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.
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:
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:
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.
When you pull your credit report, seeing something you don't understand or recognize is always a bit disconcerting. After all, this is supposed to be a report of all of your credit activity, so you would expect everything on your report to be intelligible.
If you're looking at your credit report and you see a term or account that doesn't make sense, you might be worried that something has gone wrong. One common question we receive is what 'updated tradeline' means on your credit report and whether this is a good or a bad thing.
In many cases, an updated tradeline shouldn't be cause for concern. However, it's always worth taking a closer look to make sure that the activity being reported didn't result from identity theft or fraud.
When your credit report says 'updated tradeline,' it simply means that some sort of change has occurred with one of your accounts, and one or more of the credit bureaus is therefore updating the information.
A tradeline is the term used in the credit industry to refer to the accounts that appear on your credit report. Examples of tradelines include personal loans, credit card accounts, and mortgages.
There are several different possible reasons that you could see a message indicating an updated tradeline on your report, including:
There are a number of ways that an updated tradeline can influence your credit score. The nature of the update is going to be important when considering how it might change your score.
Before we look at some potential ways that updated tradelines can change your credit scores, it's important to remember that several factors go into calculating your scores. Depending on your particular credit history and profile, in addition to the nature of the updated information, an update to one of your tradelines could have a very noticeable effect on your credit, or it could have little to no effect.
Here are some examples of how an updated tradeline could impact your score depending on the nature of the updated information:
Tradeline alerts are notifications that communicate updates or changes to your credit report's tradelines. You can use this tool to proactively monitor your credit report and accounts.
You can set up tradeline alerts through the credit bureaus or through credit monitoring services. Anytime there is a change on one of your tradelines, such as a payment update, a new account opening, delinquency, or a change in your credit limit, you can receive an alert through one of the following:
Staying vigilant and aware of any major changes in your credit file is important, and signing up for tradeline alerts can help you do just that. When you know that something significant has changed on your credit card, you can detect potentially fraudulent activities, promptly address any inaccuracies, and take any necessary steps to manage your credit responsibly.
Each credit bureau has its own process and format for updating credit report tradelines. Therefore, you can expect there to be some variation in the information provided by each credit bureau. In general, though, updated tradelines will include the following details:
Depending on the reporting practices of the creditor or lender, the frequency of tradeline updates can vary quite a bit.
Here are some general points regarding tradeline update timing to help you get a sense of when you should expect a tradeline will be updated:
There are a number of reasons a new tradeline might appear on your credit report. The most common explanations for a new tradeline showing up are:
Considering the potential for identity theft and credit fraud, it's vital that you pay attention to new tradeline alerts or at least regularly check your credit report.
Understanding the details of your credit report can be tricky, so let's take a minute to go over some basic information about tradelines and updated tradelines that appear on your credit report.
Every account that you own appears on your credit report as a single credit tradeline. This is true regardless of whether the account is open or closed, your payment is current or past due, or you are the sole owner or a joint owner of an account.
That being said, there are three different categories that tradelines can fall into.
Examples of revolving accounts include lines of credit or credit cards.
Revolving accounts involve being alloted a credit line that can be accessed in an ongoing manner, which payments minus interest and feed charged opening up credit to the account holder. Examples of revolving accounts credit cards, home equity lines of credit (HELOCs), and lines of credit.
Since the available credit, balance, and payment due are all regularly changing as you make payments and purchases, these are known as revolving accounts.
Examples of installment loans include auto loans, mortgages, student loans, and personal loans.
Rather than having a credit limit that you can continue to borrow from and pay back as with revolving credit accounts, installment loans involve borrowing a fixed amount of money and repaying the debt on fixed terms.
Installment loans are loans where a fixed amount of money is borrowed that is paid back according to a fixed schedule and terms. Examples include personal loans, student loans, auto loans, and mortgages.
While many experts lump mortgages in with other installment loans, some prefer to classify home loans as their own separate, fourth category of tradeline.
Open accounts are not common for individuals and are instead more often used by businesses.
Also known as an account payable by the bearer, open accounts are mostly used in the business world and aren't normally going to show up on an individual's credit report.
These involve an account that is payable in full when the buyer receives merchandise or a specific item of value.
To some extent, how much weight a credit tradeline carries depends on the type of tradeline.
It's also worth noting that your credit limit and utilization will be included in a credit card tradeline, while this information won't be present for an auto loan tradeline.
When you see a note or receive a notification that says a tradeline has been updated, it simply means that the info on your credit report in relation to a specific account has been altered to reflect the most recent accurate details.
At the same time, there is always the possibility that the credit bureau or your creditor has made a mistake and is reporting inaccurate information. Beyond that, there's also the possibility that someone else has gotten a hold of your personal information, and activity on your accounts is indicative of identity theft or fraudulent behavior.
For this reason, it's very important to regularly check your credit report and keep an eye out for errors or anything that seems off. You can take a look at our guides to removing 30-day late payments, evictions, hard inquiries, and collections from your credit report to help you in your quest to clean up your credit report.
Building credit is something that is best tackled slowly over time, but there are some ways to quickly boost your credit and improve your chances of being approved for a loan, credit card, or another new tradeline. For more resources about cleaning up your credit report and increasing your credit score, check out our Credit Building Tips blog.
Honda is well known for producing reliable car that will keep you safe on the road. There are lots of people that swear by Honda vehicles as offering the best bang for your buck, as they put out a wide range of affordable, long-lasting models.
That being said, even the cheapest new Honda (the LX trim of the Honda Odyssey starts at a little over $33k) likely costs more than you're going to want to pay out of pocket.
Let's take a look at what you need to know about purchasing a Honda with financing, and how your credit score can impact your ability to qualify for good rates and terms.
There is no set minimum credit score for purchasing a Honda using financing. Even if you are seeking financing through a Honda dealership, the minimum required credit score can vary from one dealership to the next.
That being said, to buy a Honda through dealer financing, you will likely need a credit score of at least 610.
The general rule of thumb is that you will need a credit score of at least 600 in order to qualify for a traditional car loan. To receive financing through a Honda dealership, you will most likely need a score of at least 610.
Every lender has its own criteria through which it determines whether or not to extend an auto loan to a potential borrower. That being said, a credit score of 600 is usually considered the cut-off point for getting a traditional car loan.
If your credit is less than ideal, it doesn't mean that you're completely out of luck. What it does mean, though, is that you will probably need to look for a car loan specifically for people with bad credit, which will mean that your rates and terms aren't nearly as favorable.
Are you wondering what credit score you need to purchase a brand new Mercedes-Benz with financing? Check out our guide to getting a Mercedes car loan to learn more.
Before we go further into how to finance a Honda, let's talk a little bit about the difference between buying a Honda with financing and leasing one. Depending on your particular circumstances and preferences, you might find one of these options more appealing than the other.
If you want to purchase a Honda using their financing program, you can go online to get pre-approved before heading to the dealership. It's usually not a bad idea to shop around a bit when it comes to car loans, though-- it's possible that your local credit union or another lender will be able to offer you a better deal. Even if you don't intend to go through with either of these loans, you can have them in hand when you go to the dealership and use them as leverage to get a better deal.
Honda dealerships will sometimes offer 0% APR promotional financing offers, so you might want to search around for local dealerships and see if any of them have particularly good offers. Their loans typically range in length from 2 to 6 years.
Are you wondering how auto financing shows up on your credit report? You can learn more in our guide to Capital One Auto Financing.
You can often lease a Honda with a small down payment or even no down payment at all. Just like with purchase financing, each dealership is going to have its own offerings.
Some typical lease terms you might find at a Honda dealership include the following:
What happens when your lease is up, you ask?
Honda Financial Services makes it fairly easy to apply for financing. You can use their online platform to apply for pre-approval as well as to check your approval status.
Getting pre-approved before you head to the dealership can help you save time and also give you a better sense of the price range of the vehicle you should be looking for.
When you apply for preapproval, you'll want to have the following information close at hand:
You will usually receive your pre-approval decision within one business day via email.
