Pawnshop loans can be an intriguing option for people looking to come up with cash quickly or with less-than-ideal credit.
If you take out a pawnshop loan, though, will it hurt your credit score? Will your credit be damaged if you don't pay a pawn shop loan back?
While there are definitely some reasons to be wary of pawn shop loans, one good thing about them is that they won't hurt your credit score. Pawnbrokers won't report your payment history to the credit bureaus, and the loan won't appear on your credit report.Before you grab your grandmother's antique jewelry or your flat-screen TV and start driving to the local pawn shop, you'll want to learn a little bit more about these loans and explore some of your other options.
Also known as a pawnbroker loan, a pawnshop loan is a type of secured, short-term loan. These can be obtained either at brick-and-mortar pawn shops or online pawn shops.
A secured loan is a type of loan where the debt is backed by collateral. In the case of a pawn shop loan, the asset backing the loan is the item of value you leave with the pawnbroker.
If you agree to the loan, you'll leave the item with the pawnbroker. The catch is that they can keep and resell your item if you don't pay the loan back within the time period that was agreed upon.
Pawnshop owners will typically offer a loan that is somewhere between 25% and 60% of the estimated resale value of the item. This will usually be a lot lower than the price you originally purchased the item for.
Not only do pawn shop loans put you at risk of losing a potentially valuable and maybe even sentimental item if you aren't able to repay the loan, but it's also important to note that this type of loan isn't usually very cheap.
Before taking out a loan like this, it's a good idea to assess your other options and make sure you're not going to end up in a worse financial position than where you started.
Though there are definitely some pros and cons to weigh out when it comes to taking out a pawnshop loan (which we'll take a closer look at in the next section,) one advantage is that it won't hurt your credit score.
When you take out a pawnshop loan, your payment history won't be reported to the credit bureaus by the pawnbroker. This means that whether or not you repay the loan won't have any impact on your credit. At the same time, making timely payments toward a pawnshop loan won't help you rebuild your credit.
If you're hoping that all of your pawnshop loan repayments will help you improve your credit score, you're, unfortunately, out of luck. On the other hand, if you're worried that your pawn shop loan is going to ding your credit, you'll be glad to know that pawn shop loans won't end up on your credit report.
Beyond that, pawn shop loans won't end up with you being harassed by debt collectors if you fail to pay them back. If you don't pay back the loan within the stated period of time, the pawnbroker will keep the item that you left as collateral and resell it.
Is it a good idea to borrow money using a pawnshop loan? While there are definitely some appealing things about these loans, including the fact that they don't impact your credit score and you can get cash quickly, there are also a number of drawbacks to consider.
Pawn shop loans can be attractive when you don't have great credit and when you're looking to get a quick loan.
Here are some of the ways that pawnshop loans can be beneficial to borrowers:
On the other hand, borrowing money from a pawnshop can be risky in a number of ways.
Here are some of the negative aspects you'll want to keep in mind before pawning your valuables for a loan:
If you need quick access to cash, but you're worried about the risks of taking out a pawnshop loan, there are other options that you can look into. You'll notice that we don't include high-interest payday loans or title loans on this list-- both of these loan types come with high costs and high risks that make them generally a bad idea.
What are some alternatives to pawnshop loans when it comes to borrowing money? Here are some other options to keep in mind.
If you have a credit card with a credit available, you can either use the card to make a purchase or even consider a cash advance. However, you'll want to look at the interest rate for cash advances, as the interest rates are often higher than for standard purchases.
That being said, the APR for a purchase or cash advance using a credit card will most likely be significantly lower than the APR you would receive if you took out a pawnshop loan. Of course, you don't want to spend money that you don't think you'll be able to pay back, as this can continue the cycle of debt.
If you have decent credit, you also might be able to qualify for a promotional 0% APR credit card. This means that you won't have to pay interest for a set period of time.
A number of big banks and online lenders will offer small-dollar loans to existing customers.
These are short-term loans that will have much more favorable interest rates than pawnshop loans. These do, however, usually require a credit check.
Personal loans are typically unsecured loans, meaning that you don't have to put down collateral. Even though the interest rates for personal loans are higher than many types of secured loans (auto loans, home loans, etc.), they will usually be lower than the APR you'd find at a pawn shop.
Even if you have bad credit, you might be able to find a lender that offers loans specifically for people in your situation. Additionally, some offer emergency loans. It's always important to check out the terms of a loan before signing on and shop around to compare interest rates and terms.
Payday loans are an incredibly expensive way to borrow money. On the other hand, payday alternative loans (PALs) have a lower interest rate. These are offered by federal credit unions specifically as an alternative that is more affordable to payday loans.
Another option is an online lending platform. The rates and terms can vary quite a bit, but the credit requirements might not be as strict as they are for a more standard personal loan.
There might be local nonprofits, religious groups, or organizations in your community that offer help to people that are dealing with short-term financial problems. There are also a number of federal, state, and local programs that out there to help people with utilities, groceries, medical bills, and other essential expenses.
Though it can be hard to ask someone close to you for financial help, this can help you avoid costly interest charges and other fees. Mixing personal relationships and money can be tricky, so it's important to come up with a clear agreement about how and when the money will be repaid.
Wondering how else you can come up with cash quickly without getting a loan? Here are some ideas to consider.
The same item you're thinking about pawning could be better put to use by simply selling it yourself. If you're ready to let go of some of your valuable items and you want to turn them into cash, consider selling them through platforms like Craigslist, eBay, or Facebook Marketplace.
There are a lot of side gigs out there you can pick up quickly, such as food delivery, ride-sharing, online tutoring, babysitting, pet sitting, or part-time freelance work. A little bit can go a long way when you're trying to get out of a financial rut, and a side gig might be just what you need.
If you simply need a little extra cash to get through to next week, you might be able to ask your boss or HR department if you can get an advance on your paycheck. This isn't something you want to do all the time, but as a one-time thing, your company might be understanding and willing to help you out.
There are a number of apps that you can use to receive an advance on your paycheck if you'd rather not ask your boss for a favor. When searching for a cash-advance app, make sure you take a close look at the interest and fees charged.
Have an extra room in your home that you don't use? You might consider renting it out short-term using a service like Airbnb or long-term and taking on a new roommate. There are obviously pros and cons to these options, but it's worth considering if you're strapped for cash.
Even if you don't have anything of value that you want to sell, you might be able to find items on sites like Craigslist or Facebook Marketplace that you can clean up and flip for a profit. You can also check out thrift stores, estate sales, and free piles.
If you live near a college or university, it's possible they offer paid research studies that you could participate in. There are almost always parameters you have to meet to participate, and some will pay in gift cards rather than cash. According to Miami Clinical Research, most studies pay between $50 and $300 per day.
Have a big jar of coins sitting on your dresser? If you're coming up short this week, you might be surprised how much cash is hidden in that jar. You're not going to find enough to buy a new car, but you might be able to scrounge together some extra cash to put toward your bills or buy some groceries.
If you're considering a pawnshop loan because you're having a hard time paying your bills, here are a few more things you might consider:
If your credit has seen better days, all hope isn't lost. You can rebuild! Check out our guides to credit repair hacks, removing derogatory marks, and removing evictions, late payments, collections, and hard inquiries from your credit report.
Finally, let's answer a few other common questions about pawn shop loans.
To get a pawn shop loan you'll need to show proof of your identity and be 18 years old or older. Sometimes you'll also need proof of ownership or purchase of the item. No credit check is required.
Though there are rules at both the federal and state level that regulate pawnshops, that doesn't mean that all pawnshop owners are following the rules. It's possible that a pawnbroker could charge a higher APR than what is technically allowed by the state or otherwise engage in predatory lending practices.
There have been a number of lawsuits filed against specific pawn shops by the Consumer Financial Protection Bureau (CFPB) due to their illegal practices.
Taking out a pawnshop loan certainly comes with its fair share of risks, including losing the item you put up as collateral, paying high-interest rates and fees, and even the potential to be a victim of predatory lending. At the same time, pawnshop loans are typically considered a less harmful way to borrow money compared to other options like payday loans or auto title loans.
If you don't repay a pawnshop loan, you'll lose the item, as the pawnbroker will resell it. You won't get the money back that you put toward the loan, and you won't receive any of the profit the pawnbroker made when they sold it.
If you repay a pawnshop loan within the time specified in the loan terms, you can retrieve the item you put up as collateral. There are often options for extending loans at pawnshops, but you'll have to pay additional interest and probably storage fees, too.
According to data from the National Pawnbrokers Association, the average size of a loan received from a pawnshop in the U.S. is $150. Some shops might have set minimums and maximums for loans, and some states might regulate how much money a pawn shop can loan out and the length of the loan term.
The terms for pawn shop loans can vary quite a bit, though they typically involve a high-interest rate. In a number of states, legislators have stepped in to try and regulate pawnshop loans. This means that some states will have laws that will dictate how long you can take to pay back a pawnshop loan.
For example:
Interest rates for pawnshop loans are commonly between 5% and 25% a month, typically closer to the 20% to 25% range. There are also sometimes additional fees for storage, insurance, and other costs. This makes it a costly way to borrow money.
You can pawn just about anything at a pawnshop that has value. At the same time, not all pawnshops will accept specific items as collateral for a loan.
Some of the most popular pawned items include:
Running out to the pawn shop (or finding one online) to take out a loan might not be the absolute worst way to borrow money, but it really isn't the best, either. Though a pawn shop loan won't harm your credit score, it's definitely an expensive way to borrow money and comes with a number of unpleasant risks.
Luckily, there are a number of other things you can do if you need quick access to cash, are having trouble paying your bills, or are trying to borrow money with poor credit.
Though you might have short-term financial woes right now, it's a good idea to start thinking about the big picture. With some attention and dedication, you can work to rebuild your credit over time so that funds are much easier to obtain the next time you need to borrow money.
Is it time for you to start working on your credit to help you gain access to better financial opportunities? If so, make sure you check out our Credit Building Tips blog.
Around the world, more than 150 million users have booked over one billion reservations through Airbnb. Every second, six guests check into an Airbnb somewhere on the planet.
