If you have impossibly high interest on those credit cards, then do cancel them. It doesn’t help to have open credit cards if the interest rate makes it nearly impossible for you to get the balance down. In fact, banks currently have hardship programs, where they will reduce your interest rate TO ZERO if you agree that they will cancel your cards. Yes, you wll take an immediate hit on your credit score, but that will quickly improve as you pay down your credit cards, which you can now do because you don’t have those usurious interest rates to pay.
How to use it effectively: The money you withdraw from your 401(k) loan should go directly to paying off your credit card debt. After your debts are paid off, payments most likely will be taken from your paychecks until your loan is repaid. If not, continue to make regular, on-time payments. While you’re repaying your loan remember to keep your job — don’t quit and avoid any actions that may lead to your dismissal so you aren’t subject to penalties.
As newer debt weighs more heavily on your credit report than older debt, your score can drop when you make an effort to pay, whether in part or in full. While the payment will make the debt show as settled in full, it may show on your report as new debt. Regardless of how it shows on your report, ensure that the lender removes the charged-off status on your old debt and shows it as paid in full.
“A good credit repair company will scrub questionable credit report items against other laws — like the Fair Credit Billing Act, which regulates original creditors; the Fair Debt Collection Practices Act, which oversees collection agencies; and others that address medical illness, military service, student status and other life events,” Padawer said.
However, there is a big myth that you have to borrow money and pay interest to get a good score. That is completely false! So long as you use your credit card (it can even be a small $1 charge) and then pay that statement balance in full, your score will benefit. You do not need to pay interest on a credit card to improve your score. Remember: your goal is to have as much positive information as possible, with very little negative information. That means you should be as focused on adding positive information to your credit report as you are at avoiding negative information.
When negative information in your report is accurate, only time can make it go away. A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. The seven-year reporting period starts from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.
The Target REDcard™ Credit Card offers great perks that are sure to please frequent Target shoppers. You receive 5% off every eligible transaction made at Target and Target.com. The discount automatically comes off your purchase — no redemption needed. Other benefits include free shipping on most items, early access to sales and exclusive extras like special items, offers, and 10% off coupon as a gift on your REDcard anniversary each year.* Recently, cardholders received early access to Black Friday deals. Reminder: This card can only be used at Target and on Target.com.
The right way: You should expect some fees, but avoid excessive fees when you consolidate. You don’t want to make your journey out of debt any steeper than it has to be. It’s worth noting that a debt management program has fees, but they get set by state regulation. They also get rolled into your program payments, so you don’t actually incur an extra bill.
Closing out delinquent accounts or those with a history of late payments can also help, as long as you've paid them off in full. Because history is important, if you do decide to close a few more accounts, close the newest ones first. The length of your credit history is 15% of your score, so even after you've paid down your balances, keep your oldest cards open. Be sure use these cards to make occasional purchases (then pay the bills in full), so the card company won't close your account for inactivity.
This offer edges out competitors with the longest 0% intro period and standout perks. The Amex EveryDay® Credit Card from American Express has increased value with an intro 0% for 15 Months on purchases and balance transfers, then 14.74%-25.74% Variable APR and a $0 balance transfer fee. (For transfers requested within 60 days of account opening.) In addition to the great balance transfer offer, you can earn rewards — 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

Access to credit and loans may come easier than you expect, but that should also be a danger sign. There are several lenders who are willing to provide lines of credits or loans to people with poor credit. These options are often very predatory. If you’re simply trying to rebuild your credit history and improve your credit score, then there is no need to take this offers. If you’re in desperate need of a line of credit for an emergency, but have bad credit, please email us at info@magnifymoney.com for a tailored response.
The deal is you get the prime rate for 3 years with no intro balance transfer fee. That’s currently 4.75% variable, though your rate will change if the prime rate changes, either up or down, and you have 60 days to complete your transfer with no fee. After that, it’s $10 or 3% of the amount of the transfer, whichever is greater. Also beware the prime rate deal isn’t for new purchases, so only use this card for a balance transfer.
The best way is to be sure you are paying all your bills on time. And, if you have credit cards, try to keep your balance to less than 30% of your credit limit (less than 10% is even better). We suggest checking your credit score monthly (you can get two scores every 30 days from Credit.com), along with personalized advice for improving your credit. Here’s how to monitor your credit score for free.

