Category: Building Your Credit

Does a Good Credit Score Mean Cheaper Car Insurance?

Posted on by admin

It’s no secret that nowadays your credit score is almost as important as your social security number, but can having a good credit score lead to cheaper car insurance? Although insurance providers like Utility Saving Expert may not willingly divulge the information on exactly how your deductibles and premiums are calculated, but it’s almost a guarantee that your current credit score is thrown in the equation.

Why you may ask? Instead of using your FICO score, insurers examine what’s referred to as an “insurance score” to determine whether or not you’ll be a potential risk for filing claims – a lower credit score, according to some experts in the industry, means that a customer with a low credit score will be a higher risk than those with higher digits. Ultimately, cheaper car insurance premiums do depend on your current credit score, and there are also different options, for example if you drive an Uber or a Taxi, you can Compare cheap car insurance with no deposit to find the perfect option for you.

Affordable Car Insurance and Good Credit Scores
The recent statistics from a study conducted by CarInsurance.com are promising for individuals with credit scores of 750 save on average $783 each year on lower car insurance. The 40% of customers with a credit score over 750 can expect to save almost $23,000 on cheaper auto insurance costs over the span of an adult lifetime.

For teen drivers between the ages of 16-24, credit scores aren’t really significant in factoring cheaper auto insurance because the majority of teens don’t yet have established credit; however consider the following statistics for teens with established credit:

• Credit scores above 750 pay an average of $2,515/yr
• Credit scores between 650-749 pay an average of $2,387/yr
• Credit scores between 500-649 pay an average of $2,692/yr
• No credit pay an average of $4,191

Young adults between the ages of 25-34 with credit scores over 750 and a clean driving record qualify for lower vehicle insurance and pay an average of $1,155 annually, compared to $1,938 to the same population with credit scores below the magical 750. Other statistics revealed the average driver between the ages of 25-34 with:

• Credit scores between 650-749 pay an average of $1,658/yr
• Credit scores between 500-649 pay an average of $2,023/yr
• No credit pays an average of $2,182/yr.

Ways to Boost Your Credit Score to Become Eligible for Cheaper Car Insurance
Even if your current credit score is less than perfect, there are ways to improve your credit to take advantage of lower vehicle insurance premiums.

• Routinely check your credit score from the 3 major credit reporting agencies
• Immediately report any errors.
• Always make payments on time.
• Never allow coverage to lapse.
• Establish credit in your name.
• Don’t hesitate to compare insurance quotes; doing so doesn’t affect your insurance score.

Remember that maintaining a good driving record as well as a credit score of 750 or above are the most effective ways to enjoy the benefits of lower auto insurance! While it may take some effort on your part to be responsible, consider cheaper car insurance premiums a well-worth investment into your future!

NJ Identity Theft Victims Offered Help With Credit Repair Process

Posted on by admin

Identity Theft topped the Federal Trade Commission’s list of consumer complaints in 2010, accounting for 19% of the 6.1 million complaints received, and 2011’s totals are expected to be even higher.

ID theft is now an estimated 37 billion dollar crime. Victims of identity theft can face out-of-pocket costs of $3,000 or more plus be left with hundreds of hours fighting creditors.

Most cases of credit card fraud involved misuse of existing credit card or other accounts, while 1.8 million found that new accounts were opened, or other frauds were committed, using their personal identifying information.

How does ID theft affect the average victim?

  • 47% have trouble getting credit or a loan as a result of identity theft
  • 19% have higher credit rates
  • 16% have higher insurance rates because of identity theft
  • 11% have had a negative impact on their ability to get a job
  • 70% have trouble getting rid of (or may even never get rid of) negative information on their credit records
  • 40% have experienced stress in their family lives as a result of displaced anger and frustration over the identity theft

The odds of becoming an identity theft victim increase considerably if you are a young adult or a small business owner. The reason people in these demographics tend to be more exposed to identity thieves based on the normal behavior they need to engage in to survive in today’s world.

Young NJ adults, especially those away at college, are likely to use shared library or dorm room computers. New Jersey small business owners tend to complete financial transactions by mail or over the Internet, often using their personal accounts and home addresses to aid in processing them. More than 1 out of 3 businesses have been hacked by thieves putting your personal information at risk.

  • 29.1% are Medical/Healthcare,
  • 16.2% are Government/Military,
  • 10.5% are Banking/Credit/Financial,
  • 9.2% are Educational institutes.

These are types of companies we all use every day.

It makes sense to trust an experienced firm like Better Qualified, LLC to follow up so you know you are covered.  Even if you are a victim who has been offered help by a company that has had its accounts hacked by thieves, you should consider hiring someone to represent YOU.

If all this concerns you, contact us today to learn more about BQ IDShield, identity fraud services.

Credit Scoring: A Consumer’s Perspective

Posted on by admin

It is no secret that insurance companies use the credit scores of individuals as one tool in the approval/disapproval process and in establishing premiums.

Most courts allow this process as long as the scoring is uniformly applied to all insureds and is consistent with the purposes of the individual state’s insurance code. But just because credit scoring is legal does not make it right.

Insurers contend that there is a clear correlation between credit scores and the risk of loss; that is, the lower the credit score, the more likely that the insured will file a claim. This may be statistically correct, but I wonder if insurers take into consideration the fact that the credit-scoring companies often make mistakes. And, what is even worse, the credit-scoring companies don’t admit mistakes or when they do, it takes months and even years to make the corrections.

That is not going to help any potential insured get coverage when it is needed.

Insurers want to attract and retain low-risk customers since this is a way to make a profit, but many state insurance codes have the express purpose of making insurance available and affordable for everyone. Turning away a potential customer or charging the customer prohibitively high premiums because of some anonymous crowd of pencil-pushers using subjective standards does not seem to me to be living up to that express (and grand) purpose.

Plus, I just find it irritating that these credit-scoring agencies have so much power over the daily lives and operations of citizens (and even countries as the effect of the downgrading of the U.S. credit rating shows).

Now, before anyone thinks I am complaining because I have a low credit score, the fact is that I don’t. And I realize that an insurer needs to make a profit to continue in business.

But credit scoring still seems to me to be a crude, unfair, overly subjective way to set underwriting standards. There has to be a better way to establish the insurance-worthiness of a potential customer.

Those in the insurance business are intelligent people, and ignoring credit scores or at least downgrading their importance when it comes to the approval/disapproval process and establishing premiums cannot be that hard a task.

 

David D. Thamann

David D. Thamann, JD, CPCU, ARM, is managing editor for FC&S Online.

NJ Credit Repair Company Helps Establish Restore Business and Personal Credit

Posted on by admin

Better Qualified, a leading NJ credit repair company, can help restore personal and business credit in as little as six months.

According to Better Qualified, many consumers have erroneous information on their credit report that is hurting their score.  The Public Interest Research Group (PIRG) conducted an independent study and found that 79% of credit reports surveyed contained either serious errors or other mistakes of some kind. These mistakes can cost consumers hundreds or even thousands a year. It proves that getting a high mortgage rate often results in financial insolvency. Is it possible to get a fair mortgage rate? Learn more at BranchRight.com and get the best deal.

The Freedom Package from Better Qualified has been the credit repair solution many have been looking for. This package consists of a comprehensive six-month program that includes NJ credit repair services, identity theft resolution, education services and much more.  This popular program has helped thousands of consumers with bad credit and the company’s superior customer service has earned them an “A” rating with the Better Business Bureau.

Better Qualified’s superior customer service is evident online, where many have given the NJ credit repair company top ratings.

