Category: BQ News

Paying Off Old Collections

Posted on by

Can Paying off Old Collections hurt you?

The short answer is… Yes.

Paying off those old collections seems like a great idea, your credit score may decline if you pay a collection that is older than 2 years. When you pay off a collection that has been lingering on the report for some time, the date of last activity may change, causing the  account to appear fresh. Your credit report will take the hit and your score will drop.

Always try to pay your accounts on time. If you are like many Americans who have had an account fall to a collection, make an attempt to settle it as soon as possible. If the collection remains unpaid for more than 2 years, paying it will result in a decline in your score. Your best option would be to consult credit professionals.

3rd party collections must abide by certain standards set forth by the Fair Credit Reporting Act (FCRA.) If collection companies go against the FCRA, then your collection may be in violation. Violations can result in the collection getting removed from your account, and in some cases, a cash settlement for you!

Better Qualified has a team of attorneys looking through all of our client’s collections for violations. If  you were looking to pay an old collection, first find out if you can get the collection removed before it effects your credit score.

Fill out the form below for a free credit analysis.


Huge Credit Report Overhaul: Medical Debt to Weigh Less

Posted on by

Medical Debt

It will be announced today that the 3 credit reporting agencies (CRAs) will be making some serious changes to the way they report your credit. After long meetings between the New York Attorney General’s office and the CRAs, decisions have been made to change the reporting of medical collections and the process of consumer disputing.

I know what you’re asking… “What does that mean and how does that benefit me?”
Here’s what you need to know:

Medical Collections

Countless times have I heard client’s horror stories: Their insurance company was late paying their medical bills, and now they have a medical collection reporting on their credit.

While medical collections won’t directly hold you back from obtaining a loan, they will bring your scores down which can indirectly affect the loan officer’s decision to get you approved. This new announcement ensures that medical collections cannot report on your credit until 6 months after your debt becomes delinquent. This allows those slowpoke insurance companies time to to pay off your debt before it hits your credit. The announcement also states that once the debt has been paid off or satisfied, it will be removed from your credit report. Soon the days of lingering paid medical collections will be long gone and your scores will improve!

New Consumer Disputing Process

Consumers who choose to dispute items on their credit report will now receive more information pertaining to those accounts. If the person disputing does not agree with the results they should receive, the CRAs will include actions each consumer can take.

The CRAs will have trained professionals examine and review all consumer disputes to ensure no mistakes will be made.

“The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumers’ credit reports. This agreement will reform the entire industry and provide vital protections for millions of consumers across the country,”
-New York Attorney General Eric Schneiderman

According to Credit Karma, 25% of consumers have credit report errors on their report. It’s no secret the CRAs are in a mess right now with consumer information. This new disputing process looks to fix the mess and help consumers eliminate incorrect information.

Changes will be implemented over the next several months in New York and nationwide within the next several years.

6 Steps to Handle Identity Theft

Posted on by admin

ID-theft

You’ve seen numerous web pages and blogs about what you can do to prevent your Identity from being stolen, but what are the steps you can take if you are already a victim of identity theft? Approximately 15 million US residents have their identities stolen each year. Stats like this make identity theft the fastest growing crime in the country. Although there may be an infinite number of steps you can take to prevent it, sometimes identity theft is inevitable. So what do you do if you are a victim of identity theft?

1. Monitor Everything

From now on, make sure you monitor and document all contact that is made between yourself and your financial institutions. Every phone call needs to be recorded or written down and documented. Every email, saved and archived. Every letter or document you receive in the mail must be put away and kept in a safe place. This way you can keep track of all of your accounts, who you talked with, and when.

2. Fraud Alert

Immediately after you realize you have been a victim of identity theft contact fraud lawyers Melbourne and call one of the credit bureaus (numbers listed below.) Explain the situation to them. Tell them your identity has been stolen and you wish to put a fraud alert on your account. Confirm with them that they will contact the other 2 bureaus as well.

With the fraud alert, you will receive a free credit report. The alert will remain on your account for 90 days (or more if you wish to extend it.) Now every time credit is applied for in your name, the report will come back with a fraud alert. The applicant will be asked security questions and/or to provide proof of identity in order to become approved.

