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How to Successfully Repair Your Credit All By Yourself

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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“Poor credit? No problem!” claim the credit repair scammers on TV. Scammers and shady businesses swindle away millions of dollars by claiming to have the silver bullet for credit repair, but these companies make promises that they can’t deliver.

Improving your credit score requires thoughtful financial management, but you can improve your credit score on your own. This guide will teach you how to improve your credit score, the right way.

What Is Negative Credit Information?

Negative credit information is any action that causes creditors to consider you a riskier borrower. It includes late payments, accounts in collections, foreclosures, bankruptcy, and tax liens. Once negative credit information is introduced into your credit history, you cannot remove it on your own. However, time heals all wounds. The longer it’s been since the negative information was introduced, the less it will affect your credit score. In time, negative information falls off your credit history.

This list details the length of time that negative credit information affects your credit score:

Late payments: 7 years
Bankruptcies: 7 years for completed Chapter 13 bankruptcies and 10 years for Chapter 7 bankruptcies
Foreclosures: 7 years
Collections: Generally, about 7 years, depending upon the age of the debt being collected
Public record: Generally, about 7 years, although unpaid tax liens can remain indefinitely (always pay the tax man first!)

Rather than despair over negative information, take action to improve your score.

The best way to improve your score is to have good behavior reported every single month. For example, you can take out a secured credit card and use it monthly. Charge no more than 10% of the available credit limit, and pay the balance in full and on time every month. Your credit score will improve as your negative information ages and your credit report fills with positive information.

How to Spot a Credit Repair Scam

Credit repair scammers prey on people who are desperate to remove negative credit information and improve their credit score. Engaging with these scammers won’t improve your credit and may also lead you into legal hot water.

The signs below indicate that a credit repair company is a scam:

  • The company wants you to pay before it provides a service.
  • The company recommends that you don’t contact any credit reporting agencies directly.
  • The company tells you that it can get rid of negative credit information in your credit report, even if that information is accurate.
  • The company advises you to dispute all information in your credit report, regardless of its accuracy or timeliness.
  • The company suggests that you create a new credit identity.

Companies that want you to lie about credit history or create a new credit identity can get you into legal trouble. Companies that provide “new” identifying information use stolen Social Security numbers, and if you use this number then you are committing fraud. Likewise using an Employee Identification Number or Credit Profile Number provided by these companies is a crime. Rather than committing fraud, take the steps below to improve credit on your own.

Assess Your Credit History for Free

You are entitled to receive one free credit report from each of the three major credit reporting bureaus (Experian, Equifax, and TransUnion) every year. These credit reporting agencies keep detailed records of your credit history that you can use to assess your credit. Assessing your credit involves three simple steps:

  1. Download a free copy of all three credit reports.
  2. Review the credit report to find errors.
  3. Prepare a list of items that you need to dispute.

Download free credit reports

AnnualCreditReport.com is a website sponsored by the three major credit reporting bureaus, and they are required to provide you with a full credit report every year. The first time that you assess your credit history, download a report from each of the major credit bureaus by following these steps.

Step one: Visit AnnualCreditReport.com and click on the “Request yours now!” link.

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Step two: Follow the step-by-step instructions on the website. Download credit reports from all three bureaus because a mistake may only be listed at one bureau.

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Once you’ve filled out the form and requested reports from all three bureaus, you’ll fill out some security questions and be directed into your report, one agency at a time. If the security questions trip you up, the website will lock you out of your report, but it will offer a phone number that you can call to get your credit report via mail. If you get locked out, request the report via mail.

After the bureau authenticates you, you’ll be directed to your credit report. In the next step, we’ll show you what you need to review.

Review your credit report

Review every credit reporting agency’s credit report in detail. Each report has the following sections: Credit Summary, Accounts (includes payment history), Inquiries, and Negative Information. Reviewing each section can help you understand the source of a poor credit score, and it can help you identify if your report contains errors.

When you review your credit report, you will need to visit each section of your credit report, and keep notes about erroneous information. Remember, there are three bureaus, so you need to repeat this process for all three reports.

The next section details what you should should note.

Take notes

As you review your report, these are the things you should note.

Accounts section
The accounts section contains a detailed history of all accounts (open and closed), your balance, and your payment history associated with each account. You should be able to see month-by-month payment information for 7 years of history. Each month will have a symbol next to it that indicates whether the account was paid as expected or if it was late.

Review each account, the balance, and the payment history, and ask these questions:

  • Do you recognize all of the accounts on your credit report?
  • Are all your closed accounts noted as closed?
  • Does each account have the appropriate account balance listed?
  • Is your payment history accurate?

If you see missed payments that shouldn’t have been there, write it down. Your credit score is negatively impacted when you are 30 days or more past due. If you see a balance on a card that you haven’t used in years, it could be because the account has been stolen. Misinformation in the accounts section harms your credit score, so make a note of all incorrect information.

For your own records you should also take note of the following:

  • What is my current balance relative to my available credit (credit utilization)?
  • Do I have any open accounts that have associated late payments?

Resolving these issues can help you improve your credit score moving forward.

Credit inquiries

Credit inquiries are records of new credit that you’ve applied for. For example, if you apply for a new credit card, a car loan, or a mortgage, you will see records of credit inquiries.

  • Do you recognize all of the inquiries on your credit report?

If someone steals your identity and tries to apply for new credit in your name, an unrecognizable credit inquiry is usually the first sign of a problem. Make a note of any unrecognizable credit inquiries.

You will also want to take note if you see many credit inquiries where you did not receive the line of credit you wanted. Credit inquiries have a slight negative effect on your credit score, so if you’re applying for a lot of credit, you may need to slow down until your credit score improves.

Negative information

Negative information includes negative accounts, collections, or public records. Negative information has the biggest impact on your credit score.

  • Do you recognize all of the negative information on your credit report?

If the negative information in your account is not accurate, you will need to contact the credit bureaus to correct it.

Negative information hurts your credit score, but as it gets older the effect lessens. Take note of all accurate negative information, so you can follow our strategy to avoid it in the future.

Next steps

If all the information in your credit report is correct, then learn how to monitor your credit score for free and how to improve your score.

On the other hand, if you don’t recognize all the information, you will need to take steps to remove incorrect information. And, if your identity has been stolen, there will be even more steps required.

Resolve Incorrect Information on Your Report

Incorrect information appears on your report for four reasons:

  • Someone stole your identity and opened new accounts in your name.
  • Someone stole one of your existing accounts, and started using it.
  • The bank made an error and reported a delinquency or default that never happened.
  • A collection agency made an error and reported a collection item on debt that was never yours.

If someone stole your identity

Incorrect information due to identity theft is a serious issue that you need to resolve as soon as possible. You may not know whether the incorrect information in your report is due to identity theft, but these are some common symptoms of identity theft:

  • You don’t get your bills or other mail because someone has changed the mailing address on your accounts
  • Debt collectors call you about debts that aren’t yours.
  • Medical providers bill you for services you didn’t use.
  • Your health plan rejects your legitimate medical claims because records show you’ve reached your benefits limit.
  • The IRS notifies you that more than one tax return was filed in your name.
  • You are arrested for a crime someone else allegedly committed in your name.

Warning: A common form of identity theft is when a family member steals your Social Security number and uses it to apply for credit.

You can start to resolve identity theft issues by visiting www.identitytheft.gov to report identity theft and get a recovery plan. This is an excellent, free website created by the Federal Trade Commission. In addition to reporting identity theft, you will receive a free action plan, and you’ll gain free access to people who can guide you through the identity resolution process.

Below we detail some important action items you can take.