Though booking an Airbnb short-term rental isn't always the best deal for short stays or small groups, you can save some money compared to hotels for longer trips or stays with larger groups.
It's a good idea to book your Airbnb well in advance, but you might be hesitant to book a stay if you're concerned about when they will charge your credit card. The payment will be charged when the reservation is confirmed, even when you use Instant Book.How much you will be charged depends on whether or not you've chosen to pay in a one-time payment or in installments. Long-term rentals of more than 28 days will require an initial one-month payment and then will be charged monthly after that.
Airbnb will charge you once your reservation is confirmed. This isn't just the case for regular bookings but also for Instant Book, which is a listing that lets you reserve a place immediately without having to wait for approval from the host.
Hosts won't receive payment until 24 hours after you've checked in, no matter how far in advance you book your accommodations.
As we'll discuss in the next section, if you choose to pay in installments rather than in a one-time payment, you will be charged an initial deposit upon confirmation of your booking. Then the subsequent payment dates will be listed during the checkout process and can also later be found in your Airbnb account.
Once your accommodation has been booked, there are two primary ways that you can pay:
You will find that you can use a payment plan on most listings. This means that you can pay an upfront deposit and then make the rest of the payments on dates down the road. These days will be listed as a part of the checkout process.
If you decide to pay for the whole thing in one payment, the full balance of the booking will be charged once the host confirms your stay.
Even though the booking will be charged upon confirmation by the host, it's worth noting that the host actually doesn't receive the funds until 24 hours after check-in. This helps to ensure that guests have the opportunity to resolve issues once they are there. Basically, both guests and hosts have the chance to make sure that everything pans out as expected before money exchanges hands.
AirBnB accepts a number of different payment methods in the United States, including:
Accepted payment methods are going to depend on the country where you are booking a stay. If you're booking outside of the United States, you'll want to check on the AirBnB site to learn about the acceptable forms of payment.
It violates Airbnb's terms of service to pay in cash, offline, or off-platform (after all, they want to get their cut, right?) You can end up being removed as a user from the site if you violate their terms of service.
Did you choose to pay with a payment plan, and you're wondering how to find out when your card will be charged?
Here are the steps you'll want to take:
Are you planning on booking a rental through Airbnb for more than 28 months? If so, the payment process is a little bit different. Stays of this length are considered long-term reservations.
For extended getaways, the first payment will be made at the same time as the confirmation is processed. This means that you'll want to be ready for your card to be charged as soon as you make the booking. The following payments will be made monthly after the initial month's rent has been made.
Now let's look at some of the most common questions we receive about Airbnb and credit cards to help you plan your next trip.
If you're planning on staying at an Airbnb for an upcoming trip and you've stacked up some credit card points recently, you might be wondering if you can use them toward your stay.
There are three ways that you can cover your next Airbnb booking with credit card points:
If your credit card offers cash-back rewards, you can use your rewards points to get cash sent back to your card or to your bank account. It's also possible that your rewards program will let you buy a specific Airbnb gift card as one of the redemption options.
It's worth noting that there can be some restrictions with Airbnb gift cards. For example, you can't use these gift cards to cover long-term reservations (meaning longer than 28 days.) You also can't use them as second payments if you're paying in two installments or to make changes to existing reservations.
Before you go this route, it's worth looking into how many cents you're receiving per point or mile. This is because turning your points into gift cards or cash back isn't always the best way to get the most bang for your buck, particularly with some of the big travel cards. You might find that there is a better way to use your points or miles to pay for a booking.
That being said, if you don't have travel plans anytime soon and your points are going to expire, spending them on a gift card now can let you take advantage of them before they disappear.
If you have a credit card that is a co-branded hotel card, you will usually only be able to redeem them with a specific hotel chain. However, there are also more general travel cards that come with a lot more flexibility.
While the details are going to vary depending on the card that you have, there are many travel cards that let you redeem miles or points for credit that can end up being put toward a wide range of travel purchases, including Airbnb bookings. This is because payment networks categorize Airbnb payments in the same way they classify hotel purchases.
If you have one of the fancier credit cards out there, it's possible that you will be able to use your annual travel credit in order to save some money on your next Airbnb stay.
For example, the Chase Sapphire Reserve card comes with a travel statement credit of $300 which renews every year on your account anniversary. This is a benefit that cardholders receive automatically and can use on lots of different travel expenses, including Airbnb.
Another instance of this possibility is the U.S. Bank Altitude Reserve Visa Infinite Card, which comes with a $325 annual travel credit. According to U.S. Bank, this credit can be used at Airbnb so long as the purchases are classified as hotel purchases.
The card also comes with an enrollment bonus that is worth $750 in travel expenses if cardholders spend $4,500 in the first 90 days of opening the account.
Both of these cards come at a price, of course-- the Chase Sapphire Reserve has a $550 annual fee, while the U.S. Bank Altitude Reserve Visa Infinite has a $400 annual fee.
In addition to the Chase Sapphire Reserve card discussed in the previous section, there are a number of cards that let you earn extra rewards on Airbnb stays. With some of these points cards, you can even redeem the same rewards you earned using Airbnb to purchase more bookings at Airbnb!
Every dollar you spend on all purchases, including Airbnb purchases, will give you two miles back. You can also redeem your points at Airbnb at the rate of one cent per mile through redemption as a travel statement credit. This is true for Airbnb purchases as well as other travel purchases that qualify.
Here are some more benefits of this card:
On the flip side, here are some of the less desirable features:
You can use the Chase Sapphire Preferred on Airbnb purchases and other travel expenses and earn two points back for every dollar spent. You can pay for Airbnb bookings with points by redeeming the points as cash back, which come in at a rate of one cent per mile.
Some great things about this card include:
Cons include:
Some other cards you'll want to explore if you're planning on staying at a lot of Airbnb's include:
Do you want to clean up your credit report to work towards eligibility for some of these cards with great rewards? Make sure you check out our guides to removing collections, hard inquiries, dispute comments, charge-offs, evictions, and late payments if you are ready to improve your credit.
Managing the calendar of payments for your credit cards and other bills can be a challenge, but when you put in the time and effort to keep your credit file clean it can be a major benefit to your financial life. Using a credit card for things like Airbnb stays can help you build up a positive payment history if you pay your bills on time. This shows creditors and lenders that you are a responsible borrower who will likely pay back your debts.
If you have a thin credit profile, though, or less-than-ideal credit, it can feel overwhelming to achieve a great credit score. Though cleaning up your credit report and building credit might not be anyone's idea of a great time, it's well worth the effort. Over your lifetime, having an excellent credit score can save you tens of thousands of dollars, if not more.
Are you searching for more resources to help you build your credit? If so, make sure you check out our Credit Building Tips blog.
There are few things more unnerving than realizing that someone has stolen your credit card or your financial information. If someone committed credit card fraud using your card number or info, what happens to them?
Is credit card fraud a felony? What punishment does a fraudster receive?
Credit card fraud is a serious crime, but whether or not an individual is charged with a felony or a misdemeanor will first depend on where the crime was committed and whether the crime is being prosecuted at the state or federal level. Though punishments can vary depending on the jurisdiction, punishments can include lengthy jail time and hefty fines.If someone stole your credit card and racked up charges, it's natural to want to know what will happen to them. Let's take a look at what you need to know about the credit card fraud laws in the United States at both the federal and state levels.
When a person takes information from another individual's credit card or debit card with the intent to remove funds or charge purchases to the card, it is considered a form of identity theft.
There are a number of ways that an identity thief can obtain information from a credit card, including:
There are a few different ways that credit card fraud can be committed. Some common examples include:
Fraudsters use a wide variety of scams to open new accounts in someone else's name or to get card info illicitly.
Here are some common fraud methods:
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There are laws at both the state and federal levels addressing the rising threat of credit card fraud and debit card fraud. Whether or not credit card fraud is considered a felony or a misdemeanor depends on a number of different factors. Still, it is primarily determined by the laws in the jurisdiction where the fraud is committed.
Some factors that can influence whether this type of fraud is considered a felony at the state level include:
The laws regarding credit card fraud at the federal level focus on commerce that occurs between states or internationally. Using a credit or debit card that is stolen or was obtained fraudulently is a federal crime.
Most credit card fraud cases are prosecuted at the state level. However, under 18 U.S.C. § 1029, they can also be charged as a federal crime. At the federal level, credit card fraud is often referred to as access device fraud.
It is a felony at the federal level to use, produce, or traffic in "unauthorized access devices" or "counterfeit access devices." Access devices are any tool that are used to gain access to another individuals personal information or financial accounts and include credit cards, gift cards, and debit cards.
Federal credit card fraud might sound like something only big-wig criminals are guilty of, but it's actually not as complex as you might think. If someone uses another individual's credit card to purchase something online or uses someone else's card that was issued in a different state, it becomes a federal crime.
It's also worth noting that someone who has committed credit card fraud at the federal level could also be charged with a number of other related federal crimes, including:
Credit card fraud laws in every state in the U.S. make it illegal to possess and use a credit card illegally. If you're interested in learning the laws in your state, you'll want to look at the specific statutes on the books.
Let's look at a few U.S. states' credit card fraud laws.
As an example, let's look at the credit card fraud laws in Texas, the second most populous state in the country.
In the next section, we'll look at what the punishment is for committing this crime in Texas.
Looking at the laws in Ohio regarding credit card fraud, we see that credit card fraud is a 1st-degree misdemeanor if the total value of the property, services, and debt is less than $1,000.
First and second offenses for credit card fraud in Florida, so long as the amount is $100 or less, is considered a misdemeanor. Any fraud involving a value of more than $100 is considered a felony, as well as third offenses of any amount.
Using a revoked or canceled credit card knowingly is considered a misdemeanor in New York. However, it's a felony to be in possession of a stolen card.
The state of California typically prosecutes credit card fraud as theft. Whether the charge against the fraudster is a misdemeanor or a felony has to do with how severe the crime was.
Ready to rebuild your credit? Take a look at our list of credit score hacks and our guide to removing derogatory marks from your credit report.
What type of punishment does a credit card fraudster receive? Though it can vary depending on a number of factors, the consequences of this type of crime can be as severe as serving substantial time in prison and large fines.