Equifax: 1-800-525-6285

Experian: 1-888-397-3742

TransUnion: 1-800-680-7289

 

3. Contact Your Accounts

Contact all of your financial accounts and let them know you had fallen victim to identity theft. Tell them you had already placed a fraud alert with the credit bureaus. Make sure your accounts are all where they need to be. If some money is missing or something seems off in one of your accounts, make sure you notify them as soon as possible.

Change all of your passwords and pins. Try not to use the same password for every account. This can make it really easy for your identity thief to log into all of your accounts. If need be, close old accounts and open new ones.

4. Call the Federal Trade Commission

The FTC processes complaints by consumers who have fallen victim to identity theft. The FTC will provide you with the necessary steps you need to take in order to resolve your identity theft issue. You may also fill out the FTC’s online form.

After completing your call or online form, you will be given a report called an Identity Theft Affidavit. Take this report to the police station for our next step.

5. File a Police Report

With your Identity Theft Affidavit in hand, go to your local police station and file a police report. It is very important to always file a police report if you believe your identity has been stolen. Although the chances are extremely slim to none that the police will catch the responsible party, the police report can help you in the future when dealing with creditors or financial institutions. After you file your police report, make sure you make a copy for yourself.

6. Get Credit monitoring

If you don’t have credit monitoring by now, get it! Credit monitoring is the best way to stay on top of your accounts and help prevent ID theft from happening. Just because you make have had your identity stolen once before only makes you more liable to have it stolen again. Make sure you are on top of your accounts.

Luckily for you, Better Qualified is giving away 3 months of credit monitoring for free! Our credit monitoring service includes a free credit report and free money manager. Just click the link here!

Untitled-1

How to Stop Collection Harassment

Posted on by

Stop those pesky collections from interrupting your life!

There’s nothing more annoying than coming home after a long day of work only to be bothered by pesky collection companies. They call your home, your relatives, and workplace. They flood your mailbox with their notices. This kind of treatment can leave you drained and stressed. Often you might think you’ll never be able to get out of this mess. Well I’m here to tell you, you can stop collection harassment today!

First, you must know your rights. Instead of of dodging the calls only to be pestered later on, confront them. There is an easier way to deal with the calls and mail rather than just ignoring them and hoping they’ll go away (they won’t).

Know Your Rights

According to the Fair Debt Collection Practices Act (FDCPA) there are a certain standards that collectors must comply with when attempting to collect your debt. If a collector violates these standards, the collection company may be subjected to a fine, removal of account, or a cash settlement for the consumer.

  • Collection companies are prohibited to call before 8am or after 9pm
  • Cannot call you at work if your employer doesn’t allow
  • Collection companies cannot lie
  • Cannot use obscene language or insult you
  • Cannot make demands to pay more than the debt owed
  • Cannot pretend to be an attorney
  • Cannot claim the papers they send you are legal forms if they are not
  • Cannot threaten to sue unless this threat is followed up

Pay the debt if you know you owe it and you can afford it

The first time you speak to the collection company, you can get a good idea of where the debt is from and how much is owed. If you know the debt is yours, and you can afford it, feel free to go ahead and pay it off. This will get you out of debt and stop collection harassment. If you think the debt is not yours, is a wrong amount, or simply cannot pay it, then you will want to start with a cease and desist letter.

Cease and Desist Letter

After talking to the collection company and telling them you cannot/will not pay this debt, they will continue to contact you whether it be by phone, mail, email, you name it. Your first step to get this burden off of you is to write them a cease and desist letter. When collectors receive a cease and desist letter, they must stop contacting you for the debt. Send the letter certified mail with a return receipt. This will give you the documentation needed to show the collector had received your letter.

Now the collector may only contact you to acknowledge that your letter had been received, or to inform you that they will be suing you for the debt. The phone calls and excess mail will stop now. Do you feel that? that’s the stress starting to lift already (but it’s not over yet!) Just because you are not longer falling victim to collection harassment, does not mean the debts are gone.

