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reduce credit card debt - Complete Controller

The use of credit cards has sent the youth of America into debt that most fear they can never payback. This debt is because credit is being made available to young individuals who don’t fully understand good financial discipline. Overspending at such a young age mounts up debt that most have to pay back once they have graduated from college, often along with substantial student loans. This pile of debt at such an early age can be a significant setback for most and ends up in an endless spiral of more and more accumulated debt. It is highly advisable to seek financial advice at an early age so that one is well-informed about their financial responsibilities. This financial advice is the first step towards understanding financial management.

Are you someone who has piling credit card debt and wanting to pay it off quickly? Here are some easy steps that you can take to eliminate that debt as soon as possible. Check out America's Best Bookkeepers

Cards with higher interest rates should be paid off first

If you have multiple credit cards and all of them have balances, begin with paying off the one that is associated with the highest interest rate. Most credit card companies offer different interest rates on credit cards, depending on your credit score and past purchase history. Understanding what interest rates are attached to what card is essential and will help in paying off the highest cost debt first. One should invest all their extra cash on credit cards with the highest interest rates while paying the minimums on the other cards. This structuring of payments would help ensure that interest charges are kept at a bare minimum, with the most costly debt being eliminated first. Check out America's Best Bookkeepers

Stop using your cards and maintain a stringent budget

Not using your credit cards makes it much easier to manage expenses and stick to a pre-set budget. This is because paying in cash restricts impulse buying, leading to better purchase choices and cost savings. Setting a budget and having only limited money available at any given time reduces unwanted expenditures. Also, since the card is no longer in use, paying even the minimums will see your overall debt reduce much faster. It is never easy to stick to a budget, but by using cash only, it makes adhering to it much more manageable. Not having the liberty to spend more than one has can often lead to much smarter purchases and result in more disposable income left to pay off accumulated debt. Check out America's Best Bookkeepers

Negotiate better credit terms

Requesting a lower interest rate from your credit company can result in lower monthly payments and fees. It is recommended to push for better interest rates from your credit company as they often consent to such requests. Credit companies will discount the total amount of the bill if you stick to a payment plan. Balance transfers are another method that can be recommended for debt saving. Debts with high-interest rates can be transferred over to best balance transfer cards that offer perks such as 0% APR for up to 18 months. This can help pay off your debt much faster as you save quite a lot on interest payments.  Another recommended method is to consolidate debt by borrowing money from the bank. The bank loan can be used to pay off all accumulated debt of varying interest rates. Once this is done, you can focus on paying off the bank’s large loan payment per month.

Eliminating credit card debt

By following the above methods, one can speed up their debt repayment goals. Financial management does not only require financial knowledge but rather, and more importantly, it requires discipline. Consulting a financial advisor to understand how debt elimination works is also something that most people should consider doing. This may save you from a lot of pain later down the road.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
credit report - Complete Controller

A credit score is a powerful indicator in assessing the economic status of an individual. The lenders and banks mainly utilize it before providing you the loans for different purposes. Several businesses have started to use a credit score to make decisions about giving loans to individuals. Through the credit scores, lenders also evaluate your future capability to pay back loans and determine the risks of loan money. It also provides the basis for setting the interest rates on your loans and credit cards and deciding whether to approve the request of a credit card. Companies that give car insurance also use the credit score to set the rate of monthly installments. Utility companies also evaluate a credit score before establishing new services for you. To offer a job, a promotion, or to increase your salary package, some employers also consider credit history. Check out America's Best Bookkeepers

Payment History

The payment history comprises 35% of the total credit score. The way you manage your payments impacts the credit score. Payment issues such as bankruptcy, charge-offs, foreclosure, and repossession can have adverse effects on credit score. Timely payments of your bills can positively affect your credit score and prevent you from having future difficulties in applying for multiple types of credit.

Level of Debt

Your debt level is 30% of your total credit score. It happens that despite your timely payments of bills, your requests for credit cards and loans can still get rejected due to your debt level issues. The calculations of credit scoring like the FICO score cover a few factors that impact your credit scores, such as the overall amount of debt, ratio of credit card balance and credit limit, and the association of total loan amount and your loan balances.

