3 Simple Steps To Break A Credit Card Habit

You wake up one morning and you realize that your credit card debt is rising…FAST! But still, you can’t avoid using you credit card to get yourself some fancy items or dine at expensive restaurants. A tried and tested recipe for disaster, if credit scores could reach 0, I know many fellow citizens would get that big O.

Many people get easily addicted with credit card purchases, they’re like gonna die if they don’t get to swipe that card even for 1 day, and what’s sad, is if you look at their credit card purchases you’ll notice that most of them are unnecessary expenses. People get lured to the illusion of an expanded buying power. I say illusion because with credit cards you are merely borrowing money, and you get charged an interest rate that’s over the roof!

So, if you think of it, you are actually reducing your buying power everytime you use your credit card. You are spending money that you don’t actually have yet. Many people, including me at one point, are literally broke because of monthly credit card payments, they’re just juggling debt. Not funds but debt.

And what happens when you are unable to settle you credit card bills on time? You get bombarded with malicious letters and threatening calls.

So if you think you have the potential to become addicted to credit cards, better follow these 3 simple steps to break a credit card habit…NOW!

• Close - This is easiest and most effective way to prevent yourself from spending money that you don’t have.

• Cut - From the very first day that you come to your senses, cut your credit card in half so you can’t use it, then call to have it canceled.

• Forget - Turn your back to credit cards completely! No matter how good the offer is, say no.

It might be a bit difficult at first, specially if you’ve become deeply dependent on your credit card. Sounds like drug addiction, huh? All addictions are basically the same, you develop a habit that is hard to break, only the consequences are a little different but they’re all devastating one way or another.

Ok, so now you gotta be disciplined enough keep your spending within your limits. If you want to buy something, save for it. It feels great to buy something without ever worrying about payments.

And if you happened to screw your credit score, then that’s a different story. It will take some work to beef up your credit ratings, but the good news, is that it is doable and it’s not as difficult as you might think.

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3 Simple Steps To Break A Credit Card Habit

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Repair Bad Credit - Pay Your Bills On Time

One of the best ways to improve your credit score is simply to pay your bills on time. This is absurdly simple but it works very well, because nothing shows lenders that you take debts seriously as much as a history of paying promptly. Every lender wants to be paid in full and on time.

If you pay all your bills on time then the odds are good that you will make the payments on a new debt on time, too, and that is certainly something every lender wants to see. Experts think that up to 35% of your credit score is based on your paying of bills on time, so this simple step is one of the easiest ways to boost your credit score.

Paying your bills on time also ensures that you don’t get hit with late fees and other financial penalties that make paying your bills off harder. Paying your bills in a timely manner makes it easier to keep making payments on time.

Of course, if you have had problems making your payments on time in the past, your current credit score will reflect this. It will take a number of months of repaying your bills on time to improve your credit score again, but the effort will be well worth it when your credit risk rating rebounds!

Repair Bad Credit - Pay Your Bills On Time

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Credit Management Tip – Close out credit accounts you don’t use.

If you want to repair your bad credit or simply want to improve your already good credit score then you will want to take a look at your credit report and check out any credits that you have and are not using. Nowadays, it is easy to apply for a store credit card that you forget all about in a matter of months.

Store credit cards are enticing, but they’re only useful if you are a regular on that store, if you’re not, you’re bound to forget about it and it will affect your score as long as it is open.

Having credit lines and credit cards you don’t need makes you seem like a worse credit risk because you run the risk of “overextending” your credit. Keenly checking your credit report is essential to be able to repair bad credit.

Also, having lots of accounts you don’t use increases the odds that you will forget about an old account and stop making payments on it - resulting in a lowered credit score and in an immediate need to repair bad credit.

Keep only your used accounts and make sure that all other accounts are closed. Having fewer accounts will make it easier for you to keep track of your debts and will increase the chances of you having a good credit score.

However, realize that when you close an account, the record of the closed account remains on your credit report and can affect your credit score for a while. In fact, closing unused credit accounts may actually cause your credit score to drop in the short term, as you will have higher credit balances spread out over a smaller overall credit account base.