  1. Place a fraud alert on your account with the credit reporting agencies by calling each credit bureau (numbers below).
    • Equifax: 1-800-525-6285
    • Experian: 1-888-397-3742
    • TransUnion: 1-800-680-72892
  2. Put a credit freeze on your credit reports. A freeze blocks potential creditors from getting access to your credit report, making it less likely an identity thief can open new accounts in your name. Follow the directions in this article to place a credit freeze on your credit reports.
  3. Create an Identity Theft Report by submitting a complaint about the theft to the FTC and filing a police report.

If someone stole your account

If someone stole the account information of an existing account, you should immediately contact your bank or credit card company. Once you report your card as lost or stolen, the bank will typically reissue a new card and correct information on the credit report directly.

Dispute Credit Report Errors

If you do not think you were the victim of identity theft, but believe that there is incorrect information on your credit report, you can dispute the information directly with the credit reporting agencies. We will explain how.

Disputing incorrect information involves three steps:

  • Dispute the item online with each credit reporting agency.
  • Write a letter to each credit reporting agency, and keep copies of your correspondence.
  • Write a letter to each organization (bank, collection agency, credit union, etc.) that submitted incorrect information, and keep copies of those letters.

When you dispute incorrect information, you must keep a copy of your mailed correspondence in case the issue does not get resolved right away. Keeping copies of your correspondence will allow you to get help from the Consumer Federal Protection Bureau if necessary. Your dispute should include all of the following:

  • A copy of your report.
  • Specific information about what is incorrect.
  • Any documents that support your position.
  • An explicit request to remove or correct incorrect information.

If you need to dispute information, download the following step-by-step instructions and letter templates that will make disputing incorrect information as pain free as possible.

Download Now

Reporting to debt collections agencies can be trickier since collection agents are more aggressive in their tactics. The Consumer Federal Protection Bureau has a letter template that you can use to make it clear that you do not owe the debt.

Download Letter Template Now

After you dispute the incorrect information, you will need to follow up to be sure that the information gets resolved.

If following the steps above seems daunting, some organizations specialize in paid credit repair services. Most of the services require a monthly subscription fee between $60-$100 per month, and most reviews report that the negative items are completely removed within 3-5 months. Despite the high cost, legitimate companies provide a valuable service if you’ve been the victim of identity theft and you want someone else to do the work for you.

Of the major credit repair organizations, only Lexington Law has received an A rating from the Better Business Bureau. The Credit People and CreditRepair.com received high ratings from their consumers online, but are not rated by the Better Business Bureau. These companies don’t do anything you can’t do yourself, but they may be worth your money if you’ve got a lot of negative information to remove.

Follow Up on Disputes

Once you register your dispute with the credit reporting agencies, they must investigate the item in question within 30 days, and they must forward all the relevant data you provide about the inaccuracy to the organization that provided the information.

If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file.

When the investigation is complete, the credit reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. This free report does not count as your annual free report.

If you ask, the credit reporting company must send notices of any corrections to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

What if my dispute isn’t resolved?

If an investigation doesn’t resolve your dispute with the credit reporting company, you can request that a statement of the dispute be included in your file and in future reports. You can also ask the credit reporting company to provide a statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service, and a dispute on your credit report does not improve your credit score.

Do I have any other options?

If you are unhappy with the way your case was investigated by the credit reporting agencies, you do not have to give up. Instead, you can complain to the Consumer Financial Protection Bureau (CFPB) on their website (www.consumerfinance.gov).

When you complain to the CFPB, you can should provide copies of all of your correspondence to prove your case. The CFPB will reach out to the credit reporting agencies on your behalf and try to help get your situation resolved. At MagnifyMoney, we have worked with many people who have had good outcomes working with the CFPB.

Monitoring Your Credit Score

In order to catch issues, and stay on top of your credit score, you should implement a credit monitoring strategy. The best, free way to monitor your credit is with Credit Karma, which gives you access to two out of three credit reports.

If you prefer more monitoring and additional credit protection, you can pay a fee for services that provide daily three-bureau credit monitoring, resolution assistance if your identity is stolen, and insurance if you have to engage in a legal battle. This guide ranks the top identity theft protection services.

Whether you choose a free or paid version, credit monitoring is a great service. As soon as you detect suspicious activity, you can take action. The sooner you work to deal with issues in your credit report, the less damage can be done.

Improve Your Credit Score

Once you resolve issues on your credit report, it’s time to implement a strategy to start improving your credit score. The single best thing that you can do to improve your credit score is to pay current accounts on time and in full every single month. You can picture it as burying negative information under a mountain of positive credit information.

Your top priority should be keeping accounts current. Continue to pay whatever account has the most positive information.

Your next priority should be keeping accounts out of collections. If you owe late payments, work to pay them back before the item goes into collections. Once these accounts are current, they will start to work positively toward your score.

Next, work on paying down your debt to provide positive information, and in time improve your score. Likewise, paying off installment credit (like mortgages and car loans) will add good information to your credit report.

If you have no current accounts, consider taking out a secured credit card and using less than 10% of the available credit each month to add positive information to your report.

The last thing you should do is attempt to resolve debts in collections. Once an item is in collections, paying it off will not improve your credit score.

Going forward, take care to avoid taking on more debt than you can handle, and implement a strategy to pay down your debt quickly. Once you start making positive changes, your credit score will improve, and within a few years, you’re likely to have good credit again.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah at hannah@magnifymoney.com

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Minimize Rejection: Check if You’re Pre-qualified for a Credit Card

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Check if You're Pre-qualified for a Credit Card

Updated August 16, 2017

Are you avoiding a credit card application  because you’re afraid of being rejected? Want to see if you can be approved for a credit card without having an inquiry hit your credit score?

We may be able to help. Some large banks give you the chance to see if you are pre-qualified for cards before you officially apply. You give a bit of personal information (name, address, typically the last 4 digits of your social security), and they will tell you if you are pre-qualified. There is no harm to your credit score when using this service. This is the best way to see if you can get a credit card without hurting your score.

What does pre-qualified mean?

Pre-qualification typically utilizes a soft credit inquiry with a credit bureau (Experian, Equifax, TransUnion). A soft inquiry does not appear on your credit report, and will not harm your credit score.

Banks also create pre-qualified lists by buying marketing lists every month from a credit bureau. They buy the names of people who would meet their credit criteria and keep that list. When you see if you are pre-qualified, the bank is just checking to see if you are on their list.

A soft inquiry provides the bank with some basic credit information, including your score. Based upon the information in the credit bureau, the bank determines whether or not you have been pre-qualified for a credit card.

If you are not pre-qualified, that does not mean you will be rejected. When they pull a full credit report or get more information, you may still be approved. But, even if you are pre-qualified, you can still be rejected. So, why would you be rejected?

  • When you complete a formal credit card application, you provide additional personal information, including your employment and salary. If you are unemployed, or if your salary is too low relative to your debt – you could be rejected. There are other policy reasons that can be applied as well.
  • When a full credit bureau report is pulled, the bank gets more data. Some of that incremental data may result in a rejection.
  • Timing: your information may have changed. The bank may have pre-qualified you a week ago, but since then you have missed a payment. Final decisions are always made using the most up-to-date information.

Even with these caveats, checking to see if you are pre-qualified is a great way to shop for a credit card without hurting your score.

Where can I see if I have been pre-qualified?

Most (but not all) banks have pre-qualification tools. In addition, some websites (like CreditCards.com) have tools that let you check across multiple banks at once. Here is a current list of tools that are functioning:

CreditCards – CardMatch is a very good tool developed by CreditCards.com that can match you to offers from multiple credit card companies without impacting your credit score. This is a good first stop.

Bank of America

Capital One

Chase

Citibank

Credit One  – This company targets people with less than perfect credit.