People that are convicted under the federal statute for access device fraud, which includes credit card fraud, can face up to 10-20 years in prison. Beyond that, they can also be required to forfeit items or money that they acquired illegally and pay a fine of up to $250,000. Restitution is also a possible outcome of credit card fraud at the federal level.
Being found guilty of related crimes such as mail fraud, financial institution fraud, computer fraud, or wire fraud can result in up to thirty years in prison.
The punishments for credit card fraud at the state level are going to vary depending on the state where the crime was committed and is being prosecuted.
Earlier in the article, we discussed the Texas laws regarding credit card fraud and the fact that they are all charged as felonies.
Here are the potential punishments for committing credit card fraud in Texas:
In California, penalties range from spending six months in jail and paying a $1,000 fine to being sentenced to three years in prison. The criminal can also be ordered to pay restitution.
The state of Florida offers severe punishments to credit card fraudsters as they are often classified as third-degree felonies unless the value is less than $100 and it is only a first or second offense. This can result in up to five years in prison and up to $5,000 in fines. For crimes that exceed $300 or involve more than one victim, criminals can be given up to fifteen years in prison and up to $10,000 in fines.
According to the Federal Trade Commission, credit card fraud has been the most common type of identity theft since 2017, except for a couple of months when there was a rise in unemployment benefits and relief program fraud during the height of the pandemic.
A survey released by the Federal Reserve helps to give more clarity to the scope of credit card fraud in the US, with the Survey of Consumer Payment Choice finding that 3.5% of credit card holders stated that they experienced theft, loss, or fraud related to a credit card in the previous year. The percentage of people that report this type of issue varies a bit from year to year, but the average is roughly 4.7%.
Another survey conducted by Security.org discovered that 58% of respondents had, at some point in their lives, experienced credit card fraud. For 9% of these respondents they had dealt with credit card fraud four or more times.
As you can see, credit card fraud is not, by any means, rare, and you certainly shouldn't assume that it just won't happen to you.
What can you do to keep yourself safe from credit card fraud?
Here are some tips:
If you think someone has been fraudulently using your credit card information, what should you do?
Here are some steps you can take:
Credit card theft isn't always considered a felony, but it is pretty much always treated as a serious crime. Whether it occurs at the federal level or the state level, knowingly using someone else's credit card information can result in lengthy prison or jail sentences as well as large fines.
If you are curious to know what the laws are in your state, you'll want to take a closer look at your state's penal codes. These will outline how fraud is defined, what constitutes each level of misdemeanor and felony, if applicable, and the potential punishments for individuals found guilty.
Dealing with credit card fraud can be truly overwhelming. Still, it's important to know that there are steps you can take when you discover fraud, ways to protect yourself in the future, and strategies you can use to clean up your credit so you can increase your access to financial opportunities down the road.
Are you on a quest to improve your credit? If so, make sure you check out our Credit Building Tips blog for more valuable resources.
Most of us are happy when our credit cards offer us some cash back rewards or airline miles. For the lucky few that are in possession of the hardest credit card to obtain in the world, though, the perks go far beyond these basic benefits.
The average Joe or Jane isn't going to be able to even apply for one of the most exclusive credit cards, though. These are typically invite-only and are reserved for the planet's most affluent individuals.
There are several cards in the running for being the most difficult to obtain-- including the Amex Centurion Card, the Dubai First Royal MasterCard, the Stratus Rewards Visa White Card, and the Coutts World Silk Card.Are you curious about how the other half lives? If so, stick with me while I take us on a journey through the luxurious perks of the world's most prestigious credit cards.
It's hard to pin down precisely which card is the hardest to get in the world. That doesn't mean, though, that there isn't impressive competition for the title.
One reason it's hard to pick one card as the most difficult to obtain is that the card issuers are very tight-lipped about the qualifications for these status symbols. Instead, curious consumers have to rely on rumors in many cases to learn what is required to have one of these exclusive cards in their wallets.
Let's take a look at some of the contenders when it comes to the hardest credit card to get in the entire world.
If the Centurion Card doesn't sound familiar to you, maybe you've heard of this exclusive American Express charge card by its colloquial name-- the Black Card.
Reserved for only the wealthiest clients of Amex. In order to qualify, individuals must have a certain network and credit quality. Beyond that, they have to have met certain spending criteria on the Platinum Card, which is considered its gateway card.
Minted out of anodized titanium, accented with stainless steel, and laser-engraved, this card weighs about half an ounce. With its distinctive black color, this card is recognizable around the world.
Considering this is one of the most exclusive cards in the world, it should come as no surprise that there's no easy way to apply. Though the requirements for receiving a private invite for this card aren't officially released by Amex, the rumor is that you will need to spend and pay off a certain amount of money across all Amex accounts in one year-- potentially as much as $350k and $500k.
Joining this exclusive club isn't free either-- there's an initiation fee of $10k, and the annual fee will run you $5k.
Are you on a mission to improve your credit so you can qualify for credit cards with better interest rates, better terms, and better perks? Take a look at our guides to credit repair hacks and removing derogatory marks from your credit report.
Though the Black Card (aka the Centurion Card) is definitely a major status symbol, it also offers some serious benefits:
Looking for an American Express card that's a bit more accessible to a regular Joe? Check out our guide to the easiest Amex card to get.
Some of the biggest named celebrities carry around a Black Card in their wallet.
They include:
Another contender for the title of the hardest credit card to get is the JP Morgan Reserve Credit Card. This is another invite-only card, you'll need to already be a J.P. Morgan Private Bank member in order to be considered.
Once known as the Chase Palladium Card, the card is made out of palladium, a rare chemical element.
The JP Morgan Reserve Card's annual fee sounds like a steal compared to the cost of some of the other cards on this list-- only $595 a year.
What can you expect once you're invited into this exclusive club and receive your card?
The perks associated with this card aren't actually that incredible when you consider that many of them are very similar to a much more accessible card: the Chase Sapphire Reserve.
In this way, you could say that this card is more of a status symbol than anything else.
That being said, cardholders enjoy the following perks:
It's hard to say which credit card is the most selective, but the Dubai First Royale Card is definitely in the running. This is another invite-only card, and Dubai First will literally scout out potential clients. You probably shouldn't hold your breath waiting for an invite, though-- most cardholders are members of the Saudi or Dubai royal families or at least have an exorbitantly high net worth.
According to a 2011 statement from the senior vice president of Dubai First, there are only a few hundred cardholders in the entire world.
Made with gold edges and a white diamond, this card has no purchase restrictions or credit limits. If you find yourself one of the lucky few that have this card in hand, you won't have to worry about the embarrassment of your gold-and-diamond card being declined at checkout.
Some of the benefits of this outrageously hard-to-get card include the following:
If you need any convincing that the Coutts Silk Card is exclusive, you'll likely be persuaded by the fact that the British Royal family are known to be cardholders. Offering both charge cards and credit cards, this is considered one of the hardest cards to get in the world.
In order to be considered for this card, individuals must already be Coutts clients. Though companies are famous for being tight-lipped about the requirements for these elite cards, rumor has it that potential cardholders need to have the ability to deposit something around one million pounds into their account.
Only the wealthiest clients have access to this card, which comes with a number of perks:
Searching for more information about credit cards? Check out our guides to CareCredit credit cards, what happens if a credit card is closed with a balance, guaranteed approval credit cards, and credit card nicknames.
When you hear the term "gold card," you probably think of a gold colored card that's supposed to help regular old consumers feel kind of fancy. This isn't the case with the Sberbank Visa Infinite Gold Card-- this card that is only offered to Sberbank's top clients is said to be made of pure gold. If that isn't enough, it also has twenty-six diamonds and a mother of pearl.
Getting this card will cost cardholders $100,000-- while $35k gets credited to the client's account, the other $65k goes toward actually making the card. Oh, and there's a $2k annual fee on top of that.
Some of the perks of this card include:
Not quite ready to apply for one of the most exclusive credit cards in the entire world? No problem. If you're looking for something a little more accessible, check out our post about the best department store credit cards for bad credit.
You may have heard this card referred to as "The White Card." Incredibly exclusive, there is very little public information about this card beyond the $1.5k annual fee.
In order to get one of these exclusive cards, you have to be either:
Wealthy cardholders can enjoy the following benefits:
If you're chomping at the bit to get your hands on the Amex Centurion, Dubai First Royale Card, or another one of the hardest credit cards to get, you likely have a long road ahead of you unless you're already a multimillionaire.
At the same time, the journey of a thousand miles starts with a single step! If you're ready to build wealth and ensure that you have access to the best financial opportunities out there, one of your first tasks is going to be to check in on your credit report and score.
If your credit score has seen better days, don't fret! With some time and dedication, you can clean up your credit report and increase your credit score so you start qualifying for better cards with more impressive rates, terms, and, of course, perks!
Are you ready to begin your journey to a better financial life? If so, head over to our Credit Building Tips blog for tons of resources to help you along the way.
Did you open a new credit account only to find that your new Capital One credit card is restricted?
There are a number of reasons this could have occurred, and in many cases, there are easy steps you can take to ensure you can use your card.
Your Capital One credit card might be restricted because you haven't yet activated it, or it could be due to late payments, going over the credit limit, or suspicious activity.Let's take a closer look at the reasons why your card might be restricted and some common solutions that could help you regain access to your credit account.
Getting a new credit card can be exciting, but seeing that your card is restricted can be quite concerning. When it says that your account is restricted it means that it is suspended.
Before you start to panic, it's important to recognize that a suspended or restricted account doesn't mean that your account is closed. It just means that you won't be able to use the card or account until the restriction is lifted.
Are you thinking about applying for a new credit card? Make sure you look at our posts about getting a credit card before applying for a home loan and how a new card impacts your credit score.
Credit card restriction or suspension isn't something that just happens with Capital One cards. It can happen with any credit card issuer.
Some of the most common reasons for a restricted card include:
If you haven't used your card at all yet, though, none of these should apply to you. In that case, it might be that your account isn't yet activated or that there is a technical problem happening on Capital One's side of things.
If your Capital One card is brand new and your account is restricted, there's a good chance that this is simply because your card is new.
