What a Bad Credit Score Is

What is considered a bad credit score can vary depending on the credit scoring model being used but, ultimately, it comes down to what each lender considers a “bad” credit score. Your credit score is used by lenders to assess the risk that you may pose to them, should they provide you credit, and each lender may consider a different score as a “bad” credit score. When considering the most commonly used credit scoring model, FICO, the scores range from 300 to 850, and is usually categorized in the following ranges:

  • Excellent Credit: 781 – 850
  • Good Credit: 661-780
  • Fair Credit: 601-660
  • Poor Credit: 501-600
  • Bad Credit: below 500

The information in your credit report from credit bureaus is used to determine your credit score.

While the above ranges can help you get a better idea of where your credit score falls in regards to typical risk assessment and quality of credit, as stated above, each lender may consider a different score as being a “bad” credit score. For example, an auto loan lender may consider a credit score between 300 and 500 as being a bad credit score while a mortgage lender will likely consider a credit score between 300 and 650 as being a bad credit score.

What Does A Bad Credit Score Mean For Me?

For many people the subject of credit scores can be a stressful, if not sensitive, topic to discuss, especially if your credit score falls within the range that is typically considered as a bad credit score. There are numerous reasons that someone would have a bad credit score – many of which may not have been in your control – but here you are now, with “bad” credit, and it’s important to know how it will affect you.

First of all, as you may have already experienced, a lower credit score can lead to you being denied by a lender for anything from buying a mattress with a payment plan to a new home mortgage. Being denied credit, a mortgage, or even a job because of poor or bad credit can be stressful and frustrating but even being approved by a lender while your credit score is low can cost you greatly. With a bad credit score, if a lender does approve you, they will give you a very high interest rate which can cost you thousands of dollars extra. For instance, with a $25,000 5-year car loan at an interest rate of 16% (which could be significantly higher with bad credit) would likely cost you over $6,000 more than if you had decent credit and were able to get the same loan with an interest rate of 8% (which could be significantly lower with a 700+ credit score) – a typical home mortgage could cost you an extra $100,000 in interest!

What Gives You A Bad Credit Score & What You Can Do To Improve Your Score

If you’ve discovered that your credit score falls into the “bad” credit range, it is helpful to know what may have caused your credit score to drop. You can get this information by reviewing your credit report which will include any negative items which negatively impacted your credit score, causing you to have a bad credit score. There are a number of things that may give you a bad credit score, a few of which include:

  • Defaulting on a loan or credit card
  • Paying a credit card/loan/mortgage payment late
  • Foreclosure
  • Bankruptcy
  • Changing your address too frequently
  • Running frequent credit checks
  • Keeping a high balance to credit limit ratio

The above are some of the most common issues that lead to a poor or bad credit score but there are many others as well. It is important to review your credit report with a credit consultant to help shine more light on what may have caused your credit score to drop and how you can improve or repair your credit.

Thankfully, having a bad credit score is not the end of the world. There is a light at the end of the tunnel as there are many ways to improve your credit score or repair your credit. Here are a few ways in which you can take control of your credit and work on getting your score back up:

  • Pay your bills on time. Delinquent payments and collections can have a major negative impact on a credit score.
  • Keep balances low on credit cards and other “revolving credit”. High outstanding debt can affect a credit score.
  • Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score.
  • Pay off debt rather than moving it around. Also, don’t close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may lower your credit score.

Another option to get out of that “bad” credit score range quickly, is to repair your credit score by disputing negative credit items which are showing up on your credit report. This can be done manually or through a credit repair company. In many cases there may be false information or even simple mistakes that can allow the negative times to be disputed and removed from your credit report. By removing these negative items from your credit report, your credit score will go up.

Source: creditabsolute.com

5 Ways to Perfect Your Credit Score

If you’re trying to perfect your credit score, it’s important to first understand what makes up your credit report and credit score. Your credit score is determined by an advanced algorithm which was developed by FICO and pulls the data from your credit report to determine your score. When calculating your credit score, the following information is going to affect your credit score in the corresponding percentages:

  • 35 percent: History of on-time or late payments of credit.
  • 30 percent: Available credit on your open credit cards
  • 15 percent: The age of your lines of credit (old = good)
  • 10 percent: How often you apply for new credit.
  • 10 percent: Variable factors, such as the types of open credit lines you have