NJ Credit Repair testimonials

Jason W. writes “Better Qualified found mistakes on my credit report and began cleaning negative marks immediately. At that time they also suggested that I take initiative with their help to separate my personal credit and business credit so that I would not have future complications. A year later my credit score has risen and my business credit is established with multiple creditors. I highly recommend that everyone use Better Qualified for your personal credit and if you own a business. You will not regret it.”

Jeff V, an employee at a mortgage firm in NJ, praised Better Qualified for helping his client with his tarnished credit score.  Jeff writes, “On behalf of myself and my client, we wish to thank you for successfully getting his credit score from 644 to 688 in under 45 days. By getting his score up, we were able to avoid the 1.5% add-on for a credit score under 649 and get him a 4.25% rate…essentially leading him to $4,861 in savings and $57 savings every month. You guys are the best and I’ll be sure to refer anyone else I know to you!”

Additional Better Qualified credit repair testimonials can be found online.

Better Qualified takes a time tested, legal approach to restoring bad credit. The NJ credit repair company will challenge all disputable information on a credit report and will work to have any erroneous information deleted.

To learn more about their services call (888) 533-8138.

How Balance Transfers Impact FICO Scores

Posted on by admin

By Eva Norlyk Smith, Ph.D. October 25, 2011

Need money for a small home remodeling job, or to make much needed car repairs? Or do you simply want to use a 0 percent balance transfer offer to pay down high-interest credit card debt?

Th_balance-transferBefore you apply for that new balance transfer card, make sure you know the ins and outs of how balance transfers impact FICO scores so you can minimize potential disadvantages.

Taking out a balance transfer may lower your FICO score in the short-term. But it can also help boost your score over time. Here are the three ways in which taking out a balance transfer will impact your credit score.

1. Opening a new account will shorten the average length of your credit history.
Any time you open a new credit card, it will shorten the average length of your overall credit history.

“About 15 percent of your FICO score takes into account the length of your credit history,” says Kim McGrigg, Community and Media Relations Manager at Money Management International. “Part of that average is all your accounts, so when you open a new account, obviously it affects the average length of credit history. If you close the old credit account, it will impact scores even more.”

The good news is that the impact on credit scores from opening a new account is small and relatively short-lived, as long as you follow good credit management practices on the new account. The key is to keep that old account open and use the card occasionally so it’s still active.

2. Credit inquiries will ding your FICO score.
Each time you apply for credit, a lender will check your credit history to determine if you’re a good credit risk. This will show up on your credit report as a “hard inquiry,” which can lower your score.

According to FICO, one credit inquiry every once in a while will have minimal impact, shaving as little as four to eight points off credit scores, and the effect, again, is relatively short-lived. However, frequent credit inquiries affect FICO scores proportionately more and the impact lasts longer.

3. Your credit utilization rate will suffer or improve, depending on how you use your balance transfer.
Next to paying bills on time, your credit utilization rate, or debt-to-credit ratio, is one of the most important components of your FICO score. It makes up a full 30 percent of scores.

And when you take advantage of a balance transfer offer, it can hurt or help your credit utilization rate, depending on how you use the loan.

For example, if you open a 0 APR balance transfer credit card in order to fund a small home remodeling project or large purchase that you plan to pay off gradually, your debt-to-credit utilization will increase, lowering your score. The impact may be blunted by the fact that your overall credit limit will also increase. However, if the loan is large enough, your score will still be negatively impacted until you pay down the loan.

On the other hand, if you take out a balance transfer to pay off existing high-interest debt on another credit card, your overall utilization will decrease. The amount of debt that you have will stay the same, but with the new credit card, you will have a greater overall credit limit, so the total debt-to-credit utilization will improve.

In addition, your within-card utilization may also improve, which help boost your score. For example, let’s say you apply for a new balance transfer credit card and get a card with a $10,000 limit. If you transfer $5,400 from a card with a $6,000 credit limit to a card with a $10,000 limit, you will lower your overall credit utilization — and you will lower the within-card utilization as well (from 90 percent utilization to 50 percent).

