Tag: credit

Credit History: Versions Of Interest Rates, Collections And Payments Part 2

Service fee of transfer of the balance sheet from one card to another (Balance-transfer fee). Balance sheet transfer is a deed of conveyance of indebtedness from one account (credit card) into other account. As a rule, it is motivated by more favorable terms of credit. In such cases the bank in which you transfer the balance sheet, sends the check for the same sum. This check produces payment of a debt to other bank.

Payment for payment with delay (Late Fees). The payment for untimely payment is levied when the client has delayed monthly payment on a credit card. If payment has been delayed not because of the client the bank is obliged to return money. In practice, the credit companies don’t like to argue with clients if they hear in their words the weighty reasons of delay of payment.

Payment for a credit overdrafting (Overdraft Fee). It is levied in a case when expenses of the client have exceeded the admissible sum.

Payment for account opening (Setup Fee). A single payment for bank account opening.

Payment for return of the poor check (Return-item fee). It is levied, when the client pays (check), but on the account there were not enough means for a covering of expenses. In such cases usually use expression “bounced check”.

There are also other kinds of payments and collections. For example, a payment at payment by phone, and also at use of other additional types of service which use depends on the discretion of the client.

For today there is a huge set of credit cards.

1. With what it is necessary to begin a choice of credit card?

Yu should know the answer of the following questions:

What type of a credit card I search?

How will I pay for expenses: completely every month or monthly by installments?

On the type, all credit cards can be divided into following basic categories:

cards with a low interest rate;

cards with soft terms of transfer of the balance sheet;

cards with bonuses;

cash back cards (the bank returns from 1 to 25 percent from the spent sum);

prepaid cards;

cards for those who doesn’t have credit history;

cards for students;

card business.

How correctly to choose a credit card?

At filing of application on a credit card, automatically you face variety of unfamiliar concepts.

The special attention should be stopped on:

* a version of interest rates;

* a version of collections and payments.

2. Where it is possible to learn about credit card conditions?

With it there should be no problems. The law of the USA obliges credit establishments to inform the clients on conditions on which they perform issue of credit cards. As a rule, these conditions are listed in so-called “Schumer’s box” (in honor of the senator of the State of New York who has published the law fixing the given rule). Schumer’s Box, it is possible to find on the back offers sent by the credit companies by mail.

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Importance Of Good Credit History: Taking A Car In Credit. Part 1

How correctly to take a car in credit?

The majority of us buying the car fall in love with it and forget about financial nuances. This factor can play a bad role, especially at car purchasing in credit.

How to avoid errors? Let’s consider the most widespread of them.

Error number one is that people at first go to choose the car but only then choose terms of credit.

The employee of a motor show can suggest receiving to you a machine purchase credit directly in their dealer shop. And, as a rule, this offer is much more unprofitable than the offer received directly from bank. Try to consider that cost of the car in the end of term of payments, loses the original cost. On the average, the car gets already cheaper on 10-15 % while the new owner leaves on it from motor show territory. For comparison, think, what is going on with the business of the real estate purchasing in the market?

Such situation, American people name “Upside down” i.e. when for the machine have paid more money, than it of that already costs actually. Thus, the best method is at first to purchase the credit, and then to go and buy the car!

What size of an annual interest on the credit is considered normal?

Certainly, the less is the better. Banks give a smaller annual interest for people with good credit history.

It is possible to check up free of charge credit report from which it is possible to find out on what annual rate for you to count at machine purchasing on credit.

Error number two is barrowing of too great sum of money payments on which you can’t master.

Exit is very simple. Take the calculator, a pencil and a paper blank leaf, sit down to table and make calculation of the monthly budget.

What sum it will be convenient to pay every month? How purchasing of the new machine is entered in the personal (family) budget?

The third error is signing of the credit for very long term, without possibility to extinguish it ahead of schedule without paying thus the penalty (prepayment penalty).

You can also download the list of questions in more convenient form in the internet. You can download there all the questions which are necessary for asking the future creditor. Take the list with your and consistently mark points, at credit reception in bank or a personal call to the future creditor. Also hold it before yourself before arranging the credit through the Internet.

Also you should definitely read the next part of this article and find there also all the necessary information that will be definitely very useful for you in taking a car in credit.

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Importance Of Good Credit History: Taking A Car In Credit. Part 2

Credit insurance. We will not name this point as an error. However, it is your choice — to arrange the insurance on the agreement of crediting or to refuse it if other isn’t provided by conditions of bank (creditor).