Your debt doesn’t qualify for bankruptcy. Not all types of debt qualify for bankruptcy, which is why it’s not a solution for everyone. Cole said her company receives many inquiries about student loan debt because many people don’t realize student loan debt is not dischargeable in bankruptcy. Other types of debt that do not qualify for bankruptcy include alimony, child support, most taxes and debts resulting from fraud.

Education Loan Finance:This is a student loan refinancing option that is offered through SouthEast Bank. They have competitive rates with variable rates ranging from 2.55% – 6.01% APR and fixed rates ranging from 3.09% – 6.69% APR. Education Loan Finance also offers a “Fast Track Bonus”, so if you accept your offer within 30 days of your application date, you can earn $100 bonus cash.

It's tempting, isn't it? Getting rid of all of your credit card bills, no more annoying multiple payment to multiple creditors, just one, automatic loan payment every month that comes out of your account automatically and you're back on the road to being debt free, right? Well sure—but it comes with a couple of pretty big caveats that might sour the milk for you. Let's explain, and then you can decide whether it's a good idea in your case.


My wife and I recently decided we wanted to buy a home better suited to starting a family and sell our townhouse (which she owned when we met). I didn't have the best, let's say, track record with financials in my past and my credit was abysmal. I hit rock bottom 2.5 years ago when my car ( a beautiful fully loaded Jeep) was reposed on Xmas eve morning. Even then, although angry and ashamed, I didn't do much to help myself out. My 20's, which were years of partying, spending and generally speaking not caring had finally caught up. I was 29. So, we got to work with fixing things. Paying off creditors, paying down debts, making on time payments, etc. When we had my credit run about 6 weeks ago, it was 588. This was much higher than the 410 I had a couple years ago, but still a far cry from good. (Side note here, be mindful of using credit cards that track your fico score, or having a credit bureau account that gives you your score. There are around 30 different scores that are used, and different scores are used for different types of inquires (auto loan is different than mortgage)). So we got to work, paid off the last couple things and really started paying attention to what was happening. One thing I can't stress enough is every year, you're allowed to get 3 free credit reports, 1 from each bureau. You MUST do this each year. This is where I found my credit windfall. I was able to uncover the fact that a debt that had been paid of was still being reported as open and late. I also found a debt that wasn't mine! A big one. $1700 showing open and late for 2 years with a collector. I filled a report with the CFPB (Consumer Financial Protection Bureau) and they started an investigation. The company that had this debt wrote me a letter saying that even though I had no proof that the debt wasn't mine, they would absolve it and would contact the 3 credit bureaus to have the reporting removed and cleared. At this point, I called my broker and said it's time to run the simulator. They ran it, and then performed what is called a Rapid Rescore. Some brokers charge for this; good ones don't. Since they are trying to get your business they will do it for free. If it's at cost, it's roughly $10 per item per report. If you have a lot of issues it can add up. Anyhow, they did the rescore, did the simulator, ran a hard inquiry and BOOM, 657.
Consolidating the debt probably won’t hurt your credit scores over the long run, but there could be a short-term impact from the new loan with a balance. So I can’t guarantee that your scores won’t dip when you do this. If your scores are strong enough to get the lease now you may want to go ahead and do that. If not you may be taking something of a chance – it could go either way. Will Debt Consolidation Help or Hurt Your Credit?
If your credit score is pretty good, but not good enough to get you the interest rate you want, you may be able to improve it by taking out a small loan and repaying it as promised – in other words, by adding some positive activity to your credit history. Also, because installment loans add to your mix of credit, obtaining one might improve your score.
The Target REDcard™ Credit Card offers great perks that are sure to please frequent Target shoppers. You receive 5% off every eligible transaction made at Target and Target.com. The discount automatically comes off your purchase — no redemption needed. Other benefits include free shipping on most items, early access to sales and exclusive extras like special items, offers, and 10% off coupon as a gift on your REDcard anniversary each year.* Recently, cardholders received early access to Black Friday deals. Reminder: This card can only be used at Target and on Target.com.
As part of the bankruptcy completion, there are two courses you need to take. The first is the pre-filing credit counseling and the second is the pre-discharge debtor education, which is a financial management course before you make your final bankruptcy plan payment. In taking both courses now, before you file, you can learn about a variety of options for debt consolidation and ways to rework your budget and re-prioritize your spending. It’s possible that this re-education can give you the skills and resources you need to create a personal plan for organizing and tackling your debt without filing for bankruptcy.
I would disagree with this option, as a credit analyst its my job to investigate credit and determine customer eligibility for loans etc... typically creditors do not look for a card thats been used 1 time for $15 then never used again this kind of credit is disregarded and or not taken seriously. When we look to approve a consumer we look at several factors and what that makes a large impact is how they make their payments, the balance currently on all their revolving and installments and the history of payments. if you only charge a tiny amount and pay it off its going to show no history and therefore not be a heavy influence. in fact if you can handle it it is good to sometimes charge the card near max but then pay it off super fast. yes this well temp drop score however. it will show creditor your applying for that you can handle larger amounts and that you pay them down good and fast. 
There’s a possibility that a third-party debt collector will sue you if you don’t agree to make payments on your debt, regardless of whether you actually owe the money. If you do receive a court summons, do not ignore it, Rheingold said. Be sure to show up on your appointed date, with an attorney if you can, to make sure that the court doesn’t rubber-stamp a judgment against you.