If you need a Cease and Desist letter format, download one from us for free here!

What if I don’t owe any money?

IF you feel that the debt is not yours, or that the amount is incorrect, send the collection company a letter stating so. These letters must be sent 30 days after you receive the validation notice. If the collector responds with a verification of debt (like a copy of the bill) they may begin to contact you again. If this happens it will not stop collection harassment, and you may have to send them a cease and desist letter (See Above)

What happens if I don’t pay the debt?

Aside from this account sitting on and destroying your credit, if the debt remains unpaid the collector can file a lawsuit against you. This can results in a judgment being entered against you by the court. After you get hit with a judgment, your wages may potentially be garnished either from your bank or your paycheck.This ordeal is court ordered and will continue to happen until the account has been paid off.

Judgments are serious! If you receive a summons, make sure you respond to it either through your attorney or personally.

Better Qualified legal help

Instead of going through the hassle to get an attorney, Better Qualified has a legal team to work with your collections as soon as you enroll to stop collection harassment. Our attorneys will send out validation of debt letters and look for violations in the collection accounts. If violations are found, the collector accounts will be removed, erased from your credit report, and you may be subject to a cash settlement. It’s all included in your service with Better Qualified!

New Years Resolution: Get Out of Credit Card Debt

Posted on by

images

It’s a new year and that means everyone is off to an inspiring start on their new years resolutions. You may already have your plan in effect to lose weight, get fit, and aim for that new promotion, but what are you doing about the pile of debt you racked up over the holidays? It’s well worth noting that only 8% of the population will be successful in their new years resolutions (according to the trivia flip calendar on my desk.)

While you pay the minimum balance on your credit card accounts, that debt is going to continue accruing interest and take you years to pay off. Wouldn’t it be nice if you started to take control of it today before it controls you? (And if it already does, I can help.) Here are a few tips to live by to get your mountain of debt in order.

Find out what is on your credit report

You would be surprised at the amount of people who have not a clue as to what is reporting on their credit report. Most people aren’t even sure how much debt they are actually in. They may say its one number when it’s actually much more. Your first step towards paying off your debt is to find out how much of it you have. You’re going to need to get a credit report. You can obtain one by visiting www.annualcreditreport.com. They will give you one free FICO credit report every calendar year. You may also go with free online sites like Credit Karma or Credit Sesame. However, the free online sites only pull from one bureau and their scores are not FICO. (For more on FICO vs FAKO, read our past blog here.)

Once you get your credit report make note of all of your debt. Write it down and add it up so that you know just exactly how much debt you are in. For some of you this may be devastating, but don’t worry, look at it more like a goal to obtain and keep you mind focused on the end result.

Make a budget

Now that you can see how much debt you are in and how many bills you have to pay, it’s time to make a budget. Study your past bills and bank statements and write down all your necessary living expenses. This includes: Rent or mortgage, utility and credit card bills, car payments, ect. Make sure you’re paying everything on your credit report on time so that your accounts don’t fall into the negative.

Be realistic with yourself and cut out any unneeded expenses. Goodbyes are never easy, you may have to start making some sacrifices. Cook meals at home and bring lunch to work instead or dining or ordering out. It may be a good time to cut Netflix, HBO, or any of those other premium channels out of your life (you’ve already watched everything good on there anyway.) Once you get rid of all your unused subscriptions and services, you may find yourself with much more money than expected. Those $8/month subscriptions really add up when you have  a bunch of them.

Try for better rates

Most of the population today takes whatever is given to them without asking any questions. I’ve found that you can actually go far and get more out of life by simply calling and asking for it. If you get denied, you’re in the same position you were in before. Some of your credit cards may be impossible to pay off simply because their rates are too damn high! If you can get a better rate on the card, then why pay more money if you don’t have to? Try calling up each of your credit card accounts and asking them to lower your rates. Just make sure you prep yourself and do your research. You may want to find out what the prime rates are for that card. If you’re unsure of how to ask, try doing what Sally from creditcards.com did here

Apply for 0% balance transfer cards.