Discover

U.S. Bank

Below are credit card issuers that do not always have the pre-qualification tool live:

American Express – We have reports that this does not work for everyone. To find the pre-qualification page, click on “CARDS” in the menu bar. Then click on “View All Personal Charge & Credit Cards.” At the bottom of the page you will find a section called “Do More with American Express” – and you can click on “Pre-Qualified Credit Card Offers.”

Barclaycard – unfortunately Barclaycard has taken down their pre-qualification tool. We will keep looking to see if it comes back.

Consider A Personal Loan (No Hard Inquiry and Lower Rates)

If you need to borrow money, you may also want to consider a personal loan. A number of internet-only personal loan companies allow you to see if you are approved (including your interest rate and loan amount) without a hard inquiry on your credit report. Instead, they do a soft pull, which has no impact on your credit score. Personal loans also tend to have much lower interest rates than credit cards. If you need to borrow money, personal loans are usually a better option.

We recommend starting your personal loan shopping experience at LendingTree. With one quick application, dozens of lenders will compete for your business. LendingTree uses a soft credit pull, and within minutes you will be able to see how much you qualify for – and the interest rate – without any harm to your credit score. (Note: MagnifyMoney is owned by LendingTree)

Not pre-qualified but still want to apply?

We still believe that people are too afraid of the impact of credit inquiries on their score. One inquiry will only take 5-10 points off your score.

If you pay your bills on time, do not have a ton of debt (less than $20,000) and want to apply for a new credit card, an inquiry should not scare you. The only way to know for certain if you can get approved is to do a full application.

How We Can Help

Don’t forget to follow us on Twitter @Magnify_Money and on Facebook.

*We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Discover it® Secured Card Review: Rebuild and Establish Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Secured cards are great if you have little to no credit history or have poor credit history. With proper credit behavior they are a great way to build credit. The Discover it® Secured card is an excellent secured card that lets you build credit while also earning cash back. There is no annual fee associated with this card, making it easier to put your money where it’s needed.

Discover it® Secured Card - No Annual Fee

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Discover it® Secured Card - No Annual Fee

Annual fee
$0 For First Year
$0 Ongoing
Minimum Deposit
$200
APR
23.99% APR

Variable

Credit required
zero-credit
No credit, 670 or less

How the card works

The Discover it® Secured card is meant to help you rebuild or establish credit. You need to make a $200 security deposit that will become your credit line. If you want a credit limit that is higher than $200, you will need to put down a larger security deposit.

Discover reviews your account monthly starting at eight months to see if you can be transitioned to an unsecured card. This is a feature that makes the Discover it® Secured card unique. If you have responsible credit management, you may benefit from this feature and be transitioned to an unsecured card. If moved to an unsecured card, you will receive your security deposit back. This is hassle free and another reason the Discover it® Secured card is a great option.

This card offers 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great bonus, but the main goal of a secured card is not to earn rewards, but to be responsible and build credit. Don’t let the prospect of cash back lead you to overspending. That will only defeat the purpose of this card.

To get the most benefit from your secured card, keep a low utilization rate and pay your statements in full and on time every month. Utilization is the amount of your total credit limit you use. It is calculated by dividing your statement balance by your available credit. A low utilization is not spending more than 20% of your credit limit. So if you have a credit limit of $200, that means don’t spend more than $40.

By following these two practices, you will begin to see your credit score rise. You can even build credit with $10 a month using a secured card.

How to qualify

To qualify for the Discover it® Secured card, you need to be at least 18 years old, have a Social Security number, U.S address, and U.S bank account and provide all the required information in the online application. Be sure to have your bank routing number and account number ready when you apply as they will be needed for the $200 security deposit. Don’t worry if your credit history is nonexistent or unfavorable — this card is great for people who are new to credit or are looking to rebuild credit.

What we like about the card

Earn cash back

You will earn 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. This is a great added bonus that most secured cards do not offer. Discover will automatically match all of the cash back you earned at the end of your first year as a cardholder.

Automatic monthly reviews after 8 months

Discover takes the guessing out of wondering when you will qualify for an unsecured card by reviewing your account monthly starting at eight months. If you have responsible credit management across all of your credit cards, you may be transitioned to an unsecured card. This is hassle free and another reason the Discover it® Secured card is a great option.

Free FICO Score

It is important to monitor your credit score and each month you will receive your FICO Score for free. If you practice proper credit behavior, you will see your score increase.

What we don’t like about the card

High APR

This card, like most secured credit cards, has a high APR. If you pay your statement balance in full and on time every month, the APR will not matter (because no interest will be charged). And if you do that every month, your credit score will improve over time — making it cheaper to borrow money (if you need to) in the future.

Who the card is best for

This Discover it® Secured card is best for people looking to rebuild or establish credit. In addition to an easy transition to an unsecured card when the time is right, the Discover it® Secured card provides a cash back program and has no annual fee. By using this card coupled with proper credit behavior you can see a boost in your credit score.

Alternatives

If you want a smaller security deposit

Secured MasterCard from Capital One Bank

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$49

APR

24.99% APR

Fixed

The Secured MasterCard from Capital One is made for people who want to rebuild credit. There are lower security deposit options than the Discover it® Secured card, making it a good alternative if you can’t afford a large security deposit. However, it’s important to note that the lower security deposit is not guaranteed. This card also has no annual fee and offers your free credit score; however, there are no rewards. Just remember: A lower security deposit also means a lower credit limit.

An unsecured card from a credit union

Visa® Classic from Georgia's Own Credit Union

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

-

APR

12.99%-17.99%

The Visa Classic from Georgia’s Own Credit Union offers a competitive APR that is lower than Discover. There is no annual fee associated with this card and no rewards, making this card strictly for rebuilding credit. Keep in mind you will need to join the credit union, and the application process is more complicated compared to Discover. This card is a good alternative if you prefer to have an unsecured card and don’t mind working with a credit union.

FAQ

No, your cash back does not expire as long as your account remains open.

If you pay your balance in full and close your credit card account, your security deposit will be refunded. This can take up to two billing cycles plus 10 days. Also, during Discover’s monthly automatic reviews of your credit card account starting at eight months, they will see if they can return your security deposit while you continue to enjoy your card benefits.

The maximum credit limit is $2,500. This will be determined by your income and ability to pay. Keep in mind your security deposit must equal your credit limit, so you will have to deposit $2,500 if approved for this credit limit.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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OpenSky Secured Visa Review: No Checking Account Required

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The OpenSky Secured Visa secured credit card can be helpful for those who have bad or no credit history. This card is designed for consumers who want to rebuild or create a credit history. OpenSky does not require a checking account or credit check when you apply, which makes the application process simple. Take note that this card does come with an annual fee, unlike other secured cards. With responsible use, you could see an increase in your credit score and move to an unsecured card.

OpenSky® Secured Visa® Credit Card from Capital Bank N.A.

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OpenSky® Secured Visa® Credit Card from Capital Bank N.A.

Annual fee
$35 For First Year
$35 Ongoing
Minimum Deposit
$200
APR
18.39% APR
Credit required
zero-credit
New to Credit, Bad

How the card works

Since this is a secured card you will have to make a security deposit. This money will become your line of credit and must remain in your account while your card is open. There are four options to make your security deposit and fund your account. The first is using a debit card. Simply provide your debit card information on your application, and OpenSky will process your transaction right away. You can also complete a wire transfer to Capital Bank. If you don’t have a checking account, you can use Western Union or mail a check or money order. An email with instructions on how to fund your security deposit will be sent after your application has been approved. Note that, depending on the method of payment that you choose, it may take up to five business days for your security deposit to clear.