Capital One can restrict accounts until new credit cards are activated as a way to protect your account from fraudulent activity. For example, if someone else got a hold of the card Capital One sent you in the mail, without restricting your account it's possible that an identity thief could start making charges to your account.
If you just recently received your Capital One credit card and you haven't yet activated it, there's a good chance that activating the card will remove the restricted status from your account. If you activate the card and it is still restricted, you'll want to contact Capital One customer service.
Another possible explanation for a new Capital One card that is restricted could be that Capital One is dealing with a system error or a network outage. If you are sure that your account is in good standing and that there shouldn't be any signs of suspicious activity, there's a chance it's just a problem on Capital One's end.
Before trying to troubleshoot other issues, you can give Capital One a call and try and determine if they are dealing with technical problems. It's possible that solving the problem is just a matter of waiting for them to resolve the issue.
Is Capital One showing up on your credit report and you're not sure why? Check out our guide to what COAF means on your credit report.
If you've been using your new card for some time and all of a sudden, your account is restricted, another possible explanation is that Capital One has flagged purchases that they find suspicious. Suspicious activity can include purchasing activity that isn't in sync with your normal spending patterns.
For example, if there are several unusual transactions on your account in a short period of time, a very high-dollar amount purchase, or a purchase overseas, Capital One might restrict your account out of concern that your credit card information has been obtained by a fraudster.
If you're traveling abroad and your card is restricted all of a sudden, it might be that Capital One is concerned that someone has gained possession of your card or your information. You'll want to contact them to let them know that you're traveling and that the purchases are being made by you so you can regain access to your account. A particularly prudent move would be to call them before you leave town so you can give them a head's up that you'll be traveling.
Have you missed payments, made late payments, or gone way over the credit limit of your new card since you've been using it? If so, it's possible that these repeated violations of the credit card's terms have resulted in your account being restricted.
There are a number of different ways you can violate the terms of your agreement, but regardless of the cause, you'll want to try and determine the specific cause and rectify it right away. If you've missed a bunch of payments, for example, Capital One could eventually charge off your account. This means that the account is closed and passed off to a debt collector, both of which are going to be harmful to your credit.
When it comes to spending more money than your credit limit, it's worth noting that many card issuers will let you spend a certain amount more than your limit and maybe charge you a fee when this occurs. If you do this over and over again, they might restrict your account.
Have you been dealing with financial problems that led to less than ideal credit? Start cleaning up your credit report with our guides to removing collections, evictions, hard inquiries, and charge offs from your credit report.
Whether or not you can reactivate a restricted card or a suspended card depends on the credit card company, the circumstances that led to the restriction or suspension, and other factors.
You might want to take a look at your credit report to take a look at the status of your account and what's been reported. You can receive free copies of your credit reports through AnnualCreditReport.com, which is the site created by Experian, Equifax, and TransUnion and authorized by Federal law.
What should you do if your account is restricted? Here are the steps you'll want to take.
If your card is literally brand new and you haven't used it yet or even activated it, try to activate your card using the information on the sticker on your card. If you haven't received your card yet, you'll need to wait until you receive it to activate it. After all, you wouldn't want your activated card out there in the mail before it's in your possession.
If your card is already activated or activating it doesn't seem to help, the next step is to call Capital One customer service.
The customer service number for Capital One is 1-800-CAPITAL (1-800-227-4825). A representative will be able to inform you as to why your account has a restricted status and what steps you need to take to remove the restriction.
Once you give the customer service agent your information and verify your identity, they will be able to give you more information about your specific account. Make sure you confirm with them the actions you'll need to take in order to have your account restored before getting off the phone.
For example, if the restriction is due to having a balance that is over the credit limit, they might state that you need to pay off enough of the card so that what you owe is less than your total credit limit. Once you do that, your account will likely no longer be restricted.
If the restriction was caused by late payments, you might be able to make a specific minimum payment in order to have the restriction removed. No matter what the reason behind the restriction is, ask the representative about the time frame regarding when your account will be back to normal.
Dealing with a restricted card can be pretty frustrating, particularly if you're trying to make a purchase. Luckily, there are a number of things you can do to reduce the likelihood of ever having to deal with an account restriction.
If you end up spending more money than you are allowed via your credit limit, it could result in your account becoming restricted.
To avoid this outcome, make sure you regularly monitor your credit card spending as well as your balance. You can easily see how much money you have left before reaching your credit limit.
If you expect that you're going to need to spend more than the credit limit and you have had a good history with your issuer, you might consider asking for a credit limit increase. This can result in a slight ding to your credit if they run a hard inquiry to make sure you meet the standards. However, inquiries usually only negligibly impact your credit in the long run.
A number of credit card issuers offer fraud and security notification services. This means they will send you a notification or a message if any account activity comes across as suspicious.
Capital One and other card companies might restrict or suspend an account if they think it might be being used fraudulently. For example, if there are unusual purchases or large purchases made that are out of the ordinary for the account, they might freeze it to ensure no further fraudulent activity occurs.
Signing up for one of these services can help you know as soon as possible if Capital One thinks that activity on your account is suspicious. This can allow you to contact the card issuer and sort the situation out if it was, in fact, you who made the purchases. If it wasn't you, you'd want to know so that you can take the necessary steps to avoid further fraudulent activity.
If you miss too many payments, your Capital One account (or any other credit card account) could be permanently suspended.
It's essential to make payments on time if you're going to have credit cards, as missing payments can absolutely wreak havoc on your credit score. A certain number of missed payments in a row can result in your account being charged off and passed to a debt collector. To keep your credit report and score in good standing, make sure you're always keeping up with your payments.
Credit card companies might also restrict an account if purchases are all of a sudden being made in a different country than where you live or a place that is otherwise far from your home. This is a fraud prevention technique, but it can be frustrating and stressful if you're actually just on vacation trying to use your card.
Many credit card companies allow you to give travel notice using their website on mobile app if you're planning on taking a trip far from home. This can ensure your card won't be declined when you try to use it in a different state or country.
While you aren't required to tell your credit card company if you're traveling, it can help save you some hassle to alert your card issuer about your plans.
If you're traveling to a different city not terribly far from where you live, you probably don't need to set a travel notification with your issuer. However, if you're traveling out of the state or out of the country, there's a chance your card could be declined unless you let them know ahead of time.
You can also call up Capital One to let them know if you're planning on making an unusually large purchase. The same goes for any other card issuer-- Capital One isn't the only company that restricts accounts.
For example, maybe you have always only used your card to buy gas for your car. This month, though, you're planning on using it to buy new appliances for your kitchen, all on the same day.
Consider giving your credit card issuer a head's up when you're planning on making an unusually large purchase. This can help ensure that your card isn't restricted due to being flagged for suspicious activity.
When your account is restricted or suspended, it can be pretty inconvenient. At the same time, you might worry that it's going to destroy your credit score. Will it have any impact on your score?
The answer to this has to do with the reason for the restriction and whether or not you will be able to reopen your account. If your account is permanently suspended, there's a possibility this could lead to the account being closed completely.
Having a credit card account closed can impact your credit score in two primary ways:
Beyond that, if your account was restricted or suspended because you stacked up a number of late payments, it will also have a negative effect on your score. This is because payment history is a big part of your credit score. Additionally, any missed or late payments are going to show up as derogatory marks on your credit report for up to seven years.
All that being said, if your account wasn't restricted because of late payments or isn't going to be closed for good, a restricted card shouldn't hurt your credit.
Getting a new credit card only to find that it's restricted is pretty frustrating. If you've never used the card, it's possible that you just need to activate it. If you have used the card already, reasons for a restricted status include a balance that's over the credit limit, suspicious activity on your account, several late payments, or a technical problem on the part of Capital One.
Either way, though, the best course of action is to call the card company to try and figure out what's going on. There's a good chance there is a quick fix to the problem-- whether that's activating your account, paying down a high balance, or something else-- so that you can start using your card again.
Are you on a mission to improve your credit so you can have lots more financial opportunities in the future? If so, make sure you take a look at our Credit Building Tips blog for tons of resources that will help you get in great financial shape.
Mobile homes can be an affordable and accessible way to become a homeowner, but they are usually still costly enough that buyers want to finance the purchase.
In general, it can be a bit more difficult to find financing for a manufactured home than it is for a traditional home because they tend to depreciate over time. That being said, that doesn't mean there aren't plenty of loan options for people that want to buy a mobile or manufactured home.
Your credit score is going to have a big impact on whether you're approved for a loan as well as the rates and terms you're offered. The minimum credit score necessary to buy a mobile home is going to depend on the type of loan you apply for and the lender. While Fannie Mae and Freddie Mac have a 620 minimum, other options like FHA loans, personal loans, and chattel loans can help people with less-than-ideal credit purchase a home.Let's take a look at what you need to know about financing a mobile home or manufactured home and how your credit score will impact your chances for approval.
When you decide to start shopping for a mobile home, one of the first questions on your mind is likely how you're going to pay for it. Considering that even the most affordable used mobile homes usually cost at least $10,000 and new manufactured homes cost more than $125,000 on average, there's a good chance you're thinking about finding financing for the purchase.
Once you start talking about taking out a loan for a big purchase, the next question that crops up is usually:
"What credit score am I going to need?"
The truth is, there is no set credit score minimum for financing a mobile home because it's going to depend on the type of loan and the lender you choose. That being said, the better your credit score, the better chance you'll be approved and the more appealing rates and terms you'll be offered.
Here's a general sense of what you can expect as far as minimum credit scores go, depending on the loan type you apply for:
Do you have bad credit but you want to buy a mobile or manufactured home? Make sure you check out our guide to buying a mobile home with bad credit.
Mobile homes, modular homes, and manufactured homes are all built in a factory and then shipped to the location where they will be set up.
Mobile homes are built in a factory and then transported to a place where the house will be set up. In some cases, metal tie-downs will be used instead of a foundation.
Mobile homes:
- Were built before June 15, 1976
- Often don't have a basement or crawlspace and instead are usually built on a metal frame
- Were built in a factory and delivered fully constructed to a location
- Might have tie downs rather than a permanent foundation
- Cost, on average, between $10k and $50k
So far, this description also fits manufactured homes. The distinction between the two has to do with when the home was constructed.