Many of this may be common sense or information that you’ve already learned over time, resulting in a good credit score but possibly not a perfect score. If you have a bad credit score, it could take a lot of time and work to perfect your score and you may first want to consider repairing your credit. If your credit score is already above 700 but you’re trying to shoot for that perfect score of 850 to ensure the best deals and interest rates, here are 5 ways to perfect your credit score:

1. Maintaining Debt-To-Limit Ratio

To perfect your credit score, it’s recommended that you keep your debt-to-credit ratio below 30% and, if possible, as low as 10%. The debt-to-limit ratio is the difference between how much you owe on a credit card versus how much your credit limit is. For example, if one of your credit cards has a credit limit of $5,000, then you should always keep the balance below $1,500 but preferably around $500. As you can see above, 30% of your credit score is determined by the available credit on your open credit cards, so keeping the debt-to-limit ratio will increase your available credit and also show that you’re responsible with your credit.

2. Keep Your Credit Cards Active

Make sure that you use your cards at least once a year to keep them shown as “active” credit and make sure that you never cancel your credit cards. 15% of your credit score is determined by the age of your lines of credit, so you should always keep your credit cards active to lengthen the age of your line of credit. Many people tend to cancel cards that they no longer use – many times because the rates aren’t very good or because they have another card with better benefits – but even if you don’t use the cards very often (just once a year is fine), you should keep them active. Typically, someone with a credit score over 800 has credit lines with at least 10 years of positive activity.

3. Always Pay Bills On Time

Probably the most well-known factor of a credit score and the factor that has the biggest impact on your credit score (35% of your score) is your history of paying your credit payments on-time. If you have a history of always making your credit card, mortgage, and car payments on time, you will greatly improve your credit score. This can also have an adverse effect as well, should you ever make a late payment. Unfortunately, it only takes one late payment to severely reduce your credit score so it’s crucial that you make sure to always make credit payments on time.

4. Dispute Errors On Your Credit Report

If you don’t already, make sure that you request a copy of your credit report once every year and review it for errors. It is actually quite common for credit reports to contain errors which can be disputed and potentially allow you to have negative items removed from your credit report. If, for instance, your credit report shows a late payment on a credit card but contained errors in the record, you can dispute the negative item and request to have it removed from your report. Having a negative item, like a late payment, removed from your report can improve your credit score significantly. While disputing errors on your credit report can be tedious and take a lot of time, it is usually worth it. Another option would be to contact a credit repair agency to help you dispute any negative items on your credit report.

5. Reduce The Number of Credit Inquiries

While this may only affect 10% of your credit score, keeping the number of credit inquiries down can still help to build that perfect credit score but is often ignored. You should never have more than one credit inquiry per year but many people do not realize how often this is done and often times have their credit checked more than once per year. If you’re applying for a car loan, checking your credit score online, or applying for a new credit card, these type of actions will almost always result in a credit inquiry and should be avoided if you’ve already had a credit inquiry earlier in the year. Make sure you do your research on what will result in a credit inquiry so that you don’t accidentally have more than one a year without realizing it.

Source: creditabsolute.com

How you get bad credit

No one likes having a low credit score or bad credit and in many cases you may not even know why you have bad credit. While it is more common for young adults to find themselves damaging their credit without realizing it, it can happen to anyone at any age. If you want to avoid having bad credit, it’s important to know what causes your credit score to go down and how you get bad credit.

First of all, it’s also important to know the difference between bad credit and no credit. If you’ve never had a credit card, car loan, mortgage or any other type of loan or any credit history, then you’ll likely be deemed as having no credit and could be denied by lenders as being high risk, simply because they have no data to show whether you’re a reliable borrower. This is not the same thing as having bad credit which looks as bad or worse than having no credit. Bad credit is caused by a bad credit history, large amount of debt, or other issues on your credit report.

Top 4 Reasons You Have Bad Credit

To help you better understand why your credit is bad, here are 4 of the most common reasons that you may have damaged your credit:

