We get it, soon-to-be-grad, you’re busy. Finals need to be taken; dorm rooms need to be cleared out. Jobs need to be procured — as does your very first apartment. But amid all these big changes, you’ll also want to make time for some good old fashioned financial literacy. After all, money management is critical to your success in the so-called real world. And, believe it or not, having a credit card can help your overall financial health. Of course, that’s only if you use that little piece of plastic responsibly, so, to help you come out ahead, here are 7 credit card tips for soon-to-be college grads.
1. Get One
Sure, there are plenty of reasons to be wary of plastic. But a credit card is one of the best ways to start building credit — and you’ll need a solid credit score when it comes time to get an affordable auto loan, mortgage, insurance policy or more. If you don’t have a credit card already, you’ll probably need to look into secured credit cards, which require an upfront deposit that serves as your credit limit and are designed specifically for people with thin or bad credit. If you were using plastic while in school, you may be eligible for an unsecured card with better terms and conditions. Of course, that’ll come down to what your credit looks like already. (You can see where you stand by viewing two of your credit scores for free on Credit.com.)
2. Pay Your Bills on Time …
The number one rule of credit cards? Pay your bills on-time each and every month. If you don’t, you’ll likely be hit with a late fee, face a penalty annual percentage rate (APR) and damage your credit — seriously. A first missed payment can cause a score to drop 100 points or more.
3. … & in Full Each Month
Or, at the very least, keep the total amount of debt you’re carrying on the card below at least 30% and ideally 10% of your total available credit limit. Any balance over that could hurt your credit utilization rate, which is the second most important factor among credit scores.
4. Monitor Your Statements
Do it even if you’ve signed up for auto-pay, because fraud, unfortunately, can occur at any time. Plus, you’ll want to be sure your balances aren’t burgeoning out of control. Check statements every day or at least once a week. Make small payments if those balances are starting to climb too high and be sure to report any suspicious activity your spot right away to your issuer.
5. Upgrade When You Can …
The better secured credit cards on the market (go here to check those out) usually provide cardholders with automatic reviews after 6 to 12 months of use that’ll determine whether they can get their deposit back and possibly receive a credit limit increase. Make a note of when you’ll be eligible for that type of upgrade and keep an eye on your credit as you use your card. You may be able to build a score solid enough to qualify for not just an unsecured credit card but a rewards or low-interest piece of plastic.
6. … But Resist the Urge to Churn
Be prepared to encounter big signup bonuses as you shop around for new plastic. (Example: Earn $150 when you spend $3,000 or more in your first three months as an accountholder.) But refrain from applying for every offer you see. Yes, an extra $150 or a boatload of bonus miles are nice, but too many new credit inquiries (which are generated each time you fill out a credit card application) can damage your credit score and make it harder to qualify for important financing down the line.
7. Know When to Stop Charging
If your spending starts to get out of control, put your card on ice. Literally, if you have to. (That’s actually a better bet than formally closing the card, which can hurt your credit score, though you can do that, too, if absolutely necessary.) Next, come up with a plan to pay down those debts. Rework your budget to come up with some extra dollars you can put toward your balance and, if you’re carrying debt on multiple cards, prioritize payments. Make the minimum payment on all your cards but put the most money toward the balance with the highest APR (which can lower the total cost of your debt.) Alternately, you can pay off the smallest balance first, which could keep you motivated as you work to get back into the black. You can find more strategies for paying down credit card debt right here.
[Disclosure: Cards from our partners are mentioned below.]
Thanks to student credit cards, secured credit cards and a little something called “the authorized user,” plenty of college seniors will be graduating with some credit. And, if you’re one of them (you can check via your free credit report summary on Credit.com) you might want to consider a plastic upgrade.
Starter credit cards are great for building credit, but they don’t usually tout the best terms and even if there’s a $0 annual fee or base rewards program, that plastic likely carries a low credit limit — which might not help in case of an emergency or if you want to further boost your credit. (Remember, a low limit makes it harder to maintain a solid credit utilization rate — how much debt you’re carrying versus how much credit is available to you. For best scoring results, you’ll want to keep your charges below at least 30% and ideally 10% of your total credit limit.)
If you’ve outgrown your starter credit card, or think you’re about to, here are five credit cards worthy of your consideration.
Purchase APR: Variable11.74% to 23.74%, depending on your credit
Annual Fee: $0
Why You’ll Want to Consider it: Because the Discover it is a solid rewards credit card with some built-in training wheels. Cardholders get 6-months of 0% financing on purchases and a full 18-months 0% financing on balance transfers (the annual percentage rate after that will be a variable 11.74% to 23.74%, depending on your credit). There’s also no late fee for a first missed payment (which you should still avoid at all costs) and no penalty APR.
Plus, if you use your card right, you’ll earn some serious rewards. The Discover it offers 5% cash back on up to $1,500 in purchases in revolving bonus categories each quarter and 1% cash back everywhere else — plus, Discover will match all the cash back you earn at the end of your first year. And there’s an added bonus for new grads getting ready to move out of their parents’ house: Now through June, you can get 5% cash back on up to $1,500 in purchases at home improvement stores.
Purchase APR: Variable 14.24% to 24.24%, depending on your credit
Annual Fee: $0
Why You’ll Want to Consider it: Rewards credit cards can be tricky. Points, miles and cash back are nice, but they can easily entice someone to overspend. Charge more than you can pay off each month and any interest you pay on the balance will wind up eating those rewards — and then some. But here’s the thing about the Citi Double Cash Card: It rewards you for paying the bills. Cardholders earn 1% cash back on purchases, then another 1% back when they pay that purchase off. That means you can earn a full 2% cash back on every dollar you spend, which is pretty tops for a cash back credit card, especially since there’s no annual fee. There’s also a 0% introductory APR for balance transfers for your first 18 months. (You’ll pay a variable 14.24% to 24.24% after that.) (Full Disclosure: Citibank, as well as Discover, Capital One and Barclaycard advertise on Credit.com, but that results in no preferential editorial treatment.)