As stated before, the interest rates may be too close to the minimum payment on your card. This will take forever to pay the account off if only making minimum payments. Most large credit card companies will offer 0% balance transfer cards, interest rates worst enemy. 0% balance transfer cards are the secret play in your playbook to get out of credit card debt. These cards will allow you to transfer your balance to a new card with 0% interest for a period of time. Making it perfect people who are trying to pay off debt! Your balance will drop surprisingly faster if you are not paying interest. Transfer your debt to a 0% balance transfer card and make it your goal to pay off the balance before the interest rate kicks in.

It is vital to note you should NOT CHARGE THE CARD as you will only make your debt situation worse. These cards should only be used to pay off the debt, not add to it. You will need to get approved for the card as they may only issue them to people with good credit. Shop around, and choose the right card for you.

Pay off the large accounts first

So now you’re ready to start paying off your accounts, but which ones do I take care of first? The best method would be to flood your extra cash into the largest accounts with the highest interest rates, while making minimum payments on all others. This will ensure that you are paying less in the long run. The higher the interest rates, the more money you will have to spend paying off the account. Once you finish with your biggest baddest account, flood your extra cash into the next biggest baddest account until that one is paid off. Continue this process and you’ll be out of debt much sooner than you think.

Some people may suggest the opposite. Take care of the smaller accounts and work your way up to the big ones. While this is still not a bad idea, in the long run you will be paying more due to the accruing interest on the big accounts.

Don’t use your credit cards

The whole point of this process is to pay off your debt. If you continue to use your cards while attempting to get out of debt you’re going to get nowhere. Do not close your credit card accounts as doing so will drop your credit score. Start paying for items in cash rather than credit. You’ll find cash is a much cheaper and safer means of currency.

Don’t apply for new lines of credit

This one should be a no-brainer. Applying for any new lines of credit such as new credit cards or loans will only hurt your process towards a debt free life. New lines of credit means new debt and a new bill for you. Hold off on applying for any new credit until your debt is gone.

If you start utilizing these methods, you’ll find getting out of debt isn’t as hard as you may have thought. It can be a timely process but the end result is very rewarding. Living a debt free life will take a heavy burden off your back and will result in a happier less stressed you! Once you are out of debt, remember to always pay your bills on time, and don’t rack up your credit cards as you once did before.

What Black Friday Means for your Credit

Posted on by

Black_Friday_Target

In just a few weeks we’ll all be bombarded with pre-Black Friday ads and promotions as we flip through the channels or tune into your favorite radio station. But before you put together your list and get ready to face the shopping anarchy on November 27th, there are some shopping precautions you may want to take.

In this week’s credit blog, we’re going to look at the facts, the deals, and the safest shopping methods for your 2015 Black Friday.

The Facts

First, let’s get some of the Black Friday facts straight. In 2013 $12.9 Billion dollars was spent on retail sales on Black Friday. $1.964 Billion was spent on online retail. In 2012, $59 billion dollars was spent on Black Friday weekend (Thurs-Sun). That averages out to about $423 per individual shopper. The average holiday shopper will spend around $804 for the entire holiday season. According to these statistics, more than half of holiday shopping is done on Black Friday.

The “Deals”

Are those “Outrageous Doorbusters” really THAT outrageous? On Black Friday you will see doorbuster sales in every store you go. You may even camp out in line to secure your item. Just remember retailers aren’t here to give you a deal. Retailers are here to make money and turn a profit. Once you’re in the store and you get that doorbuster, prepare to be pounded with a plethora of add on items that seem to fit so well with you “deal”. Once you walk out of the store chances are you’ve spent more than you’ve planned and bought things you didn’t need.

Opening Store Cards

You’ve stood in line for an hour waiting to get into the store. You’ve shopped for an hour, and now you’ve been standing in line for another hour waiting to check out. Suddenly a new lane opens up and the cashier says “Anyone opening up a new store card can come to this line.” Sounds tempting doesn’t it? They may even offer you another 20% off on your purchase on top of the line cut.

