I Didn’t Open All of These Accounts on My Credit Report. What Should I Do?

Free Credit Report Summary - Payment History

See your payment history?

Payment history is the record of when—and if—you pay your bills. And, it’s one of the main things that creditors look at. Payment history makes up 35% of your credit score—the biggest part. Your report card shows your grade, total late payments and more. See your payment history now »

See How You’re Using Available Credit

How you use credit affects your credit score. Use too much and your score goes down. Your credit utilization ratio, or how much of your credit limit you use, makes up 30% of your credit score. Your credit report card shows your ratio, credit card debt, credit limit and how different factors affect your score. Get your debt usage now »

Free Credit Report Summary - Debt Utilization Free Credit Report Summary - Number of Inquiries

Take a Peek at Your Credit’s Age

Credit age, aka credit history, is the age of your oldest account, not how long you’ve used credit. Creditors want older credit histories. And older accounts are better for your score. Credit age makes up 15% of your score. See your credit history and the ages of the oldest and newest account on your credit report card. Know your credit age now »

See Your Account Mix

Revolving credit, installment loans and the mix of the two—student loans, auto loans, mortgages, etc.—make up 10% of your credit score. A good mix shows creditors you can handle different types of debts. See how many revolving credit accounts and loans you have in your free credit report summary. Check your account mix »

Free Credit Report Summary - Age of Accounts Free Credit Report Summary - Account Mix

Know How Many Inquiries You Have

Every time you apply for a new credit card or loan, it can show up as a hard inquiry on your credit report. That’s true even for denied credit. And hard inquiries make up 10% of your score and can cause it to drop. Applying for credit too frequently is a red flag to creditors. When was your last inquiry? See how many inquiries you have and how long you’ve had them on your report card. Check your inquiries now »

See Why—and How—Your Score Changed

If you want the details of why your score changed, it’s all there. Simply select “See details” for “Why did my score change” to see the historical view of your credit score—and what’s changed it.

Free Credit Report Summary - Age of Accounts

Source: credit.com

Statute of Limitations on Debt vs. the Reporting Period on Credit Reports

When it comes to understanding your credit score and credit reporting, there are a lot of terms to remember. Because of this, sometimes it’s easy to get confused when it comes to knowing your rights and improving your credit.

woman on laptop

Two of the most commonly confused concepts in credit reporting are the statute of limitations on collecting debt, and the reporting period on credit reports. While these are two separate, non-related concepts, getting the two confused can potentially cause problems with your credit score.

Understanding the Statute of Limitations

The statute of limitations for any debt is the length of time a creditor has to bring legal action against you in order to collect the debt. This date varies from state to state and may be anywhere from three to ten years. It may also change depending on the type of debt.

In some instances, such as a domestic judgment, the statute of limitations may be even longer – up to 20 years. However, once this date has passed, if a creditor tries to sue you to collect the debt, you have the legal means to successfully defend against having to make payments.

When the Statute of Limitations Runs Out

An important thing to remember is that the statute of limitations runs out after the last missed payment or activity on the account. So, if your account is past the statute of limitations, but you make a payment, you’ve reset the clock. This means you will have to wait for another three to ten years for the collection period to expire.

In some states, just the promise to make a payment can reset the statute of limitations, whether or not you actually follow through on the payment itself.

It’s very important to watch what you say in any phone call, letter, or other communication with a creditor so that you don’t accidentally reset the statute of limitations. In the meantime, your creditor will be able to legally sue you over the debt. They can also attempt to recover not only what you owe, but interest on it as well.

Calculating the Statute of Limitations:

  1. Add six months to the last date of activity on the account (payment or otherwise).
  2. Add the number of years for your state’s statute of limitations.
  3. After this date, your creditors can no longer successfully file suit, as long as you can prove that the statute of limitations has expired.

Example:

  1. You opened an account in May of 2015 and stopped making payments on June 3rd, 2016. Add six months to June 3rd for a date of December 3rd, 2016.
  2. Your state’s statute of limitations is 4 years. Add 4 years to December 3rd.
  3. Your creditors can no longer sue you for payment of that debt after December 3, 2020.

How to Find Your State’s Statute of Limitations

It’s easy to find the details on your state’s specific statute of listings. We provide a comprehensive resource guide for you here. Each state’s time limits are broken up into four separate debt categories:

  • Open-ended account: This includes any revolving debts like credit cards and retail store cards, as well as lines of credit.
  • Oral agreement: Any promise that was made verbally, but wasn’t written down.
  • Written agreement: A loan or other agreement with terms signed by both you and a creditor.
  • Promissory note: A loan with specific terms on how often certain amounts should be paid, what interest is charged, and by what date. Common examples include mortgages and student loans.

The length of the statute of limitations for each type of debt can vary greatly by each state. California, for example, has only a two-year limit for oral agreements but has a four-year limit for the other three types of debt.

Iowa is a much stricter state, requiring a ten-year statute of limitations for promissory notes and five years for everything else. Other strict states include Louisiana, Missouri, Ohio, Rhode Island, and Wyoming.

Some more lenient states include Washington, South Carolina, Oklahoma, New Hampshire, North Carolina, Mississippi, and Maryland. If you’ve moved since incurring the debt, check your terms of agreement to figure out which state’s statute of limitations applies to you. In some cases, it might be the state in which you took on the debt, not the one in which you currently live.

Understanding the Credit Reporting Period

By contrast, the credit reporting period only states how long the record will remain on your credit report, regardless of the actual time left on the statute of limitations. In most cases, after seven years, the debt will be removed from your credit report, whether or not you actually paid the debt.

Here is where things can be confusing: Say the statute of limitations is 3 years in your state, and your debt is 4 years old, with no account activity in the last 4 years. This means that the statute of limitations has passed, even though the debt is still listed on your credit report.

Debt collectors may contact you and try to get you to make a payment on this debt. But, even if you don’t pay anything, the debt will be removed in another three years.

However, if you make a payment on that account, you renew the statute of limitations. And the debt may also be re-listed as new debt. So any missed payments will once again have a negative impact on your credit score.

Dealing with Debt Collectors

Once your statute of limitations has expired, a collection agency can’t legally sue you, but that doesn’t mean they can’t keep trying to get you to pay the outstanding debt.

There is a way, however, to get the debt collector to stop attempting to collect. By sending a notification of SOL expiration letter, you can inform the creditor that you know the statute of limitations has passed and that they should stop contacting you.

Keep the language simple and straightforward and don’t claim ownership of the debt. Look at some letter templates as examples of what information you should include and what you should definitely not include for the best results.

How to Get Help with Your Credit

If you’re confused about the statute of limitations and the credit reporting period, you aren’t alone. There are several credit repair services that can help you, and that will offer sound advice of when it’s prudent to pay the bill and when it’s more prudent just to sit tight.

Getting professional advice may help you to avoid unnecessary problems with your credit score. Remember, even the slightest incorrect communication with a creditor can reset your statute of limitations.

Working with a professional puts them on the phone instead of you, so your emotions and nervousness don’t get the best of you. That way, you can successfully put old debts in the past and enjoy the benefits of having better credit.

