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The reason for Secured Credit Cards Part 2

Posted by Percy A Lowe on March 22, 2013 at 7:00 AM Comments comments (0)

Secured loans require you to own a valuable item that you can use to place against the loan. Throughout your loan period a 3rd party company will hold your asset, and if you fail to repay the lending vendor can take the item in to their possession. Due to the high amounts you are usually required to take out to qualify for a loan, the item you deposit is typically a house, car or object of similar value.

The great thing about this aspect of secured credit cards is that technically if you end up in further financial trouble and really can't afford to pay off your balance, you have a backup plan which can quickly and easily wipe the debt of your shoulders. This does mean losing the valuable asset you first used as a deposit, however you will have known and understood that this could be the case from the start of your application.

So, having a deposit help keep an negative out come on your credit report. hen you can stop all drafts until you ready to start over again. This way you are in total control and not held to any obligations some secured credit cards hold you too. The key here is to position your self in such away you are able to maintain an high credit score like close to 700 are above 700. 

 

The reason for Secured Credit Cards Part 1

Posted by Percy A Lowe on March 21, 2013 at 7:00 AM Comments comments (0)

For some people, a credit card is a valuable necessity that is required for use in everyday life and a secured credit card solution seems pointless, after all why would need to secure you card when you don't need to? For some people, in particular those that are struggling with a bad credit history secured credit cards can be one of the only options for financial aid available.

Understanding the difference between secured credit cards and regular credit cards can be hard however it is very simple if you know about secured and unsecured loans. These cards take pretty much exactly the same principles as loans in the way that unsecured loans or cards require no upfront payments and secured do. 

So, it is important to know what you are doing when purchasing a secured credit card. Seek the wise use of the secured credit card because it can be very helpful to you always maintaining a credit score 680 and above.

 

SECURED VS PREPAID CREDIT CARDS PART 3

Posted by Percy A Lowe on March 20, 2013 at 7:00 AM Comments comments (0)

Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.

Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000. Then leave it alone. It will only cost you the price of the annual fee to keep it in their bank. Most people feel the need to charge something on the card to "prove" they can pay it back. This assumption could not be further than the truth. Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent.

So, you want to put your monthly cost of living on one of the secured credit cards if your adverage monthly living is 2,000 and over you need a card that allows you to palce $3,000 on the card. With the potential of rasing the limit after a few successful months. If your monthly living casot is below $2,000 then you need a care that allows you to start off with at least $2,000. Note: if you montly cost of living is below $500 you will have ot create some bills. Like grocery, gas, lunch, and etc. 

When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card.

 

SECURED VS PREPAID CREDIT CARDS PART 2

Posted by Percy A Lowe on March 19, 2013 at 7:00 AM Comments comments (0)

Secured Credit Cards - are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards with outrageous designs and colors.

The price you pay for rebuilding your credit is interest. The worst thing is that you are paying interest on your own money! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 15%. Secured credit cards are not usually "re-loadable". Meaning, once you make your initial deposit this becomes your "credit limit". Your payments will bring down the balance giving you more purchasing power.

Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score. The best thing to do is use the secured credit card as leverage with your life needs. 

You could best used the secured credit card after creating a monthly budget are spending plan. Note: that the more you can put on the card and successfully use the card and not go over the amount you put on the card is mot effectively. You like to purchase a secured credit card in which you create your own credit limit. You never want no secured credit card issuer to pull your credit to give you a credit limit. 

 

HAVE THE STORM OF BAD CREDIT HIT YOU PART 2

Posted by Percy A Lowe on March 5, 2013 at 1:00 AM Comments comments (0)

The final thing you need to focus on when clearing your credit is sticking with the plan. If you don'y have a well thought out plan the you need to visit: www.coveringyouwithwealth.com . Restoring your good name will take a considerable amount of time. Don't think that because you are in repayment with a few creditors that all is well. It took you time to blemish your credit, and it will take even more time to get your record into creditworthy condition. While you are in the process remember to think outside the box. Don't be affraid to work on developing new ideas like learning to leverage yourself against the scoring models. I know you never herd of leveraging your credit to raise your credit score. well thats why education is important at all times. 

