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Credit Card With No Credit History

February 11th, 2009

While applying for a loan or a credit card, not only the fact that you have bad credit will work against you, but also absence of credit will hamper your attempts. You may not like it, but the business of consumer credit works in this fashion. Lenders avoid lending to people with no credit history because of the absence of the track record of payments.

That means, you cannot rent a car, stay in a hotel, or shop online without a credit card. However, there are a few things that you can do to rectify the problem.

Available Credit Options

If you do not have a credit history, most of the larger credit card companies will refuse to issue you a card. But you can try the smaller players like department stores. Apply for a card from a department store that is ready to issue you a card. A gas station card is also a good bet. What is crucial is that you pay your bills on time. Aim to build a good credit history and not simply to get a credit card.

Choose a credit card company that will consider your overall financial situation and not simply your credit history. Some lenders will consider your employment history, your housing condition and how frequently you have relocated. If all these details are good, they can approve your application. But it is imperative to use the card sensibly.

Credit Unions

If you are an existing member of a credit union or fulfill their membership criteria, find out their terms for issuing the card. Though they do not issue the cards blatantly, their terms for the members are more relaxed. There is no need for you to be employed by a particular company to be eligible to become a member of a credit union.

Secured Credit Cards

A credit card whose limit is equal to or slightly more than the cash deposit you have to give to the issuer as a security is called secured credit card. If you pay your bills on time consistently, the lender will usually increase your limit without asking you to pay further deposit. Once the lender becomes secure in the knowledge that you are a reliable customer, you can opt for the unsecured credit card.

Student Credit Cards

For a student, a student credit card is the best bet. Student credit cards are the excellent method of developing the credit history that is essential for availing further credit after graduation. But it is crucial that you utilize the opportunity sensibly. Many banks, especially those present in college or university cities and towns, will offer a credit card to the students.

Once you get a credit card, never forget that you are setting up a credit history. Prove that you are a safe financial bet by paying your bills on time. Do not overspend as it can drag you down into debt and worsen the situation.

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Various APR Features For Credit Cards

February 11th, 2009

There are different card products offered by various card companies, and their features vary greatly. Hence getting the right card that is suitable for your situation is a tricky process. Each credit card has its own set of unique features. But the fact is that most of the cards have the same features but with small degree of variation. Each card has its own APR and it is crucial that you understand what it means and how it works.

APR denotes “Annual Percentage Rate”. It is the interest charged to you for making purchases using credit and not paying off the full outstanding amount. It is shown in percentage.

The crucial APR

It is vital to consider the APR while applying for the credit card. It can dramatically affect your capacity to repay your card balance. The APR of the card differs not only amongst the various cards but also from the method and the type of purchase.

The APR for the cash advance on the card is the highest, followed by the APR for purchases. So if you are taking a cash advance of even $100.00, you attract an APR that can be a steep as 23%. For purchases, the APR can hover in the vicinity of 19%. Hence it makes sense to use the credit cards in case of emergencies or for purchases that you can pay off completely by the end of the month.

APRs also depend on the balance unpaid on the card. They are known as tired APR’s as the APR varies according to the balance tier in which you fall on the specific month. E.g. the balance of $0-$2,000 can have an APR of 14% while the balance exceeding $2,000 carries an APR of 18%. Hence it makes sense to carry lower balance on these cards.

Again, there is a penalty APR, which is applied if you make late payments frequently. This will increase the APR and consequently the total balance. Ensure you make timely payments.

0% interest credit cards

The very popular marketing technique used by the card companies is the introductory APR. You can transfer your existing higher interest card debt at this reduced interest rate on the new card. The purchases you make during the introductory period will also attract this lower interest rate. This allows you to reduce your balance substantially and you can repay more of debt during the introductory period.

But be careful of the future APR/ delayed APR that is effective once the duration of the lower rate is over. This rate may be far higher than the intro rate.

Hence it is important to look carefully at the APR and find out the actual rate for the card you are considering.

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Protecting Your Business From Credit Card Fraud

February 11th, 2009

Credit cards have become popular to due to convenience of having not to carry large cash and wide acceptability. They are the most popular form of payment on the Internet. Many online businesses readily accept credit card payments. But this method of payment is also susceptible to fraud. Hence you should protect your business from credit card fraud. Follow the steps outlined below to protect your business from being defrauded by unscrupulous customers.