Source: crediful.com

What Is A Bad Credit Score? (and What You Can Do To Fix It)

Maybe you already know your credit score is lackluster, or maybe you’re dragging your feet to find out because you don’t want to know just how bad it is.

425 poor

Before worrying anymore about that dreaded three-digit number, find out just what is a bad credit score and what your financial options are if you have one. Bonus? We’ll even give you a few tips on how to improve your credit score.

What are the different credit scoring models?

Before you can figure out what exactly a bad credit score is, you need to understand the range of possible credit scores. And that depends on which credit scoring model you use.

FICO

The most popular model is the FICO score, which was created by the Fair Isaac Corporation and is used by the majority of lenders in the U.S.

FICO scores range from a low of 300 to a high of 850. The most influential factors are your payment history and the amount of debt you owe.

Together, these two categories comprise 65% of your FICO credit score. The remaining 35% is spread out amongst the length of your credit history, your credit mix, and new credit/inquiries.

VantageScore

An increasingly popular scoring model is called VantageScore. The older credit scores ranged between 501 and 990, but the latest version, the VantageScore 3.0, scores between 300 and 850 just like FICO.

This makes it easier for consumers and lenders alike to have the same base level understanding of a credit score regardless of which model is used.

For VantageScore, the most influential information is your payment history. The next most important factors are the age and types of credit you have, combined with how much of your credit limit is in use.

The model then takes into account your total balances and debt, followed by recent credit inquiries and your available credit.

Why does your credit score matter?

Your credit score isn’t just some arbitrary number that sits in a file somewhere. It’s constantly changing based on how you handle your finances.

When you pay your bills on time and don’t carry a lot of credit card debt, you should have a good credit score the next time it’s pulled. On the other hand, if one of your accounts has gone to collections, you can expect to see your credit score plummet.

All of this matters because lenders and other creditors use your credit score to determine how likely you are to repay a potential loan. When your credit score is good, a lender determines that you are creditworthy, approves your loan application, and offers you favorable interest rates and terms.

If however, you have a bad credit score, you’ll be offered higher interest rates over longer periods of time, resulting in higher monthly payments and more money spent on interest. Alternatively, with bad credit, you might not even be approved for a loan at all!

But credit scores don’t just matter the next time you need a loan or a credit card. Many other situations in life require a decent credit history. Landlords, for instance, might request your credit score as part of the application process to check if you’re likely to pay your rent on time.

Even employers can pull your credit report if you’re applying for a job that requires you to handle money. When you have bad credit, so many different areas of your life can be negatively impacted, so it’s best to avoid getting yourself into that situation in the first place. If you’re already there, now might be the right time to fix it.

So what is a bad credit score?

Most financial experts define a bad credit score as anything below 600, but each lender has its own standards when reviewing applications. The average American has a credit score of 687, which helps put the range into perspective.

If you have poor credit, you’ve probably had a combination of negative items on your credit report, like missed payments, delinquencies, or maybe even a bankruptcy or foreclosure.

You can always request a free credit report to figure out what exactly is keeping your credit score so low. In fact, we recommend checking your credit report every year.

Federal law allows you access to a free copy of each of your three reports every 12 months, so there’s no reason not to take advantage of this benefit. Just visit AnnualCreditReport.com to request your copies from Equifax, Experian, and TransUnion.

Where can I find out my credit score?

When you request a copy of your credit report, you’ll see your financial history listed out over several pages (or more or less, depending on how much history you actually have). However, you won’t get your actual credit score when you order your report.

Lenders look at both pieces of information to determine your loan offer, so it’s essential to know where you stand in terms of both your credit report and credit score. So how can you get your credit score?

Educational Credit Scores

Lots of websites offer free credit scores, although they are known as educational credit scores, or even “FAKOs,” because they’re not your actual FICO score. When it comes time to apply for a loan, you might be surprised to see a wide discrepancy between your free educational credit score and your FICO score.

Real FICO Scores

To find out your real FICO, you can purchase it from the company’s website. You can also sign up for a credit monitoring service if you expect to work on your credit over time and want to view your progress on a regular basis. Just be sure to select a company that does indeed use the real FICO.

You can also check to see if you’re eligible to receive free credit score updates from one of your existing credit cards. Many companies now give this service away as a cardholder benefit. Check out this comprehensive listing of credit cards offering free credit scores and see if yours makes the list.

What credit score do I need for a personal loan?

A lot of different factors go into determining your eligibility for a personal loan. The type of lender you choose also affects whether or not you’ll be approved. Obviously, the better credit score you have, the better your interest rate will be. But it’s important to know that some lenders specialize in offering loans for people with bad credit.

You’ll probably qualify for a smaller loan amount, but it can still be helpful if you need to finance a large purchase that you can’t handle with your normal cash flow.

You might also need to provide collateral for a personal loan since an unsecured loan represents more risk to the lender. Be sure to shop around for the best loan possible before making a final decision.

See also: Best Personal Loans for Bad Credit for 2021

Can I get a mortgage with bad credit?

Most mortgage lenders have strict guidelines they must adhere to. If you don’t meet their eligibility requirements, there’s not much you can do to get a home loan until you improve your credit. But you do have a few mortgage options, even if you have a bad credit score.

A conventional loan typically requires a minimum credit score of 620.

FHA Loans

An FHA loan, however, allows borrowers to have as low as a 580 with just a minimum 3.5% down payment.

Technically, you could still qualify for an FHA loan with less than a 580, but you’d need to put down at least 10% of the home’s sales price.

Of course, you’ll also need to demonstrate other financial capabilities other than your credit score when applying for a mortgage.

For example, your monthly debts should be no more than 43% of your gross monthly income — this formula is known as your debt to income ratio. Lenders also look at your employment and assets.

See also: How to Get a Mortgage with Bad Credit

How can I fix my credit score?

Credit naturally repairs itself over time, usually within around 7 to 10 years. But there are several ways you can help expedite the process while waiting for those items to drop off on their own.

Dispute Inaccuracies

Start by making sure everything listed on your credit report is indeed accurate. If there’s an incorrect item, it’s fairly easy to dispute it with the credit bureaus. The Fair Credit Reporting Act states that any items that can not be verified must be removed from your credit report within 30-45 days.

Having many negative marks on your credit report is one of the main reasons people have bad credit. It may be worthwhile to enlist the help of a professional credit repair service.

Work on Your Credit Utilization Ratio

Another easy idea is to work on paying off your debt to decrease your credit utilization. This helps both your credit score and your overall loan or credit application.

Get a Secured Credit Card

You probably won’t be approved for a regular credit card, but there are some banks and credit unions that offer secured credit cards. These types of credit cards allow you to put down a deposit that is equal to your credit limit. That way, the banks aren’t actually lending you money. You are actually kind of just borrowing from yourself. But, the payments get reported to the credit bureaus.

Bottom Line

With a bad credit score, there are only so many quick fixes you can implement before hitting a wall with your progress. But a credit repair company can help you fully exercise your rights when it comes to removing negative accounts and fixing your bad credit.

