilization low, as we discussed here.

In Summary:

A business card has many benefits. It will impact  your credit score and make it better, by lowering your credit utilization, additionally give better rewards, and make employee spending easy to track.

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Why Your First Credit Card Is So Important

If you are  ready to apply for your first credit card, congratulations, you came to the right place. We take pride in helping people advance their credit, and we would love to assist you too! There are several reasons why your first credit card is so important.

Why Your First Credit Card Is So Important

  • It is the start of your credit history
  • It will be your oldest account
  • You will probably never close it

We discussed in depth the importance of good credit, what your credit score depends on and how to improve your credit score.

Your first credit card starts your credit history. It is the oldest account in your portfolio. It adds to your account’s age average. It is usually never closed.

Your first credit card starts your credit history

When you are applying for your first credit card you are making a statement. You saying that you are ready to build a credit history. When the banks give you a credit card, you are getting a line of credit from them. Month after month of good payment history does wonders to your credit. It encompasses 35% of your FICO credit score.

It will be your oldest account

The age of your accounts play an important role on your credit report. 15% of your scoring is factored off your accounts age. The older your accounts are the more trust the bank has in you. Your account history starts from your first credit card.

You will probably never close it

It isn’t wise to close the first card you opened. It has the longest credit history. It is smart to chose a card that has no annual fee as your first card. We recommend a card like the Discover IT® for a starter card. It has no annual fee, and only need fair credit to be approved. Read our review on the Discover IT® card here.

Articles that may interest you:

Beginners Guide To Credit Cards: How What When Why Where

Credit Score: How To Fix A Poor Credit Score

Credit Score: How To Improve A Low Credit Score

In Summary:

Your first credit card is so important because it has a big impact on your credit report.

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Fix credit

Credit Score: How To Fix A Poor Credit Score

Your credit score is very important. We discussed yesterday how to start a credit history. This is usually for 18-20 years old’s that never had a credit card or loan. Today we will explain how to fix a poor credit report.

Why you should care if you have poor credit?

Having poor credit is a terrible thing. We discussed yesterday how to start a credit history. Someone with poor credit will not be approved for loans, mortgages or credit cards. you will not be able to lease a new car, not that stinks!

How does one’s credit come poor?

Poor credit doesn’t have to do with the amount of money in your bank account. It doesn’t either get affected by your age. Poor credit is determined by 5 categories. ‎
  • Payment History – 35%
  • Credit Utilization or Amounts Owed – 30%
  • Age of Accounts 15%
  • New Credit – 10%
  • Types of Credit In Use – 10%
To read our full report on you credit score, read our article what makes up your credit score. If any of these categories are affected your credit drops. For example: You can have a sterling credit, pay all your bills on time, a long age of account, low credit utilization, and no new account. If you would have 1 unpaid doctor bill, that can knock your score 100 points. If you have several account that are delinquent as well as high credit utilization you are a victim of poor credit.

What happens when you have poor credit

When you have poor credit you are in bad shape. Nothing happens, and you are not a bad person. You may not be approved for a mortgage. If you are approved, it may be at a higher rate. You will not be able to sign up for credit cards. You may not be able to get a lease, or a student loan. No one trusts someone who has poor credit.

How do you make your credit score increase?

You need to pinpoint the reason why you have bad credit. Is it credit card debt or is it a doctor bill. There are companies that help you repair your credit. We recommend to try to fix it yourself first. Depending on what the cause is determines what you need to do to fix it.
High credit utilization
That’s easy to fix, slow down! You need to be spending less then 30‎% of your total credit line.
Unpaid Credit Card Accounts
Stop spending. The only way you will be able to use credit cards is if you are responsible. Make it a rule, do not buy anything on credit card that you can’t afford. If you don’t have the money for it, don’t buy it.
Call the credit card company. Ask them to lower your APR, this will save you money. Ask them if you are able to make a settlement. A settlement is when you agree on a amount you have to pay, as well as a time frame. for example if you owe $5000 to the bank. They might agree for a settlement of $100 a month for 4 years. This will be a total of only $4800. The benefit is you will not be paying any additional interest. You can also have this delinquent account removed from your credit report.
Delinquent Accounts
Many times your insurance doesn’t cover a payment and you have an unpaid doctor bill. This unpaid bill makes it’s way to “collections” and from there onto your credit report, which makes an ugly mark. Delinquent account are not only from doctor bills. They can be from your utility company, your cell phone provider or even from your credit card provider.
The first thing that you need to do is verify if the charge is correct valid.
  • If the charge is valid, use one of the ways we discussed earlier to remove it. (Lower APR, make a settlement etc.)
  • If the charge is not valid, then you are able to dispute it. to dispute a charge you need to know which credit bureau the delinquency is on. All credit bureau’s have an online form to fill out to dispute inaccurate information. Fill out the form, and within 2 weeks you should hear back from them. If there is any substance to your claim, the negative account should be completely removed from your credit report. Read Point Me to The Plane’s narrative on how to dispute an Experian error.

There are many more minor factors that influence your score. Opening a new credit card drops your score by 5 points. Having a lot of new credit lowers your score as well. At the end of the day, these factors are temporary, as minuscule compared to the delinquencies and unpaid accounts.

Keep tabs at all times of your credit so you can know where you are holding. You can view your credit report for free once a year by visiting annualcreditreport.com. We recommend to take advantage of this offer, and do it yearly.

More Articles that may interest you

How To Improve A Low Credit Score

FACO Credit Score FICO Score: What’s The Difference?

What Makes Up Your Credit Score

Beginners Guide To Credit Cards: How What When Why Where

Soft Inquiry vs Hard Inquiry What Is The Difference?

In Summary:

Keeping tabs on your credit score is very important. There are a few ways to improve your credit score. If you have accounts in collections, try to settle them with the collectors. Dispute inaccurate information. Pretty soon your “poor credit score” will be looking good.

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