It would be hard for those who have poor credit score to apply for a credit card. Credit card issuers may have doubts about your capability to keep up with your payments if you have a history of bad credit. But, it’s not the end of the world for those who have poor credit history. They still have chance to improve their credit rating. How?
One way is by applying for a prepaid credit card. Prepaid card issuers do not conduct credit check so anyone can get approved easily. Since prepaid debit cardholders are not given a credit line, issuers do not have to worry about the risk of defaults.
In fact, even those who are unemployed or are still looking for a job can get approved for a debit card. Students who want to build an early credit history can also get a prepaid card without questions. If you are a parent with kids in college, you can use a prepaid debit card to conveniently send money at anytime.
Prepaid Debit Cards and Bad Credit
Prepaid credit cards can be used for both establishing credit history and rebuilding bad credit.
There are many prepaid cards choose from, so take time in doing research and comparison. Choose a prepaid debit card that will report your payments to the major credit bureaus.
The Fair Credit Reporting Act gives consumers that right to dispute negative records in their credit report. By sending a dispute letter to the credit bureau, negative charges or remarks can be verified and if found inaccurate, must be deleted from your report.
However, in order to ensure positive response from the credit bureaus, you need to make sure that you will send a proper letter of dispute. In this article, let’s discuss the step-by-step guide on how to write and send an effective letter of dispute.
Get your credit report. The first step is to order a copy of your report from the three major credit bureaus (Experian,Equifax,TransUnion). Take note that each bureau makes it own report so it’s important to get a copy from all three.
Examine. Check your report for unauthorized charges, false details or outdated remarks which can give pull down your score. If you do find errors, it’s time to prepare your dispute letter.
Specify the items in dispute. You must clearly point out the item in dispute. In your letter, state the exact information that you want to be verified or you think is incorrect. Include a photocopy of your report with the items on dispute marked or encircled.
Instead of cash, another mode of payment that you can use when purchasing goods and services are prepaid debit cards. Both prepaid debit cards and credit cards can be used exactly the same way. But in terms of practicality, the prior is considered to be far better than the latter because you have smaller chances of encountering debt issues.
In this article, we shall tackle the advantages and the disadvantages of using prepaid cards.
The advantages of using a prepaid card:
• Prepaid cards are being used worldwide and so you can bring it with you on your travels. Carrying a prepaid card is safer than carrying cash. Choose a prepaid card that has the Mastercard or the VISA logo to ensure that your card will be accepted in more establishments.
• Reloading can be done in various ways- via online, ATM and over the phone. There is no limit as to how much you can reload.
• Prepaid cards allow you to make purchases without cash.
When creditors transfer the collection of debts to a collection agency, borrowers often encounter problems dealing with collectors. Some collection agencies violate the Fair Debt Collection Practices Act and ignore the consumer rights of the borrower. Meanwhile, many consumers are not even aware of their rights and privileges.
If you have received a notice from a debt collection agency demanding you to submit payment, the first wise thing to do is send a dispute letter. Even when you know that you are in debt with the original creditor, sending a dispute letter has its benefits.
First, it will buy you more time to work on your repayment. Second, you have the right to validate whether the charges you are requested to pay are accurate. Third, exercising your right to dispute protects you from abusive debt collectors.
If you are not familiar with the process of disputing charges, here are the steps on how to write an effective dispute letter addressed to a collection agency:
In real life, most people wait until the last minute before checking on their credit scores. It is only after getting denied on their credit application that many people decide to take a look at their credit reports. But waiting until a lender has rejected your application can prove to be risky. By that time, you may have incurred too many negative entries on your credit report and you may need to wait a longer time to work on improving your credit before you can re-apply for new credit.
Checking Your Credit Score
When the Fair and Accurate Credit Transactions Act was passed, everyone is entitled to get a free copy of their credit reports each year. Therefore, there really is no reason why you should not be aware of the status of your credit. How can you get your free report?
Visit the annualcreditreport.com and exercise your right for a free credit report. This website was put up by the three major credit bureaus- Equifax, Experian and Trans-Union as compliance to the new credit legislation. Take note that you can only receive your free credit report by going to the annualcreditreport website and not from any of the credit bureau’s official sites.
Application for a guaranteed approval credit card for bad credit is usually done online. As the name suggests, this type of credit card gives instant approval and are especially designed for people who are suffering from bad credit history.
