Posts Tagged: ‘Credit Score’

What You Should Know before Closing out A Credit Card

July 19, 2017 Posted by kingcade

When closing out a credit card, the effects it can have on your credit score lie in the details.  Here are some important facts you need to know before closing out your card.

  1. Age Matters. The age of your credit card that is. The average age of your open accounts makes up 15 percent of your overall credit score. So if the card you are closing out has been open for a long time, it really is better to keep it open and pay it in full, otherwise your score will be negatively effected.
  2. Available Credit. Your credit utilization ratio is important. A low credit utilization ratio would be if you have $300 or less on a credit card that allows you to spend $1,000.  A high credit utilization ratio is if you have $993 in charges on a card that gives you a credit limit of $1,000.  Lenders do not like you to do this and your score will be penalized as a result.
  3. Automatic payments. If you have been using your credit card to make payments on your car insurance or electric bill each month automatically, make sure and update this information timely before closing out the card.  This way you can avoid getting hit with late fees and other penalties.
  4. Rewards. If you have accumulated reward points on your credit card, redeem them first before closing out the card.  Otherwise you will likely lose them.
  5. Verify. It can take up to a month or two before the account is closed, so keep that in mind. Mistakes on credit reports are also fairly common. In fact, a recent study revealed that one in five consumers have at least one error on their credit report. It is always a good idea to double-check your account has been completely closed out.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://www.cnbc.com/2017/07/12/10-things-to-know-before-closing-a-credit-card.html

Mark Your Calendars: Starting July 1, certain negative marks will vanish from credit reports

June 21, 2017 Posted by kingcade

Starting July 1, many people with tax liens, civil judgments and certain medical debts will see a boost to their credit scores.  The three largest credit bureaus- Experian, Equifax and TransUnion, will no longer report a tax lien or civil judgment on a consumer’s credit report if it does not include the person’s name, address and either their social security number or date of birth.  Existing liens missing this information will also be expunged.

Consumer-friendly changes will also be made to the way medical debts are reported. According to the new rules, bureaus will not display medical collections until at least six months after the account became delinquent.  They will also remove any existing medical collections that insurance companies have paid or are paying for.  After the liens and judgments are expunged, some consumers can expect to see their credit score increase by as much as 40 points- enough to affect a loan approval or the terms.  The leading scoring company, FICO, estimated that out of 200 million “scorable” consumers, roughly 12 million will have a lien or judgment disappear from their report.

Starting July 1, the credit bureaus also will check lien and judgment data every 90 days to make sure the information is still accurate. These changes come as credit bureaus have been put under pressure from regulators and state attorneys general to improve the accuracy of credit reporting.  To confirm their data is correct, consumers should get a free copy of their credit report from each of the three bureaus once a year at www.annualcreditreport.com.

Click here to read more on this story.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

The Surprising Debts Holding Many Americans Back

June 15, 2017 Posted by kingcade

According to a recent survey, student loans and credit card bills are not the only debt holding many Americans back.  Credit Sesame, a site consumers can use to check their credit score, analyzed more than 5,000 user accounts and found they had significant amounts of debt from medical expenses, utility bills and cell phone charges.

Consumers whose medical debt had gone into collections had an average of three accounts, with a combined total of $3,670 in collections.  The average balance for customers who had cell phone bills in collections totaled $887 per account.  Customers whose utility bills were in collections owe $368 on average per account, the study concluded.

Not surprisingly, having those bills in collections hurt consumers’ credit scores.  The average credit score for someone whose medical debt is in collections is 552.  Those who have delinquent cell phone accounts have average scores of 550.  And those who have outstanding utility bills have a score of 542.

Lenders see applicants with lower credit scores as riskier than applicants with higher credit scores.  They oftentimes make you pay for this risk by charging a higher interest rate.  A poor credit score can affect your ability to rent an apartment, as landlords often check an applicant’s credit score before allowing you to sign a lease.

