How To Rebuild Credit In 5 Easy Steps

July 13, 2011 | By Xpert In Credit Score | Comments Off

It is possible to rebuild credit in spite of past credit difficulties. There are basically two ways to approach the task. You can get help from a variety of legal and financial groups that specialize in this type of work, or you can do it yourself.

If you are uncertain that it is something you want to tackle on your own check your local phone directory for Credit Counseling types of agencies. Check for qualifications that you recognize as reliable. Be aware that this type of help will involve fees for their service, so make sure you find out exactly what your costs will be before you commit to anything.

However, it is not impossible to rebuild credit on your own. The first thing you will need to do is get organized and create a plan of action. Here are the basic steps to take to rebuild your credit.

1. Obtain a copy of your credit score. Check it for errors and if you do find something you think is wrong, be sure to get that corrected first. There should be information on the report itself that will explain how to handle disputes.

2. Get up to date on any overdue accounts and make them current so that they don’t get sent to collections. Talk to your creditors and make arrangements for this in order to keep them from affecting your credit score.

3. The next step is to try and bring your maxed out credit cards down so that they are under their limit. Make regular minimum payments to keep them current and below their maximum.

4. Apply for a new credit card. It will likely be hard to obtain a major credit card but you may be able to get a department store card or another smaller credit card. Be sure to apply only once. Only get a small credit limit on this card and stay within it. Pay it regularly and you will begin to rebuild credit.

5. Finally, now that you are on track, draw up a budget that will allow you to stay on top of all your credit card payments and stick with it. It is not easy to rebuild credit, but it can be done!

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Understanding Your Credit Card Interest Rate

July 13, 2011 | By Xpert In Credit Card Fees | Comments Off

Sometimes trying to understand your credit card interest rate may seem more like an advanced algebra class!  So what is that percentage rate that shows up on every bill? And how is it calculated?  We break it down for you.


Understanding your credit card interest rate doesn’t make it any easier to pay your bill every month but it is a good idea to  understand the fundamentals of what credit card interest is and how it is calculated.

One of the most important terms to understand is APR or annual percentage rate.  This is the rate that credit card issuers charge on the unpaid balance each month.

Even though your interest rate appears on each of your monthly bills, it is actually an annual rate.  Credit companies divide this rate over twelve months to calculate the amount of interest charged.

Here is an example.  Say for instance you have a credit card with a $2000 balance owing.  In January, you made a payment of $100.  That means the remaining balance is $1900.  This is the amount that you will be charged interest on.

Next, take the yearly rate of interest and divide it over twelve months to give you the monthly rate.  The final step is to multiply your unpaid $1900 balance by the monthly.

Although there are slight variations to this calculation with some credit card companies, most use a formula similar to this one.  From time to time, some companies will use a daily interest rate but it is not overly common.

Of course, if you pay off the full amount before the due date, no interest is tallied.  This is by far the best way to avoid many common credit card pitfalls like falling into credit card debt or letting missed or late payments affect your credit score.

When it comes to the basics of using credit cards, there are few things more important than understanding your APR.  It is more then just some number on your bill.

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Filed under: Credit Card Fees