Mobile homes can be single wide (500-1000 square feet) or double wide (1,000 to 2,200 square feet)
Technically, mobile homes were built in a factory before June 15, 1976. At this point, the National Manufactured Housing Construction and Safety Standards Act was put in place by the U.S. Department of Housing and Urban Development, which changed the name of this type of home going forward and put new safety standards in place.
If you're looking for a pre-existing home that will come at a lower price than newly manufactured homes, a mobile home can be a good option.
The simplest way to understand what manufactured homes are is to see them as mobile homes that were built after June 15, 1976. Just like mobile homes, they are built in a factory and then delivered fully constructed to the location where they will be set up.
One key distinction between manufactured and mobile homes, though, other than the date of construction, is that manufactured homes aren't built with the intention of being moved once they have been put in place.
Manufactured homes:
- Were built after June 15, 1976
- Often don't have a basement or crawlspace and instead are usually built on a metal frame
- Were built in a factory and delivered fully constructed to a location
- Might have tie downs rather than a permanent foundation
- Cost, on average, $87,600
The construction of manufactured homes is highly regulated under the HUD Code, known as the Manufactured Home Construction and Safety Standards. Manufactured homes also need to meet the local building standards for the place where they will be set up, and designs for these homes have to be approved by a HUD-approved Design Approval Primary Inspection Agency.
Manufactured homes can be single wide (500-1000 square feet) or double wide (1,000 to 2,200 square feet)
Manufactured homes can be a good option for people that are looking for a home that is new but isn't as expensive as a traditional home, while also requiring no building on site.
Modular homes are also built in a factory and delivered to their final location, much like mobile and manufactured homes. However, they are a lot more like a regular home, using a traditional foundation and including either basements or crawlspaces.
Modular homes:
- Usually require some construction on site
- Are typically delivered in multiple pieces to the property
- Are more similar in size and features to traditional homes
- Usually have a traditional foundation and a basement or crawl space
- Cost, on average, $270k
Rather than appearing on the site in one piece, modular homes will usually arrive in one or more pieces and then be constructed on location by a local contractor. These homes must meet the same building codes as any other home in the same area.
Modular homes are often between 900 square feet and 2,000 square feet
Pricier than mobile and manufactured homes but still more affordable than other new construction homes, modular homes can be a good choice for people that want a new home with customizable features for a lower total cost than a traditional home.
Let's take a quick look at some of the financing options you'll want to explore when considering buying a manufactured or mobile home.
Fannie Mae has a specific program for purchasing manufactured homes known as the MH Advantage program.
In order to qualify, there are a number of qualifications you'll need to meet, including:
You might be able to put as little down as 3% for these 30-year loans.
The Freddie Mac Home Possible mortgage program could help you buy a manufactured home so long as you qualify. You can choose between fixed-rate and adjustable-rate loans, and you might be able to put as little as 3% down.
Both Title I and Title II FHA loans can be used to purchase manufactured homes. Though there are a number of requirements one must meet to qualify. This can be a great option for people that have a lower credit score but the ability to put 10% down.
Members of the military community might qualify for a VA loan for a manufactured home. With these loans backed by the Department of Veterans Affairs, lenders can sometimes offer up to 100 percent financing.
This is a particular type of personal property loan that is designed to finance pricey vehicles like boats, planes, farm equipment, and mobile homes.
This is a secured loan where the vehicle serves as collateral. This means that you can get a lower interest rate with a chattel loan than a personal loan, but it also means you can lose your mobile home if you default on the loan.
Depending on the price of your mobile home, a personal loan might cover the cost. These tend to have higher interest rates because they are unsecured loans. At the same time, there aren't costly appraisal, escrow, and title fees that are often involved when getting a secured loan for a mobile home or traditional home.
Personal loans are a type of installment loan, meaning that you borrow money from a lender and pay it back over time at a fixed interest rate in equal monthly payments.
What are the steps you'll need to take to get financing for a mobile home? Let's take a look.
One of the first things you'll want to do when you decide that you want to buy a mobile or manufactured home using financing is to take a look at your credit report.
As a part of your loan application, the lender is going to consider your credit score and file. Having a strong credit score as well as a clean credit history will make it much more likely that you will have your application accepted. Beyond that, the better your credit is, the better rates and terms you will be offered.
When you look at your credit reports-- which you'll want to pull from all three major credit bureaus-- you should keep an eye out for any inaccuracies or errors. If you find mistakes, you'll want to start the dispute process to ensure that your credit report is all cleaned up before lenders take a look at it.
Has your credit report seen better days? Check out our guides to removing evictions, 30 day late payments, charge offs, collections, and hard inquiries to help you clean up your credit file.
Buying a mobile or manufactured home means that you're also going to need a piece of land to put it on. Some people might choose to buy their own land or use a piece of land they already own, while others might plan to rent the property.
The reality is that there will be fewer loan options if you are thinking about renting land rather than buying it or using a piece of land you already own. In general, lenders are going to be more open to offering financing if you will own the land it is on, particularly if there are no wheels and axles on the home.
The type of loan you will be eligible for will be impacted by the type of home you're thinking of buying. Purchasing a manufactured home that costs more than $100k, for example, will mean that you won't qualify for an FHA loan.
If you're looking for an actual mobile home that was built before 1976, you are likely going to struggle to find financing. These older, used homes do come at a cheaper price tag, though, meaning that you might be able to make it work using a personal loan or another type of loan.
Making decisions about the type of home you're going to buy can help you get a better sense of what your loan options are.
Now that you know whether you're buying or renting land and what type of factory-built home you want to buy, it's time to take a closer look at what your financing options are.
When you're exploring your options, there's a good chance that you'll encounter a pretty big range of loan rates and fees. It's a good idea to shop around, as you might be able to save yourself a lot of money over the life of the loan.
It's generally a good idea to start looking into your financing options as soon as you know that you're planning on purchasing a mobile or manufactured loan down the road. This can give you the space to find the best rates and terms and also make an offer on the right home in a timely manner.
Finally, it's time to apply for the loans you've decided are worth pursuing. You'll want to make sure that your application is as complete as possible, as this will help boost the odds of qualifying.
Additionally, you'll want to be prepared to put down a down payment once you're accepted to help the process continue to move forward.
There are more factors than you might think that you'll want to consider when buying a mobile or manufactured home. Let's take a look at some of the most important questions you should ask yourself as you start exploring your options.
Mobile homes are, by definition, not going to be new as they were made in a factory before the summer of 1976. Beyond that, unless a home you've found has been stored in a warehouse somewhere since the day it was built, you're unlikely to come across a mobile home that's never been lived in.
When you shop around for used homes, you'll find that they are quite a bit more affordable than new homes. Unless they have been well-maintained, though, they will likely show signs of age and the wear and tear of being lived in.
You'll also want to take a close look at any rules and regulations for the location where you're planning on putting your home, as some of them won't allow manufactured homes that were built before a specific date. The last thing you want is to buy a home that you aren't allowed to set up on the land that you're renting.
Finally, it can be tempting to try and buy the cheapest mobile home that you can find when you're shopping around. However, it's important to think about the maintenance costs that you will need to cover over the life of living in the home. In some cases, paying a bit more upfront can ultimately save you more money in the long term.
Mobile and manufactured homes are typically classified based on their width. You'll usually see the following terms used to describe the size of these homes:
The size of the mobile home you choose will impact the size of the lot you need and also tend to be more expensive. This means that you will need a larger loan both for the home and for the land if you want to go with a double-wide.
Another important consideration is that some cities don't allow single-wide mobile homes. For this reason, it's essential to take a close look at the rules in your area before you start seeking financing or making a purchase.
One of the great things about mobile and manufactured homes is that you don't only get to choose the home you want, but you can also pick where you put it, too. With traditional homes, you have to find a house that you love in a location you love. When you buy a manufactured or mobile home, you can create the setting you want.
So, where will your mobile home go? Your options are:
One popular option is to rent land in a mobile home community. This means paying a monthly rental fee but also saving you money upfront since you don't have to buy raw land.
If you choose to put your home in one of these communities, make sure you check out any and all regulations and restrictions to make sure that the home you're buying will be allowed in terms of its size and features.
Though mobile and manufactured homes can be an affordable living solution, there are always going to be additional costs to ownership.
Some of the costs you'll want to consider when thinking about your budget overtime include:
In general, the better your credit score, the easier it will be to be approved for a loan with great rates and terms. Depending on the type of loan you're applying for and the lender you're working with, the minimum credit score is going to vary.
If you know that you're going to be buying a mobile or manufactured home in the future, it's a good idea to start working on boosting your credit score and cleaning up your credit report now. With some time and attention, you can improve the odds of approval and help yourself save tons of money over the life of the loan.
For more information about how to boost your credit to help you qualify for the home of your dreams or any other financial opportunities, make sure you check out our Credit Building Tips blog for more resources.
If you own a small business and a customer owes you money, you might be wondering whether or not you can report them to the credit bureaus. Even if you don't own a business, you might be curious to know if you have the right to report someone that owes you money to the major credit reporting agencies.
The reality is that reporting to the credit bureaus isn't something you can do in a one-off way. In fact, there really isn't any way that an individual can report to the credit agencies.
Small business owners that allow customers to pay for things in installments or offer lines of credit, though, can choose to apply to become data furnishers for one or more of the major credit bureaus. As data furnishers, these businesses are required to send accurate information monthly about their consumer accounts. An alternative option is hiring a debt collection agency to try and recoup the debt and report to the credit bureaus.If you're considering starting to send customer account information to the credit bureaus, stick with us while we go over everything you need to know.
Only officially approved data furnishers can report information to the credit bureaus about a consumer. Individuals aren't authorized to apply to be data furnishers.
Even small businesses, though, can report to the credit bureaus if they are accepted into their data furnisher programs.
If you want to report someone to the credit bureau, you will first need to become an approved data furnisher for the credit reporting agency where you want to send your information.