As long as you stay focused, create healthy spending habits and see this process through, your credit will be restored. The financial storm will clear, and creditors will be willing to lend to you at a future point in time. With your second chance, be wise. Remember the storm; remember the damaged, and you'll appreciate your credit that much more.

 

HAVE THE STORM OF BAD CREDIT HIT YOU

Posted by Percy A Lowe on March 1, 2013 at 12:35 PM Comments comments (0)

Just imagine a flood sweeping through your town, and destroying everything in its path. When the flood finally subsides, the people of the town find that everything is destroyed. Houses are flooded out, and things have been moved around the city. The people of the town are hopeless and feel everything has lost.

Many people get that same feeling when it comes to their credit. Much like the storm, debts that go to collections can cause a person's credit to be destroyed. Not only is your credit ruined, you may well be listed within ChexSystems. And it is entirely logical to assume that you are also listed in the Early Warning System (EWS), a fraud detection, and credit-reporting database. Your whole world may feel like you're experiencing a financial disaster .

When it comes to clearing your credit, the concept is the same. After a storm, people begin to clean, and the same action is necessary after your credit has been blemished. There is hope for people who have been hit by this whirlwind. The road is long, and it will take much dedication and perseverance. For you and the company you choose to help get back on track. But, you must choose a company that is transparent to your needs and understand your situation.

The most important word in cleaning up one's credit is self-restraint. Learning how to be disciplined is something that many with blemished credit have failed to do. In order to determine where your money is being spent, you need to create a budget. Just as well as a monthly expense sheet to help build your credit score up 100 points. Then learn to leverage your credit score against the model they uses to determine your credit score. Yes, you can leverage your credit score and yes, I know you never heard of that term before. That is because I am the only person teaching this the right way.

A budget can be difficult to create, but once you calculate your income versus your obligations, it is quite easy to figure out how much you can actually spend. Now, whether you adhere to this number is another story altogether. If you struggle with self-restraint, you will have “Unlocking Financial Success” to help you manage your budget.

Next, you will need to get into the rebuilding-credit mindset. Much like the analogy of the storm, clean up will take some time. Yes, you can do this yourself but remember do you do your own dental work. If not then don’t try to do this alone if you don’t know what you are doing, because this will almost always lead to failure. That will become a bigger storm and more costly to fix from someone who is experience in doing this type of work. Tackle one debt at a time, paying it off and moving on to the next. There is no need to contact all of your creditors at the same time. Put together a solid game plan that you can see before calling your creditors that will work. So, you want set off a barrage of harassing phone calls or threatening letters if the debt has been sold to a collection agency. And not know the proper way to talk to a debt collector.

 

Learning to Leverage your credit score

Posted by Percy A Lowe on January 10, 2013 at 6:10 AM Comments comments (0)

Often we hear people talking about raising and boosting their credit scores. How often we hear people talking are teaching how to leverage the credit scores. Not, often enough why, glad you asked because it is a numbers game. With 90% of American not good with numbers and don't understand how the credit numbers really work. Well one thing is for sure that is the higher the credit scores the more points that are taken away when your credit determines what is going to happen with your purchase. Then the lower the credit scores the least points are taken away.

Well in this case how can someone leverage themselves against the credit system? There are two ways this can be done and it helps the consumer maintain a credit score at 700 and above. The one thing that has to take into account is can you payoff all you charge on an unsecured credit card at the end of the month. Another thing is you using automatic draft from your account are you using your debt card to pay online bills. Neither of the two helps raise your credit score at all. But I know you saying paying your bills doesn't do anything to help your credit score. Yeah, you are right but if taught how to change that would you change it is the point. Don't use prepaid cards to handle things other than online purchases so no hackler want hack into your account information. We discuss the wise use of prepaid credit cards in 2013 as well.