Bad credit doesn’t have to make you feel like you’re backed into a corner. You may still have credit options available to you now, and there are also concrete steps you can take to get back on a better financial path.

The Job Scam That Even You Could Fall For

This might be the most sophisticated job scam I’ve ever seen. Thanks to a near-victim, you’ll get a rare chance to see a real pro almost pull off a nearly perfect digital caper.

You do things when you are job hunting that you wouldn’t normally do. You meet strangers. You share a lot of personal information with the world, on resumes and through job sites. You’re vulnerable. And most critically: You generally need money. It’s a scammer’s dream, and that’s why job-hunting scams are so persistent and prevalent.

Every chance I get, I try to explain that “smart” folks fall for scams all the time — and those at greatest risk are those who think they are too clever for criminals. This is one of those stories.

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Privacy Policy

Josh Belzman is not just a tech savvy worker; he’s spent the better part of the last decade as a social media professional in Seattle. He’s been working in and around the internet’s cesspools for years.

Still, he recently went halfway down the aisle with a criminal offering the false hope of an exciting job in social media. Like all victims and near victims, he couldn’t stop blaming himself as he described the sequence to me— but I can see exactly why Josh danced with the devil.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Josh, 39, is job hunting, and he received an email from a woman named Morgan who said she worked for a big law firm and needed contract social media work for $39-$45 an hour. That kind of short-term gig is exactly what people like Josh need while they look for their next career step.

“I probably should have trusted my spidey sense and not engaged at all but you know how it goes when looking for work— your guard and confidence can drop,” he said.

Morgan asked for a Google hangout chat as a first step. Josh did his due diligence, and Googled her. Up came a LinkedIn profile that checked out. She had a long professional history in the Seattle area, including alleged stints as a ski instructor at nearby Snoqualmie Summit. It said she had worked at various law firms dating back to 2009. The firm (I won’t mention it) was real. So he jumped online, ready to answer her questions and ask a few.

Generally, con artists betray themselves during real-time interactions. They speak poor English, they show obvious lack of subject matter knowledge, and there are awkward delays. Morgan exhibited none of those. In fact, her questions for Josh were spot on. Here’s a partial list I pulled from a transcript of their chat.

“Could you give us an example of a limitation on a social platform that you have experienced? How did you overcome this?”

“Have you ever had to handle a Social Media crisis? If so, could you provide an example and how would you describe your work ethics?”

“How would you allocate our Social Media advertising budget and How do you evaluate new social platforms? How do you stay on top of the latest updates and innovations in Social Media?”

“Do you have your own blog? Do you currently write content for various Social Media platforms and why should we hire you?”

Josh answered each one deliberately. After each response, she replied, “good,” “very good,” and eventually “great.” All what you’d expect, or even hope for, during an interview.

Reading through the full transcript, you can see in retrospect that all these questions could have been cut and pasted from a script. In fact, I suspect the criminals somehow lifted them from an actual interview involving a social media position— perhaps they’d applied for a job themselves earlier just to understand what “marks” would expect.

Only once was there something more that might have tipped off Josh. When he, smartly, tried to interrupt and ask his own questions, Morgan’s reaction was a bit off.

Josh: Mind if I ask a few questions about the role?

Morgan: Sure when we done with this process so you can get all the details you need to know.

But that’s it. The rest of the interview went as you might expect. LinkedIn page and all. Until …

Morgan: How soon can you begin work if luckily chosen for the position, do you need any our Company benefits and what means of Payment would you prefer; Check Or Direct Deposit?

Morgan: What bank are you with for Direct deposit/Check so we can see if it tallies with our preferred banks and do you have any question before i move forward?

Josh: I’m not comfortable sharing banking info online.

(Morgan may not be on Hangouts right now. Your messages will be seen later.)

The “line” went immediately dead.

Fortunately, after an hour of “seduction” and with the lure of a $35-an-hour job, Josh did listen to his spidey sense and threw up a roadblock. And as soon as Morgan saw he wouldn’t play along, she “hung up” on him.

An hour or so wasted, but it could have been much worse.

“I should have never entertained this — the initial email was sketchy but I chalked that up to some office admin being asked to help find candidates,” he said. “Going back through I see very few comments in ‘her’ voice— just a lot of cut-and-paste questions and ‘OK good.’ Amazing the tricks your mind plays in you when you’re visualizing a certain situation.”

After the disconnect, Josh called the firm and was told no one by that name worked there.

I, however, did find someone with her name who had posted a resume that was similar. It’s likely the con artists assumed elements of her identity for the scam. I emailed her, and got no response. I also emailed the person who chatted with Josh and got no response.

“The initial email was unsolicited with that odd name but I saw the LinkedIn profile and I’ve had some of those mails come through (job sites),” Josh said. “The hangout thing raised eyebrows but I suspended some of that because I got caught up answering the questions.”

Tips for Avoiding Scammers

So what should you do? The big one: Always trust your gut. I pretty much never talk to anyone who falls for these things who doesn’t say they had a queasy feeling in their stomach at some point.

Also, do what Josh did. Say it out loud: “I’m not comfortable with that.” It’s a handy phrase. A real person will react with an apology to that, like “Oh, I’m sorry, I didn’t mean to make you uncomfortable.” A con artist, or a bad person, will push you instead. Or hang up.

Finally, be realistic. If you are out of work, you are vulnerable. No matter how smart and put together you think you are. Know that going in. You’ll be more likely to hit the pause button if things go south, and generally, hitting pause is enough to scare off bad guys.

Here’s a handy list of ways to spot “Work at Home” scams. And if you think you’ve already fallen prey to an identity theft scam, it’s a good idea to keep an close eye on your credit. New accounts you don’t recognize on your credit reports or a sudden drop in credit scores are signs that fraud is afoot. (You can pull your credit reports for free each year at AnnualCreditReport.com and view two of your credit scores for free each month on Credit.com.) You can find more steps to take if you are an identity theft victim here.

Image: PeopleImages

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Source: credit.com

What is a Credit Limit, How is It Determined, and What Credit Cards Offer the Highest Limits?

[UPDATE: Some offers mentioned below have expired and/or are no longer available on our site. You can view the current offers from our partners in our credit card marketplace. DISCLOSURE: Cards from our partners are mentioned below.]

What is a credit limit and how is it determined? A credit limit is the maximum amount of credit you’re allowed, and it is determined by a financial institution (bank, credit union, retailer, etc.).

Essentially, when you apply for a credit card and you get approved, the issuer decides how high (or low) your limit will be. The average credit card limit is $16,737, but this varies depending on your credit score and where you live.

We know how it goes: first you cross your fingers hoping you’ll get approved for the credit card you want. Then you cross them again hoping the credit limit will be generous enough to get you what you want. Maybe you need it to pay for some expensive dental work or perhaps you are applying for a 0% balance-transfer offer so you can transfer debt from another, higher-interest card. Either way, the credit limit is often a few hundred or a few thousand dollars short of what you need — and you have no idea why. How did they even come up with that number?

Credit card issuers will tell you what factors they consider when they assign a credit limit, but exactly how they calculate it remains proprietary. Not a single card issuer we reached out to for this story could (or would) give us specific information about how they determine credit limits.