Perhaps you have received offers for instant approval bad credit credit cards in your inbox. If you have bad credit, you may easily to get enticed by these offers. But before you go and sign up that online application, check out these tips:
1. Don’t make decisions hastily.
Don’t be tempted with the first guaranteed approval offer that comes your way. Before you make any decisions to apply, be sure that you’ve checked all your options first and that you’ve chosen the one that best matches your needs. Take the time to compare between different guaranteed approval credit cards in the market. Check out their application procedures.
Holiday seasons often become a trap for credit card holders. Why? Most card holders have trouble keeping their purchases in control especially when buying gifts. You may want to give only the best for your loved ones and friends but don’t forget that you also have a responsibility to take on. After charging everything on your credit card, you have the obligation to pay back what you owe.
To avoid the headache and misery that being stuck in debt brings, make sure that you’re prepared to face the holidays. Let’s talk about how you can get through the holiday season without putting yourself in a mire of credit card debt.
Plan early. Everyone knows that early preparation is the best way to combat the holiday rush. Most items increase in price as the holiday season approaches. Therefore it’s best to start buying your gifts a few months in advance.
Prepare your list of recipients and write down the possible gifts you’ll want to give them. Purchase each gift one at a time so you don’t end up purchasing everything all at once. It is also a good idea to buy your holiday cards, gift wraps and other things you need for your gift giving early in the year.
Take advantage of sales. When you’ve prepared your gift-giving list early, you can choose to purchase your gifts when there is a sale in your local shop and all items are sold at a discounted price. You can also choose to purchase online and avail of special promotions such as free shipping and discounts before the holiday rush.
Parents are often uncomfortable with the idea of their kids having their own credit cards. But if you have a child who’s about to enter college, this is the perfect time for them to learn about how to handle credit and debt repayment responsibly. More importantly, this is their chance to build their personal credit history so they can be prepared for the financial challenges they will face in the coming years.
In this article, let’s talk about prepaid debit cards and how these cards can be the perfect tools for building early credit history and for teaching kids about proper credit management.
Prepaid Cards – How They Work
Prepaid debit cards are another form of cashless payment. These cards can be used for buying items in stores, supermarket, diners, and other establishments. Prepaid cards can be used to shop online as well. What makes it different from a traditional credit card?
As a prepaid cardholder, you will not be given a credit line. This means, you need to deposit cash into your account before you can start paying with your debit card. When you run out of funds, you will not be able to charge expenses to your card. You must submit a new deposit before you can shop with your debit card.
As the name suggests, prepaid credit cards are paid in advance. Instead of purchasing in advance and paying at a later time, a prepaid cardholder is expected to pay first before charging purchases to his/her card.
Today, prepaid credit or debit cards are increasing in popularity. More and more people prefer to get a debit card than a regular credit card to keep away from bad debt. But can you really stay away from bad credit with prepaid debit cards?
Who Needs A Prepaid Card?
Prepaid cards are wonderful tools for teenagers or students who need a cashless mode of payment. Parents can also send monthly allowances for their teens using a prepaid account. These special cards are great for people who cannot qualify for standard credit cards because of a bad credit history. More importantly, prepaid cards can be used to rebuild damaged credit.
We often hear the importance of building good credit and striving for a high credit score. A higher credit score gives you the power to bargain with your creditors, ask for better rates, and instantly get an approval. But do you really need a perfect credit score? Will a few points in your credit score really make a big difference in your life?
Understanding the FICO Scoring System
Today, the three major credit bureaus, lenders, insurers and most financing companies use the FICO score in determining one’s credit worthiness. The FICO score ranges from a very low of 300 to a very high of 850. Let’s consider how your FICO score is calculated and how it can affect your status as a borrower in the eyes of your creditor.
Lenders have different standards in measuring a prospective client’s credit worthiness. For some creditors, a score between 775 to 850 is considered as excellent rating while other creditors may consider 750 as the cut-off for an excellent credit.
So do you really need to reach a perfect score of 850 just to be considered as an excellent borrower? Technically, no. As long as your score falls in between 700 to 850, you will be getting the same rates that are given to people with excellent credit. In fact, statistics prove that it is very rare for someone to achieve the perfect credit score of 850.
Nevertheless, if your credit score falls even just one point below 700, you will be charge with rates that are given for people with average credit. In this case, you want to make sure that you improve your credit at least a few points above what is considered as excellent score.
It would be hard for those who have poor credit score to apply for a credit card. Credit card issuers may have doubts about your capability to keep up with your payments if you have a history of bad credit. But, it’s not the end of the world for those who have poor credit history. They still have chance to improve their credit rating. How?