Now, let’s get to leverage your credit score in 2013. The first thing is if you have a unsecured credit card and can put all your bills: lights, water, gas, all insurance, cell phones, and other things that is not reported to the credit bureau on the card. Then pay it off at the end of the month do so, that will help raise the score. Think not every American can do this they pay their bills out of their account and with debt cards. Some even still go to the grocery stores to pay bills come on people. You will pay certain bills till you die on-time guess what you never get credit for your accountability. So, why want you get you a secured credit card pay all your bills with the secured credit card. Transfer the funds from your account checking or saving. Then pay all your bills and groceries as well with a secured credit card. Keep doing this as long as you are paying these bills. So, when you buy at stores that say we have to check your credit. Then you are approved. Whatever points you lose you will gain right back within months even more points because you are paying the Conn's Bill on-time, the car note on-time, and etc. The key is to get secured credit cards that don’t check your credit for you to get the card. You control the new line of credit with your own deposit remember new line of credit account for 10% of your credit score rating. Why not add positive points this way.

Inquire how to set this system up at: www.coveringyouwithwealth.com by clicking the Inquiries tab under teens & Credit. After reading the post be sure you: Like, Comment, and Share with others

 

How to appreciate your credit more

Posted by Percy A Lowe on September 26, 2012 at 6:55 AM Comments comments (0)

Just imagine a flood sweeping through your town, and destroying everything in its path. When the flood finally subsides, the people of the town find that everything is destroyed. Houses are flooded out, and things have been moved around the city. The people of the town are hopeless and feel everything has lost.

Many people get that same feeling when it comes to their credit. Much like the storm, debts that go to collections can cause a person's credit to be destroyed. Not only is your credit ruined, you may well be listed within ChexSystems. And it is entirely logical to assume that you are also listed in the Early Warning System (EWS), a fraud detection, and credit-reporting database. Your whole world may feel like you're experiencing a financial tornado.

When it comes to clearing your credit, the concept is the same. After a storm, people begin to clean, and the same action is necessary after your credit has been blemished. There is hope for people who have been hit by this whirlwind. The road is long, and it will take much dedication and perseverance. For you and the company you choose to help get back on track.

The most important word in cleaning up one's credit is self-restraint. Learning how to be disciplined is something that many with blemished credit have failed to do. In order to determine where your money is being spent, you need to create a budget. Just as well as a monthly expense sheet to help build your credit score up 100 points.

A budget can be difficult to create, but once you calculate your income versus your obligations, it is quite easy to figure out how much you can actually spend. Now, whether you adhere to this number is another story altogether. If you struggle with self-restraint, you will have “Unlocking Financial Success” to help you manage your budget.

Next, you will need to get into the rebuilding-credit mindset. Much like the analogy of the storm, clean up will take some time. Do not try to do this alone if you don’t know what you are doing, because this will almost always lead to failure. That will become a bigger storm and more costly to fix from someone who is experience in doing this type of work. Tackle one debt at a time, paying it off and moving on to the next. There is no need to contact all of your creditors at the same time. Put together a solid game plan that you can see before calling your creditors that will work. So, you want set off a barrage of harassing phone calls or threatening letters if the debt has been sold to a collection agency. And not know the proper way to talk to a debt collector.

The final thing you need to focus on when clearing your credit is sticking with the plan. Restoring your good name will take a considerable amount of time. Don't think that because you are in repayment with a few creditors that all is well. It took you time to blemish your credit, and it will take even more time to get your record into creditworthy condition.

As long as you stay focused, create healthy spending habits and see this process through, your credit will be restored. The financial storm will clear, and creditors will be willing to lend to you at a future point in time. With your second chance, be wise. Remember the storm; remember the damaged, and you'll appreciate your credit that much more.

Looking into the Face of the Unscoreable

Posted by Percy A Lowe on June 26, 2012 at 2:20 PM Comments comments (0)

Millions of creditworthy borrowers, for numerous reasons unrelated to their ability to pay back loans, find themselves unscoreable using traditional credit scoring models. At the same time, lenders are seeking new pools of creditworthy borrowers, creating an environment that is searching for an answer to the unscoreable conundrum.

Barrett Burns, president and CEO of VantageScore Solutions, shed light on this issue during

his presentation at the 7th Annual Underbanked Conference in San Francisco, an event hosted by the Center for Financial Services Innovation and American Banker.