Usually it is offered two kinds of insurance of the credit.

Life insurance credited or Credit Life Insurance. It is the first kind of insurance. This kind of insurance pays expenses in case of death credited. The sum which remained not paid at date of death of the insured person is meant expenses. The insurance company will pay this difference, and the car remains at relatives or relatives credited.

The second kind insurance is insurance on a case of work incapacity, accidents, illnesses or Disability or Accident and Health. The name speaks for itself. Expenses will become covered during time when you can’t work, were ill or had an accident. Usually, in the conditions of the insurance company, it is told that the insured should be invalid not less than 15-30 days, depending on conditions of the insurance company.

The future owners of cars set to creditors very few questions. Or set, but not what should be set. Often happens that the person faces for the first time registration of a purchase credit of the car, and fear to seem incompetent in this question, forces it to agree simply silently with the seller of cars (or the creditor).
It is necessary to notice that the dealer organizations, as a rule, give the credit from 100 % a guarantee even if there is no credit history. Before it, they certainly will arrange small show to give the importance of their offer, but it already from psychology area, instead of the finance. It is necessary to notice only what to agree on this offer, it is extremely undesirable. Dealers are not banks.

Nevertheless, if you have decided to arrange the crediting agreement in dealer agency, ask more about credit conditions.

The best that it is possible to make is to constitute the list of such questions.

Let’s consider questions which are necessary for asking the future creditor:

what is size of an annual interest rate?;

what is the period between monthly payments (accounts)?

what is the term of loan payout? (Whenever possible, take the credit for smaller term. It is less term — less payment for using the credit);

Whether there is a penalty for premature loan repayment?

what is size of the minimum monthly payment?

what sum you pay for the credit finally if will produce only the minimum monthly payments during all period?

what collections it is necessary to pay at credit registration?

Is it necessary or not to arrange the insurance on the credit? How much does costs?

Whether there is an advance payment (down payment)?
the size of the interest rate is fixed or changeable?

what documents it is necessary to give?

* what time is required to them for decision making?

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What Is Better: A Loan Or A Credit Line?

In the given article the answer to following questions is given:

— In what a difference between a “loan” and a “credit line”?

— They render what influence for the sum of credit points?

So let us begin:

Let assume that we will understand in more details the difference between these concepts.

The basic difference between a credit line and a loan, first of all consists in a payment procedure.

So any way what is better: a loan or a credit line?

Credit line (line of credit)

The received means in the various purposes give the chance to the borrower to use the agreement on credit line granting. At credit line reception is the total established sum which the client can obtain in bank. The flexible hours are given — there is no fixed maturity date, for example, you can spend once the entire sum then will come to make accounts with instructions of minimum payment. The size of minimum payment depends on conditions of the company which has given a credit line. The available credit amount proportionally renews in process of debt settlement.

The credit line doesn’t demand each time to legalize papers in bank on purchasing.

Loan

The loan, assumes target granting of means with the accurate schedule of payments, it has a definite period of repayment which makes a reservation in the contract (two years, ten years etc.) For many clients, discipline of repayment of an amount of debt for a definite period is more attractive offer than payment during uncertain term.

Now, let’s look how the loan or credit line is used, it is displayed on a condition of credit points.

At loan use, in the credit report it is possible to see:

How the payment is produced;

Extent of a debt;

Predictability of expenses;

The size of a remainder of a subject for payment.

At credit line use:

to the creditor it is not clear how and when the client will extinguish the balance sheet completely;

it is impossible to predict expenses on this account.

The size of a limit of a credit line is underlined in the report. Approach of expenses to a limit of expenses of a credit line is equivalent to approach to a limit of expenses on a credit card. The given circumstance negatively affects the sum of credit points of the report — credit points start to fall. For example, credit line use is inexpedient in that case when you try to increase a score in the credit report. In it, actually, the question in the given clause also consists. So now you know all the necessary information about credit lines and loans and you know what to choose for yourself.

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Credit History: Transfer Of The Balance Sheet Into Other Account

The majority of credit card issuers in the USA for attraction of new clients is advertized by the credit cards, offering very big induction period on extent (sometimes about 15 months!).

For variety of people the termination of period of validity of an induction period of credit card is a signal of the beginning for searching the new one. Many people use such offers to cut down the expenses, i.e. not to overpay money to creditors, throwing the debts into new, interest-free credit accounts. The smaller size of an annual interest or its total absence and accordingly the card holder will pay less money behind using the credit.