If you’re looking to improve your credit score, the best way to take advantage of this card is to start off with a low credit limit and find a recurring expense you can put on the card. For example, you can put your utility bills on the card. Make sure that you pay this on time and in full every month. To ensure it’s paid on time, you can enroll in their auto pay program, which will guarantee you never miss a payment. Once you enroll in auto pay, the credit card company will make a scheduled monthly payment automatically on the day you choose. This way, you will have a purchase every month that OpenSky can report to all three major bureaus.

How to qualify

To quality for this credit card you do not need to have credit history, but you do need a job. By having a job you will show a stable source of income, which shows credit lenders you are responsible and can pay your bills. In addition you will need a security deposit. That means if you want a $1,000 credit limit, you’ll need to have $1,000 deposited at account opening. The online application is four simple steps that can be completed in 10 minutes. They request basic personal and financial information, have you choose the starting credit limit you prefer, and fund your security deposit. Your requested credit limit is subject to approval based on your creditworthiness.

What we like about the card

No credit check

OpenSky does not check your credit history during the application process. This is great if you lack a credit history or have poor credit, therefore improving your approval odds.

Simple application process

The application process takes place solely online, making it easy to apply at your convenience. It only takes 10 minutes according to OpenSky to complete the application. There are four easy steps: provide your personal and financial information, customize and fund your card, review your information, and accept the terms and conditions.

No checking account needed

OpenSky does not require you to have a checking account to apply for this card. This is great for those who want to establish credit but don’t have a bank account. The majority of credit cards require bank accounts, so this is a good option if you don’t have a bank account.

What we don’t like about the card

Annual fee

OpenSky charges cardholders a $35 annual fee. Be sure to review your credit options, because you can find other secured cards that do not charge an annual fee. However, note that those cards may require a checking account, so make sure to review your options.

Foreign transaction fee

Make sure this card remains at home when you travel abroad since there is a high 3% foreign transaction fee. This will increase your bill if you make purchases abroad, so it’s best left at home.

No option for an unsecured card

If you’re ready to move onto an unsecured card, there is no option with OpenSky. That means you’ll have to look to another company, which could be a hassle because of the process of applying for the card, getting a credit check, and closing your current card.

Who the card is best for

If you’ve struggled with being approved for credit cards in the past due to bad or nonexistent credit history, the OpenSky Secured Visa may be right for you. With no credit check during the application process, you have good approval odds. This card is also for those who do not have a checking account but want to build credit, as you won’t find many credit cards that are offered to people without checking accounts. However, the annual fee and lack of transition to an unsecured card can make you think twice about this card. You can find MagnifyMoney’s ranking of the best secured credit cards here.

Alternatives

Secured MasterCard from Capital One Bank

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$49

APR

24.99% APR

Fixed

This credit card doesn’t require that you have your security deposit equal your credit limit. You can make a deposit as low as $49, unlike the OpenSky card, which is $200. However, this card will check your credit history and will determine your deposit requirement based on your creditworthiness. There is no annual fee associated with this card, unlike OpenSky.

Discover it® Secured Card - No Annual Fee

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$200

APR

23.99% APR

Variable

This card has no annual fee, unlike OpenSky. It also features 2% cash back on up to $1,000 per quarter on gas and restaurant purchases and 1% on other spending. In addition, after eight months you may be eligible for an unsecured credit card, which you can’t do with OpenSky. These are great benefits that make the Discover it® Secured card a good alternative.

DCU Visa Platinum Secured from Digital FCU

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$300

APR

12.50% APR

There is also no annual fee for this card, as well as no cash advance or balance transfer fees. The APR is lower than OpenSky, which is beneficial if you think you might carry a balance month to month. According to a DCU representative, the maximum credit limit is $2,000. However, it is determined by your overall creditworthiness. Also, you’ll need to be a member of Digital Federal Credit Union, which may be difficult to get into. You can learn about eligibility requirements here.

FAQ

No, OpenSky does not check your credit history. So any bad history you may have will not affect your approval odds.

A security deposit is the amount of money you deposit into your account and acts as collateral. It also becomes your line of credit. That means if you make a $1,000 security deposit, you’ll have a $1,000 credit line.

There are four options to make your security deposit.

  1. Debit card- Simply provide your debit card information on your application, and OpenSky will process your transaction right away.
  2. Wire transfer to Capital Bank

If you don’t have a checking account:

  1. Western Union
  2. Mail a check or money order

An email with instructions on how to fund your security deposit will be sent after your application has been approved. Note that, depending on the method of payment that you choose, it may take up to five business days for your security deposit to clear.

Additional reporting by Alexandria White

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here

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QuicksilverOne Review: Unlimited 1.5% Cash Back for Average Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

For people with “average” or “fair” credit, Capital One offers QuicksilverOne Rewards. Every credit card issuer has a different definition of what “average” or “fair” credit means. Generally speaking, it means a FICO score between 580 and 669.

The QuicksilverOne Rewards card gives you an unlimited 1.5% cash back, which is a pretty sweet opportunity for consumers with less-than-perfect credit.

Just beware of the two catches: There’s a $39 annual fee and a high purchase APR.

QuicksilverOne® Rewards from Capital One

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QuicksilverOne® Rewards from Capital One

Annual fee
$39 For First Year
$39 Ongoing
Cashback Rate
up to 1.5%
APR
24.99%

Variable

Credit required
fair-credit

Average

QuicksilverOne Card Overview

The QuicksilverOne Rewards program is low maintenance.

Unlike other programs with revolving categories and spending caps, this card doesn’t hold you to either. You will earn 1.5% cash back every time you swipe.

You can redeem cash back at any time for a check, account credit, or gift card. Cash back you earn never expires.

What We Like About This Card

No fuss.

We like that the cash back program terms are uncomplicated. There are no preset bonus categories that you have to adapt your spending to each month. You can also redeem cash back at any time without having to wait for the balance to reach a certain threshold.

Low credit score requirement.

The QuicksilverOne is one of the only cash back rewards cards around town for average credit. If you’re having trouble getting approved elsewhere, this is a card you need to seriously consider.

What We Don’t Like About This Card

The annual fee.

Since this card costs $39 per year, you need to spend at least $2,600 per year (or $217 per month) for the cash back to break even with the fee. Ideally, you’ll want to spend more than just the bare minimum for the rewards card to be worthwhile.

High APR.

This is a high interest rate. Avoid carrying a balance at all costs if you choose this card.

Who This Card Is Best For

Again, the QuicksilverOne is our top unlimited cash back pick for consumers who have trouble getting approved for other cash back cards.

According to Capital One, you may qualify for this card if:

  • You have defaulted on a loan in the past five years
  • You have limited credit history
  • You have had your own credit card or other credit for less than three years (this may include students, people new to the U.S., or authorized users on someone else’s credit card)

Keep in mind, these are just guidelines to give you a general sense of whether you’ll qualify. Your income, debt, and other credit limits are also factors used to make a decision.

Capital One has a nice feature where you can get preapproved online for offers without a hard credit inquiry. See if you prequalify for the QuicksilverOne card here.

Keep an eye out for the Quicksilver alternative while checking offers as well.

Quicksilver Rewards is the “big brother” of the QuicksilverOne card. It has no annual fee, and it’s for people with excellent credit. There’s no harm in checking to see if you prequalify for the Quicksilver card.

Is the QuicksilverOne card good for rebuilding credit?

Despite the lenient qualifying criteria, the QuicksilverOne card is not our top recommendation if you’re rebuilding credit, because of the annual fee.

Your focus should be keeping your credit utilization very low when rebuilding credit. You shouldn’t worry about having to earn enough cash back each month to cover a card’s annual fee.

Try a no-fee secured card like the Capital One Secured MasterCard or the Discover it Secured Credit Card instead.

