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The Pros and Cons of Prepaid Credit Cards

The Pros and Cons of Prepaid Credit Cards

Most people agree that prepaid credit cards definitely help them in a lot of ways. Ever since the introduction of the technology of this plastic money, more and more people want to apply for a credit card. With only a plastic card, you can have different opportunities for the things and items that you want to purchase in the market. Even if you do not have a lot of cash at hand, you can simply use your credit card to buy the things that you want. Moreover, since you do not have to carry a lot of cash all the time, it also saves you from the possible robbery in the streets.

Advantages Of A Credit Card

Having a credit card at hand is indeed advantageous; however, it also has its downsides. A credit card is truly a big responsibility especially if you are only starting on building up your finances. Since credit cards give you the chance to buy now and pay later, it gives you a sense of assurance that you are financially stable today. However, as you purchase more items, so does your debt accumulate. It means that after the purchase, you then have to deal with credit card bills that may tell you have already spent the maximum restraint on your credit card and that you have to pay on the given deadline. But what if you cannot afford to pay on time?

Prepaid Credit Cards as an Alternative

While credit cards may be a great tool for purchasing, another type of credit card, the prepaid credit card also works wonders. A prepaid credit card works just like a normal credit card but the difference lies with the payments that you are giving. This type of credit card already has a preliminary balance within it, so if you want to use it to purchase something, the value of the item will be simply deducted for your current account. This gives you a lot of benefits since unlike credit cards, you can absolutely track the deductions that are happening in your prepaid credit card. Furthermore, you can see just how much money you are spending each day, and thus giving you an opportunity to properly plan and budget your finances.

Pros of a Prepaid Credit Card

In addition, since you are aware of your balance, the only money that you can spend, then you are aware that any unnecessary spending will give you a tremendous deduction in your account. This type of credit card truly works for anyone who is too afraid of taking the risk of owning a credit card. Also, this type of credit card is great for people who want to budget their money well.

Cons of a Prepaid Credit Card

However, there are also cons with having a prepaid credit card. Having such a card means that you have deposited a certain amount of money into your account so that you can spend it later on. But the problem will arise if you have no possible resources to deposit to your account, thus making your prepaid credit card temporarily halted. To prevent such a thing from happening, you have to make sure that you plan very carefully your finances so that a certain percentage can be allotted for your credit card. As long as you are being thrifty with your decisions, then your prepaid credit card will definitely work great for you.

Need help find the best credit cards for you? Just answer a few questions and we’ll narrow the search for you.

Understanding Credit Scores and Repairs

Understanding Credit Scores and Repairs

If you are applying for a mortgage, you’re going to have to deal with credit scores. Therefore, understanding credit scores and methods for improving them is a must.

Credit Report

Step one in the process is making sure that you have a current copy of your credit report. Congress recently amended the Fair Credit Reporting Act so that consumers may now receive one free credit report annually. There are three major credit bureaus: Equifax, Experian, and Transunion. Since entries can vary across bureaus, you’ll want to request a free report from each of the three companies. (Go to www.annualcreditreport.com)

Credit Score

It’s also imperative to know just what a good credit score is. Most A-Paper scores typically begin around 680, although this number may differ slightly among lenders. Don’t despair if you come up shy, there is always room for improvement. Increasing your score just 5 points can save a significant amount of money. For example, if your score is 698 and you increase it to 703, then you could save yourself thousands of dollars over time as a result of a slight improvement to your loan’s interest rate.

While credit repair is necessary for some, it is not the panacea to increase your credit score. Even if you have stellar credit, you can enhance your score through these steps:

1. Evenly distribute your credit card debt to change the ratio of debt to available credit. Let’s say you have a credit score of 665. If you have debt on only one card, and four additional credit cards with zero balances, evenly distributing the debt of the first card could move you closer, and possibly into, that ideal bracket.

2. Keep your existing accounts open and active. The average consumer is usually anxious to close credit card accounts that have zero balances, but doing this can cause them to lose the benefits of long-term credit history and increase their ratio of debt-to-available credit. The bottom line is don’t close those old accounts!

