Debt Negotiation Zone » fico score

American Express paying cardholders to close their credit cards

admin — Thu, 12 Mar 2009 04:52:36 +0000

American Express is paying some of its members $300 to close their accounts. Amex has been know to cater to wealthy clients expanded their base to people outside of this sphere. The plan has backfired and they are losing millions. American Express is looking to manage credit risk based on customers credit scores and credit profiles. Accounts must be closed by the end of March.

Credit Card companies are cutting credit lines

Just like their competition Capital One, Chase, Discover and Citibank, American Express is selectively cutting credit limits to customers and not going after as many new clients. Keep an eye on your mailbox, that credit card in your walled may be finding a new home in the garbage can.

How Credit Card Companies are Hurting Your Credit Score

admin — Wed, 11 Mar 2009 16:41:25 +0000

Credit card companies are hurting your credit score with the new rules that are coming out. Across the board credit card companies are cutting credit lines, lowering credit spending limits and closing credit card accounts. Well this may seem benign to some it is actually hurting your credit score. When your credit card is closed, all of your credit history goes with it. About 15% of your credit score is based on your credit history. When the credit card goes away so does part of your credit score. When your credit limit is lowered and you have an existing balance already, your credit card company can max you out. When you go over 50% of available credit on your credit card, you credit score is impacted severly. I have seem peoples credit scores drop 100 points or more just by having their credit cards max out.

Use Your Old Credit Cards

Credit Card issuers are canceling credit cards because of no activity. You may want to dust them off and start using them here and there just so you don’t loose them. Credit cards are getting harder to get. You may loose one and regret it later if you can’t get another one. The credit card makes money when you use the card. It is actually an expense if you don’t. Banks are looking to cut costs so be sure to use your credit card if you don’t want to loose it.

Whether you have visa cards, capital one, chase cards, kotak credit cards, citi cards, wamu credit cards or any of the other credit card company cards out their, you need to be aware of the new changes going on. You want to use your credit cards instead of your credit cards using you.

Can I Go To Jail If I Don’t Pay My Credit Card Bills?

admin — Tue, 28 Oct 2008 02:55:43 +0000

Can you go to jail if you do not pay your credit card bill? No, If you stop paying your credit cards, your life will become a lot more difficult. The first thing that will happen is that your credit score will drop like a rock. A few late payments can drop your fico score as much as 200 points. Your credit card company is going to raise your interest rates and start tacking on late fees.

When Will Creditors Starting Calling Me If I Get Behind On My Bills?

Your creditors may start calling you in as little as 30 days once your are behind on your credit card bill. They will probably start off nicely but the longer they go unpaid, the more aggressive they may become in trying to collect from you.

When Will My Credit Cards Be Sent To Collections?

Usually after the fourth month, your original creditor will send you to collections. This is when the fun starts. A collection agency can make your life hell. They may call you all day long. They may even try to contact your family, neighbors or even your employer to try to reach you.

What Are My Options If I Can’t Pay My Bills?

Once your are behind on your bills, there are not a lot of great options. You may want to try credit counseling or debt consolidation. You may have referred to this as a CCCS program. A CCCS program will lower your rates and payments and hopefully get you back on track. You may also want to consider a debt settlement or credit card debt negotiation program. A credit card debt settlement company can negotiate your credit card debt as much as 60% of what you owe. If you are really in dire straits you may want to consult with a bankruptcy attorney.

This information is of general interest and is not legal advice. If you need legal advice consult with a professional or attorney.

Does Transferring Balances Hurt Your Credit Score?

admin — Tue, 16 Sep 2008 15:51:44 +0000

If you are considering transferring your credit card balance to a new low rate 0% APR card you may want to reconsider. Transferring your balances often can hurt your credit score. You may only want to do it maybe once a year.

Should I Leave My Old Credit Card Open If I Do A Balance Transfer?

If you do a credit card balance transfer you should leave your old credit cards open. The way the credit reporting system works is flawed. If you cancel a credit card all of the credit history goes with it. So you will look like a new credit user if you get rid of the card. Just keep them open. I know it does not make sense but this is how it works.

Does Doing A Balance Transfer Lower My Credit Scores?

Doing multiple balance transfers every year can have a big impact on lowering your credit score. In the eyes of the credit bureaus you are in trouble and lower your credit score for it. They do not want you to take on more new credit and increase your financial exposure. The credit card companies are being more careful about exposing themselves to risk in this economic environment. Doing one balance transfer a year probably wont have to much of an impact on your credit score.

The other problem you can have with transferring balances often is that at some point you can get cut off and you may be stuck with an interest rate that is going to go sky high.

What happens if I cancel a credit card?

admin — Thu, 07 Aug 2008 14:59:57 +0000

What happens to my fico score if I cancel my credit card? canceling a credit card does not eliminate your responsibility to repay the debt. What it can potentially do is to lower your credit score. A percentage of your credit score is determined by your credit history. When you cancel a credit card, your credit history goes with it. Canceling a bunch of credit cards and moving the debt to another credit card will hurt your credit score in most cases.

What is maxing out a credit card bad?

When you max out a credit card your fico score will suffer. Consolidating your credit cards onto one low rate credit card may help lower your credit card payments but it will most likely lower your credit score if you go above 50% of your available credit balance. Ideally you do not want to go over 30% of your available credit on your credit card. Once you start gobbling up available credit on your credit card, the credit bureaus take notice. All that activity is a cause for alarm and they lower your scores. They do not want you to get any more credit. Lowering your credit score will make it difficult to get any additional credit.

Talk to a loan officer before you do anything with your credit cards. You may be doing damage to your fico score and not even know it.