This Week in Credit News

Wausau, Wis., has top credit score of U.S. cities

“Several other Midwestern cities are among the metro areas with the best credit scores, Experian said. Compared with the rest of the nation, they tend to have lower unemployment rates and less debt.”

Credit-Card Issuers Circling Subprime Borrowers Again

“The move is part of a broader effort by banks to lure more credit-card customers after many lenders retrenched from the subprime market. A surge in losses from soured loans during the recession and a regulatory overhaul prompted many of the largest credit-card issuers to focus exclusively on borrowers with the best credit.”

3 credit cards that reward healthy choices

“Personal finance columnist Liz Weston says there’s no credit card reward rich enough or “healthy” enough to offset the cost of carrying credit card debt. “When you’re carrying a balance, your primary concern should be getting the lowest possible interest rate so you can get out of debt faster,” she says.”

This Week’s Credit Repair Blog

Tips for Building a Better Credit Profile

This Week’s Credit Repair Q&A

Will Credit Monitoring Protect Me From Identity Theft?

When Do I Stop Paying My Old Card After a Balance Transfer?

Is Your Credit Score Determined by How Much You Make?

There’s a lot of advice available online about building the perfect credit profile.  Every financial advisor, weekend blogger, and credit repair service seems to have the one solution that’s guaranteed to work for your credit report.  How many credit cards you need, what types of accounts are best for your score, how many inquiries you should have – the list goes on and almost always looks different.

Here’s one more ingredient to the massive stew of credit advice available online, while at the same time diluting out all of the unnecessary “tips” to help you build the perfect credit profile.  Hope you brought a bib, things could get messy.

Take a breath

The first piece of advice might seem a little unconventional, but hear me out: Don’t worry so much about your credit profile.

If you’re fretting over your credit scores to the point that you are eyeing your credit score through a microscope every other Friday, do yourself a favor and stop.  Generally speaking, consumers who obsess too much over their credit profiles could only be harming themselves – especially if they’re prone to opening credit accounts one day and closing them the next if they don’t see an improvement in their scores.

They could also be the type of consumer who reads all those finance articles that offer conflicting opinions on managing credit (seriously, ask any 5 of them what the best way to find debt relief is, and you’ll somehow wind up with 6 different answers, but I digress), and so wind up following all their differing tips and screwing themselves over.

What your credit report needs

Folks, here’s exactly what your credit profile needs to be the best it can be:

• A mortgage.
• A car loan.
• No more than 4 open, good credit cards.

Your creditors and lenders are looking for more than just a high score when they pull your report; they’re looking to see how good you are at handling money.  That doesn’t stop with paying your credit card bills on time (although you certainly want to keep paying them) – it also extends to how well you handle various types of accounts.

Your credit report should include a mixture of both revolving credit accounts (the credit cards) and installment accounts (a home loan, car loan, or even your student loans), all in good standing.  This shows lenders you’re good at handling different types of financial accounts, and makes them more likely to agree to a loan application.

Credit cards and your credit report

How many credit cards you should have for your credit report to look its best is a tricky subject.  Opinions vary wildly on how many cards you should actually have, as well as what types of cards they should be, what your balances on each of them should be, etc.

For our part, we recommend you always keep at least 4 good credit cards open.  If you’re unsure what types of cards to get, we recommend you stick with Visa and/or MasterCard – preferably through your bank.  If you don’t have any cards open in your name, look into opening secured credit cards with your bank.  They work just like regular credit cards, but require a deposit to activate and are available to just about anyone.

Once you’ve got your 4 cards, my advice for making the most of them is to use 2 cards sparingly, and to carry no balance at all on the other 2 cards.  Charge a tank of gas or a trip to the grocery store to the latter 2 cards every once in a while to keep them from closing due to inactivity.  This helps keep your credit utilization down – something creditors love to see on your report.

We recommend using your 4 credit cards like this because FICO – the firm who assigns you the credit score most used by creditors – looks at not only your individual credit accounts, but your cumulative profile as well when determining your credit score.

This Week in Credit News

U.S. Consumer Credit Decreased $9.5B in August

“Decreasing credit shows American households are either continuing to pay down debt or lack the confidence to boost spending on non-essential goods. A thawing of credit and a faster pace of purchases may require bigger gains in income and payrolls.”

NYC identity theft and credit card fraud victimized thousands, more than 100 arrested, says D.A.

“Bank tellers, restaurant workers and other service employees in New York City lifted credit card data from residents and foreign tourists as part of an identity theft ring that stretched out to China, Europe and the Middle East and victimized thousands, authorities said Friday.”

