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How Credit Cards Help You Build Your Credit Score?



While most of the card issuers require you to have an active credit profile, some banks like HDFC may issue select credit cards to those who are new to credit.

When you apply for a credit card, your card issuer will judge your application on a number of factors such as age, income, occupation etc. But before all these factors, your credit score and credit report are checked. Your credit report helps banks or NBFCs learn about how you have managed credit in the past. If you have effectively managed your credit and made payments on time, you are likely to have a good credit score and to get approved for a credit card.

While most of the card issuers require you to have an active credit profile, some banks like HDFC may issue select credit cards to those who are new to credit. If you are new to credit and apply for HDFC credit card online, you are most likely to get a basic card such as HDFC Moneyback or HDFC Freedom. However, if you have a credit history of about 5 years, you may be eligible for their premium range cards such as HDFC Regalia, provided you meet the income and other requirements.

Credit cards can be very helpful in building your credit profile from scratch or repairing a bad credit score. All you have to do is make bill payments on time and maintain a low credit utilization ratio.

So, before we talk about how you can use credit cards to build your credit score, let us first understand what credit history and credit score means.

What Are Credit History, Credit Reports, and Credit Scores?

Your credit history is the record of your past behavior as a borrower. Lenders use this past behavior to determine how likely you are to pay the money back. When you apply for a credit card or loan, a lender will check your credit reports and scores to determine how likely you are to pay back a debt.

Credit history is recorded in the form of credit reports. Each credit bureau collects and maintains data about your credit history in the form of a credit report, which can be accessed by you as well as the lenders (when you authorize them to). Your credit reports contain information about accounts you have had and your payment history.

A credit score is a number that indicates your risk as a borrower and the likelihood that you will pay your bills timely. Many popular credit scoring models use a range of 300 to 850. A “good credit score” is typically anything above 700, but this is subjective.

Best Ways to Use a Credit Card to Build Credit

A credit card can either help you build a positive credit or hurt your credit- it all depends on how you use it. Below we have listed the best ways to use your credit card to your benefit:

1. Pay your credit card bills on time

Make your credit card payment in full and on time. Bills that go unpaid will be reported to the credit bureaus, which in turn, negatively affects your credit score. The number of days for which your balance remain unpaid is reported in the Days Past Due (DPD) section of your credit report. So, if your bills are overdue for 5 days, the same will be reflected under DPD and your credit score will be impacted.

2. Maintain a low credit utilization ratio

Credit utilization ratio is the percentage of your available credit limit that you use. We recommend keeping your credit utilization below 30% on all cards in order to maintain a decent credit score.

3. Periodically review your credit report

You should closely monitor your credit report and check for errors and discrepancies. Dispute any errors you find that might be lowering your scores.

4. Limit new credit applications

Avoid applying for multiple credit accounts such as cards and loans within a short span. Applying for credit card or loan can cause a small & temporary drop in your credit score and if you make multiple applications at once, this drop can have a lasting impact on your score.

5. Read and understand your cards’ terms and conditions

Read and understand your cards’ terms and conditions carefully as it contains all the important information about payment terms, interest rates, annual fees and penalties. For instance, penalties and finance charges start accruing when you miss the minimum due on your credit card. This can lead to a debt spiral and further lead to missed payments. All this can have a heavy impact on your credit score.

6. Read your monthly statements carefully

It is necessary to check all the information listed in the statement as it helps in keeping track of how you are making use of your credit card. If you have several EMIs active on your card, it may be a good idea to reduce further expenses on that card so that the total bill does not exceed your budget.

How are credit scores calculated?

Credit bureaus usually consider the following 5 factors while calculating your credit score-

  – Payment history (35%): Whether you have paid your past credit accounts on time

  – Amounts owed (30%): The total amount of credit and loans you are using compared to your total credit limit, also known as your credit utilization rate

  – Length of your credit history (15%): The length of the time you have had credit

  – New credit (10%): How often you apply for and open new accounts

  – Credit mix (10%): The variety of credit products you have such as credit cards, installment loans, finance company accounts, mortgage loans etc.

Bottom Line

Credit can be a powerful tool to help you achieve your financial goals. It’s important to understand how it works, how to build your credit and how to ensure that your credit history always works for you.