In every case, your credit score and income level will have a great deal to do with whether you are approved, and for how much. If you’ve had credit before and handled it well, a card issuer is more likely to approve your application. But that is not the whole story.

Your income comes into play, and so do your current financial obligations, such as rent, a car loan, and the amount of credit available to you through other cards. Part of the equation is behavioral: What do they think you are likely to do if you have more credit extended? In this guide, our Credit.com experts present the top cards with high credit limits that match your financial health and history, and help you understand all that goes into determining your credit limit.

Credit Cards With High or Unlimited Credit Lines

Did you know there are credit cards with unlimited credit lines? Well, there are—and you’ve probably heard of them. Although credit limits are determined by various factors, as we discussed (such as income and credit score), it is possible to find cards with high limits. Here are some of our favorites, from our trusted partners*:

Chase Sapphire Preferred® Card

  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
  • 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash’s subscription service. Activate by 12/31/21.
  • Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.

Blue Cash Preferred® Card from American Express

  • Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
  • $0 introductory annual fee for one year, then $95.
  • 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
  • 6% Cash Back on select U.S. streaming subscriptions.
  • 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
  • 1% Cash Back on other purchases.
  • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee.
  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • Terms Apply.

Credit Cards for Building Credit

You’ve checked your credit score, and it’s not as high as you’d like — in fact, it’s quite low. Don’t worry, you can rebuild your credit score. It will take time, so be patient (and diligent about paying your monthly bills on time) and eventually, you could be qualified for an unlimited credit limit. Until then, consider these credit cards, which will help you continue to build your credit:*

OpenSky® Secured Visa® Credit Card

  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card

First Progress Platinum Elite Mastercard® Secured Credit Card

  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Full-Feature Platinum Mastercard® Secured Credit Card
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 — $2,000 Submitted with Application
  • Just Pay Off Your Balance and Receive Your Deposit Back at Any Time
  • Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file
  • Nationwide Program though not yet available in NY, IA, AR, or WI * See Card Terms.

Why Your Credit Limit Matters So Much

While it feels great to get approved for a new account, pay attention to the credit limit. If you’re given a limit of $2,000 and you regularly spend $1,500 per month, then you’ll be using 75% of your credit, which can really hurt your credit score. Balances higher than 20% to 25% of your available credit can hurt your credit scores.

In the case of a balance transfer, you’ll have to weigh that against the interest you’ll save by getting out from under a high interest rate. And in the case of essential bills, like dental or medical, you may have to accept a temporary hit to your credit in order to pay the bill and avoid having an account turned over to collections.

So getting a high credit limit is ideal. There is no credit limit calculator that determines exactly what limit you’ll get, unfortunately, but we’ll help you figure out what factors may go into the decision.

What Should Your Credit Limit Be?

Having a high credit limit comes with many perks, and if a company offers you a high credit limit when you apply, it means they consider you a reliable customer. This is a good thing. But if you look at the flip side, what if you’re an overspender? It can be tempting to want to spend as much credit as you’re given, but doing so can really hurt your credit score.

Keeping your limit low could prevent you from spending more than you have (but to avoid this, you should consider using financial apps to better manage your spending habits and/or debt). Ideally, a high limit is both preferable and recommended, if you want to improve your credit. To improve your credit, you can apply for credit cards with high limits. If you maintain a high limit and a very low or no monthly balance, the better for your credit score.

Should I Ask For a Higher Credit Limit?

If you believe the credit limit you were assigned is too low, you can call the credit card issuer and ask for a higher one. It helps if you can justify your request with some information the issuer did not have when you applied (“I just mailed in my last car payment” or “My spouse has returned to work, and now our household income is higher than the number on the application”). It’s smart to consider that your credit limit can also be lowered if you give your lender reason to believe you may not be able to handle your current limit.

Sometimes, however, you can get them to change their mind simply by sweetening the pot and letting them know you’ll bring over a balance from another card or charge a significant purchase to the new card. Issuers want cardholders who pay interest on balances. After all, that’s how they make money.

When Should You Ask For a Credit Increase?

If you already have a credit card and feel you deserve a credit limit increase, you should ask yourself the following questions:

  • Am I paying off my balance each month?
  • Has my income changed significantly to justify the credit increase?
  • What should my credit limit be?
  • Do I have good credit?

You should wait for at least one year after opening your credit card to ask for an increase. When you do ask, be prepared. The credit card company may make a hard inquiry on your credit reports — and this, of course, can impact your score (minimally, though).

If you feel you have built up good credit, are financially responsible and capable of taking on a higher credit limit, then you should consider asking.

What If My Limit is Raised Without Asking?

Sometimes your credit card issuer may raise your limit without your requesting it, too. That can happen after a period of paying on time and keeping balances low. Some people worry that perhaps there is a downside to this, and wonder if they should ask that the lower limit be reinstated. Generally the answer is no.

Assuming your credit card usage stays the same, you’ll be using a smaller percentage of your available credit, and that can only help your score. Remember, it’s a good idea to keep your credit utilization to less than 20–25% of your credit limit; less than 10% is ideal. Credit utilization refers to the ratio of your credit card balance(s) to your credit limit. The lower, the better for improving your credit, earning rewards, and saving money.

So, sadly, it’s generally not possible to know exactly what your credit limit will be ahead of time. In the meantime, you can control some factors that may affect the issuer’s decision. It’s important to maintain (or work toward) good credit.

You can check your progress with a free credit report summary, updated every 14 days, on Credit.com, or you may find free scores on your monthly credit card statement. You should be sure you are comparing the same score from month to month, because many scoring models are used, and you want to be sure you look at the same one so that changes are meaningful.

The other thing you can do is to check your free annual credit reports to make sure the information there is accurate (and to dispute any that is not). Because your scores are calculated from information in your credit reports, you want to make sure it’s correct and that your information has not been mixed in with anyone else’s.

What Factors Go Into Selecting Your Credit Limit?

When credit card issuers determine your application status and your credit limit, they use a variety of factors, all of which may weigh differently to the issuer. Here’s what could impact their decision:

  • Your monthly income—If your income changes drastically from year to year, this could change the issuers decision. Again, if you salary changes (or if your marital status changes and impacts your income), the issuer should be notified.
  • Your credit history and worthiness—Have you had low or high credits before? Have you kept zero or low balances on previous credit cards? This could impact the application status.
  • You relationship to the issuer—If you’ve been banking with them for years or have another card from them, this could help get you approved and issued a high credit line (but only if you’ve proven to be a reliable customer).
  • Your employment status—This may or may not make a difference, but the issuer would like to know if you are part-time, full-time, self-employed, or unemployed, as this could affect your ability to pay off your future balances.
  • Your residential status—If you own a home and pay a monthly mortgage, you will likely be able to pay monthly credit card bills, too.
  • What type of card you’re applying for—Are you applying for the card with the highest rewards, but you have low credit? Make sure you’re being realistic when you apply for a credit card, but don’t sell yourself short either.