Once you have this in hand, you can head to the dealership, which will help you with the next steps in acquiring financing. Of course, you don't have to use Honda Financial Services to finance a vehicle from a Honda dealership, and it can be worth shopping around for a better deal. More favorable preapproval offers might mean that Honda will offer you better rates and terms, or it might mean that it's worth taking some extra steps to use financing from elsewhere to purchase your new car.
Some sources state that Honda Financial Services only uses the Equifax credit bureau. In contrast, others claim they will pull your credit from all three credit reporting agencies when you apply for financing.
If you are planning to apply for a car loan from Honda Financial Services, it's best to take a look at all three of your credit reports to make sure that there aren't any inaccuracies or errors. Doing so in advance can give you ample time to dispute any mistakes before the lender pulls your report.
Are you trying to clean up your credit report before applying for a car loan? Take a look at our guides to removing 30 day late payments, evictions, hard inquiries, and collections from your credit report.
Again, every Honda dealership is going to be a bit different when it comes to their criteria for offering financing. In general, though, here are some things you'll want to keep in mind when it comes to the pros and cons of using Honda Financial Services.
Some of the advantages of using Honda Financial Services include:
Some of the disadvantages of using Honda Financial Services include:
Unfortunately, Honda doesn't disclose a great deal of information about the specific eligibility criteria for receiving an auto loan. That being said, the dealership might be able to help arrange financing for you through a different lender if your score is on the lower side. Of course, the lower your credit score is, the less likely you'll be to receive great rates and terms.
There are a number of other things you'll want to keep in mind when you're shopping around for a new Honda, including:
If you want to buy a Honda, but your credit is less than perfect, you can either deal with the fact that the loan is going to cost more, or you can work to build your credit first before applying.
Are you ready to start improving your credit? As your credit score climbs and your credit report gets cleaned up, you'll find that the financial opportunities available to you significantly expand.
Wondering what you can do to make sure you come off as a responsible borrower to any potential lenders or creditors? Make sure you check out our Credit Building Tips blog more resources. If you're wondering where you should get started, take a look at our guides to removing derogatory marks from your credit report, building credit with no credit history, and simple credit repair hacks.
According to the Pew Research Center, the vast majority of Americans own a cellphone of one kind or another. A whopping 97% of people in the U.S. have a cellphone, and 85% of the population use a smartphone.
Having a cell phone (and, specifically, a smartphone) is pretty much a necessity these days as the world moves increasingly into the digital space. It’s certainly possible to get by without one, but this is a decision that requires accepting inconveniences and difficulties as employers, retailers, airlines, hospitals, etc. increasingly expect that everyone has a smartphone in their pocket.
Getting a cell phone with bad credit without paying a deposit might require a bit of creativity, but it’s certainly possible.
When it’s time to get a new cell phone, your credit score might not be the first thing on your mind. After all, you’re not buying a house or a car, so why should anyone pull your credit report?
The reality is, though, that there are a number of different reasons why your credit score can have an impact on your ability to purchase a cell phone and a traditional postpaid plan:
If you are motivated to avoid a credit check when getting a new cell phone, you do have some options. Additionally, there are some routes you can take in order to get a cell phone, even if your credit is less than ideal. Some of these options even involve a little-to-no deposit, which can be incredibly helpful when you need a phone but are strapped for cash.
It might seem frustrating that your credit is relevant for something that is so essential in the modern world– a cell phone– but it’s important to recognize that cell phone providers are businesses that are motivated to minimize their own financial risk. They can use your credit score to help determine how likely you are to fulfill the contractual obligations and pay back the money you owe on time.
Getting a cellphone with bad credit and little-to-no deposit is not impossible at all. All it means is that you might have to stray from the traditional contract-based postpaid plans and settle for a device that isn’t one of the brand-new models or has been previously used.
As we’ll discuss a little later on, you can receive the benefits of a traditional postpaid plan (if that’s desirable to you) with bad credit if you are able to join a family plan or find a cosigner.
If your credit isn’t awesome, but you need to get a new phone plan, one of the easiest ways to do so is to simply get a prepaid plan. As opposed to postpaid plans, where you pay a bill the month after using the service, prepaid plans involve paying a specific fee in advance every month or refilling your minutes, texts, and data as needed.
Prepaid cell phone plans don't require a credit check or a contract.
Since you are paying ahead of time for services that you have yet to use rather than agreeing to repay services you have already used, prepaid plans don’t require a credit check. This means that your credit won’t have any effect on your ability to get a prepaid plan. That being said, if you’re buying a new phone at the same time and you can only afford to buy it through financing options, you will face a credit check for the phone purchase.
If possible, you might choose to use an old phone or purchase a used phone with cash that you can then use with the prepaid plan. This way, you can completely avoid the credit check or a required deposit for having bad credit. Of course, you will need to pay your monthly bills in advance rather than after the fact, but you won’t face a hefty deposit upfront.
AT&T offers a number of prepaid plans, one of which includes unlimited high-speed data with 5G access for $50 a month (after an autopay discount of $15 per month.) One of their cheapest plans is only $25 a month when you pay for 12 months upfront, offering you 16 GB of data and excluding taxes and fees.
As of May 2023, AT&T is advertising that you can get a free SIM card when you bring your own phone and have the $15 activation fee waived when you sign up for one of their prepaid plans with a compatible phone.
Verizon also offers a number of Prepaid options, ranging from $30 to $60 a month when you enroll in autopay. Without autopay, these plans range from $35 to $70 per month.
The cheapest plan gives you unlimited talk and text but only light data use. The cheapest plan that allows a bit more wiggle room for data usage gives you unlimited talk and text, 5G access for capable devices, and 15 GB of data. Their priciest plan is the “Unlimited Plus,” which costs $60 per month after the $10 a month auto pay discount and includes a lot more bells and whistles for people that heavily rely on their smartphones.
Here are some other carriers that offer prepaid plans. Depending on your needs and expected usage, there’s likely a plan out there that will fit what you’re looking for:
No contract plans are similar to prepaid phone plans– in fact, prepaid plans fall under the umbrella of no contract plans. Rather than having to sign on for a contract of two or so years, you can sign on for a monthly plan that lets you opt out whenever you want without a cancellation fee.
A no-contract phone doesn't require that you commit to a specific carrier for several years as is common with traditional post-paid plans.
A number of the big-name carriers offer no-contract options, and there are also a number of smaller providers that advertise similar or less expensive plans. The strictest definition of prepaid plans requires that you pay for every minute you talk and every text you send, refilling your minutes, texts, and data when necessary. No-contract plans, on the other hand, only involve one set bill each month. It’s worth noting that the line between prepaid plans and no-contract plans is quite blurry.
Another option when it’s time to get a cell phone with bad credit is to join a family plan. Major cell service providers offer multi-line cell phone plans where you can share data with other people or even have access to unlimited data.
A family plan allows a number of mobile contracts to be linked under one account with only one monthly bill payment. They often offer a discount and only require a credit check for the primary account holder.
When you’re on a family plan, the main account holder’s credit report will be pulled in order to initially establish service. However, the people that are added to the plan won’t have to pass a credit check. In this situation, the primary account holder is the only one that is responsible when payments are missed, so it’s important to make sure that you are holding up your end of the bargain so you don’t cause trouble for them.
Joining a family plan allows you to bypass the credit check and maybe even save some cash.
Are you ready to get a cell phone but don’t have any credit history, a very thin credit profile, or straight-up bad credit? One option is to put down a deposit. Though this can be a bit frustrating, it’s a method worth considering if you have the cash on hand.
If you are not opposed to paying a deposit up-front but just want to get a regular cell plan, this is another option when you have no credit or bad credit. Deposits are usually eligible for refund once you have paid your bill in full and on time for a specific number of months. That being said, you'll want to read the fine print for each carrier as they can vary.
How much the deposit will be is going to depend on both your credit score and the carrier you are working with. The specifics of how deposits are handled vary between carriers, so it’s important that you take a close look at the fine print before moving forward.
Another option on the table is finding a cosigner to help you get a cell phone. Of course, this is only useful if the cosigner (either a family member or close friend, usually) has good credit. It’s also important to understand that the account would be opened solely in their name, meaning that they are the one that is responsible if you don’t hold up your end of the bargain and pay your bill.