QuicksilverOne Credit Card Benefits

QuicksilverOne offers:

  • Travel accident insurance and 24/7 roadside assistance. Travel insurance for death or loss of limbs. You can call in for help if your car breaks down.
  • Auto rental insurance. Insurance covers rental damage from collision or theft.
  • Extended warranty. Purchases made on your card will get an extended warranty.
  • Price protection. You can get reimbursed the difference if you find items you purchased on sale within 60 days.
  • Fraud coverage. Covered by $0 fraud liability if your card is lost or stolen.

Alternatives to the QuicksilverOne

QuicksilverOne doesn’t have much competition since it’s the best card for consumers with average credit. The following no-fee cash back cards officially require good to excellent credit but allow you to prequalify without a hard inquiry.

1.5% cash back, no fee

Chase Freedom Unlimited<sup>SM</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1.5%

APR

14.24%-23.24%

The Chase Freedom Unlimited card gives you an unlimited 1.5% cash back on all spending without category restrictions or caps. What’s great about Chase is it’s another credit card issuer that lets you prequalify for offers without a hard pull. Check out offers you may prequalify for here.

You can redeem cash back from your Chase Freedom Unlimited card at any time, and cash back never expires as long as you keep your account open. At times there is an intro APR deal or cash back bonus offer that add benefits to this card, and ongoing rates are sometimes lower than what you’d see on the QuicksilverOne.

Double cash back, no fee

Citi® Double Cash Card

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

1% when you buy, 1% when you pay

APR

14.49%-24.49%

Variable

The Citi Double Cash card is another good choice for low-maintenance cash back rewards. It gives double cash back on all purchases. You earn 1% cash back when you spend on the card and another 1% cash back when you pay off the bill.

This is a card that members report qualifying for with a credit score in the high 600s. Citi lets you shop for prequalified offers on the website as well. If you’re interested in this card, see if you can get prequalified here. In addition, there are changing intro APR deals for this card that allow you to save interest early on, and ongoing interest rates are sometimes lower than with the QuicksilverOne.

Bottom Line

The QuicksilverOne Rewards is a good rewards card for those with average credit. If you have had difficulty being approved for other higher cash back rewards cards, you may be approved for the QuicksilverOne Rewards, which offers unlimited 1.5% cash back. Be aware that this card comes with an annual fee and high APR, so make sure to do your research and see if this card is right for you.

FAQ

You should not keep a balance on this credit card to benefit from the cash back. The high APR is a large amount of interest to be paying on purchases. If the interest charges you experience on this card coupled with the annual fee surpass the cash back you earn, this card is pointless.

No. You’re free and clear to spend money on anything, and it’ll earn 1.5% cash back. This is the beauty of an unlimited cash back card. However, cash advances and balance transfers will not qualify for cash back.

No, you can redeem cash back for any amount at any time.

No, cash back does not expire as long as your account remains open.

You can, but not with average credit. The QuicksilverOne card is the best unlimited cash back card there is specifically targeting people with fair credit. Another option you have is working to improve your credit first before applying for a credit card to qualify for a card that gives you more cash back.

Taylor Gordon
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Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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Building Credit, Credit Cards, Earning Cashback

The Discover it Secured Card wins: No fee, Free FICO and up to 2% cash back

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Discover it Secured Credit Card Review

Updated August 1, 2017

Discover offers the Discover it® Secured Card – No Annual Fee for people who are looking to build credit and establish good credit history. Secured credit cards are an excellent way to build your credit with responsible use. With this product, Discover has created one of the best secured cards on the market. You do need to make a security deposit of $200 or more to establish your credit line (up to the amount that Discover can approve). If you are unable to afford the $200 deposit, you should consider the Capital One Secured MasterCard, which only requires a $49 deposit. But if you can afford the $200 deposit, this card is clearly one of the best no fee secured credit cards available.

Learn More

Key Product Features

Here are the key product features:

No annual fee: There is no annual fee on this card. You do need to make a security deposit of at least $200. If you want a bigger limit, you will have to make a bigger deposit.

Automatic monthly reviews starting at 8 months: After just eight months, Discover will start monthly automatic reviews of your account to see if you can be transitioned to an account with no security deposit. With an 8-month review, Discover has one of the best upgrade policies in the market.

Earn cash back: Most secured credit cards do not offer any rewards. With Discover it, you have the opportunity to earn cash back while earning rewards. You can earn 2% at restaurants and gas stations (on up to $1,000 of combined purchases each quarter). Plus, get 1% cash back on all your other purchases. Earning cash back is not the primary reason to select a secured credit card, but it is a nice option to have available.

Free FICO Credit Score: Discover will provide you with a copy of your official FICO credit score. If you use a secured credit card properly, you should expect to see your score increase over time. And by providing your FICO score for free, you will be able to watch your improvement.

Monitor Your Social Security Number: Discover will monitor your Social Security Number and alert you if they find your Social Security Number on any of thousands of risky websites. Activate for FREE. This is a great feature that will help alert you of possible fraud.

You can learn more and apply by clicking on the link below:

LearnMore

How to Use a Secured Credit Card

A secured credit card is an excellent way to build or rebuild your credit history. In order to gain the most number of points in the shortest amount of time, you need to have a strategy. We recommend the following strategy (and describe how it helped someone build an excellent score in one year here):

  1. Avoid spending more than 10% – 15% of your available credit limit. Yes, that means if your credit limit is only $200, you should not spend more than $20 – $30 a month. Utilization is a very important part of your credit score. To calculate utilization, divide your statement balance by your available credit. People with the best credit scores have utilization well below 20%. Because you want to build an excellent credit score, you should keep your utilization low.
  2. Pay your statement balance on time and in full every month. To ensure your payments are made on time every month, you should consider automating the monthly payments. At the Discover website, you can sign up to have your monthly payment debited automatically from your checking account.
  3. Just continue to repeat Step #1 and Step #2. Your credit score should improve over time, which will help you qualify for a standard credit card.

If you have less than perfect credit and need to borrow money, you should consider shopping for a personal loan.

Who is Eligible to Apply?

According to disclosures on the Discover website, you are eligible to apply if:

  • You are at least 18 years old.
  • You have a Social Security Number.
  • You have an address in the United States.
  • You have a bank account in the United States. Note: You will need to provide your routing number and account number when you apply. If your account is overdrawn, it is highly unlikely that you will be approved.

Your credit history will be reviewed, and not all applications will be approved. The card is best for those with no credit, or scores of 670 or less.

The Application Process

You can apply online and Discover usually provides a decision instantly. You will need to make your security deposit as part of the application, which is why Discover asks for the routing number and account number of your bank.

Please remember that when you apply for the secured credit card, you will have an inquiry on your credit report just like an application for a normal credit card.

Alternate Secured Credit Cards

Discover it has one of the strongest offerings in the market. However, it might not be right for everyone. Here are some other good options.

If you cannot afford the $200 minimum deposit, you should consider the Capital One Secured MasterCard. There is no annual fee and a minimum deposit of $49. You will also be able to receive your FICO score for free. Capital One is known for accepting people with more adverse credit histories. So, if you are rejected by Discover, you might want to consider trying Capital One instead.

Capital One Secured MasterCard

Go to site

You should also consider a secured credit card from your local credit union. MagnifyMoney has a list of some of the best no fee secured credit cards offered by credit unions here.

Build Your Score, Not Your Balance

Secured credit cards are a great way to build your credit score. And, with this product, Discover has created an excellent tool. Just make sure you don’t use your credit card to build a balance and borrow money. Keep your balance well below 20% of your available credit, and pay your statement balance on time and in full every month. If you do that, you should start to see real improvement in your score.