For balance sheet transfer usually it is required to call in bank where you want to translate the balance sheet and to ask them to send you the check for balance sheet transfer. Such checks differ nothing from their habitual kind. After reception of such check write out it addressed to bank in which you want to extinguish the balance sheet. Transfer of the balance sheet into the card with lower interest rate can save money if you don’t repeat the most widespread errors.

Also you should pay attention to the following issues:

1. A payment while translating the balance sheet (Balance transfer fees)

The majority of the credit companies levy a payment for balance sheet transfer. Such payment can be fixed (we will tell $35 – $70) or expressed in percentage of the translated sum, more often this percentage expression with instructions of minimum and a maximum amount.

At the moment of a writing of this clause, the majority of the most known emitters suggest to translate the balance sheet on their cards for 3 % from the translated sum (is usual makes a reservation that not less than $5 and no more than $75) that sounds attractively enough.

2. Other interest rates

Pay attention to the size of other interest rates on a new credit card where you are going to translate the balance sheet. Very often this category of cards has higher interest rate for the sum of purchasing or cash withdrawal. Higher – means above, than on a credit card which you now use for purchasing. Another matter if you aren’t going to use this card for purchasing.

3. Sequence of repayment of the balance sheet

Remember that in treaty provisions of absolute majority of emitters, first of all the order of repayment of your indebtedness begin with the sum greater interest rate, and only then your payments extend for the sum with the leviable smaller interest rate. For example, you have transferred the balance sheet at a rate of 3000$ into the new account, and have then made purchasing on 400$.

In the end of a month you have sent in bank the check for the same sum of 400 dollars. If under treaty provisions, APR on purchasing is above than for the sum of the translated balance sheet the check written out by you for 400 dollars, will go on repayment of an outstanding amount of the translated balance sheet (i.e. $3000 – $400 = $2600).

4. The induction period expiry of the term

The induction period won’t last eternally. Therefore it is necessary to reflect over, whether it will be favorable to you to use such credit card in the future?! You agree to pay 17 %, 20 % (and more than percent) after the induction period expiration?

Also remember that the credit company can change the interest rate at infringement of treaty provisions by you (at untimely payment, for example).

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How To Protect Yourself From Credit Card Swindle? Part 2

So let us continue talking about credit card protection measures.

For swindle revealing, and also fraud risk decrease it is recommended to known and to do the following:

1. Regularly to perform monitoring of your account, also you should be convinced that all operations are authorized.

2. Use of service of the notification by e-mail or SMS, at address modification or large purchasing. This service usually is offered by bank. Check the e-mail regularly.

3. Attentively look through accounts of payment and reports from banks.

4. Check your credit information in the basic credit bureaus, it is possible to make free of charge usine the web site or it is possible to do by the phone call.

5. Consider the problem on signing on credit monitoring. For the best protection, be convinced that services perform monitoring of all three cores of credit bureaus.

If you have found out swindle or loss of your credit or a debit card, it is necessary to perform following actions:

1. Address in bank, the credit company or to the seller immediately, by phone or in writing the letter if it seems to you that you can appear a victim of swindle.

2. Close any accounts which can be subject to a swindle.

3. Consult at your bank about their conditions of a guarantee from swindle to help you to solve and overcome any potential losses.

4. Having received a copy of your credit report in any of three credit bureaus, you can make “the credit prevention” that your account can be subject to swindle. It will act 90 days from the date of registration, it won’t allow other creditors to use your name without preliminary identification. During these 90 days you also can subscribe for a longer period of time “the credit prevention” acting during seven years.

5. Attentively study conditions of the agreement which change depending on staff. Find what notifications to you should be undertaken at theft of your credit card.

6. Consider possibility completely to refrigerate your credit information, now it is authorized in 12 states, it will cease display of your credit report by all without an exception.

7. Address in police field office where there was a theft or credit card loss, and receive a copy of the constituted report.

8. You also can call by in federal trade commission and report it about the swindle fact.

Be vigilant, at realization of operations with credit and debit cards.

So now you know exactly what to do and how to act in case of the case swindle or card loss. Just be careful and attentive as it will help you to prevent any bad situation with your credit cards, credit history and your personal money.

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How To Protect Yourself From Credit Card Swindle? Part 1

Recently we discuss a theme of swindle with credit cards. So let us find out what it is necessary to be afraid of and what measures we should take for safety provision?

Actually all is very simple, it is necessary to be a bit more attentive to your personal things. All credit card issuers suggest to apply the given security measures, simply not all are in time to report it to you.

