How to Get a Better Credit Score

A good credit reputation could get you the loans and credit opportunities that you need. Not only is it easier to apply and qualify for financial contracts, the credit rates are also cheaper.

Not everyone is blessed with a stellar credit, but you can always turn things around. If you are one of those people that are wondering how you can improve your credit then read on.

Of course, there is no shortcut to success, if you want to have a better credit, then you best by work hard for it. Creating a good financial plan could always turn your bad credit around.

If you cannot stick to your plans, then you are going to keep struggling with your finances. According to Linda Gunter, a Birmingham resident who used to suffer from bad credit, to get out of that sticky situation, you have to train yourself not to use your credit card.

She says if you can’t pay for something you want with cash, then you best by just forget buying it. Recovering from bad credit is just easier said than done, the real secret to success is good planning and great self-control.

Stephen Yoder, a professor at UAB a School of Business shares that you must make sure that your earnings are equal to your expenses. You can never recover from bad credit if you spend more than you earn.

He says that you must get hold of your credit report, study it and check for errors. These mistakes in the credit records often lead to bankruptcy and bad credit for unsuspecting clients. If you find a mistake in your records then you should write to the agency and correct them.

You should also ask yourself if you have been religious enough in paying your bills. If you fail to pay them on time and they pile up then it could spell trouble for you. If you are not very good at organizing your bills, then you can always set up something called an automatic payment system, where you pay a fixed amount with your card online.

Tips to Improve Your Credit Rating

At present, the economy of United Kingdom is experiencing another recession. The solution to the problem is not completely apparent. Moreover, there is a higher insecurity ahead because the effects of a federal Europe or a pending Greek or Spanish withdrawal from the Eurozone are still not identified.

However, in spite of the economic condition, it is getting clear that one of the causes of the problem was bad debt and irresponsible lending. As a result, we’re currently facing a credit crunch. Banks are more hesitant in terms of lending and consumer spending is little.

Because of this trend, the lending market is more demanding and even with the Government’s measures to improve liquidity, the flow of cash from banks to small firms and the people is still staggering and unstable.

On the other hand, one approach that can boost the odds of getting credit is to keep a good credit rating. Having a good credit rating convinces banks that the money they are lending will be paid back in full and on time and the borrower will have more chances of getting approved for a loan.

A person’s credit rating shows their ability to pay back debt. Consequently, improving your credit rating means getting and responsibly paying off the debt.

When applying for a credit card, put a lot of thought into it because once you have a credit refusal, it will be recorded and can have a negative effect on your credit rating. To avoid these negative effects, consider checking the Internet for opinions and experiences of others found in several forums.

Another great way to increase your credit rating is to get on the electoral roll. Some credit ratings agencies take into account a person’s presence on the electoral roll when giving a credit rating. Contact your local government authority and fill up an application form, which can be found online at times.

Capital One Got the Most Complaints Compared with Its Market Share

In terms of picking the best credit card, most of the consumers take into consideration the interest rates and rewards. However, a recent study found another factor: complaints against credit card issuers filed with federal authorities.

Based on a report by Ken Thomas, a Miami banking analyst, some of the credit card issuers that got the most complaints in relation to their market share are SunTrust, TD Bank, GE Financial and Capital One. On the other hand, issuers with the least complaints in relation to their market share are HSBC, American Express, Discover, JPMorgan Chase, Bank of America and Citigroup.

According to Thomas, besides getting a good interest rate and benefits, it’s also sensible to check complaints so that you are aware of the kind of customer service offered. Reports like the one conducted by Thomas will convince banks to work more in order to meet the needs of their customers.

Thomas examined 13,502 credit card complaints filed with the Consumer Financial Protection Bureau that had the name of a particular user. The bureau started getting complaints on July 21 until May 15. Due to the Freedom of Information Act, Thomas was able to get the necessary information.

The results showed that Capital One had the highest number of complaints, accounting for 20 percent. Following is Citigroup, with 17 percent and tie at third are JPMorgan and Bank of America, with 16 percent each.

American Express and Discover got only a few complaints because both are known for their high customer satisfaction, according to credit card surveys done by researcher J.D. Power.

At present, credit card accounts in the United States have reached more than 500 million, which is more than the country’s residents of approximately 310 million. Credit cards have the highest interest rate among all loans that consumers can apply for. Outstanding credit card debt already exceeded $730 billion.

Aqua Advance Credit Card for Those with Poor Credit

Aqua has recently released a new credit card intended for consumers with poor credit, and it charges an interest rate that may decrease through time. It starts with an interest rate of 34.9 percent APR, but if you pay your debt responsibly, the interest rate of the Aqua Advance card will decrease by 5 percent annually over three years. You will then end up with an interest rate of 19.9 percent.

The Aqua Advance credit cards are intended for those who previously have had credit problems or who have zero credit history and wish to build one. The initial credit limit of the Advance card ranges from £250 to £1,600. Moreover, it offers a 24-hour helpline, text message reminders prior to deadline of your payments, and zero foreign currency exchange charges so you may be able to use it out of the country.

Aqua also released the Reward credit card, together with the Advance card, which pays 3 percent cashback on all of your purchases and limited at £100 cashback annually.

In addition, Aqua decreased its interest rate on the current Classic card to 32.9 percent, which was originally 35.9 percent. Just like the Advance card, it also has a credit limit which ranges from £250 to £1,600.

Some other credit builder cards include the Capital One Classic, which has a credit limit that ranges from £200 to £1,500 and an interest rate of 34.9 percent, and Vanquis Visa, which has an interest rate of 39.9 percent.

These credit builder cards will help you if you had troubles in the past in terms of borrowing. However, these cards must be used responsibly, which entails spending a little of the money, then paying it off in full and on time. Since the interest rates for credit builder cards are higher compared to those of typical cards, do not put yourself in a situation where the interest drains your account.

Effects of Banks Downgrades

Last Thursday, the credit ratings of 15 of the largest banks in the world were downgraded. While the deposits are completely protected, the downgrades could negatively affect people in other ways, for instance, an increase in the fees charged by the banks and more difficulty in getting a loan. Consequently, mortgages, credit cards and the job market can be affected as well.

According to Jim Nadler, chief operating officer at Kroll Bond Ratings Agency, it is common that people are anxious about their money’s safety before anything else. However, the actual costs might be concealed.

Unfortunately, the downgrades come to banks currently in a fragile situation. Several of the fees that are charged on credit cards and checking accounts have been removed because of the most recent rules adopted after the financial crisis. Moreover, banks are excluded from making profitable bets in the stock and bond market, which eliminates a lot of money in the form of trading income.

Together with the downgrades, current fees might increase even further and new ones could emerge.

The three top rating agencies, Moody’s, Standard & Poor’s, and Fitch, give ratings on a scale that corresponds to the ability of a company and state or local government to pay off their debt.

In addition, the downgrades will direct money into reserves and decrease the amount of capital that banks have to loan.

Americans applying for home mortgages, auto loans, and credit cards will experience the effects. Banks have been very selective regarding lending money, approving only those that have stellar credit or a steady employment history. Also, since people with bad credit are not given cards, the numbers of credit cards issued by banks have decreased significantly.

The effects of the downgrades will be felt even more by small and medium-sized businesses. They provide jobs for people within the country but recently, there are lesser jobs to offer. These businesses are finding it hard to get bank loans as well.