3. Keep credit inquiries to a minimum. Each inquiry into your credit history can influence your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you’re only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.

Remember, credit scores do not instantly get better. Improving them requires time and diligent effort on your part, so it’s a good idea to start at least three to six months prior to submitting your application for home financing.

If credit repair is what you need, you can either begin the process yourself or seek out a repair service. If you decide to make your own improvements, visit as many websites as possible to get information regarding credit laws and consumer rights. Diligently search through them and educate yourself to ensure that you don’t sustain any self-inflicted wounds. A good place to start would be the Federal Trade Commission’s website, which contains a plethora of helpful literature.

If you’re facing severe or complicated credit issues, then you’ll probably want to enlist the assistance of a professional credit repair company. Before you do, be sure to familiarize yourself with the FTC’s regulations on credit repair. With over 1100 credit repair companies to choose from, it’s important to be certain you are dealing with a reputable firm. Examine the FTC’s information on fraudulent practices to avoid falling victim to credit repair scams.

Albeit, addressing credit issues can be uncomfortable. By taking these steps now, however, you’ll be that much closer to obtaining the home of your dreams.

Two Ways To Begin Repairing Your Credit

Two Ways To Begin Repairing Your Credit

Credit is a necessary tool for many people’s day-to-day lives. Good credit allows for many advantages that we sometimes take for granted: credit cards, the ability to rent an apartment, qualifying for financing, or a car loan, and that’s just the beginning. If you fall behind in payments towards a creditor, each incident will be reported to your credit bureau, end up reflecting badly in your credit rating, and make the credit-dependent activities above difficult If not impossible. If you have a poor credit rating, repairing your credit should begin as soon as possible.

Credit repair is not a quick process and requires you to build a better rating over time. Here are some steps to get you started:

1. Add Accounts to your Credit Report.

If you apply for credit and are denied, you should immediately get a copy of your credit report from the credit bureau who denied you. When you receive the report, examine it closely for any errors. If the report reflects no errors, you may realize that the only reason your credit rating is “poor,” is because you don’t have enough credit history to give you a good rating.

Some types of credit, like gas cards or department store credit cards, may not be tracked by credit bureaus. However, as long as the credit bureau can verify that the account is legitimate, most credit bureaus can add it to your account for a fee. By adding these accounts to your credit report, and paying them regularly, you can begin to establish a better credit rating.

2. Seek Credit Counseling.

Once you’re mired in debt, bad credit can become a vicious circle that it’s difficult to escape from. If you see yourself being drawn into the bad credit-cycle, consider credit counseling. Not to be confused with credit repair companies, a credit counselor is usually a non-profit service that offers advice and guidance for individuals trying to repair their credit. Credit repair companies operate for-profit and sometimes have dubious ethics. They generally charge fees for doing things that with a little bit of knowledge, you can easily do of yourself. A good credit counselor helps you create a realistic budget – and stick to it – as well as make practical decisions in regards to your current credit situation.

By adding accounts already in good standing to your credit report and seeking help from a credit counselor if necessary, you will begin to make headway in the credit repair process. It is important to remember that a good credit rating takes a long time to build, but only a very short time to damage. There is no quick-fix for bad credit: you will have to work on building your credit rating up, sometimes from scratch. Avoid credit repair companies that falsely promise quick and easy solutions for a fee, and instead try to make long-term changes to your budget and spending habits. Follow these steps, give it time, and you will be successful in repairing your credit.

Need more guidance in repairing your credit? Let us work together and figure out the things you need for you to achieve that financial freedom you’ve been dreaming of.

Three Steps To Fix the Error on Your Credit Report

Three Steps To Fix the Error on Your Credit Report

Have you spent a little more (or a lot more) than you should have with credit? Most American’s have several credit cards with a few thousand dollars in debt racked up, as well as car or personal loans. When you combine these payments with your everyday living expenses, it can be really hard to get yourself out of debt. Here are 3 steps you can take right now to fix the error on your credit report.