Credit Cards, when used responsibly, can help you build and maintain a good credit record. It is imperative to maintain a strong credit record. Don’t spend more than your repayment capacity, keep credits available for emergencies and most importantly pay your credit card bills on time.

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Bad Credit

Subprime Auto Loans: The Basics You Should Know



Before you dive head-first into the world of subprime auto financing, it’s a good idea to know what you’re getting into and what to expect. We’re covering the common requirements of subprime lenders and the items you need to prove that you’re ready for a car loan.

What is a Subprime Lender?

Subprime lenders are also called bad credit auto lenders. They specialize in assisting borrowers with poor credit, those who’ve gone through bankruptcy, and those in other challenging credit circumstances. Subprime can also refer to the credit rating as well, typically defined as a credit score around 501 to 600, or those with a credit score below 660. Borrowers with credit in this credit score range are typically referred to as bad credit borrowers and may need the help of subprime lenders to get an auto loan approval.

Getting into a subprime car loan means finding a dealership that’s signed up with these lenders. Many dealerships are signed up with third-party lenders that can finance borrowers with lower credit scores. The finance manager at these dealerships acts as the middleman between you and the lender. Locations that are signed up with subprime lenders are called special finance dealerships.

Subprime lenders differ from traditional auto lenders (think banks, credit unions, online lenders, and some automaker’s captive lenders) in that a poor credit score isn’t enough to get turned down for financing. They know that your credit isn’t going to be perfect when you’re seeking a subprime car loan. So, they look at your credit history as a whole, your income, living situation, and many other factors to determine your creditworthiness and eligibility for vehicle financing.

Requirements of Subprime Auto Loans

Since every lender varies in their specific requirements, we can’t provide an all-encompassing list of requirements – but we can provide some of the more common ones you’re likely to encounter. At Auto Credit Express, we’ve created a network of dealerships that are signed up with subprime lenders. Thanks to our dealer network, we know the commonly requested documents you need to prepare for a trip to the dealership.

Subprime Car Loans: The Basics You Should KnowCommon requirements of subprime financing typically include:

  • Income – To qualify for any car loan, you need income. Subprime lenders usually require around you to have $1,500 to $2,500 of minimum monthly income (before taxes). Prove your income with 30 days of computer-generated check stubs that show year-to-date income. This requirement typically needs to be met by a single source, but some subprime lenders may allow multiple sources of income to meet this requirement in certain circumstances.
  • Residency – Subprime lenders require proof of permanent residence. This can be proven with a recent utility bill in your name, or a recent bank statement.
  • Down payment – Having bad credit almost always means needing a down payment to qualify, and subprime lenders typically require at least $1,000 or 10% of the vehicle’s selling price.
  • Working phone – Subprime lenders may need to contact you, so they require a working contract cell phone or landline phone. Proven with a recent phone bill in your name.
  • Valid driver’s license – To drive the car off the lot, you need a valid driver’s license. This also proves your identity. Your license can’t be revoked, expired, or suspended.
  • Personal references – This isn’t a requirement to qualify for financing, but it’s likely the lender will ask you for a list of references. Typically, they ask for five to eight references with complete contact information. The only requirement with references is that they don’t share your address.

Remember that these are only general guidelines for what to expect from a subprime lender, but it’s definitely a good place to start!

Your personal situation may require the need for more or different documents to qualify you for auto financing. For example, if you had a bankruptcy that was recently discharged, then you may need your discharge papers to prove you’re in the clear. Another common situation is if your income isn’t W-2 and you don’t receive check stubs. If you’re a 1099 worker, then you’re likely to need two to three years of tax returns to prove you have the income for an auto loan.

Letting the special finance manager know what your situation is can make the process easier, and help move it forward without too many snags.

Finding a Special Finance Dealership

Subprime lenders are third-party, so locating one without finding a special finance dealership isn’t likely to be easy, but we want to help. Let us get you connected with a dealership that’s signed up with subprime lenders in your area.

Here at Auto Credit Express, we’ve created a nationwide network of dealers that are ready to assist borrowers in all sorts of tough credit situations. Get started right now by filling out our free auto loan request form. There’s never an obligation to buy once you get matched to a dealer, it’s completely free, and we do all the hard work of looking for the bad credit resources for you.

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How can I refinance my mortgage with bad credit?



