credit card Archives | Ovation Credit Repair Services

Build, Grow & Repair Credit

By | Your Credit

Whether you’re new to having credit or you’ve had credit cards for years, growing your credit, protecting it and repairing your credit takes work. This guide can help you manage all of your debts and improve your credit score.

Topics in This Guide:

Build or Rebuild Credit at Any Age:

  • Access and Review Your Credit Reports
  • How High Balances Affect Your Credit
  • How Long Does it Take to Repair Credit?
  • How to Avoid Paying Credit Card Interest
  • How to Improve My Credit Score
  • How to Repair Credit Mistakes
  • How to Repair Credit When You Don’t Have a Job
  • Identity Theft and Your Credit
  • Using Your Tax Refund to Pay Off Credit Cards

Credit and Mortgages/Refinancing a Home:

  • How to Pick the Best Type of Mortgage
  • Refinancing a Home and How it Affects Your Credit

Let’s begin!

Build or Rebuild Credit at Any Age

If you’re in college, you might ask yourself, am I “too young” to start building credit? The best time for credit-building is when you have a reliable job and pay your bills on time every month.

Your credit report is the history of your credit payments, and items stay on your reports for up to 10 years, or longer for student loans. Typically, you’ll have credit cards, lines of credit, student loans and installment loans. To build credit, use credit moderately and pay the balances quickly.

Access and Review Your Credit Reports

You can receive a free credit report annually from AnnualCreditReport.com using a secure, private computer. You need to enter your social-security number, address and date of birth. Then you can view credit reports from Experian, TransUnion and Equifax and make copies of your report. Remember never to save it on a public computer.

Familiarize yourself with your credit report. It shows accounts that are open, closed, paid-off and in collections. It also gives your payment dates. It may include student loans, installment loans, bankruptcies or other accounts.

Tip: You can access a free credit report from AnnualCreditReport.com.

How High Balances Affect Your Credit

When you carry high debts, you can damage your credit score even if you pay minimum balances on time. High balances let creditors know that you might be struggling to make payments.

How Long Does it Take to Repair Credit?

To repair your credit, businesses have 30 to 45 days to respond to disputes. After that, disputed items like collection accounts are removable.

How to Avoid Paying Credit Card Interest

If you pay your full balance each month, then you won’t have to pay interest. Always pay on time to avoid late fees.

How to Improve My Credit Score

Your credit-card payment history makes up 35 percent of your credit score. To improve your score, keep your balances low. Pay on time and never let accounts go into collections or charge-offs that are 180-days past due. If you fall behind, then make the payment as soon as you can.

How to Repair Credit Mistakes

Maybe you’ve done a search online for “how to fix my credit.” First, review your credit reports and flag anything that you don’t recognize or anything older than seven years. To dispute credit mistakes, select the option “dispute” when your credit report is open and give the reason. For example, maybe you don’t recognize the account, or it’s older than seven years.

Creditors have 30 to 45 days to respond, but you might hear back from them sooner. If they don’t respond, then you can often remove disputed items from your account’s report.

How to Repair Credit When You Don’t Have a Job

If you’ve lost your job and fallen behind on payments, talk to the collection agencies about making smaller payments. You may be able to remove collection accounts older than seven years if you dispute them on your report. Never discuss bills older than seven years with collection agencies because any correspondence reopens the account.

For further help, check with Ovation Credit for credit-repair assistance.

Identity Theft and Your Credit

If you want to know how to dispute credit report charges you don’t recognize when you’re on a credit-report site viewing your report, then select the option to “dispute” on your screen and give further details.

If anyone has stolen your identity, then contact the credit-reporting bureau and your credit-card company. You may need to file a police report to block any further fraudulent transactions on your account. Having a company that monitors your credit is very beneficial to avoid situations like this.

Using Your Tax Refund to Pay off Credit Cards

Use tax refunds to pay off credit-card debts. The average refund is $3,000, and you’ll improve your credit score. With better credit, you can get lower interest rates.