Your credit score may be temporarily dinged by opening a new account. However, because credit utilization accounts for a full 30 percent of your score and opening new accounts only affects 10 percent of your score, the overall impact will still be positive.

However, with that said, be aware that having extra credit available could also turn out to be a credit score liability if you’re not careful, warns McGrigg, especially if you keep your old account open and active.

“It’s true that if you don’t close the old account, you might actually have a chance to improve scores,” says McGrigg. “However, that’s only true if you don’t charge the account right up again. For many people, having an account with a zero balance is too tempting, and they might end up twice as much in debt as before.”

It’s also important that you don’t get complacent, warn experts. Transferring your debt to a lower interest balance transfer card may be a step in the right direction — but there’s still more work to be done.

“So many people think that [by] moving to a better account with a better interest rate, their problems are solved,” warns credit repair expert and financial literacy advocate Harrine Freeman, “But they’re really just moving money. Don’t get fooled by tricks and gimmicks. You don’t know what will happen in another year; you could move, you could lose your job. It’s best to just pay your debt the old-fashioned way.”

Consumers With Bad Credit Get Help Obtaining Mortgage Loans from Better Qualified

Posted on by admin

Better Qualified, a leader in credit restoration services, helps consumers with bad credit obtain mortgage loans. The comprehensive credit repair program helps consumers gradually improve their score so that they can be qualified for a regular mortgage loan instead of a bad credit mortgage loan. But first, most customers go onto websites like freecreditreport.com.au/brisbane-queensland-qld/ to acquire their credit report to know their credit score.

The rules of lending are much more stringent today then they were a few years ago.  Many consumers with low credit scores are now unable to qualify for a mortgage loan.  Individuals who want to avoid the high interest rates of a bad credit mortgage loan can improve their credit score with the help of companies like Better Qualified, after they get their credit in order, they can seek the best loan programs.

Their most popular credit repair program is the Freedom Package, a comprehensive six-month program that includes their credit repair services, identity theft protection, education services and much more.  This popular program has helped thousands of consumers with bad credit and the company’s superior customer service has earned them an “A” rating with the Better Business Bureau.

Credit Repair Program Teaches Consumers How Credit Reporting Works

During the credit repair program, consumers learn how credit reporting works and how to make better credit decisions in the future.

According to Better Qualified, many consumers have erroneous information on their credit report that is hurting their score.  The Public Interest Research Group (PIRG) conducted an independent study and found that 79% of credit reports surveyed contained either serious errors or other mistakes of some kind. These mistakes can cost consumers hundreds or even thousands a year.

Better Qualified takes a time tested, legal approach to restoring bad credit. The company will challenge all disputable information on a credit report and will work to have any erroneous information deleted.

To see some of the incredible results achieved through the Freedom Package from Better Qualified, visit their credit repair testimonials page.

5 Simple Facts about Credit Card Debt

Posted on by admin

by: Janna Weiss

Wherever there are credit cards, it seems that tales of identity theft and unmanaged debt are always lurking nearby.  But it’s entirely possible to have a credit card – or several – without carrying an unhealthy load of debt or worrying about your identity being stolen while using it online. Fo identity protection, you can use the Fully-Verified’s services and instead of using a photo verification, use video verification to ensure complete security. Plenty of people do just that. Here are five facts about credit card debt that can help you use your own credit cards to your advantage – not to your detriment.

Debt Isn’t Necessary

When you open a credit card account, don’t assume that debt is just a part of the package. Debt is sometimes the result of unfortunate accidents or emergencies, but most of the time it can be controlled. To keep yourself out of debt, use your credit card the same way you would use cash. Set a spending limit, and don’t spend more than you can pay back at the end of each month. Cardholders who pay off their balances each month keep a good credit history with little or no debt. Problems arise when you start carrying a balance from one month to the next.