While you time and possibly money will be saved, your credit score will take a hit. Taking on new debt and a new inquiry will cause your credit score to drop. On top of that, most consumers will pay off the debt in increments. This will cause you to pay interest on the purchase. Now that great deal you just got doesn’t happen to be a deal at all and you may wind up paying even more than you thought.

No Payments Until 1 Year

Retailers will try to get you to buy large purchases with the promise of delayed payments. “Buy now and you won’t pay until next year!” What they won’t tell you is once your payments begin, you’ll still have to pay interest for that entire year you weren’t paying. Suddenly, this doesn’t sound too great. If you do fall victim to this scheme, make sure you pay off the entire purchase BEFORE your payments start. This way you can avoid all those pesky interest fees.

Shop Safely

Last year Target fell victim to a massive security data breach. Millions of Black Friday shoppers had credit card info and valuable personal information stolen. Data breaches seem to be showing up more and more in today’s tech filled world. If you fall victim to one, your credit could suffer for the rest of your life.

The simplest solution to this: Pay in cash! If you are going out shopping this Black Friday, it might be a good idea to swing by the bank and take your shopping budget with you. This way you can protect yourself against cyber criminals and stay within your budget as well.

 

For more do’s and dont’s of credit, consult our credit blog here!

For more information on data breaches, check out Data Breaches: Why you Should Worry

5 Ways to Build Your Credit Score

Posted on by

When it comes to improving your credit score, consumers are left in the dust. Most individuals have basic knowledge of what can destroy their credit. Few know the steps to increase their credit score. Here’s 5 tips that will help build your credit score to where you would like it to be.

1. Positive Trade Lines of Credit

Without positive trade lines of credit, you cannot have a good credit score. Your credit score is determined upon the following factors: payment history, amounts owed, length of credit history, new credit, and types of credit used. The more positive trade lines of credit you have, the better. Does that mean you should go out and apply for loads of credit? Not exactly.

FICO chart to build your credit

The more credit you apply for, the more inquiries you will acquire on your credit report. The more inquiries on your credit report, the lower your score. Also, anytime you take on new debt, your scores will initially see a drop. It is not until a few months of on time payments that you will start to see them increase again.

Individuals with no or few trade lines of positive credit may not be able to get approved for new credit. If this is the case, you may want to seek out secured credit cards. Secured credit cards are credit cards that the consumer backs themselves. These cards report to all three credit bureaus and will generate positive credit after a few months of use. Secured credit cards are a great tool to help build your credit.

If you already have trade lines of credit, it is critical to make sure they are paid on time. This includes: student loans, credit cards, car payments, and mortgages, among others. (We’ll get more into this further in the article)

2. Become an Authorized User

Everyone knows that one person who has immaculate credit. Maybe it’s a close family member or one of your best friends. They never miss a payment and are never denied. If it is alright with your friend or relative, it would be beneficial for you to become an authorized user on one of their accounts.

Becoming an authorized user will build your credit as it will show a positive trade line on your credit report. You can essentially “piggy back” your way to better credit with the help of a friend or relative’s account.

Becoming an authorized user on the account will not require you to get your own card or make any payments. Your name will just be attached to the account. Just make sure your have the OK from your friend/relative. However, if they miss a payment and the account becomes derogatory, it will negatively affect your credit as well.

3. Pay Down Accounts

Keeping your credit utilization down will allow your scores to go up. It is recommended to keep your credit utilization rates as low as possible (but not at zero). The closer you come to the high balance on your account, the more your scores will decline. If an individual with maxed out credit cards has no derogatory accounts, his score will negatively reflect that.

Build your credit utilization

A recent study shows the highest credit scores belong to individuals with 1-10% credit utilization. It is also worth noticing that consumers with 0% credit have an average score lower than consumers with 31-40%. The idea is to use your credit cards, but pay them off and use them minimally. Also take into consideration that the more debt on your account, the more interest you will wind up paying over time.

4. Avoid Derogatory Accounts

Derogatory accounts are negatively reporting items on your credit report. These accounts devastate your credit score. Most derogatory accounts will start off as just one late payment. If not handled correctly, late payments can change to charge offs or collections.

