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Debt Management

Can Bad Credit Credit Cards Really Improve My Score?

This guest post was written by Jason Bushey. Jason is a personal finance consultant and blogger. 

If you’re looking to improve your bad credit score, odds are applying for a new credit card isn’t the first solution you came up with. After all, it was likely those very same credit cards that got you into the issue of poor credit in the first place. 

But did you know applying for and receiving a bad credit credit card is one of the easiest and most important things you can do in the journey back from bad credit? 

Here’s how it works. 

For starters, you should know what makes up your FICO scores – the ones being reported by the three major credit bureaus: Equifax, Experian and TransUnion. While there are several factors, the biggies are (in the following order): 

  • Payment History (35%)

  • Amounts Owed (30%)

  • Length of Credit History (15%)

  • New Credit (10%)

  • Types of Credit Used (10%) 

You’ll notice that these all relate in some regard to applying for and receiving a new credit card. For starters, a credit card for bad credit can give you a new credit line to make on-time (and in full) payments each month, thus boosting that most important credit score factor, Payment History

Second and nearly as important is Amounts Owed. This factors in your credit utilization ratio, which is the amounts you owe in relation to the amount of credit available to you (your credit line). It’s important to report to the credit bureaus that you’re using less than 30% of your available credit, and it’s ideal to report less than 10%. So if you have an available total credit line of $1,000, ideally you want to report that you’re using less than $100 of that credit to the CRA’s (Credit Reporting Agencies). 

If you have a poor credit score, odds are you’re reporting more than 30% usage to the CRA’s and – quite possibly – a whole lot more. So by adding a credit line, right away you’re going to lower your credit utilization. And since you’ve started making on-time payments with your new credit card, you’re also continuing to lower that utilization ratio while improving your payment history. That’s a win/win. 

And finally, you’ll notice that credit history and new credit make up a combined 25% of your credit score. Obviously, a new credit card will count as “new” credit, and a new account and consistent on-time payments will work to enhance your credit history. So overall, adding a bad credit credit card and using it responsibly can go a long way towards improving your credit score. 

There’s only one small catch: by and large, credit cards for poor credit are not the most amazing credit cards on the market… 

But what did you expect? The best credit cards are reserved for the consumers that earned it, and vice versa. However, the good news is that there are some strong options available for people hoping to rebuild credit. The Capital One® Secured Mastercard®, for example, is one such credit card that, while on the surface isn’t the best card around, is simply one of the best options available if you have bad credit. 

First, it’s secured, so it does require a deposit guaranteeing your credit line. However, the security deposit is fully refundable and the minimum deposit required is one of the lowest on the market today. ($49 or more based on credit-worthiness.) Once a consumer is approved and their deposit secured, a consumer will be given a credit line somewhere close to 70% of their security deposit. 

OK, so why is this card – and secured credit cards in general – good for improving bad credit? 

For starters, secured credit cards have lower ongoing interest fees than unsecured credit cards. And in the case of this Capital One® card, the small annual fee attached to the card includes credit monitoring tools so that consumers can watch their credit score improve. (That’s the idea, anyways.) 

Plus, after several months of responsible usage and on-time payments, Capital One® may consider members for a new unsecured card. Consider a secured card a credit-builder and a “gateway” card to improved credit, all at once. 

When it comes down to it, there are a lot of things one can do to improve their credit score, but one of the easiest things to do is apply for a credit card for bad credit. This is the first and most simple step one can take on the road to improved credit.

Debt Management

The Ultimate Guide To Slashing Your Personal Debt And Expenses

One thing that most people have in common is debt. Some folks only have a small amount of debt, while others might be drowning in it! We usually get in debt because we want to buy something that we don’t have the spare cash for at the time. Examples include electronic gadgets, cars and houses.

Debt isn’t always a bad thing as it’s a way of proving to future creditors that you are a responsible borrower.

Slash Debt

Source: Flickr

But only if you can manage your debt. If you have to pay out more than you earn, you are on a slippery slope to debt hell.

If that sounds like you, today’s blog post will go some way towards helping you off that debt mountain you’re stuck on. If your money management skills suck, keep reading to find out how you can rebuild your finances.

Make a list of debts and earnings

The first step is to create a list of outstanding debts that you have. It will show you what you pay for each month so that you have an accurate analysis of what you owe and to whom. The list you compile should have the following information:

  • Name of creditor;
  • What you pay each month;
  • What your balance is;
  • Interest rate (i.e. APR);
  • Arrears, if any.

Once you have compiled this list, you need to add in how much you earn each month. For those of you that are self-employed, make a note of your average monthly earnings. You can also include income from other sources like pensions, share dividends and so forth.