If you possess higher loan balances or higher levels of debt, it could impact your credit score unfavorably. Fortunately, it is possible to reduce the credit score by paying down the loan balances. Check out America's Best Bookkeepers

Age of Credit History

Your credit score also considers the period for which you have been using credit. The age of your credit history includes the average age of all the accounts in your possession and your older account’s age. It comprises 15% of your credit score. The older credit age is beneficial for credit scores as it shows that you have a vast experience of handling the credits. On the other hand, new accounts present on your record history harm your credit score and decreases the credit age. In this scenario, the opening of several new accounts is typically not suitable for loans or insurances. However, if you manage your timely payments, it would not have many effects on the credit score. 

Types of Credit Used by you

The FICO formula also uses your types of credit while determining our credit score that whether you use a mixed kind of credit or not. Types of credit mainly cover 10% of the total credit score. There are two major types of credit accounts, which are installment loans and revolving accounts. Suppose you have both types of credit accounts than it would positively affect your credit score. It indicates that you have the experience of various kinds of accounts, which is beneficial for your credit score. However, if you do not have any of the accounts, it would not affect your credit account due to its lesser percentage. Other accounts include store accounts and mortgages. Check out America's Best Bookkeepers

Credit Inquiries

Every time you apply for the loan, credit card, or insurance with the requirement of credit check, then an inquiry shows on your credit account, which shows your credit-based application. It also encompasses 10% of your credit score. Few queries do not have much impact, but when the number increases from two within a shorter period, it costs tens of points and affects the credit score. For this purpose, make fewer applications at one time and this can prevent you from this issue. Fortunately, the inquiries made during the last 12 months are considered suitable for the credit score. Note that bookkeeping is an effective way to check your credit score by keeping records of financial matters.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
check credit score - Complete Controller

For any business or individual, improving credit is a tedious journey, as it doesn’t happen overnight. Credit scores consider years of past financial behavior, all being recorded on your credit report by three different credit bureaus. They are keeping separate accounts of your credit scores. Therefore, the scores may vary. However, the credit score puts more emphasis on the recent information, which means you always have a chance to get your score on the right path.

Certain factors are more significant than others for improving credit score. Payment history and credit utilization ratios are among the most imperative in many credit scoring models. When combined, they can profoundly influence your credit score. Check out America's Best Bookkeepers

Payment history

When you apply for a loan, lenders look at your credit report to analyze it. One factor that the lending institution is interested in is your payment history because past payments history is a good predictor of future behavior. Some of the best and easiest ways to improving credit is by paying all your utility bills, monthly mortgage payments, credit card bills, and other payments in time. Late payments or partial payments are corrupt for your credit scores and should never occur. 

It is essential to highlight that all kinds of payments, including auto or student loans, should be paid on time. It is always good to use all the available tools and resources to make these payments effectively. Using calendar reminders and automated payments are some of the tools available at your disposal.

In case you are lagging on a specific payment, it is best to bring them current as soon as possible. Though late payments show as negative information on your credit report, their effect can reduce over time.

Improving credit with a credit utilization ratio Check out America's Best Bookkeepers

The credit utilization ratio is also an essential measure of your credit score. It calculates by dividing your total credit card balances by your total credit limit. The rate is measured for all your credit cards as well as for each card individually. Lenders prefer individuals who have a low credit utilization, typically 30% or lower. A small ratio signifies that you have not maxed out on your credit card limits. Therefore, you are more likely to manage your credit well. Improving your credit requires you to maintain a low credit utilization ratio, which can be achieved by paying off the debts and keeping low credit card balances. 

