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Young woman just found out the best credit card offer.

Credit Card Offers You Should Think Twice About Taking

By | Credit Cards

When you’ve embarked on the journey to build or improve your credit, choosing the right credit cards is nearly as important as paying your bill on time. Ideally, your credit card should offer low interest or APR (a minimal or nonexistent annual fee), and rewards or other incentives that fit in with your lifestyle. Unfortunately, credit card companies often use misleading language to steer unsuspecting consumers into signing up for credit card offers that do not actually help credit. As you sift through the next stack of credit card offers in your mailbox, make sure you take the time to review the fine print hiding underneath the colorful attention-grabbing headlines and lofty promises. There are certain credit card offers to think twice about taking. We’ll give you the lowdown on the most glaring offenders, so you can separate the good credit card offers from the not-so-good and downright harmful ones.

Tricky Bonus Conditions

Credit card companies count on generous welcome offers to entice new customers into signing up. The problem? If the user does not meet certain conditions — such as never holding a card from that company before — the company reserves the right to deny the bonus. What that means: Think twice before you take a credit card welcome bonus offer. You may not qualify for the offer, based on any other accounts you have ever opened with that issuer. And even if you do qualify now, the card issuer could revoke your eligibility for several reasons. Your best bet is to call up the card issuer and confirm the terms and conditions of the offer, as well as your eligibility. You will also want to hold onto the documentation setting forth the credit card offer guidelines.

Store Credit Cards

Store credit cards effectively solicit consumers with tempting offers, such as 10% or 20% discounts on purchases or the chance to earn store credit. Think about the timing of the offer — right as you are about to drop a significant amount of cash, and it’s likely when you do not have the time to carefully review the rates and the terms you are accepting. Most people only find out about the excessive interest rates after they receive the first bill a month or two later. The average APR on a store credit card can reach around 22.99%. If you do not pay the balance every month, the interest you’ll rack up will easily cancel out any of the benefits.

Low-Rate Intro Offers

Introductory offers are another example of a credit card offer you should think twice about taking. Some cards lure you in with the promise of a low-interest rate during the introductory period — a common offer for cards geared toward appliance or furniture purchases. If you fail to read the fine print, you will not find out when the intro period expires — and the rate that will then take effect. Many people are shocked to find their rates jump exponentially after the intro period. To add insult to injury, the interest usually starts accruing at the time of purchase. If you have not paid off the debt during the intro period, the interest could be charged retroactively at the higher rate.

Rewards Cards

The right kind of rewards card pays off in dividends, allowing you to earn points that can be later redeemed for travel, other high-ticket items, or cash back on the items you purchase the most. However, remember that some rewards cards can come with a hefty price tag in the form of high-interest rates or annual fees. Before you commit to a card with alluring rewards, make sure the card actually gels with your lifestyle — and doesn’t bring with it any exorbitant fees. In addition, be prepared to pay off the balance every month, or the amount you pay in interest will offset the rewards. Think twice about taking a credit card offer that sounds too good to be true.

The best kind of credit card offer can set you up for a healthier credit score. While you are shopping around for the best offer to improve your credit score, check out the rest of the services we can offer you at Ovation Credit. Our team of professionals can whip your credit report into shape quickly and efficiently. Find out how we can help you today with a free consultation here.

Man decides to rent and fix his credit with rental reporting

Rental Reporting Services: How They Can Help You

By | Credit Repair

As anyone who has ever signed a lease knows, renting an apartment requires on-time, regular monthly payments. But unlike mortgages and car loans, those payments rarely appear on a credit report and won’t lift your credit score — that is, unless you enlist the help of rental reporting services. These services report your rental payments to some or all of the major credit agencies, for a fee that could range from a few dollars to up to $100 per month. Although more unconventional than the typical methods of building credit — like installment loans and credit cards — rental reporting services are nonetheless growing in popularity.

There are a number of different rental reporting services available, and the fees and enrollment procedures vary for each one. In some cases, you as the renter will be the applicant; other services may require your landlord or property manager to sign up. Whichever type of service you choose, make sure the benefits justify the additional expense. Here are some of the top ways a rental reporting service can help you.

It Boosts Your Credit Profile

You won’t see as much change to your credit score as you would by opening a credit card and making regular payments on it. Even still, when you’re trying to improve your credit standing, even just a few extra points here and there will help your cause — and it is certainly possible to enhance your credit rating with a pattern of on-time rental payments. In turn, these records may allow you to qualify for credit card offers or loans that might otherwise be outside your reach.