If you can find someone with good credit that is willing to act as a co-signer, it can allow you to get a new phone with a traditional plan even if you have bad credit. The co-signer will be responsible if you fail to make payments.
One of the good things about this option is that the account can eventually be moved into your name by the co-signer. Though the carrier will usually run a credit check before this process is complete, you don’t necessarily have to pay a deposit.
Each carrier handles the process of having a co-signer and transferring account names differently, so it’s always a good idea to look at the fine print offered by the specific carrier you are considering working with. As an example, T-Mobile will allow account ownership to be transferred after 90 days.
If you’re trying to avoid the credit check that comes along with financing a new smartphone, consider trying to buy a pre-owned phone instead. These will often be quite a bit cheaper than the newest, snazziest versions of popular Apple and Android devices. You can also find refurbished options sometimes offered by wireless carriers, smartphone companies, or private sales.
Buying a pre-owned or refurbished phone could give you the ability to purchase the device outright rather than needing to obtain financing.
You will need to put a new SIM card in your phone and will also need to make sure that the phone is compatible with the carrier you use.
“Bad credit” can sound like kind of a vague term, but each cell phone company has its own specific definition of what number you need to be below in order to end up in this category.
Different companies have their own cut-off points for what they consider bad credit, but in general a score below 550-600 will be considered a subprime score.
For another example, let’s look at AT&T:
You are not completely out of luck when it comes to getting a phone if your credit is less than ideal. Additionally, it is possible not to pay a hefty deposit when you have bad credit. However, depending on how pressing your need for a new phone is, you might consider building your credit first before applying in order to make the process simpler and more straightforward.
If your primary concern is avoiding putting a deposit down when getting a cell phone and you want to sign up for a standard postpaid plan, here are your best options.
Enrolling in a family member with your relatives or friends will help you avoid paying a deposit even if you have bad credit. The credit check will only be for the primary account holder, and they will also be the one held accountable if bills go unpaid. For this reason, it’s important to make sure you are taking care of your end of the deal to ensure that they are not punished for your unpaid bills.
The other best option for avoiding paying a deposit when you have bad credit is to find a cosigner. The cosigner will be the person listed as the account holder, meaning that it will be their credit report that is pulled and their responsibility if you stop paying your bills.
Before we sign off, let’s take a look at some of the most common questions about the relationship between cell phones and credit scores.
There are a number of different ways that you can finance a cell phone:
Major phone manufacturers like Apple or Samsung typically offer financing options. This type of financing typically works in a similar way as credit cards, meaning that a line of credit will be opened in your name.
This means that activity on your account will be reported to the credit bureaus. If you make your payments on time and keep your account in good standing, it can help you build credit over time.
There are probably going to be a number of different financing options when you buy a phone from the wireless carrier you plan on using. One way is to lease a phone with the option to upgrade in the future. Another is to pay off the phone monthly without interest (for a set period of time) through an installment plan.
Activity regarding your financing or leasing agreement usually isn’t reported to the major credit bureaus. This means that this method of getting a phone typically won’t help you build credit.
You might find that other third-party retailers offer financing for phones, such as electronics stores. It’s common for these types of stores to offer credit cards that come with 0% interest for a specific period of time.
Financing a cell phone can, in some cases, affect your credit. Here are the three ways it can have an impact on your scores:
Fortunately or unfortunately, depending on your perspective, cell phone providers usually won’t report your payments to the three major credit bureaus. This is the case even though they will typically check your credit score when making a decision about whether to approve you for an installment plan or a phone contract. Since these carriers don’t normally report to credit bureaus, it means that your on-time payments won’t help your credit score.
Though it might seem unfair, missing payments can hurt your credit score, even though on-time payments don’t help. For the record, one or two late payments usually won’t impact your credit as long as you catch up on the money you owe before the carrier chooses to terminate the contract and turn the account over to collections.
If the account does end up in collections, though, it will hurt your credit. Collections accounts show up as a tradeline on your credit report. This won’t just harm your score, but it won’t be something that lenders look favorably on when determining your creditworthiness for a loan or line of credit.
It’s also possible to hurt your credit score if you disconnect your phone services without paying the remaining balance or the early termination fee. Additionally, terminating your contract prematurely can result in a lowered credit score if you don’t pay the money that you owe.
If you want all of your on-time payments to help your credit, there are services you can use, like Experian Boost. These monitor your checking account for on-time payments to service providers like cell phone companies and utility companies. Though this can potentially boost your credit score by adding up to two years of payment history, it’s worth noting that you will need to give up your bank account and other information in order to set up the service.
If you need a cell phone right now and your credit is bad, using one of the many options listed above will help you achieve your goal. When getting a new device, you could choose to purchase a cheaper pre-used or refurbished option or even ask your friends and family if they have an old phone they’re no longer using. Older models tend to be cheaper than newer models as well.
On the other hand, if you are simply trying to plan ahead for getting a new phone and plan down the road, you might choose to use this time to work on improving your credit.
Are you ready to build your credit so you don’t have to spend time researching things like how to get a cell phone with bad credit? Are you ready to increase the number of financial opportunities available to you by cleaning up your credit report?
If so, make sure you check out our Credit Building Tips blog for tons of useful resources that will help you improve your credit scores.
It's easy to not think about your credit score until your gearing up to apply for a loan.
In most cases, you will find that lenders typically require a minimum credit score of at least 580-620 in order to receive a mobile home loan.
That being said, it is possible to receive financing with a lower credit score. There are a number of loans you can apply for when buying a mobile home, many of which will require that you make a larger-than-usual down payment if your credit score is less than ideal.
A minimum credit score of 580-620 is often required in order to receive a loan for a mobile home.
What this means is that you might find that you qualify for a mobile home loan even if you do have bad credit, depending on which credit scoring model is being used and depending on what you mean by bad credit.
The lowest category of FICO credit scores is "poor," with scores ranging from 300-579. The lowest category of VantageScore credit scores is "very poor," ranging from 300-499.
For FICO scores, a "bad" score is typically considered below 670. Under this number, a credit score falls into the ranges of "fair" or "poor."
For VantageScore models, a score of less than 661 means that your credit score is "fair," "poor," or "very poor."
When you are at the point where you know what type of mobile home you're looking for, and you know where you want to put it, the next step is to determine how you will finance the purchase.
There are a number of different loan types available for buying mobile homes. It is worth taking a look at each one, as they have different requirements for qualifications, including different minimum credit scores.
Individuals can receive mobile home loans offered by the Department of Housing and Urban Development through the Federal Housing Administration loan program.
The primary difference between these two loan types is that your mobile or manufactured home does not need to be attached to the land when you apply and receive an FHA Title I loan. On the other hand, the home needs to be attached permanently to land owned by the borrower.
FHA loan programs work with borrowers that have credit scores that are as low as 500.
If you have less-than-ideal credit, a Title I FHA loan might be a good place to start looking for a mortgage.
With a 10% down payment, they accept credit scores as low as 500 to 579. If you have a credit score above 580, you can make a down payment as low as 3.5%.
There are a number of ways that a Title I loan can be used when it comes to mobile homes, including:
Even if the buyer isn't planning on purchasing the land where the mobile home will go or doesn't already own this land, lenders can offer Title I loans for mobile homes.
Borrowers that don't own the land and aren't planning on buying the land where the mobile home is going to stand will need to submit a signed lease with an initial term of three years or more for the mobile home plot.
It's common for mobile homes to be placed in mobile home parks or manufactured home communities, where residents can lease rather than own the land their home is on.
There are a number of requirements you'll want to be aware of when applying for this loan program.
When it comes to the maximum loan amount, the following requirements must be met to qualify:
The maximum loan term required for one of these mobile home loans are:
Title II loans can be used to purchase a manufactured or mobile home along with the land that the home will stand on. This is the case as long as you meet all of the requirements of the loan.
The minimum required credit score for Title II loans are the same as those for Title I: scores of 500-579 must put 10% down and scores of 580 or higher can put 3.5% down.
Real estate investors aren't allowed to get this type of loan-- it's only for people that are using the mobile home as a primary residence.