Credit and Mortgages/Refinancing a Home

How to Pick the Best Type of Mortgage

To pick the best mortgage, talk to your bank about mortgage options. FHA mortgages or those by the United States Department of Veterans Affairs can be more-affordable options. U.S. Department of Agriculture mortgages and the first-time buyers program are also worth considering.

Refinancing a Home and How it Affects your Credit

Refinancing your mortgage is taking out a new loan to replace your current loan. People take this step to lock in lower interest rates. When banks run a credit report, it can lower your score slightly. If it’s only one inquiry, then it may not affect your credit that much.

Bottom Line

Credit cards often lead to debts and huge responsibilities. By paying your credit-card bills on time, you can have a good credit score and better interest rates for years to come!





5 Ways to Pay Off Credit Card Debt

By | Debt

Pay Off Credit Card Debt

Paying down credit card debt is one of the best methods for repairing credit and improving your credit score. Here are easy and painless ways you can pay off your credit card debt:

1. Pay More Than the Minimum

With most minimum payments, it can take years to pay off credit card debt. Paying the minimum will not only hurt your credit score, but it will cost you a ton of money in interest. If you can afford it, you should pay more than the minimum.

If you can’t afford to pay more than the minimum, keep in mind that as you pay the principal down, your minimum payment will go down as well. However, you should keep paying the same amount you were paying before in order to pay down your debt faster. Eventually, you will be able to pay more than the minimum and repair your credit.

2. Find Extra Money

If you can’t afford to pay more than the minimum payments, try and find extra money. You don’t have to get a second job to pay down debt. For example, if your minimum payment is $40, be conscious of the fact that only $40 more per month will double your payment. You may have extra money in your budget or you may be able to earn cash. Here are some tips:

  • Fill out surveys
  • Use apps like Ibotta to get cash back from shopping
  • Use coupons
  • Try a no-spend challenge
  • Reduce your spending by just $10 per week

3. Use the Snowball Method

For multiple credit cards, the best and simplest way to pay them off is to use the snowball method. With this strategy, you pay off the card with the lowest balance first. Then, you put the money you were using for that card toward the card with the next lowest balance, and so on. Here’s a step-by-step example:

  1. You have three cards. One has a balance of $300, the 2nd a balance of $1,000, and the 3rd has a balance of $1,500. You’re paying the minimum payments on all three, but you have an extra $50 you can use toward the debt.
  2. Take the extra $50 per month and apply it toward the 1st card; then, pay minimums on the others until they are paid off.
  3. Take the extra $50, the 1st card’s minimum and the 2nd card’s minimum, and apply to the 2nd card until it’s paid off. Continue paying the minimum on the 3rd card.
  4. Apply the $50, the 1st, 2nd and 3rd card’s minimum to the 3rd card until it’s paid off.

You will be debt-free relatively quickly without having to put a lot of money toward your credit cards.

4. Make the Most of Unexpected Cash

The fastest way to repair credit and pay off debt is to pretend extra money doesn’t exist. If you get a raise, bonus, overtime payment or cash gift at work, apply it toward your credit cards. You should budget as if overtime or bonuses don’t exist. That way, when you get the money you can use it to pay off debt or build savings.

5. Pay Twice

Some credit cards calculate interest based on average daily balance. If your credit card is one of them, remember that the easiest way to pay off the balance is to pay twice per month. Before you panic, you don’t need to pay twice the minimum payment each month. Instead, take your payment and divide by half. Pay that amount every two weeks. This will reduce your average daily balance, which will reduce your interest so you can pay off debt faster.

You can repair your credit score and pay off debt by following these strategies. Credit card debt may seem daunting, but you can unbury yourself and improve your credit.





Student Loan or Credit Card Debt Which Is Worse?

By | Debt, Uncategorized

Credit cards and student loans are two major debt lines plaguing American households today. It’s said that the average American family carries $16,061 in credit card debt and a whopping $49,042 in student loan debt.

The latter statistic is worth looking into further.

Student Loan and Credit Card Debt

How Your Student Loan Impacts Your Credit

Your student loan is as real as any credit card or loan on your credit file. It’s not anymore “forgiving” than any other type of installment debt. This means every delinquency will hurt your credit score.