It Builds a Longer History

The length of your credit history is one critical factor in your credit score calculation. If your history is particularly scant, you may want to consider a service that offers to certify past rental payments. That’ll provide a longer history of payments — and the longer and more positive your history, the more your credit score stands to benefit.

Change Can Happen Fairly Quickly

Once you sign on with a rental reporting service, you can generally expect to see your rental payments start showing up on your credit report within a couple of months. Some services may take longer, such as ClearNow, which requires four on-time payments before it’ll begin submitting them to the credit bureaus. As far as the credit-building process is concerned, that is a fairly swift turnaround. If you have a specific time-sensitive goal in mind, such as qualifying for a loan, this can help you build a positive history in your credit report in a relatively short amount of time.

It Enhances Future Renting Prospects

If you rent in the future, you will be able to easily provide a record of documented, timely payments to potential landlords. References from other landlords can be helpful, but concrete evidence of on-time payments will most definitely give you an edge — even if your credit history is relatively limited.

It Encourages On-time Payments

If you know that a rental reporting service is going to send your payments to the credit agency, you’re much less likely to slack off on payments. Keep in mind that you’ll need to be even more vigilant than usual that you’re paying on time. Some services facilitate the payment process by offering to deduct the payments automatically from your bank account. That’s one benefit worth taking up to your landlord — who might even decide to take on the cost of the rent reporting service if it will guarantee timely electronic deposits.

The Downside

Although using a rental reporting service will get your rent payments to appear on your credit report, they might not be calculated as part of your credit score. Not all credit scoring models, especially the more established, older ones, will consider rent payments, even those reported to the major bureaus. However, some credit cards do cater to those whose rental history is listed on their credit report, so it’s worth doing your research to find the best offers available. Cost of the service is another concern. Your best bet is to seek out a budget-friendly option that reports to all of the credit bureaus — and will certify past payments, if possible — which gives you the best chance of increasing your score.

If you’re weighing whether to sign up with a rental reporting service or you’re looking for an additional way to boost your credit profile, you already know that every little bit helps. At Ovation Credit, we specialize in helping consumers target the inaccuracies that may be dragging down their credit score. Check out our free consultation, and with our assistance, you may be able to dispute some of these errors and improve your score.

Collections can harm your credit score.

Recovering Your Credit Score After a Collection Item

By | Collections

An account that lands in collections is typically the result of a series of missed payments. It’s also one of the quickest ways to sink your credit score. After all, much of the criteria that determines your credit score depends on your payment history — and even one collection account could send your score into free fall. Unfortunately, the history of your collection item will remain on your credit report for seven years after the date of the first missed payment, affecting your loan approvals and interest rates.

The effect on your credit score will vary, depending on the amount of the account in question and the level of your score when the collection occurred. A low-dollar collection item will likely affect your overall score much less than a larger one. Generally, the higher your score when the collection takes place, the more points you’ll tend to lose.

Although you could wait seven years for the collection item to fall off your report, it’s better to be proactive and approach the problem head-on. With hard work and persistence, you can reverse some of the damage done to your credit score. Read on for our top four tips for recovering your credit score after you have an account transferred to collections.

1. Focus on the Positive Information

The negativity on your credit report won’t disappear overnight, but you can lessen the damage by boosting the more positive elements of your score. Payment history comprises as much as 35 percent of your total credit score. Resolve to keep all of your credit card and loan payments current — and make sure that you keep those “positive” accounts open, even when you aren’t actively using them. The length of your credit history is also a substantial factor in your credit score, so the older and more timely paid accounts you have on your credit record, the better. Gradually, these critical, everyday efforts will result in a steadily improving score.

2. Open Up New Accounts

Another way of tilting the balance in your favor is to open up new accounts, which you can in turn use to build up some more positive marks. A secured credit card is an excellent option if you’re trying to rebuild credit because it offers minimal risk to both you and the card issuer — you can only “charge” what you’ve agreed to deposit into the account. When you pay off the new accounts every month, your score will rise — and the collection item will gradually factor less and less in the overall calculation of your credit score. Just make sure that you aren’t taking on too much too soon — the key is to focus on one or two new accounts that you will easily be able to pay on time every month.