The other requirements for qualification include the following:
All of this means that this type of loan can't be used for mobile homes in mobile home parks or manufactured home communities.
Before you start looking down obscure paths for your mobile home financing, the easiest answer might be right under your nose.
You will need to have a minimum credit score of 620 to qualify for a loan through the Freddie Mac Home Possible mortgage program. There are a variety of options to choose from if you are able to go this route:
Depending on your credit score, it's possible to put as little as 3% down for one of these loans. It's also possible in some instances to use grant money or gifted money toward your down payment.
Are you thinking about opening a new credit card but you aren't sure whether you should wait until after you buy your house? Check out our article about how opening a new account will impact your ability to buy a house.
There are some lenders that offer Fannie Mae mortgages to individuals that want to purchase a mobile home. This occurs through what is known as the MH Advantage program.
A minimum credit score of 620 is required to qualify for the MH Advantage program.
You will need to satisfy a variety of criteria, including:
Certain architectural design, construction, and energy efficiency standards also need to be met to qualify for the MH Advantage program.
Here are a few other key points about these loans you'll want to know:
It's possible that you could qualify for a loan that is insured by the Department of Veteran Affairs if you belong to the military community.
There are no minimum credit score requirements for VA loans.
When it comes to mobile homes, you can use a VA loan to:
If you qualify for a VA loan, you might be able to receive 100% financing for your mobile home.
Are you trying to improve your credit? Take a look out our guides to credit repair hacks, removing derogatory marks from your credit report, and deleting collections in exchange for payment.
If you are worried that you aren't going to be able to qualify for a traditional home loan to purchase your mobile home, or you don't want to deal with the often arduous mortgaging process, you could also consider a personal loan.
There are a number of pros and cons to using personal loans rather than traditional mortgages to purchase a mobile home.
Some of the advantages include:
On the other hand, the major drawback of using a personal loan for purchasing a mobile home is that the interest rates will likely be higher than those of a traditional mortgage. This is precisely because the home isn't used as collateral for a personal loan the way it is for a home loan.
Are you on a mission to learn more about improving your credit? Take a look at our guides to how long tradelines stay on your credit report, using installment loans to rebuild bad credit, and writing hardship letters to credit card companies.
Finally, you might also choose to apply for a chattel loan, which is a special kind of personal property loan that could be a good choice for a person with bad credit.
These loans are designed for the specific purpose of purchasing expensive vehicles, including:
Chattel mortgage lenders will often only require a minimum credit score of around 575, which is quite a bit lower than the minimum credit score for many other loan types.
With chattel loans, the property being financed serves as collateral for the loan. You can typically get a chattel loan even if you don't own (and don't plan to purchase) the land where the mobile home will stand. For this reason, chattel loans are popular choices for individuals that are expecting to lease a lot in a mobile home park.
There are some lenders that offer mobile home chattel loans that are government insured by:
There are a few important differences between chattel loans and traditional mortgages:
Chattel loans will commonly come with higher interest rates than traditional mortgages-- typically they are 0.5 to 5 percentage points higher.
When you have bad credit, and you're motivated to buy a mobile home, it's a good idea to have some tips and tricks up your sleeve. This can help you save money during the process and make the financing process easier.
It's important to remember the old adage-- when there's a will, there's a way. The worse your credit is, the more creative you might have to get. That doesn't mean you are completely out of luck when it comes to buying a mobile home.
In addition to our extensive list of loan options that you can apply for even when your credit is subpar, here are some alternative methods you can try:
Is it time to clean up your credit report? Check out these guides to removing charge offs, collections, and hard inquiries from your credit file.
If you are interested in buying a mobile home with bad credit, you are not entirely out of luck. However, the options available to you are going to depend on just how bad your credit is, how much money you are planning on spending on a mobile home, the amount you can put down for a down payment, and more.
Sometimes, time is of the essence when you are trying to get a loan. On the other hand, if you aren't in a rush to buy a mobile home, it might be worth taking the time to improve your credit before you start shopping around and filling out applications.
Even though mobile homes are quite a bit cheaper than traditional homes, you will still be able to save a significant amount of money over the life of the loan if you are able to lock in the best interest rates.
Are you ready to start improving your credit so you can purchase a mobile home easily and with the best loan rates and terms? If so, make sure you check out the rest of our Credit Building Tips blog for tons more information about boosting your credit, cleaning up your credit report, and improving your financial health.
If a credit card company has been unable to recover the money that they lent you, there is a certain period of time (known as the statute of limitations) during which they can bring a lawsuit against you.
If they obtain a judgment from a court of law, they can use a number of methods in accordance with state law to try and collect on the judgment. These methods might include garnishing your wages, filing a lien against your real estate, executing against personal property, and more.
Credit card companies can file a lawsuit in order to try and get a credit card debt judgment against you if you're account is in default.
If the judgment is awarded to them, then they can use a wide variety of collection methods against you in order to get the money they are owed.
A judgment is an order that is entered by a court of law. This order indicates the findings of the court.
When you borrow money from a credit card company, you are legally obligated to pay the debt back to the creditor. This is the case when you have a credit card account, receive financing for a large purchase, or get a line of credit from a bank.
When a creditor receives a judgment, they are extended the right to use collection methods above and beyond what is allowed without a judgment in order to collect their debt.
The first step in obtaining a judgment is to file a lawsuit against a borrower. They do this in a civil court and will file a document known as a complaint. This complaint will also be delivered to you.
There are a handful of ways that credit card companies can achieve judgments after they have filed their lawsuit, including:
There are a number of methods that credit card companies can use once they obtain a judgment in order to try and collect the debt they are owed. Without a judgment, credit card companies can not use these tactics.
The following methods may be allowed under state law:
If a credit card company has obtained a judgment against you, how long that judgment will last before expiration depends on state law. When a judgment expires and is no longer renewable or revivable, it means that the creditor can no longer use the methods afforded to them under the judgment to collect on the debt.
Let's look at the laws in all 50 states. However, it's important to note that laws are subject to change, and certain exceptions may apply. If you have questions about how long a credit card judgment lasts, it's a good idea to get in touch with an attorney in your state.
Are you trying to improve your credit and you're wondering whether you should pay for a credit repair company to help fix your credit? Check out our guide to the cost of credit repair services.
It's worth noting that there is a statute of limitations for credit card debt in each state, which sets a limit on how long lenders and collection agencies have to sue an individual over debt.
Basically, there is only a limited period of time in which debt collectors can file a lawsuit against you. How long this time frame is depends on both the specific type of debt and the state, you live in. However, in many cases, it ranges from three to six years.
Debt collectors no longer have the right to sue you in an attempt to collect on the debt after the statute of limitation has passed.
Even though you can't be sued after the statute of limitations has passed, that doesn't mean that you're entirely off the hook. They can continue to try and collect on the debt, but they must stay within the bounds of the law in these attempts.
Credit card debt is considered an "open-ended account" as opposed to a written contract, oral contract, or promissory note. The type of debt and the state you live in determines the statute of limitations.
Has your credit report seen better days? This article looks at four simple ways to remove derogatory marks on your credit.
The following states have a three-year statute of limitations for open-ended accounts:
The following states have a four-year statute of limitations on open-ended accounts:
The following states have a five-year statute of limitations on open-ended accounts:
The following states have a six-year statute of limitations on open-ended accounts:
Rhode Island is an outlier, with a ten-year statute of limitations on open-ended accounts.
Do you have a debt currently in collections? To avoid an outcome where a judgment is made against you, consider striking a deal with the debt collector.
If a lender has successfully taken you to court in order to try and recover funds that they lent to you, it historically would have appeared on your credit report. The reason this information used to show up on your credit report is that potential lenders want to know that it could be risky to loan you money.
In the past, even if you paid back the money you owed or they recouped their money through other means (aka, the judgment has been "satisfied"), it would still appear on your credit report.
Judgments used to stay on your credit report for seven years starting from the filing date until the credit bureaus stopped recording judgments in April 2018.
However, all of this changed once the credit bureaus decided to stop reporting judgments as of April 2018. This means that judgments no longer impact your credit score and do not appear on your credit report.