In order to become a data furnisher, you'll need to:
You can find more information about the specific requirements and application instructions for each credit bureau using the following links:
Once you have been approved as a data furnisher for your selected credit bureaus, you'll want to follow the following steps to report consumer information:
In order to maintain your ability to regularly report consumer information, you'll need to update the required software on a regular basis. Each credit bureau has its own standards that must be maintained in order to continue qualifying as an official data furnisher.
Here are a few additional tips for small businesses that want to report consumer information to the credit bureaus:
If you're not a large lender and aren't interested in becoming a data furnisher with one or more of the major credit bureaus, another option is to hire a collection agency.
Collection agencies are companies that will attempt to collect the debt that you are owed. This can be a reasonable route to take if you only have a few unpaid customer debts.
When choosing a collection agency, you'll want to consider the following:
The three major credit bureaus will not accept information from just any old consumer. If someone owes you money or has been repeatedly late in paying back a private, non-official loan, you're not going to have luck trying to add this information to their credit file.
In order to contribute information to the credit bureaus, you have to become a data furnisher.
Businesses must apply and be accepted as data furnishers at each individual credit reporting agency (or whichever credit bureau they wish to work with) in order to report consumer information. This is not a free service and requires that businesses adhere to and abide by the Fair Credit Reporting Act and all other applicable federal laws.
However, this does mean that small businesses that allow customers to make purchases on credit or pay using installment plans can become data furnishers if they want to make monthly payment reports on their customers.
To become a data furnisher, businesses need to choose the credit bureaus they want to report to and then apply for membership in their business reporting programs. Companies that want to make reports to all three credit bureaus will need to be separately approved by each agency.
Creditors, lenders, and small business owners that offer lines of credit or installment payment plans aren't required to report to credit bureaus by law.
Even though this isn't a requirement, many businesses choose to report information about consumer accounts to the credit bureaus, such as:
It is with this type of information that credit reporting agencies are able to generate consumer credit reports and calculate credit scores.
Other major events will also often be reported to the credit bureaus such as charge-offs and account closures.
You might wonder why businesses and creditors would bother reporting to the credit bureaus, particularly because it is a service that costs them money. There are ultimately a number of reasons why companies might be motivated to become data furnishers, including:
Unfortunately, you are not able to directly report your own financial activity to the credit reporting agencies. Even if you have bills that you regularly pay on time that aren't showing up on your credit report, Equifax, TransUnion, and Experian won't accept information from an individual consumer in this way.
The reason for this is that you have to become a "data furnisher" in order to report information to the major credit bureaus, which is an officially recognized status.
If you own a small business that lets people pay in installments or carry lines of credit, though, it's possible for you to become a data furnisher and report information regarding account payment histories to credit reporting agencies.
There are a number of third-party services you can use as well as services offered by Experian and FICO to add positive information to your credit report. These services will usually require that you turn over private financial and account information.
That being said, there are a number of ways that you can indirectly self-report your own positive financial habits to Experian, Equifax, and TransUnion. There are a number of third-party services you can use, like RentTrack and PayYourRent, which will help you gain positive marks on your credit for on-time rent payments. You can also use Experian Boost to add utility bills and phone bills to your Experian credit report.
Another new service is UltraFICO, which lets you add the balances in your bank account into the mix when calculating your credit score. This can help lenders understand that you have responsibly managed your bank balance (not frequently overdrawing your account) and have cash in your account.
The credit reporting process isn't as straightforward as one might expect, and you can't just report someone to the credit bureau as a regular Joe. To report to the major credit bureaus, businesses and lenders must apply and be accepted as data furnishers.
Yes, landlords and property managers can report information about a tenant's rental payments to the credit bureaus by signing up for a rent reporting service.
All three credit reporting agencies will display rental payment information if they receive it. Of course, landlords and property managers need to be accepted as data furnishers in order to contribute this information.
If your landlord or property manager doesn't report your rent to the credit bureaus, there are a number of reporting services that one can sign up for to have rent contribute to your positive payment history. These include:
Individuals cannot report information to the credit bureaus. Only businesses that have applied and been accepted to the respective data-furnishing programs for credit reporting agencies can send information. There are strict requirements and rules that govern reporting, and data furnishers that don't send regular or accurate reports can have their agreement terminated.
Some credit reporting agencies also maintain credit reports for businesses in addition to consumers. These reports will include the credit accounts owned by a given business, their payment history, the amount owed, any collection activity, and more.
In order to report information regarding another business to the credit bureaus, a company needs to apply and pay for the business credit reporting service at the credit bureau they want to report to. This is a separate service from the consumer credit reporting service.
It's easy to never give much thought to the world of credit reporting until it's something that impacts you directly. After all, the activity of the major credit reporting bureaus can seem pretty out of reach, and understanding how and why our credit reports look as they do can feel cryptic, to say the least.
Having negative information on your own credit report can be pretty frustrating, but it's natural for your tune to change once someone owes you money for an unpaid debt. You might wonder if you can report them to the credit bureau and, if so, how.
The truth is individuals can't report to credit bureaus, only businesses. Even then, there is a cost to doing so and a number of requirements that must be met in order to qualify as a data furnisher. Another option on the table is hiring a collection agency, but you'll want to weigh out the pros and cons before going this route.
Whether or not you decide it's worth it to become a data furnisher, there is always value in better understanding the credit reporting process. As business owners and consumers, credit files and scores can have a major impact on our financial opportunities. When it comes to your credit, knowledge is power!
For more resources about building credit and understanding the world of credit reporting, make sure you check out our Credit Building Tips blog.
When you are unable to pay back a debt that you owe in full, you might choose to settle the account. While a "settled" status on your credit report will show that you don't owe a debt anymore, it is still considered a negative mark because it indicates that you did not pay back the full amount that you owed.
Having a settled account on your credit report can lower your credit score, and these accounts will usually stay on your report for seven years after the date of first delinquency.
Though companies are not obligated to remove settled accounts from your credit report unless they are there in error, there are a few things you can try if you want to have it removed. Beyond filing a dispute for inaccuracies, you can try and strike a pay-for-delete agreement, send a goodwill letter, or send a hardship letter. If these options don't work, you can wait for the mark to fall off your report and work on building your credit in the meanwhile.Ultimately, settling debt is better than not paying it back at all, but it's still inferior to repaying the entire debt when it comes to your credit score and report.
If you have been behind on payments for a period of time, you might choose to settle the debt. This means that you and the creditor or debt collector come to an agreement where you pay less than the amount that you owe in order to satisfy the debt.
You might wonder why any lender or creditor would consider accepting an amount of money that isn't the full debt amount. After all, wouldn't all consumers try to settle their debt in order to save money?
The truth is, though, that trying to collect an unpaid debt is a costly endeavor for credit card companies and lenders. If they aren't able to coax you into paying what you owe, pursuing a lawsuit gets even more pricey. Additionally, there's always the chance that you could end up filing for bankruptcy if your finances are in really bad shape, which could leave the creditor in a position where they don't receive any of what they're owed.
From the consumer side of things, settling a debt can be harmful to one's credit. It's, therefore, not a useful strategy at all to hold off on making payments and hopes for a settlement down the road. Beyond that, a consumer might not receive a settlement they are happy with and could even end up getting sued by the lender or creditor. At the same time, settling debt is often a better option than not paying a debt back at all.
Though a settled account might sometimes be referred to as a closed account, as the account is no longer active, technically, settled accounts and closed accounts represent two different outcomes for a particular credit obligation.
Both settled and closed accounts will continue to appear on your credit report for a set period of time. Closed accounts typically have a more positive connotation compared to settled accounts, as the implication is that the consumer fulfilled their financial obligations as outlined in the original terms of the loan or line of credit.
If you're wondering what happens when you close a credit account when you still owe money, take a look at our article about closing a credit card with a balance.
When you settle an account, it will still show up on your credit report for seven years after the first date of delinquency. The original delinquency date is the day that it was first noted that a payment was late on the account.
Settled accounts usually stay on a credit report for seven years and tend to have a negative impact on credit. However, the impact of settled accounts on a consumer's credit score typically diminishes over time.
Since a settled account indicates that the creditor accepted an amount of money that was less than what you fully owed, it is considered a negative entry on your credit report. This means that it will usually reduce your credit score. That being said, the impact that a settled account has on your credit score will diminish over time.
Though settling an account is better than not paying at all, that doesn't mean it won't have a negative impact on your credit report. If you are unable to fully pay back what you owe, settling can be a reasonable option rather than letting the account go delinquent or default on it entirely.
Settling a debt can impact your credit in a few ways:
- Increasing your credit utilization ratio because the account will be closed
- Late payments often lead up to a settlement, and your payment history is a big part of your credit score and will show up on your credit report for years
- If the account is unpaid for an extended period of time, creditors can resort to a charge-off and send the account to a debt collector
- You can appear to be a riskier borrower to future potential lenders
- If you're saving up money to make a lump-sum payment, it could mean you miss more payments in the meanwhile and further damage your credit
You might think that since you are reducing your debt obligations, settling a debt should actually help your credit score. However, participating in a debt settlement plan will modify or negate the original credit agreement which can ding your score.
Additionally, if you apply for loans or credit in the future, you might find that lenders are reluctant to loan your money or extend lines of credit to you due to the presence of a settled account on your report.
At the same time, having a high account balance and late payments on your report has likely already hurt your score. It's possible that settling debt is your best path toward improving your credit score in the long run, so it can be worth accepting a temporarily lower credit score to help you achieve a sounder financial future.
Unless the information regarding a settled account on your credit report is inaccurate, you are technically not supposed to be able to remove them. Even though the lender is no longer trying to collect on the debt and you repaid part of the debt based on the settlement agreement, these settled accounts will stay on your credit report for seven years.
You might be wondering what your options are if the information is accurate, but you would still like it to be removed from your account.
While there is no guarantee that you'll be successful, three of your options include:
In the next section, we'll take a look at the different steps you'll need to take if you choose to pursue one of these options or if you need to dispute a settled account that appears in error.
If a settled account appears on your credit report and the information is accurate, there is no guarantee that you'll be able to have them removed. If it is an error, you can dispute the information with the credit bureaus and the lender or debt collector.
Even if the account isn't on your report inaccurately, there are a few things you can try when it comes to having the tradeline removed.
