Credit Cards
One of the most common mistakes that people make when it comes to their credit cards is to spend money that they don’t have. Once they have realized their mistake and worked to get out of the debt they created, the next most common mistake is to completely swear off the use of any credit cards. 360 Credit Consulting provides the help you need to learn when and how to use credit cards to rebuild and improve your credit score.
Debit Cards
Debit cards are also known as bank cards, and they are the complete opposite of a credit card. You can make purchases by accessing the money in your bank account. Even though it is not a credit card, many people mistakenly believe that debit cards report spending history to the credit bureaus, which helps their overall credit score. This is not true, which means that you will need to work on improving your score through other means.
Improve Your Credit Score
There are a number of ways to improve your credit score, but they all take time — there are no shortcuts. At 360 Credit Consulting, we will work with you to evaluate what information is currently in your report, and then build the next steps you need to take to move the numbers in a more positive direction. If you are ready to get the credit score you deserve, then call 360 Credit Consulting today and schedule your free credit analysis.
Sample Credit Comparison
Here is a comparison of the impact that credit problems can have on the credit scores of two different people: Josh and Vanessa. Note that their initial credit scores are 100 points apart.
First, we will give you a snapshot of Josh’s and Vanessa’s credit profiles: (These statistics are estimates and this information has been cited from myfico.com)
| Josh has a credit score of 680 and: | Vanessa has a credit score of 780 and: |
| Has six credit accounts, including several active credit cards, an active auto loan, a mortgage, and a student loan. | Has ten credit accounts, including several active credit cards, an active auto loan, a mortgage and a student loan. |
| An eight-year credit history | A fifteen-year credit history |
| Moderate utilization on his credit card accounts (his balances are 40-50% of his limits) | Low utilization on her credit card accounts (her balances are 15-25% of her limits) |
| Two reported delinquencies: a 90-day delinquency two years ago on a credit card account, and an isolated 30-day delinquency on his auto loan a year ago. | Never has missed a payment on any credit obligation. |
| Has no accounts in collections and no adverse public records on file. | Has no adverse public records on file. |
|
Josh |
Vanessa |
|
|
Current Credit Score |
680 |
780 |
|
Score after one of these is added to a credit report: |
||
|
Maxing out a credit card |
650-670 |
735-755 |
|
A 30-day delinquency |
600-620 |
670-690 |
|
Settling a credit card debt |
615-635 |
655-675 |
|
Foreclosure |
575-595 |
620-640 |
|
Bankruptcy |
530-550 |
540-560 |
As you can see, there are many factors that impact your credit score. Some may be more damaging than others.
High scores can fall further. Notice that Vanessa would lose more points for each negative scenario than Josh, even though her credit score was 100 points higher than his. This is because Josh’s lower score of 680 already reflects his riskier past behavior. So the addition of one more indicator of increased risk on his credit report is not quite as significant to his score.