That being said, there are a few ways that judgments (which are public records, by the way) can still impact your finances:
Are you on a mission to improve your credit? Check out our posts about credit repair hacks to increase your credit score, bank overdrafts and credit scores, repairing credit after identity theft, and removing charge-offs from your credit report.
Even though having a judgment against you won't show up on your credit report, it's really not a situation you want to be in. Creditors can garnish your wages, file a lien against your real estate, execute against your personal property, or levy your bank account, for example, in order to recoup their funds if they win a judgment against you.
If you are behind on your credit card debt, it's best to try and get on top of it right away. You might find that you can reach an agreement with the creditor using a hardship letter if you have a strong argument for why you are behind on your debt. Though it can be tempting to avoid thinking about your debt after your first 30-day late payment mark, it's really best to avoid an outcome where the credit card company is able to garnish your wages or otherwise threaten you financially.
Are you ready to improve your credit score and get on top of your debt? Make sure you check out the rest of our blog for more useful resources and informative articles.
Mercedes Benz is one of the most aspirational auto brands out there-- when you own a Mercedes, it's a sign that you've made it in life.
Only the most affluent of car owners, though, can afford the steep price for these vehicles out of pocket.
Of course, your credit score and credit report will have an impact on the loan terms you are offered. In order to qualify for a traditional auto loan, you typically need a credit score of at least 600. If your credit score is lower than 600, it's possible to locate a bad credit car loan with much less favorable rates and terms.
There is no standard minimum credit score that you will need in order to apply for a car loan. That being said, each lender will have their own minimum standards that they will apply when they review auto loan applications.
- In general, you will be charged more interest on your loan the lower your credit score. You will typically need to have at least prime credit in order to get a good interest rate on an auto loan. A credit score of 661 or up is considered prime credit in some credit scoring models, while 680 and up is favorable for others.
There are two primary factors that will inform the minimum credit score you need in order to qualify for a car loan:
If a lender advertises a minimum credit score, it doesn't necessarily mean you're out of luck if your credit score is below the listed number. The following conditions might allow you to receive an auto loan from a lender even if your score doesn't meet their minimum:
There are a number of factors that will be taken into account beyond your credit score when you apply for a car loan. In order to determine whether you will be approved and what interest rate you will be offered, lenders will likely evaluate the following:
Though several factors are taken into account when determining whether or not you will be approved for a car loan, your credit score is one of the major factors.
The minimum credit score required for buying a Mercedes Benz with financing is going to depend on the lender that you use. We will go into details about financing using Mercedes-Benz Financial Services a bit later on in the article, but first, let's discuss what you need to know about getting a car loan from any lender for a Benz.
The average cost of a new Mercedes-Benz reached $76,590 in 2022, which is a 43% increase over the average for 2019. This increase has aligned with rising car prices as well as the carmaker's push to focus on top-end models in recent years.
The average cost of a new Mercedes is more than $76,000.
There is no set minimum credit score for purchasing a Mercedes Benz or any particular type of car, for that matter. However, the better your credit score is, the more likely you will be approved and receive favorable terms for an auto loan. This is particularly important when you are buying a car as pricey as the average Mercedes, as higher interest rates will mean paying thousands of dollars than you would if you received the lowest possible interest rates.
You will typically need at least a credit score of 600 to qualify for a traditional car loan, and a score of 661 or higher (sometimes 680 depending on the credit scoring model used) will help you secure a low interest rate.
For example, let's say that you are buying a brand-new Mercedes at the cost of $76,590. You are a prime borrower and therefore receive a low-interest rate of 4.03% for a 48-month loan. You put down 20% as a down payment, which amounts to $15,318.
Not factoring in the cost of sales tax, title, registration, and other fees, this would mean that you would be making monthly payments of $1,384.29 for 48 months. The total interest you would pay over the life of the loan is $5,173.75, meaning that your total cost, including interest, would be $81,763.75.
Receiving financing with a less than ideal credit score can mean that you pay thousands or tens-of-thousands of dollars extra in interest over the life of a loan.
Keeping all of the factors equal except for your credit score, let's now say that you are a non-prime borrower that receives an auto loan interest rate of 6.57%.
In this scenario, your payments would be $1,455.04, and you would pay $8,570 in interest over the life of the loan. The total cost, including interest, for the car would be $85,160.
Finally, let's look at the same example if you were a deep subprime borrower. You receive an interest rate of 12.84%, meaning that your monthly payments amount to $1,638.91. Over the life of the loan, you pay a whopping $17,395.81 in interest for a total cost of $93,985.81.
As you can see, there is a tremendous difference between the amount of interest you pay over the life of the loan depending on your credit score. For this reason, it's worth working to improve your credit score, if possible, before applying for an auto loan.
Has your credit report seen better days? This article looks at four simple ways to remove derogatory marks on your credit.
If you want to get a loan for a Mercedes Benz, you have a few options:
There are pros and cons to each option:
Is there a tradeline on your credit report with the acronym COAF? This stands for Capital One Auto Finance, and you can learn more about how this impacts your score and report in this article.
Receiving financing from Mercedes-Benz Financial Services typically means that you need a credit score of at least 680. If your credit score is below this, you will probably want to shop around for different lenders with less strict credit score minimums.
It's pretty easy to apply for a loan through Mercedes-Benz Financial Services. Here are the steps you'll want to take:
If you want to get an auto loan through Mercedes-Benz Financial Services, you will need a credit score of at least 680 in order to receive favorable loan rates and terms.
If you want to apply for a loan through a different lender, here are the steps you'll want to take:
Are you on a mission to improve your credit so you can buy the car of your dreams? Check out our posts about credit repair hacks to increase your credit score, bank overdrafts and credit scores, repairing credit after identity theft, and removing charge-offs from your credit report.
Auto loans are usually a better choice than personal loans when it comes to financing a car.
This is because:
That being said, you might have your reasons for wanting to apply for a personal loan to purchase a Benz.
To apply for a personal loan, you'll want to:
Did you overdraw your bank account and you're worried it's going to impact your credit score? Check out our post about overdrafts and your credit.
It can be very convenient to receive financing through a dealership when you're buying a car, but it isn't always the best deal. There are other lenders you can use to purchase a Mercedes-Benz, and you will typically receive more favorable rates and terms from a bank, credit union, or online lender.
There are a number of reasons why you might choose to look elsewhere for financing, including:
All that being said, there are some situations where you might actually get a better deal securing financing through a dealership.
It's generally a good idea to shop around for a car loan before you head over to the dealership. More information is always better, and it will give you a sense of whether the financing the dealership is offering is competitive.
No one likes spending their free time figuring out how to boost their credit score or clean up their credit report, but the truth is that improving your credit can help you achieve your dreams in life.
If you've always wanted a Mercedes-Benz, you're going to need to be approved for a substantial car loan.
Are you ready to improve your credit and purchase the Benz you've always wanted? If so, make sure you check out our Credit Building Tips blog, with tons of resources and articles about credit health.
Reading through your card member agreement as a credit card holder can sometimes feel like you’re trying to translate a different language. If you’re trying to figure out when Discover reports to the credit bureaus and which credit bureaus they report to, it’s easy to start feeling frustrated pretty quickly.
Understanding when credit card issuers report to credit bureaus can help you understand how a late payment can impact your credit and when you should make payments during your billing cycle to ensure your credit score is as high as possible.
In this article, we’ll explore what you need to know about when Discover reports to the credit bureaus and how you can use this information to your advantage.
Let’s do a quick refresher on how credit reporting works before jumping into the details of when Discover reports to credit bureaus. There are three major credit reporting agencies in the U.S.– Experian, Equifax, and TransUnion.
It is this information that goes into a formula in order to calculate your credit score, which is a numerical score that indicates your financial health. Most creditors report monthly to the credit bureaus, including Discover.
With a revolving line of credit such as a credit card, though, you might rack up a bit of a bill before paying it off on the due date. The tricky thing is that many credit issuers, including Discover, report to the credit bureaus shortly after the billing period has closed but before you’ve made your payment. This can mean that your credit file shows a higher credit utilization ratio than you would expect because the credit card issuer is reporting that you are carrying a balance.