1. Thanks to changes in federal laws, every citizen in the United States is now eligible for a free credit report every year. It used to be you had to be denied credit with a company before you could obtain a free report, now you can request one each year to keep on top of what’s being put in your credit report. This allows you to find and fix the error before it costs you your good credit reputation. Order a copy of your credit report to determine how severe your financial situation is. You may think that you have bad credit, but your credit report may show otherwise, and vice versa. If your report shows a lower score than you would like, you can then start taking steps to improve the situation.

2. Investigate the credit report thoroughly and look for errors. You would be amazed at how many people have found accounts on their reports that they have never had in their name. The usual errors are credit card accounts that are showing open when you’ve paid them off and closed the account, and this appears to be money available to you that hurts your overall credit score. You can fix these errors by writing to each of the companies that have reported information in error, and asking them to correct it immediately. Save a copy of all correspondence and seek the advice of the credit reporting agencies if necessary. Once you get the errors corrected, you may be happy with your new credit score!

3. Fix your long term credit situation. Once the errors have been corrected from your credit report, chances are you still have quite a bit of debt you need to get rid of in order to fully improve your credit rating and get yourself out of debt. The first thing you absolutely must do on the journey to repairing your credit is “STOP USING CREDIT CARDS”. If you have them, get rid of them! You must work at paying off the existing debt, and it will only be worth your time and effort if you stop adding to that debt by continuing to spend using your credit cards.

Consider a Loan to Consolidate Credit

If you are still able to, you might consider obtaining a loan to pay off each of your individual credit cards. Doing this will help you because it changes your monthly expenses from several, individual credit card payments, each with their own interest rates and finance charges, to a single monthly loan payment, with just one interest rate. You should also accept a loan with high interest in this case if it’s all you are able to get if it means paying off ALL of your existing credit card debt. Why? For the simple fact that having a single monthly payment with high interest is still going to save you money over the long term than having four or five credit cards with their own interest rates and finance charges that are added, month after month. Your payment will go further on a single loan payment than when it is sent to individual credit cards, regardless of the interest rate on the loan.

The Marvel Of A Prepaid Credit Card

The Marvel Of A Prepaid Credit Card

Most of the time, people think twice before applying for a credit card especially if they are still not sure if they can handle accumulating a certain amount of debt for a time. Although credit cards can pose different advantages for their users, they also have their own disadvantages. These disadvantages occur if the person who owns the credit card fails to pay off his debt regularly and also if he has accumulated a lot of debt over the long run. The possibilities with a prepaid credit card are indeed endless, but not too many realize that also limitless is the possibility of you not being able to handle your finances and your credit properly.

Rejection Due To Bad Credit Standing

In some instances, people also get rejected to acquire a credit card because of bad credit history. It may be caused by previous debts coming from other banks or institutions. Also, perhaps it can be brought by existing credit cards that are yet to be paid off. Whichever may be the reason, applying for a credit card is indeed a difficult task especially if you have already made a bad history with your previous ones. However, there is one type of credit card that enables you to have a credit card without the risk of accumulating future debts.

Prepaid Credit Cards

This is in the form of a prepaid credit card. Basically, a prepaid credit card is a typical bank account that lets you deposit money into it. After acquiring such an account, the bank then gives you a prepaid credit card which you can use just the same way as you would with a normal credit card. The difference is that with a prepaid credit card, you are spending your own money at your own will. If you decided to purchase a certain item on the market, you will use the credit card as payment and the amount that you have purchased shall be deducted from your current bank account.

Advantages Of Prepaid Credit Cards

Another marvel of the prepaid credit card is that since it is not paid after the purchase, it absolutely holds no interest charges for you. You do not have to concern yourself with monthly bills and additional fees since the transactions are made directly to your bank account. In essence, this type of card works just as much like a debit card that is linked to your savings account. Having a prepaid credit card can definitely help you in limiting your expenses which means that you can be more practical with your decisions and purchases. It helps you predict just how much you can still spend over a given period of time. It will help you, in the long run, become a much thriftier and wiser person in terms of your finances.

