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[ad_1] When it comes to credit reports, the worst credit score you can possibly have is 300, and the highest score you can have is 850. According to Experian, one of the three leading credit bureaus, the average credit score in the United States is 714. No matter where on the credit score meter you rate, it’s important to understand if potential lenders and creditors view your score as poor, fair, good, very good, or excellent. This article takes a closer look at credit scores, the factors that impact these scores, and how to know where you rank with other consumers. In This Piece What Is a “Bad” Credit Score? What Are the Consequences of Bad Credit? How Many People Have Bad Credit? How Can You Improve a Bad Credit Score? Stay on Top of Your Credit What Is a “Bad” Credit Score? Credit bureaus, such as Experian, Equifax, and TransUnion, collect and maintain financial records pertaining to consumers around the country. The details from these records are then used to calculate your credit score. FICO is the most common credit score available, but some lenders and creditors also check other credit scores, such as VantageScore. FICO scores are rated on a scale from 300 to 850, which is broken down into the following subgroups: Creditors and lenders each have their own set of standards as to which credit scores are acceptable and which are too low. However, in most cases, any score under 600 is considered a “bad” credit score and could impact your ability to secure credit, among other consequences.    What Are the Consequences of Bad Credit? Having bad credit can significantly impact your daily life in ways you may not expect, such as: Keep in mind that each creditor, lender, and service provider has its own set of rules and regulations when it comes to credit scores. As you start to rebuild your credit, you may need to shop around to find a vendor willing to work with you. How Many People Have Bad Credit? Research shows that as many as 16% of consumers in the country have no credit score because credit reporting agencies don’t have enough information on these people to calculate a score. Even more alarming is the fact that more than 100 million consumers have bad credit or no credit at all. This statistic means that more than 1 in 3 Americans are struggling with credit issues. If your score falls within this “bad” credit level, it might give you some solace to know so many others are in the same boat. This doesn’t mean you shouldn’t still take steps to improve your score, though, because having a low credit score does come with some significant consequences. How Can You Improve a Bad Credit Score? Several factors can make a significant impact on your overall credit score. Here’s a look at the top five surprising things that may affect your credit score, as well as actionable tips to help you build your rating. 1. Lack of Credit History It’s possible to have no late payments or outstanding debt on your credit history and still have a low credit score. That’s because having a limited credit history can significantly impact your credit. The best way to overcome this challenge is to start developing some credit. Consider opening a utility, such as electric, gas or cell phone, in your name. Keep in mind that some utility companies may require you to pay a security deposit before you can start service. You can also open a secured credit card. 2. Credit Utilization Ratio Your credit utilization ratio compares the difference between all your credit balances and the amount of credit you’ve already used. This ratio is critical and accounts for 30% of your credit score. Most lenders like to see this ratio sitting below 30%. If you currently have a high credit utilization rate, it’s likely impacting your overall credit score. Work toward paying down some of your debt and refrain from using any more credit until you can bring the ratio well below the 30% threshold. 3. Payment History Your current and past payment history is one of the most important components of your credit report and accounts for 35% of your credit score. It’s important to realize that any late payment or overdue payment can sit on your credit report for 7 years. If you already have late payments on your account, there’s little you can do about it. But you can take steps now to make sure no more late payments show up on your account. Start by setting a budget to make sure you can afford all your outstanding debt. Next, consider setting up automatic payments when possible. This step can make sure your payments are always made on time. 4. Mixture of Credit Accounts About 10% of your credit score is based on the type of credit accounts you have. Lenders like to see a nice mixture of installment credit accounts, such as personal, auto and home loans, and revolving credit accounts, including credit cards and HELOCs. To improve your credit score, you should work toward building a mixture of these credit accounts. 5. New Credit Inquiries Having too many credit inquiries on your credit report can also lower your credit score. A credit inquiry occurs when a lender runs a check on your credit. During the pre-qualification process, lenders often run a soft inquiry, which doesn’t impact your credit score. When lenders request your full credit report, however, it’s a hard inquiry and does negatively impact your score. This can seem like a catch-22. To build your credit, you may need to open more credit accounts, but doing so can increase the number of new credit inquiries and lower your score. The trick is to make sure you’re not trying to open too many accounts or loans at the same time. Stay on Top of Your Credit The most important step you can take to improve your credit score is to

[ad_1] Your credit history and scores can impact your entire life. Whether or not you can get a loan—and at what interest—often depends on your credit. Credit can also play a role in whether you can rent the apartment you want, get a credit card for use in daily life or enjoy a great deal on car insurance. Good credit improves your chances at these things, while bad credit decreases them. It’s important to stay on top of your credit report and work to repair your credit when problems arise. You don’t have to pay a fortune to do that, though. Find out more about free credit repair for low-income families and individuals below.   In This Piece Your Credit Report Card Free Access to Your Credit Reports A Free Look at Your Credit Score Educating Yourself on Consumer Credit Sites Disputing Inaccurate Information on Your Credit Reports Creating a Plan to Pay Down Debt Working With a Credit Counselor Increase Your Credit Limit Your Credit Report Card The first step in repairing your credit is understanding where you stand and what might be affecting your credit score. One way to get free credit report help is sign up with Credit.com to view your free credit report card. This free tool: Gives you some insight into what might be on your credit report. Breaks your credit performance down into five major categories, scoring each with an easy-to-understand letter grade. Lets you see which areas are most impacting your credit so you can focus on the biggest issues when you begin to work on credit repair. Free Access to Your Credit Reports You can get more details about your current credit situation by getting a copy of your credit reports. You’ll want to get a copy of your report with each of the three major credit bureaus, as the information in each file can be different. Here are some ways to get your credit reports for free: Use AnnualCreditReport.com. You can get a free copy of your credit report from each of the major credit bureaus — TransUnion, Equifax and Experian — every 12 months via annualcreditreport.com. During the COVID-19 pandemic, the credit bureaus started offering this perk once a week. As of early 2023, you could still get your free credit report once a week with each of the bureaus, though this option may end at any time.  Request the report in writing after being denied credit. If you’re denied credit based on something in your credit report, the lender must notify you in writing. The notification must include the name of the bureau that provided the credit report and some general idea of what caused the denial. When you receive that notification, you can use it to request a copy of your credit report from the bureau in question. Check your financial accounts for any credit reporting perks. Some credit card and banking accounts come with credit reporting perks. You may be able to see some information about your credit report via the customer service portal for your account, so check with your lender or bank to find out if that’s the case. A Free Look at Your Credit Score Credit scores and reports aren’t the same thing. Your free credit report through AnnualCreditReport.com, for example, doesn’t come with a credit score. Getting your credit score in addition to your report gives you a fuller picture of your credit performance and helps you understand how much work you may have to do. Here are some ways you might be able to see your credit score for free: Sign up for a free credit score service. Some apps and businesses offer free access to one of your credit scores for informational purposes. You can have a number of credit scores, as there are different scoring models and the information in each of your credit reports can be different. Because of that, your informational credit score via these free options typically won’t line up exactly with the score a lender might pull. However, checking your free credit score once a month can help you understand whether you’re moving in the right direction. Get your credit score via your lender. Some lenders and credit card companies provide one of your credit scores monthly as a perk. Check your account portal, app, or credit card statement to see if this is the case.  Start a free trial for a credit score monitoring service. If you want access to more than one informational credit score, consider signing up for a free trial of ExtraCredit. You won’t be charged if you cancel your account within any trial period that might be offered, but many people find the perks and savings available in the app make it worth the monthly subscription. Educating Yourself on Consumer Credit Sites When it comes to free credit repair and report help, consumer credit sites are a great resource. You can browse blogs, articles, and how-to tips on these sites to better understand how you can move forward positively with your finances. Some sites to consider include: Credit.com. Browse the Credit.com blog for tons of information on how credit works, how to repair or improve yours, and how to save money when dealing with credit or other parts of daily life. The Consumer Financial Protection Bureau. The CFPB is a government agency that works to educate and inform consumers on a variety of topics, including credit and debt. The Federal Trade Commission. The FTC also provides a lot of consumer advice, including information about dealing with or avoiding fraud and identity theft and learning about your credit. You can also learn about your rights under federal credit and debt laws. Disputing Inaccurate Information on Your Credit Reports After educating yourself about what’s in your credit report, where your score stands and what your rights as a consumer are, you can take action on DIY credit repair. This involves disputing inaccurate information on your credit reports. The process includes: Finding errors on your report. Review your credit report carefully for

[ad_1] Paying your taxes is never easy, especially if you owe a large sum of money to the IRS. In these cases, you may be tempted to pay your tax debt using your credit card. But can you pay your taxes with a credit card? Smiling woman using laptop and holding credit card In short, yes, you can. The IRS, through a third-party vendor, accepts many types of credit cards, including VISA, MasterCard, Discover, American Express, STAR, PayPal, NYCE, and AFFN. But just because the IRS allows credit card payments doesn’t mean this is your best option. It’s important to understand the benefits and drawbacks of using your credit card to pay your tax bill. In This Piece How to Pay with a Credit Card Benefits Drawbacks Alternatives How to Pay with a Credit Card While you can pay your tax debt using your credit card, the IRS doesn’t accept credit card payments directly. Instead, these payments are processed through one of the three approved third-party vendors, payUSAtax, Pay1040, and ACI Payments, Inc. You can make these payments online or over the phone. The third-party vendors then transfer the funds to the IRS on your behalf. You can use multiple credit cards to make a payment. However, some vendors may limit the number of cards you can use. Does H&R Block Accept Credit Cards? Many tax preparation companies, including H&R Block and TaxAct, also allow you to make credit card payments to cover your tax debts and tax preparation fees. However, these companies may charge extra processing fees for these services. It’s important to ask about fees before using these services. Benefits If you’re thinking about using your credit card to pay your taxes, you may be eligible for a variety of benefits. Below is a look at the top benefits of paying your taxes with a credit card. Convenient and Safe Paying your taxes with a credit card can be more convenient than paying by cash, check or wire transfer. In fact, using your credit card may be the easiest option available. Additionally, credit cards come with fraud liability coverage that’s typically better than bank debit cards. This factor can give you peace of mind knowing your online payment is safe. Rewards Nearly all credit cards offer some types of rewards, including cash back rewards and travel rewards. Cash back rewards often range from 1% to 2% of spending. While this may seem insignificant, even when your tax payment is large, it can make a big difference. For example, if you’re making a $5,000 tax payment, you may receive cash back rewards between $50 and $100. Travel rewards can be even more substantial. For instance, you might earn a free night at a luxury hotel, a bump to a higher class on a flight or other special offers. These options often require high reward point balances. Using your credit card to pay your tax balance may be enough to push you over this limit.   Some credit cards also offer an introductory 0% interest program that gives you a set amount of time to pay off your balance before interest starts. If you can pay your tax bill off before this introductory period ends, you could save some money on interest. Spending Bonuses Many credit cards offer special sign-on bonuses that reward you with a large number of bonus points. The trick to obtaining these points is that you have to make a set amount of purchases within the introductory period. For some families, spending this amount is virtually impossible. Applying your tax payment to your credit card may help you achieve this total and earn these extra points. Avoid Interest from IRS If you fail to pay your taxes on time, you’ll likely face late fees and interest charges. The IRS assesses a 0.5% penalty per month for all late payments. If you enter into an installment agreement with the IRS, you may be able to reduce this penalty to 0.25% per month. For instance, if you have an unpaid tax bill of $5,000, you could pay an extra $25 in penalties per month. Additionally, the interest rate for unpaid taxes is 6% for 2022. This interest will start to accrue from day one. The combination of penalties and interest rates could be substantial. Depending on the size of your tax bill and the amount of time it takes to repay your bill, it may be more affordable to use your credit card than to face these added fees.   Drawbacks Before you pay your tax bill using a credit card, it’s crucial that you understand the potential drawbacks of choosing this option. Below is a look at the several disadvantages of paying your federal taxes with a credit card. Fees The most direct potential drawback of paying IRS taxes with a credit card is the processing fees you may incur. These payment fees vary between processing companies and are based on the amount of your tax debt. They range from $2.20 to $198.00. payUSAtax Pay1040 ACI Payments, Inc. Payment Amount Debit Fee Credit Fee Debit Fee Credit Fee Debit Fee Credit Fee $50 $2.20 $2.69 $2.50 $2.50 $2.20 $2.50 $100 $2.20 $2.69 $2.50 $2.50 $2.20 $2.50 $250 $2.20 $4.63 $2.50 $4.68 $2.20 $4.95 $1,000 $2.20 $18.50 $2.50 $18.70 $2.20 $19.80 $2,500 $2.20 $46.25 $2.50 $46.75 $2.20 $49.50 $10,000 $2.20 $185.00 $2.50 $187.00 $2.20 $198.00 You may incur additional fees if you hire a tax preparer to complete and file your taxes. Unless you have no other alternative, comparing these processing fees with the benefits you can receive from using your credit card is recommended. If the fees are higher than the benefits, you may want to consider using another form of payment. Utilization Using your credit card to pay your taxes can also impact your credit score. Depending on your specific situation, adding a large tax bill to your credit card can significantly impact your credit utilization ratio. This ratio accounts for 30% of your overall credit

[ad_1] Are you hoping to build your credit by paying your cable bill on time? Unfortunately, most cable companies, like many other utilities, don’t report payments to credit reporting agencies. With no information, it’s impossible for these agencies to use this information when calculating your credit score. So, making these payments on time typically doesn’t impact your credit score. However, paying those bills with a credit card can affect your credit indirectly—and never forget that unpaid bills can often have a negative effect on your credit score. Keep reading to find out more about why cable and utility bills aren’t often reported to the bureaus and how to build credit regardless using these tips. Are cable bills and streaming services reported to the credit bureaus? Are you one of the millions of consumers paying monthly cable bills along with several streaming services, such as Netflix and HBO Max? While it may seem like making these regular payments shows a history of paying your bills on time, sadly, it doesn’t. The harsh reality is that most cable and streaming companies don’t make a habit of reporting payments to any of the credit reporting agencies. Without any record of whether you pay your cable bill on time or not, these reporting agencies can’t include this information on your credit report.   Does paying cable or internet bills help build credit? Unfortunately, the short answer is no. Since cable companies don’t submit payment information to any of the credit reporting agencies, there’s no way for this information to impact your credit score. On the other hand, if you fail to pay your bills, it could damage your credit score. Typically, when you miss paying your cable bill for several months in a row, the cable company will close your account. It may also transfer your unpaid balance to a collection agency. This agency will make multiple attempts to collect this unpaid balance. It also has the option to report this unpaid debt to one or all of the credit reporting agencies. Since your payment history accounts for 35% of your credit score, having just one unpaid bill or late payment on your account can lower your score. These unpaid bills can remain on your credit report for up to 7 years, even if you eventually pay them off. However, the impact of these late payments lessens over time. For example, after 2 years or so, an unpaid cable bill won’t have the same effect on your credit score as a new unpaid bill. What bills affect credit score? If you want to build your credit, it’s important to understand what types of bills affect your credit score and which don’t. Here’s a look at the most common types of bills and an explanation of how they may affect your credit score. How to build credit with bills There are some steps you can take to make sure that paying your bills helps build your credit rather than damage it. Payment history Keep in mind that your payment history makes up 30% of your overall credit score. Therefore, it’s crucial to get in the habit of paying all your bills on time, even the ones that aren’t regularly reported to the credit reporting agencies. This step can eliminate the risk of having any negative payment information posted to your credit report. Additionally, having multiple positive tradelines on your account can also help boost your credit score. Credit utilization The amount of debt you owe also impacts your credit score. Lenders determine your credit utilization ratio by adding up all your debt and dividing it by the total amount of credit you have available. This ratio accounts for 30% of your overall credit score. It’s recommended to keep your credit utilization ratio below 30%. Pay bills with a credit card One of the best ways to build credit with cable and other utility bills is to use your credit card to make your payments. While your cable company doesn’t report these payments, your credit card will. Paying your cable bill with your credit card and then making on-time credit card payments can help improve your credit score.  This is true for other types of bills too, including utilities and medical bills. If you don’t currently have a credit card, consider applying for one. If you’re unable to secure a traditional credit card, you may qualify for a secured credit card, which can still help improve your credit score. Credit card companies base your credit limit on a number of factors, including your annual income and credit history. Good credit habits Maintaining good credit habits, such as sticking to a budget, paying your bills on time, managing your debt utilization ratio and using your credit card to pay basic bills, can help you boost your credit score. Get credit for regular bills with services like ExtraCredit You may also be able to get credit for paying your regular bills on time through several financial services, including: ExtraCredit Credit.com’s ExtraCredit program can also help build your credit. Not only does ExtraCredit track your FICO score and provide frequent updates, it helps track your rent and utility payments as well, including your cable bills. Making sure these payments are part of your credit report can help boost your score and allow creditors to see your full payment history. If you’re working towards building your credit, you likely want to make every payment count. Check out Credit.com’s ExtraCredit program to make sure both your rent and cable payments are being reported to the right agencies.  The post How to Use Your Cable Bill to Build Credit appeared first on Credit.com. [ad_2]