When you open up a new credit card account, it increases your credit limit. Still, it will open up a hard inquiry on your credit report. Too many inquiries can negatively influence your credit score and remain on the report for up to two years. However, maintaining a low credit utilization ratio will ensure that this does not cause any cause. Check out America's Best Bookkeepers

Changes that can affect the credit score

Some people often wonder how specific actions can alter their credit score. For example, when you close two revolving accounts, whether it will make any contribution to improving credit score. To answer this question and many others, you must realize that your credit scores depend entirely upon the information present in the credit report. Any change in that information will impact the score positively or negatively.

Closing two revolving accounts do lower the number. However, it will lower your credit limit, which will eventually raise your credit utilization ratio, therefore, negatively impacting the credit score. It is also possible that one change affects many items in your credit report and completely understands it. You will have considered each situation individually.

Few guidelines for improving credit

  • Minimize your debts
  • Abstain from applying for credit unnecessarily
  • Watch your credit card balances
  • Do not write off old debts that no longer exist
  • Pay bills on time
  • Use a calendar

Following the tips mentioned above will ensure that your credit score keeps improving over time, making your life a lot easier.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Individuals who recognize the significance of having a good credit score will work hard to uphold it from day one. Others, who might not consider it to be something important, would end up learning it the hard way. Whether a person is to build credit from scratch or working assiduously to reconstitute it after mistakes along the way, some tried, and true methods can have a positive impact on your credit. Here are some key factors that play an essential role in building a great credit score:

Build Credit the Right Way

Check out America's Best Bookkeepers Are you someone who is looking for a new home or a car? To avail any of those, you will need to first look at your credit ratings. Your credit score is a rating from 300 to 850, which highlights your apparent creditworthiness. The credit score considers many factors, containing the amount of debt, different debt sources, missed payments, and other key financial details.

Lenders and credit card companies heavily rely on your credit score to make important decisions. An inadequate credit score can shell the process of acquiring a loan. To build credit, you will have to make the right financial decisions one after another for a considerable duration of time as it takes years to build solid credentials. There are many possible ways to do that. However, it is essential to stay patient during the whole process and do not make instinctive decisions, instead evaluate the consequences of your every choice thoroughly. Here are a few ways to do it the right way. Check out America's Best Bookkeepers

Check credit report

A credit report is a record maintained by credit bureaus, which highlights your credit score. Three main bureaus keep a separate record, and their recorded scores might vary. You can check your score once a year for free, while if you want to check more often, you may need to pay a certain fee.

It is always a great idea to check your credit report if you are serious about building credit. Take a vigilant look at your credit rating to ensure that all information, such as your married name or a new address, is up to date. Any errors in the report must be disputed immediately so that it could be removed, which eventually will have a positive impact on your solvency.

Maintain immaculate payment history

The best way to build a high credit score is to pay your debts and bills on time. It seems like something pretty obvious, however, it’s easy to overlook, and many people end up with missed payments. Rather than relying on memory to make the payments, you must avail the automated payment options available at your bank for making certain important payments as it would significantly improve timely payments as well as your credit ratings.

Paying your bills and debts promptly is another way of building an impeccable credit score. Your student loans, mortgages, auto loans, utility bills, and all other relevant payments have to be paid within a specific deadline each month or as arranged. You must at all-time be aware of what you owe and make in-time payments one after another without any inconsistencies. It is one of the best ways to build credit in a short duration of time. Check out America's Best Bookkeepers

 

Uphold low credit utilization

A lower credit utilization ratio is another seamless way to maintain your creditworthiness. More debt means that your credit utilization ratio will be on the higher side. Usually, a ratio of 30% or lower is considered to be healthy for good credit, however, if you close down any old accounts or credit cards, it could hurt the ratio significantly, which ultimately will mean a negative impact on the credit score. This is because when you close old accounts, your allowed credit limit also decreases, which surges the percentage and hinders your efforts to build your credit score.

Do not open multiple accounts or credit cards at once

While one credit inquiry won’t affect your credit, more than one inquiry in a short period will do the opposite. The inquiries will show up on the credit report and lower the score. This kind of behavior is not considered normal by the creditors, and it hurts a person’s credibility. 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

KEY 1: Make a Budget

Like everything in life, the first thing is to make a plan. In this case, the plan is called a budget and consists of making two lists. In the first list, you put all the income you have each month, and in the other all the expenses.