Why You’ll Want to Consider it: Available to people with average credit, the QuicksilverOne is a solid alternative for any new grad who had a credit misstep (or two) while they were in school. Yes, you’ll pay an annual fee ($39) and its 24.99% APR will sting if you wind up carrying a balance (expert intel: avoid carrying a balance), but you’ll earn an unlimited 1.5% cash back on all your purchases. You’ll also have access to a higher credit limit after making your first monthly payments on time and receive a few ancillary benefits that’ll come in handy if you need to purchase some stuff for your first apartment. Those bennies include an extended warranty that doubles the original manufacturer warranty up to a maximum of 12 months on most purchases and price protection that reimburses you the difference in price on eligible items charged to the card if you find a lower price for the same item within 60 days of purchase (see card agreement for full details.)
Plus, if you use the card responsibly, you may be able to upgrade to the QuicksilverOne’s no-annual-fee big brother: the Capital One Quicksilver Cash Rewards Credit Card — which we’ve got a full review of right here.
Why You’ll Want to Consider it: If you’re worried about overspending for rewards, are looking for an in-case-of-emergency card or you need to make a big purchase soon that you might not be able to pay off right away, the no-frills, low-cost Barclaycard Ring Card will probably fit right into your wallet. There’s no annual fee, no foreign transaction fees and no balance transfer fee. Plus, the card comes with a 15-month 0% introductory APR on purchases and balance transfers made within 45 days of account opening — after which, you’ll pay a reasonable variable 13.74%. So, if you need to pick up a few necessities for your first apartment, this is the kind of card you’ll want to put those on. Not to mention the Barclaycard Ring lets cardholders drive: You’ll be invited to share your opinions and vote on product changes in Barclaycard Ring’s online community.
Annual Fee: Technically $0, but you’ll need a Costco membership to apply — and that’ll cost you at least $55
Why You’ll Want to Consider it: Because the card offers big-time rewards on all the stuff you’ll be purchasing once you leave the nest. That includes 4% cash back on eligible gas for the first $7,000 per year (then 1%); 3% cash back on restaurants and eligible travel purchases; 2% cash back on Costco and Costco.com purchases and 1% cash back everywhere else. Plus, there’s a 7-month 0% introductory purchase APR (after that, your APR will be a variable 15.99%). Of course, only Costco fans should apply: While the rewards are plentiful, they’re issued as an annual credit card reward certificate on February billing statements and are redeemable for cash or merchandise at U.S. Costco stores.
Remember, no matter what credit card you choose, smart spending habits should apply. Sign up for alerts or set your bill to auto-pay so you never miss a payment, keep your balances low (or, ideally, pay them off in full) and avoid signing up for every credit card on the market that catches your eye — too many inquiries can damage your credit standing.
At publishing time, the Discover it, Citi Double Cash, Capital One Quicksilver One, Barclaycard Ring and Citi Costco Anywhere Visa cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.
Chances are, your credit isn’t actually the worst. According to data furnished to Credit.com by TransUnion, only a very tiny portion of the U.S.’s scoreable population has the lowest VantageScore possible. Of course, escaping the dreaded 300 won’t get your credit out of the woods. Any score below 600 is considered, well, bad, and even a score in the 650 to 699 range will cost you in interest.
Still, there’s no need to despair: Nothing lasts forever, including a terrible credit score. You’ve just got to take steps to rebuild it. Paying down high balances, shoring up delinquencies, paying collection accounts and disputing errors on your credit report are great places to start. (The further you get from 300, the better. You can track your progress using Credit.com’s free credit report summary.)
After that, consider getting a new credit card. It sounds counterintuitive, we know, but that plastic can be instrumental when it comes to reestablishing a solid payment history. Just be sure to pay all your bills on time and keep balances as low as possible.
Here are five cards designed to help people with bad credit rebuild their scores. (See card agreements for full terms and conditions.)
Why It’s a Good Option: Yes, secured credit cards are designed for people with bad credit, but most still require a credit check, and there’s no guarantee you’ll be approved. The OpenSky Secured Visa Credit Card foregoes pulling your credit and doesn’t require a checking account either, so if your finances are really damaged, you may want to take up their offer. OpenSky reports to all three credit bureaus, so you’re covered there. And there’s a wide range for a security deposit: You can put down as little as $200 and up to $3,000.
Beyond that, the terms of the card are decent, especially given that there’s no credit check. (There are certainly secured credit cards out there touting higher APRs and annual fees.) One drawback worth mentioning: There’s no built-in way to upgrade to an unsecured credit card, so you’ll have to improve your scores and apply elsewhere.
Why It’s a Good Option: Back in Dec. 2016, Discover announced that Chapter 7 bankruptcy would no longer automatically disqualify Discover it Secured applicants, so someone with that big blemish on their credit report could conceivably get approved. That’s great news for people with bad credit, because this card is pretty tops, as far as secured credit cards go.
There’s no annual fee, account reviews begin at seven months to determine whether to refund your deposit (a minimum of $200 is required to open an account), and there’s even a rewards program. Cardholders earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter, and 1% cash back on everything else. Plus, Discover is currently matching all the cash back you earn at the end of your first year.
Other Big Perks: Discover reports to all three credit bureaus, waives the late fee on your first missed payment and won’t impose a penalty APR if you miss a bill. Just be sure to pay your balances off in full: That APR is on the high side and will quickly negate any rewards you do earn.
Why it’s a Good Option: There’s no credit history or minimum credit score required for approval — so long as you don’t have a pending bankruptcy. First Progress reports to all three major credit bureaus, offers a flexible deposit range ($200 to $3,000) and features a reasonable annual fee and low APR. Again, the potential drawbacks are that you don’t have a built-in option to upgrade and the card isn’t currently available in Arkansas, Iowa, New York or Wisconsin.
Why It’s a Good Option: This card touts guaranteed approval so long as your monthly income exceeds your monthly expenses by $100 or more. Plus, while that $49 annual fee can be bested, you’ll be hard-pressed to find a secured credit card with an APR lower than primor’s. There’s no penalty APR either, though you’ll still want to pay your bills on time and ideally in full. Your card use will be reported to all three credit bureaus, and you can put down a deposit of $200 to $5,000. There are no built-in upgrades with an unsecured credit card, however.