Quentin Cottrell, a debt-free small business owner who found himself among the millions of

unscoreable consumers, also participated. Mr. Cottrell delivered a heart-filled speech about his struggle to finance his growing business of providing transportation services to special needs

children because he wasn’t scoreable based on the most common scoring methods. Through the search for funding, Mr. Cottrell discovered that he did have a VantageScore credit score. Conference attendees learned about his trials and tribulations as he sought the credit he needed to upgrade his fleet of vehicles; ultimately finding himself the subject of a national news program that shared his story.

While Mr. Cottrell presented the human side of this issue, Mr. Burns provided an analytical perspective, explaining how the ranks of the unscoreable are actually an important growth opportunity for lenders because new tools like the VantageScore credit score model are able to

score more of these prospective borrowers.

Today's Credit Market's has changed

Posted by Percy A Lowe on June 21, 2012 at 11:50 AM Comments comments (0)

Hello Percy,

Today’s credit markets are very different than they were in years past. New regulations and economic factors have had significant impact on the way we measure and price risk.

 

With this new economy, it’s appropriate to rethink and reconsider how we actually define risk. Specifically, based on a new proposed rule by the FDIC, how higher risk consumer loan exposure will be defined and calculated for FDIC Deposit Insurance Assessment will change.

In changing the definition, the FDIC is seeking to more accurately define and differentiate risk concentrations at lending institutions and guard against how shifting economic factors can influence risk assessments.

 

One of the key changes is that the traditional three-digit credit score used to set its risk threshold will be replaced with “probability of default,” (PD). Based on the proposed rule, the new definition for a higher risk loan is one that has a 20 percent or higher probability of defaulting in two years.

 

The new rule has a number of wide ranging implications. It will impact a lender’s FDIC assessment and it will allow lenders to uniformly and easily assess risk regardless of their use of proprietary credit scoring models, or the multiple generic credit scoring models now available in the market.

 

Obviously this is a major change for the credit industry. I’m delighted to share with you that VantageScore Solutions is hosting a live webinar on June 27, 2012, whereby the FDIC and industry representatives will explain the definitional shift from credit score values to probability of default in this proposed rule.

 

The webinar, which is dubbed, “The New Subprime Definition: Who is Subprime Now? How Much Subprime is in Your Portfolio?” includes presentations from Tyler Davis and Brenda Bruno who are both Senior Financial Analysts and the lead FDIC representatives for this program, as well as Dana Wiklund, Vice President, Credit Risk Analytics, at TD Bank, and our own Sarah Davies, Senior Vice President and head of Analytics, Product Management and Research. Each worked on an industry task force with the FDIC to provide input for its proposed rulemaking that also included the American Bankers Association, the Risk Management Association and a number of risk management professionals from large lending institutions, the three national credit reporting companies (CRCs), and other industry participants.

 

Registration opened earlier this month and if you haven’t already registered, you can do so here.

Of course this isn’t the only iron in the fire for VantageScore Solutions. Last week, I presented at the 7th annual “Underbanked Conference” in San Francisco along with a consumer, Quentin Cottrell. You might remember Quentin. He is the small business owner and former loan underwriter who was surprised to find himself without a credit score using traditional methodologies. His story was aired before millions on the nationally syndicated public radio program, “Marketplace Money.”

 

Quentin graciously volunteered to share his story with the conference attendees. Quite literally, Quentin brings this issue to life and is an example of how someone can become unexpectedly unscoreable. I also gave a presentation that was entitled, “Looking into the Face of the Unscoreable,” which provided a profile for the millions of American’s who find themselves unscoreable using traditional credit score models. An article about my presentation is below and Quentin is also our “Five Questions With” guest this month.

 

Also in this month’s issue of The Score, we share an important new consumer educational resource that details how to be a better manager of credit and how certain common credit-related actions impact credit scores. And lastly, our “Did You Know” column, which derives from the aforementioned paper, details the amount of time it takes to recover from certain actions that have a negative impact on credit scores. The information provides a level of hope and confidence for consumers who have recently missed payments or have other problems managing their debts.

 

Sincerely,

Barrett Burns VantageScore