Can Credit Cards Help Your Credit Score,
By
Easy Tips
—
Tuesday, 24 July 2018
—
Credit Tips
Which one will work best for you, While every credit card is different, there are some that are better suited for consumers with poor or no credit. Just be aware that when you open a new card with poor credit, your interest rate will be higher than average, and you’ll still be responsible for any additional fees.
If you have poor credit, First Access could be a great card for you to consider. This is an unsecured credit card offer, where a deposit isn't required to open it but your credit score can influence your eligibility and credit limit. Unsecured cards can be harder to get approved for, but the First Access offer from VISA is designed for people with thin or less than perfect credit. Another option for a credit card is Total VISA’s unsecured credit card.
You’ll also need a checking account to apply and will be required to pay some fees. Because this is an unsecured credit card, the chances of being approved with poor or no credit are lower compared to a secured credit card. NetSpend won’t report your payment history to the three major credit bureaus, so it won’t bolster your credit score. What it can do is help build good spending habits as a safer alternative to carrying cash.
There’s no activation fee or minimum balance due when you apply, and the bank won’t run a credit check for approval. What makes a prepaid card different from a credit card is that instead of borrowing money from the bank, you’re using your money as your credit balance. One of the best features NetSpend offers is Payback Rewards.
This is optional, but if you choose to enroll in the program, you’ll earn cash back for many purchases you buy daily. You’ll also get personalized offers based on your shopping habits to choose from. Credit cards are a great way to establish credit and improve your overall credit history.
With all of the credit card options available, it can be difficult to choose which one will work best for you. Let us here at Auto Credit Express help find the right card for you. On the flip side, if you need to finance a car but worry your credit will be in the way, we still want to help. Auto Credit Express works with a nationwide network of dealers who have the lending resources available to help credit-challenged car buyers get the financing they need. Get started today by filling out our no-obligation auto loan request form.
But avoid anything that might strain your budget. Diversity your debt. 10% of your credit score is determined by your “credit mix”. Creditors like to see a pattern of handling credit responsibly over time on a variety of account types, including both revolving credit and installment loans. The only inquiries that impact your credit scores are those that result from applying for credit. Checking your own score through the Wells Fargo Credit Score offer does not hurt your credit.
Achieving financial literacy should be a goal for every American. Adults with a firm understanding of personal finance, credit cards, and credit are more likely to avoid money troubles. And financial education is best started in childhood, before most kids have the power to make independent financial decisions. Despite the importance of financial literacy, many adults lack an understanding of basic financial concepts, which can lead to bad credit. You can help your kids avoid poor credit by teaching them how to avoid mistakes. Here are six common credit mistakes you should teach your kids to avoid.
It’s easy to ignore your credit when you don’t understand how it works or why it’s important. But monitoring your credit can be viewed as part of being a healthy, productive adult, just like getting an annual physical exam. And if you ignore your credit, you could miss out on getting a credit card, owning a car, homeownership, and more. Luckily, paying attention to your credit and credit score is fairly easy.
You’re entitled to a free annual copy of your credit reports and there are many free credit score monitoring tools available. If your kids understand one credit mistake to avoid, let it be making late payments. Payment history makes up 35% of your credit score, and one late payment can cause your score to plummet.
Most creditors won’t report a late payment until you’re at last 30 days past due, but it’s risky just to get to that point. Instill the importance of timely payments in your kids. Young adults may be tempted to apply to several credit cards as soon as they turn 18. This is a mistake for two reasons. First, a hard inquiry from a credit card application can ding your credit score a few points, so you don’t want multiple hard inquiries occurring at once (especially when you’re just starting out).
Second, it can be difficult to juggle multiple credit cards at once when you’re just starting to establish financial independence. A higher minimum payment isn’t the only consequence of maxing out your credit cards. Experts recommend using no more than 30% of your available credit at one time. If you go above that threshold, you could be damaging your credit with a high credit utilization ratio. Your kids should keep their credit card balances low.
Defaulting on a loan - whether it is an auto loan, mortgage, student loan, or other type - has many consequences that will vary based on the type of loan. Your credit will almost certainly take a big hit, debt collectors may go after you, and you could have your wages garnished as the result of a court judgment.