Business Credit Card

If you ve done any searching on the Internet for information pertaining to Credit Repair, you ve no doubt found that there s a great deal available. Unfortunately, there s also a lot of misinformation as well.

Let s take a look at some of the most common misstatements you ll come across and examine them in detail.

MYTH #1

Credit repair doesn't work!

While it s true that credit repair is more art than science that s not to say it doesn t work. If you undertake to repair your bad credit score, there s never any guarantee you can restore it to perfect status. But sometimes you can, and in almost every case you can at least affect some improvement in your credit score, and often major improvement at that!

First of all, credit reports for the most part are filled with errors. While there seems to be no general agreement, it s estimated that anywhere from 1/3 (Attorney General of NY) to as many as 90% (Charles Givens Organization) of credit reports contain errors.

Removal of erroneous negative information alone will go a great way toward improving your credit score. But there s more to the story, which brings us to myth #2.

MYTH #2

Negative information that can be verified cannot be removed

This is one of those statements that are almost true, but taken literally is misleading. As is often the case, the inclusion (or exclusion) of one seemingly small word makes the difference in a truthful statement, and one that s not (or not necessarily) accurate.

Let s take an analogy. Suppose it s the middle of summer, and your grass has grown unusually high. Let s also suppose that you own a lawn mower, it s in good working condition, and has plenty of gasoline in the tank.

Now let s say that you re sitting on your couch and say to yourself My grass will get cut today because I CAN go outdoors anytime and cut it.

So will your grass get cut? Not necessarily! Just because you can go outdoors and cut your grass doesn t mean it s going to get done. You can repeat this statement to yourself all day long, but your grass isn t going to get cut until you actually go outside and DO it!

Likewise, because a negative item on your credit report can be verified doesn t mean it will be. According to the Fair Credit Reporting Act, a credit bureau must investigate and verify within a reasonable period of time any item in your credit report that you dispute. If the information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall promptly delete such information.

Now in this context can be verified clearly means verified by the credit bureau s investigation of the item, and the reasonable period of time has been established (by subsequent rulings) to be 30 days. So if the credit bureau doesn t complete its investigation of the disputed information within 30 days, or if for some reason the creditor fails to respond and verify the information, by law the disputed data must be deleted from your credit file.

MYTH #3

Credit repair agencies are all scams

It s true that there ARE a good many unscrupulous credit repair agencies. But there are also some corrupt police officers, lawyers, and politicians. Yet we don t label all members of these professions as corrupt.

If you re looking for help to repair your bad credit you do need to be careful and do your homework when selecting an agency. There are many honest credit repair companies that are not scams. But beware of any who make promises as to results!

As stated above, it s not always possible to restore your bad credit history to perfect status, and no one should be making any promises to that effect. Beware of any company that does! And while an agency will in all likelihood be able to improve your credit score, if any agency makes this promise, be sure it s accompanied by a money back guarantee. Otherwise, look elsewhere. And don t forget to ask for references and follow up on them.

MYTH #4

You have to hire a credit repair agency or lawyer to fix your credit

Going back to the analogy above, you can always hire someone else to cut your grass (or to do just about anything else) for your. And if fixing your own credit seems an intimidating task, you might prefer to hire a credit repair company to do it.

But it s not really necessary that you do. First of all, credit repair agencies aren t cheap. You can expect to pay anywhere from $2,500 to $5,000 or more. Plus, you ll be paying a high fee for something you can just as well do for yourself, which brings us to myth #5.

MYTH #5

It s too difficult or complicated to fix your own credit

A credit repair company isn t going to do anything for you that you can t do for yourself! Credit repair isn t rocket science. It involves writing letters to credit bureaus and to creditors. If you re able to write a letter, put a stamp on it and mail it, you re able to repair your own credit.

Given the proper knowledge, you can fix your own credit

This statement IS true! You re entirely able to repair your own credit, given the proper knowledge. And given the proper knowledge, you can fix your own car, repair your own plumbing, or for that matter perform brain surgery.

While fixing your own credit is relatively simple and straightforward, you do have to know how to go about it. Essentially it involves getting a copy of your credit report and writing letters to the 3 major credit bureaus disputing negative information in your file.