Managing Your Credit and Personal Finances

We’re all aiming for financial stability, and whether that means owning a home, paying off your mortgage, paying for your kids’ colleges, or retiring early, the ultimate goal is to lower your debt-to-income ratio and become debt-free. To determine your credit, limit calculators are available online.

Use Credit.com’s debt-to-income calculator to evaluate how much combined debt you currently have (ex. student loan debt plus car loan payments plus credit card payments, etc.) and how long it will take to pay off based on your current income and your monthly rent.

If you’re struggling to pay off the balances on the credit cards you currently have, check out Credit.com’s credit card payoff calculator to determine how much you still owe and when you’ll likely be debt-free. Just remember, credit repair takes time (and credit repair services are available to those who need them), but when your credit score improves, likely so will your credit limit.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

*Note: At publishing time, the Capital One, Chase, Credit One Bank, and Discover credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

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The 623 Dispute Method – Disputing With The Original Creditor

When the conventional method of disputing an inaccuracy on your credit report fails to yield results, the 623 dispute method may be a viable alternative to getting erroneous or unconfirmed information removed from your report. It’s named after Section 623 of the Fair Credit Reporting Act (FCRA).

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It allows you to dispute any inaccurate information on your credit report directly with the original creditor, as long as you’ve already completed the process with the credit bureau. Learn the step-by-step process to correctly execute this strategic dispute method.

What is a 623 dispute?

A 623 dispute does not work in the same way as a traditional dispute through the consumer reporting agencies because you are not asking for verification of the debt. Instead, you’re asking for an investigation of the accuracy of the records on that debt.

If your creditor does not have accurate records pertaining to that debt, then the consumer reporting agency must remove the negative information on your credit report. The process usually follows these steps:

  1. File a dispute with the credit bureau.
  2. Await the results of the investigation. If the negative information is not automatically removed through that process, proceed to the next step.
  3. File a 623 dispute notice with the original creditor, asking for an investigation into the debt or delinquency.
  4. If they don’t have proof of the debt or delinquency, the negative information must be removed from your credit report.
  5. If they don’t comply, you will have to file suit in order to have it removed.

Remember that all 623 disputes must begin with a traditional credit bureau dispute first. As you’ll soon find out, you could bring on some unintentional negative consequences if you don’t.

What is the 623 dispute process?

In order to successfully challenge negative listings on your credit report, you must first dispute the information through the credit bureau. When you send a 623 dispute letter to them, you must wait for the 30 days for the investigation to be complete.

If the original creditor verifies that the negative listing is accurate with the credit bureaus, then you move forward with the next step which is to dispute directly with the original creditor itself.

Creditor Investigation

Under the laws governing the 623 dispute method, creditors must conduct an investigation when requested. When investigating, they must review the information that you provide relating to that dispute, and they must respond within 30 days to your original investigation request.

In 2010, revisions to the Fair Credit Reporting Act went into effect that explicitly requires original creditors to investigate when requested by a consumer.

Creditor Rights

While the Fair Credit Reporting Act is in place to protect you and your rights in the face of creditors, you must also pay careful attention to the rights of the creditor. Otherwise, you run the risk of giving up some of your rights in the process.

One key example of this occurs in the 623 dispute process. As we stated earlier, you must file a traditional dispute with the consumer reporting agency first. If you don’t, and instead dispute directly with the creditor, you waive your right to sue the company.

If they refuse to look into your request or start an investigation, you have no legal recourse because you didn’t follow the proper protocol.

You can try and get a federal or state regulator to pursue your case on your behalf, but there’s no guarantee it will happen. Make sure you follow each step of the process exactly so that you can fully benefit from the 623 dispute process.

Can a 623 dispute really work?

This method will only work to remove entries from your credit history that are inaccurate, or entries in which the creditor no longer has to verifiable information.

While you might think that the credit bureaus will have up-to-the-minute information about your past debts, this is often not the case. In fact, most credit card companies will only keep your records for 13 to 18 months.

If you have any late payments, charge-offs, or other relevant information prior to this time, they probably won’t be able to verify any of it through their records. The 623 dispute method works because anything that is inaccurate, or not in the creditor’s records will have to be corrected on your credit report.

This means that if the creditor does not have any records on your account at all they must contact the credit bureaus to have the negative information removed.

If you have disputed the information through the credit bureau before initiating the 623 dispute process, and the creditor refuses to remove erroneous information, you will have grounds to sue.

Otherwise, your only legal recourse will be to have the state or federal authorities pursue the case, and it is solely at their discretion to do so.

When won’t a 623 dispute work?

There are a few different scenarios in which a 623 dispute likely won’t be successful. For example, it probably will not work for a debt that is fairly recent. It is also unlikely to work for those companies who do keep detailed records spanning several years.

In addition, you will need to be somewhat specific about the information you wish to be investigated and any records that you have that can prove that there is an error will be helpful. So if you don’t keep your own consistent records, you may have trouble getting the information removed.

How to Initiate a 623 Dispute

At the very minimum, you must identify the account by the actual account number and provide a reason to the original creditor explaining why you are disputing the accuracy of their records.

If you do not provide this information as a part of your investigation request, the original creditor may determine that your request is frivolous and deny the investigation. If they do decide this, then they have five days in which to notify you in writing.

Overall, the 623 dispute method works best for past delinquencies and charge-offs that may no longer be listed appropriately in the records.

Still, you’ll need at least the basic information to get started. If you can’t find anything in your own records, check your credit report to see if there is any account information listed there.

If the original creditor fails to comply with your 623 dispute letter, you’ll have to take legal action. You may also file a complaint with the Consumer Financial Protection Bureau (CFPB) and your state attorney general.

Hiring Professional Help

When you still don’t have success with a 623 dispute, even after following these steps and supplying detailed account information, consider talking to a professional.

Credit repair companies have the legal knowledge and extensive field experience with getting all types of negative items removed from credit reports.

See also: Best Credit Repair Companies (Updated Reviews for 2021)

You can start with a simply phone consultation to see what they think about the steps you’ve already taken and how they might be able to bolster your case. Whether you have one negative item on your report or several, it’s never too late to ask for help.

5 Cyber-Security Myths We Need to Ditch

Pick a subject, any subject, and there are myths and pure nonsense that someone will buy into.

  • Birds will die if they eat the uncooked rice flung at newlyweds. (Nope)
  • If you eat Mentos and drink Diet Coke simultaneously your stomach will explode. (Hardly)
  • You only have one credit score. (Wrong)
  • Napoleon was short. (At 5’ 6”, his height was average in his day).
  • “President Obama was the founder of ISIS.” (Oh, come on Donald!)

Cyber-security has its own set of misconceptions as well. Here are five.

1. Software Will Protect You

Say it with me now: “Software alone is not going to stop cyber-crime, even a little.”

There is no more harmful notion than the one that leads people into doing whatever they want on their computers or smartphones because they downloaded a software update. While software has its benefits, they often have to do with containing damage, not stopping an attack.