The worst case scenario comes from defaulting on your student loan debts. This is something you absolutely want to avoid. It can send even the strongest credit scores down 100s of points. The road to recovery will be long, and the damage will stay on your credit report for seven years.

You can usually negotiate with your student loan provider. If you’re in financial distress, try to work out a payment plan for the near future. Even avoiding a delinquency entry on your file can save you an 80-point drop after your first 30 days of being delinquent.

Your student loan reports both good and bad. However, it’s the bad that does the most to your credit rating, while good efforts have little reward. You need to avoid the penalties to your FICO score to have a chance to repair your credit effectively.

How Credit Cards Differ from Student Loans

Credit cards are a type of “revolving” debt, which means there’s an open credit line at all times. You will be able to borrow up to your max amount so long as the minimum monthly interest payments are paid.

It’s imperative to stay up to date on your credit card debts. Defaulting will cause extensive damage to your credit. You can typically pay a very small payment to keep your card alive. Meanwhile, the minimum payment for your student loan might be a bit more difficult to sustain.

Your credit score’s second-biggest factor is your utilization rate. This is the amount of debt you carry versus the amount you’re able to borrow. The higher it is the worse it says about you as a borrower. You want to keep it low (below 30 percent) for as long as possible; your payment history is another calculation variable and it considers your previous utilization levels.

Pay Credit Cards or Student Loan First?

It’s quite the dilemma. Paying your student loan helps with offing a major outstanding debt. However, paying off your student loan will not impact your credit utilization rate for the better in any way.

If you have a substantial amount of credit card debt, it makes sense to tackle that first. Each $1,000 you knock down will have a bigger impact on our credit rating, but keep in mind if your student loan runs into default it will be all for nothing.

Your payment history still remains the number-one factor in your FICO score calculation. Thus, it’s a good idea to see how you can improve it. This would mean maintaining payments on your student loan while reducing other debts.

You want to use any extra cash to tackle your overall credit card debt. The goal is to bring your utilization rates down as much as you can. This can be done from accepting credit limit increases too – so long as you avoid using the newly available funds.

Using Tax Refunds to Pay Off Student Loans

You will not want to make the mistake of using your tax refund as a way to pay off your student loan. Everyone thinks it is hard to take care of, so using your taxes is a sensible way to get the debt under control.

The truth is, your student loan will not hurt your score if the debt remains on your balance sheet. Trouble only arises when you run delinquent or if you default the loan. This means you can leave this particular installment loan for last while focusing on paying off higher-interest debts.

You are endangering your creditworthiness by putting your tax refund to use to pay off your student loan. The large lump sum can go toward your credit cards and have a much greater impact. Remember, credit cards accrue interest month after month as you fail to pay them off; it won’t take long for your debts to pile up if these are left unchecked.


At the end of the day, the worst type of debt to carry is the one you fail to pay off. It’s important to prove you are a good, trustworthy borrow in every sense of the term. Therefore, you must maintain positive status with your accounts (including your student loan) even if you only pay the minimum.

If you ever feel unable to pay your student loan payments, consider one of the three payment plans they offer. You can arrange to pay as you earn, based on your income or contingent on a certain amount of generated income.

If you fail to come to a deal then missing your payment will result in a late payment entry on your credit report. The damage will be irreversible; now that you know what’s at stake, make sure you sort your debt repayments accordingly.





5 Biggest Credit Score Myths Debunked

By | Credit Scores

Credit Score Myth

Your credit score plays an important part in your life. Whether you realize it or not, that three-digit number can impact whether you are hired for a job, the interest rate on your credit card, and even your mortgage payment. Yet, around 40 percent of Americans never bother to check their credit ratings, and many people simply don’t understand how credit scores work.

Let’s put a stop to that. Here are five of the biggest credit score myths, and the truth behind the lies.

Credit Score Myth 1 -You Only Have One Credit Score

One of the biggest credit score myths is that each person only has one credit score. The reality could not be further from that misconception. The truth is that each credit reporting agency has its own method for calculating your credit rating, and many lenders have their own system, too.