Nick Clements
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Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Building Credit

Build Your Credit Score: 6 Best Secured Cards With No Annual Fees

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Build Your Credit Score

Updated: August 1, 2017

Applying for a secured card is a simple way to begin building (or rebuilding) your credit history. Secured cards are a way to prove to a lender you can be responsible without a lender having to take much risk. When you open a secured card, you put down a deposit and the lender gives you a line of credit. Typically, your line of credit matches the amount of your deposit. But just like credit cards, not all secured cards are created equal. Below are the five secured cards that don’t charge an annual fee, thus save you money as you build credit history.

Our #1 Pick from Discover

Discover it® Secured Card – No Annual Fee

Discover offers our favorite secured credit card. Unlike most credit card companies, Discover is ensuring that benefits and rewards traditionally associated only with unsecured credit cards will be available on the secured card. This card is best for people with no credit, or with scores of 670 or less. Here are the reasons why this card is our favorite:

No annual fee: There is no annual fee on this card. You do need to make a security deposit of $200 or more to establish your credit line. If you want a bigger limit, you will have to make a bigger deposit.

Bankruptcy? No problem: If you have filed Chapter 7 bankruptcy in the past, you can still qualify for this card. It is a great way for people to rehabilitate their credit.

Automatic monthly reviews: Discover will start automatic monthly reviews at month 8. If you qualify, you could be transitioned to an account with no security deposit. Even better, you could potentially be eligible for a bigger credit limit. This feature really sets Discover apart from the competition – and your goal should be to get back your deposit as quickly as possible through responsible credit behavior.

Earn cash back: Most secured credit cards do not offer any rewards. With Discover it, you have the opportunity to earn cash back while earning rewards. You can earn 2% at restaurants and gas stations (on up to $1,000 of spend each quarter). Plus, get 1% cash back on all your other purchases. Earning cash back is not the primary reason to select a secured credit card, but it is a nice option to have available.

Free FICO Credit Score: Discover will provide you with a copy of your official FICO credit score. If you use a secured credit card properly, you should expect to see your score increase over time. And by providing your FICO score for free, you will be able to watch your improvement.

You can learn more and apply by clicking on the link below:

LEARN MORE Secured

on Discover’s secure website

Citi Secured MasterCard with $0 Annual Fee

Citi® Secured MasterCard® – No Annual Fee

citi-secured-credit-cardCitibank has just eliminated the annual fee on its secured credit card. If you are declined by Discover, this could be a good back-up option. In order to qualify, you cannot have filed for bankruptcy in the last two years. Citi will hold onto your deposit for 18 months. Unlike Discover, there is no cash back available and Citi will not perform annual eligibility checks to see if you can be approved for a standard card. Here are the key facts:

  • $0 Annual Fee
  • Provide a security deposit between $200 and $2,500. Your credit limit will be equal to the amount of the security deposit you’ve submitted.
  • 22.49% Variable APR

Option Two – Your Local Credit Union

If you belong to a credit union, go there and ask. They probably have a no annual fee option and could set you up right away. It doesn’t hurt to ask a bank either, but they are less likely to have a no annual fee option.

Option Three – Credit Unions “Anyone Can Join”

If you don’t belong to a credit union, or don’t like the secured card options your bank offers, below are three no fee cards from credit unions anyone can join. While it may cost as much as an annual fee to join the credit union, there is also an added benefit of being a credit union member for life.

These are ranked by lowest to highest minimum deposit

JFCU-LOGO-2C

Justice Federal: Visa Classic Secured Credit Card

  • Cost to join – $5 to join JFCU or $43 if you need to join another organization to become eligible
  • Minimum deposit – $110

Eligibility

Unfortunately, not everyone can easily join Justice Federal Credit Union. JFCU provides financial services to employees of Justice, Homeland Security and the Law Enforcement Community, as well as their family members. If you believe you may qualify, then check the credit union’s member eligibility page. Those who qualify, will need a five dollar deposit and to fund their account.

However, there is a loophole.

One of the eligible associations for membership is the National Sheriff’s Association. It costs $38 to join the NSA as an auxiliary member or student. By joining the NSA first, anyone can then become a member of the Justice Federal Credit Union. This brings the cost of membership to $43.

The Secured Card

Visa Classic Secured Credit Card

  • No annual fee
  • 16.90% APR
  • Credit limits ranging from $100 up to 110% of pledged shares

 

State Department

  • Cost to join – $1 to join the credit union (which the SDFCU usually covers) + $5 (or $15) to join American Consumer Council, if you don’t work for the Department of State.
  • Minimum deposit – $250

Eligibility

You are eligible to join the SDFCU if you’re an employee of the Department of State or one of the extensive organizations with ties to the credit union (all listed here under “who can join”). If you don’t work for the Department of State, you may also be eligible through the American Consumer Council. You can join the ACC for only $5 if you’ve used any major consumer product or service within the past 12 months – and you probably have.

The Secured Card

EMV Savings Secured Visa Platinum Card

  • 7.49% APR
  • No annual fee
  • Minimum deposit –$250

 

DCU

Digital Federal Credit Union (DCU)

  • Cost to join – $5 to join DCU + membership costs to join eligible organization if you aren’t eligible
  • Minimum deposit – $500

Eligibility

You must be a member of DCU in order to apply for the secured card. You can be eligible to join DCU if a relative is already member, if your employer offers membership or your community is included within field of membership. If none of these apply, you can join an organization with member privileges. Joining these organizations range in membership cost from $25 to $120. Once you join DCU, you have a lifelong membership, so you could cancel a membership with the other organization after joining.

The Secured Card 

Visa Platinum Secured Card

  • No annual fee
  • 12.00% APR (18% penalty APR)
  • Minimum deposit – $300

Option Four – Banks

If you don’t want to join a credit union, these banks offer instant online applications with no annual fee.

Harley Davidson Visa Secured Card from US Bank

Harley

 

 

 

We know it seems a little strange, but the Harley Davidson Visa Secured Card from US Bank offers a good option for those not interested in paying to join a credit union.

  • 23.49% APR – so don’t carry a balance
  • Minimum deposit – $300
  • No annual fee

Capital One secured card

Capital One secured cardIf you currently can’t afford the $110 – $500 deposit, consider the Capital One  secured card with a $49 minimum deposit for a $200 line of credit. Capital One used to have an annual fee of $0.

However, this deposit is based on what Capital One deems as “creditworthy.” It is possible it will ask for a deposit of $99 or $200.

Understand how to use your secured card properly

Once you’re approved, be sure to use your secured card responsibly. You can find more tips on how to use a secured card and build your credit history here.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Building Credit, Credit Cards, Reviews

Georgia’s Own Visa Classic Review: Good Choice for Rebuilding Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The Georgia’s Own Visa Classic card is made for those with low credit scores and helps you rebuild and re-establish your credit. If you’ve struggled in the past with getting approved for other credit cards due to poor credit, you may qualify for this card. By using this card, coupled with proper credit behavior, you will be able to improve your credit score.

Visa® Classic from Georgia's Own Credit Union

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on Georgia's Own Credit Union’s secure website

Visa® Classic from Georgia's Own Credit Union

Annual fee
$0 For First Year
$0 Ongoing
APR
12.99%-17.99%
Credit required
bad-credit
Bad

How the Card Works

This is a relatively straightforward credit card. There is no annual fee and no rewards. Lack of a rewards program makes this card predominantly for rebuilding credit. Look at it this way — there are no tempting rewards to lead you to overspend, allowing you to focus on rebuilding your credit.

The APR for this card is a fair 12.99% to 17.99%. Other cards charge upward of 20%, so this is reasonable. However, a lower APR shouldn’t encourage you to accrue a balance month to month. Always make it a point to pay your balance in full and on time.