Spend less: If you have to reduce expenses, the leisure section is usually the first injured, but there are more options. For example, perhaps you can find cheaper accommodations. Did someone say shared apartment?

Enter more: To supplement the money your parents give you, one option is to take a part-time job. See also all scholarship and study aid options.

 

KEY 2: Meet your Budget

Making a budget is easy, but respecting it is something else. You will have to resist the temptation to spend money on things that go beyond your budget however much you want.

At the beginning it is likely that the forecasts – especially the expenses – vary from what was expected. The important thing is to be aware of how much money you are spending each day, and to ensure that you do not exceed your income. It’s better to prevent than to cure!

 

KEY 3: Protect your Money

You will need somewhere to keep the money you receive until you spend it. The best place is the bank. The ideal is to have branches both where your parents live and where you are going to study.

When you open an account, the most convenient way to access your money is to get a debit card. It is possible that you can also ask for a credit card. It is important to understand the difference between the two.

Debit card:  When you pay with a debit card, or when you use it to withdraw money from an ATM, the amount is deducted immediately from your account. When your account is at zero, you cannot use the debit card.

Credit card: Credit cards allow you to continue buying even if you do not have money. When you buy, your account balance does not change because it is the bank that pays for you. This generates a debt with your bank that is usually settled at the end of each month. If there is not enough money in your account, you will pay high interest on that debt as long as it exists.

 

KEY 4: Organize!

Especially when you go out to study abroad, you will have periodic payments that you will have to remember: rent, electricity, telephone, etc. Some, like the telephone, you can auto-pay. That is, they will be deducted automatically from your bank account without you having to do anything. Others you will have to pay for ordering a bank transfer or paying the receipt at a bank branch.

It is very important to always pay on time. If you pay late or if you do not pay, it can damage your credit and make it harder for you to obtain credit cards, loans or mortgages in the future.

Enter the due dates of the different invoices in your calendar. Put the bills to pay in a folder in your file cabinet, and mark the due dates in your calendar so you do not forget.

 

 

KEY 5: Minimize your Expenses When you Can

 

  1. See all the free activities offered by your city for young people (concerts at parties, visits to museums …) and organize your leisure time around them. Leisure activities is where you usually spend much of the budget.

 

  1. Take advantage of all the discounts offered by the Youth Card for students and all offers for leisure. For example, go to the cinema on “Spectator’s Day”.

 

  1. Buy at the cheapest supermarkets. Identical products usually have a very different price depending on the store where you buy it.

 

  1. Second hand things. Think about what you need and you could buy secondhand. Many times you can get a textbook that costs you $54, for only $11 if you buy it used. It’s the same book, but it’s not new. For the money you save, it’s worth it!

 

  1. Save on transportation. Spending on transportation is very important for students. One way to reduce it is to use the monthly subscription for students. You can also go buy a car and share your gas expenses with other students and many places walking or cycling!

 

  1. Pay cash. You can better control what you spend if you take out money once a week and pay for everything in cash. So you can see exactly how much money you have left each week, and if you spend and spend everything, you just have to put up a few days before taking it out again.

 

  1. Before buying something, ask yourself if you really need it. Many of the purchases we make are made on impulse. You see some super-cute glasses and they are at a 50% discount, they are a bargain! But you already have 5 sunglasses, do you really need them?

 

  1. Make a list of what money you spend and on what. This way you will know where you put each penny and where to reduce expenses if you need it.
Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Stacks of coins and dollar bills, blackboard in the shape of a house with text "CREDIT SCORE" on wooden background. Business and Financial concept
Credit scores and credit reports are a reflection of how well or poorly you have managed your finances. If your credit report is showing negative information, it becomes critical for you to get rid of any unpaid debt. Otherwise, you may be charged with an exuberant amount of interest. If your credit report is showing bad reviews of your financial behavior, it will be difficult for you to obtain credit from other creditors. You may still get some credit, if and only if you collateralize it with a property or an asset. But, if you don’t own any valuable assets to use as collateral, you will not be eligible to get any form of credit which leads to a worse financial situation.