[ad_1] You might assume that everyone over the age of 18 has a credit score. However, research shows that nearly 16% of the consumer population doesn’t have any credit rating because the credit reporting agencies don’t have enough financial information on them to determine a score. What’s the easiest way to tell if you have a credit score? One of the fastest and easiest ways to check your credit score is with Credit.com’s free credit score checker. Keep reading to learn more about credit scores, how these scores are determined and how to boost your personal credit score. In This Piece What Is a Credit Score? When Do You Get a Credit Score? What Determines Your Credit Score? Where Can You Check Your Credit Score? Why Does Your Credit Score Matter? How Can You Build Credit? What Is a Credit Score? Your credit score is one of the most important numbers related to your finances. This score is what creditors use to determine your ability to repay debt and assess your overall credit risk. Without a credit score, you’ll find it nearly impossible to obtain credit without a cosigner. A credit score is a three-digit number ranging from 300 to 850. FICO is the most common credit score, but some creditors may use other credit ratings, such as VantageScore. These scores are determined by financial records that various credit reporting agencies collect and maintain, including your payment history, credit balances and bankruptcies. Lenders break these scores down into five different risk levels: Poor credit score: 300-579 Fair credit score: 580-669 Good credit score: 670-739 Very good credit score: 740-799 Exceptional credit score: 800-850 Lenders consider any score under 600 to be in poor standing, which could significantly impact your ability to secure credit. On the other hand, a good score is any rating over 670. When Do You Get a Credit Score? While credit reporting agencies may start gathering data before you reach the age of 18, you typically won’t get a credit score until you’re over 18 years old. But this doesn’t mean you’ll automatically receive a credit score at 18. The credit reporting agencies must have enough financial information about you to determine a credit score. For example, you need to have credit accounts, such as loans or credit cards, or at least utility bills in your name. Once you’ve established credit for at least 6 months, you should receive a credit score. What Determines Your Credit Score? Five factors that contribute to your credit score are discussed in more detail below. Payment History Your payment history is the most important aspect of your credit rating and accounts for 35% of your score. If you pay your bills on time every month, you should have no trouble scoring high in this category. If, on the other hand, you have multiple late payments on your account, your score may be lower than you want. Credit Utilization Ratio Your credit utilization ratio identifies how much credit you’ve used in comparison to the total amount of credit you have available. This ratio accounts for 30% of your credit score. While many factors go into using this ratio to determine your credit score, most lenders prefer to see this number sit under 30%. Length of Credit History The length of your credit history contributes 15% to your overall credit rating. The longer you’ve maintained a credit history, the higher your credit rating. Unfortunately, if you’re young or just starting to build your credit, the only thing you can do to improve this portion of your credit score is wait and maintain good credit. New Credit Inquiries The number of new credit inquiries you have can also impact your credit score by as much as 10%. A credit inquiry occurs when a potential lender or creditor submits a request for your credit report. It’s important to note that during the pre-qualification process, lenders often run a soft credit inquiry. This type of credit inquiry doesn’t affect your credit score. Only hard inquiries have an impact. Mix of Credit Accounts The type of credit accounts you have in place also account for 10% of your overall credit score. The better the mix of revolving credit accounts, such as credit cards, and installment credit accounts, such as a car loan or home mortgage, you have, the higher your rating. Where Can You Check Your Credit Score? You can obtain a free credit report once a year from all three major credit reporting agencies: Experian, Equifax and TransUnion. Reviewing these credit reports gives you a great idea of what financial information determines your credit score. However, these reports don’t include your credit score, and it’s impossible to determine your score from these reports alone. You can get a free credit score report from Credit.com. This credit score is from Experian, and you receive an update every day for 2 weeks to help track your progress. Why Does Your Credit Score Matter? Your credit score is extremely important. With no credit or even poor credit, you’ll have a difficult time being approved for a credit card, car loan or home mortgage. If you’re lucky enough to get a loan with a lower credit score, you’re likely to incur higher interest rates. With higher interest rates, you’ll pay more for your car, home, and personal loans. You may also face higher rates on your home and auto insurance premiums due to a poor credit score. Even utility companies, including electric, phone, and gas, run credit checks on customers. If your score is too low, the company may require you to pay a security deposit before you can establish a new account. Landlords can even request a higher security deposit if your credit score doesn’t meet their standards. Most importantly, however, you could lose out on job opportunities if your potential employer runs a credit check. How Can You Build Credit? If your credit score is lower than you want, there are things you can do to build up your