If you need to build up credit due to having no credit or due to having bad credit a sure fire method is going with a secured credit card. Yet at some point you need to get your secured credit cards converted into full fledged credit cards. When you get your secured cards upgraded to regular credit cards you will receive your deposit back with interest. When is the best time to get your secured cards converted to regular credit cards?
Your only reason to go with a secured card in the first place is to boost your credit score. So you simply need to monitor your credit score. Some banks secured credit cards will offer you your FICO score for free each month, such as Capital One credit cards. Knowing where your score stands is the knowledge you need to choose when to make the switch. You will need a credit score of at least 650 to get a good credit card, and once your score rises past 700 you can obtain almost any credit card you want.
You need to keep the card going at least a year, and you need to keep your balance at or below 20 percent of your available credit limit. This will boost your credit score big time. After about a year is when you should start looking hard at your credit score. If you have not made any late payments and followed the advice about your credit limit your credit score should be at least 650. I would wait to make the switch until your credit score reaches the 700 range.
You have two options when it comes time to make the switch. The first is to ask your credit card company or bank to simply upgrade the credit card to a non-secured credit card. This is the ideal option. The second option is the least ideal, as it could harm your credit score, that option is applying for a new credit card and closing out the old card. The reason why this is not ideal is applying for a new card will result in a hard inquiry, plus when you close a card out your score tanks if your credit utilization rate changes due to closing the account down. You can also tank your score due to having to few open accounts now on your credit report. If you do decide to apply for a new card it would be best to keep the old account open for a time at least, allowing your new account to age somewhat before closing out the old one. You should keep the old account open for at least a year.
If your bank resists upgrading your secured credit card to a regular card you may need to take your business elsewhere. Banks love to hold onto that deposit since they make money on those funds unless the bank advertised that they would give you the deposit back plus interest. If you do need to take your business elsewhere you will still need to keep the old account open for an additional year.
If they do convert your card over to a regular card ask them to keep your account number the same. This is so that you can continue to build your credit history on your already aged account. Length or duration of your active accounts also contributes to your credit score.
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You hear me talk about the big B word, budgeting often. You also hear my discussing the many virtues of saving money, and indeed it is good to save up money, in fact it is the corner stone of good finances. Yet there are times where spending a decent sum of money today can prevent the need to spend a small fortune later, and this is what we will discuss today. Sometimes being frugal can truly hurt you as you will see in the examples below. Most of this advice will apply to homeowners because homes tend to eat up our finances over time.
One area any home owner needs to be critical of is their roof. If your roof is damaged you are only looking at a repair bill on average of $500 to $1800. That is not that much money to get your damaged roof back in shape. Yet the cost to replace a roof that has been neglected of repairs is now well over $6000 so it is clearly far better to spend the money now to repair that roof rather than to neglect the repairs and face within years or even months the startling conclusion that your roof needs to be gutted and replaced. If your roof is damaged I can guarantee it is not going to improve in the least without the attention of a qualified roofer. Also if you allow even a small amount of water to enter into your home from the roof you are now looking at a possible mold contamination issue since mold loves to grow in wet damp attics and crawl spaces. Mold outbreaks can destroy your home, make it unsellable and cost you thousands of dollars to re mediate.
One of the areas most neglected by home owners that ends up costing home owners big time is their gutters. Yes I know often times you cant see gutters without a ladder, but they have a very important function, channeling away water from your foundation, walls and attic. If your gutters are falling apart or are in need of repair it is best to simply shell out the money now to repair them or even replace them as failure to do so can result in more expensive roof damage or even damage to your homes inner walls and foundation. The damage that can result could well be worth 4 months or more of your precious paychecks.
If you are thinking of replacing your laptop or desk top computer to upgrade to a new model or if your computer is running a tad slow you could very well save money by simply upgrading the computers ram and/or mother board. Most parts in your computer are often fine, when you boil it down it is often only ram that needs replacing, although sometimes you need a new processor and or mother board, but even replacing these 3 things is often cheaper then out right replacing the computer. If you tend to game a lot and your gaming has slowed to a crawl it might be time to upgrade to a new video card. How I save money on my computers is replacing individual parts as new and better parts become available, namely video cards, ran, mother boards and processors. Most often it is a ram issue slowing down your computer and adding ram will get it back on track again, unless you mother board is not rated to accept any more ram in which case you will need to upgrade this as well, but even so you can save several hundred dollars and also avoid the need to migrate files and re-buy software.
When it comes to things like home repairs it is far better to spend money on the problem now than to let it fester into a bigger problem. Some repairs could set you back between $500 and $1000 but those same repairs if neglected could end up costing you thousands of dollars later due to inaction. Of course your savings can fund these repairs, but again it is better to address problems when they are small rather than letting them spiral out of control.
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