When you want to actively manage your credit score before applying for a loan or credit, it can be useful to make several payments throughout the month so your balance stays low. This way, when the credit card issuer does report to the credit bureaus, your credit utilization ratio will be as low as possible.
Discover reports to credit bureaus on a monthly basis. They do this within several days after the end of a cardholder's billing period. This means that the information that Discover sends to the credit bureaus will be reflected on your credit report a brief period of time after your monthly statement has been issued.
If you are a Discover card member, you can find additional information about how and when Discover reports to credit bureaus under the Credit Reporting section of your monthly account statement.
You will want to note, however, that the date that your payment is due doesn’t always line up with the date that Discover reports to the credit bureaus. This means that it’s possible for you to maintain a zero balance on your card by the end of each billing period– ensuring that you don’t pay any interest and that you aren’t carrying debt from month to month– but your credit report shows that you have a balance on your card.
When Discover reports to the credit bureaus about your credit card activity, the changes can sometimes appear on your credit report immediately. In other cases, though, this new information might not show up on your report for more than a month.
For this reason, it can be useful to learn precisely what date Discover reports to the credit bureau each month so you can make sure you schedule your payments accordingly. You might find that if you make your monthly payments just a few days in advance, the balance reported to the credit bureaus will be more reflective of your actual credit activity and more beneficial to your credit score and file.
It is believed that Discover reports to all three of the major credit bureaus– Experian, Equifax, and TransUnion– about once a month. As stated above, reports are usually made around or just a few days after the monthly billing statement is issued to a card member.
When you are applying for a Discover card, the company might pull your credit report from any of the three primary credit bureaus. That being said, consumer-reported data seems to indicate that Equifax is the bureau they lean most heavily on for sourcing credit reports, with Experian being their second preference followed by TransUnion.
Though it isn’t entirely clear which bureaus Discover uses when pulling credit reports, it seems that their preference can vary depending on the state you are in.
In the following states, it appears that Discover primarily pulls credit reports from Equifax:
It seems that Discover relies on Experian for pulling credit reports in the following states:
Finally, TransUnion appears to be the credit union of choice for the following states:
Of course, you don’t want to assume that Discover will definitively only pull your credit report from one specific credit bureau when you apply for a credit card. It's best to keep an eye on all of your credit reports and make sure they are free of any errors or inaccuracies, particularly if you are planning on applying for a loan or a new line of credit in the near future.
Are there hard pulls on your credit report that aren't accurate? Take a look at our recent post to learn how to remove hard inquiries from your credit report.
Now that you know when and where Discover will report to the credit bureaus, it’s time to take a look at the specific information that they send to Equifax, Experian, and TransUnion on a monthly basis.
The following information will be reported by Discover to the credit bureaus:
Did you find information on your credit report that you don't recognize? Though there are many potential explanations, one possibility is that you've been the victim of identity theft. Check out our guide to repairing your credit after identity theft and fraud.
Your credit limit will be reported to the credit bureaus by Discover when you first open a card with them. This information is important because it is used (along with your account balance) to calculate your credit utilization ratio.
If your limit changes during the time you have an account with Discover, they will report this change to the credit bureau. For example, they might reevaluate your credit file and determine that they want to reduce the amount of credit extended to you. On the other hand, you might request a credit limit increase that is approved by the issuer.
If you do increase your credit limit with Discover, it can take a little time for it to be updated on your credit report. For this reason, you might notice a temporary increase in your credit utilization ratio if you are using more of the credit available to you. Still, your credit limit hasn’t yet changed on your credit report.
Are you worried that a recent bank overdraft is going to lower your credit score? Take a look at our recent post about how overdrafts can impact your credit to learn more.
Understanding when credit card issuers report to credit bureaus can help you time your credit card payments in a way that is advantageous to you. If you always make your payments on the final due date, it’s possible that your credit report always shows you carrying a balance even when you pay your cards off in full each month.
This means that your credit utilization ratio could always be higher than it needs to be. Your credit utilization ratio is considered “extremely influential” to your VantageScore, and it makes up 30% of your FICO score.
FICO and VantageScore are the two most widely used credit scoring models.
Essentially, this means that your credit score could be consistently lower than it needs to be simply because of the timing of your payments and the credit card issuer’s reporting schedule.
Of course, ensuring that your credit score is as high as possible might only be necessary if you are planning on applying for a loan or credit card or if you are otherwise going to have your credit report pulled (for example, by a landlord or potential employer.) Rather than scrambling to try and improve your credit score when you realize your credit report will be pulled, though, it can be easier to time your monthly payments, so they always reflect your true balance at the end of the billing cycle.
There are a number of methods you can use to make sure your true credit card balance is reflected on your credit report every month. By being a bit strategic as to when you make your payments, you can ensure that your credit score is always as high as it can be– at least when it comes to the way your credit utilization ratio factors in.
One thing you can do is make multiple payments throughout the month. You could also choose to set up a series of automatic payments that will withdraw from your account at intervals throughout the month.
If you can get a definitive answer from the credit card issuer as to when they report to the credit bureaus (you might find that a customer service representative can give you a more specific answer in relation to your particular account), you could also set up an autopayment schedule where your card gets paid off in full several days or a week before the issuer reports to the bureaus.
Credit scores, credit cards, and credit reporting agencies are all somewhat mysterious, which leaves most people with a big pile of unanswered questions. Let’s take a look at some of the most commonly asked questions about Discover cards and credit bureaus so you can be armed with valuable knowledge in your quest to improve your credit score.
It is reported that Discover does report to all three credit bureaus. This isn’t just the case for individual and joint account holders but also for authorized users.
Discover reports to the credit bureaus roughly once a month. They typically report around or just after they issue your monthly billing statement.
As a cardholder, it can feel a bit overwhelming trying to learn everything you can about the benefits and consequences of having a credit card. Check out our guides to closing a credit card with a balance, credit card nicknames, and reporting income on credit card applications to learn more.
If you believe that there is information on your credit report that was made in error or is otherwise inaccurate, you can dispute it. You can contact both the credit bureau that is reporting the false information and the credit card issuer. Depending on the error you’ve noticed and whether or not you have an account with Discover, you will also want to make sure that the inaccuracy didn’t appear as a result of identity theft.
Missed payments will usually be reported to all three credit bureaus. However, this typically happens after the 30-day mark, meaning that it has been 30 days since the due date. If you manage to make the payment before they report to the credit bureau, the late payment won’t show up on your credit report. However, you will probably incur some late fees on your account.
Did you have a credit card account get passed over to a debt collector? This type of mark on your credit report can be very harmful to your score, and deleting a collection in exchange for payment is one potential way of repairing your credit report.
Paying a credit card bill one day after the due date often means that you will be charged additional fees for the late payment. However, it shouldn’t show up on your credit report because a creditor like Discover won’t report to the credit bureaus until the payment is 30 days late.
If you do end up receiving a 30-day late payment mark on your credit report, it will likely have an impact on your score. Late payments will stay on your credit report for seven years, but they do become less damaging to your score as they age.
Even if you know that you're going to be a bit late on your credit card payment, it's important that you try to make the payment before thirty days have passed since the due date. Though you will likely incur a late fee, it at least won't show up as a derogatory mark on your credit report.
According to some sources, one late payment will be forgiven by Discover. However, this information can only be found on third-party sites and isn’t available on Discover’s site. If you don’t see that the late payment has been forgiven automatically (meaning no late fees appear on your account), you will need to call and ask if they will be willing to waive the fees since this is your first time being late with a payment.
It’s best not to assume that a late payment will be forgiven, but it isn’t uncommon for creditors to waive the late fees when it is your first late payment. After your first late payment, though, they will be less likely to waive these fees unless you can convince them the late payments have been due to a hardship that you are working to overcome.
If your credit is in really rough shape, there is a Discover card that can help you improve your credit so long as you use it responsibly.
The Discover It Secured Credit Card is a secured card, meaning that you will have to place a security deposit of at least $200. The amount that you deposit becomes your credit line if you end up being approved for the card.