In order to get rid of bad credit scores, the only option you are left with is to start rebuilding your credit. Improving your credit score will help you get approved for loans or credit cards and, as a result, you will be rewarded with better interest rates. A bad credit score is one that is equal to or below 619 per the FICO score. Follow the mentioned steps below to get your credit score back on track.

Review your Credit Report

Make sure to review your credit file so that you know your financial position. By doing so, you will get a better idea of what points need improvement. Do you have late or missing payments? Is your credit file showing that you have a higher rate of debt-utilization? Reviewing such information will help you formulate a plan on where to start in order to improve your credit score. You also need to check your scores to know whether there are any errors or inaccurate payment details that are present without your knowledge. If yes, then dispute the problem and get those debts removed, which will automatically improve your score. In case of any dispute, FTC offers some great rewards which will help you rebuild your credit score.

Catch your Payments

Your payment history has a major effect on your credit report. If you fail to meet your payment deadlines, it will not be possible to improve your credit score. In fact, you will only be making it much worse. If you are finding it difficult to make your payments on time, you should contacting your creditors in order to get a more suitable payment plan. Make sure to be up-front when contacting your creditors and explain your whole scenario. Let them know that you still want to pay for your responsibilities. You can also ask for services from a credit counseling agency to make a proper payment plan.

Pay your Bills on Time

You can slowly rebuild your credit by paying your bills on time. This also includes paying non-credit card bills such as utility, phone, internet, etc. Late rent and missed utility payments are reported directly to credit bureaus. Payment history helps you to establish a reliable pattern in order to improve your score. Make sure that you are not falling into the bad habit of making late payments. If you have the option to make automatic payments from your bank account, utilize this so as to not miss any more future payments.

Avoid Closing Credit Card Accounts

Try to avoid closing your credit card accounts, whether you use them or not. The longer the history of your credit, the better it is for your score. However, if you are far behind on your payment deadlines, the only option you are left with is to get a payment plan. A payment plan is required to cancel your credit card account. But, make sure to track the history of your credit score in order to rebuild it.

Pay Down Debt

Credit utilization is another factor to consider in order to improve your credit score. Credit utilization is a way to measure how much debt you have and it is expressed as a fraction of the available credit that you use. For instance, you have an available credit of $10,000 and you only use $7,500; the amount of your credit utilization is 75%. You need to make a plan to pay off your debt more rapidly by using the approach of credit utilization. Reducing your debt will help you to improve your credit score.


Check out America's Best Bookkeepers


About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Bad credit word on grey background
Everyone isn’t a master at banking, bookkeeping, accounting, and economics. We can all make mistakes that hurt our credit scores and ratings, without even knowing it. Here is a guide to what mistakes you might be making, in order for you to improve your credit score.

1. Closing Old Credit Cards

Once you’ve paid off a credit card bill entirely, it is tempting to cancel the card to avoid getting another big bill again. Many people choose to close their accounts like this but what they don’t know is that they are actually hurting their own credit rating. This is because closing a card causes you to have lower available credit and available credit, along with the history of credit cards owned, both affect your credit rating. It is a much better decision to keep an old credit card open and avoid using it.

2. Maxing out Credit Cards before Bankruptcy

When considering filing bankruptcy, many people find it tempting to put extra expenses on their credit cards, anticipating that the debt incurred in those expenses would be wiped out when filing bankruptcy. However, upon seeing that someone maxed out their credit cards right before bankruptcy, creditors can and will take measures against your bankruptcy in court. This can also lead to a judge rejecting your petition for bankruptcy, causing a much bigger financial crisis.

3. Applying for Gas Station and Department Store Cards 

It may sound really smart to have all of your gas expenses on one card and all grocery related expenses on the bill of another credit card. Unbeknownst to consumers is the fact that these cards come with extremely high interest rates. It is much better to go for Visa or MasterCard credit cards which have much lower interest rates. Moreover, having several accounts will adversely affect your credit score. Therefore, only apply for an additional credit account when you really need it. 