1. For the certificate the persons use only the driver’s license. Never carry with yourself social security number, also don’t write down it on an underside of photos in your purse. Store all private papers, and also checkbooks and other securities in a safe place.

2. Replace possible paper documents, invoices, and other payments with electronic systems. Subscribe for automatic charge of a salary on your card if for the employer it is possible to make.

3. Use effective codes and passwords.

* Choose difficult passwords, mix figures and letters;

* don’t use the personal information for your PIN code, for example — date of birth, a name of the loved one or number of phone.

* don’t disclose codes and passwords, even in the house, and periodically change them.

4. Never give the information of the personal character to unknown persons, also don’t answer unfamiliar e-mails, and don’t answer automatic telephone messages which force you to give the personal information for settlement arisen with your bank account.

Instead use contact addresses, sites or telephone numbers which to you are known, or which can be checked up easily.

5. If you have a house computer, establish and regularly renew the anti-virus software and options of safety of the browser.

For bigger safety use the special programs given by banks, such as virtual credit cards. When perform purchasing on the Internet be convinced that you have business relations with known firm.

6. Ensure safety of your mobile phone, a handheld computer or the laptop, use special programs of enciphering.

7. Don’t fill various post offers on acquisition of the credit cards, containing forms with the personal information.

8. Necessarily tear all important documents when you are going to throw them out. Destroy all important digital media, at recycling of old computers, devices of storage of the information and phones.

9. Use a safe mail box. If your house mail box isn’t safe, consider possibility of reception of mail on work or mail box rent in postal service.

10. Remember your environment when perform purchasing in public places at input of a PIN code.

So I am sure that if you would adhere to those safety measures your credit card won’t be stolen by swindles and your pin numbers will be known only to you.

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The Reasons To Protect The Credit History

Easier to spoil the credit history, but it is difficult to correct it then. And can, actually, positive “biography” of the borrower be necessary to us? For the sake of what it is necessary to protect credit history and regularly to pay under credits?

The first reason. Bureaus of credit stories communicate with each other.

Before crisis the requirement to teach the borrower what is unfair, didn’t face banks so sharply, as today when organizations are extremely careful in issue of new loans. According to requirements of banks credit bureaus start to develop. With renewal of crediting the question of a cognizance of dishonourable borrowers becomes absolutely sharply for now experts only predict that bureaus will start … to exchange the data.

It is necessary to notice that credit bureaus develop, and data exchange between bureaus would be a logical stage of this development. Certainly, it is a question of authentic and qualitative data exchange. I think that sooner or later our bureaus to it will come. However, according to specialists, it will occur not so soon as it would be desirable. It is possible, and there is a certain form at which the exchange of such information can occur on a mutually advantageous basis. However, in my opinion, such interaction between different bureaus of credit stories is a question of not immediate prospects.

The second reason. In the future credit bureaus will unite

In spite of the fact that today all credit bureaus did not unite yet, and the current situation in the market allows them to earn not bad, selling credit stories of borrowers, not a secret that for successful functioning of the market all banks should know if the diligent client has come to them or not. For this reason sooner or later bureaus will unite. Bureaus already understand the vital necessity of their consolidation and cooperation. I am assured that very soon we will hear news concerning this theme, confirming similar assumptions.

However, not all specialists consider that consolidation of credit bureaus will have only positive sides. As well as any consolidation it can have both positive and negative consequences. On the one hand, banks can receive the most complete list of credit stories from one source. With another – the monopoly in market can lead to falling of quality of services given by them (which now and so not at the highest level) and to growth of tariffs, in this connection it is possible to call into question coefficient of utility of this idea in immediate prospects cut. At the given stage the market should develop how it develops.

And though future changes in the legislation are focused more likely not on problem borrowers, and on suppression of swindle with counterfeit codes and with counterfeit inquiries on incomes, the tendency is available: the government acts even for such revolutionary changes for benefit of credit bureaus. That also look – the bill providing an obligatory exchange by the negative information about borrowers between all credit bureaus will be following step. Or still any innovation the extremely favorable to bank system, but unpleasant for the people who have spoiled the credit history.

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The Reasons To Protect The Credit History Part 2

The third reason. There is a uniform register of borrowers

There is a uniform information system “the Register of borrowers”, that called to collect the negative information about unfair borrowers. The overwhelming majority of the banks already work with this system. Within 10 days from the date of transfer of indebtedness of the borrower into defaulting debt accounts, bank is obliged to form and send the information on borrowers with defaulting debt. The information on borrowers-juridical persons is given with obligatory instructions of the data on founders and a management. However, while the system functions not so perfectly as it would be desirable. It is necessary to lower a threshold of the sum of the defaulting debt given by banks, and also to reduce submission due date information.