Mad at bank fees? Credit unions get another look

“Whenever a big bank rolls out a controversial fee, customers start fuming about taking their business elsewhere and the attention often falls on credit unions. That happened again last week when Bank of America said it would soon start charging customers a $5 monthly fee to make debit card purchases.”

This Week’s Credit Repair Blog

Free Credit Score with No Subscription Required!

What to Know When Dealing with Credit Repair Companies

This Week’s Credit Repair Q&A

Credit Cards with 2 APRs – Where Do My Payments Go?

Will a New Installment Loan Affect My Utilization?

Does the Credit CARD Act Protect Against Over-the-Limit Fees?

This Week in Credit News

SEC Report Finds Problems at Credit-Rating Firms

“The Securities and Exchange Commission found credit-rating firms sometimes fail to manage conflicts of interest, citing problems with employee stock ownership policies, and said one firm allowed employees to inform some people about a pending rating action before it was publicized.”

Credit Cards Aimed at College Students

“The new rules restricting aggressive credit card marketing on campus, included in the CARD Act of 2009, seem to have reduced the practice, says a report from Credit.com.”

Banks May Hold Onto Credit-Default Swap Risks for Weeks, Fed Report Says

“Credit-default swap dealers often hold onto risk from big trades for longer than many investors thought, which may complicate efforts by regulators to impose new reporting rules in the $28.4 trillion market, according to a Federal Reserve report.”

This Week’s Credit Repair Blogs

How to Tell a Good Debt From a Bad One

How to Pay Off a Debt

This Week’s Credit Repair Q&A

Paid Off My Car and My Credit Score Dropped

What Happens to Our Student Loans When We Die?

Can a credit card company really garnish my wages?

This Week in Credit News

Debit or Credit? Citi Places Its Bet

“Citi mailed an estimated 346 million card offers to North American customers in the third quarter, according to figures to be released later this month by Mail Monitor, a unit of research firm Synovate. That is more than one for every man, woman and child in the U.S. One in three credit-card offers that landed in consumers’ mailboxes last month came from Citi, Mail Monitor estimates.”

Deal Credit Gushes at Top

“The flood of offers reflected bankers’ eagerness to snap up a piece of a big deal. The company wasn’t expected to use anywhere near that much money. Indeed, United Technologies said Wednesday that it had agreed to buy Goodrich for $16.4 billion.”

Discover Profit Tops Estimates as Loan-Loss Provision Falls

“Discover Financial Services (DFS), the credit-card issuer and payments network outperforming two larger rivals this year, posted third-quarter profit that beat analysts’ estimates as loan-loss provisions declined.”

This Week’s Credit Repair Blogs

How to Get Rid of Judgments

What’s the Point in Maintaining Your Credit Score?

This Week’s Credit Repair Q&A

Can Paid Collections Pop Back Up on My Report

Credit Cards vs. Installment Loans – Which do I pay down first?

Should I use Retail Credit Cards to Build My Credit

This Week in Credit News

Citibank credit card defaults rise again in August

“The credit card division of Citigroup Inc. said in a regulatory filing that its default, or charge-off rate, rose to 6.92 percent of balances on an annualized basis in August, from 6.64 percent for July, according to a regulatory filing.”

5 new credit-card management tips

“On the credit card front, a new study by CardHub finds that while card companies are more transparent than they were a year ago, information isn’t as plain and simple as it could be. “Information related to rewards redemption and information on the balance transfer fee continue to be the areas with the most deficiencies across the board,” according to the study.”

‘Jersey Shore’ Gets $420,000 Tax Credit from State

“The MTV reality series “Jersey Shore” has been approved for a $420,000 tax credit from the state of the New Jersey, even though the film tax credit program has been suspended due to state budget cuts.”

This Week’s Credit Repair Blog

Beware of Free Credit Score Promises

Five Credit Score Fallacies to Forget

This Week’s Credit Repair Q&A

Should I combine My Credit Cards?

Credit Report Removal of Collection

Remove State Tax Liens

This Week’s Credit News

Chairman: Okla. tax credits should face scrutiny

“Oklahoma doles out hundreds of millions of dollars each year to companies in the form of tax credits and other incentives with little oversight or transparency, and there’s no way of knowing exactly how much it’s costing the state, a lawmaker complained Wednesday during a task force meeting.”