Steps For Online Business Owners

Generally many consumers consider that credit card online processing fraud affects the buyers more; the fact is that the seller is more likely to fall prey to such a fraud instead of the buyer. These tips will prevent you from becoming a victim.

First you should always cross-check the address given by the buyer. Find out its authenticity. Your merchant account in all likelihood will provide you an Address Verification System to check the address given by the buyer matches with the billing address of the cardholder.

The shipping address should tally with the billing address provided by the customer. If there is a mismatch, investigate the transaction and do not ship the goods.

Be careful with the unusual orders. As the fraudster is unaware of the purchasing history of the customer on your site, check out if something unusual is ordered. Call up the customer if possible. They can either confirm or reject the transaction.

Ask the customer for the maximum information while filling the order form. Besides name, address, and telephone number, get the name of the card issuing bank and 3 or 4 security digits found at the back of all the cards.

Mention clearly on the web site that it is protected by anti fraud devices that are working all round the day. This will make the fraudster rethink before entering the web site.

Steps For Offline Business Owners

The risks of fraud in this case are far lower as you are more likely to see the person who is using the credit card. But in spite of all the precautions, frauds can still take place. These tips will protect you against credit card fraud.

Do not take a credit card without properly identifying the owner. Compare the name and signature to find out if they match. Most customers will not be irked by this as they know it is for their benefit.

Find out if the credit card is genuine by looking out for the characteristics present on the genuine ones. Today’s cards have a hologram, whose color changes when exposed to the light. Check the signature panel to ensure the signature cannot be wiped away. In fake card, the signature will be erased. Check if the magnetic strip is not tampered with.

Using the Address Verification Service will also be helpful.

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Free Credit Score Repair

February 11th, 2009

Opting for a free credit score repair service is an excellent way to get your bad credit back on track. It is a method that you can do by yourself. You need to be serious about your credit rating since it can affect your future credit. The free credit repair is the cheapest and intelligent way of improving your score.

The first step in the free score repair is to go through your credit report. This will help you to detect any discrepancy in the report and prevent any unnecessary hassles in the future. To verify the accuracy, confirm the accounts on the report as yours or you owned them once, double-check all the account numbers for their match. If you come across anything that is out of place, use a free repair for investigation and take immediate remedial procedures.

The second step in the process of a free credit score repair is to consolidate major part of your high interest credit card debt and make it into a single low interest loan. There are various places that offer you this service and save you a lot of money. Besides your credit rating will also go up.

Transferring balances can also be undertaken under free repair. It is just like a consolidation but uses your existing accounts. You transfer any high interest cards balances to cards charging lower rates of interest. Many a times, these reduced rates are offered only for a short time, but simply lowering you payment for some time will move you closer to your goal of clearing off your debts.

But making late payments will take away the advantage of free credit rating repair. Paying your bills on time throughout should be your first priority. Late fees simply increase your balance and repaying the bills becomes more difficult. If you are in trouble, talk to your creditor and alter your due date. They will easily help you out.

A free credit rating repair offers various other advantages, besides raising your score. A long-term good credit record will offer you credit with better interest rates. Mortgage rates and car loan rates will also be attractive. Hence a free credit rating is well worth the effort.

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DIY Credit Repair

February 11th, 2009

A poor credit record can close all the doors to procuring financial assistance when you are desperately in need. Sometimes a lot of things can go haywire, resulting in skipping payments. This can be damaging to your credit record. Bad credit bars easy access to loans, financial help or credit cards, or forces you to pay sky-high interest rates on the loan. As you may have to apply for the credit in the future, it is imperative you start remedying the situation immediately. Do not clear your debts just before applying for the fresh credit, since the lenders will consider your financial history before approving your credit.

Repairing bad credit is not a simple task but you can undertake certain steps to simplify the entire process. Use this advice to help you get out of the sticky situations.

First thing you should do is to contact the credit bureaus who offer credit reports to the lenders. There are reputed credit bureaus in every country that keep a watch on your credit history, and are available for free or at a small fee. If there are various reputed bureaus, get the report prepared by each of them. This is essential because the information used by different bureaus in preparing your credit report differs, since this information is provided by different reporters. You can get a snapshot of your credit standing.

Go through the reports carefully, to find out any errors. Most of the times, you may see some errors or negative comments. Check out the credits that you have paid but are still marked unpaid in the report or accounts that you have not opened. Many scamsters open accounts in other people’s names just to clear the credit when the attached credit line becomes reasonable. This can damage your credit rating. There may be harsh negative comments in your report.

