Credit Cards Tips for You

Dear Creditnet: I filed Chapter 7 bankruptcy on April 1, 2009, and I’ve avoided any type of credit since then. I haven’t even checked my credit scores in years.

When will the bankruptcy fall off my credit reports, and will it happen automatically? If it doesn’t happen automatically, what do I need to do to convince the credit bureaus to remove it?

- Jake from WI

Answer: According to the FCRA (Fair Credit Reporting Act), most negative items can remain on your credit reports for seven years. A Chapter 7 bankruptcy, on the other hand, happens to be one of those negative marks that can stick around longer. In fact, a chapter 7 bankruptcy can remain on your credit reports for 10 years from the date of filing.

Since you filed chapter 7 on April 1, 2009, you could still have more than 7 years to wait before the bankruptcy permanently disappears from your credit reports. That’s the bad news. The goo

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 Can’t decide whether to pay for your lawn seed with cash or credit? Or maybe you’re just not sure which credit card you should be using. Maybe you forgot your wallet. Not to worry, you can now pay for a Home Depot purchase with your phone number.

PayPal, the leader in online payment processing, with over 100 million users, is taking their cloud payment technology to brick and mortar stores. First stop is Home Depot which recently launched PayPal payments in 2000 stores. It will soon come to a retailer near you.

The beauty of PayPal has always been its convenience and flexibility for just about any type of online transaction, whether you are purchasing something, or you need to make or receive a payment from someone. You simply establish a PayPal account, enter account information from your bank and credit cards of your choice, and you can make payments without having to provide your credit card information. What PayPal has been able to do for a 100 million people online, it expects to be able to do for them and many more at the store.

Will consumers bite?

According to PayPal and Home Depot, the test pilot was a huge success, spurring Home Depot to install PayPal in 2000 of its stores. Will

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Dear Creditnet: I know that my credit utilization ratio makes up a large part of my FICO credit score.  I’ve also read that it’s important to keep my ratio under 30%, or preferably at 10% or less.

My question is would it be better to keep my credit utilization ratio at 0% or 10%?  If I pay my balance off every week and my credit utilization is reported at 0%, is that hurting my FICO scores?

Answer: A 0% credit utilization ratio certainly isn’t hurting your FICO scores. Technically, it’s the best credit utilization ratio you can achieve, which means it should also translate to the best possible FICO credit scores.

However, even if you never carry balances on your credit cards, a 0% utilization ratio can be difficult to achieve.  Credit issuers all report balances at different times each month, which means keeping track of when your balances are reported and trying to pay them off in advance can become quite tricky for many cardholders.

If you have just one card and wish to pay it off each week in order to keep your available credit as high as possible, keep doing it.  Your FICO

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Ever wonder how your state stacks up against others in terms of its residents’ average credit score?  While you may think your neighbors have great credit scores, this map could tell you otherwise.

Check out our infographic below and see just how good your state’s residents are at managing their credit:

One of the changes implemented by the Dodd-Frank financial reform bill will take effect tomorrow, July 21^st: if you’re denied a credit card or asked to accept an above-average interest rate, you have a right to know how your credit score influenced the decision. This new protection applies not just to credit card issuers, but to utilities, insurance companies, landlords and anyone who falls under the designation of “creditor.” Now, if you’re turned down or if you are issued a card with a high interest rate, the issuer will have to detail exactly why you have these adverse terms.

In the words of the Federal Reserve, this new law “requires creditors to disclose credit scores and related information to consumers in risk-based pricing and adverse action notices under the Fair Credit Reporting Act (FCRA) if a credit score was used in setting the credit terms or taking adverse action.”

That needs a bit of parsing. If you get abnormal terms on a credit card (a higher interest rate, say), are denied for the card outright, or have to pay a higher insurance premium, then the issuer will have to tell you 1) your credit score and 2) any information they used in addition to your credit score. This is int

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