A good way to start rebuilding your credit with the Georgia’s Own Visa Classic is to add a recurring payment, like Netflix or Spotify. You can solely have your monthly Netflix or Spotify charge on your credit card statement and increase your credit score as long as you pay your bill in full and on time. This will give you a low utilization (the amount of your credit limit you use), which is a key factor in determining your credit score. For example, if you have a credit limit of $100 and charge your recurring $7.99 Netflix bill, then you will have a utilization of 8% (below 20% is ideal).

How to Qualify

In order to qualify for this card, you need to have a stable source of income, so a job is needed. This will prove that you can afford to make your monthly payments on time and are responsible.

In addition, since this card is provided by a credit union, you have to join Georgia’s Own Credit Union. Don’t worry if you reside outside of Georgia; anyone can become a member regardless of residence. There are four free eligibility options that can qualify you for free membership. Otherwise you will have to join the GettingAhead Association, with a $5 annual membership fee. The best bet is to speak to a Georgia’s Own loan officer (404-874-1166) and see if you’re pre-approved for the credit card. If pre-approved, you can join the GettingAhead Association while completing your credit card application. All members will also need to keep $5 in a savings account that must remain in the account while you have the card open.

A note on the application process for Georgia’s Own — when you apply for a credit card on Georgia’s Own website, you are directed toward an application that is for all the credit cards they offer. This means that depending on your creditworthiness, you may not be directed to the Visa Classic as an option. Therefore if you want to apply directly for the card, the best bet is to speak with a loan officer, who will tell you if you’re pre-approved for the Visa Classic card.

What We Like About the Card

Good chance of getting approved

Georgia’s Own tailored this credit card toward those needing to rebuild or re-establish their credit history. This gives those with bad credit a greater chance of being approved. Also, if your score is above 620, you are more likely to be approved.

Fair APR

This card has a fair APR ranging from 12.99% to 17.99%. This is significantly lower compared to other cards targeted to people with less than perfect credit, with APRs as high as 23.99%. Although your goal is to pay every bill in full and on time each month, if you keep a balance this low, APR won’t accrue as much interest as other cards.

What We Don’t Like About the Card

Have to join the credit union

In order to get this card, you have to join Georgia’s Own Credit Union. There are four free eligibility options, and if you don’t qualify for free membership, you will have to join the GettingAhead Association, with a $5 annual membership fee. You will also need to keep $5 in a savings account that must remain in the account while you have the card open.

2% foreign transaction fee

Make sure to leave this card at home when you travel abroad as you’ll be charged a 2% foreign transaction fee on all purchases. This is slightly lower than most cards, which charge a 3% foreign transaction fee, yet high enough to increase your bill significantly if you make purchases abroad.

No rewards program

There is no rewards program for this credit card. Georgia’s Own offers a Visa Platinum card that has a rewards program, but you may have a harder time qualifying if you don’t have a good credit score.

Who the Card Is Best For

If you’re someone who has a low credit score and doesn’t mind working with a credit union, this card may be right for you. We recommend this no-frills card for people who want to rebuild their credit with a credit card. While you won’t earn any rewards with this card, if you practice proper credit behavior, you’ll be rewarded by a better credit score.

Alternatives

Secured Card with Rewards

Discover it® Secured Card - No Annual Fee

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$200

APR

23.99% APR

Variable

If you don’t want to join a credit union, you might want to consider a secured credit card to help you build credit. With a secured card, you make a deposit – and receive a credit limit based upon that deposit. The good news is that your secured credit card will report to the credit bureaus. That means your good behavior can help you improve your credit score over time. One of our favorite secured credit cards is from Discover.

Rewards Card with Good Approval Odds

Walmart® MasterCard<sup>®</sup>

Annual fee

$0 For First Year

$0 Ongoing

Cashback Rate

up to 3%

APR

17.65%-23.65%

Store cards are more likely to approve people with low credit scores, and the Walmart MasterCard can be a good option for you. The Walmart MasterCard has unlimited rewards with up to 3% cash back. Don’t worry if you don’t shop at Walmart since you can earn rewards on any purchase. Be aware that this card has a higher interest rate than the Georgia’s Own card, so compare which card is best for you.

Bottom Line

With no annual fee and fair interest rates, the Georgia’s Own Visa Classic credit card is a good option for those with bad to fair credit who are looking to improve their credit score. If you don’t mind working with a credit union, this card is a good option to rebuild credit.

FAQ

If you don’t qualify for the four free eligibility options, you will have to join the GettingAhead Association, with a $5 annual membership fee. The best bet is to speak to a Georgia’s Own loan officer (404-874-1166) and see if you’re pre-approved for the credit card. If pre-approved, you can join the GettingAhead Association while completing your credit card application. All members will also need to keep $5 in a savings account that must remain in the account while you have the card open.

You should work hard to make sure you make payments on time every month. A missed payment will lead to a late fee and interest accruing on the balance. This will ultimately leave a negative mark on your credit report and lower your credit score. Try not to spend more than you are able to and stick to a budget with these helpful budgeting apps in order to rebuild your credit score.

There is no one way to increase your credit score; rather, there are numerous behaviors responsible cardholders practice to establish good credit history. Good practices include paying all of your statements on time and in full and keeping a utilization below 20%; these will help you rebuild credit.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Building Credit, Credit Cards

A Guide to Getting Your Free Credit Score

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

As a consumer of financial products it is important to monitor your credit score on a regular basis. This will ensure that you know where you stand in the credit landscape when it comes time to apply for a new credit card, loan, mortgage, or other product. Monitoring your credit score regularly can also help notify you of any unexpected changes to your credit history such as fraud.

There are numerous free credit scores available for you to access; however, not all scores are considered equal. Credit lenders will often pull specific scores, depending on the product you are applying for. Therefore, we have created a simple chart for you to see where you can get specific credit scores from the top two companies — FICO® and VantageScore. The best part is, it’s all for free!

Read on for details on important aspects that make up your credit score and which score suits your individual needs.

 

Finding the Right Credit Score

Where to Access Your Credit Score for Free

The below chart lists some of the various versions of credit scores and where you can access them for free from a variety of banks, credit card companies, and personal finance websites.

FICO® Score vs. VantageScore

You may be wondering which score is better — FICO® score or VantageScore? We’re going to break down what the different versions of the two scores are best for in the next section, but for now here are several differences between the two major types of credit scores.

Find the Best Credit Score for Your Needs:

The credit score that you are looking for varies, depending on what type of credit you are looking to apply for. Each credit score version has different benefits, and lenders pull certain scores in accordance with your application.

Credit Score Monitoring

The best options: All VantageScores and FICO® scores

If you’re simply looking to monitor your credit score and stay on top of your credit, either VantageScore or FICO® score will suffice.

New Credit Card

The best options: FICO® Bankcard Scores or FICO® Score 8 primarily; FICO® Score 3

Where to get them: Get your FICO® Score 8 from Credit Scorecard by Discover or freecreditscore.com

When applying for a new credit card, these scores are most likely to be pulled by credit card issuers. Lenders may pull your score from one or all three bureaus.

Mortgage Loans and Mortgage ReFis

The best options: FICO® Scores 2, 4, 5

Where to get them: myFICO for $59.85

These scores are used in the majority of mortgage-related credit evaluations, with lenders pulling your score from all three bureaus. However, these scores are not free and can only be purchased at myFICO.

Auto Loans

The best options: FICO® Auto Scores 2, 4, 5, 8, 9

Where to get them: myFICO for $59.85

Auto scores are industry-specific and used in the majority of auto-financing credit evaluations. Lenders may pull your score from one or all three bureaus. Unfortunately, these scores are not free and need to be purchased at myFICO.