Take action to clear out these discrepancies. Clear out the accounts that are not yours from your credit report. Discuss with the creditors who have given the negative comments about you or are showing your debts are unpaid when the opposite is true. Many of the lenders will happily cooperate with you after you have explained the facts. You can also file a dispute, if you are certain that few negative comments or bad debts should not be there on the credit and the creditor isn’t cooperating, even though you have the proof to validate your argument.

Sometimes the negative comments can be true. But if your credit record has been good for a long time, negotiate with your creditors and try to get the comments erased. Lesser number of negative comments will make your credit report attractive. Also take note of the total outstanding debts. Excessive debt can signify financial disaster and a poor credit rating. Lenders won’t approve loans or credit if you are burdened with massive debts, though most of them have been cleared. Even if you get the credit, you will have to pay exorbitant interest to compensate for the risk of providing credit. It makes sense to keep debts below 30% of your limits and to repay the loans with highest interest rates at the earliest.

Similar to excessive accounts, fewer accounts can also damage your credit. If there is not adequate number of accounts, your credit rating will be much lower than actual. Owning departmental store or gas card account that has good payment record will improve your credit standing. You can also go for a loan or credit card and use it to purchase any goods/services that you can pay easily. Repaying small loans or credit card purchases quickly will enhance the odds of repairing bad credit.

Bad credit cannot be eliminated quickly. It is a time-consuming process that needs patience. Start repaying your debts gradually, with the high interest ones coming first. If you can show your prospective lenders that you are serious about clearing your old debts, they will be impressed and assure them that you are serious and trusted in your finances.

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3 Credit Report

February 11th, 2009

A 3 credit report helps you in various ways. There are 3 major credit reporting agencies: Experian, Equifax, and TransUnion. Each agency keeps its own information about your credit. Hence for a good credit report, you should use all the three. The cost of a 3 credit report is nearly $24, and will give you the detailed information about your credit.

Various organizations want to access your 3 credit report before approving you for any credit. So if you are aware of a 3 credit report, your prospects of getting various services improve a lot. Home loans, insurance, a credit card with a reduced APR and at times leasing a house or car will be difficult if your credit score is low. Once you are aware of your 3 credit report, it will inform you of those services that you are ineligible for and thus save you time.

Besides with your 3 credit report score, it is possible for you to find out if somebody has been defrauding you or stealing your identity. E.g. if somebody has been getting bills with your name and has not informed you or not paying them, they will appear on your 3 credit reports with bad score. This will help you in taking a suitable legal action to strike them off your record and get the identity thief arrested.

Removing the charges of the bad fraud from your 3 credit report score can be difficult. You have to produce various proofs of identity and mail. You should also provide the documentary evidence of the home title as the proof of the residence.

There are various methods of improving your credit score. One method is to get a credit card and making regular monthly payments on time. This indicates you are reliable and you will not default on credit. If you make prompt payments for credit card, gas, phone, electric, and utility bills, it will help you a lot. It is always advisable to keep your credit record good to get lower interest rates, bigger lines of credit, and various financial benefits that are not available to someone with bad credit.

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Selecting a Credit Counseling Company

February 11th, 2009

After you have decided to use the method of credit counseling to solve your financial problems, it is time to select from one of the various credit counseling companies that are springing up in plenty nowadays. There is no simple answer to this question, but you should look for the following things in the credit counseling company that can help you make this decision.

Cost is a major factor to consider when you choose credit counseling. If you have been unable to pay the debts due to financial constraints, it is very likely that you lack spare cash to pay the fee for the credit counseling. Under this circumstances, choosing a reputed, non-profit, credit counseling companies that will help you for free. But if you think that paying the fee will get you better quality service, go for a fee based credit counseling company.

The best solution while selecting the right credit counseling company to assist you is to find the one that will offer customized solution to your problem. Each condition that necessitates the use of credit counseling is different. If your financial problem is far complex than the one of average consumer, the standard financial plan will not solve your problem and you should exclude credit counseling as the solution.

The most crucial point to note is that you should fall into the same financial problem as you are now, once you have undergone credit counseling. Ensure that the selected credit counseling company offers you financial education. It doesn’t make sense to clear the debt if you don’t educate yourself on the money management and then fall back into the debt trap again.