Advantages Far Outweigh the Disadvantages of Having Prepaid Credit Cards

Aside from these, not only is a credit card able to purchase items on the market but it can generally serve as a credit card in reserving for rental rooms, hotels, and cars. And since your payments are done outright, you do not have to worry anymore about bills and interest rates. Indeed, having a prepaid credit card has more advantages than the risks that it may present in the long run.

Credit Repair Solutions for Building Credit

Credit Repair Solutions for Building Credit

When it comes to life the majority are always assuming, and most of them assume the worst. Creditors, debtors, or anyone today all base their theories on assumptions and assumptions from the beginning of time has caused nothing but failure. Asking for guidance from Credit Counselors is the solution when you don’t see a way out on your own. The professionals work closely with your creditors, you, and work toward credit repair solutions.

When people fail to pay their bills on time, many of the creditors assume that the debtor does not have the means to pay the debt. Many creditors with the assumption that you are not capable of paying your bills will often set up an arrangement or else lower the amount so that you can repay the debt. This is a step to credit repair, however, it takes you to contact the creditors to let them know your situation.

If you have several bills on hand and all the bills are pressing it makes sense to pay off the debt that benefits you the most. After this bill is paid you can set aside an amount the following paycheck to payoff another of the bills. Once you follow this strategy it allows you to work your bills down gradually thus repairing your credit. If you don’t have the funds to repay the entire bill at most pay the minimum amount so that you can continue using the service. Most debtors assume they are in debt and there is nothing they can do to resolve the problems that plague their lives every day. Creditors are always on their back, and their paychecks are never enough to make ends meet.

This is the process of giving up on life. When we give up it often leads to stress. The answer is often in front of them or comes somewhere down the line. Sometimes we see Credit Counseling or Debt Consolidation advertisings and think, ‘how can they help me.” The fact is Debt Consolidation is only a lead to get creditors off your back for a moment. Credit Counselors are more prone to help you find a solution to repairing your credit.

This is certainly a way to get creditors off your back, work out an agreement with your debts, and reduce the stress level that comes along with financial burdens. Some of the Credit Counseling Services offer a low fee for their services and provide you with a financial managing solution. The services often offer help with managing your money, as well as offering counsel to homeowners, students, and so on. There are many solutions for debt relief so the key then is not assuming the worst. Again, one of the best credit repair solutions is paying off the debts that are considered priorities. If you have a secured loan, it is always wise to find a way to pay these bills first. Unsecured loans pose a threat, but nothing compared to secured debts.

Some of the nonessential bills can include credit cards. Although you are responsible for this bill, however, the worst that happens with credit cards is that you lose your privileges. Check your terms & agreements, since some credit cards may allow you to pay the interest on the cards. This will give you the time you need to find a solution for paying off the card. Some cards may even allow you to pay the minimum balance on the card and allow you to keep the card in your possession. If you have credit cards you might want to consider paying your bills, which will give you time to repay the credit card.

Pay the maximum amount on the credit card before the bill comes in so that you have funds available to pay your bills the following month in case you don’t have the funds available. There is always a solution, so never assume that you can’t deal with any problem. You might want to cut back on some of your spendings so that you will have extra cash when those bills come in also. Cutting back only provides credit repair solutions for gaining money and repairing your credit.

Student Credit Cards 101 – Building Your Credit

Student Credit Cards 101 – Building Your Credit

If you are a student who has just learned how to drive a car or is headed off to college, most of you may not have been given access to your parents’ credit cards. But college student credit cards may provide a solution for young people in need of credit anyway because building good credit with student credit cards may be more beneficial in the long run than borrowing your parent’s credit card. Believe it or not, getting a new student credit card in your name is relatively easy – even if you have minimal income, no co-signer, and no credit history. To get your own student credit card, just follow these simple guidelines.

Get A Job

If you don’t already, consider part-time work around campus on in your neighborhood. It can be for only a few hours a week on campus. If you’re going to have your own student credit card, you’ll need to make payments on a monthly basis. Having your own checking and savings account at a local bank or credit union is also a good idea. Most banks have special student accounts that require a very little deposit to open. Establishing a history at the bank and accumulating some savings, will give you more opportunities for credit in the future.