Personal Loans, Student Loans, and Retail Credit

The best option: FICO® Score 8

Where to get it: Credit Scorecard by Discover or freecreditscore.com

For other financial products such as personal loans, student loans, and retail credit, FICO® Score 8 is best. This is the credit score most widely used by lenders, and they may pull your score from one or all three bureaus when making a decision.

Other Scores and Their Value

FICO® Score 9 is the newest model and not widely used yet. It is also not available for free at this time. The benefits of this score are that it doesn’t penalize you for paid collections and reduces the ding you get from unpaid medical collections. See our review for more information.

The FICO® NextGen score is used to assess credit risk, but only a small number of lenders use it due to its 150-950 scoring range and older model.

Credit Score Basics

What are the three credit bureaus?

There are three credit bureaus that report your credit score to financial institutions and personal finance websites. The bureaus are TransUnion, Experian, and Equifax. They collect credit information from a plethora of lenders and data providers and then consolidate it into a credit file, with your credit score being the key piece of information. You can’t get your credit score directly from the bureaus, but earlier in this article we discussed numerous resources where you can access your credit score — for free.

What is a FICO® score?

A FICO® score is a number that predicts how likely you are to pay back a loan or other credit products in a timely manner. FICO® scores range from 300 to 850. The higher your score, the more likely you are to be approved for credit cards, loans, mortgages, and other financial products. FICO® scores are the most widely used credit scores — influencing over 90% of U.S. lending decisions.

How is a FICO® score calculated?

FICO® scores are calculated from data in your credit reports and made up of the following five key factors:

Source: ficoscore.com
  1. Payment history (35%):
    Your payment history is simply a record of your on-time or missed payments. It’s the largest component of your FICO score — and therefore the most important aspect to focus on if you want to improve it.
  2. Amounts owed — aka utilization (30%):
    Utilization is the amount of your credit limit you use. It is ideal to have a utilization below 20%. If you have two credit cards, one with a $10,000 limit and the other $5,000, then your total credit limit is $15,000. If you have a combined $3,000 debt across both cards, then your utilization would be 20%.
  3. Length of credit history (15%):
    The total length of time that you’ve had credit across all products you have. For example, expect your credit score to be slightly lower if you have had credit for six months versus six years.
  4. New credit (10%):
    Frequency of credit inquiries and new account openings. When you open a new account, your credit score will take a slight dip for about six months, then it will rise — as long as you’re responsible in the other four factors mentioned.
  5. Credit mix (10%):
    This is the different types of credit you have. This includes credit cards, retail accounts, installment loans, and other financial products. The more variety of credit you’re responsible with, the better your score will be.

What is a VantageScore?

A VantageScore is also a number that measures your credit risk. These scores typically range from 300 to 850 (501-990 for earlier models) and are used by 20 of the 25 largest financial institutions. VantageScores are in line with FICO® — the higher your score, the better. VantageScores are more widely available for free from online resources than FICO® scores; however, a majority of lenders pull your FICO® score when making decisions.

How is a VantageScore calculated?

VantageScores are calculated from data in your credit reports and influenced by the following six key factors:

Source: your.vantagescore.com

FAQ

Credit scores are typically updated every 30 days. Depending on your activity, your score may remain the same or fluctuate.

No, checking your score will not do any damage to your score.

Your credit scores differ based on the information that each bureau pulls. Most information is the same, but one bureau may use unique information that another bureau doesn’t have, creating a difference in scores. Also, if you compare your FICO® scores and VantageScores, they will differ because they use different criteria when pulling your score.

A FAKO score is a non-FICO score that is known as an “equivalency score” or “educational score.” FAKO scores give you a general picture of where you stand, but aren’t used by lenders when making a credit decision and therefore aren’t accurate in predicting if you’ll be approved.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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12 Million People Are About to Get a Credit Score Boost — Here’s Why

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

12 Million People Are About to Get a Credit Score Boost

Some serious tax liens and civil judgments will soon disappear from millions of credit reports, the Consumer Data Industry Association announced this week. As a result, millions of consumers could see their FICO scores improve dramatically.

(This post was originally published on March 15, 2017.)

The CDIA, the trade organization that represents all three major credit bureaus — Equifax, Experian, and TransUnion — says they have agreed to remove from consumer credit reports any tax lien and civil judgment data that doesn’t include all of a consumer’s information. That information can include the consumer’s full name, address, Social Security number, or date of birth. The changes are set to take effect July 1.

Roughly 12 million U.S. consumers should expect to see their FICO scores rise as a result of the change says Ethan Dornhelm, vice president of scores and analytics at FICO. The vast majority will see a boost of 20 points or so, he added, while some 700,000 consumers will see a 40-point boost or higher.

Even a small 20-point increase could improve access to lower rates on financial products for these consumers.

“For consumers, the news is all good,” says credit expert John Ulzheimer. “Your score can’t go down because of the removal of a lien or a judgment.”

The change will apply to all new tax lien and civil-judgment information that’s added to consumers’ credit reports as well as data already on the reports. Ulzheimer says consumers who currently have tax liens or judgments on their credit reports that are weighing down their credit scores will be able to reap the rewards of removal almost immediately

“The minute the stuff is gone, your score will adjust and you’re going to find yourself in a better position to leverage that better score,” says Ulzheimer.

But, importantly, he notes that just because credit reporting bureaus will no longer count tax liens or civil judgments against you, it does not mean they no longer exist at all. Consumers could still be impacted by wage garnishment and other punishments associated with the liens and judgments.

“This is the equivalent of taking white-out and whiting it out on your credit report. You can’t see it any longer, but you still have a lien, you still a have a judgment,” Ulzheimer says.

Solution to a longstanding problem

Many tax liens and most civil judgments have incomplete consumer information.

The changes are part of the CDIA’s National Consumer Assistance program that has already removed non-loan-related items sent to collections firms, such as past-due accounts for gym memberships or libraries. The program also has set a 2018 goal to remove from credit reports medical debt that consumers have already paid off.

“Some creditors may have liked having inaccurate credit reports, as long as they were skewed in their favor. That’s not the way the system is supposed to work. This action is just one more proof that the CFPB [Consumer Financial Protection Bureau] works, and works well, and shouldn’t be weakened by special interest influence over Congress,” says Edmund Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

The move is likely the result of several state settlements and pressure from the Consumer Financial Protection Bureau, the federal financial industry watchdog.  Beginning in 2015, the reporting agencies reached settlements with 32 different state Attorneys General over several practices, including how they handle errors. The CFPB also released a report earlier this month that examined credit bureaus and recommended they raise their standards for recording public record data.


Time to start shopping for better loan rates?

High credit scores can lead to long-term savings. Borrowers who expect their scores to improve as a result of these changes may find better deals if they can wait a few months to buy a new house, refinance a mortgage, or purchase a new car. Even a 10-point difference can lead to lower rates on loans.

If you expect the credit reporting changes might benefit you, Ulzheimer suggests holding off on taking out new loans or shopping for refi deals, such as student loan refinancing.

“Let it happen, pull your own credit reports to verify the information is gone, then take advantage of the higher scores,” Ulzheimer says.

Ulzheimer also says the changes may not be permanent. “There is a possibility that if the credit reporting bureau is able to find the missing information, the negative information could reappear on consumer credit reports,” he says.

There isn’t anything in the law that forbids the reporting of liens and judgments anymore, and lenders can still check public records on their own to find missing information.

Ulzheimer says if he were the CEO of a reporting agency, that’s exactly what he would do.

“I would embark on a project to get this information immediately back in the credit reporting system,” he says, then adds all he’d need to do is find an economic way to populate the missing data.

“From a business perspective, I would do it in a New York minute. Because I would immediately have a competitive advantage over my two competitors,” says Ulzheimer.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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