It is essential to your credit to always pay on time! Set reminders or use autopay features to ensure that you are always current. Just one derogatory account will drop your credit score dramatically, making it difficult to build your credit score.

5. Seek Credit Repair

If your credit report is flooded with derogatory accounts or incorrect information, you need to contact Better Qualified. Even if satisfied or current, derogatory accounts can remain on your credit report for 7 to 10 years. Better Qualified will attack derogatory accounts and correct false information. It’s what we do! Give us a call at (888) 533-8138, or fill out the form to the right for a free credit analysis. Even after our dispting process, Better Qualified will continue to advise you towards building your credit score.

 

Educate yourself a little more and read our credit blog. Be sure to check out the don’ts of credit with the 7 Mistakes That Will Destroy Your Credit

 

7 Mistakes That Will Destroy Your Credit

Posted on by

Building your credit score takes time, patience, and loads of hard work. Wrecking it, on the other hand, is a cakewalk.

Cardkey

With just a couple errors you can see your credit score plummet into the danger zone, where it can remain for YEARS if not taken care of. Once your score drops, you can be stuck in credit score limbo. The sad thing is, most consumers aren’t even aware of the damaging effects their decisions can have on their score…. until now!

Here are 7 key mistakes to avoid when it comes to your credit score:

1. Making Late Payments

This one seems obvious. Just 1 or 2 late payments can be devastating to your credit score. According to a recent Credit Karma Analysis, consumers with excellent scores (750 or higher) pay 99.9% on time. Consumers with fair scores (640 to 699) still pay 99% on time. With that being said, about a third of Americans have a debt that is in a collection.

What can you do?

With today’s fast pace world, it’s easy for a bill to slip your mind here and there. Be sure to set reminders on your phone or sign up for an autopay feature to make sure you’re always current with your payments.

2. Applying for Tons of Credit/Constantly Pulling Scores

Just last month I was at the car dealership looking for a new vehicle. I had barely even looked at any cars and already the dealer was asking for my social security number to pull my credit score. He told me the banks would “fight over each other” to give me the best rate for my new ride. While this might sound intriguing to most people, to me it sounds like my credit score is going to be run 30 times. Needless to say, I didn’t let them run my credit and kept shopping until I found the car I desired.

Consumers don’t realize their scores will drop around 3-5 points every time a hard inquiry hits your credit report. This includes applying for loans, obtaining new lines of credit, and checking credit scores. Let’s take my trip to the Chevy dealer for example, and let’s say they had 5 banks run my credit. Boom! Each of my scores could have just dropped 25 points!(and that’s if I only went to one dealership).

When you have a bunch of hard inquiries on your credit, it will bring your scores down and appear you are desperate for credit. This is something lenders and creditors do not like to see. On top of that, any new credit lines will initially decrease your score. Only after several months of on time payments will it bounce back and start generating positive credit.

What can you do?

Limit your inquiries. Don’t create a hard pull for your credit when you don’t need it! Most places like car dealerships want to run your credit as soon as you walk through the door just to get you approved. Shop around first and make sure you know what you want at the price you desire(This goes for homes too). Once you find something that fits your needs, then pull your score. Make sure they only pull it a couple times. Remember they want your business. Most places will still work with you when you refuse to let them shogun your credit. Try to have only 1 to 2 hard inquiries a year.

3. Closing Old Credit Cards

When it comes to credit cards, the longer your history, the better. Some consumers tend to treat their old credit cards like old furniture. “We’ve had it for years, it’s brought us lots of good times, but it’s old. We want that shiny new account!” Closing old credit cards just because of their age will instantly decrease your score. In fact, 15% of your credit score is calculated based upon the length of your credit history. The more accounts that get closed, the more credit utilization is dependent on your open accounts.

What can you do?

Instead of closing old credit cards, leave them be until they become inactive. It’s best to cancel newer credit cards rather than old ones. As said above, older credit cards carry more weight when it comes to calculating your credit score.Fico Chart

4. Maxing Out Credit Cards

Your credit card activity is a big factor when it comes to being approved by lenders. Based upon activity on your report, lenders can tell how well a consumer uses credit. When your accounts are reporting as maxed out lenders tend to get a little weary.