Debt Will Sink Your Credit Score

If you owe too much, creditors will notice, and they’ll be reluctant to lend you more money. To them, a high debt-to-credit ratio is the sign of undisciplined spending. Make sure not to utilize more than 25% of the available credit on any one card.

Debt Has Other Consequences, Too

Besides driving down your credit score, debt can result in litigation and the garnishing of wages. The laws vary by state, but it is possible to be taken to court over unsecured debt such as credit card balances. Having a judgment against you will look bad on your credit report, and may result in creditors garnishing your wages or seizing your property. You Can Settle for Less

There are plenty of stories of people who settled their outstanding credit card debt for a percentage of what they actually owed. This is possible, but it’s not something that should be taken lightly. First, most creditors will require you to be months behind on your payments before they will negotiate a deal. Be prepared to offer them a lump sum, and don’t expect this strategy to work more than once with the same creditor. Finally, be aware that all of your forgiven debt can be reported and taxed as extra income.

Credit Card Purchases Can Be a Good Thing

It’s important to know when a credit card purchase will be beneficial. For example, you can use credit cards as a short-term loan to help cover the costs of moving, or to buy items that you truly need, but don’t have the cash to cover. Set up your own repayment plan, and stick to it. Repaying the balance over three months won’t cost you too much in interest, but drawing out the repayment over three years would be very costly!

The Better Qualified Renters Certificate

Posted on by admin

Renting an apartment is never easy for either landlord or tenant. And the hardest part, especially in this economy, is convincing a landlord to rent to a tenant who has had credit problems. With that in mind we have created The Better Qualified Renters Certificate, a program designed to assist people with low credit scores who are looking to rent. It provides their prospective landlord with a certificate showing they are in our program and authorizing the landlord to check on their status as they are being worked on to make sure they do not drop out of the program. We believe that our Renters Certificate can help bridge the gap between tenant and landlord and smooth out what is normally a very large hurdle.

Will Paying Off Old Debt Boost Your Credit Score?

Posted on by admin

Angie Mohr, provided by

Investopedia June 1, 2011


If you have a low credit score and are working towards raising it, it seems to make sense to pay off all of your old delinquent debts. However, this strategy can sometimes backfire and drop your score further. Any credit score repair strategy should involve analyzing each debt and predicting how changes to it will affect your overall score.

 

Although the exact formula used by FICO is proprietary and not publicly-disclosed, it is estimated that approximately 35% of the score relates to your payment history and 30% to the amount you currently owe. Paying off old debt will not erase the impact that previous delinquent payments have already had on your credit score. Depending on the status of the debt, making payments on or paying off a charged-off debt can hurt in the currently-owed category.

Paying off a Delinquent Account
If a credit account is simply overdue and shows as outstanding debt, paying it off will improve your credit score, as will making any payments against it. You will not be able to eradicate the late payments that are showing, but returning the debt to current status and reducing the overall amount owed will both boost up the number.

Paying off a Charge-off
This is where payments can actually reduce your credit score rather than improve it. If you have an old debt on your credit report that has been charged off by the lender – meaning that they do not expect further payments – setting up a new payment plan can re-activate the debt and make it appear to be more current than it actually is. This is often the case with debt that has been turned over to a collection agency. The agency may register the debt with credit bureaus as new rather than reporting it against the written-off debt. As newer debt weighs more heavily on your credit report than older debt, your score can drop when you make an effort to pay this type of debt. This can also occur with paying out the debt entirely. While the payment will make the debt show as settled in full, it may show on your report as new debt. Regardless of how it shows on your report, ensure that the lender removes the charge-off status on your old debt and shows it as paid in full.

Settlements
If you choose to settle with a lender for less than the total owed, the arrangement will show on your credit report and may drop your score depending on how it is reported. Some lenders will simply mark it as paid, which has a positive affect on your score; however, if they show it as settled, your score may suffer. Although you can ask a lender how they will report the settlement while you are in negotiations with them, you ultimately have no control over how they will report it.