There are three main credit reporting agencies — Equifax, Experian and TransUnion – but they aren’t the only ones in the game. There are lots of credit reporting agencies in the United States. Then, there are the companies like FICO and Beacon that have their own systems for figuring your credit score. The worst part is that, depending on the algorithm each one uses, your credit score could vary significantly.

Credit Score Myth 2 – The Fewer Credit Cards You Have the Better

Another popular credit score myth is that the fewer credit cards and loans you have, the higher your credit score will be. People, believing the lie, close their accounts and pay off loans early in an effort to boost their credit scores, but when the dust settles, their credit scores are often lower than they were before they closed those accounts.

The reason comes down to the amount you owe relative to the available credit you have. It is called credit utilization, and it has a major impact on your credit score. If you close your accounts, the amount of available credit you have also goes down and your credit utilization rate increases in response. In turn, your credit score takes an unnecessary hit. Ideally, you want to have a large amount of credit available and be using a small percentage of it.

Credit Score Myth 3 – Your Credit Score Is Affected by Your Income

The idea that your credit score is impacted by your income is a common myth, and it couldn’t be more false. Your credit score is calculated using many different factors. Whether you have paid late or missed a payment, how much you owe, your credit history, the number of new accounts you’ve opened, and the types of credit you carry all figure into your credit score to varying degrees. Income is not part of that picture.

While a creditor or lender may use your income in tandem with your credit score to make a decision about whether to grant your loan or allow you to open a credit card, if someone such as your insurance company or a potential employer runs your credit score, your income does not come into it. In fact, credit reporting agencies do not even have access to that information.

Credit Score Myth 4 – One Late Payment Isn’t a Big Deal

The mail gets lost. You misplace your statement. The dog eats your bill. Late payments happen. However, they have a bigger impact than you might expect. “Payment history is typically the single largest factor in a credit score,” explains Discover. Your payment history makes up about 35 percent of your credit score, and some places may weight it even higher – the penalty can be severe. According to Discover, “Missing one payment could wind up on your credit report for up to seven years. What’s more, in the short term, it can drop your score by more than 100 points.” That’s enough of a drop to cost you an opportunity or at least qualify you for a far less advantageous interest rate.

Credit Score Myth 5 – Your Credit Score Is Accurate

One of the most dangerous myths about your credit score is that it will always be accurate. After all, why check your credit score if you can’t change it? As it turns out, there are some pretty big reasons to keep an eye on your credit score.

According to a 2013 study by the Federal Trade Commission, “one in four consumers identified errors on their credit reports that might affect their credit scores,” and for around 5 percent of people, those errors were significant enough to result in paying higher interest rates. The FTC also found “slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report.”

Moreover, the study found that one out of 250 people had an error on their credit report that resulted in a change of over 100 points after the inaccuracy was corrected. It is for this reason that the government allows you to check your credit report from each major credit reporting agency once a year. It is also the reason that so many companies provide assistance in correcting credit report errors.

With this much misinformation out there, it can be hard to know what to do about your credit score. You need a trusted adviser who knows what goes into a credit score, as well as how to correct errors in your credit report. Ovation Credit Services can help you make sure your credit report is accurate and provide you with the guidance you need to improve your score and reach your financial goals. Contact us today for a free consultation.

10 Little-Known Benefits of a Better Credit Score

By | Credit Scores

Better Credit Score Ovation

There are many reasons why you want to make sure your credit score is as high as possible; it’s not just to ensure you can qualify for a credit card or mortgage. Take a look below at 10 little-known benefits of better credit scores that you’ll want to learn right now.

1. Moving Violations Don’t Hurt Your Credit Score as Much

It’s unfortunate, but a moving violation can cause your insurance premiums to go up. The amount of the increase ranges depending on the situation. Your risk level is also taken into consideration. A big part of this is your auto insurance score, which is almost the same as your basic FICO score.

So, you’ll find yourself in a much better situation after a moving violation if you have good credit. In fact, the amount your premiums could go up may be as much as $1,000 a month after a single violation. Yet, if your credit-based insurance score is strong enough, you might only see a smaller increase of $100 to $150 per month.