The more money you charge on your card, the less likely it is you will be paying the debt. When a card becomes maxed out it can take an eternity to pay it off. You can find yourself be paying boatloads of dough just on interest. This is when most consumers find themselves missing payments. After a few missed payments and the account may get sold to a collection (which with be devastating to your credit).

What Can You Do?

Avoid maxing out your credit cards. Maxing out the card will have you swimming in debt and interest. Instead, try to keep the utilization rate between 1%-30% of the high credit limit on the card. If you pay on time and keep a balance in this zone, your credit scores will likely improve. This shows that you know how to correctly use a credit card and will reflect on your score. Always keep this in mind so you can avoid those impulse buys and save money. You can also pay more than once a month to show that you are determined to drop that balance. After you’ve had the account for some time (and with positive history), request a credit increase. This will make it easier for you to stay within that 1%-30% margin, and keep you away from that high credit limit.

5. Making Minimum Payments

Plain and simple, making minimum payments will show the credit bureaus you take too long to pay off debt. You’ll also be paying a mountain of interest. So although the payments are smaller, you’ll actually be spending more.

What Can You Do?

Simple, pay off more than minimum payments. Set monthly payments to double the minimum if you can afford it. When you find yourself with extra cash, throw it towards your payments. The sooner you pay the account off, the sooner you can cross off this expense and put more money into your wallet.

6. Charging Major Expenses on Cards for “Rewards”

We’ve all seen it. Almost every major credit card has “rewards”. Charge x amount to the card and get a bunch of airline miles or points towards redeeming a certain “prize.” It’s so easy to take their bait when they’re waving a “free” vacation in front of your face. The truth is, whatever “benefit” you get from these cards will be offset by the amount of interest you will be paying.

What Can You Do?

Don’t take the bait unless you already have the money to pay it off immediately. You’re better off saving up and paying for a vacation, and it’ll probably cost less in the process.

7. Not Monitoring Credit

The last and one of the most important factors. 1 in 4 consumers have errors on their credit reports!  With identity theft being the number one crime in America, it is insane to not sign up for a credit monitoring service. (if you haven’t read last weeks blog on data breaches, you can do so here)

What Can You Do?

Perform routine checkups on your credit. Get free credit reports online to make sure there is no fraudulent activity occurring on your account. www.AnnualCreditReport.com supplies you with one free FICO credit report per year. Check your credit from consumer sites like www.CreditKarma.com and www.CreditSesame.com.

cutting Card
Be sure to take the next step and enroll in a credit monitoring program. Fill out the form below and have Better Qualified go over a credit report with you. We’ll enroll you into our own credit monitoring program with BQ911.com. Plans start as low as $9 a month. Get protected and take control of your credit before it’s too late!

Fill Out The Form for a Free Credit Consultation



 

Data Breaches: Why You Should Worry

Posted on by

It’s your day off, and you’re out picking up some groceries at WalMart. After the cashier is finished ringing you up,  you pull out your AMEX and swipe to pay without thinking twice.

 On the way home you stop by Target to pick up that rug that you’ve been eyeing up for the past few months. (You’ve been told it would really tie the room together.) This time you swipe your VISA bank card to pay.

 What you’re not thinking about is how WalMart and Target have your personal information tucked away in their databases, potentially putting your personal information at risk in the event of a data breach.

Internet Heists Are Real

 You’ve seen the movies where a group of gangsters team up to knock off a jewelry store, only to escape in their getaway car just seconds before police can apprehend them. Data breaches are not much different. The gangsters are hackers, the diamonds are your personal information, and the getaway car is the internet. In a technology driven world, it is becoming easier every day for hackers and Identity thieves to get their hands on your personal information.

Last December we received a rude awakening when it was made public that Target had a massive data breach, potentially compromising more than 40 million customer’s credit and debit accounts. Since then, there have been major data breaches almost every month. Those data breaches include: Michaels Stores, The Home Depot, Sally Beauty Supply, eBay, AOL, P.F. Chang’s, and most recently JP Morgan Chase. In 2013 alone,  there were more than 600 data breaches, costing the USA over $100 billion dollars.