Carefully review older debt that shows as charged-off. Before contacting the creditor or collection agency, check your state laws to see if the debt is statute-barred or time-barred, meaning that it is too old for creditors to attempt further collection. If it is not statute-barred, even contacting the creditor can re-instate the debt as currently collectible, which can drop your score.
That's very commendable of you to handle your daughter's financial problems that way.  I used to be employed as a loan officer in finance, but things have changed so much in the last 20-30 years.  I accomplished something very similar to her situation, but I started in the fair range on scoring.  I raised mine 204 points in less than 9 months.  Thanks for passing along this great advice and experience.
Credit scores are calculated from your credit report, which is a record of your credit activity that includes the status of your credit accounts and your history of loan payments. Many financial institutions use credit scores to determine whether an applicant can get a mortgage, auto loan, credit card or other type of credit as well as the interest rate and terms of the credit. Applicants with higher credit scores, which indicate a better credit history, typically qualify for larger loans with lower interest rates and better terms.

If you do not make your payment on time, most credit cards will immediately hit you with a steep late fee. Once you are 30 days late, you will likely be reported to the credit bureau. Late payments can have a big, negative impact on your score. Once you are 60 days late, you can end up losing your low balance transfer rate and be charged a high penalty interest rate, which is usually close to 30%. Just automate your payments so you never have to worry about these fees.


Here is a simple test. (This is not 100% accurate mathematically, but it is an easy test). Divide your credit card interest rate by 12. (Imagine a credit card with a 12% interest rate. 12%/12 = 1%). In this example, you are paying about 1% interest per month. If the fee on your balance transfer is 3%, you will break even in month 3, and will be saving money thereafter. You can use that simplified math to get a good guide on whether or not you will be saving money.
So, the first thing you should do is assess the damage by looking at a current credit report issued from one (or all) of the three major credit bureaus. Under the Fair and Accurate Credit Transactions Act, every American has the legal right to receive one free report from each one of the companies per year, which will save you some money on processing fees. You can get access to each one at the site annualcreditreport.com.

There is a feature that will assist your transition from a secured to an unsecured card. Capital One automatically reviews your account for on time payments and will inform you if you’re eligible for an upgrade. However, there is no set time period when they will review your account — it depends on several credit activities. If you receive notification that you’re eligible, you will be refunded your security deposit and will receive an unsecured card.

To have a good credit score, you need to have positive information reported into your credit report on a monthly basis. The easiest way to do that is with a credit card. Just try to keep your utilization low (although there is no magic number, VantageScore released data showing that people with excellent credit scores tend to have utilization below 10%). And make sure you pay your statement balance in full and on time every month. If you repeat this, over time your score will improve.
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