Your college-age kid needs to establish credit, and a credit card is a great place to start.

No, seriously. It’s like they say, “guns don’t kill people…” Credit cards aren’t evil. Yes, they get marketed to young and inexperienced people, who sometimes get themselves into trouble. But that’s where you come in. Help your kid learn the right way to use a credit card, and the traps to avoid. One of the basic rules is to use the card for ESSENTIALS. A flat tire or textbooks, these are essentials. Concert tickets and pizza are not. Teach a little discipline, and your kid could be on his way to financial maturity!

Learn more about credit and credit repair in SC here.

There are a couple of schools of thought on cancelling an old credit card. One thought is that an old card, even if you never use it, is evidence of long-standing credit.  Why would you get rid of that?  On the other hand, an old unused card is easy to forget about. If some identity thief gets hold of that old neglected card, they could cause some real chaos before you are able to get a handle on the situation.  You also have to consider whether cancelling this card will make all that much difference.  You could go through a lot of hassle, only to find that your credit score ticks up just a few points.  Then again, if you absolutely feel the necessity to cancel a card, it’s not like that history goes away. It will be on your credit report for years to come.

Learn more about credit and credit repair in SC here.

If you’ve got adult kids, this topic may come up some day—co-signing a loan for your child. Sometimes they’re just out of school, with that first big job. Good kids, achieving, doing the right stuff. But they’ve not been at it long enough to establish good credit. Sometimes, it’s later in life. Maybe they’ve had a divorce, or credit trouble.  Naturally, you want to help. But is co-signing the right thing? If you co-sign, and they default in 3 years, will you be able to take on those payments? Is jeopardizing YOUR credit something you’re comfortable with? It’s a highly personal decision.  Maybe it’s better for them to wait and save, to build credit and job tenure, than to jump into a loan they might not be able to handle.   

To learn more about credit services in South Carolina, click here.

This is one of the oldest bits of advice out there, but it’s a goodie. When you’re trying to pay off that credit card, you HAVE to pay above that minimum! When you only make the minimum payment—even if you never use the card—it takes years and years to pay off that card. Typically, the minimum payment just services the interest on your principal. Anything you pay above the minimum goes right to the principal. It starts a profitable cycle for you. The more you pay on principal, the lower your interest charges. What you’ll notice is that the minimum payment keeps going down, bit by bit. Say your minimum payment is $225, but you pay $300. Keep doing it, and your minimum will creep downward to $222, $218, etc. But keep paying $300. If you have an emergency some month, make the minimum payment, but get right back on the horse ASAP!

To learn more about credit services in South Carolina, click here.

When you set out to repair your credit, one of the first things they tell you is to nuke those high-interest credit cards and transfer your balance to some kind of low…or lower, at least…credit card.  But it’s hardly ever an even swap. There’s a lot of things to consider.

Transfer fees: sometimes it’s a flat fee, sometimes it’s a percentage of the balance being transferred.  So make sure the money you will save in interest doesn’t get eaten up by transfer fees!

Old debt, new debt: It’s still a credit card, and you’ll be tempted to use it.  And you may get low interest on the transferred debt, but the interest on new purchases may be much higher.

Payment distribution: if you do use the card for new purchases, you may find that your payment goes to service the new debt, instead of the old.

These are just some of things you should think about. Balance transfers are a tried and true way to help shave down your debt. But you have to do your homework!

To learn more about credit repair in SC, click here.

Identity theft is a problem everywhere. They say that Arizona is worst. But we have our problems in SC, for sure. There were over 2600 reported cases of ID theft in SC in 2007. Over 20% of those involved credit card fraud. Here’s the top five cities for identity theft in South Carolina:

Top 5 ID Theft Cities in SC (2002 data):

·         Columbia

·         Greenville

·         Charleston

·         Rock Hill

·         Myrtle Beach

So keep an eye on your credit card statements, bank statements and your credit report!

To learn more about credit repair in SC, click here.

Finding a Reputable Credit Repair Company

My nephew had a rough start, and he did all the things young adults sometimes do to mess up their credit. Eventually, he got his life together, and went looking for some help in repairing his credit. He asked me for any advice I could give.

Basically, I said there’s plenty of decent companies to help you out, but there are always a few bad apples. And “bad apples” means any credit repair company that suggests that you do something shady or even illegal. I’ve read about companies that suggest that you try to invent a “new” credit identity, which would mean a new credit report, by trying to get an employer identification number instead of using your Social Security number. I told my nephew, fraud is fraud, kid. A good credit repair company will tell you LEGAL ways to fix your credit. And they will tell you there’s no instant fix. Do your homework, and you’ll find there are reputable companies out there to help you get a fresh start.

A Little Credit Self-check

Whether you’ve had credit problems or not, I think it never hurts to keep tabs on your credit from time to time. Like they say in the commercials, what’s in your credit report can help you get a loan, or kill your chances. And I don’t think I have applied for a job in the last 10 years where they haven’t run a credit check on me to see if I am a “responsible” citizen or not. And these days, that “identity theft” thing is bigger than ever. You hear that one so much it’s sort of lost its meaning. But this is one big way your identity gets “stolen.” Somehow the crooks get hold of your personal info, open a credit card and run up a bunch of bills in your name. That happened to a guy I worked with, and it was a drag. So if there’s charges—or even entire accounts—on your credit report that aren’t yours, take action!

Running Credit Reports

One thing to remember when you are shopping for a home loan is that you should not let numerous mortgage lenders run credit reports on you. Wait until you have a reasonable expectation that they are the lender you are going to use to obtain your home loan. Not only will you have to explain any credit inquiries in the last ninety days, but numerous inquiries will lower your FICO score by a small amount. This may not matter if your FICO is 780, but it would matter to you if it is 642.

Don’t Buy A Car Just Before Looking for a Home!

In conclusion, a word of advice not directly related to FICO scores. When people begin to think about the possibility of buying a home, they often think about buying other big ticket items, such as cars. Quite often when someone asks a lender to prequalify them for a home loan there is a brand new car payment on the credit report. Often, they would have qualified in their anticipated price range except that the new car payment has raised their debt-to-income ratio, lowering their maximum purchase price. Sometimes they have bought the car so recently that the new loan doesn’t even show up on the credit report yet, but with six to eight credit inquiries from car dealers and automobile finance companies it is kind of obvious. Almost every time you sit down in a car dealership, it generates two inquiries into your credit.

Learn more about Credit Resources in South Carolina. 

Benefits Of Early Credit Building

At some point those who are now students will want to purchase a property. Having a long and stainless credit history will greatly contribute not only to a home loan approval but also to get better terms on the mortgage loan. Therefore, a line of credit such as these ones can be excellent tools for guaranteeing future loan approval by building a credit record from scratch.

Remember though that credit history needs to be free from delinquencies in order to provide them with a good credit score and therefore, it makes no sense to apply for a credit card unless you are completely sure that they will be able to afford the monthly payments and thus, keep the balances within reasonable levels of debt.

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Long Term Credit Mistakes Can Damage Your Credit Rating

Having good credit for any South Carolinian is more important now than ever before. In an age where many have had their credit ratings destroyed through heavy credit card debt, bankruptcy actions, late payments and other credit transgressions, keeping your credit rating as healthy as possible will save you a great deal of money. Unfortunately, some financial missteps do more than just ding your South Carolina credit rating. Some can ruin it for a long time. Here is some of the more egregious credit mistakes people make and tips for guiding the journey back to good credit.

Read more about negative long-term credit and its effects.