Annual Fee: $0 to $75, the first year; $0 to $99 thereafter, based on your credit
Purchase APR: Variable 15.90% to 24.40%
Why It’s a Good Option: OK, if you’ve got really bad credit, you’re probably going to pay a high annual fee and receive a high APR with the CreditOne Bank Visa. But it’s an unsecured credit card, meaning you won’t have to put down a deposit that serves as your credit limit. Plus, it’ll let you pre-qualify without incurring an inquiry (which would damage your already-hurt credit score), so it’s worth considering if you don’t want to go the secured-credit-card route. There are also rewards — 1% cash back on eligible purchases, including gas, groceries, mobile phone, internet, cable and satellite TV services. Just be extra careful about paying your balances off in full, and prepare for a fee when looking to get a higher credit limit, as one may apply.
At publishing time, the OpenSky Visa Secured, Discover it Secured, First Progress MasterCard Select Secured, primor Secured Visa Gold and CreditOne Bank Visa credit card are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, these relationships do not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).
Hey, credit-builder: The team here wanted to let you know that Credit.com’s free credit report card has changed. Don’t worry, you’ll still be getting two free credit scores, along with a letter grade for how you’re doing in the five key credit scoring categories: payment history, debt usage, credit age, account mix and inquiries.
But, starting April 11, the three-digit-number located in the upper left corner of your credit report card, along with your customized action plan, will reflect your VantageScore 3.0 Advantage Score. Previously, the credit report card was based off of your Experian National Equivalency Score (NES), which is your secondary score, visible once your click the “Other Scores” hyperlink.
Why are we making the switch? Well, as you may have heard, there are lots of different credit scores out there, but the most widely known models, including the VantageScore 3.0, follow a range of 300 to 850. The NES score, on the other hand, follows a less common range of 360 to 840. Plus, as you may have gathered, it’s used solely by Experian, whereas VantageScore 3.0 is used by all three of the major credit reporting agencies: Equifax, Experian and TransUnion.
The swap will help us provide you better credit card recommendations as you monitor and improve your credit score. It should also clear up some confusion, as the 300 to 850 range is the one most people are familiar with.
You can find more on VantageScore here. And, to give you an idea of where your credit stands generally, here’s how the ranges on both scores break down.
Vantage 3.0 Score: 300 to 850
Excellent Credit: 750+ Good Credit: 700-749 Fair Credit: 650-699 Poor Credit: 600-649 Bad Credit: below 600
NES Score: 360 to 840
Excellent Credit: 750+ Good Credit: 700-749 Fair Credit: 650-699 Poor Credit: 600-649 Bad Credit: below 600
In either case, if your scores have been fluctuating, your credit report card should provide some valuable insights as to why. Remember, while scores and their associated algorithms vary, they are all based on information in your credit reports, so focusing on your risk factors or negative line items should help you boost your standing across the board.
We get it: All this credit stuff can be confusing and it’s easy to stress about whether you’re acing every score. However, instead of trying to track down all your digits (which is pretty much impossible anyway, given lenders buy proprietary algorithms), it’s a good idea to compare apples to apples by choosing a common score, like VantageScore 3.0, and monitoring your standing over-time.
Our credit report card will provide some helpful hints for how you can improve along the way.
And, so long as you pull your full credit reports from each credit bureau regularly and/or right before you apply for a loan, you shouldn’t be in for any major surprises. (Remember: Viewing your own credit doesn’t damage your scores.) You can get your credit reports for free every 12 months by visiting AnnualCreditReport.com. Checking them will help you spot any errors or line items that might be on only one of your credit files. (Some lenders just report to one credit bureau.) If you find an error, be sure to dispute it. And don’t hesitate to reach out with any credit-related questions in the comments sections below. Our Credit Experts will do their best to help!
Getting a debt collection call is never fun. Even in a best-case scenario — it’s your debt and you can pay — that outstanding account can cause a headache or two. And if the debt’s contentious, not yours or just too darn high, the situation can become (or at least feel) a lot more dire. But knowledge is a superpower when it comes to dealing with a debt collector in any shape or form.
Here are 50 things anyone who’s gotten a debt collection call should know.
1. You Have Rights
Yes, a debt collector has every right to collect on a debt you legitimately owe, but there are rules and restrictions — formally known as the Fair Debt Collection Practices Act (FDCPA) — that govern how they can go about their business.
2. Old Debts Expire
Each state also has laws specifying how long collectors have to sue you over a debt. In most states, these time limits last for four to six years after the last payment made on the account. You can consult this chart to determine your state’s statutes of limitations (SOL) — and if you get a call about a very old debt, you should really consult this chart, because …
3. Zombie Debts Are Real …
Collection accounts get resold all the time, and it’s not uncommon for someone to get a call about a debt that’s outside the SOL or no longer owed. The latter is illegal, but the former may not be: The SOL applies to how long a collector has to sue you over a debt, but, in many cases, they can still try to get you to pay.
4. … & You Can Wind Up Reanimating Them
If the old account is legit, you can unwittingly restart the clock on the SOL by paying part of the debt or even agreeing over the phone that it’s yours. If you get a call about a debt, be sure to get all the details before saying you owe. That due diligence is doubly important because …
5. There Are a Lot of Scammers Out There
That’s not to say you’re talking to one, but you’ll want to stay on guard. “Ask the caller for their name, company, street address, telephone number and if your state licenses debt collectors, a professional license number,” writes the Consumer Financial Protection Bureau (CFPB), which has more tips for spotting a debt-collection scam on its website.
6. You’re Entitled to Written Verification
In fact, FDCPA requires a collector to send a statement outlining the specifics of the debt within five days of contacting you. That notice — which is basically step one in determining whether a debt’s legit — must include the amount of money you owe, the name of the original creditor and what actions to take if you believe the information is wrong.
7. You Can Dispute the Debt
Debt collectors must investigate a debt so long as you file a dispute in writing within 30 days of their initial contact — and they’re to cease contact until they verify (again in writing) that you owe the amount in question.
8. Collectors Can’t Just Inflate What You Owe
Regarding that amount: A debt collector can charge interest, but only up to the amount stipulated in your contract with the original creditor. Most states also cap the amount of interest and fees a debt collector can charge.