If you have poor credit but want to take advantage of the current low interest rates and refinance your mortgage, make sure first it makes good financial sense, and don’t forget to factor in closing costs and other fees. (iStock)

Bad credit happens. This may be especially true for the thousands of people out of work due to the coronavirus pandemic. Even so, you can refinance your mortgage with bad credit. It may be more challenging, but it’s possible.

The coronavirus pushed interest rates to record lows. Such low rates are the driving force behind the surge in mortgage refinances — up 89.54% from last quarter and up 297.3% from just one year ago, according to US Mortgage Originations.

Take a look at your options and your limitations, and visit Credible to compare rates from multiple lenders all in one place.

How to refinance your mortgage with bad credit

If you have bad credit, you may qualify for private-sector programs, options backed by the federal government, or you can try co-signing with a stronger borrower. If you’re considering using a cosigner or want to see if you’re eligible for a refinance on your own, Credible can help. Click here to learn more about refinancing your mortgage and whether you’d be approved today.

Here are four mortgage refinance options for potential borrowers with bad credit.

  1. FHA Streamline Refinance program
  2. FHA rate-and-term refinance
  3. VA refinance 
  4. Portfolio loan

1. FHA Streamline Refinance program

If you have an existing FHA loan, you may qualify for the FHA Streamline Refinance program, which can permanently lower your monthly payments. Most lenders won’t check your credit or demand an appraisal because you already have an FHA loan. You may qualify for current refinance rates, but you’ll likely have to show you’ve made six consecutive monthly payments on-time, in-full.

2. FHA rate-and-term refinance

A rate-and-term refinance is for anyone who already has an FHA loan. It’s meant to help you refinance your current mortgage and reduce monthly payments. A new home appraisal and credit check are part of the application process, and like the Streamline Refinance program, you must show six months of consecutive on-time payments, paid in full.

3. VA refinance

If you currently have a VA loan, you can refinance with the Interest Rate Reduction Refinance Loan (IRRRL). Generally, lenders won’t require a credit check or home appraisal to qualify. The VA allows you to refinance up to 100% of the property’s value, but there is an upfront funding fee that may be added to the loan amount.

4. Portfolio loan

A portfolio loan is originated and retained by your mortgage lender. Because your mortgage lender is 100% responsible if you default on your loan, your credit history and finances will be reviewed. There are likely closing costs and other fees due at the time of closing or added into your loan payment.


What are today’s mortgage rates?

The COVID-19 pandemic pushed interest rates lower than they have been in many years. That’s why it’s such a good time to refinance your mortgage — even if you have bad credit.

These are current mortgage rates, according to Freddie Mac:

  • 30-Year Fixed-Rate Mortgage (FRM): 2.79%
  • 15-Year FRM: 2.23%
  • 5/1-Year Adjustable Rate Mortgage (ARM): 3.12%

Mortgage interest rates fluctuate with supply and demand in the secondary market. If the supply of money goes up and the demand for money goes down, interest rates will go down as well — exactly what has happened due to COVID. If you want to take advantage of today’s low mortgage rates, make sure you use Credible’s free online tools to refinance and start saving today.

The Federal Reserve doesn’t set mortgage rates, but it can influence rates. This past August, Federal Reserve Chair Jerome H. Powell stated that interest rates would likely stay low for some time to recover from the recession the COVID-19 pandemic caused.

Compared to the current rate of 2.65% for a 30-year FRM, on January 2, 2020, the 30-year mortgage rate was 3.72%, and on December 26, 2019, the rate was 3.74%. On the same date in 2018, the rate was 4.55%. Even one percentage point can make a big difference in your monthly payments.

If you have bad credit, but you want to take advantage of the current low-interest rates, use an ​online mortgage refinance calculator to determine new monthly costs. Credible can also help you crunch the numbers and determine what your monthly payments and total costs would be.


Should I boost my credit score first?

Banks, credit unions, and many online lenders offer better interest rates to people with good credit. Although the required credit score to qualify for a refinance varies from lender to lender, most mortgage loans require a minimum credit score of 620, according to Experian.

To get the best rates (and pay less interest over the term of your loan), it makes sense to boost your credit score before applying for a mortgage refinance. Accordingly, interested borrowers should visit Credible​ to get prequalified without impacting their credit score.


