Want to understand how to get approved for a mortgage or auto loan? Or how you can qualify for a credit card and get a lower interest rate? Do you have good payment history already but want to know what else you can do to raise your score? Our credit experts can help. We also offer you personalized product matches based off your credit scores, and give you lots of different options to choose from, so you’re in control!
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Payment history is the largest component of your credit score. Making your credit card or loan payments on time is crucial in establishing your credit and maintaining a good score in the future. Payments that are more than 30 days late will start to hurt your score. At the very least, be sure to pay your bills no later than 30 days after the due date.
Perhaps our favorite secured card, Discover it® Secured, has numerous benefits for those looking to rebound from a bad credit score. There is a $200 minimum security deposit that will become your line of credit, which is typical of secured credit cards. Your deposit is equal to your credit line, with a maximum deposit of $2,500. Additional perks include a rewards program (very rare for secured cards) that offers 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter, plus 1% cash back on all other credit card purchases.This card has another great feature: Discover will automatically review your account, starting at month eight, to see if your account is eligible to transition to an unsecured card. Discover will decide if you’re eligible based on a variety of credit factors, and if you are, you will receive notification and get your security deposit back.
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Credit scoring is used throughout the credit industry in South Africa, with the likes of banks, micro-lenders, clothing retailers, furniture retailers, specialized lenders and insurers all using credit scores. Currently all four retail credit bureau offer credit bureau scores. The data stored by the credit bureaus include both positive and negative data, increasing the predictive power of the individual scores. TransUnion (formerly ITC) offer the Empirica Score which is, as of mid-2010, in its 4th generation. The Empirica score is segmented into two suites: the account origination (AO) and account management (AM). Experian South Africa likewise has a Delphi credit score with their fourth generation about to be released (late 2010). In 2011, Compuscan released Compuscore ABC, a scoring suite which predicts the probability of customer default throughout the credit life cycle. Six years later, Compuscan introduced Compuscore PSY, a 3-digit psychometric-based credit bureau score used by lenders to make informed lending decisions on thin files or marginal declines.
2. First Premier – The bank claims to want to offer people a second chance when it comes to their finances, but its fee structure and fine print prove the exact opposite. First Premier charges you a $95 processing fee just to apply for a credit card. Then it levies a $75 annual fee on the credit cards and most cards only come with a $300 limit. You’re paying $170 for a $300 credit line! The APR is a painful 36%. In year two the annual fee reduces to $45, but then you’re charged a monthly servicing fee of $6.25. And to top it all off, you’ll be charged a 25% fee if your credit limit is increased. Stay away from this card! Use the $170 it would take to open the card and get a secured card instead.
No, credit reports list your credit history without interpretation. Credit scores, on the other hand, apply a formula to the data in your report to create a three-digit number predicting how likely you are to repay money as agreed. Two companies dominate credit scoring in the U.S.: FICO® and VantageScore®. NerdWallet partners with TransUnion® to provide your VantageScore® 3.0, based on information in your TransUnion® credit report. Credit score is only one factor lenders consider and they may not use the TransUnion VantageScore.
The amount of credit you owe also affects your credit score in a big way. If your credit-to- debt ratio (how much you owe compared to your available credit) is low, your credit score will benefit, since it illustrates that you don’t rely too much on credit. You can figure out your utilization rate by dividing your total credit balances by your total credit limits.
Your credit report includes instructions on how to dispute inaccurate information. In most cases, you have to provide your credit bureau with a written statement regarding the information you are disputing. The credit bureau will then open an investigation with the creditor listed on your report. When the investigation is complete, the credit bureau is required to provide you with a written report of the outcome, as well as an updated copy of your credit report. If the dispute is ruled in your favor, the creditor must provide adjusted information to all three credit bureaus. In cases of identity theft, you should also file a police report.
Nothing in the scoring models suggest that carrying credit card debt month to month is beneficial. It is totally possible to establish a good credit score by paying off your credit card on time and in full every month. Don’t plan to pay interest — in other words, don’t pay just the minimum payment — to build your credit score. It won’t help with your score, and it will cost you a staggering interest payment.
When the investigation is complete, the credit reporting company must give you the written results and a free copy of your report if the dispute results in a change. (This free report does not count as your annual free report.) If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider.