Author: Ruben Reese

At the tail end of a period of such high unemployment rates, many Americans are getting back to work and bidding farewell to the stress and upset of being without a job during the Covid-19 pandemic.

The re-entry into the workforce can feel like a new beginning, a fresh start, a clean slate. But there are a few key steps to rectifying or preventing some of the potential damage caused to your credit by unemployment.

Here are a few of the necessary steps you will want to take:

Saving is the New Spending

Over the past few weeks, months, years, you’ve likely made plenty of adjustments to your everyday life.

Generic grocery store brands replaced big names in your pantry, Wal-Mart outings began to seem exciting and ground beef has become the top source of meat in your diet.

While now you may be able to afford steak dinners and fancy bottles of wine, take a lesson from the life you’ve been living before re-employment and stick to the basics with luxuries enjoyed only in moderation.

Grocery shopping on a budget can be stressful, but now that your budget may be lifted, try sticking closely by it and you might even find it exhilarating.

Get Insured

Health insurance often goes out the window with employment, as does life and disability insurance.

If your new employer is offering these policies, ask about them right away, so as not to miss the opportunity to enroll. If not, set up an appointment with an insurance agent with money designated from your very first paycheck back.

Otherwise, an accident or illness could set you right back to where you just were.

Develop Payment Plans for Lenders

If you’ve been behind on any car or payday loans, contact your lenders and ask if they can help you in establishing a reasonable plan to help get your payments up-to-date.

Most reputable payday loan companies will be more than willing to work with you, but if yours is not, contact the U.S. Housing and Urban Development Administration for help.

Also, keep in mind that new credit card legislation has allowed exorbitant interest rate increases. So your credit card may actually be one of the debts you put more focus into paying down than others.

Put Yourself on an Allowance

While you may feel like all of your money must go toward rent or mortgage, insurance, car lenders, and other bills, setting up a “salary” for yourself will make you feel more in control.

If you really need $2,500 a month for bills, debts, and necessities, but have another $500 leftover, put that directly into savings. If you are essentially only allowing yourself to take home $2,500, then anything bonus can be saved up for a rainy day.

Getting approval for a credit card can be difficult if you have no credit history to your account. This is because most of the banks or issuing agencies need a previous credit history or a credit score for them to approve your credit card application.

For the past few years, there are plenty of credit card types available for people having no credit history.

Good job

– An individual must be employed somewhere. It should be a good source and a descent of monthly earning should be a must. An individual looking to get a credit card must have sufficient earnings that will lead to waiving off his balances if any. The income of your spouse, husband, parents, and siblings will not land you a credit card. You should have your income source.

If you are authorized to have access to their accounts than you may be given access to your card if certain terms and conditions of the issuing company are met.

The more the income you earn the more the chances of your t get a credit card. There is no minimum income that will entitle you to a credit card. But you should make sufficient money such that you can repay your credit card balances with it.

Utilization

– To have a strong credit score you should have managed your account in a very good manner. Pay off your debts on and even before time. Waived off any of your bills on time and have maintained sufficient savings in your account. These attributes can assure your good credit history and a decent credit score and you may qualify for a credit card.

Prequalification

If you are already having a bank account and meet certain requirements of the company, then you may be offered a credit card. There are many such issuers which offer you credit card on your existing profile.

This is a great opportunity to have a credit card and increase your credit score such that you can apply for the desired credit card in time to come with better prospects. A pre-qualified credit card comes with most bank account types.

These are great to have with no credit history. Prequalifying for the desired credit card does not entitle you to a card. Your income, source, verifications also play an important part in it. If you applied for an application before and got rejected, then you must have received a letter.

You should refer to that letter to find the causes of rejection. Work on them and ameliorate those areas to make a better chance of getting a credit card.

Secured Credit Card

– If you have been rejected for a conventional credit card then secure credit cards are good options for you. For obtaining a secure credit card you have to deposit a security amount initially. Depending upon the type of deposit or fees required for secured credit cards, there are numerous types available in the market. Capital One Secured Credit Card is one such type of card.

Obtain a credit card for student

– Most of the students qualify or are eligible for a student credit card. They are designed for students who have no credit history or not sufficient sources of income. To be eligible for a credit card of student type you must be a student in a university or a college. These credit cards have more amounts of fees that they charge and more interest rates.

Credit Card for retailers

– There are specific credit card types for retailers. Issuers of retail credit cards often approve applications of individuals who lack a credit history. This card can only be used for that particular store as they lack mater card or visa card brand to the name. Thus these credit cards cannot be used outside the specified store. But they prove beneficial to improve your credit history and score. High-interest rates and low credits are a few areas that come with these types of cards.

Minor Spending

– If you had a credit card in the past and have not used in the while, then you can spend some amount to pay from it. Good credit history from your bank account will prove beneficial and entitle you to a credit card.

Pay debts

– If you had a loan assigned to your name and have paid the dues and interest back on time and even before time then you can become eligible for a credit card.

Issuers are seeking customers that are loyal and careful enough. If you have not paid off your debts on time or interest or even the due date has passed then there are negligible chances you may get a credit card. So ensure that you waive off your loan time and build a good reputation for securing a credit card.

There are numerous ways to make your credit score better.

By doing things in a certain way and following certain tips you can improve your credit score. Do you have poor credit score?

Every month you can make your credit report ameliorates by paying on time and in response to a credit limit having a balance that is lower than it.

Plenty of options are available nowadays in the market from which a person can choose a credit card depending on various characteristics even if they have a bad credit value.

You won’t be able to reap most of the benefits that the conventional credits cards give, due to poor credit, but you can still manage to have a credit card.

You can have a very fundamental credit card that can be purchased which does not offer many advantages yet it can prove to be beneficial to improve your credit score and move up a ladder.

People with no or bound credit limit have offers of pre-approved credit cards. Such credit cards should be purchased as they aid you in attaining a good credit score over time.

You do not need to fill numerous forms to have them. The procedure is quite simple for having them.

With great APRs, annual fees and safety deposit one can easily get access to these cards and help make his credit better.

Persons with poor credits have very fewer choices of credit cards available to them. Since there is always a risk of increasing credit limit various banks and issuers avoid revealing many options to such individuals.

Many things can be taken into considerations before purchasing a credit card.

Annual fees– Most credit cards that offer huge perks and advantages come with a fee. They may leave you your pockets a bit empty. A large number of credit card types have an annual fee imposed on them that ranges from few to hundreds of dollars. Few credit cards do not have any annual fee charges.

APR– Some credit cards have APR rates from 19%, 24%, 25%, etc. APR varies according to card types and the benefits it allocates.

Purchases– Not all the credit cards offer you cash backs on purchases. They all have restricted cash backs on specific items of purchases. Ranging from 1% to as high as 1a5% cash back these cards have offerings.

Payment dates– Always try to choose such credit cards that easily match payment dues as per your schedule or else you will find your credit score deteriorating more.

Security– It is always better to know how much secured your credit card is.

As digitization is increasing so is digital frauds and scams have surged up. Numerous malicious sites are on the rising which tries to steal your identity and pieces of information.

Thus security options on credit should also be kept in mind while getting a card. Various points of the line of security must a credit card have.

Charges– Many of the credit cards comes with unauthorized charges.

An individual must evaluate beforehand various charges that can be imposed of the credit card during the interim for security purposes and to avoid your valuable savings go in vain without proper considerations.

Secured credit cards are one of the best credit cards available to have when a person has bad credit.

To have this card, a person has to deposit some amount as safety, which is refunded back after up gradation or termination of the account.

A source of income must be showcased to have such credit cards.

Next in line come unsecured credit cards. Unsecured credits may cost you more than the deposit for a secured credit card due to high fee rates on them; they do not have any security deposit for them.

A person should always be cautious while purchasing a credit card as numerous terms and conditions are there to them which are not easily understood or disclosed at the time of purchase and people fall for purchasing such cards.

Such cards may have high-interest rates and poor credit limit. Let us have a look at a few credit cards type given below for individuals with poor credit cards.

• Discover it® Secure- Suitable for circumventing type perks
• Credit one bank ®unsecured card platinum visa®- suitable for grabbing basic type perks
• Capital One ® Secured Master Card ®- Suitable for attaining better credit in a short time
• Open Sky ® Secured Visa ® Credit Card- Suitable for minimum charges
• Credit One Bank ® Visa ® Credit Card- Suitable for getting rewards bonuses
• Milestone ®Gold Master Card®- Suitable for one who was bankrupted before
• Discover it ® Secured- Suitable for getting cash backs
• Indigo ® Platinum Master card ®- Have normal APR

Having a credit card without a credit history is difficult. A low credit score can also be a reason in difficulty to obtain a credit card.

Bad credit is detrimental if you are looking for getting a credit card.

But you can make a better credit score with new credits.

If your bank or issuers are reluctant to provide you with a credit card for your past issues or bad credit, then you can obtain a secured credit card.

It will give you a sigh of relief and have to rebuild your credit. Just like a conventional credit card is a secure credit card.

In all of the conventional cards, an individual has to make the purchases of payments from the limits of the cards.

Secured credit cards can be used to make purchases in the same way just as conventional unsecured cards.

In a more precise and better way, an individual can get a credit score ameliorated if they had bad credit.

Your secure credit card limits the spending to about 35% and less for the amount of credit you have, leading to a benevolent impact on your credit score as suggested by experts.

By making your dues on time you can greatly improve your chances of securing an unsecured credit card as your credit score is enhanced with timely payments.

But in secured credit cards, a customer is required to make a security deposit against the limit imposed on the card.

Between 100% – 50% is the limit of the secure credit card.

This means that if you have a deposit of 200$ then the limit will be 100 $ – 200$ respectively. Secured credit cards come up with numerous fees. So an individual needs to e cautious before purchasing it.

Timely payments– By making payments on time you can help get good credit.

Secure credit cards can prove to be beneficial to worthwhile in getting a great credit.

Paying your balances on time displays to the bureau that you are credible and thus can achieve a good credit.

Several ways to remove your debts can prove beneficial. Your secured credit card can help you get a payday loan.

Thus helping to clear off your dues and establishing a good credit history. You can achieve this by making marginal purchases in a month and then pay off your bill on time. You can also avoid interest build-up by paying off the amount on time.

For an organic credit score paying off your dues on time is beneficial. This is also a factor that affects credit score.

Increase your minimum payment every month. You can easily dictate that you are capable of pay off your balances by paying off more than the balance and decreasing the ratio of utilization of credit.

You can keep your debts low by making several payments. If you entire amount in a month no surety will not create a negative effect on your credit score.

High Balance – You can get your credit history reshaped by making a good security deposit. The more security deposit you have for a secure credit card the more limits you will have and thus dictating to the issuer more balances. Fewer balances are one of the reasons for low credit score.

Set priority – Make payments on time

Even if you’re planned and coordinated then also there are chances that you may forget to make a payment. Create popup or reminders for your payment dues. You can also do this with your bank and the issuer.

Get yourself notified a reminder before the due date and help yourself create a good credit for you.

Reminders

Yet many people forget to make payments on time even after continuous reminders. In these cases, you can generate an automatic debit facility. Get your card activated for auto pay mode.

This will ensure automatic deduction and timely deduction of remaining balances for the purchases you have done in the month. You should keep sufficient balances for this purpose failing to which you may get yourself a bad credit instead of good ones.

So always be vigilant enough and ensure you do have a sufficient amount in limits to pay off your dues. Secure credit cards aid an individual to get better credit history or to lay the foundation for the one by notifying the information to 3 credit bureaus.

Buy following these concrete advices given above you can improve your bad credit score.

You just have to remember that the way you take your finances in your considerations and how you manage them affects your credit history.

If you have proper finance management then you can build a great foundation of good credit score using secured credit cards.

If you’re thinking about applying for a new credit card, a loan or a mortgage first thing you ought to ensure is that your credit score is spick and span.

A low credit score will make you untrustworthy, so to speak, with your lenders and you may face trouble securing a loan or a credit card. Stay clear of these 8 common mistakes typically made:

A Bad Payment History

If you have not had the best record in making due payments, this could be a negative on your credit score. Late Credit Card payments, late bill payments, late loan repayments or nil

Credit Utilization

How much credit is good credit? The typical benchmark is 30%. The less your credit utilization the higher your credit score and the more cooperating your lenders.

Credit Utilization is calculated by dividing the amount of revolving credit that your current usage reflects divided by your overall credit limit.

This figure is what needs to be below the 30% ceiling for you to have an acceptable credit utilization score.

Numerous Hard Inquiries

The more the number of applications you make for Credit Card, the higher your number of Hard Inquiries.

Every time a financial institution checks your Credit Score to assess whether you are the right candidate for a service like a credit card or not, it adds to Hard Inquiries in your account and reflects on your score.

One way to avoid this is instead of applying to multiple companies for a loan, you may consider applying to companies online. These are considered soft inquiries and do not malign your credit score.

Judgment

A judgment demanding you to make certain payments is not the most welcome entry on your credit score. As this indicates that formal legal measures had to be taken to compel you to clear your debts.

Thus, this must be avoided at all costs. In case you do get dragged into a court case, try to persuade the other party to go for an out of court dispute settlement as most countries have Alternate Dispute Resolution mechanisms like Arbitration, Conciliation, Negotiation or Mediation.

No credit history

Someone with absolutely a clean page of credit history can apply for a credit card or loan. Many lenders have facilities for such customers as well.

There are different kinds of credit cards. You can even go for a secured credit card, a retail credit card or a student credit card.

Avoid Getting Your Account Charged Off Or Sent For Collection

When you have defaulted on your credit card payment more times than is acceptable, the lenders get your account charged. Think of it as “blacklisting” you.

This causes much damage to your credit score. A lender may even send your account to third-party debt collectors which is a reflection of how they failed to receive payments from you directly and were compelled to hire other sources for the same.

Settle Payments Before Closing Your Credit Card

Before you close your credit card for good, be mindful of the fact that it is settled. Closing your credit card while it still has balance will have the effect of nullifying the limit while your balance remains the same.