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Quick Tips To Help You Improve Your Credit Score

February 11th, 2009

A lot of companies make tall claims that they can to repair and restore good credit if you happen to fall into the bad credit category. Remember, repairing the bad credit is not a fast method. A few companies assure you that they can certainly get a credit card for you, irrespective of your credit history. But what actually happens a lot of time is that they fleece you of the money and escape by using the legal loopholes and fine prints mentioned in the agreement.

Paying your bill on time is by far the best and cheapest method of increasing your score. Late and negligence in bill payment is the main reason why many people have low credit scores. But if you can pay your bills on time for 6 months to a year, your score will certainly improve.

The other method of improving the credit score is by procuring the free copy of your credit report, offered by various companies. There is no charge either to get the copy of this report or making any alterations in it. If there are any discrepancies in the report, they are usually made by the credit card company and it is their job to rectify them.

Once you have done some background work and concluded that you can handle the task by yourself, the first thing to do is to get a copy of your credit report. Scan the report thoroughly to look for any errors and discrepancies. If you find anything wrong in the report, you can dispute it and get it investigated. Contact the creditors directly to inform them of any errors and correct the errors. Some flaws will remain forever but you can minimize their damage by living within your means and making timely payments for the bills. If you establish a good credit record, the negative effects of the past mistakes will significantly reduce as time passes.

Using the services of a credit counseling company is another method of repairing your credit. You need to investigate these companies thoroughly. Avoid registering with the company just by being brainwashed by their commercial or slogan. You should be alert when it is the matter of money and reputation. A reputed credit counseling company acts as a go-between with your creditors to reduce or forfeit the high interest rates while you go on clearing your debts. They expect you to cancel all your open accounts and repay them before taking a new credit card. They can consolidate your debt by letting you make a single payment to them directly and in turn, they repay your monthly payments to your creditors.

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Credit Card Debt Negotiation

February 11th, 2009

Debt negotiation on credit cards is also commonly called credit card debt settlement. Credit card negotiation is the next option if you have failed to consolidate your debt. If you have been unable to pay the dues for at least 3 months or do not have enough to make the minimum payments, you should consider this option.

This process works on the similar basis as a debt settlement but only deals with unsecured credit. The unique nature of unsecured credit gives the debt settlement company the authority to negotiate a pay off that lies normally between 40-50% of the balance. Many creditors accept this offer because there is a major danger of losing all their money in case the bankruptcy is filed.

This transaction that consists of the settlement, the debt settlement company makes a single payment at once to the creditor to the remaining balance of the loan. Then you should start repaying the loan to the debt negotiation company along with any fees/charges that have been previously decided upon.

The major negative effect of this method is that it can harm your credit score and the fees charged by some companies can be very steep. You can also choose self-arbitration.

If you have the will and ability to repay your debts, you can talk to your creditors by yourself. Consequently, you will be charged lower interest rate or offered a highly practical repayment plan.

If you choose to self arbitrate, sign a written agreement between you and your creditor/ collector that gives in writing the fact that the settlement has been ‘paid as agreed’ or ‘satisfied in full’.

Self-arbitration or working with a credit card debt negotiation program can be very successful and effective. Positive debt negotiation on credit cards can work out if you have decided to repay your debts and get rid of debts forever.

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Debt Settlement Companies

February 11th, 2009

Debt settlement is a method of negotiating on your debt if you are at the end of your tether and considering bankruptcy. Debt settlement companies try to negotiate with your creditors for settling 60-75% of the balance of your debt. They can also chalk out a no interest payment plan that reduces your overall payments and help you in paying off your debt within a shorter duration.

Debt settlement companies usually persuade the creditors to settle for the part of the money rather than choosing the lengthy and expensive process of bankruptcy. When you sign the contract with the debt settlement company, your creditors will change the status of the account to the current. This process is called re-aging.

After you conclude an agreement, the debt settlement company will attempt to field all calls from your creditors. Debt settlement requires rigid budgeting as you will be paying your monthly installment to your debt settlement company in place of your creditors. Failure to make regular monthly payments will force the company to stop handling your case and inform your creditors to take legal action against you.

Debt settlement companies also provide credit repair services. This method charges fee but can be useful in the long term. They work with your creditors to erase the bad remarks about you as a gift for you if you honor the bargain.

Before signing up with a debt settlement company, check out the prospects properly to ensure they understand the state laws. A good debt settlement company will help you gain long term stability and managing your financial affairs smoothly. Ask plenty of questions, get your doubts clarified and read the material on the internet to understand the entire process.

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