Besides, banks yet don’t consider system effective and concern it accordingly. For example, formally the bank declares transfer of negative credit stories to the Register, however upon the minimum quantity of files can be transferred only. At great volumes and the automated process of crediting there is a question on expediency of inquiry to such register with unknown hit rate and absence of possibility of the detailed analysis of credit history. Two more reasons – low level of automation of inquiries and reception of answers from the Register, and also the limit on quantity of inquiries a day.

At last, the legislation yet doesn’t allow to use the register differently, than as the tool for supervision of banks. However in a press there was an information that the regulator wants to use the register for revealing by banks of malicious non-payers under credits. It is necessary to assume that for similar changes to wait not for long – after all the will of a regulator is already clear. Possibility of functioning of the given system in the near future, in my opinion, in a greater degree depends from banks as the banks interested in decrease of credit risks and improvement of system of a risk management, will join the register only at understanding of its efficiency.

The last reason. Credits can be necessary to you.

Having left behind the first recession year especially noted by increase of rates under already given out credits, it is possible not to be surprised, why so many people have decided not to resort once and for all for themselves to bank borrowings. However to lift rates unilaterally already have prohibited, and credit products actually can … be useful. There are a lot of cases when the loan can be necessary. For example, if to you for work it is necessary to buy a car, but there is no possibility to pay for it all sum at once. Or if on your credit card the long grace period when you can use borrowed funds free of charge is established.

Among various and often expensive bank products come across very interesting and useful. And then you as the proprietor of good credit history can choose from many variants. After all banks prefer to credit such clients with good credit history.

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Increasing A Limit On A Credit Card!

Actually, every credit card has an expenditure limit, even that about which says that it without a limit. At use of such cards as American Express, for example, credit bureaus take for a basis the highest balance sheet on your card as its limit.

From the previous clauses you, probably, already know that on a credit card it is not only that sum more which you can’t spend a limit. The limit on the card is a relative indicator of your expenses in relation to a credit total sum.

This ratio directly is reflected in the sum of your credit points.

Constituting factors of credit points

At school, the teacher checks knowledge of pupils by means of tests, dictations, oral polls, quests etc. Thus, for the teacher, the estimation for examination has greater weight, than estimation for the oral answer.

Credit points settle payments by the same principle.

Points in itself can vary from 300 to 850.

However, general idea on what the system of calculation is based for a long time is known:

Constituting factors of credit points:

35 % — are constituted by history of payments. It is of great importance, as the creditor wants to know how the client pay the accounts. The quantity of points depends on that, how many accounts have been paid in due time, how many with delay, how many from them have been directed to agency on collection of debts, bankruptcy etc.

30 % of points are constituted by an outstanding amount from the sum of the accessible credit. The more cards with the balance sheet approached to a limit, the more low credit points. As a rule, try not to exceed the balance sheet more than on 25 % from an admissible limit, and it won’t lead to score decrease.

15 % — are constituted by an estimation of duration of history of crediting. I.e., the more term of credit records, the better it is reflected in the sum of credit points.

10 % from total quantity of points are inquiries about issue of credit cards and other kinds of a loan. Frequent inquiries and frequent refusals are a stoplight for the creditor. Probably, you have simply got into debt?

10 % of points, are based on kinds of available credits (a housing loan, machines etc.)

Nevertheless, very small quantity of people increases a limit on the card even if necessary. Some credit card holders throughout the long period of time have a limit of expenditure at a rate of 300-500 dollars and at all didn’t try it to increase.

It is not good to approach to this question from a position “And what for it is to me? Yes, probably you are ok with that credit points that you got and you think today that it is totally sufficient for you. But imagine that a year or two from now you will want to buy the new car, the house or apartment. Here your points also were useful to you to receive more favorable terms of credit.

For example, it is possible directly and to motivate the inquiry about credit limit increase that you don’t want that the sum of your credit points decreased each time when expenses come nearer to a limit. Tell that you aren’t going to use all sum, it is only technical necessity. The method checked up and well works!

If you have already reflected, over that to increase the size of a limit of an expenditure on a credit card — make it today. For demand of money don’t take. It won’t be reflected negatively in the credit report; on the contrary, in case of increase in a limit it will yield positive result.

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