3. Pay the Outstanding Balance

Unless you’re dealing with a very understanding collection agency, you probably won’t be able to get the collection account deleted from your credit report. Still, it doesn’t hurt to ask. In a “pay for delete” letter, as it’s known in the business, you can offer to pay the collection account in full in exchange for its removal from your credit report. Worst-case scenario? The agency turns you down and the account remains on your report, but potential lenders will still be able to see that you at least paid the balance due on the account.

4. Write a Goodwill Letter

Another possibility is to pen a letter to the collection agency, detailing the financial hardships that led to your account landing in collections. You will want to be specific about the particular circumstances, as well as the steps you have taken to regain your financial footing. Wrap up the letter with a request that the collection agency consider your special circumstances and delete the account from your credit report. If you do not hear anything within a few weeks, follow up with a phone call. Sometimes, persistence can pay off.

It’s important to also consider whether the account transferred to collections has been reported correctly. If it wasn’t — or the collection item belongs to someone else — you may have an excellent case for disputing that item with the credit bureaus. The pros at Ovation Credit would be happy to review your situation and, if necessary, file a dispute on your behalf. Reach out to our team and learn more about how we help consumers like you.

Women trying to repair credit

This Change Could Come to Your Credit Report — and Boost Your Credit Score

By | Credit Repair

This Change Could Come to Your Credit Report — and Boost Your Credit Score

Reliably paying your cell phone and utility bills month after month never used to mean anything to your credit score. The same is true for maintaining a healthy bank account. But thanks to groundbreaking credit report changes that could be on their way as early as this year, your financial efforts outside of the credit realm could soon be rewarded. FICO and Experian recently announced plans to launch two unique new programs that could instantly lift your credit score — likely without changing anything that you are already doing. Here’s what you need to know about the programs and how these credit report changes could affect your credit health.

UltraFICO: The Basics

Fair Isaac Corp, the architect behind FICO scores, is expected to roll out a pilot program this year called UltraFICO. With UltraFICO, you can opt in to allow access to basic information about your bank account — such as average balances, age of accounts, and level of activity — to be factored into your credit score calculation. The information would be used to demonstrate how well you manage your bills and whether you have accumulated any savings. When you opt in to share your personal banking information, the new credit scoring model will evaluate your bank account on a one-time basis. The data from your account will then be calculated alongside the other factors that comprise a credit score. The other criteria that decide your score, such as payment history and age of accounts, will still be considered. FICO will just have an additional piece to evaluate.

Experian Boost: The Basics

Major credit bureau Experian is also set to usher in a pilot program of its own, titled Experian Boost, later this year. As with UltraFICO, consumers will be able to opt in to share additional information — but this time, the only data Experian will pull is the payment history for cell phone and utility bills. True to the program’s name, the focus here accentuates the positive. If you miss a payment or two, this negative information will not show up on your credit report. There is a limit, however. If you lapse on payments for three months, Experian will no longer pull the information from your phone or utility bill — which means that any increase you had seen from the data would disappear.

The Positive: Better Credit Opportunities

If your credit history lacks some positive entries, these credit report changes will likely prove particularly helpful. After all, paying a cell phone or utility bill every month, or maintaining a healthy bank account, can speak volumes about your financial health — perhaps even more than the value of your current credit score. You’ll stand a much better chance of qualifying for loans and credit card terms from lenders that might have snubbed your application in the past. The credit report changes could provide some useful evidence of your ability to manage ongoing bill payments, which could help a lender decide whether to approve you for a loan.

The Negative: Exercise Caution

Either of these programs could easily bump up your credit score, boosting your loan approval odds and saving you thousands in interest payments every year. Having a higher credit score puts you in position for higher loans with more favorable terms, and even more tantalizing credit card offers. Just make sure you don’t use the higher credit score as an excuse to apply for loans you cannot afford. A higher credit score can expose you to more opportunities for loans and credit cards — but if used improperly, you could end up saddled with excessive debt. And the flip side of these programs is that they are specific to a certain credit-scoring model and a credit bureau. If a lender chooses to work with a different scoring model or credit bureau, you won’t reap the benefits of these programs.

Another Helping Hand

If credit-building is among your 2019 resolutions, these credit report changes could prove to be a very positive development. While you wait for the programs to launch to the general public later this year, take some time

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