Understanding How Credit Card Debt Can Affect Your Credit Score

America has been facing financial difficulties in the past several years. The reason for the financial woes can be attributed mostly to debt. Debt can arise from many different areas such as mortgage loans, student loans and credit cards. Credit cards have for years been a way for people to buy misc. goods and/or services without needing the money up front. This type of consumer spending is what led America to the financial crisis that it faces today.

Credit cards normally charge a reasonable interest rate as long as you pay the balance every month. Conversely, credit cards normally charge outrageous rates when you are late on a payment, sometimes making it impossible for the customer catch up on his or her payments. All the while this is negatively affecting this person’s credit report. A credit report is a numerical assessment of a person’s ability to repay a loan that is not based on a person‘s income. Many credit card companies use this report as a means of determining whether or not they’ll grant customers the card.

Many consumers are unaware of their credit score and don‘t know whether or not they are helping it. The government has made credit reports available to all consumers for free once a year in order to be fair. Credit cards can be a great way to increase your credit rating if you decide to purchase an item and can make the payments on time, every time. In this way you will be able to reap the benefits of having a credit score that will enable you to purchase items of higher value in the future.

Companies that help consumers keep track of their credit report can be a good way to help them become financially responsible. The reason for this is if you have someone that is constantly keeping track of your credit report and whether good or bad it would be easier to go about taking care of unpaid debt. For instance, if your credit score was low it would probably because of poor decisions in the past in regards to credit decisions.

Maybe paying credit card payments late, not paying the bill on a mobile phone service, or becoming delinquent on any kind of loan will negatively affect your credit score. The credit report would detail what areas in your credit file need help in order to progress the credit score to a level more suitable to qualifying for future credit. A good credit repair company could tell you what type of steps you can take in order to create a better score.

If you get your credit report and your credit score is to your liking, a credit monitoring company would be able to aid you in maintaining such a score. Steps to be taken can be to take a small loan in your name and gradually pay back the loan over the course of a year. This type of financial responsibility will show up in a credit report.

Credit reports are normally given out by three main agencies, Equifax, Experian and TransUnion. Most credit reporting agencies base their scores on FICO which is created by Fair Isaacs Cooperation. Some financial institutions use other means of determining whether or not the person will be eligible for the financial services in which they offer. This means that even if your FICO score maybe good that you may still not get approved for the financial service in wish you hope to receive.

If you have not checked your credit score in the recent past, now would be a good time to do so. It is becoming more and more difficult to get credit extended to you based on the current state of the economy and unless you have a high enough score you probably don’t stand a chance of qualifying for anything with a decent interest rate. Get your free credit report and score online and keep track of building better credit. You will be so happy you did.


Workers Earning Less Now than at the Height of the Recession

If you have ever wondered why you don’t seem to be able to stay on top of your bills, a recent report issued by the New York Times can answer that question quite easily. You are probably earning at least 6.7% less than you were during the height of what is being called the Great Recession.

It is difficult enough to keep up with recurring bills such as utilities, rent/mortgage, automobile payments, credit card bills but when you are earning $6.70 less on every hundred you make, it is almost unbearable. Not only are you earning less, but prices just keep on going up. Inflation is at a breakneck speed and it does not appear that it will level off any time soon.

According to a study conducted by two former officials of the Census Bureau, the median household income is now at $49,909 which marks a total decrease of 6.7% from December of 2007 when the recession officially began. During the recession household income only fell 3.2% which is why it is so dismaying that we have fallen so low when Washington tells us the recession is over.

Americans are not only unhappy with the current state of affairs, they are downright angry. When polled, most people state that leaders are letting them down and that it’s politics as usual. This does not appear to be good news for either the Democrat or the Republican parties as the caucuses are in full swing.

President Obama is calling the financial situation an official ‘emergency’ and is asking for Congress to pass his jobs bill. Many analysts feel that it doesn’t stand a chance of passing even though there are some strong spots in the bill. However, at a cost of $477 billion, it is more than Washington is prepared to spend at the moment. The bill itself is a blend of public works, tax cuts and unemployment benefits which Republicans are none too pleased with.

The two men responsible for the report on the current state of household income, John F. Coder and Gordon W. Green, Jr. find that the American standard of living is significantly reduced. Oddly, our standard of living is reduced but joblessness is waning as well. They find that there are two main factors contributing to this situation.

First of all, there are growing numbers of people outside the workforce. These are categorized as those neither working nor seeking a job. The second factor is that hourly pay is being held low and is not in keeping with the rate of inflation. Of note are the rises in the cost of oil and food which have risen significantly. What is most surprising about these facts is that during the recession, wages rose faster than inflation.

The pair noted that a great number of people who became unemployed during the recession had to take a sizeable decrease in pay just to get a job again. In fact, the situation is so critical at the moment that many of the country’s leading economists claim that the recession is far from over.

For the average consumer in the United States, this means tightening our belts and really keeping an eye on our own debt. If all you can make is minimum payments, then at least keep up with them. Economists suggest that we charge less, pay more and watch our own personal finances. We could be in for the long haul if things don’t improve soon.

Also, take the time to keep track of your credit report because hard economic times also tend to lead to rising amounts of identity theft. Make sure to order your annual free credit report and score so that you can make sure that everything on your report is of your making. If not, dispute it as soon as possible. Times are not getting easier and you need to know that any debt on your report is fair and accurate.