9. You Can Ask Them to Stop Calling
Per FDCPA, a collector must cease contact if you send a letter requesting they do so. That letter won’t absolve you of a legitimate debt, but it can curb incessant and heated phones calls, which is important because …
10. Too Many Calls Are Illegal
Another facet of FDCPA: Collectors can’t call you too early in the morning (before 8 a.m.), too late at night (after 9 p.m.), too many times a day or at work once you tell them not to. They’re also not allowed to use abusive language — no cuss words or name-calling.
11. Collectors Can Contact Friends & Family
But only to locate you. They can’t identify themselves as a debt collector, and there are limits on the number of times they can contact a third party.
12. You Can’t Inherit a Debt
Speaking of family, you can’t inherit a loved one’s debt after they die — unless, of course, you cosigned on the loan in question. Debts owed by the deceased are generally paid out of their estate, not by friends or family, so don’t panic if you’re an executor. You can learn more about dealing with a loved one’s debt after death here.
13. Ignoring a Debt Can Have Big Consequences
It can be tempting to cut off communication with debt collectors, particularly if they’re stepping out of line. But doing so won’t make that debt go away. And a debt collection account can just lead to a whole lot of phone calls. For one …
14. That Account Can Appear on Your Credit Report …
16. Resale of the Debt Won’t Restart the Reporting Clock
If your debt changes hands, as collection accounts often do, that sale does not restart the seven-year credit reporting window. If the new collector re-ages the account, you can dispute the date with the credit bureaus. And if the same account is being reported by multiple collection agencies, that’s a violation of the Fair Credit Reporting Act (FCRA), and you can dispute the accounts listed by the agencies that no longer own the debt, too.
17. You’ll Soon Get Extra Time to Settle Medical Debts
Thanks to a settlement brokered by state attorney generals back in 2015, the credit bureaus will soon wait 180 days from the time a medical debt was first reported before adding it to your credit file, giving you more time to address bills with your insurance and health care providers. (The settlement gave the bureaus a little over three years to implement these changes.)
18. Not All Collectors Report Right Away
Some collectors will hold off on notifying the bureaus so they can use credit reporting as leverage to get you to pay. This practice is important to note, because it means …
19. You Can Owe a Debt That’s Not on Your Credit Report
Checking your credit can help you verify a debt or track down a debt collector you’re looking to pay, but don’t take an account’s absence as absolute proof you don’t actually owe. The collector just may not have reported it to the bureaus yet.
If your negotiation tactics work, be sure to get the terms the collector is agreeing to in writing — particularly if they involve skipping further adverse action against you.
22. A Collection Account Will Hurt Your Credit Score …
If it hits your report, a single collection account can cause your credit score to drop 50 to 75 points or more. The better your score, the harder the fall.
23. … For Quite Some Time …
Collection accounts, paid or unpaid, can be reported to the credit bureaus for seven years, plus 180 days from the date the original account went delinquent, though its effect on your score will lessen over time. (We’ve got more on how long stuff stays on your credit report here.)
24. … Even if You Pay …
You read that right: Paying a collection account won’t guarantee removal from your credit reports. In fact, thanks to their contracts with the credit bureaus, most collection agencies will continue to report the account for that full seven-year timeframe — though there are signs that’s changing.
25. … But There Are Reasons to Settle
If the account is sticking around, make sure it’s at least (correctly) reported as paid. Paid collections carry less weight than unpaid ones, and some newer credit scoring models even ignore them entirely. Beyond that, settling a debt can stop a collector from taking further action against you. Don’t panic, though …
26. The Debt Itself Won’t Land You in Jail
You can’t be arrested just because you owe someone money, so if a debt collector keeps talking jail time, they’re seriously out of line.
27. No Threats Allowed
In fact, they’re illegal. FDCPA prohibits dire threats of arrest, violence or even a lawsuit if the collector doesn’t intend to file one. Having said that …
28. You Can Be Sued
So long as the statute of limitations in your state haven’t expired and you legitimately owe, though there’s no guarantee a collector won’t try to get a court ruling on a debt you’re contesting or otherwise unable to pay.
29. Small Payments Won’t You Spare You
A debt collector can still move to sue you for the outstanding balance so long as it’s legit and within the SOL. That’s why, as we mentioned earlier, it’s important to get a payment agreement in writing. A signed agreement not to sue could hold up in court, but even if you have one don’t ignore a court summons.
30. Skipping a Court Date Can Cost You
Failure to appear in court could result in a warrant for your arrest, which is why confusion persists as to whether an unpaid debt can land you in prison. It’s more likely your absence will net a default judgment for the collector, which can lead to garnishment.
31. Garnishment Lets a Collector Seize Funds …
Usually they’ll garnish your paycheck or levy your bank account. In most cases, however, the collector can’t do this without a court order. (The exceptions are back taxes, outstanding federal student loans and unpaid child support.)
32. There Are Limits to How Much They Can Take
Garnishment caps are established by federal law and state law, meaning they can vary, depending on where you live. Some states don’t allow garnishment on certain types of debt at all. You can consult a local consumer attorney or call your state Attorney General’s office to get an idea of the laws in your area.
33. Certain Assets Are Safe From Garnishment
Those assets include Social Security, disability and retirement accounts, though things get tricky once those funds hit your bank account, and there are exceptions here, too, that usually involve unpaid federal debts.
Since it can be difficult to collect on a judgment, especially if your wages or assets can’t be garnished, a collector may be willing to accept a lump sum payment to put the debt to bed. Again, just make sure you get an agreement in writing before forking over any funds.
36. A Judgment Can Blemish Your Credit …
Technically, unpaid judgments can remain on your credit reports for seven years or the governing statute of limitations, whichever is longer. Once paid, a judgment must be removed seven years after the date it was entered by the court.
37. … But It’s Getting Harder
Starting July 1, the credit bureaus won’t list a judgment on your credit report unless it includes, at a minimum, your name, address, Social Security number and/or date of birth. Plus, judgments will be removed if public records aren’t checked for updates at least every 90 days.
38. Judgments Can Involve Interest
But, again, only at the rate specified in the contract you signed with the creditor. There are state-level caps and restrictions at play here as well.
39. Judgments Can Expire
The collector has a set time in which they can collect on a judgment. This SOL varies by state but is often 10 to 20 years long, and in most states it can be renewed. That’s why …
40. Judgments Are Best Avoided
It can be tempting to try to ride out your state’s SOL, but unless you’re very near or past that due date, it’s not really worth chancing a lawsuit, judgment and subsequent garnishment (with interest!), not to mention the big damage an unpaid account can do to your credit. If you do have a judgment against you, you may want to consider settling.
41. You Can Sue a Debt Collector …
Not simply as a means to get out of a debt you do owe, but if a collector is in clear violation of FDCPA, you can file a claim against them so long as it’s within one year of the date the law was violated. You’ll need proof that the collector broke the law, though, so it’s important to catalog your communications with a debt collector — even before things potentially take a turn for the worst.
42. … Even if They Have the Wrong Number
A collector shouldn’t be bothering you about a debt you don’t actually owe, so if they continue to harass you after you’ve made it clear you’re not the person they’re looking for, that’s grounds for a lawsuit.
43. Robocalls to Your Cell Are a Big No-No …
Thanks to the Telephone Consumer Protection Act (TCPA), those are illegal. Per TCPA, companies, not just collection agencies, can’t call you on your cellphone using an automated telephone system or pre-recorded message without your consent.
44. … Unless They’re on Behalf of Uncle Sam
One big exception to the rule: Debt collectors working on behalf of the federal government can autodial you, but they’re currently limited to three robocalls a month, unless you give them permission to call more.
45. Hiring a Lawyer May Not Cost You …
Attorneys specializing in debt collection cases typically offer a free consultation — and many will often represent you for free if they think a collector has broken the law. (They’ll collect their fees from the plaintiff.)
46. … & Should Cease Communications
In general, a debt collector can’t contact you if you tell them you have an attorney and that attorney is handling your debts.
47. You Can Report Rule-Breakers …
Debt collection agencies fall under the purview of the CFPB, so if you’re dealing with a debt collector who’s way over the FDCPA line, you can file a compliant with the bureau.
48. … & Scammers, Too
If they’re trying to scam you, there’s a good chance they’re trying to scam others, too. That’s why it’s important to file a complaint with the Federal Trade Commission and your state Attorney General’s office so they can investigate the callers.
49. Bankruptcy Is an Option
Collectors can’t try to recoup a debt discharged in bankruptcy, but that doesn’t mean you should rush to file. For starters, not all debts are dischargeable. Plus …
50. It’ll Wreck Your Credit
Bankruptcy is a major credit score killer. It can cause your score to drop as much as 200-plus points when it hits your file. And you’ll be stuck with the big, old blemish for quite some time. Some bankruptcies can stay on your credit for up to 10 years and can affect your ability to get a loan that entire time. If you’re considering bankruptcy, be sure to consult with a consumer attorney.
Remember, there are ways to keep a debt from going to collections. If you fall behind on your payments, contact your creditor immediately to see if you can work out a payment plan or refinance. And keep an eye on your mail: Sometimes bills, particularly medical debts, go to collections simply because you don’t know you owe.
For plenty of people — and millennials especially — a credit card is a scary prospect. And we get why: Phenomenal spending power plus itty-bitty charging restrictions equals a major opportunity to go into debt.
But if you’re foregoing credit cards completely, you could be making it harder on yourself when it comes to another important facet of your finances: building a solid credit score. That’s because credit cards are fairly easy to qualify for — there’s actually a whole category of them designed specifically for people who need to build or rebuild. (You can monitor your progress by viewing two of your credit scores for free on Credit.com.)
Plus, while installment loans (think auto loan or mortgage) come with an automatic price tag and, more often than not, automatic interest, you don’t need to take on debt to build credit with a credit card. That’s actually a common misconception, but, trust us, no balance here required.
To help you how to best leverage your plastic, here are four ways a credit card can help you build credit.
1. You’ll Establish a Payment History
And that’s the number one most important factor when it comes to credit scores. Of course, to build good credit, you’ll want to make all of your credit card payments on-time. (One misstep can really cost you and your score.) To avoid any blemishes, set up alerts that reminds you when your due date approaches or even consider setting up auto-payments each month. Just be sure to keep an eye on your statements for any errors or fraudulent charges.
2. Its Limit Can Bolster Your Credit Utilization Rate
That’s how much debt you’re carrying versus your total credit. Experts generally recommend keeping your credit utilization below at least 30% and ideally 10% of your total available limit(s) — which is easier to do when you have a credit card you’re consistently paying off in full.
3. Your Credit Will Start to Age
And that’s a good thing because length of credit history accounts for about 15% of your credit scores. Length of credit history, also referred to as the age of your credit, is essentially how long you’ve had your credit lines. When it comes to building credit in this category, there’s little credit newbies can do, except, you know, wait. But because a credit card represents one of the easier points of entry into the financing world, that plastic in your wallet can help you get started.
4. You Could Be Rewarded for Having a Mix of Accounts
Credit scoring models like to see that you can manage different types of credit. So, if you’ve got an installment loan on your file — like, say, that student loan you took out to pay for college — adding a revolving line of credit, like a credit card or home equity line of credit, could improve your performance in this key credit category. Mix of accounts, or credit mix, accounts for roughly 10% of the points in your credit score.
Of course, there are ways to build credit outside of simply using your own credit card. That includes looking into credit-builder loans at your local bank or credit union or becoming an authorized user on a friend or family member’s credit card. (The account will appear on your credit file and bolster your performance in the aforementioned credit scoring categories, but you won’t be liable for the charges.) And if your credit is kind of shoddy, you can try disputing any errors on your credit report, limiting credit inquiries and addressing accounts in default. You can find a full 11 ways to improve your credit scores here.
Got a credit score question? Ask away in the comments section and one of our experts will try to help!
Now through May 31, 2017, new Hilton Honors cardholders can earn 80,000 points after spending $2,000 in their first three months. Hilton Honors Surpass cardholders can earn 100,000 points after spending $3,000 in their first three months and a free night on their one-year membership anniversary.
Before the big change, cardholders could earn 50,000 points and 75,000 points, respectively.
There’s also a Member-Get-Member bonus on the table — meaning if a friend applies and gets approved, Hilton Honors cardholders will get an extra 20,000 points while Surpass cardholders get 25,000.
The sweeter signup bonuses are launching alongside some recently announced upgrades to Hilton’s loyalty program. Point redemption is now much more flexible, with pricing adjusting alongside rates and, starting April 2017, members will be able to pool points with family and friends. Plus, beginning Summer 2017, you’ll be able to shop with Hilton Honors points on Amazon.
