Credit – A Curse of all Young Adults

It is possible to overcome credit challenges

When I was little, credit cards were still plastic cards passed over by a carbon copy machine for submittals that took weeks at a time to be processed. Almost as long as writing a check for processing, versus the near instant ramifications of today.

Why I know what I do about credit:

Credit cards can be hard
Credit cards can be hard

It took me years of research and trial and error to not only clean-up 10 days’ worth ($40,000) of medical bills but to final make headway towards a score that would allow me to buy a house.

If you happen to fall on this post, may these tips help you as much as they have me.

  1. Fico score is a mixture of three credit scores and your consistent bills such as your insurance payments
    1. Experian
    2. Equifax
    3. Transunion
  2. You can annually get a copy of all of your credit scores for free.
  3. Identity theft sucks and the process to request a change a social security number involves so many steps it’s wiser to learn how to protect yourself then to gamble someone getting a hold of it.
    1. Shred all offers for pre-approved credit cards. Not something leaving whole in the garbage can that I’d recommend.
    2. Pay attention to your statements and transactions for signs of hijacked information. Some credit card companies will notify you via SMS of any transaction over an amount you set. I recommended $20 it’s not high enough that a quick snack will set it off, but anything more than one tank of gas will flag.
    3. Understand you need to sign your credit card (see id is not legally binding and can null and void your fraud coverage) to ensure you meet liability requirements of a credit card company
    4. Slow credit machines/machines unable to print receipts could be a sign of an infected machine. So if there’s a posted note or the guy before you had problems, be vigilant of your transactions fire a while.

THIS is a critical reason using credit cards over debit is vital. Most credit card companies have fraud detection. With debit cards, once the money is out if your account, recovery is near impossible and if successful takes a while. Don’t use debit unless you have to!

Behaviors that can help make a difference:

  1. For years I’ve tracked my bills on mint.com to ensure I wasn’t behind. But this is only a fraction of the factors involved to create your credit score. A large fraction but a fraction of the formula, none the less.
  2. And let’s face it there is general crap that happens to everyone, divorce, medical, all kinds of this. But there are web sites and service providers that can help you overcome these events and the damage they do to your credit. In October of 2014 I was directed to Quizzle.com to pursue more ideas of how to deal with my issues with getting a mortgage/refinancing (doing a rent to own situation). And it was there that I found creditrepair.com could be employed to contact my creditors on my behalf and address inconsistencies and errors on my credit record. (If you do decide to use this company and they ask who referred you, please give them my name, Flora DeKock. They had a referral program when I started that gave discounts for those who you refer, but I haven’t seen anything lately. If not ok, but if so, that would be kind you.)
  3. Now for example, in 6 months, this company has gotten 37% of the negative items that were apparently significantly weighing down my score, removed. The services aren’t cheap, as enrollment for their services is ~$90 a month. And to ensure you get any form of results, you need to plan for at least 2 months of enrollment as legally businesses have a 45 day window to respond. From the beginning, my rule has been when I stop getting at least 1 removal two months in a row, then I’ll terminate services. That has yet to happen. So I’m about to pay for another month.
  4. Pay attention to website’s you’re doing purchases/tracking money on. Make sure the web address starts with https://, as the “S” means secured. This encrypts the information you’re providing, minimizing the success of hackers stealing your identity/payment information. Without that “S”, almost any 14 year old could between you and the website and get all your information.

Can it really make that much of a difference?

As a side effect, since I’m constantly watching my accounts and paying bills on time, my scores have gone up 10-50 points dependent on the credit bureau. For someone who’s been fighting an uphill battle, this was the reading the mountain top and now things are progressing and ferrying better monthly.

Another huge issue I had to overcome I was always under the wrong impression, as I was told that paying off your credit card is not something credit card companies like. But on the contrary, they love it. Two years ago when I learned this, I paid off ALL my credit cards starting with the highest interest rate first to maximize the money usage. (Higher interest rates mean each month any balance left will be exponentially greater the higher the balance.) Since then, my one credit card with Merrick bank had it’s available balance went from 750 to nearly 4 times that just by paying as much as I can, every month.

How did I do this?

  1. By moving every bill possible to my credit cards. Because with the fact I’m already allotting that money from my budget to pay them, and stagnant credit cards do NOTHING to help your credit, I combined the two. Pay bills with the credit card, and then pay the cards off. It’s a constant winning formula.
    It is possible to overcome credit challenges
    It is possible to overcome credit challenges
    1. Lastly, some providers like Capital one offer daily balances or prompts when you exceed a certain balance you set. Now one of the factors that hurts/helps your credit is exceeding 30% of the funds available to you. So a card with a $300 available should never go over $100. And trust me that I know it is not easy to pay bills with that little amount of money, but to me it’s worth making it happen. So if this option is available set it up to notify you at a point BEFORE you get to the 30% mark so you can make payments. Credit bureaus check your records more than once a month.

    And, to ensure your credit card is always reflecting the lowest balance, don’t use any credit card for 10 days AFTER the due date. Ideally, having two cards, due approximately 15 days apart for a sure will allow you to juggle payments and optimize how your credit record looks.

There are probably more things I’m not thinking about at the moment, but these are the key things I’ve learned that come time mind right now.

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