Rebuilding your credit can feel like an incredibly arduous and time-consuming process. If you're thinking about hiring a credit repair service to help you improve your credit, make sure you read our guide to the cost of credit repair services.
There are a number of different factors that go into Discover’s calculation of your credit limit.
The credit limit offered to you by a credit card issuer is the maximum dollar amount that the lender will allow you to spend. In order to have the best possible credit score, though, you ideally want to be using 30% or less of all of the credit that is extended to you. The ratio of your credit limit in relation to how much of your credit you've used is known as your credit utilization ratio.
It is common for card issuers to report to credit bureaus shortly after a billing cycle has ended. This means that the date that the company reports to these agencies might be days or weeks before your payment is due.
That being said, each issuer can follow its own schedule for reporting to the credit bureaus, though most of them will report every 30 to 45 days. Beyond that, some issuers might only report to one bureau, while others might report to two or all three. Ultimately, it is the decision of the company how they deal with reporting to the credit bureaus.
When it comes to improving your credit, not all tactics are created equal. There are some things you can do that will help boost your score right away, while others can take time to really take effect. To learn more about how to improve your credit score, check out our article with eleven credit repair hacks.
Discover reports to credit bureaus on a monthly basis, usually shortly after a billing cycle ends. They seem to report to all three credit bureaus, but which credit bureau they will pull a credit report from seems to vary by state.
It's easy to get frustrated with the entire credit system-- why should you need to know exactly when Discover reports to the credit bureaus?
In truth, though, having this type of knowledge can make a big difference in your credit score when you're applying for a loan. If a creditor like Discover reports your account information when you're balance is at its highest, it's going to make your credit utilization ratio higher than it needs to be.
Similarly, understanding when they report to the credit bureaus can help you determine whether a late payment is going to show up on your credit report. Making sure you pay any late payments before thirty days have passed since the due date is important if you want to keep your credit in tip-top shape.
Are you on a journey to improve your credit? If so, make sure you check out our Credit Building Tips blog for more tips, tricks, and resources.
Signing the back of a credit card was once a key step consumers could take to prevent credit card fraud. These days, the ability to electronically (and securely) authenticate credit card purchases makes it so the signature on the back isn't quite as important.
That being said, some credit issuers still require cardholders to sign the back of their card in order for it to be considered active and valid.
Without further ado, let's explore the question of which pen to use to sign the back of your card.
We’ve all been there– you received your new card in the mail and activated it using the authorization number. You flip your card over and sign your name, only to find that your signature smudges or even completely wipes off after just a few uses.
Luckily, the answer is yes.
When searching for the perfect pen for signing your credit card or debit card, look for the following features:
If you’re going to go out and get a pen to sign your card, the best choice is going to be an industrial fine-tip Sharpie marker. A regular, fine-tip, or ultra-fine-top sharpie can also work in a pinch, as well as fine-tip markers that are designed for labeling DVDs and CDs.
If you’re looking for a bit more guidance than that, don’t worry. We’ve got you covered!
Here are some pens that will help create a smudge-free signature that doesn’t wear away after a few swipes:
Did you get a new debit card, and you're wondering if your recent overdraft is going to ding your credit score? Check out this article to learn about whether bank overdrafts impact your credit.
Most people have a collection of different types of pens sprinkled around their house– ballpoint pens, fountain pens, felt-tipped pens, and gel pens. Let’s look at how each of these can work for signing your cards.
Ballpoint pens can smudge easily when you use them to sign the back of a debit or credit card. Even if they don’t smudge right away, they can rub off over time with use.
If you do end up using a ballpoint pen to sign the back of your card, you’ll want to make sure that your signature dries completely before you stick your card in your wallet.
Fountain pens aren’t a good choice for credit or debit card signatures. The ink from fountain pens can be easily wiped off or smudged because of the way water-based ink interacts with the smooth surface of the card.
Getting a new credit card can be exciting, but there can also be a lot to learn as a new cardholder. Check out our guides to closing a credit card with a balance, credit card nicknames, and reporting income on credit card applications to learn more.
The best pens you can use for credit card signatures are permanent markers, as they dry quickly and don’t smudge or wear off the same way other types of pens do. However, many permanent markers have a big, chunky tip, which won’t work well for the thin signature strip.
When choosing a permanent marker to sign your card, look for one with a fine or ultra-fine tip. This way, your signature will be easily readable.
Gel pens are probably the worst type of pen to use on a credit or debit card. The nature of the ink means that it doesn’t adhere easily to the plastic card, and the ink will likely smudge or rub off quickly. The ink doesn’t dry quickly on such a slippery surface, meaning that you really don’t even want to use this type of pen in a pinch.
If this is your very first credit card, you might be unsure of how the whole process works and what it means for your credit report. You can learn more about the tradelines on your report and how long they stay there in this recent post.
You should always use black ink to sign the back of your credit or debit cards. Though black and blue ink is often considered acceptable for financial and official documents, it’s possible that signing your card with blue ink could actually invalidate the card. If you have your heart set on using blue ink, you’ll want to check with your debit or credit card issuer.
The material that credit cards are made out of is quite slick, which means that not all ink will easily adhere to it. Using the wrong pen to sign the back of your credit card can mean that your signature smudges right away.
In order to have your credit card signature remain legible and clear for years to come, you'll want to use a felt-tipped pen. Using a pen with a fine or ultra-fine point will ensure that your signature is written in a way that is easily readable.
When you get your new card, the last thing you want to do is somehow invalidate it by not signing it properly. Let's take a look at the answer to some of the most common questions asked about signing credit and debit cards.
Signing the back of your credit card was once an essential step in preventing the occurrence of credit card fraud. Back in the day, the merchant would compare the signature on your card to the signature on the receipt when you paid with a credit card. If the signatures were a match, the transaction would be approved by the merchant.
Here in the present day, authentication occurs electronically. This means that it isn’t nearly as important to sign your credit card as it once was.
That being said, some card issuers still require that your card is signed. In these cases, your signature can be an indication that your card is active and that you are on board with the credit card agreement terms.
You might even find that one of the cards in your wallet says something along the lines of:
Considering that a card that isn’t signed could be viewed as invalid or inactive by a merchant, it’s possible that your card could be refused if there isn’t a signature on the back. When in doubt, it’s a good idea to check with your credit or debit card issuer to see if it’s necessary for you to sign the back of your card.
Did someone get a hold of your credit card information and wreak havoc on your credit score? This guide goes over how to repair your credit after identity theft and fraud.
Some cardholders will write “See ID” in the signature strip rather than actually signing their name. Is this a good idea?
The reason that people do this is that it theoretically decreases the chance of being a victim of credit card fraud. The idea is that when the merchant goes to check their signature, they are prompted to ask for ID before continuing with the sale. If someone fraudulently got a hold of the cardholder's credit card, they wouldn’t be able to produce an ID that matches the name on the card.
While this might seem like a worthwhile layer of protection between you and credit card fraud, there are a few issues with this strategy:
If you are interested in writing “See ID” instead of signing, you’ll want to contact your issuer or take a look at your credit or debit card agreement.
Speaking of keeping your credit card info safe and secure, have you ever wondered what that three or four digit number is on your credit card? Take a look at our guide to CIDs on credit cards to learn more.
This depends on whether or not the card issuer requires that your card is signed in order for it to be considered active and valid. If your issuer doesn’t require a signature, you are free to leave the signature strip blank if you so choose.
These days, some cards don’t even have a signature box if the issuer doesn’t require it. If this is the case, you certainly don't have to sign.
Are you considering applying for a new credit card but you're also planning on applying for mortgages soon? Take a look at our article about whether it's a bad idea to open a new credit card before buying a house to look at both sides of the argument.
When you receive a new credit card or debit card, flip it over to look at the back. There should be a blank, white strip. This is what is known as the signature bar, and it is where you should sign your card.
Don't worry-- this doesn't mean you received a defective card. Card issuers have started phasing out the signature strip as retailers have been moving away from requiring signatures. Transactions can now be authorized through the EMV chips in your card, meaning that the signature doesn't play the same crucial role it once did in preventing credit card fraud.