To make sure you cover all of your bases, it's usually best to contact both the credit reporting company as well as the credit card company or lender that provided the information when you need to dispute an error.
After you identify an inaccuracy on your credit report, you will want to contact all of the credit bureaus that are reporting the error. You can do this by using their online dispute center portals, calling them, or sending a letter through the mail. You can find the contact info for the credit bureaus here or on the Consumer Financial Protection Bureau site.
When contacting the company that provided the incorrect information, you can either call them on the phone or send them a letter. The CFPB provides both a template letter and instructions for sending a letter to the furnisher when disputing an inaccuracy.
You can sometimes work out an agreement with the lender or creditor where, in exchange for paying off all or part of the debt, they agree to remove specific negative information from your credit report.
This is known as a pay-for-delete agreement. Though companies have no obligation to participate in this type of agreement, it doesn't hurt to try.
One important note is that you should always receive a written explanation of the agreement before sending your payment, including the fact that they are agreeing to delete specific information from your credit report. Debt collectors, lenders, and credit card companies alike are known for saying just about anything in order to encourage payment, and you should not trust that a verbal agreement will be upheld.
Note: When you negotiate a settlement for a student loan debt, either private or federal, you typically won't be able to receive an agreement from lenders to delete negative information from your credit report.
Even if your credit report is displaying accurate information about your debt settlement, you can try to send a goodwill letter to the creditor asking them to remove the negative information. Some borrowers have found success in this way, though it's worth noting that lenders are not obligated to help you out.
You will generally have the best chance of success with a goodwill letter if you have otherwise proven yourself to be a responsible borrower from the specific lender.
If you have experienced a specific hardship that has led to you falling behind on payments and in need of a settlement, you might consider sending a hardship letter. In a hardship letter, you will want to state your desired request for a modification to the agreement, including asking that they will not remove that "settled" status from your credit report.
Circumstances that typically qualify as hardships include:
Though lenders might be willing to show leniency when you can prove that you've experienced hardship, they are ultimately going to be primarily interested in recouping as much of their loan as they can. For this reason, it's important to clearly state why the modifications you're asking for will help them get some of their money back.
If you are unable to have the settled account removed from your credit report, your last option is to simply wait it out and work on building your credit in the meanwhile.
Though it can be discouraging to have a negative mark on your credit report, a settled account will usually only last on your report for seven years. In the meanwhile, you can take steps to improve your credit to lessen the impact that this derogatory mark has. The other good news is that the negative impact of a settled account and any related late payments will lessen over time.
Before I sign off, let's take a look at some of the most commonly asked questions about debt settlement and how it impacts your credit.
Paying off a debt in full is always a better option than settling a debt. That being said, settling debt is still better than choosing not to pay at all.
The benefits of settling a debt are as follows:
There are also some risks that you will want to consider when it comes to settling a debt, including:
Paying a debt in full is always better than settling. When you pay off the total amount of money that you owe, it will read as "paid in full" on your credit report. This indicates to future lenders that you have fulfilled the original terms of your agreement with the lender by paying the full amount due.
When accounts are closed in good standing, they will stay on your credit report for up to ten years. The positive payment history that you have on these accounts will continue to keep your credit score strong. Though getting out of debt can feel overwhelming, you might find that using the debt avalanche method, the debt snowball method, or applying for a debt consolidation loan or balance transfer credit card can help you start digging your way out.
According to the National Foundation for Credit Counseling, a consumer's credit score can be lowered by 100 points or more by engaging in debt settlement practices.
Though this might be shocking and unwelcome news, it's worth noting that the exact impact debt settlement will have on your credit score will vary from person to person. The amount of debt owed on the account can also influence the impact.
Usually, a person with a higher credit score will see a greater impact from debt settlement than a person that already has a lot of negative marks on their credit report. At the end of the day, though debt settlement isn't as ideal as paying an account in full, it is still better for your credit than not paying back the debt at all.
One thing you want to consider is that there are a number of actions that can be taken that will actually restart the debt statute of limitations. The statute of limitations is the amount of time in which a creditor or debt collector can take legal action against you to try and recoup an unpaid debt. Each state has its own laws for the length of the debt statute of limitations.
Though debt collectors and creditors can still try and collect on old debts after the statute of limitations has passed, an expired statute of limitations can serve as a defense in court if sued for a past-debt.
Some of the things that can restart the clock on the debt statute of limitations include:
For this reason, it's always important to be very careful if you're communicating with a debt collector or a creditor about a debt. They can be pretty sneaky and might intentionally try and get you to say something or take an action that will restart the clock on the statute of limitations.
Having a settled account on your credit report isn't ideal-- it can signify to lenders that you didn't repay the full amount of a debt you owed and otherwise hurt your credit score. Though there is no guarantee that you will be able to remove accurate info from your credit report, you can try to have a settled account removed by:
Otherwise, you can wait for the mark to fall off your credit and work to build your credit in the meanwhile. If the account appears in error, you'll want to dispute it both with the credit bureaus and the companies that are reporting the incorrect information.
The notion of credit scores and credit reports might seem fairly abstract, but the reality is that they can have a very real impact on your life. When you have strong credit, it can make it easier to get approved for credit and loans and give you access to lower interest rates and loan terms. Beyond that, your credit can even impact your ability to rent an apartment, your employment opportunities, and your insurance rates.
For these reasons and more, it's well worth the time and effort to clean up your credit report and work on increasing your score. If you're ready to open yourself to greater financial opportunities in the future, make sure you check out our Credit Building Tips blog for tons of resources on improving your credit.
Having a great credit score can allow you to get great deals on credit cards, loans, cell phone plans, apartments, insurance premiums, and more.
If you visit Credit Karma and Experian to find out your credit scores, though, you'll likely find that the two scores you find aren't the same. Why is this?
Experian is one of the three major credit reporting bureaus that compile information about your credit into reports that are used to calculate your credit scores. Credit Karma, on the other hand, isn't a credit bureau and uses information from Equifax and TransUnion to provide free credit scores and credit reports.While Experian will offer you your FICO 8 score, Credit Karma gives you access to your score based on the VantageScore 3.0 scoring model. The combination of using different credit scoring models and drawing from reports from different bureaus can result in Credit Karma and Experian giving you different credit scores.
Two big names you'll likely come across if you want to check your credit score or report are Credit Karma and Experian.
Credit Karma isn't a credit reporting bureau, but is instead an online service that you can join as a member. Once you're a member, you can receive credit scores and reports along with financial advice and resources. Signing up for a membership with Credit Karma is free.
Here is some basic information about the difference between these two companies:
Credit Karma is an online financial platform and not a credit reporting agency. Creditors don't report to Credit Karma, but, instead, Credit Karma makes credit information easily available to consumers.
You can also access a number of educational and financial tools through this site in order to try and boost your credit scores. This was a privately held company until early 2020 when it was purchased by Intuit.
As a member, you can access your credit reports and scores, which you can save as PDFs or print from their online platform. You can also get a more complete financial picture by registering credit card accounts and bank card accounts. They also have mobile apps for both Android and iPhones.
You can see your Vantage 3.0 scores from both Equifax and TransUnion when you use Credit Karma.
Vantage is a credit scoring model that results from a collaboration between Equifax, TransUnion, and Experian. Your Vantage 3.0 score will be updated weekly as a member, and you can also sign up for credit monitoring alerts that will let you know if there's a change in your score.
There are a number of other credit monitoring services that you can sign up for, which also typically offer credit monitoring alerts as well as identity protection tools and identity theft monitoring tools.
Experian is one of the three major credit bureaus in the United States. Monthly data is provided for each account, including the payment amounts, minimum payment due, and account balances. Using their reports, you can see how much longer your account will show up on your credit file and also detail the monthly balance history for each of your accounts.
Experian is more commonly used for credit reporting by companies than both Equifax and TransUnion. This means that any particular debt or account you have is more likely to show up on Experian reports if they are going to show up on any of your reports.
Operating in 30 countries with 27,000 employees, Experian is a huge company. There are four main business lines: marketing services, credit services, consumer services, and decision analytics.
If you have questions about your credit, you can use the Experian credit hotline in order to talk to an actual person that will help walk you through your report. There are lots of financial resources on their site, including videos and articles, much like Credit Karma.
While Credit Karma offers your Vantage 3.0 credit score, Experian provides a FICO score 8. While there are a number of similarities between the VantageScore 3.0 and FICO 8, they won't produce the exact same number when calculating your credit score.
Though VantageScore and FICO used to use different score ranges, they now both adopt a range from 300 to 850. Higher scores are always better, and both scores are designed to help predict the likelihood that a consumer will repay their credit obligations.
Each of these categories is waited differently, though, meaning that your scores likely won't be exactly the same on both services.
If you are looking to sign up for a service that lets you keep track of your credit scores and reports, Credit Karma and Experian are both popular options.
With Credit Karma, you can sign up for a free membership where you can receive free credit reports, free credit scores, free alerts, and free credit monitoring. When you sign up for the free trial, you don't have to register a credit card.
Credit Karma will also recommend credit cards that you are likely to qualify for, and that could help save you money. The orientation of the site is to help you improve your credit scores, so they'll provide a personalized grade for each of the credit factors and offer suggestions for how you can improve your rating.
There are a number of free options at Experian as well as some paid service packages. For example, you can pay to receive reports from all three major credit bureaus.
Experian's free service, called Experian CreditWorks Basic, offers a number of services for free, including:
Experian CreditWorks Premium comes with a seven-day free trial and then costs $24.99 a month.
Upgrading will give you access to the following features:
There are additional service bundles you can purchase to gain access to even more information and protection. One free service that might interest you is Experian Boost, which lets you add positive payment history to your Experian credit reports from utility and telecom accounts. This can help boost your credit score instantly, though it requires that you hand over some personal financial information.
There are a number of reasons why your Credit Karma score is going to be different than your Experian score.
Credit Karma and Experian offer different scores because they are pulling from different credit reporting bureaus-- Credit Karma provides your scores from Equifax and TransUnion, while Experian provides your Experian credit score.
One reason is that Credit Karma will show you your VantageScore from Equifax and TransUnion, while the free version of Experian will show you your FICO score from your Experian credit report.