But there s a right way and a wrong way to do it. In fact even some of the high priced credit repair agencies get it wrong, which brings us to myth #6.

MYTH #6

You improve your credit score by getting all the negative items on your credit report removed

It s possible to get all the negative items on your credit report removed and actually see you credit score go DOWN as a result! The reason? Your credit score depends on a number of factors, one of which is the length of your credit history. In some cases, you re better off to NOT remove some negative items on your report, especially if they involve a few late payments in the distant past, but show timely payments during recent years.

While the nuts and bolts of credit repair is beyond the scope of this report, there are a number of sources of good information online. If you have bad credit, there are 3 major points you should keep in mind:

1. If you have a bad credit history, it can (and probably will) cost you many tens of thousands of dollars in higher loan interest over the years, as you ll be charged much higher rates than you would be with good credit. If your credit is really bad, you may not be able to get a loan at all!

2. The situation isn t hopeless! In almost every case you CAN improve your credit score. You can easily do it yourself or find a reputable agency to do it for you. But in any case, GET IT DONE!

3. If you choose to repair your own credit (recommended) there are good books and eBooks available that can walk through the process. Get hold of one and get started NOW!

By: Jim Eastman

Labels: business credit card, credit, myths, repair

They sound sensible, but acting on them can cost you
We've all heard some of them, and we've probably believed more than a few, but living by a credit card myth can cost you a lot of money in fees and hurt your credit rating.

Here are seven of the most pervasive credit card myths to watch out for:

Myth No. 1: Writing 'See ID' on the signature line on the back of your cards will stop a credit card thief cold and absolve you of any liability if a thief uses it.

The Logic: The "Ask for ID" or "See ID" prompt reminds salespeople to confirm that the name on the credit card matches that of the person holding it. And why write your signature in that little white space when it could be copied and used on checks, legal forms or other documents? There are even reports of law enforcement personnel recommending this precaution.

The Reality: An unsigned credit card is invalid, technically, according to the agreements that card issuers have with retailers. Moreover, many clerks don't even check for signatures at all, meaning that they're unlikely to see "See ID" on the back of your card, even if it is there.

If you do give a clerk an unsigned card or one with "See ID" written instead, they're supposed to have you sign the back of the card and check the signature against your driver's license or passport. This may trip up the fraudster a bit -- after all, a thief is unlikely to be able to mimic your signature on command -- but that's only if the cashier bothers to take the time to compare that signature to the one on the driver's license.

So what about the liability issue? Does writing "See ID" absolve you if the card is taken and used? No, because "no matter what's on the back, you're only liable for up to $50 charged when a card is stolen, and some companies waive that for their cardholders," says Lauren Zeichner, an attorney with Consumer's Union. "Writing 'Ask for ID' might encourage a retailer to ask for your ID, but it has no legal bearing."

Myth No. 2: There's no credit limit on your American Express card, so you can buy anything you want.

The Logic: Years of powerful advertising from American Express have probably locked at least one of their messages in your mind: "No preset spending limit." So when the AmEx arrives in the mail, you can activate it and buy tickets to Maui -- or your own Gulfstream jet to take you there, right? After all, there's no limit on your account.

The Reality: AmEx has changed; it no longer issues only charge cards -- the type that allow you to rack up a lot of debt, as long as you pay off the entire debt every month. They issue credit cards, too, which allow you to carry a balance.

In addition, when you inspect the marketing info from American Express, the phrase "no preset spending limit" usually comes with an asterisk. In the fine print, you'll find wording to the effect that this "... does not mean unlimited spending. Your purchases are approved based on a variety of factors, including current spending patterns, your payment history, credit record and financial resources known to us."

"There is no preset spending limit. It's dynamic. It can change based on your financial situation and how you use the card," says Mona Hamouly, a spokeswoman for American Express. "We have customers who make extremely large purchases with their cards, but that may be part of their profile."

In other words, if you don't already make high-dollar purchases with your credit cards, expect AmEx to question why you're suddenly buying $6,500 designer shoes when you stated on your application that you earned just $30,000 a year. "The best thing to do when you're going to make a purchase that's out of the ordinary for you is call and let us know, so we can discuss the details," says Hamouly.