For example, if your unused accounts amounted to $2000 and you owe $1000 on accounts that you have now (let’s say on two credit cards that total $2000) you have gone from using one fourth of your credit ($1000 owed on a possible $4000 you could have borrowed) to using one half of your credit (you owe $1000 from a possible $2000).

This will actually cause your credit risk rating to drop. But don’t be alarmed, it’s all part of the process. After a while you’ll notice that your credit score will start shooting up and you won’t be googling “how to repair bad credit” anymore.

Credit Management Tip – Close out credit accounts you don’t use.

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Identity Theft and How to Prevent Them

Identity theft is very common nowadays, in fact, 10 million Americans fall victim to identity theft each year, yet so many people are still unaware of that fact or they simply just don’t care.

Identity theft is a type of crime in which people take your personal information and steal that information to pose as you in order to get access to your accounts or identity.

A lot of people who are careful about paying bills on time and having minimal debts are shocked each year to find that they have low credit scores. In many cases, this happens as a result of identity theft.

For example, someone with your PIN numbers can remove small amounts of money from your bank account each month or someone can use your name and personal information to get credit cards in your name and use those credit cards with no intention of paying back the money. You are stuck with the large debts and the poor credit score.

How To prevent identity theft.

• Always check your account statements carefully each month and immediately report any charges or activities you don’t recognize.

• Check your credit report regularly and immediately investigate any new credit accounts you do not recognize - this is the best way of detecting and acting on identity theft.

If in case you fall victim to identity theft, report to the police at once and get a police statement. Send copies of this to your bank, credit card providers and credit bureaus. Better yet, get the credit bureaus to attach the report to your credit report, if you can. Close all your accounts and reopen new ones. You should not have to pay for someone else’s illegal activity.

In most cases, people begin to care and start being wise after they become a victim of identity theft. Which is sad because the damage has been done, they’re already left with a huge amount of debt and a low credit score. Repairing them takes time, and I’m sure nobody wants to be a part of that 10 million.

So act now while your credit score is still in good shape. As the doctor says, prevention is better than cure.

Identity Theft and How to Prevent Them

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Fix my Credit, Help!

Does this sound like you? I don’t even know how many times I’ve heard that phrase. Friends, relatives, colleagues, all have the same question. “How do I fix my credit”?

There are no shortcuts in credit repair, if somebody tells you that you can significantly increase your credit score by doing just one thing, then he’s probably just hyping you up so he can get a couple of hundreds or more from you. Remember credit scores are calculated based on different factors so you have to be doing different things religiously so you can get to that well sought after 720 and above credit score.

Now, don’t be alarmed by the “doing different thing religiously”, it really is easy but you need to be very disciplined and you have to have a plan. Without a plan, you won’t know whether you are achieving something or not.

Here’s what you need to do.

• First and foremost you have to know where you stand. Know what your credit score is.


• Study your credit report and find out what is causing your credit score to drop. Ask yourself these questions.

• How much debt do I have?
• How many unpaid bills?
• Did somebody give a negative report?
• Have I defaulted on a loan?
• Have I failed to pay taxes?
• Have I been recently reported to a collections agency and other factors that will obviously affect your score?

Once you know what is causing your credit problem, then you can work up a plan and decide how you want to go about in boosting your credit score. That way you won’t hear yourself say “fix my credit please!” anymore.

When you seek professional credit counseling or credit help, counselors will generally work with you to help you develop a personalized strategy that expressly addresses your credit problems and financial history.

Seeking professional help is wise. It’s always better to have somebody who “knows” to guide you in the process. But you have to be careful on whom to trust, sadly, there are companies out there who are charging an arm and a leg for services that you can get at half the price.

For a trusted and affordable credit repair service, click here.

Or, you can do it yourself. Just follow these simple steps and I guarantee that your score will go up. Not overnight, of course.

• Start paying your obligations on time.