The false sense of security fostered by the idea that software can protect anyone from the kinds of daily mutating, highly sophisticated attacks out there today is dangerous.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

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2. Cyber-Crime Is Mostly About Credit Card Fraud

The idea that cyber-crime is just about credit card fraud is a pernicious misconception that, ironically, can lead to credit card fraud and other forms of credit-related crimes.

There is no right answer to the question regarding the most prevalent forms of cyber-crime. But by far the majority of the capers out there are focused on grabbing colossal amounts of personal identifying information from organizations that do business with millions of people or, alternately, stealing confidential business information that can be sold to the highest-bidding competitor. Sure, there are other forms of attack, some of them very much on the rise, such as ransomware schemes, but by and large the focus among cyber-criminals is on sellable information and making a lot more money than can be had from a credit pump-and-dump.

That said, the ways that stolen information can be used leads back to consumers and can very easily result in credit fraud, since stolen data can be easily purchased by identity thieves for next to nothing on the dark web.

3. Cyber-Crime Is Only About Making a Buck

If cyber-crime were only about making money, we’d all be a lot safer than we are right now.

Let that sink in.

Make no mistake, there are hordes of hackers out there driven by ideology. Many are far less interested in making money than in making money disappear or taking down the electrical grid or rigging an election. For them, mere monetary reward is not a motivation unless it is needed to facilitate an attack.

This is the stuff of nightmares and blockbuster Hollywood films, and there isn’t a thing most of us can do to stop any of it from happening.

In a world where the Stuxnet worm that was used to attack Iran’s nuclear program is quaint technology and detonating a hydrogen bomb would inflict less casualties than a cyber-attack that shuts off the power grid, having our credit ruined by a pajama-wearing identity thief is the least of our worries.

4. Cyber-Criminals Don’t Target Small Businesses

The myth that cyber-criminals don’t focus on businesses that aren’t at the top of the food chain can be debunked with one name: Target. The company was hacked by one remove. The criminals managed to get malware on a far-flung point-of-sale system by coming in the side door. They merely had to compromise a smaller HVAC vendor.

No matter how small the enterprise, it must have serious security protocols and a meaningful cyber-defense plan, lest it suffer an extinction-level event and potentially bring down a whole lot of other folks with it.

5. There Is No Way to Stop a Cyber-Attack

This is the biggest myth out there, in my opinion. Except, of course, that in the final analysis it is true: There is no way to stop every single cyber-attack.

That said, for many attacks, PEBCAK is the answer. Unfamiliar with this approach? It’s an oldie but goodie that anyone in IT will recognize, the letters forming an acronym that neatly states why countless attacks are successful. PEBCAK stands for Problem Exists Between Chair and Keyboard.

While it is true that cyber-threats abound, the only way to contain the pandemic and meaningfully push back is if everybody does what they are supposed to do. That is a big “if.” But one can hope, and while fixing the human problem is a Herculean task, it’s a worthy goal.

If you’re concerned you’ve been a victim of identity theft, it’s important to keep an eye on your credit as new accounts in your name or a sudden drop in credit scores indicate fraud has occurred. You can view two of your free credit scores, updated monthly, by visiting Credit.com.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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Source: credit.com

How Long Does It Take To Rebuild Credit?

If you’re trying to rebound from a major financial nosedive, it may seem like you’ll never get your credit back on track. Maybe you’re overwhelmed by credit card debt, or you lost your job and got behind on all kinds of bills.

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No matter what has happened in your past, there is always something you can do to take control of your finances and your credit. It might take some time, but it is possible. So just how long does it take to rebuild your credit? Read on to find out.

How long does it take to rebuild your credit history?

Your credit score reflects the information on your credit report, so you have to take into account what items are listed, how much impact they have, and how long they stay on there.

The maximum amount of time for a negative item to stay on your credit report is 10 years. This is typically reserved for Chapter 7 bankruptcies and unpaid tax liens. Most other derogatory items, such as delinquencies, charge offs, and foreclosures, remain there for seven years.

If these items are accurate and all of the proper protocol was followed by creditors, it can be difficult to get them removed from your credit report ahead of schedule. However, it’s important to know that their effects on your credit score lessen over time, despite still being listed on your report.

How can you find the problem areas on your credit report?

Before even thinking about rebuilding your credit, you have to figure out exactly what’s wrong with it. Start off by ordering your credit report for free from each of the three credit bureaus.

Once you have them, carefully review each one to see what information is reported there. Lenders don’t just look at your credit score. They also look at your credit reports to see what is contributing to your credit score.

You’ll potentially see a list of credit items listing negative items. For example, you might see a late payment listed here, including how far past due it was. You’ll also see a list of your accounts in good standing, and a list of credit inquiries made over the last two years.

Assuming everything you see is accurate, you’ll have a good sense of what items you need to work on, either through actions you can take today, or simply by waiting.

How to Start Rebuilding Your Credit

Once you know what type of credit you’re working with, you can take a few different steps to start rebuilding. Some items take a while to make a difference in your credit score, while others start to have an impact right away.

Either way, all of these tips are necessary in order to maintain healthy credit even if some major items simply need time to repair themselves.

Pay Your Bills on Time

Maybe you’re living paycheck to paycheck, or maybe you just don’t pay attention to due dates. No matter what your attitude is towards paying bills, it’s time to shift your mindset and pay them on time.

Being just 30 days late on a payment can cause your credit score to drop more than 100 points. And the real kicker? The higher your credit score is, to begin with, the more points you’ll lose. So if your credit score is already in the high 700s or even the 800s, it’ll drop on the higher end of the range for any infraction.

Bottom line: take care of those bills each and every month. Sign up for automatic bill pay that comes out right on payday if you have to. Also, note that this rule doesn’t just apply to credit cards and loans.

Just about any creditor can report a late payment to the credit bureaus, even your cell phone carrier or utility company. So get out the calendar and make a plan to pay each and every bill before it comes due.

Keep Your Debt Low

Owing a large amount of debt can hurt your credit in a variety of ways. There’s an entire category devoted just to your amounts owed, accounting for nearly a third of your credit score. And there are several different ways in which your debt level is analyzed for your credit score.

First, it’s important what kind of debt you have. Revolving debt like credit cards is not looked upon favorably because the debt is unsecured. There is no physical property that a lender could seize if you stop paying your balance. Plus, there’s no potential for any type of growth in value.

Whatever you purchased with your credit card probably won’t garner more money than you paid for it, and probably not even face value at that.

Installment loans, on the other hand, are scored better because they usually have an asset tied to them (like a mortgage or car loan.) They potentially offer some type of added value, like equity in your home.

Credit Utilization Ratio

Another reason to keep your debt low is that your credit score takes into account your credit utilization ratio. This refers to the amount of credit you have access to compared to the amount you actually use.

It’s ok to have a couple of credit cards, and the higher your credit limits are, the better it is for your credit. But the more you charge (and don’t pay off), the more that credit limit shrinks.

Ideally, you don’t want to use any more than 30% of your credit. So if your credit card limits total $10,000 and you only have a $2,000 balance, then you’re only utilizing 20% of your credit limit.

To quickly rebuild your credit, try to pay down any debt you have to get your ratio under 30%. You should notice an uptick in your credit score after a month or two.