If there's no signature strip, it means you don't have to sign your card.
If you want to change the signature on the back of your debit or credit card, you will want to request a new card. This will allow you to create a fresh signature on the back that matches the signature you use during transactions.
It's generally advised that you sign your name in cursive instead of simply printing your name on the back of your card. The reason for this is that it is typically harder to forge a distinct cursive signature than a printed name.
When you sign the back of your card, you want your signature to be identical to the way you would sign your name on a receipt or on any other document. This means that if you normally include your middle name in your signature, you'll want to do the same on the back of your card.
Technically, some credit card issuers require that your card is signed in order to be valid and active. Others, however, don't even require that you sign your card anymore.
It isn't important that your signature is legible on your card-- many people have signatures that are very difficult to read. What is important is that it matches your typical signature on other legal documents. If you are concerned about legibility because the signature is wiped off or smudged, you'll want to use an ultra-fine felt-tip pen to ensure it is permanent and easy to read.
When your brand-new credit or debit card shows up in the mail, the first thing you'll want to do is activate it. You can easily do this online or over the phone, and the information you need to activate your card should be included on a sticker on your new card.
This sticker will give you the instructions you need to follow to activate your card. Once your card has been activated, it's time to sign the card (if there is a signature strip where you can do so.)
The question of which pen to use to sign the back of your card might seem like a minor issue, but it's details like these that add up to create a healthy and stable financial life. Though signing the back of your card might not be required by all card issuers, it's still possible that it could provide some added security for you against credit card fraud. Beyond that, some credit card companies actually require that you sign your card in order for it to be considered active and valid.
It's possible, in this case, that you could end up having a transaction declined because your card is considered invalid and inactive without a signature. Even if you did sign it once, a signature that wipes off over time could eventually cause you some trouble.
Are you working on getting your finances in order and rebuilding your credit? If so, you've come to the right place. Make sure you check out our library of resources over at our Credit Building Tips blog to help you boost your credit quickly and effectively.
Your checking account is a central part of your financial life. For this reason, you might assume that overdrawing your account could have an impact on your credit score.
The truth is, though, that normal day-to-day use of your checking account won't show up on your credit report as you aren't spending money that you borrowed from someone else. Instead, when you use a debit card, write a check, use an ATM, or otherwise use your checking account, you're simply drawing upon your own stash of cash.
Let's take a look at what you need to know about overdraft fees and your credit score to ensure that your score stays as healthy as possible.
Your credit report displays information about your current credit situation and your credit activity. This means that information about your credit card accounts will show up on your credit report, including 30 day late payments.
However, a debit card isn't using money that you're borrowing-- it's taking money out of the checking account you have with a bank.
This means that checking accounts aren't one of the accounts that are listed on your credit report. The same is true when you use a debit card to withdraw money from an ATM, write a check, withdraw money in person, or have automatic payments withdrawn from your checking account.
When you use a debit card, you aren't borrowing money from anyone but instead using the money you have in your checking account. This means that checking accounts don't show up on credit reports.
Information about your checking accounts won't appear on your credit report unless a financial institution sends your account to collections for unpaid overdraft fees or negative balances.
When you make a payment using your checking account, but there isn't enough money in your bank account to cover the cost, banks will sometimes still pay the transaction.
There are a number of ways you can overdraw your checking account, such as through debit card, ATM transactions, checks, electronic or in-person withdrawals, or automatic bill payments.
There are lots of banks and credit unions that offer programs known as overdraft protection programs.
If you spend more money than there is in your checking account and your bank covers it, you might incur an overdraft fee.
It's worth knowing that there is an organization called ChexSystems-- a bank reporting bureau-- that does keep an eye on your checking and savings accounts with credit unions and banks.
Items like overdrafts, unpaid negative balances, bounce checks, fraud related to your account, or involuntary account closures will be tracked by ChexSystems.
If your ChexSystems report shows that you have used bank and credit union accounts irresponsibly in the past, you could be denied when you apply to open a new bank account.
If you're denied opening a new bank account because of your ChexSystems report, this can obviously cause a number of problems for you financially. That being said, it won't impact your ability to get a new credit card or take out a loan, and it won't affect your credit score.
There is one circumstance where your credit score could be hurt by an overdraft-- if it is sent to a collection agency.
Are you worried you won't qualify for a loan because you have too many recent hard inquiries on your credit report? Check out this guide to removing hard inquiries from your report.
If your bank or credit union covers the cost of a transaction for you via overdraft protection, you will have fees and a negative balance to pay. If you pay these, it won't have any impact on your credit score.
However, if you don't pay the fees or your negative balance, the financial institution might send your debt to a collection agency. Once an account has been created for you with a debt collector, it can end up appearing on your credit report.
It's, therefore, essential that you cover any negative balances you have as well as any overdraft fees right away. This is the only way to avoid the account being sent to collections.
If your credit dropped dramatically over a short period of time, check out our post about why you might experience a large drop in your credit score.
It will negatively impact your credit score if your account is sent to collections for unpaid overdraft fees or negative balances.
The longer you have unpaid debt in collections, the more derogatory marks you will accrue on your report. This is because late payments appear in a number of categories, such as 30-day, 60-day, and 120-day late payments.
Having a debt in collections is one of the most severe derogatory marks you can have on your credit report. This is because the original creditor has written off recouping the debt and has passed it off to a collection agency.
The best way to avoid this situation is to make sure your accounts are current before they get to the point of reaching collections. Ideally, any money you owe will be paid before thirty days have passed, as financial institutions usually report to credit bureaus once payment is thirty days late.
If you already have debts in collections, make sure you check out our post about how to delete collections from your credit report.
Overdraft protection can be a useful safety net, but you might choose to opt out of the program if you are consistently overdrawing your bank account. This is because it can mean paying a lot of money in overdraft fees in aggregate.
Though this can be uncomfortable or embarrassing when you go to make a purchase, it does mean that you aren't racking up overdraft fees.
Another thing you can do to provide overdraft protection for yourself is to link your checking account with a savings account. If you don't have enough money in your checking account to cover a purchase, the money will be moved from the account that you linked to your checking account.
It's worth noting that your bank might still charge you a fee for moving money from a savings account to a checking account to cover the cost of the transaction. In most cases, though, the fee is much lower for linked accounts than when the bank or credit union is covering the cost for you.
Avoiding overdrafts is the best way to avoid negative marks on your ChexSystems report as well as the potential for your account to be sent to collections for unpaid negative balances or overdraft fees.
Many banks and credit unions offer a number of different options for overdraft protection.
For example, some offer:
If you are frequently incurring overdraft fees, the best choice might be to opt out of overdraft protection completely. Though this means that your transaction will be declined, it does ensure that you aren't spending money you can't afford to pay back.
One useful tool you can use to avoid overdrafts is to sign up for an alert system if your bank offers one.
Low balance alerts can help you stay aware of when you might not have enough money in your account to cover a transaction. This can either indicate to you that it's time to transfer money into your account or to slow down on your spending.
Are you suffering from imperfect credit because someone stole your identity? Make sure you check out our recent post about how to repair your credit after identity theft and fraud.
A number of major banks in the United States have begun implementing policies to eliminate overdraft fees.
Other banks have started introducing new financial products without overdraft fees.
You might find that opening a checking account with one of these institutions is a useful strategy. Make sure you take a look at our list of the best "no overdraft fee" checking accounts.
Though overdrawing your checking account might not have a direct impact on your credit score, there are still a lot of reasons why you want to avoid spending more money than you have in your checking account.
Beyond that, if you don't settle a debt you owe to a bank for accrued overdraft fees or negative balances, the debt can end up being sent to collections. This will almost certainly have a negative impact on your credit score and make you seem like a riskier borrower to lenders.
For these reasons, it's generally a good idea to come up with a plan to avoid overdrawing your checking account. If you do end up spending more than you have in your account and your bank covers the cost, make sure you bring your account back to a positive balance and pay any overdraft fees right away. This way, you can avoid them being sent to collections.
Is it time for you to improve your credit score and clean up your credit report? Make sure you check out our credit-building tips blog for more resources that will help you boost your credit.