2. You Can Negotiate With Insurance Providers

Companies that offer auto and homeowner insurance typically use the credit-based insurance score to determine your risk level. If your score is strong, it’s possible to negotiate a better insurance premium.

Additionally, if you can prove your risk level isn’t as high as it seems, you may be able to improve your credit score, and your current insurer may reduce your premiums. If you are rejected, it doesn’t hurt to check whether other insurance companies are willing to offer more competitive rates.

3. Renting a Home Gets Less Difficult

A typical tenant screening process involves a credit check. The landlord or property manager might not care if your credit isn’t good. However, there are many that will use this as a quick way to deny your approval. Someone renting out a place is likely to see your good credit score as proof of your financial stability. Therefore, if you have excellent credit, you’ll get priority dibs for the rental properties you can afford.

4. Reward Cards Become a Lot More Rewarding

You can qualify for any reward credit card when you have excellent credit. This gives you the opportunity to earn cashback rewards on all the shopping you do. The best reward cards sometimes pay as much as 3 to 5 percent back on all your purchases. In the end, you could save thousands of dollars every year by taking advantage of rewards programs.

5. Signup Bonuses Get Better

It’s important to inspect all terms before you apply for a credit card. Picking one just for the signup bonus isn’t a good idea. However, sometimes having excellent credit can gain you access to incredible signup rewards. There are travel reward credit cards that pay especially well. In fact, some signup bonuses can be worth $1,000 or more.

We have a Credit Analyst Ready to Take Your Call Now.

  Free Credit Consultation

Take Advantage of this FREE offer.

6. Better Credit Score = Tier 1 Borrower

Many banks and lenders categorize borrowers by tier level. There are three tiers, which essentially put a borrower into one of three borrowing statuses. You’ll either be ranked as “Good”, “Better”, or “Best,” depending on your FICO score.

The cutoff depends on the company reviewing your file. Sometimes, you’ll need at least a 750 score, but on other occasions, you might require at least an 800 score. So, having as high of a credit rating as possible will ensure lenders consider you as a top tier borrower. This will result in optimal interest rates and a higher chance of approval.

7. Starting a Business Is Less of a Struggle

Most small businesses require a bit of startup capital. Without it, you have a much higher chance of experiencing failure. This is because there are many startup costs and scaling expenses you can face along the way.

Also, if your personal credit is excellent, your business creditworthiness will be sky high. This could mean that you can borrow as much as you need instead of getting capped at a few thousand dollars. If you like, all your monthly expenses and sudden purchases can go under one business card, as well.

8. Skipping the Paperwork

You are pre-approved for many credit opportunities. This ensures less paperwork when you do want a new credit card or loan of any sort. You also get to enjoy shorter wait times when you apply for new credit.

9. Qualifying for Unique Financing Options

There are certain types of financing that are not available to the average borrower. For example, you need to have excellent credit to qualify for a vacation home rental unless you make a a sizable down payment.

10. Real Estate Investments Become Trivial

Now, you have easy entry into the real estate market. You can qualify for mortgages with little down. Your interest rate is super low, so your holding costs are kept to a minimum. Sometimes, you can even get into a great deal without making a down-payment. Then, it’s just a matter of getting renovations done, which you might be able to get cheap financing on, as well.

Increasing your credit score will do you and your family good. The key is to not use your financial strength for impulsive spending or unnecessary expenses. Heed this advice, and you can enjoy the financial gain behind your excellent credit status.

Surviving the Average American Credit Card Debt

By | Credit Cards

average-american-credit-card-debtOpen your wallet and no doubt there is more plastic in it than paper with pictures of presidents printed on the front. That means you’re the average credit-carrying American and more than likely are also carrying credit card debt.

While you aren’t alone, your indebtedness doesn’t exactly put you in an elite club.  The average American’s credit card debt has risen to an almost obscene level.  According to various reports published as recently as April 2014 by the Federal Reserve, every U.S. household owes an average of $7,115 in credit card debt.  However, the statistic is somewhat misleading because it’s calculated on every household, whether or not it has credit card debt.  The more critical stat to look at is households that keep credit card balances: Here the average soars to a shocking $15,252 a household.