So Should I Sign Up?
If you’re a big fan of Hilton hotels and travel often, then, sure, consider signing up. Both cards are solid as far hotel rewards credit cards go. The Hilton Honors Surpass even made our list of the best cards for hotel hoppers, as it offers 12 points per dollar on eligible Hilton purchases, six times the points at U.S. restaurants, supermarkets, and gas stations and three times the points (mostly) everywhere else.
If you’re not interested in paying the card’s $75 annual fee, the Hilton Honors credit card is a solid alternative: seven times the points at Hilton hotels, five times the points at U.S. restaurants, supermarkets and gas stations, three times the points everywhere else and no annual charge.
Both cards tout a variable purchase annual percentage rate (APR) between 15.99% and 19.99%, depending on your credit. (You can get an idea of where you might fall by viewing two of your credit scores for free on Credit.com.)
Have Credit Card, Will Travel?
If you’re booking it all over town and beyond, a good hotel rewards credit card can make you some money back on all those stays. (Just be sure to pay any balances off in full; otherwise, you’re just kissing those points goodbye to interest.) But the right credit card for you depends on your travel preferences.
Stay solely at Starwood properties? Well, its Preferred Guest credit card, also from American Express, might give you the biggest bang for your buck. Wind up at Wyndhams? Its Barclaycard Visa is worth checking out. And, if you travel often, but don’t like to limit your stays to just one hotel chain, there are plenty of general-purpose travel credit cards out there that’ll earn you points, miles or cash back on all your flights and nights.
A bit more Credit Card 101: Be sure to read the full fine print of any card you’re considering to learn exactly what you’re signing up for. And get ready to do some math — a lot of travel credit cards carry steep annual fees (think $450 or higher) that are only worth paying if you travel and/or spend a certain amount each year.
At publishing time, the American Express Platinum and Starwood Preferred Guest credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).
Have you heard? It’s a seller’s market. Well, in most zip codes at least. But a hopping homebuying season doesn’t necessarily mean your home will go well over asking price just by putting up a For Sale sign. There’s still plenty a seller must do if they want to get the best price for their soon-to-be-former digs.
The reports of a seller’s market are greatly exaggerated — which is to say every zip code is different. If you want to expedite a sale, your “property has to be marketed properly and be priced appropriately,” said Glenn S. Phillips, CEO of Lake Homes Realty. “The feeding frenzy of a few years ago has not returned, and buyers are better informed than ever.”
2. Avoid Over-Pricing
Gradual price drops signal to house hunters that more decreases are to come, Phillips says. Plus, if your home sits on the market long enough, prospective buyers will wonder what’s wrong with it. “In the end, most homes that start overpriced sell at a price lower than a home priced [appropriately] from the start,” he said. “And the deal happens much faster and without the pain of months trying to sell.”
3. Hire a Realtor
Yes, you’ll have to pay them a commission. (Side note: You’ll be expected to cover the buyer’s agent, too.) Still, a good Realtor can be instrumental when it comes to the whole “learn-the-market, price-it-right” stuff. Plus, they’ll do the heavy lifting when showing the house and negotiating offers. Of course, be sure to …
4. Vet Prospective Agents
“Find someone who is in the business full time and who can demonstrate their skill at listing a house,” Reba Haas, CEO of Team Reba at RE/MAX Metro Inc. in Seattle, said. “This will show up in their print materials, online photos, services provided marketing presentation and ability to find the right price range to help you sell in a reasonable amount of time.”
5. Get a Home Estimate …
Yes, your real estate agent can help you set the right price on your home, but it doesn’t hurt to get a general idea of the pricing in your area on your own. There are plenty of sites online that can help you get an idea of your home’s current value.
6. Or, Better Yet, a Pre-Listing Appraisal
That’ll help preclude any problems during the bank appraisal. “An independent appraisal performed prior to listing can determine the value that a lender would assign your home,” Bruce Elliott, president of the Orlando Regional REALTOR Association, said. “While the process is never scientific, many buyers do find an independent appraisal to be a credible source for judging a home’s value.”
7. Determine How Much the Sale Will Cost You
Because there are plenty of expenses associated with selling a home. “A lot of sellers are not aware of what their costs are, including attorney, commission to broker and any other closing costs, including potential repairs before putting the home on the market,” says Kobi Lahav, managing director, Mdrn. Residential, a real estate brokerage in New York City. Fortunately, your broker or listing agent can help you pin down a rough estimate of what you might have to shell out.
8. Hire an Attorney
They’ll be instrumental when it comes time to negotiate the purchase contract with your chosen buyer, but you’ll, of course, want to …
9. Research Their Reputations (& Fees)
Ask friends and family for recommendations, or do a search online to find an affordable real estate attorney you can trust.
10. Ask for a Mortgage Pay Off Quote
You may think you know how much you owe on your mortgage. However, “it is not always what you see on your lender’s website,” Denise Supplee, co-founder of SparkRental and Pennsylvania Realtor, says. “And it is a good idea to have that information, especially if the money from your sale is going towards another sale.”
11. Build Your Coffers
Like we said, selling your home can be very costly. Be sure you’ve got an adequate emergency fund on hand to cover the costs, moving expenses and mortgage or rent associated with your next abode.
12. Check State Tax Records
“Make sure any debts you thought you paid off, were, in fact, posted in municipality tax records [and] satisfied,” Janice B. Leis, Accredited Buyer’s Representative and associate broker with Berkshire Hathaway, says. “Otherwise, you will have an arduous task getting issues resolved if faced with either a quick closing or finding out by the title company near closing, when life is hectic.”
13. Consult an Accountant
Or a trusted financial adviser before putting down For Sale stakes. They can fill you in on any tax deductions or bills associated with the sale that you’ll be expected to pay next year, Leis says.
14. Pull Your Credit Reports
In addition to liens, look for any judgments because those can go against the title of your home. “I have seen … people who thought they were getting X amount of dollars find out that they owe back taxes from many years ago,” Supplee says. (You can pull your free annual credit reports at AnnualCreditReport.com.) If you’re also searching for a new home while you’re trying to sell yours, well, then, you’ll want to …
Beyond that, pay down high credit card balances, limit new credit inquiries and address any other credit-score killers to improve your credit scores. You can monitor your progress using your free credit report summary, along with two free credit scores, updated every 14 days, on Credit.com.
18. Set Realistic Deadlines
“It takes a lot of time to prepare a home for sale,” Haas says. “Be realistic in what you can do, and consider where you may need help from family, friends or by hiring professionals.”
19. Map Out Your Move
“If coinciding with a closing and purchase, make sure there is a contingency in your purchase contract,” Reis says. “Otherwise you owe on two properties or will be in default on new purchase due to lack of proceeds from the sale of your existing home.”
20. Get a Pre-Home Inspection Home Inspection
Sure, it’ll cost you. Still, “spending a few hundred dollars on a thorough home inspection can help you get a better idea of what repairs need to be made, and more importantly, what your net proceeds will be from the sale of your home,” Emile L’Eplattenier, a New York City real estate agent and member of the Real Estate Board of New York, says.
21. Make Any Major Repairs …
Pay particular attention to roof and air conditioning issues, as buyers tend to shy from expensive repairs, Elliott says. “Completing as many repairs as your budget allows will pay off when potential buyers are not put off by the amount of time or money they would need to bring the home up to speed,” he adds.
22. … & Consider Some Small Upgrades
“Replacing old curtains and blinds or even appliances and fixtures will make your home look better in pictures and on showings,” L’Eplattenier says. At the very least …
24. Carefully Consider Major Home Improvement Projects
Fix the roof, sure. Have the AC serviced, but consult with your Realtor or stager before blinging out the bathroom or wallpapering the basement. Certain home improvements that seem like a good idea may not actually bring any value to your home — or, worse, could be a turnoff to potential buyers. (We’re looking at you, outdoor bathtub.)
25. Get Your Disclosures Ready
Though there are variations by city or state, some types of seller’s disclosure are generally mandated by law. “If you know of an issue in your home, write it down on the disclosure form provided by your Realtor,” Elliott says. “Nothing is too small to disclose, and failing to disclose is a serious breach of real estate law that can undermine the sale or worse.”
26. Trim the (Furniture) Fat
“Too much furniture makes a home look smaller than it really is, so sell or move out furniture to make the home feel more spacious,” Phillips says.
27. Tap a Photographer …
And consider hiring a professional. Solid listing photos make a big difference when it comes to getting buyers over to your house.
28. … But Clean Your Windows Before Showings
“Multi-exposure photography … will make the photos really stand out, but if the windows are dirty, you don’t get the best shots,” Haas says. “Plus, cleanliness in general just makes for a better showing.”
29. Actually, Clean Everything
We’re spelling this out just in case you hadn’t taken the initiative to do so already. “Nothing turns buyers off like grime, odor and general dinginess,” Elliott says.
30. Grout & Glaze
“How does the bathroom look?” Max says. “Do you need to reglaze the tub or put new grout on the tile?”
31. Set the Stage
Your Realtor can provide some valuable insights into how to organize your (leftover) furniture. “Stagers can also help you organize your furniture, and they can bring in just a few pieces that accentuate the positives of your home,” Kathryn Bishop, Realtor with Keller Williams Realty in Studio City, California, says.
32. Change the Light Bulbs
Lighting can be just as important as furniture feng shui when it comes to attracting homebuyers.
33. Up Your Curb Appeal
“Neatly trimmed bushes, fresh mulch and a colorful pot of flowers work wonders on that all-important first impression,” Elliott says. “Repainting (or washing) the front door and pressure cleaning the driveway and sidewalks are also simple tasks that provide eye-catching results.”
34. Find a Place for Fido
Sure, Sparky is cute and all, but you’ll want your pets out of the house during any showings. Plus, “it will always bring questions about any pet damage or difficult-to-remove smells,” Phillips says. Speaking of smells …
35. Deodorize …
“Homeowners become smell blind and don’t realize how powerful smell is to homebuyers,” he says. “The home should smell fresh and clean, not perfumed and not like cats, dogs, cigarette smoke, old furniture, mothballs, mold, old food, gym locker or just plain stale.”
36. … De-Personalize …
Pack away those personal pictures and mementos. “Removing these items helps buyers imagine themselves in the home,” Phillips says.
37. … De-Clutter …
That goes beyond offloading some excess furniture and your picture words. Bottom line: It’s time to put all those books, toys, video games and figurines away. “The more crowded the apartment is, the smaller it appears,” Stacey Max, the sales manager of BOND New York, a residential brokerage, says.
38. … & Detach
“Sellers are usually emotionally attached to their homes, which is natural,” Lahav says. “However, they have to remember that any potential buyer is looking at it without the emotional aspect that the owner has for his own property.”
39. Clean Out Your Closets …
“They should look roomy,” Max says.
40. … & Your Drawers
“We all say that one day we will go into all the rooms and drawers and throw out a lot of old items,” Lahav says. “Selling your home is the best time to do it.” In fact, while you’re at it, go ahead and …
41. Start Packing
You’ll have to do it sooner or later. Might as well get a head start.
You don’t have to junk all your belongings — or avoid decluttering just because you don’t want to part with your old Buffy the Vampire Slayer box sets. Consider renting out a storage space or keeping some stuff over at a friend’s or family member’s place while you’re trying to sell.
43. Talk to Your Neighbors
Consider this part of your curb appeal project — especially if you’re selling an apartment, co-op or condo. “You want your neighbors to be aware that there will be open houses,” Lahav says. “Buyers coming to view your home and see unhappy neighbors who look mad that the elevator [doesn’t] work or the driveway is blocked will assume that the neighbors are nasty, and that can affect their decision.”
44. Do a Final Walk-Through
Just to be sure there’s nothing you missed with regard to repairs, curb appeal or staging your home.
45. Advertise Amply
“Some sellers believe that it is OK to not put the home on the local MLS, that the agents in the area will just bring the perfect buyer,” Phillips says. “While this could happen, it rarely does. Doing this is like trying to sell a secret. The price does not matter because few buyers know the house is even for sale.”
46. Host an Open House
“Recently, my listings have all sold to buyers who came to the open houses,” Bishop says. Beyond that …
47. Be Available
“Appointments often come with only an hour’s notice,” she adds. “Work as smoothly as possible with your Realtor to accommodate showings.”
48. Adjust …
If you find you did list your home for more than it’s worth, go ahead and change your listing. (Again, consulting with your Realtor can come in handy here.)
49. … & Stay Flexible
“We’ve seen purchases fall apart over very small amounts of money, over a single appliance and over attitudes,” Phillips says. “Remember the big picture and how much it will cost to start over finding another willing and capable buyer. [Getting] the deal closed is often the best financial (and emotional) choice, even if you have to give up a little more than you wanted.”
Spring has officially sprung, which means plenty of house hunters and home sellers are ’tis-ing the season. But if you’re settled in your humble abode, the warm weather can serve as a different inspiration. Yup, it’s the home improvement season, too.
Of course, major renovations aren’t in everyone’s budget and it’s best not to go into debt if your home doesn’t actually need repairs. (That’ll just hurt your bank account and your credit — you can see how your scores are doing for free on Credit.com.)
Still, homeowners hankering to get handy will be happy to hear there are a few simple projects that can actually save them some money — at least in the long run. Here are three projects you might want to put on your to-do list.
1. Go Green
Going green and becoming more eco-friendly is great for those interested in reducing their carbon footprint, sure, but, you can also benefit financially from making your home more energy-efficient.
Yes, you’ll have to have to make an initial investment, but green upgrades tend to pay for themselves by lowering your monthly utility bills. Plus, by incorporating eco-friendly solutions into your home improvement plans, you may also be eligible for tax rebates on the local, state or federal level next year. You can check with an accountant to determine if you can save on your taxes by going green with renovations. According to the U.S. Department of Energy, the top suggestions for making your home more energy-efficient are:
Insulated windows using low-emissivity coatings
Energy efficient refrigerators using advanced compressor technology or magnetic refrigeration
Water heaters using electric heat pumps
Loose-fill fiberglass insulation
2. Spring Clean
Sure, it’s cliche, but checking some tasks off your annual homeowner to-do list (get yours right here) can prevent a major repair and save you money down the line. As part of a deep spring clean, be sure to check your drains and gutters, service your A/C (which can keep it from breaking on the hottest day of the year), replace any window screens you removed during the winter and repair any shingles or bricks that came loose due to bad weather.
Of course, this also a good time to clean our your closets, cabinets and crawl spaces. Fewer things means less stuff to worry about. Plus, you may be able to make a buck or two selling your wares online.
3. Smarten Up Your Home
The idea of programming your home and all of its appliances to answer your every verbal command is certainly not one the average homeowner is going to entertain. However, there are some simple ways to smarten up your home that won’t break the bank — and, in fact, can save you in the long run.
For instance, you could look into installing smart thermostats, which can be programmed or learn to change the temperature in your house throughout the day. They’re designed to ensure you don’t heat or cool your house unnecessarily and, thus, can wind up saving you on utilities. Similarly, consider changing out all your incandescent light bulbs for Smart (and energy-efficient!) LEDs. You’ll have to put out some cash to do this, as LEDs bulbs cost much more than your regular old light bulb, but the swap should pay off in the long run because they also last longer and use less energy.
If you’re getting a tax refund this year, you’ve got three major options when it comes to using the money: You can save it. You can invest it. Or you can splurge. But break things down a little further, and that check (back) from Uncle Sam can help you build credit, too. For serious.
Here are six ways your tax refund could help you build — or even establish — your credit scores.
1. Pay Down Credit Card Balances
Second rule of credit scores: Keep your debt level below at least 30% (and ideally 10%) of your total available credit. Anything beyond that is bad for your credit utilization ratio. If you’re over that limit or, worse yet, bumping up against your limits, putting your tax refund toward your credit card balances can help improve your credit score. Better yet …
2. Pay Off High-Interest Credit Card Debt
Because those balances are going to spike pretty fast. Plus, you’ll be saving money in the long run. Good rule of thumb when it comes to dealing with multiple credit card balances: Make all your minimums, but put more money toward either the smallest (because motivation) or the one with the highest annual percentage rate (because, like we said, it’ll cost you less). You can see how your credit card use is affecting your credit by viewing two of your scores, updated every 14 days, on Credit.com.
3. Get a Secured Credit Card …
If you’ve got thin-to-no credit, consider using your tax refund to open a secured credit card. Secured credit cards are easier to get than other types of credit cards because they require the cardholder put down a deposit (usually $200 to $300) that serves as the credit line. (Or vice versa. That’s a little bit of a chicken-or-the-egg thing.) In any event, if you’re close to cash-strapped, you can use your tax refund to open the card. That line of credit will help you establish a payment history, the most important factor among credit scores — so long as you pay your charges off by their due date, of course.
4 … Or a Credit-Builder Loan
Credit-builder loans, available at your local bank or credit union, are essentially the installment loan version of a secured credit card. You “borrow” money (that’s where you tax refund comes in), which gets put in a savings account, then you make a series of monthly payments and get access to the money once the “loan” is paid in full. Credit-builder loans usually involve paying some interest on the money you’re borrowing/depositing, but they basically provide people who otherwise don’t have credit with the opportunity to build some.
5. Pay Off That Collections Account
OK, here’s the thing: Paying a collection account probably won’t get that item off of your credit report. Legally, it can stay there for seven years plus 180 days from the date of the delinquency that immediately preceded collection activity (more on how long other stuff stays on your credit report right here). And there’s no guarantee it’ll boost your score once it’s paid off.
Quick side note: We’re talking about legitimate collection accounts here, so if a collector comes calling, be sure to verify the account belongs to you. There are debt collection scammers out there and it’s not unheard of for a legitimate collector to get the wrong guy. Under federal law, collectors are required to send written verification of a debt to a debtor five days after first contact, so that slip of paper should give you an idea of whether you’re liable for the payment.
6. Start an Emergency Fund
Yeah, we know, money in a savings account isn’t going to do anything for your credit score … right now. But socking away some dollars for a rainy day can keep you from going to the old credit card when one comes. And that’ll keep your credit utilization on the right side of 30%. Plus, you’ll skip the interest. If you’re not carrying any debt and your credit is in OK shape, consider putting Uncle Sam’s check in a high or at least higher-yield savings account. Your credit score may thank you down the line.