Does using cash improve Credit Score?

Does using cash improve Credit Score?

Sometimes people get tired of using credit cards and think that if they paid everything in cash, it will help re-build their credit.

This is untrue.

If you only use cash for your purchases, all you are doing is not using the credit cards.

In order to build your credit history it is important to use credit cards responsibly and make the payments in full if possible, within the due time for making them.

One simple way would be to use the credit card for your purchase and keep the amount in cash in a separate box that you do not touch until the time for payment of the credit card bill. A disciplined and responsible approach to using credit cards is the best approach when it come to building creditwise.Credit Cards for Bad Credit or No Credit

Credit Cards for Bad Credit or no Credit

In the past few years of bad economy, a number of people have lost their good credit standing and are falling under the group of bad credit.

Once you have a bad credit rating, banks and financial institutions do not usually want to extend reliable credit to you. However, there are choices available to issue a credit card for even the bad credit.

Obviously, the choices are limited and the interest rates offered may be unattractive, but you can get the credit card that you need and if you operate it responsibly, it can help re-build your credit score also. This ca then help in future to obtain better credit interests.

Just remember, prepaid cards are NOT credit cards. No credit is offered to you if you have a prepaid card and these cards do not report to the credit bureaus so your credit rating is not impacted.

You can obtain a secured credit card.

Secured credit cards for bad credit, work by paying a certain amount in advance to establish a credit borrowing limit. Once you have received the card, and you maintain no balance beyond the payment due date (pay all bills on time), it will help slowly re-build your credit as well.

Most of the credit card issuers offer such secured credit cards – so do not hesitate to talk to your bank.

Another way to obtain a credit card for bad credit is to have someone else become a guarantor for you. This, of course has an inherent risk for the guarantor. If you do not pay the credit card bills on time, the guarantor’s car credit rating is also affected. So, if you go this route, you must be very careful and responsible in using and paying the credit cards. Failure to do so can result not only in making your credit rating even worse, but can potentially lose relationship with your guarantor.

If you are looking for a pay day loan as a short term credit, there are companies which offer payday loans at a very unattractive interest rate. Avoid a payday loan if you can – but if you can not, and all other avenues for getting a credit are closed, you should consider very carefully how you are going to pay the loan back in order not to incur very heavy interest charges.Does Refinancing Impact my Credit Score?

Refinancing will affect your Credit Score.

Depending upon how the refinancing is done and reported, the impact may be different. For example, if a refinancing is done through modification of an existing loan and is reported as the same loan with changes, the impacts may be due to –

Credit inquiry
Changes to the loan balance
Changes to the terms of the loan.

The overall impact of these changes may be minimal on your highest credit score possible .

However, if the refinancing is done as a new loan, and is reported as such, the impacts will be due to –

Credit Inquiry
Changes in loan balanceChanges in the terms of the loan
New open date of the loan

A new open date means that the loan is a new credit obligation and therefore impacts the credit score a little more than if it was a modification to an existing loan.

Typically when you renew your mortgage and also renew your line of credit, you should speak with your financial institute and clarify these aspects of re-financing.
Benefits of Debt /Credit Consolidation

Benefits of Debt /Credit Consolidation

One of the major benefits of debt consolidation (also known as credit consolidation or loan consolidation) is to save on interest payments.

Debt consolidation is generally done with creating an inventory of all your credits/loans etc., with principal amount, monthly payments, interest rate and interest amount.

Usually these will include your outstanding credit card bills, auto loans, other loans that you may have taken like buying household appliances on credit, your line of credit etc.

Once you have done that, then you need to find a single loan that has a better interest rate. Mostly, your line of credit (or your home equity line of credit) may have the lowest interest rate among all of your loans.

This is where you will consolidate all your loans and debts to make one single monthly payment that is lower than the sum of all payments that ou were making earlier.

Benefits of Debt Consolidation –

Lower Monthly Payments – Obtaining a lower interest rate on the consolidated debt leads to you having to make a lower monthly payment. You can also extend the term of the consolidated debt , and thereby reduce your monthly payments even more.
Save on Credit Card Interest – Credit cards normally have a much higher rate of interest on your outstanding bills than a consolidated loan like a line of credit. These savings can be substantial in terms of money.
Leveraging your home equity – Usually a loan that has a collateral of your home, will offer a lower interest rate than a unsecured line of credit. If you can leverage this equity, you will be able to benefit from an even lower rate of interest. Also, the benefit of extending the term will lead to lower monthly payment, improving your cash flow.
More control over your debt – Having consolidated your debt, you will have more control over it, especially as you will be paying just one monthly payment as against many payments that you may have been making earlier.

Debt consolidation therefore allows you to not only save you money, reduce your monthly payment and improve your cash flow, it is also a very helpful tool in starting to re-build your highest credit scoreYou can Fix your Bad Credit Report!

Many people think that once they have a bad credit report, it is there for ever. That is simply not true.

Many people working in financial institutes would like you to believe that because they make more money by making you sign for loans at a high interest rate.

Whether you have collections, bankruptcy, charge off or any such similar bad credit tradeline, you have options available to you for correcting those. The fair credit reporting act provides you with these options.

Fixing a bad credit report before you make an application for a mortgage renewal or a loan is extremely important. Spending a little time and a small amount of money can result in not only fix my credit report, but can also result in savings of hundreds, if not thousands, of dollars for you.

Why give away your hard earned money to lenders?
Few Negative Items on Credit Report make a Big difference!
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Just a few negative items on your Credit report can become an issue when you apply for credit for a new mortgage or even a car loan.

Banks routinely offer their best interest rates to people with clean credit report and a highest Credit Score.

Even one or two late payments in your credit report can trigger either a denial or an interest rate that is not necessarily the best available.

Getting a higher interest rate loan can cost thousands of dollars over the course of a few years – or hundreds of dollars on your monthly payment.

A simple increase in your care credit score from about 640 to 720 can save you upwards of $5000 per year in interest costs for your mortgage.

The formula is quite simple, fewer negative items on your credit report will get you higher credit score and better interest rates for better savings.

Try eliminating the negatives completely from your credit report if possible.
negative credit score items can not be fixed by paying off!
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Many people think that by paying off the negative credit score items, they will be fixed.

This is not true.

Simply paying off the negative items will not fix the credit score.

Negative credits are allowed to stay on the credit report for a period of 7 and a half years.

Bankruptcies are allowed to stay on the credit report for 10 years.

Once you pay off the outstanding delinquent payment, the credit repair report will still say something like Paid Collection, or Paid was late. This does not read well with the creditors.

There are some limited methods that can be used to rectify this. The outstanding charge must be paid off in a proper manner to achieve this.
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