Surf the Net

As a college student, you probably have been bombarded with offers for student credit cards. Maybe you’ve opened your mail to find a fake credit card inside with your name on it. Or, you’ve seen those annoying credit card applications that always fall out of your new textbooks. You may have also seen credit card representatives with booths set up on your campus giving away free t-shirts and hats to those who complete an application. Don’t take the first offer you get, shop around for the best value. The Internet is one of the best places to comparison shop for credit cards.

Read the Fine Print

Beware! Not all student credit cards are alike. Some may have really cool designs that you can pick, such as college logos, sports teams, or graphics that act as an extension of your personality. But as the saying goes, “don’t judge a book by its cover.” Although all college student credit cards provide you with cash in the form of plastic, they can vary greatly by a number of factors: credit line offered, annual percentage rates (APR), annual fees, late fees, cash advance fees, over-limit fees, and special perks. APRs can vary from 0% to 29%; annual fees $0 – $50; late and over-limit fees can be as much as $30/month, each. Before you sign on the dotted line, carefully read the terms and conditions of the student credit card, especially the fine print. Pick the card that offers you the lowest APR and fees.

Use It (Wisely) or Lose It

Many Americans, including college kids, are in debt over the heads. Before getting your student credit card, be sure to understand everything about credit. Credit cards make it easy, and tempting, to go on a spending spree. But spend more on your college student credit cards than you make you’ll quickly find yourself drowning in debt. High-interest rates, late fees, and over-the-limit fees can cause your monthly balance to get way out of control. If you can’t pay your bills, your credit history will be destroyed. Bad credit can keep you from getting student loans, buying a car, purchasing a home… even getting your dream job.

Once you have a job, a bank account, savings, and an understanding of what credit is all about, you are ready for your first student credit card! If you’ve done your homework, then you can be confident that you will select the college student credit cards that will help you to establish your credit. Spend wisely and reap the benefits of good credit history.

Reward Credit Cards – Benefit While Building Credit

Reward Credit Cards – Benefit While Building Credit

Many cards available online are offering rewards, simply because it is the only way for card issuers to keep up with their competition. The cards available today are for students, consumers, business owners, and more, and while each card has its own style, the rewards are similar, yet contrasting. To learn more about reward credit cards, utilize the Internet where you will find a variety of card offers to compare.

Various reward credit cards online provide a way for cardholders to earn rewards, as well as discounts at select merchandisers and retailers. The rewards and discounts are available per purchase made on the card. Some credit card issuers will offer a surplus of points on initial purchases. Most credit card sites have taken special care to locate the leading card issuers, credit cards, and more. Some of the very best review cards are available at the secured sites.

Credit Card Offers

A typical reward credit card might offer 0% APR on balance transfers for up to a year as a “teaser” and some may even include 0% APR on purchases as well, although this particular feature is somewhat rare. Many reward credit cards will feature bonus points from making purchases at certain retailers such as restaurants, gas stations, office supply stores, and car rental agencies. Like many of the cards online that offer rewards, you can take advantage of billing and reports or reimbursements, viewing the information online. The best reward credit cards will also offer at least a competitive ongoing APR as well.

A few reward credit cards will give cardholders up to 5 percent cash back on charges made at supermarkets, gas stations, and drugstores, amounting to a pretty significant discount and subsequent rebate on purchases. Typically, cardholders might also be able to earn a smaller rebate percentage at a wider range of retail outlets, providing yet another incentive for purchase activity. Cardholders should make sure to find out what the maximum rebate limit is for the offer prior to applying. Typically, these cashback rewards tend to be capped out a maximum of $300 to $500 in cash benefit per year.

Low Rate Cards

Some of the best reward credit cards also feature very lowest interest rates. Certain reward credit card offers will provide introductory APRs on purchases for up to a year as well as 0% on balance transfers for up to 15 months. You will get competitive ongoing APR’s and you’ll receive generous credit lines up to $100,000 in some instances. The card issuers will also provide cardholders with options on redeeming their rewards points in either cash or travel rewards, offering great flexibility.

Reward credit cards are available everywhere, yet the Internet is one of the areas that offer security, as well as an area to search and compare some of the best reward credit cards online.