Additionally, not all of your creditors and lenders will report to all of the credit bureaus, which can create differences between your reports and your scores.
Every company is going to have its own system and preferences when it comes to pulling credit reports and scores.
In general, though, you'll want to check your FICO Score if you're planning on applying for credit. There's a good chance that lenders will be using this scoring model in order to figure out whether you are likely to pay back a debt you take out.
There are also differences between the various versions of FICO score models. For example, different industries will have standards in regard to which version they use.
If you are planning on buying a house, you'll want to check your FICO Scores 2, 4, and 5, as these are common versions used by mortgage lenders.
Are your credit reports not looking quite as good as you had hoped? Cleaning up your credit report can be well worth the trouble. Make sure you check out our guides to removing collections, hard inquiries, dispute comments, charge-offs, evictions, and late payments if you are ready to improve your credit.
Chances are your credit score will vary depending on which credit bureau is being used to calculate your score. Though people regularly talk about their "credit score," it's usually more accurate to say that each person has multiple "credit scores."
There are a variety of factors that can explain the differences between credit scores from different credit bureaus, including:
Since Credit Karma is an online financial platform but not a credit reporting bureau, you might wonder if the score they offer is accurate.
Credit Karma doesn't collect information from creditors. Instead, they use your credit reports from Equifax and TransUnion to offer scores and reports. The credit calculating model they use is VantageScore, rather than FICO.
The information on Credit Karma should be accurate, but the reality is that they don't share the most commonly used credit scoring model. FICO is much better known than VantageScore and is most widely used by lenders. For this reason, if you're just going to focus on one credit score, it might make sense to work specifically on your FICO score rather than your VantageScore.
Though it can be frustrating to realize that you have two different scores from Experian and Credit Karma, having a healthy credit profile should ensure that your scores are in good shape no matter which credit scoring model is being used or which credit report supplies the information that generates your credit score.
Building credit can take time, but it's well worth the investment of time. When you improve your credit, it can save you tens of thousands of dollars over your lifetime when it comes to the terms and rates you receive for loans, credit cards, insurance premiums, and more.
Are you searching for more resources to help you build your credit and boost your credit scores? If so, make sure you check out our Credit Building Tips blog.
Credit card issuers (and other lenders, too,) are legally allowed to ask for contact information from the credit bureaus for individuals that meet certain credit criteria.
If you're receiving loads of credit card offers in the mail, the good news is that it probably means you have good or excellent credit and that credit card companies see you as a low-risk borrower. On the other hand, if you aren't shopping for a new card, it can leave you with a bunch of unsolicited mail that contains personal information.
Since credit card offers often include personal information as well as details necessary for opening a new credit card, you always want to shred them rather than throw them in the recycling bin.If you are frustrated by the fact that you should shred credit card offers rather than just tossing them, you'll be glad to know that you can opt out of receiving pre-screened firm offers from credit card companies. In this article, we'll go over everything you need to know about discarding these offers and even opting out of ever receiving them in the first place.
Yes, you absolutely should shred credit card offers. Even though you might expect that offers you didn't ask for wouldn't contain any identifying information, this simply isn't the case.
Not only will your name and address be on these offers, but there can also be barcodes that contain additional identifying information. Beyond that, if someone other than you gets a hold of your credit card offer, they could potentially use the information to open a credit card in your name.
If the envelope has your address printed on it, you'll want to shred it as well.
Credit card offers often contain personal information. They will almost always have your name and address on them, but they can also include information like:
Even if there aren't financial account numbers or your Social Security number listed in a credit card offer, you still wouldn't want a bad actor to get their hands on the personal data contained in these letters. Identity thieves and scammers can, unfortunately, do a lot with a small amount of information, so you want to avoid throwing your personal info simply being thrown in the trash.
If you feel like you're getting tons of credit card offers every week, you're not alone. On the one hand, this can be pretty annoying. In good news, though, it likely means that you have a good to excellent credit score.
They request information about potential borrowers that fit certain criteria from the credit bureaus. They are legally allowed to do this via the FCRA, but you also have the right to opt out of having your information included on these lists.
There are two ways that credit card companies can get your personal information:
The credit card offers you receive in the mail or through email are usually "prescreens."
Credit card companies will send prescreened offers to people whose credit histories meet their specific criteria. They receive this information from credit reporting companies.
This means that the companies have already deemed you worthy of receiving a specific offer due to your credit history. However, you'll still have to actually apply for the card if you decide it's something you want to pursue.
When you receive multiple credit card offers in the mail, you might be worried that these companies are constantly running credit checks on you in a way that will impact your credit score.
The reason for this is that the prescreening process only involves a soft pull of your credit rather than a hard pull.
If you look at your credit report and you see soft inquiries from credit card prescreening, don't worry. Only you can see these soft inquiries-- potential lenders or other parties that pull your credit report won't be able to see them. Soft pulls are simply listed on the credit report you can view so that you know the names of companies that are obtaining your information.
Did you pull your credit report and it could use some cleaning up? Check out our guides to removing 30 day late payments, evictions, hard inquiries, and collections from your credit report.
If there's mail you're planning on throwing away, it's honestly safest to shred all of it. Of course, tax-related information or bank statements that you are tossing out should definitely be shredded. Still, even junk mail can give identity thieves more information than you want them to know about you.
Even the envelope a letter came in should be shredded if it has an address label on it. It's really best to actually shred your mail-- ripping it in half a few times isn't as effective as you might hope. If an identity thief wants to get their hands on your information, an envelope torn in half won't be enough to stop them.
Here's another tip to help reduce the risk of identity theft:
With information like your name, prescription number, and doctor's name on them, it's possible that a bad actor could use the info to steal your identity, or they could refill the prescription for themselves.
The FTC recommends that you hold onto medical bills, pay stubs, and bank statements for a year before you shred or destroy them.
You'll always want to hold onto your tax records, too, just in case.
Further down in the article, we go into detail about how you can opt out of pre-screened credit card offers. However, you can also reduce the amount of junk mail you receive by registering at the Direct Marketing Association's (DMA) consumer website. This allows you to choose what promotional mail you want to get. This registration lasts for ten years, and there is a $4 processing fee.
You can also send your name and address along with your signature and $5 processing fee (in the form of a money order or check payable to the Association of National Advertisers or ANA) to the following address:
DMAchoice
Consumer Preferences
P.O. Box 900
Cos Cob, CT 06807
Though you might still receive some promotional mail, registering with the DMA should reduce the amount of unsolicited mail you receive.
You might think that most identity theft and fraud occur online these days, but there are still people that will search through trash bins of unsuspecting homeowners and renters.
Identity thieves are usually looking for any of the following information:
Even if one document doesn't have all of this information (in fact, it's unlikely that one document would have all of this information,) a thief could piece together a terrifying amount of your personal info by rooting through your trash from different pieces of mail and documents.
Identity thieves can do all kinds of bad things with your info, including:
This isn't even an exhaustive list of how identity thieves and fraudsters can use your personal information. As you can see, if any of these things occurred, it would be a massive problem for you, so it's simply best to just shred any mail you aren't holding on to.
If you've been throwing credit card offers (and other mail with personal identifying information) in the trash or recycling bin for years, there are a few steps you can take to help protect yourself.
In general, it's a good idea to regularly check your credit report to make sure that there isn't any inaccurate or suspicious information on there. Additionally, keep a close eye on your bank accounts and credit card accounts and report any suspicious activity right away.
Signs of identity theft include:
If you find information that points to potential identity theft, you can:
If you left your trash by the curb, it isn't technically illegal for someone to go through it. If they're trespassing on your property to go through your trash, though, it's another story.
Choosing digital bank statements and bills (i.e., going "paperless") is a good way to reduce the occurrence of someone finding your information on physical pieces of mail. You might also consider investing in a locked mailbox, installing outdoor security cameras, and keeping your trash bins on your property as close to the time they'll be picked up as possible.
For more information about the ins and outs of owning a credit card, check out our guides to credit card nicknames, prepaid credit cards, and getting a new credit card before buying a house.
Getting tons of credit card offers when you simply don't need them can get pretty annoying, particularly when you take the step of shredding each of them to protect your private information.
To opt out of prescreened credit card offers, you can submit a request online at OptOutPrescreen.com or call 888-5-OPTOUT (888-567-8688).
Luckily, you have the right to opt out of prescreened offers thanks to the Fair Credit Reporting Act. This is true for both offers you receive through regular mail as well as email.
There are two different ways you can do this:
You will only need to submit your request one time in order to have your name and address removed from the prescreening lists of Experian, Equifax, and TransUnion.
It's possible that you will still receive offers for a while because there might already be pending offers in a lender or creditor's delivery stream.
If you start shopping around for credit cards and decide you want to receive offers again, you can call the same number to opt back in. You'll ideally want to do this a few months before you plan to apply.
When you call or use the online platform to opt out of credit card offers, you are only stating that you want to opt out for a period of five years. If you know that you don't want to receive these offers ever again, though, you'll have to send a letter through the U.S. mail.
To opt out entirely from credit card offers, you'll need to complete the Notice of Election to Opt Out form and send it to the following address:
Opt-Out Department
P.O. Box 530200
Atlanta, GA 30353
You can find this form by going to the OptOutPrescreen.com site and selecting "Permanent Opt-Out by Mail." The other options are "Opt-In" (if you want your name to be eligible for inclusion on "lists used for Firm Offers of credit or insurance") or "Electronic Opt-Out for 5 years."
When you receive lots of credit card offers in the mail, it generally means that you have good or excellent credit. While this is good news, it can be pretty annoying to get so many unsolicited letters, particularly when they contain personal information that identity thieves and fraudsters could use.
If you know that you aren't going to be looking to take advantage of any prescreened credit card offers in the near future, you can opt out of receiving them for a five-year period or permanently.
While firm offers from credit card companies can get on your nerves when you don't want a new card, they can actually be pretty useful when you're shopping around for one.
If you're hoping to get a new credit card soon, it's never a bad idea to take a look at your credit report and even do some work to boost your credit score. For more resources about improving your credit, make sure you check out our Credit Building Tips blog.