Think Twice Before Opening New Accounts

You might think that getting a credit card is a great way to increase your credit utilization ratio without having to actually pay down debt. Just get a new card to increase your limit, right?

Not so fast. Your credit report is an intertwined web of information and making one seemingly simple change can have ripple effects you didn’t account for.

There are several ways that opening a new account could actually cause harm to your credit. For starters, you’re increasing the amount of revolving credit in your credit mix. That’s not going to help your credit score at all.

Credit Inquiries

Inquiries also hurt your credit score. Sure, it’s just five or ten points, but that can add up if you’re applying for several cards at once. Plus, each of those inquiries remains on your report for two years!

Finally, new accounts shorten your average length of credit because you’re essentially adding a big fat zero that brings down your more seasoned accounts.

It’s fine to get a new credit card if you need one for a specific reason, but don’t open one solely in an attempt to rebuild credit. You’ll probably end up doing more damage in the long run.

Don’t Close Old Accounts

On the same token, closing an old account could hurt your credit by inadvertently lowering your credit utilization ratio. Closed accounts do still contribute to your credit history length for another ten years, but they won’t count towards your available line of credit.

If you’re considering closing an account because you can’t control your spending, try locking up your cards or keeping them with a trustworthy family member.

You’ll also need to delete any saved credit card information on your phone and laptop so you’re not tempted to make quick-click purchases. Obviously keeping your debt on track is most important. However, if self-control isn’t an issue, then you’re probably better off keeping your current accounts open.

What factors affect your credit scores?

Although there are five separate categories, they actually overlap in a number of ways. Here’s how they break down:

  • Payment History (35%)
  • Amounts Owed (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • New Credit/Inquiries (10%)

Opening a new credit account, for example, may increase your overall available credit. However, the brand new account also lowers the average length of your credit history and adds a new inquiry on your report.

That’s three different categories affected by one action, with one potentially positive change and two negative ones. Plus, each person’s credit score is weighted differently depending on the entire credit profile.

Bottom Line

Everything is relative. It’s nearly impossible to figure out exactly what effect your financial decisions will have on your credit score.

Rather than trying to manipulate potentially positive impacts, focus on the sure-fire wins like paying your bills and lowering your debts owed. They might take longer to rebuild your credit score, but you don’t run the risk of an unforeseen domino effect by muddled decision-making.

If you need more help, consider contacting a credit repair company. They help clients rebuild the credit by removing negative items from their credit reports. Check out our list of the top credit repair companies.

7 Texts You Should Ignore

Whether you’re trying to win tickets to a sold-out concert, remind your partner to buy milk, vote for your favorite reality TV personality or ask your headphones-encased kid a question, there’s a text for that. While texting is a great convenience and time saver (not to mention an international obsession), if you respond to a wrong text — think: Wyle E. Coyote and the Roadrunner — look out below!

Phishing via text works the same way as email, the only difference is format, tone and, of course, length. The goal remains to commandeer as much information about you as possible (to use for fraud) and/or take control of your device. The pilfered information can be seriously harmful to your sanity, not to mention your finances, since scam artists are always looking to make a quick buck at your expense.

There are many texts you should handle with kid gloves, and still others that you should ignore.

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I’m not talking about the obvious “don’ts” here, like looking at texts that were not sent to you. (Oh, and in case you missed that memo, sneaking a peak at your partner’s texts is and always will be a one-way ticket to relational oblivion.) What you need to worry about are texts that could have plausibly been sent to you.

This latter category of text is not always obviously fraudulent. The same thing that makes texting second nature to you is what makes it a potential hazard to your personal information safety.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Regardless of their apparent merit, instead of replying to unsolicited texts directly, you should call the purported sender directly to be sure they aren’t trying to contact you.

With that in mind, here are seven texts you’ll want to be wary of.

1. Texts From Your Bank With Links

Automatic transaction alerts are an excellent security measure. You can set an alert on your checking and savings accounts to cover all kinds of parameters, such as the minimum balance you have to maintain without incurring a fee, a trigger amount on a withdrawal and more. These can be delivered via text, and here’s the thing: the SMS version from your bank will never contain a link. If you get one that does, ignore it. You can also call your bank directly.

2. Texts From the IRS

This is the easiest phishing scam to detect. The IRS never sends texts — ever. It’s also worth noting that the IRS won’t email you about official business either. The only way to do business with the IRS is via the United States Postal Service or by telephone — and if you are contacted by phone, it’s a good rule of thumb to tell the person who called you that you are concerned about security, and you need a reference number or department because you are going to call back on the IRS main phone line about whatever the matter may be. Also keep in mind that just because your caller ID tells you the incoming call is from the IRS does not mean it is the IRS since many phishers are consummate “spoofers.”

3. Texts From Your Credit Card Company With a Call to Action

This is similar to a text from your bank, but with more options for failure. You may have transaction alerts set that get delivered via text. You may have also consented to promotional notices. The bottom line with texts from your credit card company: whatever they are allegedly saying to you via text, they will say to you on the phone. Ignore any texts with a call to action, even if you want to take the action, and call your credit card company directly on the number designated on the back of your credit card. Especially ignore the text if it says that clicking on the link (or calling the number) is the only way to get a particular promotion.

4. Unsolicited Texts From Your Doctor, Lawyer, or Accountant

Businesses that collect a lot of personal information from clients, like medical practices, law firms or accounting firms can be prime targets for hackers. If you get a text from any of these folks, no matter how convincing, and no matter how much about you they seem to know (remember, these same professionals may not have the best defenses against hackers), ignore the text and call them.

5. Random Texts From Your Mortgage Company

I am guessing you’re getting the gist of this game, but any seemingly official notification about one’s mortgage somehow has the ability to completely unhinge people, especially if there is a problem. As data breaches have become the third certainty in life, it is quite likely your mortgage information is out there. If a scammer gets ahold of it, they might try to scare you into taking an action via text, like sending payments to a new address. Ignore them and call your mortgage holder.

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6. Scary Texts From Your Auto Lender

Nothing is quite as classic in the storybook of personal finance as the repo man coming to take your car. Because it’s a common nightmare scenario, we are liable to fall for it. Ignore any texts you get from your auto lender. Instead of replying, always call to find out what you already know: someone just tried to scam you.

7. Promotional Texts From Your Favorite Game

Don’t be embarrassed. We all have a game we like to play, and so do our kids. The problem here is that for real devotees, there is very little one won’t do to get an edge. Whether it’s buying points or weapons or secrets, or getting the latest upgrade the second it’s released, true gamers are a juicy target for scammers who send texts hawking special promotions, and they are less likely to be careful about whom they give their contact information to, since getting more game time is more important than anything. Same rule applies here: ignore any text that you get, and make sure your kids do as well. Go online and find the promotion from a reputable site.

If you think you’ve responded to a phishing text, you should monitor your credit for signs of identity theft. (You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.)

When it comes to staying safe, let restraint be your co-pilot. A little pause goes a long way and you don’t want to end up being the get for scammers.