Why is It Necessary to Do Credit Report Repair?

Why is It Necessary to Do Credit Report Repair?

Is it necessary to do credit report repair?

Credit report repair will surely help you to improve your credit report and thereby increase your credit score. It is a process that eliminates the negative remarks and gives you a good credit report. There are many people who are unaware of repairing their credit reports and thereby create an obstacle to getting credit extension. You can even repair your credit report timely or by checking it periodically.

With the help of a good credit report, you can have credit flexibility through which you can get credit at a low-interest rate. One should not get tired of bad credit report but seek suitable measures to improve it. A self-credit repair can be a difficult task but with the help of many online services, one can easily repair it by oneself. Below are a few tips, which can help you to repair your credit report.

• Order Credit Report

This is your first step in which you must order the credit report from all the credit bureaus. Don’t be surprised to see different credit report ratings as different credit bureau have different ways to maintain a credit report.

• Check Credit Report

In this step, you must check your report carefully and slowly. It is quite general to find at least one error in one of the three reports.

• Document and Dispute Strategy

Any mistake in your credit report must be informed to the credit bureau. Finding the reason behind any error is equally important, as you understand your credit report. Maintain up to date copy of each and every document that can be used as future reference.

• Dissolve the Debts

Clear your debt payments if you are liable for it. This step is of vital importance, which can help you to improve your credit report rating.

Other Information

If you have unnecessary accounts then close it instantly. Remember Zero balance account is also taken into consideration. Verify each and every account that exists.

Making A Debt Management Plan For Credit Repair

Making A Debt Management Plan For Credit Repair

The best solution to credit problems is to exercise a debt management plan and pay your bills as on-time as possible while avoiding spending money on items you do not really have a need for. Since it has become very difficult to purchase anything without a credit card, one consideration to helping raise a credit score, and ultimately a credit rating when you are having trouble getting a credit card is to get a pre-paid card.

Many lenders offer a pre-paid Visa or Master Card, which for all purposes looks and works just like credit cards. The main difference is, instead of purchasing things strictly on credit, you make a deposit into a bank account that secures the amount of the card limit. Often there is a deposit fee required for opening a pre-paid credit account, and your limit is based upon the size of the deposit that has been pre-paid. The advantages of prepaid cards include that they really can help with credit repair; and, if in fact, your credit is really in bad shape, they may be your only option for repairing it.

Making wise decisions about spending and considering the implications of the decisions from all perspectives will help you make better overall spending decisions. Sure, bad credit is a tough hurdle to get over once you have developed bad spending habits, but it, like bad spending habits, can eventually be overcome. If you need help formulating a working plan that you can stick with on a long term basis, consider credit counseling as an option.

Credit Reports

Taking charge of your credit reports can really help you reclaim your life. There is no reason to let bad credit ruin your plans, but in order to repair your credit, it is very important to know what your credit report status really is. After all, if you know what you owe, you can take the necessary steps to repay it. Also, it is very important to keep in mind that although the three credit bureaus (Equifax, Trans Union, and Expedient) may seem all-knowing and all-powerful, the information they have on you may contain mistakes. It has been known to happen to others.

Obtain a copy of your report from each of the bureaus, but don’t do what everyone says and just apply for a loan in order to get a free report. Every time you apply for a loan there is a mark made against your credit rating and points accumulate. Instead, just pay the fees attached, it will save you money in the long run, probably a lot more than the fees to get the reports.

As you formulate your debt management plan be sure to consider long and short term steps that you can take. For example, prepaid credit cards will help in the short-term as they allow you access to purchases that can only be made with a credit card. However, they offer little in the line of long term credit restoration. While they are used as a credit card, the contribution that they have toward building or repairing credit is so small, that it is not really distinguishable on the credit reports.

Other cards will claim they can help restore your creditworthiness by offering you a larger balance card. Of course, they want a fee of $200-300 upfront. Be warned, some of these companies are scams and should be avoided. When in doubt as to whether or not an agency is offering you a legitimate offer, check with the Better Business Bureau to see if they have any complaints on file.