4. Cosigning for Someone

It isn’t easy to decline a request from someone close to you to cosign for him/her on any kind of loan. However, it isn’t commonly known that cosigning can result in pretty bad consequences for someone’s credit rating. Not only is your credit score under threat, you might even be liable to pay the loan if the person you cosigned with fails to pay. 

5. Sharing Personal Details

Calls asking for sensitive and private information such as credit card numbers or your social security number are scams looking to target vulnerable groups (such as the elderly). Calls like these are usually from criminals trying to use your personal information to steal your money. In the case that you ever fall victim to identity theft, it is best to report it to the police department and the Federal Trade Commission. Criminal activities through your card can badly hurt your credit score.

6. Accepting Offers for New Credit Cards

Offers from credit card companies are rampant. According to statistics, there are billions of offers sent out by companies every year. Accepting these offers is neither a compulsion nor a wise decision. The solution is just to say no if you are ever targeted in a sales pitch. Ask to be removed from telemarketing lists and reject any offers from mortgage and credit card companies coming via email and phone. More credit means more hits taken to your credit rating. Accepting tempting offers can hurt your financial position through loans that take a lifetime to mature or plans that involve high interest rates.

7. Ignoring Credit Reports

It is important for you to check credit reports at least once every year if you want to maintain a good credit score. Sometimes, a once a year check might not be enough so you should keep a routine check on how you use your credit card. If you are only making minimum payments, missing out on payments, or not thinking about how you will pay your bills when you are charging your card, you should halt your credit card use and seek professional help from a credit counseling nonprofit agency.

8. Opting for Credit Repair Schemes

Many people who go through a personal crisis such as bankruptcy, foreclosure, or divorce end up with a bad credit rating. Falling for a credit repair scheme offering to quickly fix your credit score sounds like and is too good to be true. It is essential for you to be wary of firms that promise to fix your credit standing in order to avoid paying a high fee upfront and being subject to multiple hidden charges.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Bad credit word on grey background
Everyone isn’t a master at banking, bookkeeping, accounting, and economics. We can all make mistakes that hurt our credit scores and ratings, without even knowing it. Here is a guide to what mistakes you might be making, in order for you to improve your credit score.

1. Closing Old Credit Cards

Once you’ve paid off a credit card bill entirely, it is tempting to cancel the card to avoid getting another big bill again. Many people choose to close their accounts like this but what they don’t know is that they are actually hurting their own credit rating. This is because closing a card causes you to have lower available credit and available credit, along with the history of credit cards owned, both affect your credit rating. It is a much better decision to keep an old credit card open and avoid using it.

2. Maxing out Credit Cards before Bankruptcy

When considering filing bankruptcy, many people find it tempting to put extra expenses on their credit cards, anticipating that the debt incurred in those expenses would be wiped out when filing bankruptcy. However, upon seeing that someone maxed out their credit cards right before bankruptcy, creditors can and will take measures against your bankruptcy in court. This can also lead to a judge rejecting your petition for bankruptcy, causing a much bigger financial crisis.

3. Applying for Gas Station and Department Store Cards 

It may sound really smart to have all of your gas expenses on one card and all grocery related expenses on the bill of another credit card. Unbeknownst to consumers is the fact that these cards come with extremely high interest rates. It is much better to go for Visa or MasterCard credit cards which have much lower interest rates. Moreover, having several accounts will adversely affect your credit score. Therefore, only apply for an additional credit account when you really need it. 

4. Cosigning for Someone

It isn’t easy to decline a request from someone close to you to cosign for him/her on any kind of loan. However, it isn’t commonly known that cosigning can result in pretty bad consequences for someone’s credit rating. Not only is your credit score under threat, you might even be liable to pay the loan if the person you cosigned with fails to pay. 