  • Too Many Credit Checks: Likely the most common reason that your credit score is lower than you’d like is due to frequent credit checks. If your credit is checked more than once per year, then you will likely lose points on your credit score. This can be caused by applying for credit cards too often, checking your credit score frequently, or even from checking mortgage rates from multiple lenders in an attempt to get the best deal on your new home. Credit checks are very common so it is imperative that you keep track of how often you have having your credit checked to avoid this common mistake.
  • Large Amount of Debt: Another reason that many people have bad credit without realizing it, it due to a large amount of debt. You may be paying your credit card payments on time, have little or no negative instances on your credit report and may have even been very careful to not check your credit too often but may still have bad credit. This is often times caused by a poor debt to credit ratio which is when you use all of your available credit for your debts. In other words, if you have a credit card with a $3,000 limit and you continually have it maxed out or more than 50% (below 30% is optimal) of your available credit is used, then you will likely damage your credit. You may also be declined for loans if you have a large amount of debt compared to your income which is very common with someone who has a mortgage, car loan, and other forms of debt which consumes a large percentage of their income.
  • Past Delinquencies: If you’ve had trouble with debt in the past, such as a foreclosure, repossession, bankruptcy, neglected loan or other similar derogatory mark on your credit in the past, it could be keeping your credit score down and causing you to have bad credit. Many of these types of delinquencies can stay on your credit report for 7 to 10 years so, while you may have forgotten all about it, it may still be showing on your report and handicapping your ability to rebuild your credit.
  • Late Payments:  It can be surprising how many people actually do not realize how their payment history can severely impact their credit. This is likely because many lenders will provide a due date for monthly payments but will provide some type of grace-period before late fees are assessed. This can often-times cause complacency, leading to occasional late payments by borrowers simply because they think they have a couple extra days after the due date to get their payment in. Well, unfortunately, many lenders will report late payments to the credit bureaus which will result in a negative mark on your credit report and a lower credit score. This is very common with credit cards and mortgage payments and any late payment can severely damage your credit and could even increase your interest rate.

How You Can Repair Your Bad Credit

While bad credit can be a complete nightmare and it may seem impossible to improve your credit again, there’s still hope. It will take time but you can certainly repair your credit and get your credit back on track. First of all, going forward, you’ll want to make sure that you avoid the common mistakes listed above but you can also work on adapting some best practices to improve your credit score. Make sure that you make your payments on time, keep a low debt-to-credit ratio – only using about 30% of your available credit on your credit cards – and make sure that you keep using your cards at least a few times a year. Rather than cancelling old cards that you don’t use anymore, it is also beneficial for you to hold on to old cards, using them occasionally, as older cards will help your credit more than new cards which no history.

Lastly, you should check your credit report for errors or inconsistencies which could allow you to dispute negative items on your report which would help to repair your bad credit. While this can be done manually, it is usually recommended that you hire a credit repair company who can go to bat for you against the credit bureaus which will give you much better chance of finding errors and getting negative items removed from your credit report. Most people see an increase in their credit score in less than 45 days when using a credit repair service.

Source: creditabsolute.com

Getting Good Rate on a Car Loan

Buying a new car? Planning to get a car loan for it? Then keep the following tips in mind to get a good interest rate – and avoid the crucial mistakes that cost you even more money over the long run.

Tip #1: Don’t Get Financing at the Dealership

The vast majority of car buyers get their car loans at the same dealership where they buy the car. Their reasoning: It’s convenient, and/or the dealers give great interest rates. Do you have the same sentiment?

Here’s the problem: As attractive as the dealer’s advertised interest rates are, they’re likely reserved only for buyers with excellent credit scores. What’s more, there’s a pretty good chance you can find an even better deal elsewhere, such as with community banks and credit unions.

Our advice: Do your homework, and get your loan lined up and ready before you visit the dealer. If the dealer offers you an even better deal, you can still have the loan canceled.

Tip #2: Check Your Credit Score

Do you know your credit score? If not – and if you let the dealer come up with your car loan for you – you’re in BIG trouble! The dealer might convince you that your credit rating is worse than it actually is, and jack up your interest rates accordingly.

Get your credit score by requesting your credit ratings from TransUnion, Equifax, and Experian. You can also check your credit score by applying for preapproved car financing. Car loans from banks and credit unions can give you a pretty good idea of the vehicles and interest rate your credit score qualifies you for.

Click here to learn how you can improve your credit score. 

Tip #3: Watch Out For Scams.

Another risk you run when you let your dealer set up your financing for you is getting scammed. A common scam is carried out when, a few days after you sign the dotted line and bring your new car home, the dealer calls you and tells you the car loan “didn’t work out,” and that you’ll need to re-negotiate a new loan with a higher interest rate – or give the car back, losing your deposit in the process.

Protect yourself by getting your car loan elsewhere, or by not buying the car until you’re 100% sure the dealer’s financing is finalized.