Payment Strategies
If you must juggle repayments of old debt, start with those debts that are still showing as delinquent. That will give you the biggest boost in the short-term. Carefully review older debt that shows as charged off. Before contacting the creditor or collection agency, check your state laws to see if the debt is statute-barred, meaning that it is too old for creditors to attempt further collection. If it is not statute-barred, even contacting the creditor can re-instate the debt as currently collectible, which can drop your score.

If the debt is due to drop off of your report in the next several months because it is almost seven years old, consider waiting until then to pay it, as it will have no affect on your score once it drops off. If the debt shows as written off but will still show on your credit report for longer than a few months, collect all of the funds together to completely pay it off before making contact with the lender. That way, you will potentially re-activate the debt but will also show payment in full which will minimize the damage to your score.

The Bottom Line
The best strategy in managing your credit score is to pay your obligations on time, every time. If you do get behind, though, how you manage your old outstanding debt can have a significant impact, either negatively or positively, on your score.

 

The Cost Of Bad Credit

Posted on by admin
Bad credit costs you in more than the extra interest you have to pay. Bad credit can lead to reduced opportunities, family stress, and having to associate with lenders who see you as a mark. Here are some of the unpleasant consequences of bad credit. 
  • Fees: Creditors may add fees, such as late fees, over-limit fees, legal fees, repo fees, penalty fees, deficiency payments, and default rates, to your balance.As bad as the fees can be on your credit cards, they can be even worse on your secured loans. If you fall behind in your house payment, you can be hit with huge fees to the tune of thousands of dollars.
  • Higher interest rates: The lower your credit score, the higher the interest rate you have to pay. Making matters worse, the policy of universal default says that if you have an issue with one lender, all your lenders can hike your rates, even though you’re still paying the others on time and as agreed.
  • Less than favorable loan rates: In a time of tight credit, you may not qualify for a loan at all.
  • Lost employment opportunities: Increasingly, credit checks are a standard part of the hiring and even the promotion process at companies large and small throughout the United States. Businesses reason that the way you handle your finances is a reflection of your behavior in other areas of your life.
  • Higher insurance premiums: A strong correlation exists between bad credit and reported insurance claims. Insurance companies run a credit check when determining your premium, so bad credit may cost you a bundle in insurance-premium increases or result in your insurance being denied.
Here are some statistics to help you better understand what this means: 

Mortgages with Bad Credit

How bad credit affects home loans –

The 30-year fixed jumbo home mortgage APR’s are estimated based on the following assumptions. FICO scores between 620 and 850 (500 and 619) assume a Loan Amount of $300,000, 1.0 (0.0) Points, a Single Family – Owner Occupied Property Type and an 80% (60-80%) Loan-To-Value Ratio.

Take a look at the chart below. Notice how a low FICO score increases the amount of money you will end up spending on a loan throughout the course of its life. If your FICO score is below a 560, most lenders will not even consider offering you a jumbo loan for a FICO score that low. If you want to save money and stay away from bad credit mortgages, sign up here!

Credit Score Rate Payment Added Cost
Excellent 720-850 4.31% $1,487 $0
700-719 4.53% $1,526 $14,040
Moderate 675-699 4.71% $1,558 $25,560
620-674 4.93% $1,597 $39,600
Bad 560-559 5.36% $1,676 $68,040
500-559 5.90% $1,780 $105,480

 

Auto Loans with Bad Credit

The 36-month new auto loan APRs are estimated based on the following assumptions. A Loan Amount of $25,000, 36 months and Interest rates are fixed for the term of the loan. (Variable rate loans may be available but are not usually beneficial to a consumer in a low interest rate environment.)

Credit Score Rate Payment Added Cost
Excellent 720-850 5.30% $753 $0
700-719 6.83% $770 $612
Moderate 675-699 8.78% $792 $1,404
620-674 12.36% $835 $2,952
Bad 560-559 18.20% $906 $5,508
500-559 19.23% $919 $5,976