5. Sharing Personal Details

Calls asking for sensitive and private information such as credit card numbers or your social security number are scams looking to target vulnerable groups (such as the elderly). Calls like these are usually from criminals trying to use your personal information to steal your money. In the case that you ever fall victim to identity theft, it is best to report it to the police department and the Federal Trade Commission. Criminal activities through your card can badly hurt your credit score.

6. Accepting Offers for New Credit Cards

Offers from credit card companies are rampant. According to statistics, there are billions of offers sent out by companies every year. Accepting these offers is neither a compulsion nor a wise decision. The solution is just to say no if you are ever targeted in a sales pitch. Ask to be removed from telemarketing lists and reject any offers from mortgage and credit card companies coming via email and phone. More credit means more hits taken to your credit rating. Accepting tempting offers can hurt your financial position through loans that take a lifetime to mature or plans that involve high interest rates.

7. Ignoring Credit Reports

It is important for you to check credit reports at least once every year if you want to maintain a good credit score. Sometimes, a once a year check might not be enough so you should keep a routine check on how you use your credit card. If you are only making minimum payments, missing out on payments, or not thinking about how you will pay your bills when you are charging your card, you should halt your credit card use and seek professional help from a credit counseling nonprofit agency.

8. Opting for Credit Repair Schemes

Many people who go through a personal crisis such as bankruptcy, foreclosure, or divorce end up with a bad credit rating. Falling for a credit repair scheme offering to quickly fix your credit score sounds like and is too good to be true. It is essential for you to be wary of firms that promise to fix your credit standing in order to avoid paying a high fee upfront and being subject to multiple hidden charges.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Bad Credit vs Good Credit sign
A healthy credit score is of paramount importance if you want to be eligible for future loans. Sustaining a decent credit score is not a far fetched delusion given you manage your finances astutely. Many things can hurt your credit, therefore, handle your credit responsibly and keep it at an ideal level. A few simple mistakes can ruin the possibility of acquiring future credit and greatly harm your financial history.

A few credit score slayers are hard to dodge such as defaulting a mortgage payment because of joblessness or reaching the limit on your credit cards because you are flooded with medical bills. However, numerous credit gaffes are merely due to inattention and can easily be eluded.

Credit Mistakes that Hurt Credit and Financial History

Defaulting on your Bill Payments

If you are uninformed of payment deadlines or unintentionally default on a payment, it can significantly hamper your credit score. Even if you are not reported by the bank to the IRS, it will charge you a substantial penalty that can really hurt your financial history.

Similarly, late credit card expenses can cost you heavy fines. Therefore, it is vital for you to make the due payments within the given time period. To avoid mistakes that can hurt your credit, use automated payment plans offered by banks and other institutions. This will ensure that the minimum amount is paid within the due date and you will have enough time to make the remaining payment.

Failure to Rank Payments According to their Significance

Prioritizing your debt payments is an indispensable component of maintaining a praiseworthy credit score. Most people typically rank their larger loan payments, such as personal loans and mortgages, over their credit card loans, which is the right thing to do. Nonpayment of bigger loans can cause grave concerns for your financial history than simply defaulting on a credit card payment.

Failing to pay your credit card payment will cost you only 1%-2% of the balance. However, do not take this rule for granted. Contingent on the payment amount, you must prioritize the payments.  Some credit card payments should be paid off right away as they are compounded and, if you let them grow for a while, they will come back to hurt your credit pretty badly. Therefore, rank your payments according to the severity of the situation.

Not Checking Credit Report Regularly

Scrutinizing your reports for inconsistencies can seem to be a wearisome task, but it should be performed regularly. There is always a chance of having an item on your report that is charged by mistake or that someone is misusing your credit card information. Checking your credit report regularly will ensure that you find these errors and report them before you miss the deadline and nothing can be done.

You have up to 60 days to dispute these charges and, once the time limit is exceeded, there is no other way. Nevertheless, charges connected to deceitful actions might permit you an extended duration to dispute a charge. Failure to check your credit report can hurt your credit as well as dampen your financial history significantly.  