• Pay down your debts. Excessive debt is alarming! You’ll have a high risk of over extending your credit.

• Make sure that you don’t reach your credit limit. Maintain 50% credit. Example if your credit card’s credit limit is $2000, make sure that you don’t use up more than $1000 of it

• Manage different types of credit. Lenders like it when they see that you can effectively manage various types of credit. Having a car loan, mortgage, and credit cards that you are not defaulting on is a gem.

The secret is following through your plan and not rushing things, you probably won’t see any significant changes in a few months, but as long as you remain a responsible debtor, your credit score will surely increase and creditors will be lining up to get your business.

Fix my Credit, Help!

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Credit Score – Where does it come from?

Understanding where your credit score comes from is very important, this way you will know how to keep your credit score high or you can work on repairing them in case you have a low score.

Credit scores are based on research, much like your insurance premium. Your insurance company likely asks you questions about your health, your lifestyle choices (such as whether you are a smoker) because these bits of information can tell the insurance company how much of a risk you are and how likely you are to make large claims later on.

Credit bureaus do the same thing; they gather information from banks, credit card companies, utility companies, other financial institutions, and even from your landlord. They will then look at how well you’ve been managing your financial responsibilities. And based on these, your credit score is arrived at.

Experts agree that these factors make up your credit score;

• Your credit history - Whether or not you have been a good credit risk in the past is considered the best indicator of how you will react to debt in the future. For this reason, late payment, loan defaults, unpaid taxes, bankruptcies, and other unmet debt responsibilities will count against you the most. You can’t do much about your financial past now, but starting to pay your bills on time - starting today - can help boost your credit score in the future.

• How long you have had credit - If you have not had credit accounts for very long, you may not have enough of a history to let lenders know whether you make a good credit risk. Not having had credit for a long time can affect your credit score. You can counter this by keeping your accounts open rather than closing them off as you pay them off.

• Your current debts - If you have lots of current debt, it may indicate that you are stretching yourself financially thin and so will have trouble paying back debts in the future. If you have a lot of money owing right now - and especially if you have borrowed a great deal recently - this fact will bring down your credit score. You can boost your credit score by paying down your debts as far as you can.

• The types of credit you have - Lenders like to see a mix of financial responsibilities that you handle well. Having bills that you pay as well as one or two types of loans can actually improve your credit score. Having at least one credit card that you manage well can also help your credit score.

Plus other factors that I might not know about. I know new credit also affect your credit score, they make up about 10% of your total score. It might look like there are a lot to look out for but if you just remain disciplined and responsible in settling your debts, your credit score will be A-OK!

Credit Score – Where does it come from?

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Credit Score – What is it?

Before I tell you what a credit score is, I think it is appropriate that you know what a credit is first. Credit can be defined as:

reputation of solvency and probity, entitling a person to be trusted in buying or borrowing

In other words, your credit or credit score is an indication of how responsible you are in handling debts.

And this behavior is being converted into a score, which ranges between 300 and 850, and that score gives lenders an idea of how well you’ve been handling your debts. The higher your credit score is, the better. Generally, scores in the low 600’s will give you a hard time in finding credit, while scores of 720 and above will give you the best interest rates out there.

The credit score is based on your credit report, which contains a history of your past debts and repayments. Credit bureaus use computers and mathematical calculations to arrive at a credit score from the information contained in your credit report.

Each credit bureau uses different methods to do this (which is why you will have different credit scores with different companies) but most credit bureaus use the FICO system. FICO is an acronym for the credit score calculating software offered by Fair Isaac Corporation. This is by far the most used software since the Fair Isaac Corporation developed the credit scoring model used by many in the financial industry and is still considered one of the leaders in the field.

Credit Bureaus, by the way, are the one’s who are computing and providing your credit score and credit report. They gather information from banks, financial institutions, utility companies, just to name a few. And the information they collected will then be converted into a score.

If you have any unpaid bills, overdue bills, late payments etc… these will count as “dings” in your credit report and will affect your score.

Credit Score – What is it?

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