Smartphones are great for navigating around town, finding new restaurants, communicating with your friends, and solving various other little problems of everyday life, but did you know that your smartphone or tablet PC can also help you monitor and improve your credit score?
Various financial services companies have developed convenient apps that make it easier than ever before to stay on top of your credit.
Formerly known as "PageOnce," Check is a mobile app that helps relieve your worries about personal finances by helping you manage your bills and money. Check keeps track of all of your bank accounts and credit cards, all in one place – helping you monitor your money and avoid late fees and overdraft charges. Check also makes it easy to pay bills online – on the spot, or by scheduling payments in advance. Check also offers three layers of bank-level security, giving you confidence to manage your money on the go.
WHY THIS APP IS IMPORTANT: Check helps you maintain a good credit rating by helping ensure that your bills get paid on time – because on time bill payments are a leading factor in a strong credit score.
Equifax Mobile App
The Equifax mobile credit app lets you check your credit score anywhere, anytime. The Equifax mobile app lets you see average Equifax credit scores in your area, see the frequency of identity fraud in your area, and see credit rankings that show how your credit compares to other people in your area. If you sign up for an eligible Equifax subscription, you can check your Equifax Credit Score plus receive alerts to any important changes in your credit file, all from within the mobile app, wherever you go.
Why this app is important: Many people are curious or confused about their credit score. Getting the Equifax mobile app gives you an easy way to check your credit score and see a high-level summary of your latest credit report at any time. This app also helps protect you from identity theft, as it notifies you of account balance changes, dormant accounts becoming active, and other activity that might be perpetrated by identity thieves. The Equifax app helps you ensure that anything happening with your credit is being done by you, and not by impostors claiming your identity.
The DebtTracker Pro mobile app (available on the Apple App Store and Google Play marketplace) helps you keep track of various debts – credit cards, lines of credit, etc. – and lets you enter your loan information so you can figure out which debts to pay off first or fastest. This app also shows you your credit utilization rate for each line of credit – for example, if you have a $10,000 credit line on a credit card, and owe $1,500 that means that your utilization rate is 15 percent.
Why this app is important: Keeping track of your credit utilization rate is very helpful in improving your credit, because your utilization rate is one of the biggest factors in determining your credit score. Keep your utilization rate low on each credit card, and your credit score will improve.
Lemon Wallet is a free mobile app that lets you store and save backup copies of your credit cards online via your smartphone, so in case your wallet is ever lost or stolen, you can immediately track down your credit card accounts, call your credit card issuers, and work to prevent identity theft and cancel your accounts easily.
Why this app is important: Lost or stolen wallets are a reality of life – and a leading cause of identity theft. The best thing you can do if your wallet gets lost or stolen is to immediately cancel your credit card accounts so that thieves can't use your cards to run up big debts in your name.
Smartphones and mobile devices are valuable tools, not just because of how they make life more convenient, but in the way that they can help us protect our credit and avoid the hazards of identity theft. Check out some of these great mobile apps and see how they can help improve your financial future.
What You Don't Know That Affects Your Credit Score
Grandpa always cautioned never to buy anything you couldn’t pay for in full. But Grandpa also kept his money in a burlap bag and never owned a credit card. Grandpa’s Depression Era advice proves worthy in our credit dependent world. Creditors are looking primarily to see if you pay your bills on time. Earning good credit scores doesn’t mean you have to pay off your balances each month. If you pay the minimum, it’s all the same to them. Just pay on time, every month, like grandpa said.
How Your Credit Score Is Reduced
Many people miss a payment, bounce a check, or overdraft his or her direct pay. This happens to the best many people, even when circumstances are favorable. When payments are missed only by a few hours or a few days. even 30 to 60 days late, there is a chance that these may never be reported to a credit bureau. A quick call to your creditor and you’ll be spared any dings on your score.
However, late payments made 90 days or more after the due date can damage your credit and remain on your report for up to seven years. The amount of the late payment does not matters, even if it was only $10.
Payment History Is Just The Start
Creditors not only look at your debt-to-income ratio, but they look at how much you owe compared with your available balances. Creditors also consider how long you have been using your credit, as well as how many times you’ve applied for credit in the recent past. Having a long payment history and few credit inquiries reflect well in the score.
If you are starting (or rebuilding) your credit, you will need to have at least one account that’s been active for a minimum of six months and one that has been updated in the past six.
Overdue Library Books & Parking Tickets Can Hurt Your Credit
Unpaid library fines, late child support payment, utility bills and even late parking ticket can all negatively affect your credit score. However, job loss or unexpected medical bills aren’t factored into your payment history.
How Credit Card Companies Take Advantage of Customers
Credit card companies can hurt your score more than many people realize. Missed payments often lead to an immediate interest rate increase and if the credit card is overcharged, overdraft fees can take effect.
The False Security of the Debit Card
Debit cards are good tools to help you keep better track of your spending, but if you spend more than what’s in your account, you can rack up overdraft fees of an average of $30 per purchase. When debit cards are used for hotels and rental cars, the company blocks off a couple hundred dollars, tying up your available funds and putting you at greater risk for overdraft. Some gas stations and retail outlets charge additional fees as well. Using a credit card in these situations will ensure that the exact amounts of your expenses are rung up at the time the purchase is made.
Credit cards can also offer more protection if your card or numbers are stolen. If a thief steals a debit card, the account can be drained quickly and make recovery impossible.
Tempting the Small Business Owner into Expensive Debt
If you’re starting or supporting a small business, you know that it’s harder than ever to find cash. Stocks and housing values are down, severely hampering your financing choices. While using credit cards might be tempting, this might start a pattern where the profit from the business goes to pay off credit card debt, says Panda Morgan of the Greater Sacramento Small Business Development Center. Take the time to write a business plan and apply for a business loan, which will hold an interest rate in the single digits. Credit card companies have been known to charge 15-19 percent, so shop around for the best rates if you choose to go this route.
The bottom line? Use credit cards carefully, and make payments on time, just like Granpa said.
Information for this article was gathered from a variety of sources including: Phoenix Business Journal, Birmingham Business Journal, Pittsburgh Business Times, The Tigard Times, Fair Isaac Corporation, Lawyers Title Agency of Washington, S. Michael Windsor, Helen Hecker of Articlesbase.com, Liz Pulliam Weston, Personal Finance Columnist, and The Today Show.