If you feel like your credit card just blew a hole in your budget, you’re absolutely right; but it didn’t happen overnight.  The fact is that credit card debt averages have not dropped below $15,000 since before 2009.  More specifically, the national average reached $19,000 in January 2009 just after the market crashed and didn’t start to decline until October 2010 when it rested at around the $15,000 mark and has stayed there in the four years since.

Did our economy’s health improve that much?  Hardly.  In efforts to improve their bottom line, banks began to write off a huge amount of their non-collectible debt between 2009 – 2010.  It was faulty math at best; a sort of “If I can’t see it, it doesn’t exist” attitude.

The national economy may not be at its best, but that doesn’t mean you cannot be working toward your financial best.  Here are some tips to help you begin lowering your own credit card debt.

The Debt Snowball.  This is a simple concept that enables you to live comfortably while paying down your debt.  With this plan, widely promoted by economist Dave Ramsey, you choose one of your debts and pay as much money as you can toward it, paying down the total as quickly as possible.  In the meantime, you continue to pay the minimum monthly payment on your remaining debts, continuing the process until all debts are paid in full.

Limit unnecessary expenses.  Consider the non-essential factors in your life and remove them.  For instance, do you have a coffee maker at home but pay $6 for an Americano on the way to work every day?  How about a DVR in a bedroom that no one actually uses?  When you really consider it, you may find that there are many places where you can find a few extra dollars to save.

Live a cash-only lifestyle.  Put away your credit cards.  You don’t have to destroy them because you may need them for an emergency.  Just lock them up somewhere safe where they are inconvenient to access. This way you can focus more on reducing your debt without adding to it.

If you have considered all of your ways to save, implemented the debt snowball, but are still in need of some help, it might be time to speak to a debt specialist, such as Ovation.  Getting a little extra information to help you find ways to get out of debt or make sense of household budgeting can be a terrific tool for building a financial future that works for you. Give us a call today for a free consultation.

7 Simple Ways to Protect Yourself from Credit Card Fraud

By | Credit Cards, Credit Repair, Credit Scores

credit-card-fraud-protectionHistorically, 13 is considered an unlucky number. Add a few zeroes behind it, and you’re closer to the more than 13 million Americans who easily fall prey to identity theft each year. Why is it so easy? As consumers, we make it easy for identity thieves to access our records by frivolously throwing around our information as if it were as unimportant as a piece of blank paper. Let’s look at how to prevent becoming part of the unfortunate 13 million.

Protect your credit card numbers

Your numbers are the gateway between you and fraudulent activity. When reciting credit card numbers over the phone, take care to only provide them if you initiated the call. If someone calls and asks for credit card numbers, ask for their name and extension, then disconnect. You can call the primary phone number for the business and ask to be routed to that person.

Take care with your actual card, as well. Be sure to tuck it away in your wallet or purse after making an in-person purchase. Call the bank or credit card company immediately if you find you have left the card behind.

Don’t store your online passwords

Between work and home, we typically have a large number of user names and passwords. Every site has a “Remember Me” feature, and some browsers offer to remember passwords, too. This makes it easy for identity thieves to slip in and steal pieces of information. Avoid saving passwords; that applies to every website, from banking and email sites to those of your social media and favorite shopping destinations.

Opt in for text alerts

Many banks and credit card companies now offer text alerts as an option for their clients. You can opt in to receive an alert when a purchase is made with your card. In this manner, you are aware when there is activity on your card and can be well informed of fraudulent activity.

Check your credit card statement carefully

Review your statement every month. Even if you paid online, thoroughly review your statement to be sure you haven’t missed any fees or unaccounted-for purchases.

Check your address

Verify your address with your credit card company and bank from time to time. It is a common scam for thieves to change your address and have your bills sent elsewhere. A brief amount of time could save you a big headache.