Tip #4: Don’t Focus on the Monthly Fee

Lastly, one of the biggest mistakes car buyers make is going for the loan with the lowest monthly fees. Low monthly fees normally mean higher interest rates and longer payment periods. If you’re not careful, you might end up paying over twice the car’s value throughout the life of the loan.

Remember that there are at least two things that go into the monthly fee: The price of the car and the car loan’s premium. (If you’re trading in your old car, that’s an additional factor.) A single monthly fee won’t tell you how much of each is going into it – and there’s no way of knowing whether you’re paying too much for your loan or getting too little from your trade-in.

So if the car salesman asks you how much you can afford to pay each month – you don’t need to answer. Don’t get trapped! Focus instead on the total amount you’ll be paying for the car loan over its lifetime. It’s the best way to save money and get a decent car at the same time.

Source: creditabsolute.com

What is Revolving Debt?

Although you have to pay back any money you owe, not all debt is created equal. There’s installment debt, like an auto loan, mortgage, or student loan, which is paid off in installments. Then there’s revolving debt, which applies to things like credit cards and home equity lines of credit.

Non-revolving and revolving debt affect your credit score differently and can affect your life differently—especially if you get in a hole of revolving debt that’s hard to get out of.

Americans averaged more than $1 trillion in outstanding revolving debt in the past few years, according to the Federal Reserve. The key to managing revolving debt? Understanding how it works and why it’s easy to take on too much.

A Closer Look at Revolving Debt

People often use the term “revolving debt” to mean a credit card balance that is carried over from month to month—and while a lot of revolving debt is carried over and not paid off in full, that isn’t technically the definition of revolving debt.

Revolving debt encompasses all debt that isn’t a set loan amount for a set period. Instead, the amount you owe, and minimum payment required, on, say, a credit card or home equity line of credit changes as you pay some off and take on more debt—like a revolving door.

You can choose to make the minimum payments required by the credit issuer, pay off the entire balance, or pay some amount between the minimum and the total balance. If you don’t pay off the full balance when it’s due, then you will ultimately end up paying more because your balance will accrue interest and finance charges.

For example, if you have a $3,000 balance on your credit card at a 16% interest rate and you make a $100 payment monthly, you’ll take 39 months to pay off the balance and ultimately pay $857 in interest.

Of course, if you continue to charge more to that credit card at the same time you pay only minimum monthly payments toward the existing debt, then it’ll take even longer to pay off.

That’s one of the quiet dangers of revolving debt: If you haven’t reached your limit, you can continue to borrow from your credit line while you still owe money, which adds to your debt and to the amount of interest you’ll have to pay.

And if you don’t pay off the balance in full when it’s due, the interest you owe will be added to your balance and accrue more interest.

What Is Installment Debt?

Installment debt is a loan for a set amount with set payments. Also called non-revolving credit, it can’t be used again when it’s paid off.

Once you pay off a home loan or car loan, for example, it’s closed, and you’d have to reapply for a new loan to borrow more.

When you take on installment debt, you agree to a set payment schedule and a fixed interest rate (or in some cases a variable interest rate that is established in your initial contract). You then make monthly payments until the loan is paid off.

Typically, secured installment debt is considered lower risk to the lender than revolving debt and therefore has lower interest rates. You’re also usually able to borrow larger amounts, depending on your credit history and income, because secured installment debt is often tied to the collateral that backs the loan, such as the car or house the loan is financing.

Installment debt may also affect your credit score differently.

How Each Kind of Debt Affects Your Credit Score

Both installment debt and revolving debt are factored into your credit score. In fact, your credit mix—meaning the different types of debt you carry—determines 10% of your FICO® score .

If you miss a payment on either installment or revolving debt, it could affect your credit score. (A late payment can’t be reported to the credit reporting bureaus until it is at least 30 days past due.)

Then there’s your credit utilization ratio —which means the amount of debt you owe in relation to the amount of credit available to you. If you’ve maxed out all your credit cards, for example, that could be a problem. However, using credit cards to take on small amounts of debt and then pay it all off can help build up your credit score.

Lenders consider revolving credit as much more reflective of how you manage money than installment loans. While having large existing loans can certainly affect the amount banks are willing to lend you, installment debt doesn’t affect your credit utilization ratio as much as revolving credit because there isn’t a larger line of credit tied to the loan.

That means that in order to maintain a healthy credit score, a borrower may choose to focus on paying off revolving debt and not taking on more in the meantime. If you’ve gotten into a revolving debt trap, with your existing credit cards accruing interest and adding to what you owe, then there are a few options to get out of revolving debt.

Getting Out of Revolving Debt

Revolving debt can be hard to get out of because the interest and finance charges keep adding to your balance.

There are a few ways to ease revolving debt, however. The simplest, though in some ways the hardest, is to make a payoff plan. That requires you to plot out how much you can afford to pay each month and calculate how long it’ll take to pay off what you owe.

One strategy is to pay off the debt with the highest interest rate first and then perhaps consolidate remaining debt to a lower interest rate.

In order to consolidate credit card debt, or really any kind of revolving debt, at a lower interest rate, there are at least two options: balance transfer credit cards and personal loans. (Personal loans are unsecured, meaning they’re not tied to collateral like a house or car. Secured debt is, well, secured by an asset.)

Balance transfer credit cards, though, are simply another form of revolving debt and can reopen that cycle, whereas personal loans are a form of installment debt.

The Takeaway

Credit cards are one of the most common forms of revolving debt: You charge some, pay some or all off, and so on. But lots of people get caught in a revolving debt trap if they don’t pay balances off in full each month. A lower-interest personal loan is one possible escape route.

Seeking a SoFi credit card consolidation loan is straightforward. You can apply for an amount from $5,000 to $100,000 and use it for a variety of expenses—in this case, to pay down existing high-interest debt.

And a SoFi fixed-rate personal loan comes with no application fee, origination fee, or prepayment penalty.

It’s easy to find your rate.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’swebsite .


Source: sofi.com

How In-store Credit Cards Can Hurt You Financially

You’ve probably heard it dozens of times – you’re going through the checkout at a large discount store retailer and the cashier offers you 10% off your order with their in-store credit card. For many people – especially if they’re making a large purchase – this offer seems quite convenient. Not only do you save money on your large order but you don’t have to pay it back right away but can it actually hurt you financially and damage your credit?

For many consumers, they have several store credit cards, one from each of their favorite retailers. The problem is, these credit cards have several draw backs. For one, most of the in-store credit cards come with a significant fee (often times the initial fees are more than what you even save when opening the credit account). Additionally, they typically have very high interest rates – usually 22% or higher – and what’s more is most of these cards do not have an introductory rate or grace period, meaning they begin collecting interest the moment you swipe the card.

In some cases these cards can be useful for certain large purchases of which you’ve already worked out a short term repayment plan. When paying them off quickly, you can avoid heavy interest fees. However, most in-store credit cards tend to apply a very low minimum monthly payment – about 3% of the balance. As many card holders tend to only pay the minimum, it can often takes years to pay off while collecting interest the entire time. That $500 TV you bought on credit could end up costing you $2,000 or more depending on how quickly you pay off the card.

In-store Credit Cards Also Affect Your Credit Score

How In-store Credit Cards are BadHow In-store Credit Cards are BadAs discussed above, the in-store credit cards tend to be a bad idea financially but they can also have a negative effect on your credit score. Each time that you apply for an in-store credit card, the store must then run your credit. If you’ve already had your credit run previously in the year (rental car, credit checks, car loan application, other credit card applications) each time you have your credit run, you can lose additional points off your score.

The in-store cards can also affect your credit score in several other ways as well:

  • Credit History
  • Number of Lines of Credit
  • Late Payments

Since you likely won’t use the store credit card as often as other lines of credit, it’s much easier to forget about. This can lead to late payments, delinquencies or simply maintaining a maxed out card for a long period of time which can also damage your credit.

If you already have several store credit cards, you may want to look into consolidating your debt or trying to pay them off as quickly as possible. Make sure that you’re making more than the minimum payments and set reminders for yourself to ensure that you make each payment on time each month.

For assistance rebuilding your credit score, call Credit Absolute for a free consultation at: (480) 478-4304

Source: creditabsolute.com

Minimum Credit Score Needed to Purchase a Car

If you are planning on purchasing a new vehicle and don’t have the cash or trade-in to cover the full amount needed for the purchase, then a car loan is needed. Getting approved for a car loan, however, can depend on a few variables, such as:

  • Employment verification
  • Income – How much and how dependable that income is
  • Credit payment history
  • Assets and net worth
  • Credit score and more

Out of those facets, your credit score can have a huge impact on whether or not you are approved for a car loan and how low your interest rate will be. Having a good credit score will not only ensure that you are approved but will lower the interest rate considerably which, in turn, decreased your payment significantly.

As far as a minimum credit score needed to be approved, that can vary depending on the lender. Some lenders are willing to take the risk of approving a loan to someone with poor credit because they are able to mitigate some of that risk by hiking up the interest rates. According to Interest.com, car loans made to borrowers with poor credit tend to pay 3 to 4 times as much as someone with good credit. Poor credit is usually identified by having a credit score between 501 and 600 while a “bad” credit score is considered less than 500.

Check Your Score Before You Apply

The general rule of thumb when applying for a car loan with a low credit score is that you will need a score above 500 to even get approved. Lower than that and it is highly unlike that you will get approved and, instead, you will only be damaging your credit further by applying. Each time a potential lender run your credit, you could be decreasing your score.

That being said, if your credit score is below 500 but you recently went through bankruptcy and no longer have any debt, it is not unlikely that lenders will line up to give you a car loan even with poor or bad credit. That is because it isn’t as risky for them to lend to you since they know you no longer have any other debt to worry about. But, again, you will likely have to deal with a very high interest rate and high payments.

The best route to take would be to work on increasing your credit score as much as you can prior to applying for a car loan. That way you can be sure that your application will get approved, your interest rate will be lower and your car payments will be much easier to make.

Source: creditabsolute.com

How Buying a Car Can Lower Your Credit Score

The end-of-year car sales are upon us and while the deals are usually really good during this time of year, you should also consider how buying a new car could affect your credit. Specifically, how it could affect, or lower, your credit score.

Your FICO credit score is calculated by a complex algorithm that involves a large list of different things that either positively or negatively affect your credit score. Right now, though, we just want to focus on how a car purchase can affect or score. I’d like to focus on how it could potentially lower your credit score.

The Credit Check

Unless you’re purchasing the vehicle with cash – in which case it wouldn’t have any affect on your score – the first step in the purchase process would be to qualify for a car loan. The process of qualification includes a credit check. If you have already had your credit run several times that same year, having it checked again could negatively impact your score. This can be extra dangerous if your credit score is low, as you may have to apply with several different lenders before getting approved. If that is the case, your credit will be run several times, lowering your score even further.

Debt-to-Income Ratio

The next area that could negatively affect your score is the debt-to-income ratio. One of the pieces in the FICO score puzzle is looking at how much debt you have versus how much your income is. If you already have a lot of debt – such as a mortgage, student loans, credit cards, doctor bills, etc. – then by increasing that debt by adding a car loan, especially if it’s a large amount, can seriously impact your credit and lower your score.

On the flip side, someone with no debt but poor credit – such as someone who recently went through bankruptcy – could actually improve their credit score by purchasing a new car. By adding some debt and making regular payments, it helps show they’re financial stable and adds positive credit history.

Monthly Payments

Lastly, you want to consider the monthly payments. While you definitely don’t want to get a payment plan that is more than 5 years, if you have poor credit and your interest rate is high, your monthly payments could also be high. The last thing you want to do is accept a monthly payment that you can “get by” with. Always remember that cars have expenses outside of monthly payments – such as oil changes, new tires, maintenance, battery replacements, etc. – which could cause financial problems down the road.

When purchasing a new vehicle, make sure that you can easily make the monthly payments to avoid the possibility of dealing with late payments. Late payments can seriously damage your credit and lower your score. Many people have the tendency to purchase a vehicle with monthly payments that seem reasonable but seldom consider the instances where things don’t go as planned. Make sure that you can easily make the monthly payments, with room to spare.

A big factor in the monthly payment is going to come down to the interest rate. That is largely affected by your credit score. If you have a low credit score, then your interest rate will be high and that will increase your monthly payments significantly. If it’s going to be tight, your best bet is to focus on improving your credit score first, before buying a new car.

For more financial advice or assistance with credit repair, contact Credit Absolute for a free consultation.