This indicates that you have exceeded the limit of your credit card which always leads to the lowering of your credit score.

Miscellaneous

Multiple payday loan rollovers may lead to your lender transferring your account to a collection agency who may, in turn, report the non-payment of the loan to bureaus which negatively impacts your credit score.

Once you file for bankruptcy it not only impacts your credit score negatively, it requires re-evaluation your entire financial life. A foreclosure can similarly very adversely impact your credit score.

And both bankruptcy and foreclosures have a certain cooling period which is different across states before which you can even apply for fresh credit. Collection accounts, charge-offs, late or missed payments etc. also have an unfavorable effect on your credit score.

Conclusion

To improve your credit score, give yourself time. Better than making payments on time is making payments earlier. This always goes a long way in ensuring that your credit score soars.

If you have too many loans in your name, try to pay some of them off to improve your credit score.

If you have a joint account with someone, keep a tab on all the payments on that account as well as that equally affects your credit and we overlook it oftentimes.

Sometimes, there are even errors in your credit score, so go through hit carefully and bring it to the notice of the authorities.

A Credit Score reflects your capacity to make payments of services you use as well as your readiness and willingness to pay back a loan.

A credit score is made of several indicators that lenders and companies rely on to make financial decisions for you.

So hold on tight, here are 12 reasons why having a great credit score is highly tempting and rewarding:

It Cuts Down On The Interest Expenditure

For any loan, you are looking to opt for or any service that essentially involves an interest rate, the most important factor that finally determines that percentage figure that will haunt you every time you have to make a re-payment is your credit score.

The higher your credit score, lower the interest rate will be and more the money that you will save as a result of it.

Experience The Satisfaction Of Paying Lower Insurance

If you have a high credit score in your name you can secure amazing rates on a lot of insurance policies.

Car insurance policies, home insurance policies, even a life insurance policy are a few examples where a great credit score has the ability to save you a lot of money in insurance.

Expand Your Credit Card Limit

The limit on your credit card is decided based on a number of factors in your credit score like how good a record you have maintained in paying bills and the status of your debts.

Typically, therefore, a high credit score will always go in your favour when it comes to expanding your credit card limit.

A Great Aid In House Hunting

This may come as a surprise to you but many landlords now do an intricate background check on potential tenants, one determinant in which is your credit score. So if you are looking to rent a house, a decent credit score can be a great aid in this regard.

A Good Score Can Land You A Good Car

Many automobile companies are indulging in a background check of potential buyers which includes their credit score. As a credit score speaks volumes about your financial habits it is increasingly becoming the go-to checkpoint for sellers and lenders alike.

Credit Card And Loan Approvals: A Cakewalk

Since your credit scores form the most fundamental records for lenders and banks to extend a loan or a credit card facility, a high credit score is undoubtedly responsible for getting you amazingly swift approvals.

For the most hassle-free experience in obtaining any of these facilities or any financial facility for that matter make sure you have a top-notch credit score.

A Huge Variety Of Credit Cards To Choose From

The top-notch credit cards with remarkable benefits, rewards and bonuses are not available to all. If you have a low credit score, the options available to you are highly limited.

As you improve upon your credit score, the range of options of the credit cards available to you grows tremendously bringing with itself royal benefits!

Start Your Business Hassle-Free

A decent credit score will give wings to your dream of owning your business. All entities that will aid you in acquiring your own business will do so only after being thoroughly satisfied by all the factors in your favour on your credit score.

Lenders will be more willing to assist you and will go that extra mile if you have awesome credit scores to give them that extra push.

Give Joint Financial Decisions A Boost

A bad credit score does not pull you down alone sometimes. Anyone who wants to partner with you to take a loan or get a joint account suffers similarly.

As lenders and creditors rely on both your credit scores, your credit score mustn’t be responsible for the denial of service to both of you.

Get Greater Loans

The higher your credit score, the more the trust banks and lenders place in you. A high credit score demonstrates that you have shown impeccable payment and credit history.

This has the chance of greatly increasing the amount you can secure for a loan.

Your Dream House Is A Good Credit Score Away

A bad credit score will always be a hindrance in your way of buying that house you have been eyeing for so long. A splendid credit score ensures you get a mortgage easily and at amazing interest rate too.

Get A Royal Treatment

The extra bonuses that some companies offer clients with splendid credit scores will make you want to pay all your bills earlier than the stipulated time! Some heavy cash bonuses are promised on certain cards.

Besides, there are travel cards that once redeemed give amazing holiday options to the cardholder!

When you make a payment, some of it goes toward the interest charges, while the rest is applied to the loan principal. Simple interest applies mostly to short-term loans, such as personal loans.

A simple-interest mortgage charges daily interest instead of monthly interest. Simple interest works in your favor when you’re a borrower because it keeps the overall amount that you pay lower than it would be with compound interest.