How to save your credit in bankruptcy

Today, after watching some NFL games, I suddenly became curious about bankruptcy, so I did a quick google search and the first figure I found was astonishing. According to official records, in 2013 there were over 1 million non-business bankruptcy filings. 1 million. 1,000,000. On average, for every 300 people in the US you know, 1 of them filed for personal bankruptcy last year. This figuratively blew my mind.

So the topic for my blog post today was quickly decided.

You know, life happens. Someone in your family falls critically ill and you have to borrow money to pay for medical expenses without being able to pay it back. You lose a job because of the financial crisis and can no longer pay your bills. I offer my condolences to those that have a legitimate reason to file for bankruptcy. The road ahead, credit-wise, is going to be tough. Bankruptcy stays on credit reports for up to 10 years, and this is not the kind of record you want on your credit profile. Lenders that see bankruptcy when reviewing your credit report will not be very likely to extend you credit.

So, if bankruptcy is inevitable, how can you minimize its negative impact on your credit?

Continue reading How to save your credit in bankruptcy

Step-by-step guide to build credit in one year

I have written this guide as a balanced approach to building credit if you are starting out. It is not intended to give you the maximum credit score, since that would require that you know perfectly how to manage credit from the beginning, an unrealistic expectation. If you follow this guide, at the end of the first year you should have a solid credit history that would allow you to get approved for most credit cards and obtain reasonable interest rates on auto loans.

Continue reading Step-by-step guide to build credit in one year

Credit card rewards: when miles, points, and cashback are not created equal

As I have explained in previous posts, credit cards have a large variety of benefits over debit cards and other methods of payments, such as credit profile building, warranty extension, delayed payment, and emergency fund. Apart from APR’s, credit cards are more or less the same with respect to most benefits.  And of course, you should never carry a balance because a low credit card APR is still a ridiculously high interest rate. How, then, do you decide what credit cards to obtain?

Credit cards

Well, how about rewards, the most prominent feature of credit cards that are advertised these days on TV and newspapers, as well as brick-and-mortar banking locations? 1% cash back on every purchase. 5 points per dollar spent on honey. 2 miles per dollar spent on US Airways flights. I’m sure you’re familiar with these commercials already. What’s confusing about these reward systems is that they use different types of currencies which are sometimes hard to evaluate. I will attempt to decipher the most common credit card currency types for you below.  Continue reading Credit card rewards: when miles, points, and cashback are not created equal