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Reduce Bad Credit
Curious about how your credit and financial state compares with the rest of the country?
The numbers don’t lie. We’ve compiled 25 useful and interesting credit, debt and saving statistics to help you better assess your situation and learn more about your credit score today.
1. On average, consumers have 13 credit obligations on record, including credit cards and installment loans, according to FICO.
2. 50% of all consumers have been 30 or more days late on a payment, according to FICO.
3. 3 out of 10 have been 60 or more days overdue, FICO reports.
4. 1 in 7 consumers uses 80% or more of their credit card limit, FICO reports.
5. 40% of credit card holders carry a balance less than $1,000, according to FICO.
6. 15% carry balances in excess of $10,000, according to FICO.
7. 84% of college students have credit cards, according to Sallie Mae.
8. 50% of college students or more have at least 4 cards, according to Sallie Mae.
9. 75% of college students who have credit cards carry a balance, Sallie Mae reports.
10. The average credit card balance for college students is $3,173, according to Sallie Mae.
When your college student comes home for the first time this fall, they’ll likely bring an intense craving for a home-cooked meal, a dozen loads of laundry and (hopefully) a few decent grades. But what you hope won’t arrive on your doorstep this fall is your college student in credit card debt.
College students in credit card debt are no doubt a major problem nationally. According to a study by student lender Sallie Mae, more students than ever before have their own cards, and an alarming number carry a large balance. Study findings include:
• 84% of college students have credit cards
• 50% or more have at least four cards
• The average balance is $3,173
• 75% carry a balance
• 60% are surprised at how high their balances are
So just how do your students get entangled in this mess, and how do you avoid finding your college student in credit card debt?
Do you pay your bills late and submit the minimum payment or less on credit card balances?
Have you made it a habit to max out credit cards?
Are you relying on payday loans just to survive?
You aren’t alone. But don’t be intimidated or overwhelmed if you need to improve a bad credit report. Instead, think back to your college days (and the time when your unhealthy credit practices may have started).
Approach cleaning up a poor report just as you did your educational career:
Hard work → high grade point average → dream job
Follow that formula to clean up poor credit:
Hard work → high credit score → dream home and car
GPA Credit Score
3.8 760
Just as a college GPA is a cumulative measurement of how well you perform in all of your classes, your credit score is a cumulative measurement that can fluctuate and is based on multiple factors:
• Fewer overdue payments = higher credit score
• More loans paid off = higher credit score
• Longer credit history = higher credit score
Mr. and Mrs. Poor Credit are no different from the many Americans with serious financial woes. Outstanding loans, credit card debt and a job loss combined to put them in an undesirable financial situation. Follow the journey of Mr. and Mrs. Poor Credit in their diary.
Sept. 7, 10:00 am: Credit is more important than you might think. It determines the house you can buy and the car you drive. It can even affect the job you may or may not get.
I’m waiting patiently to hear back from a job I recently applied for. The recruiter called a few minutes ago and said they were going to run a criminal and credit check. “Do you have anything I should know about?” he asked with a laugh.
“Hmmm…. No criminal record that I can think of,” I answered teasingly. But a little voice said, “Oh great, I know that my credit is horrible!” A couple of years of credit card debt, student loans and a divorce can really mess up your credit. Not to mention all those library books I forgot to take back. Yes, the public library will take you to collections!
It’s the end of the month, and you know what that means. Any day now, your postman is going to show up at your doorstep with the dreaded credit card bill.
If paying off your credit cards seems like an insurmountable task, you’re not alone.
A recent report from financial research firm Javelin Strategy & Research found that many Americans are having a more difficult time paying off credit cards. And who can blame them, with the economic downturn, mortgage crisis, and high food and fuel costs? Here are a few results of the study:
• 28% say paying off their credit card balance has become more difficult
• 45% say their ability to contribute to savings has decreased
Paying off Credit Cards
Especially in difficult economic times like these, it’s crucial to develop a plan to pay off credit cards. On the surface, creating a plan seems perfectly simple: charge less and pay down more. But anyone who’s ever been in debt—or anyone who’s managed their own finances for that matter—knows that sticking to the plan isn’t that easy.
Here are 6 valuable tips to help you develop a plan that you can stick with:
Improve a bad credit report, just like a leaky roof.
What’s the first step to repairing a hole in a roof?
Finding out how big the hole is.
This same logic applies if you find yourself needing to improve a bad credit report. The first step in developing a plan to improve your credit is determining just how bad it has become.
Most consumers who have experienced their credit rating fall did not allow this to happen intentionally. They simply spent money out of an immediate need, like with a leaky roof, and may not have had the luxury of developing a plan. But this lack of a planning, for whatever reason, is what has led nearly all consumers who suffer from bad credit to where they are today.
If you are a consumer currently experiencing the effects that bad credit can have on your life, you may wish each day that you could go back and develop a plan that would have kept you out of this mess. You can’t. But you can develop a plan that will help you recover and improve your report.
A bad credit score won’t just hurt your ability to get new shoes at the mall. It can hurt you in other ways as well, that have real impact on your life. Young people especially need to be aware of how a bad credit score can wreak havoc on their personal and career well-being into the future.
Bad Credit can hurt Employment Opportunities – According to the U.S. Equal Employment Opportunity Commission, 30 to 40 percent of employers use credit score as an employment selection device. In other words, bad credit could be a stopping point from landing that new job, especially in a recession, where employers are especially careful to hire responsible workers.
Buying a home is difficult for people with Bad Credit – Many young people don’t realize the importance of good credit to get the proper loans to buy a home. According to Consumers Union, the non-profit publisher of Consumer Reports: “A borrower with a credit score of 660 or greater is considered to be of less risk.” If you are considered high risk, getting something like a home loan may be next to impossible.