Protect Yourself Against Data Breaches

By now you’re probably thinking “This seems hopeless, What can I do to protect myself?”. Nearly one fifth of Americans suffer from data breach attacks. All is not lost, there ARE ways to protect yourself!

  1. Check Your Accounts Often: The sooner you realize there’s a problem, the better. It is ideal to check all your credit and bank accounts daily. Make sure everything is in order and there’s no suspicious activity.
  2. Change pins/passwords: By constantly changing your pins and passwords, you are staying one step ahead of hackers. If a data breach occurs and they have your outdated password or pin, they will not be able to access your accounts.
  3. Use Gift Cards/Prepaid Cards: Another great way to stay ahead of the game is to use gift cards or prepaid credit cards. This way you can swipe away without having to worry about any personal information being compromised.
  4. Use Cash: Cash is king! We lost that long ago. Cash is untraceable and accepted almost everywhere.
  5. Call Better Qualified: We can help protect you against Identity Theft. Go to www.BQ911.com and sign up for our credit monitoring service, or call us at (888) 533-8138. We’ll go over your credit report with you and make sure you don’t have any fraudulent activity on it.

For more information on data breaches, watch me on CBS here:

Student Loans and your Credit Score

Posted on by

With the exit of Labor Day, summer has officially come to a close. For hordes of young Americans, this means one thing: back to school. Back to late night cramming, ramen dinners, and hopelessly worrying about how student loan debt will annihilate your credit score come post-graduation. But before you start to panic, let’s take a look at some of the facts about student loans and your credit score.

Credit History 101

First, lets take a look at how FICO actually works. What exactly is your credit score? Where does it come from? Back in the 1950s Fair Issac and Company (FICO) introduced an algorithm to decide how risky it is to lend money to an individual. They based the algorithm on five categories: Payment History (35%), Amounts Owed (35%), Length of Credit History (15%), Types of Credit in Use (10%), and New Credit (10%).

The three major reporting credit bureaus (Equifax, Experian, and TransUnion), use FICO developed software along with you personal information to generate a credit score for you. The scores can range between 300 to 850, and are always changing based upon your credit history.

Student Loans DON’T Automatically Drop your Credit Score

A common misconception about student loans is that they will automatically destroy your credit score. This is not true. In fact, approximately 7% of consumers with at least $50,000 of student loan debt have FICO scores in the 800s. That’s correct, the 800s! Remember, 35% of your FICO score is based off of payment history accounts (See above). As long as you are making on time payments, student loans can actually help generate a good (if not great) credit score.

Managing Your Student Loans

For most people, it’s just a matter of “how to manage student loans correctly”. One would think paying them off ASAP would be best for your score (it’s not). Paying off student loans too quickly can actually have negative impact on your credit score. On the flip side, you don’t want to pay the minimum every month either, doing so will imply that you are taking too much time to pay off the debt. You want to find the sweet spot in between to make sure your debt will not hurt your credit.

It’s always good to minimize your student loans the best you can. You can do this by taking AP courses in high school to knock out the basic classes. Applying for scholarships, attending community college, and putting money away into a savings account can all help minimize your student loans before you apply.

Avoid Missing Payments

ALWAYS ALWAYS ALWAYS pay on time! Just a single late payment can linger on your credit report and haunt you for YEARS. In the cell phone age we live in today, it is ideal to set reminders on your phone’s calendar or email. Make sure you don’t default on your loans. Defaulting can lead to garnishments, which will obliterate your credit report. Times can be tough and if your payments are taking too big of a toll on you, try reaching out to the lender to negotiate.

Know What’s on Your Report

Finally, it’s always good to know what’s on your credit report before you apply for the loan and after you graduate. The bureaus make mistakes too and you need to make sure everything is reporting correctly. You can always obtain a free credit report online and ask the experts at Better Qualified to help give an overview of your credit report.

Student Loans