Shred your documents

It’s amazing what thieves can use to steal your information. Anything with your financial information is candy for an identity thief. It’s imperative that you even shred pre-approved credit card applications, since even those bear enough information for someone to open an account in your name.

File reports immediately

Immediately contact your credit card company as soon as you see something suspicious on your statement. The longer you delay, the more difficult it is to resolve irregularities and the greater the opportunity you allow thieves to engage in fraudulent activity.

Protecting yourself from identity theft requires just a little bit of upfront effort on your part. Cleaning up the aftermath, however, is another story. If you find yourself a victim of identity theft, remember that consulting a credit repair specialist such as Ovation can be a prudent option for maintaining your credit score. The road to recovery can be long, but restoring your credit can certainly be achieved. Whether you’re recovering or protecting yourself, start today.

Smart Ways to Pay Your Credit Card Bill

By | Credit Cards, Credit Repair, Credit Reports, Credit Scores

paying-off-credit-cardsDoes it matter much when you pay your credit card bill? As long as the lender gets some money sometime, it doesn’t make any difference to them – does it? Lenders are big companies and after all you’re just one person.

The reality is that it does matter. And it does make a difference, not just to the lender, but to you too, because when you pay your bill affects your all-important credit score, and could make it more likely that you’ll need credit repair.

To learn about the importance of making payments on or before the dates that affect your credit, read on.

Credit Card Dates to Know

Every month your account has a closing date. It’s not necessarily the first or last day of the month—it can be any day. Let’s say it’s the 15th, and imagine that we’re in the month of August. Any charge you made from July 16th—the day after last month’s closing date—through August 15th will show up on the next bill the lender sends you. The period from the 16th of one month through the 15th of the next month is called your billing period.

The other date to know is your payment due date. This falls after the close of your billing period, usually 30 days. For our hypothetical July 16-August 15 billing period, the payment due date would likely be September 15th. If you pay off the entire balance by that date, you will not be charged any interest. It’s only when you carry over a balance that you’re charged interest.

Pay Your Balance, Help Your Credit Score

Credit card companies use the date at the end of the billing period to calculate your credit utilization rate (the amount of your credit limit that you’re using), expressed as a percentage. For the health of your credit score, the lower the better is the rule. So, if you’ve run up a high balance on a credit card with a low limit, it’s wise to pay it down a little before the end of the billing period to keep the credit utilization rate low on the day it’s calculated.

How Much of Your Credit Card Balance to Pay

All of it, if you can.

Paying the bill each month, in full, is the only way to avoid interest charges. It might cost you less in the long run to write a big check for the whole amount than to pay just part of it. You’ll have to pay interest on the rest for as long as it takes to pay it off.

Most people do carry over a balance. If you do, be sure to pay at least the minimum payment requested by the due date. If you don’t, you’re subject to late fees and worse, damage to your credit report that could require credit repair.

Like any other tool that gets regular use, your credit card and credit score stay in better shape with a little regular maintenance, like paying on time and keeping balances low. But if you need a bit more help, contact a credit repair agency such as Ovation. We can provide the fix you need to get your credit humming again.

Credit Cards and Your Credit Score

By | Credit Cards, Credit Repair

credit-cards-credit-scoreWhether you are fresh out of college or are trying to build a future for your family, when you apply for a credit card you need to be able to pick one with the best combination of features for you. The right choice will help you manage your finances, and ultimately, help you improve your credit score.

What features do credit cards offer?

Interest rates: The APR (Annual Percentage Rate) is the total yearly cost of borrowing funds. This includes all the fees and costs associated with the loan. This should be the first consideration whenever you take a loan for a home, a car, or a credit card. The higher the interest rate, the more money you will spend for the privilege of borrowing.

Cash Back Rewards: Cash back rewards can seem very appealing until you understand that, in general, rewards cards charge much higher interest rates than credit cards without financial rewards. If you are carrying debt from month to month, the extra two percentage points you may be paying will cost you. On the other hand, if you pay the card off every month, a card with cash returns may be a good choice and will not hurt your credit rating.