How to increase your credit score

  1. Make all your payments on time. Payment history accounts for a large chunk of your credit score—35%. 
  2. Pay down debt. Paying down all credit card balances to less than 30% can improve your credit utilization ratio (the percentage of credit you’re using compared to your available credit) and boost your credit.
  3. Don’t close old credit accounts. Even if you’re not using an old credit card, keep it open to improve your credit history.
  4. Don’t open too many accounts. Lender’s inquiries into your credit can hurt your score, and carrying too much debt is never a good idea. 
  5. Keep a close eye on your credit score. Checking your score doesn’t hurt your credit. It can also give you an idea of where you stand when applying for a mortgage refinance
  6. Make sure your credit report is error-free. When you look at your credit report and find the information you’re not sure about, contact the three major credit bureaus and report your findings. 

If you’re thinking of refinancing, consider using Credible. You can ​use Credible’s free online tool​ to easily compare multiple lenders and see prequalified rates in as little as three minutes.


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Keco Capital Offers Easy Lending Plans To Revive Your Real Estate Business



Real Estate Lending Program

Real Estate Lending Program

As a trustworthy financial service, Keco Capital is committed to support real estate industry with different lending products

Keco Capital logo

Keco Capital logo

As a trustworthy financial service, Keco Capital is committed to support real estate industry with different lending products

Honolulu, HI, Jan. 15, 2021 (GLOBE NEWSWIRE) — No one can understand the dilemmas of a real estate investor unless they have gone through similar experiences. Perhaps, that is why, a private lending service designed by investors for the investors is all set to rule the roost. Keco Capital, a name synonymous to trustworthy and convenient financial service, offers a comprehensive range of lending plans for start-ups and those trying to rise from the ashes again in the real estate sector.

No matter what business phase you are in, Keco Capital has a lending plan best-suited for your needs.  

Lending service designed for withstanding uncertainties 

Uncertainties are the most crucial realities of any real estate business. A realtor requires a lot of financial support to keep up with the challenges of construction projects and those dedicated to renting. As mentioned by their spokesperson, some of the noteworthy features of Keco Capital lending products are explained as under:

  • A lending service working state-wide: This private lending service is designed to reach all the real estate agencies functional across the State. With the branch offices spread throughout the State, it ensures that the realtors are never away from the financial help they need.
  • No prepayment charges: It is offering loans on very easy terms. The company encourages the people to be free from liability as soon as they are capable. Thus, the company has no prepayment penalty clause. While taking a loan from the private lender like Keco Capital,  the borrower has to worry only about paying the interest amount. Unnecessary charges will not be there to boggle them.
  • No construction holdback interest payment: A project holdback is a financial liability anyway. Worsening this situation with the additional interest levying can be very taxing for a realtor. This situation finds a better solution with Keco Capital lending plans. 

Anyone can receive financial help at Keco Capital, including those who have declared bankruptcy or have a bad credit history.

Types of lending products

The company, with the help of its able advisories, has brought forth a bouquet of lending products for the borrowers. These lending products are the direct outcome of the experts’ understanding of various kinds of financial glitches, usually faced by any realtor. Types of lending products available with this private lending company are:

  • Rehab Loan (No interest in holdback)

It is an 85/85 LTV/LTC Program. It covers almost 100% of the rehab cost, up to 70% of the ARV. Other common features are no prepayment penalty and loan extensions. The loan available for one year offers pleasant convenience and is a loan purely for business purposes.

  • Ground-Up construction Program

You can get financial assistance amounting to 85% of the total cost of the project. Up to 100% of the construction cost can be financed under this plan, provided it does not exceed 70% of ARV. 

Those wanting to develop ready-to-rent properties can get financial help under this loan plan. It is a 75% LTC/LTV lending program that offers 24 months of the loan term. It does attract a 6-month prepayment penalty, but it is made up by providing loan extension of 12 months.

Reach to Keco Capital representatives right away through these channels to find more about the private lending products:

Ph No: (425) 526-3007


Address: 900 N. Nimitz Hwy #305

Honolulu, HI 96817

This news has been published for the above source. Keco Capital [ID=16271]

Disclaimer: The information does not constitute advice or an offer to buy. Any purchase made from this story is made at your own risk. Consult an expert advisor/health professional before any such purchase. Any purchase made from this link is subject to the final terms and conditions of the website’s selling. The content publisher and its distribution partners do not take any responsibility directly or indirectly.  If you have any complaints or copyright issues related to this article, kindly contact the company this news is about.


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