I recommend compiling this list on a spreadsheet as it’s easy to update and calculate sum totals. If spreadsheets aren’t your thing, you can always use a pen, paper and a calculator to do the same job!

Determine how bad your debt situation is

Calculate two sum totals – i.e. your debts and your earnings. If you’re in the red and owe more than you earn, you need to address your debt issues immediately. The same applies if you only have a few bucks spare each month.

What you need to do next is contact your creditors and ask if you can reduce or defer your debt payments for a period. Creditors would rather work with you to reach a solution than sue you for outstanding debts.

Make any debts with arrears your top priority. If you are in arrears, it can damage your credit score and make it difficult to apply for credit in the future.

Consider a debt consolidation loan

Do you have a lot of credit cards, especially those with high interest rates? If so, a debt consolidation loan could help you gain control of your finances again. Loans do not compound interest like credit cards do, and you have a fixed set of payments to make to clear the debt.

Approach your bank and see if they’ll give you a loan. If they don’t, you could try applying for a loan from a peer-to-peer lender or even a credit union. In both cases, they will assess your application on its merits rather than just relying on a credit scoring system alone.


Cut Expenses

Source: Flickr

Pay off small debts first

Part of the problem with having debt is not having the motivation to pay it off! If you have this problem, you should consider paying small debts off first. Doing so will help you to achieve your goal of becoming debt-free. That’s because you can use the extra cash freed up towards the next-highest debt and so on.

Of course, if you have some high-interest debts, you should pay them off for obvious reasons. But if all your debts have a similar rate of interest, paying off small debts first is an ideal motivator.

Make sure you have the correct insurance for your car

Having the correct insurance for your car can save you a ton of money in the long run! It means that, if you were ever to have an accident (touch wood), you would be properly compensated for damages. For example, classic cars will be so much much expensive to repair due to their rare parts etc. Getting the correct cover, such as Carole Nash Cherished Vehicles insurance, means that you can be rest assured that your baby will be well looked after without you having to fork out a bomb.

Ditch the car and buy a motorbike

It’s no secret that motorbikes are cheaper to buy and maintain than cars. If you’ve got a car but seldom carry passengers or cargo, sell it and buy a used motorbike instead. You can use the spare cash to pay off your debts faster, and you will lower your monthly expenses too!

Before you go ahead and buy a motorbike, make sure the model you want is one you can afford to insure. For instance, BMW bike insurance quotes might offer higher premiums than ones for Kawasaki bikes.

Get rid of services you don’t need

Cable TV, cell phone contracts and even streaming music services all increase your monthly debts. Your goal is to reduce your debt as fast as possible. To focus on this goal, you need to ditch any expenses you don’t need.

When you’re in a better financial position in the future, you can then consider getting them again. And don’t worry; there are cheap or even free alternatives to what you pay for right now:

  • Cable TV – watch free TV shows and films online;
  • Cell phone contracts – downgrade to a SIM-only or prepay contract;
  • Streaming music – listen to music online for free.

Sell your unwanted possessions

I can guarantee you that everyone has personal possessions they never use or even need. Do a tour of your home and find stuff that you never use and have no attachment to. If they have a value, get busy by listing them for sale on eBay!

You can also use other classifieds or auction websites to advertise your wares for sale. Or for an old-fashioned approach, consider having a garage sale. You could even sell your stuff at a flea market.

It’s quite a fun and rewarding experience. Especially as you’ll have the cash to put towards clearing your debts down quicker! It’s something that I have done loads of times in the past to get some cash together.

As a by-product, you’ll have more space in your home once you sell your unwanted items! Just make sure that you sell valuables for the best prices possible.

I hope this guide will help you to sort your debts out and lead a more stress-free life. Thanks for reading!

Debt Management

What Should You Know About Fast Credit Repair to Do It Right?

Maintaining a healthy credit rating, while fulfilling daily financial obligations, can be hard. Though we all want a college education, a house, and a fancy car, very few can get all of those without taking up loans. Even if you have a steady income, you cannot always be financially prepared for emergencies. That is when loans come to the rescue. However, your credit score takes a hit when debts keep piling up, and you cannot repay the same in time.

However, there are many ways overcome this situation even if you are struggling to keep your credit ratings up. Fast credit repair is a unique way through which you can clean up your FICO score and become eligible for things like a car or home insurance, mortgage and so on. Here we will put forth a few good insights on fast credit repair to guide you in the right direction.

The need to act fast

Advancement in technology has revolutionized consumer behavior and buying patterns, and there is also a high demand for companies to meet the changing requirements of the customers. Personalized services, which took many months or years previously, now takes only a matter of few days or hours. You can even get instant services and products with just a click. The same can be seen everywhere from drive-through food counters to even high-end banking sector. The new buzz words are DIY (do it yourself) and “instantly assemble in minutes.”

Many assume that the day of expert help is gone forever. Even the critical practices of highly secured banking transactions are now executed on the go. The living life in a hurry philosophy is also applicable when it comes to credit repair, and as a result, fast credit repair companies surfaced with a host of value-added services that aim at helping users deal with their financial mess.

What are the quickest ways to fix credit?

The primary way of repairing credit fast is to start right away. Many of the leading fast credit repair firms adopt credit repair techniques based on pay per deletion. Typical providers claim that 75% of the items may get deleted in the first 6 to 9 months or pay cycles. After that, the average removal rate may be one item per cycle. If you are clueless about how to bring your credit record in good shape, here are a few tips that will get you started.

  1. Put a stop to impulse buying when you are in the repairing phase. Feel free to look at the items you like and then set it back on the shelf. If it is something basic and mandatory, you cannot help it. However, keep your shopping list limited to only the bare essentials.
  2. Always pay your bills upfront and also try to pay a bit extra if possible on your debt repayments. It will help you to pay off a little on your principal amount too, and that may help you to reduce the pay cycles.\
  3. Refinancing is a welcome option in many cases to enjoy fast credit repair benefits. This approach helps you to take your credit scores back on track. It will help you to get lower interests and reduced monthly payments on new loans by giving the impression that you are good at managing your debts.

Once your credit rating goes through the makeover, you can slowly regain financial stability by avoiding the same circumstances which led you into the debt trap in the first place.

Debt Management

Car Title Loans in Houston Are a Safe and Legal Lending Option

Car title loans have received a bad reputation. People say that these lenders are without conscious and make their money simply by charging exorbitant interest rates. Naturally, there are some bad lenders out there. The reality is, however, that car title loans have given people the help they need during some very difficult times. So long as you know what to look for, these loans can be very beneficial. And since they are now government regulated, there are far fewer risks as well.


What Is a Car Title Loan?

A title loan is a unique construction. Technically, it is a secure loan, as you put up the title deed of your car as collateral. This title will remain with the lender until such time as the loan is paid off. However, in the meantime, you can continue to use your car. The amount of money you will be able to borrow depends on your vehicle. Generally speaking, you will not be able to borrow more than 50% of the value of your vehicle and most lenders will not issue more than $2,500. The money should be in your account the same day, or the next business day if you applied too later.

You do, however, have to understand that if you apply for car title loans in Houston, there is a chance that you will lose your vehicle. However, this will only happen if you do not meet the repayments on your loan. If there is a chance of that happening, you should not apply for a loan in the first place. It would then simply be better to sell your vehicle, as you would probably get more money cash in hand then as well.


More and more often, car title loans can be paid back over a period of time. At first, they were short term loans that would have to be paid back within 30 days, but this is now changing. Additionally, while the interest rates are high, they are now regulated on federal, state and local level. Strict laws are in place that lenders have to adhere to. As a result, you should no longer find yourself in a situation where you obtain a loan from a disreputable lender.

However, you should still take the time to review the different options that are out there. A quick search for title loans in Houston will reveal a great number of results and it is important that you find the one that is most suitable to you. Some of the things you may want to take into consideration in order to choose a lender include:

  • What percentage of your vehicle’s value are they willing to borrow you?
  • How do they determine the value of your car?
  • What is the interest rate?
  • What type of repayment options do they offer?
  • What happens if you can’t pay your loan back?

Car title loans are great solutions for people with an immediate financial need.

Debt Management

Don’t Let Debt Overload You

Debt is a huge burden when it’s accumulated for the wrong reasons. Using credit cards to by the next big thing is never the way to go when it comes to being financially responsible. 

However there are times when debt is ok. For instance, you want to buy a house. Yes it is possible to buy one with cash but that would probably take a decade if not more. So getting a loan for something like that isn’t a bad thing. 

A car loan also isn’t that bad because a car is a necessity for most people. Of course you should be getting it for it’s purpose if you’re going into debt and not necessarily because it’s the best looking sports car available. 

And another time it’s ok to get a loan….a significant hit to your finances. For instance you lose your job and you’re about to be homeless. Getting a loan to cover your mortgage isn’t the worst thing you can do. Of course, you should have cut everything to the bone as far as your expenses. 

Debt is everywhere and most people have it. But don’t let it take over your life.

Surprised at the state of UK consumer loans? View how quickly UK consumers accumulate debt with this live debt ticker.

Breaking down UK loans infographic

This infographic is brought to you by QuickQuid