Utility companies may require you pay a deposit before setting up your service.  Even certain jobs and employers can discriminate against applicants who have a less than perfect credit report. Certain jobs, particularly those in upper management or the finance industry, require a good credit history.  Note: employers check your credit report and not your credit score.  They are not necessarily checking for bad credit, but for items that could affect your job performance.

Click here to read more on this story.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:
https://www.thebalance.com/side-effects-of-bad-credit-960383

6 Credit Score Killers and How to Avoid Them

February 14, 2017 Posted by kingcade

There are financial missteps you can make that are guaranteed to lower your credit score.  One of the biggest factors in determining your credit score is your past payment history, but there are other things you may be doing that can affect your score in a negative way.

  • A first missed payment. Per a FICO study, a single 30-day late payment can cause a good credit score of 780 to fall 90 to 110 points. An average score of 680, can fall by 60 to 80 points. You can avoid missing payments by setting up auto-pay from a linked checking account every month.  If auto pay makes you uneasy, you can set up automatic alerts that will remind you when your bill is due.
  • A maxed out credit card. Credit utilization is the second most important factor of credit scores, so reaching your card’s credit limit can be problematic. What’s worse, is if you have multiple cards you are doing this with. Remember, for optimal credit score results, it is recommended you keep the amount of debt you owe collectively and on individual cards below 30%, and ideally 10% of your credit limit.
  • An error. This happens more often than you might think.  A report from the Federal Trade Commission discovered that one in five Americans had an error on their credit reports.  Staying on top of your credit score and monitoring it for mistakes can help.
  • An account in collections. That medical bill you thought insurance covered or a utility bill you forgot to pay in college can drop your score 50 to 100 points (if it winds up on your credit report).  That account can legally stay there for up to seven years, plus 180 days from the date of your first missed payment. Keep an eye on your mail for any outstanding debts and resist the urge to ignore a call from a debt collector.
  • Applying for several credit cards or loans at a time. These credit inquiries account for 10% of your credit score.  Keep credit applications to a minimum.  Making several requests in a short period of time can cause your credit score to dip.
  • Closing out your old credit cards. Another component of your credit score, 15%, is the length of your credit history. Closing old credit cards, especially your oldest card, makes your credit history seem shorter than it really is.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

http://finance.yahoo.com/news/5-big-credit-score-killers-110000016.html

https://www.thebalance.com/things-that-hurt-credit-score-960510

Delinquencies on the Rise for Subprime Auto Loans

December 6, 2016 Posted by kingcade

Subprime auto loans are back in a big way, and according to recent data have climbed to the highest level in a decade, with large increases in loans to borrowers with credit scores below 660.  The number of subprime auto loans becoming delinquent has climbed to the highest level since 2010 in the third quarter and is following a pattern similar to the months leading up to the 2007-2009 recession, according to data from the Federal Reserve Bank of New York.

New auto loans to borrowers with credit scores below 660 have nearly tripled since the end of 2009.  In 2016, approximately $50 billion of new auto loans per quarter have gone to those borrowers thus far.  About $30 billion each quarter has gone to borrowers with credit scores below 620.

The increasing delinquency of subprime auto loans is concerning because it comes as the overall economy is on the mend and the employment rate is improving.  The credit quality of other types of loans has improved.

Delinquency rates declined in the quarter for mortgages, student loans and credit cards.  The number of individuals with a new foreclosure notation on their credit reports hit the lowest level in 18 years of data.

The increase in auto loans, particularly the subprime sector, has raised alarms among some regulators in Washington. The rate at which auto loans for borrowers with credit scores below 620 has climbed for 10 consecutive quarters, especially on loans made to those with the lowest or subprime credit scores.

Lenders know that subprime borrowers are more likely to default and become delinquent on their loans and charge them higher interest rates.  The mistake during the financial crisis was that while the lenders expected higher defaults among subprime loans, they failed to anticipate just how high it would rise.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.