We have several great questions in the queue, so let’s get started by introducing our hosts, Jessica Anderson and Joan Goldwasser.
Thanks! Excited to be here today.
If you have any credit card questions, just ask and I'll be happy to answer them
I'd say the most important thing to know about your score is that it is CONSTANTLY changing
It's based on what's in your credit file, so as you accumulate and pay off debt (and how you do that), the number changes
This number is a statistical analysis of how likely you are to repay a debt and it's used by everyone
However the source of the number will vary depending by lender--the majority use FICO scores, but there are other scoring models out there
If you are young and have no credit cards, no mortgage and no auto loan, you will have a thin file and your credit score probably won't be too high
Since it's constantly changing, how often would you recommend someone checks their credit report?
Unless you're in the market for a loan--auto or home--probably once a year is fine
You are entitled to one free credit report every 12 months from each of the 3 major credit bureaus. Take advantage of that
Yup, and you don't have to get them all at the same time
Good point, Joan. My sister recently ran into that problem after coming back from abroad. She's been applying for several credit cards, but hasn't had any luck.
If you want to check every four months, you can stagger your requests
Great tips, Jessica and Joan.
Alright, if you're ready, let's get started with our first question from Steph.
If you have trouble getting a general purpose credit card, try applying to a retailer. They are usually easier to qualify for
No, those are not the only options. Check with the bank where you have a checking or savings account. Institutions such as Wells Fargo offer secured cards. Capital One and Wells Fargo don't charge the outrageous fees that often come with secured cards.
Thanks, Jessica. You can take this question from Peggy.
I would complain to the Office of the Comptroller and the Consumer Financial Protection Bureau about the 30 days. That sounds way too long
Both--you don't want to max out one card even if you have plenty of credit on others.
Good advice, Joan. It certainly couldn't hurt to submit a complaint.
Credit utilization is the overall percentage of your credit that you are using but Jessica's right . You don't want to max out on any one card
And as Joan said before, keep your overall utilization ratio below 30% for the best score results.
I think the 30% only applies to the overall ratio
As long as you keep your overall utilization low enough, you should be fine if you want to make a large purchase on one card that bumps up your usage over 30%
Alright, we only have five minutes left. Let's try to squeeze in two more questions.
I would ask them first. You can go online or read every month in Kiplinger's Personal Finance Magazine what are some of the very lowest rate cards. That will give you an idea of what is available when you call them
I'd say it's better to just approach your company directly--it's their computation on your score and other history that'll dictate their decision, not the knowledge that someone else wants to offer you a better rate.
They want to keep you as a customer so they have an incentive to keep you happy
If you've recently gotten a preapproval letter for a card with a lower rate I wouldn't be afraid to mention it though :)
Alright, here's our last question of the day from Idk
Those rates listed in preapproval letters aren't guaranteed though. It depends on your credit history
It's going to take time to improve your score if you have accounts in collection. I would talk to a reputable credit counselor first. It will be noted on your credit report if you pay off less than the amount you owe.