Introductory Incentives: Freebies like temporary zero percent card transfers, airline miles, points, or other incentives can seem very attractive, but these offers take a back seat to the more important considerations of interest rates and relevant fees. Unless the long-term costs of the card (yearly service fees, monthly interest charges, etc.), are to your advantage and will help you improve your credit rating, do not be tempted by additional free merchandise.

Security: You want to protect your money from theft and fraud, and many credit cards offer features that will enhance the security. This can be a significant benefit depending on how you use your card. Price protections that make up the difference if the cost of a product drops after your purchase are attractive for expensive items, and extended warranties are beneficial when you are buying electronics. Travelers will appreciate cards that offer travel perks like insurance. Just be sure to read the small print to see what conditions apply.

Shopping for credit cards

The internet makes shopping for a credit cardsimpler than ever, but it is easy to get confused by too much information. Google’s credit card search tool is good for learning about interest rates, rewards, and other qualities of the card. Be sure to shop around to find the most advantageous features for your situation. Your goal is to maintain or improve your credit score and pay as little as possible for the privilege of borrowing.

Credit card providers are eager to attract and retain good customers, so if you have a strong credit history, you may be able to negotiate a lower interest rate than what you were offered initially. Regular use of the card and on-time payments give you negotiating power so be sure to ask the customer service representative if you might qualify for a lower interest rate.

Your credit card and repairing your credit

Credit repair requires that you pay down your financial obligations. Select a credit card that has the lowest possible APR and pay more than the monthly minimum to reduce your overall interest costs. Ovation can also help improve your credit rating because we offer a wide range of credit repair solutions that can be personalized for you. Contact us today to find out more.

Build Good Credit: 4 Ways With Retail Credit Cards

By | Credit Cards, Credit Repair

Build Good Credit Retail Credit Cards

Building good credit can seem like rocket science when you think of all the pieces that make up your credit score, but what if we told you it can be easily done. You know the days of carrying large amounts of cash are long gone, and who even considers writing a check anymore?  That leaves two payment options: debit and credit cards.  Almost every retailer now has its own credit card and it is nearly impossible to purchase anything without hearing those sweet little “money saving” words, “Would you like to apply for our credit card and save 10 percent on today’s purchase?”

That phrase is parroted by retail sales associates throughout the nation all day, every day, and the bottom line is that when we answer yes, we don’t really consider the circumstances of our response.  In fact, according to a study commissioned by Credit Karma, 45% of respondents never gave a second thought to their credit score after hearing the word ‘discount’.

Who doesn’t love to save money?  But is a one-time 10 percent discount really worth a new credit card?  Perhaps so, if you follow these guidelines on managing your new retail card properly to build good credit.

1. Use your card on a regular basis

This might seem odd, but the concept can work to your benefit.  By using your card regularly and responsibly, you build good credit.  If you open the card and never use it again, eventually the issuer will make it inactive and you will have received no benefit beyond your one-time discount.

2. Place limits on your spending

Resist the temptation to use the card by not carrying it with you all the time and storing it somewhere safe.  When you plan to use it, have a budget in mind.  Use it for things you would normally purchase rather than going on a spending binge.

3. Pay your bill on time

Check your first statement as soon as it comes and know when your payment date is.  Read the terms and agreement so you are aware of associated fees.  Pay off the balance each month and never miss a payment.  One missed payment can stay on your credit history for up to seven years.

4. Watch your total credit utilization

Be aware of your total credit utilization for all of your cards.  This is the percentage of your total credit limits you are using at a given time.  Most credit score models will use the following equation as a means of determining your creditworthiness: credit card balances divided by credit card limits equals credit utilization.  A credit utilization of 20% is a healthy guideline to follow.

Store credit cards generally have higher interest and lower limits.  You should consider this when deciding whether or not you want to apply in order to get a discount on a larger priced item, such as electronics or furniture.  But when managed well, they can help you establish good spending habits and build good credit.  If you have questions about your credit utilization or need help establishing better credit it may be wise to contact a credit repair specialist, such as Ovation Credit Repair Services.

Call Now for a FREE Credit Consultation