Myth No. 3: You need one of each of the big cards -- Visa, MasterCard, American Express and Discover -- in your wallet because you may be stuck someplace that accepts one and not the others.

The Logic: People do wonder if the place they're going will take the card(s) they have. The rivalry between American Express and Visa has perpetuated this for years, as evidenced by TV spots for Visa that showed flashy restaurants and exclusive hotspots " ... that don't take American Express."

Some places are picky: Go to a Sam's Club, and you can only use Discover and its own branded card, while only American Express is good at rival retailer Costco.

The Reality: "If you have two of the big four, you're not likely to have any problems," says Linda Sherry, national priorities director for Consumer Action in Washington, D.C., "and millions of people just get by with one. It's much simpler."

"Although their advertising can make you want all these great cards, it's probably not great financial sense to have them all," says Sherry. "Remember: All those cards with your name on it don't make you rich and powerful, and in the end, you could become poor because of them."

Myth No. 4: You can give your credit score a boost by paying more than you owe.

The Logic: Paying more than you owe does temporarily bump up the amount of available credit on your card. It's also true that using a smaller percentage of the credit available in your accounts -- known in the industry as keeping a "low utilization ratio" -- helps your credit score. Lastly, it's thought that early credit scoring models may have given people a boost when they paid a personal or car loan a month early, so some may think that the same thing would apply to their plastic.

The Reality: "Even though you may be below zero on an account, it's assumed that's a temporary situation," says Roslyn Whitehurst, a spokesperson with the credit bureau Experian. "Whether you've got a credit of $100 or $1,000, it still shows as a zero balance for scoring purposes."

Myth No. 5: Using your debit card wisely can help your credit score.

The Logic: Debit and credit cards look alike, both bearing Visa, MasterCard or other logos. They're treated virtually the same by retailers. Thus, both should have an impact on credit scoring.

The Reality: "Having a bank account with a debit card and maintaining it properly shows that you're a responsible consumer," says Sherry. "But it is not taken into account" in credit scores, she says.

Myth No. 6: Retailers can set a minimum amount you can charge on a credit card when you buy something from them.

The Logic: In a small store or restaurant, it's not uncommon to find a sign that says, "$5 minimum for credit card purchases." If this wasn't allowed by the credit card companies, surely they'd crack down on it.

The Reality: Retailers who set minimum charges are breaking their agreements with the card companies. Because retailers pay interchange fees -- which vary, but average about 2 percent of the sale -- plus possible transaction fees on each credit card purchase, it's easy to see why a store owner would want to discourage lots of small credit card sales. But when they do so, they risk losing their ability to accept cards. "You're allowed to charge any amount on your card, even a penny," says Zeichner. "The problem is that the retailer wants you to charge enough to make it worth his while."

If you need to use a card for a small transaction that's against store policy, you can object, although you may be invited to take your business elsewhere. The other thing to do is contact the credit card company. "We want to know about retailers who do this," says Matt Towson, a spokesman for Discover Financial Services. "It violates our contract with them."

Myth No. 7: If you go over your credit limit and pay it back before the due date, you'll be fine.

The Logic: Lots of people go over their credit limits. After all, credit card companies don't want to embarrass you and lose you as a customer, so they rarely decline your purchase. As long as you're a good customer and you keep the overage reasonable, they won't hit you with an over-the-limit fee.

The Reality: It's true that credit card companies don't want to decline your purchase when you go over your limit. And if you're buying something that puts you a few dollars or more over the top, there's a good chance they'll give you the green light. But remember, every time you pass that credit limit, even for a short period, you could give the issuer a reason to boost your interest rate to penalty rate levels -- sometimes more than 30 percent.

You've also triggered one of those nasty fees that can eat up your account. Taken over time, those fees can add up and hinder your ability to draw down your debt. "It just makes sense for the company," says Sherry. "They know you don't want to have the card declined, so they quietly penalize you the $30 or $40 over-limit fee."

To avoid it, try calling before your purchase to see if they can give you at least a little bump in your credit line.

By John Morell http://finance.yahoo.com/banking-budgeting/article/106525/Don't-Believe-These-7-Credit-Card-Myths

Labels: business credit card, credit card, logic, myths, reality