More Money-Saving Reads:

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Source: credit.com

How to Manage Your Debt Effectively

Love it or hate it, debt is an integral part of modern life in the United States. And, when you think about it, debt in itself really isn’t a bad thing. Neither are credit cards or loans.

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They only become a potentially negative thing when they’re misused or mismanaged. And once they get out of control, they can head down a long spiral and bring you down with them.

The wise use of debt — whether it’s revolving (like credit cards and lines of credit) or fixed (like a secured car loan or mortgage) — is like the skillful use of the right tool at the right time for the right purpose.

So, it’s important to realize that avoiding debt isn’t really the answer. In fact, trying to go through life without incurring any debt or using credit can be unnecessarily difficult and troublesome. It can even impact non-credit-related situations like renting an apartment. The skill Americans truly need to focus on developing is how to manage debt effectively.

Following are 7 tips to help you manage your debt more effectively:

1. Think Before You Sign

Banks, retailers, and many other organizations make credit very easy to obtain if you have a good credit score.

Nearly every department store or specialty shop has its own credit card that you can sign up for instantly while you’re making a purchase, and it often comes with the enticement of an immediate discount off your purchase.

Even if your credit score isn’t very good, there are many lenders who are willing to offer credit at high interest rates, from 25% APR credit cards to 33% payday loans.

The point to keep in mind is that lenders and retailers want you to spend money with them. They’re not concerned in the least with what more debt is going to do to your budget, your lifestyle, or your future.

So, the first tip is simple:

2. Avoid Applying for Credit Impulsively

Don’t sign up for additional credit as an impulse buy or based on desperation. It’s always going to be a bad idea under those circumstances.

However, if you frequent a certain store and routinely spend money there anyway, and you’re confident you can be responsible with a new credit line, it may be beneficial to sign up. The point is, that needs to be a conscious decision, not a second thought for the sake of a one-time 15% discount.

3. Educate Yourself About Your Credit Score

Your credit score is a 3-digit number calculated by credit reporting agencies based on a number of factors, many of which the average American couldn’t even name. While it may seem somewhat arbitrary, that doesn’t change the fact that that 3-digit number can determine:

  • Whether you qualify for a 0% introductory interest rate or have to settle for a rate that fluctuates at “prime plus 23%”.
  • Whether you’re considered financially trustworthy or not, and therefore whether a landlord will rent to you or certain employers will hire you.
  • Whether or not you can afford to buy your own house one day.
  • And much more…

There are numerous situations that are partially or fully out of your control that can result in damage to your credit score. However, much of the damage done could be avoided if consumers simply understood the basic factors that affect their credit score. Then, they could actively work to improve a bad score or maintain a good one.

So, our second tip is: Seek out reliable information about managing debt effectively and educate yourself, so you’re equipped to take strategic action.

4. Assess Your Current Debt Situation

As you learn more about managing debt and understanding your credit score, you’ll begin learning terms like credit utilization ratio and debt-to-income (DTI) ratio. These simple calculations have a huge impact on your score, and on how willing lenders may be to offer you favorable terms or to offer any credit at all.

  • Credit utilization ratio is the percentage of your currently available credit that you’re already using. (A simple example: If you own one credit card with a $1,000 credit limit, and it has a current balance of $200, you have a credit utilization ratio of 20%.)
  • Debt-to-income ratio is the percentage of your monthly or annual income that goes toward paying off debt you’ve already incurred. (Another simple example: If you earn $6,000 per month and the combined total of your existing car loan, mortgage, and minimum credit card payments amount to $2,000, you have a debt-to-income ratio of 33%.)

There are other important factors as well, but these two figures form a significant part of the calculation when determining your credit score. If they’re going to offer you the best possible terms, lenders want to be relatively confident you’re able to easily afford to pay for the credit they’re offering you.

They can make that decision based, in part, on how much of your current reliable income is already going toward other debt you’ve incurred in the past, as well as how much of your available credit you’ve taken advantage of thus far.

5. Keep Your Credit Utilization Ratio Low

If you already have four credit cards and they’re all maxed out, when you apply for a new credit card, it’s a pretty good bet you’re going to max that one out too. You already have a 100% credit utilization ratio.

This shows you’re probably not great at managing debt, and there’s a good chance you’ll eventually overdraw your ability to pay. So, the credit card company may decline your application, or they may offer a lower credit limit and/or a higher interest rate to help mitigate their risk.

Of course, if your income is such that, even with all those maxed-out cards, you’re having no trouble at all making the monthly payments, (your DTI ratio is still low,) they may not worry about your utilization at all. And that’s where debt tends to snowball quickly and dangerously.

To sum up, here’s the tip: To improve your credit score and make sure you’re managing your debt effectively, you should shoot to maintain a credit utilization ratio and a DTI ratio of no more than 30%. In other words, you’re taking advantage of available credit, but you’re coming nowhere near the maximum you can afford to spend on it.

6. Make and Keep a Budget

This one requires very little explanation. Everyone realizes that creating a budget is necessary if you’re going to manage your spending. The more formal your budget, the better.

If you’re currently in good shape, your credit score is high and your debt is low, A strategic budget can help keep it that way while improving important tools like emergency savings and investments.

If you’re on the other end of the spectrum, your credit score is low and/or your debt is getting out of control. A budget can be the lifeline you need to slowly but surely pull yourself out of that downward spiral one penny at a time.

The formula is very simple: Income > Expenses.

Of course, putting it into practice is a little more challenging. There are plenty of tools available, from a pile of envelopes with cash set aside for various expenses to smartphone apps, but the real value of budgeting depends on your own self-discipline and willingness to stick to the plan you create.

So, for this tip: Make a budget that consistently keeps your income above your expenses, and do everything you possibly can to stick to it.

7. Get Professional Help with Credit Repair If It’s Needed

While all of the above tips are self-serve actions you can take right now to make a difference in your debt management, many Americans are already in a situation where it may not be possible to turn it around completely on their own.

For instance, if the loss of a job, divorce, military deployment, or other major life events caused you to unexpectedly rely on credit cards for months, you may be in a desperate situation that isn’t really even your fault.

Likewise, if you’re like so many Americans who grew up, finished school, and left home without ever learning the basics of financial responsibility, you may have gotten in over your head in debt without even realizing that was possible.

No matter what the reason is for your current situation, you don’t have to go it alone.

Hire a Credit Repair Company

Get in touch with a reputable credit repair agency and discuss your situation with a professional who can help. For a small fee, they can take the reins on your situation by:

  • Investigating your credit report to confirm its accuracy and completeness
  • Working with creditors on your behalf to negotiate payment plans or better terms
  • Disputing errors and eliminating inconsistencies on your report
  • Setting up a realistic budget and debt reduction plan
  • Guiding you through the challenges that will inevitably rise as you resolve your situation

So, the final tip is this: If you need help getting out of snowballing debt and getting yourself to the point that you can effectively manage it going forward, don’t hesitate. Get the help you need.

In modern America, completely avoiding debt is not only difficult, it’s potentially harmful. However, incurring debt without managing it effectively can be even worse. Follow the tips above, and you’re sure to get a solid handle on debt and use it skillfully.

Source: crediful.com