Beating Broke

Personal Finance from the Broke Perspective

Beating Broke Guide to Your Credit Score

By 5 Comments

Almost a year ago, I released the Beating Broke Guide to your Credit Score.  Since then, a lot has happened and it seems to me that your credit score could become more important than ever as we recover from this economic disaster.  Previously, I had it set up such that you had to sign up for the newsletter to receive a copy.  I’m changing that now.  The graphic in the right sidebar now links directly to the guide in it’s pdf form.

It’s one hundred percent FREE, so please grab a copy and take a look.  I think you might learn something.

You can download it at https://www.beatingbroke.com/BBGCS/BBGCS.pdf

The guide is now available for the Kindle as well!  Please note that the kindle version is not free as the pdf version is.  The pdf version will remain free for downloading.

Free Credit Score Report

By Leave a Comment

Your Credit Score ReportIf you read this blog through a feed reader, or just haven’t visited in the last week or so, you likely haven’t seen the new banner that I’ve put up on the right side of the site.  It’s a lovely little banner (designed by me) for a White Paper / Report that I put together.  The subject, fittingly, is Your Credit Score.  In it, I write about what a credit score is, how it is used, and the steps that you can take to improve your credit score.

My hope is that the report will be help people learn what the correct usage of a credit score are, and what the benefits are of having a good credit score.  Which is why I’ve made it a FREE report.  All you have to do is sign up for the Beating Broke newsletter.

What is the newsletter?  Well, it’s a bit in the fledgling state, but the idea is that you will get the occasional update about the site with an article or two as well as some articles and information that won’t appear here on the blog.  I promise to not fill up your email inbox with the newsletter.  In fact, at the moment, I only plan on sending it out once a month at most.  More likely, bi-monthly.

The report is well worth it if you ask me.  I’m a bit biased since I wrote it, but I really do think it could be a very valuable resource for someone who doesn’t know much about credit scores.

Also, I want the report to get into as many hands as possible, so if you want a copy without signing up for the newsletter, just send me a note with the contact form and I’ll send you a copy.

Unused Credit Cards are Being Closed

By Leave a Comment

According to J.D. and several other places I’ve seen, Credit Card Companies are Being a lot more pro-active about closing unused Credit Card Accounts.  Why would they do that?  And why does it matter to you?

First, they do it because every open account costs them something.  It may not be much, but they still have to process the data and maybe even send out a statement.  Many have moved to not sending out statements on accounts that haven’t been used, but some still do.  Most importantly, any open account is an open credit line.  It’s a potential liability for the credit card company.  If you go from having no balance to maxing out a 5000 card, you’ve just added $5000 in liability to the company’s bottom line.  Not to mention that doing so is a likely red flag for impending financial trouble and that makes the liability a risky liability.  Any way you look at it, that isn’t good for the company.

Of course, if you continue to not use the card, it really doesn’t cost them much.  It’s just the potential that they are not willing to risk.  It’s a sign of increasing risk aversion on the part of the credit card companies.

So, why does all this matter to you?  Part of your credit score is based on your credit history.  The longer you have had an open account, the better it looks on your credit report.  It’s a sign of good credit management.  Another part of your credit score is the ratio of available credit to credit used.  So, if you have a $5000 credit line, and have only used $2500 of it, it looks better than if you had a $2500 credit line and had used $2000 of it.  If you have a credit card that you aren’t using, it’s adding to that unused portion of your available credit.  That’s good for your credit score.  But if the credit card gets closed, you don’t have that unused credit available anymore and your ration goes down.  And so does your credit score.

In both cases, the dip in your credit score is likely to be fairly small.  And it is likely not a huge problem.  But it is something you should be aware of if you had been planning on applying for any type of loan and have had a dormant credit card closed recently.  Also, if you are holding a card that you haven’t used recently and doesn’t have a balance, and want to keep it from closing, you can make a purchase with it once every couple of months to keep it active.  Just make sure to pay it off right away.