credit score

Should you get a store credit card?

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Black Friday is upon us, and retailers are ready not just to sell, but to lend.

That is, they’re ready to talk you into getting their proprietary credit cards. When you shop in-store, you’ll almost certainly get asked when you pay for your purchases. If you’re shopping online, a pop-up ad will probably follow you all the way to the “pay now” button.

The introductory offers may sound tempting. (Zero interest! Deferred interest! 30% off your first purchase!) But is a store credit card the best choice for you right now, or ever?

That depends. Store credit cards may have their place, especially for those trying to build or re-build credit, but they aren’t always a good idea.

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A free “Credit Score Boot Camp.”

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Concerned about your credit score? You should be. Like it or not, that three-digit number can make a big difference in your life. Credit expert Beverly Harzog can help, with a free e-mail course called “Credit Score Boot Camp.”

Every week for six weeks, you’ll get true, actionable advice from Harzog on how to increase your score. Already have a decent FICO? Her tips can help you keep it that way.

The course author is a consumer finance analyst for U.S. News & World Report. But she’s no talking head who looks down on those who have credit issues. In fact, she freely admits she’s had issues of her own: The title of one of her books is “Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made.” (As an Amazon affiliate, I may receive a small fee for items bought through my links.)

 

Beverly may have a highfalutin title, but she’s one of the most down-to-earth people I know. And yep, I know her in real life, as the kids say. I’ve even stayed in her home and petted her impossibly cute pup, Marshall.

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Goodbye, medical collections debt.

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Got medical debt? So do a lot of people: About one in five U.S. households have medical-related debt, according to a new study from the Consumer Financial Protection Bureau. And medical collections debt can do a number on your credit score (as in, a lower number).

But change is coming, in three ways:

As of July 1, 2022, paid-off medical collections debt will no longer appear on your credit report.

The time frame for unpaid medical collections debt’s appearance on your credit report will double. Consumers will have one year, rather than six months, to deal with insurance companies and/or negotiate with healthcare agencies before the debt is officially reported.

Finally, in the first half of 2023, the three major credit reporting agencies (Equifax, Experian and TransUnion) will not list medical collection debt that’s $500 or less.

This is huge for those who’ve fallen victim to what the CFPB calls “opaque pricing” and “complicated insurance or charity care coverage and pricing rules.” (Rohit Chopra, director of the CFPB, refers to it as “a doom loop.”) Those who are experiencing medical emergencies, as well as those who have chronic illnesses, may feel they have no choice to shoulder the costs associated with getting care. 

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Credit card requirements easing.

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The good news: Banks have lately made it a bit easier to get a credit card.

The bad news: Banks have lately made it a bit easier to get a credit card.

According to the Federal Reserve’s new quarterly survey of bank senior loan officers, nearly 15 percent of large banks and 25 percent of other banks have eased the required minimum credit score in the fourth quarter of 2021. This trend is likely to continue in 2022.

Notice that not all banks are doing this. Notice, too, that I said it’s both good and bad news.

The relaxing of standards could help people who don’t currently qualify for credit, or who qualify only for cards with lousy interest rates and lots of fees. Getting a legitimate card and using it carefully can help them build their credit history. Without a solid credit history, you’ll pay more than you must for things like car loans, vehicles and insurance.

The idea is to get the best possible card and, more important, to have a plan to build credit, not create debt. That’s the “bad news” part: Being able finally to get a card could harm someone who doesn’t have a plan in place. A credit card is not the ticket to the good life, with zero consequences attached. It’s a tool, and like any tool it can be used for good or for ill.

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How are credit scores calculated?

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You try hard, but still have a mediocre credit score. You pay no attention and have a great one. Just how are credit scores calculated, anyway?

Good question – and it has a complicated answer.

This is a topic I tackled for the “How Credit Works” section at Self.inc. “How are credit scores calculated?” takes a deep and nerdy dive into the issue of credit scores.

<<Surviving and Thriving has partnered with CardRatings for our coverage of credit card products. Surviving and Thriving and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses and recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.>>

Every so often I do a “read me elsewhere” roundup of articles I’ve written. Lately a lot of the work I’ve done is either editing someone else’s site, doing non-bylined stuff or writing stuff that’s so ridiculously specialized that I wouldn’t bore my readers by sharing it.

The topic of how credit scores are calculated is one that I think can help a lot of people, though. No matter how unfair you think the credit scoring system is, the fact is that we are currently stuck with it. A smart consumer will learn to operate within its confines. That is, unless you like paying many tens of thousands of dollars in extra interest during your lifetime.

From “very poor” to “exceptional,” credit scores matter. They determine the kind of interest rate you’ll get on housing, vehicle and other loans. They might determine whether you get that loan at all, at least from a conventional lender – and the others can somehow get away with charging loan rates of up to 35.99 percent. 

 

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Get free credit reports weekly.

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Thanks to the economic impact of COVID-19, some people are paying credit card bills and other obligations late. Or even missing them altogether, which can put a major hurt on your credit score.

Coronavirus-related scams are on the rise, and identity theft is a big concern since so many people have been shopping online. The Federal Trade Commission fielded four times more fraud claims in the first few weeks of April than in the previous quarter combined.

We’re all supposed to check our credit reports every four months, through annual free reports from the big three credit bureaus (Equifax, Experian and TransUnion). But for the next nine months, you can check it every week.

Those bureaus have teamed up to provide free weekly reports through AnnualCreditReport.com. It’s a collective response to COVID-19, whose financial upheaval has led to those late/missed payments, and it continues through April 21, 2021.

However, you don’t have to be struggling financially to want to check your credit report. It’s always a good idea to make sure there’s nothing weird on your report – and it’s not always fraud-related. Incorrectly entered info, such as transposed digits in a Social Security number, can lead to errors.

For example, one time when I checked the report seemed to think that I worked at a credit union in the southeastern United States. Nope, that wasn’t me.

Note: A credit report is not the same as your credit score. But this new paradigm offers help with that, too.

 

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