Source: creditabsolute.com

Here are 5 Ways 2021 Will Try to Rip You Off, and 5 Ways to Fight Back

Wouldn’t it be useful to get an alert when you’re about to overpay? A polite little alert, not an obnoxious one. That’s exactly what this free service does. These free alerts can be added to your browser.
The pandemic has changed how we shop, and that’s expected to carry over into 2021. More of us are shopping online now — including nearly 70% of Americans, according to a new NPR poll. Of those, more than 90% have bought something from Amazon.
Prices don’t normally go down. But in 2020, car insurance companies cut their rates because the market demanded it. Customers who were quarantined in their homes figured that, because they were driving so much less, they should be paying less.
Source: thepennyhoarder.com

1. Watch Out for Car Insurance Rate Hikes

All you have to do is connect your current insurance, then Savvy will search hundreds of insurers for a better price on the same coverage. It’ll even help you cancel your old policy and get you a refund from your current insurer.
Before you check out on Amazon, Target or Best Buy, it’ll check other websites, including eBay, Walmart and others to see if your item is available for cheaper. It’ll even apply any available coupon codes to your order automatically.
It takes two minutes to see if you qualify for up to ,000.
The USDA predicts that grocery prices will rise by at least 1% to 2%, and restaurant prices will rise by 2% to 3%. That may not seem like a lot. But over a whole year, that’s really going to add up.
How about 2021? Is 2021 coming for us, too?
If you find a better deal, you can switch right away and don’t have to wait for your next renewal or even your next payment.

2. Don’t Get Ripped Off While Shopping Online

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You don’t have to take that! That’s why 2021 will require you to shop around for car insurance like never before.
Credit card debt is the most expensive kind of debt because of the high interest rates. Unfortunately, the pandemic and its shutdowns and its job losses have forced more Americans to fall back on their credit cards to pay their bills and pay for necessities like food. That’s carrying over into 2021.
Ready to stop worrying about money?
If you’re looking to buy a home in 2021, do everything you can to save money on your mortgage. A good credit score will make a big difference in how much interest you’ll pay on a mortgage or car loan. That could easily add up to tens of thousands of dollars over the life of a mortgage.

3. Watch Out for Rising Food Prices

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So, 2020 was a really terrible year, am I right? This pandemic has stolen all kinds of things from us. It took millions of jobs, hundreds of thousands of American lives, and countless hours of in-classroom school instruction. It emptied our bank accounts and shredded our peace of mind.
Could you imagine waking up with no credit card debt? A free website called AmOne can help you wipe out your credit card debt even faster.
Some purchases are optional, but food isn’t one of them. Unfortunately, the price of food is expected to rise in 2021, according to the U.S. Department of Agriculture. 
You can download the free Fetch Rewards app here to start getting free gift cards. Over a million people already have, so they must be onto something.

4. Don’t Overpay for a Mortgage

Here’s how it works: After you’ve downloaded the app, just look for products branded with the Unilever “U.” Then take a picture of your receipt showing you purchased an item from one of the participating brands. For your efforts, you’ll earn gift cards to places like Amazon or Walmart.
The median price of homes sold in January 2021 was nearly 4,000, a 14% increase compared to January 2020, according to the National Association of Realtors. That’s the highest January price that the Realtors have ever recorded.
So far, this free tool has saved users more than 0 million in the last year. You can get started in just a few minutes and see if you’re overpaying online.
Try using a free website called Credit Sesame. Within two minutes, you’ll get access to your credit score and personalized tips to improve it. You’ll even be able to spot any errors holding you back (one in five reports have one).
In summary: Hopefully 2021 will be better than 2020. At the very least, you’re likely to get a COVID-19 vaccination at some point.

5. Beware of Expensive Credit Card Debt

When it comes to money, we’re firm believers that it’s better to be safe than sorry.
Ah, but it’s a whole new year. And as Americans gravitate back to their old driving patterns, auto insurance rates are expected to climb back up, according to industry observers.
Here are five ways 2021 will try to rip you off — and five ways to fight back.

Want to check for yourself? It’s free and only takes about 90 seconds to sign up.
AmOne will match you with a low-interest loan to pay off all your credit cards at once. Its interest rates start at 3.99% — way lower than the 20% or more you’re probably paying your credit card company. That could save you thousands in the long run. Plus, you’ll be debt-free that much faster.
Just watch out for all the other ways that 2021 will try to rip you off.
We’ve got a way for you to get some of the money back. A free app called Fetch Rewards will reward you with gift cards just for any of hundreds of items at the grocery store. Right now, it’s even offering shoppers a gift card when they spend on dozens of Unilever products at the grocery store. You can do this five times, or up to . <!–


Sure, it’ll be convenient to have boxes of stuff appear on your doorstep all through 2021. But no matter what you’re buying online, you may be paying too much for it. In many cases, there might be a better deal somewhere else. It just feels like a pain to look for it.