Top 6 Credit Card Mistakes You Need to Avoid

“Despite the many types of financial instruments available to you, your credit cards are probably the ones you use most often. Most cardholders literally wear through the magnetic stripes on their cards by using them so frequently, yet few truly become experts at managing their portfolio of plastic. In fact, too many cardholders unknowingly commit some of the simplest – and most easily avoidable – credit card mistakes.”

Fitch: Credit-Card Charge-Offs Up In August, Reverse 4-Month Decline

“Credit-card charge-offs rose for the first time in four months during August as two of the larger trusts, Citigroup Inc.’s (C) Citibank and Bank of America Corp. (BAC), posted higher losses, according to a report by Fitch Ratings.”

This Week’s Credit Repair Blog

Get Me Outta This Co-Signed Loan!

This Week’s Credit Repair Q&A

How Does Credit Utilization Affect My Credit Score?

How to Remove a Bad Debt

How Do I Raise My Credit Score?

This Week’s Credit News

Principal Charged $17K on CPS Credit Card: Report

“As Chicago Public Schools struggle to close a multimillion dollar budget deficit, a Near Northwest Side Principal is under fire for racking up $17,000 on his school credit card to travel overseas.”

When Credit Ratings Lose Their Meaning

“Which is a safer investment: (A) Treasury bonds, backed by the full faith and credit of the U.S. government, or (B) securities backed by subprime loans, the same type of investments that led to the worst financial crisis since the Great Depression? For ratings company Standard & Poor’s, the answer is B.”

3 Credit Card Marketing Phrases That Don’t Mean Anything

“While reading credit card advertisements can certainly clue you in to exciting deals and promos, card issuers have a tendency to celebrate the bare minimum. Here are a few claims you should take with a large (read: mammoth) grain of salt.”

This Week’s Credit Repair Blog

Should You Take On More Credit Accounts During Credit Repair?

What You DON’T Have to Worry About Showing Up on Your Credit Report

This Week’s Credit Repair Q&A

Will Getting a Credit Card Drop My Credit Score?

Credit Repair After Bankruptcy

Can I dispute accurate items on my credit?

This Week in Credit News

Consumers Squeezed Less at Credit Unions

“Federal Reserve policy drove down loan rates in the recession to spur investment and consumer spending. But deposit rates plummeted even more quickly, resulting in a net deterioration of the interest rate climate for consumers. In the years since the height of the recession, the rate climate — as measured by our Credit Power Index — has improved in fits and starts, but has yet to recover to pre-recession levels.”

Treasurys Snap Decline, MBS Volatile on Refis

“U.S. Treasury bond prices snapped a three-day losing streak after a bleak report on unemployment claims, while credit markets were discounting hopes for additional monetary stimulus measures from the Federal Reserve when Chairman Ben Bernanke speaks on Friday.”

Bank Credit Default Swaps Reach Record High as Fed Boost Bets Evaporate

“The cost of contracts on the Markit iTraxx Financial Index of swaps linked to senior debt of 25 banks and insurers climbed 6 basis points to 257, according to JPMorgan Chase & Co. at 1 p.m. in London. The subordinated index was up 11 at an all-time high of 456, based on closing prices.”

This Week’s Credit Repair Blog

Secured vs. Prepaid Credit Cards: Which Will Help Improve Your Credit?

Keeping An Eye on Your Credit Report

This Week’s Credit Repair Q&A

How Do I Rebuild My Credit?

Do I need to pay off old charge offs?

How long do Inquiries stay on my credit report?

This Week in Credit News

How Do You Get Credit Cards Out Of Your Life?

“But, most people don’t have piles of cash lying around and aren’t counting on a big lump sum. Getting out of credit card debt is a slow process where you need to have a long-term goal.”

Web Merchants Credit Rater Wins Valley’s Backing

“Instead of FICO credit scores or pledges of collateral, Kabbage uses the length of an online merchant’s selling history, monthly transaction volume, revenue patterns, feedback ratings and other metrics to develop its own score of creditworthiness in just minutes.”

Back-to-School Special: 9 Credit-Card Tips For Students

“Even as school starts up again around the country, students may already be falling behind in one critical area of knowledge: How to choose and use credit cards. Unfortunately, until financial education is taught in high schools across America, students have to enter the world of consumer credit on their own. We talked to a couple of credit experts to ask them what they would tell students if they were teaching Credit Cards 101.”

This Week’s Credit Repair Blog

What Makes Up Your Credit Score?

Tips to Paying Off Your Credit Cards

This Week’s Credit Repair Q&A

Will Paying My Bills Early Improve My Credit Score

How is a Person’s Credit Risk Determined?

Why Do My Credit Scores Change With Little Activity?