Terminating Old Credit Card Accounts

You may be tempted to close an old credit card account that has not been used in years. However, unless there is a high annual fee associated with it, it might not be the best course of action. Closing an old credit card account will ominously hurt your credit, which will eventually mean that you become eligible for a lesser credit. Chiefly, it disturbs your credit utilization ratio that is an important element of measuring your credit score.

Terminating your oldest accounts with a financial history of on-time payments can hurt your credit, rather than improve it. Lenders like to see credit accounts that have a solid payment reputation and finishing the account would mean that it is ultimately written off. Instead of influencing your score positively, it makes a major dent in it.

Paying your Tax Bill with a Credit Card

If you don’t pay your federal taxes, the IRS has the authority to levy all of your assets, seize tax refunds, or put a lien against your owned properties. Even with all of those potential hazards, you must never be convinced to pay off the tax via your credit card. There is an interchange fee that has to be paid if you choose this option. The percentage ranges from about 2% to 4% of the total payable amount. Adding that to, an additional 12% – 18% has to be paid to the bank and you will end up with a mind-boggling figure. If unpaid, it will hurt your credit and financial history. Work out a plan with the IRS if you are in this situation and set a payment plan that is adjusted to your needs.



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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

improve credit score - Complete Controller

Improving your credit score is among the most valuable investments you can make in your financial career. Your credit score will determine whether you are eligible for a student loan, auto loan, and mortgage or business loan. Your credit score is also an essential factor when you apply for insurance, rent, or even choose to buy a cell phone. You can see the utility of having a good credit score almost everywhere. However, to improve your credit, you will have to take some of these measures. Check out America's Best Bookkeepers

Track Credit Reports for Accuracy

Because every lender associates the risk of lending a loan with a credit score, you must keep an eye on it. Credit reports are generated separately for each individual and used as a common way to measure risk. Three major credit bureaus maintain three separate statements for your credit score. Your credit score from one bureau may differ from another, and there are some inaccuracies. Check all credit reports at least once a year to file for discrepancies if there are any.

Develop a Financial Track Record to Improve your Credit

You have a financial history and a specific credit score assigned to your name. However, to improve upon that, you must establish a reliable and responsible financial track record. Whether you have paid off previous payments on time or maintained an old credit card account, everything will improve your credit. Older credit card accounts are usually a good sign as they show financial discipline on your behalf and, if you have made all payments in due time, your credit score will already be on the higher side. Check out America's Best Bookkeepers

Do not Open Multiple Credit Cards at one Time

One way to keep a good credit score is to keep a stable and consistent track record without anomalies. If you open or close multiple credit cards or other accounts, it may result in a hard inquiry on your credit report. This kind of behavior is not considered standard. The point is not to make impulsive financial decisions, which can make it hard for you to improve your credit further.

Pay Bills on Time

Paying off your bills in due time is a significant contributor to a positive credit score. All sorts of utility bills, loan payments, and student loans make up most of your bills. Recent payments are weighed more on your credit score. Even if you have missed a payment in the past, you can override it by making all of your most recent payments. Never miss a complete payment because it can stay on your credit report for seven years. Even if you have a small amount at hand, make sure you pay something.

To improve your credit and prevent missing payments, enroll yourself in an automatic payment plan with your service provider. There are also specific incentives for students to enroll in auto payments as they pay a lower interest rate on balance. Check out America's Best Bookkeepers

Avoid Constantly Switching Employers

Justifiably, this isn’t always possible. However, if you have the option and ability to retain a specific job, it is wise to seek good credit. Lenders like to see consistency in employment as steady income means that you have a higher chance of succeeding with a payment. Retaining the same employer for five or more years will significantly improve your chances with lenders. Of course, this doesn’t mean that, if you don’t like your current job, you should stay with it to improve your credit. It is essential to remember that this increases your credibility among lenders and shows positively on your credit report.

Frequent residential changes and having judgments filed against you in court would seriously harm your credit score. For businesses, maintaining comprehensive bookkeeping records improves your credit score.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers