Second Chance Checking & ChexSystems

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5 Tips For Building Credit After College

You're finally a college graduate and it's time to transition into the professional world. You've learned a lot over the past four years and surely you've hit some financial difficulties along the way. College isn't exactly the time for financial responsibility, so a lot of college students rack up debt during those years expecting to pay it off after graduation. What they don't realize often is the hardship that comes along with building credit after college when you have so much debt in student loans and credit cards. Here are five tips to help college graduated build their credit scores effectively.

Watch Out For Credit Card Offers

Credit card offers are bound to be floating your way, especially once you graduate from college. Credit card companies know that once you graduate college, most people will need a credit card to help them with a big move, furnish a new apartment or to buy a new professional wardrobe.

What college graduates need to be aware of when it comes to credit cards is how detrimental they can be to your credit score. If you are approved for a credit card and you put a big purchase on it that you don't plan to pay off right away, this could seriously hurt your credit score. Any credit card debt is bad debt and will lower your credit score significantly over just a couple of months.

When you're looking to get a credit card, look for the ones that offer no annual fee so you can start establishing a credit history immediately. This will instantly help you to start building your score and will give you the cushion of not having to worry about an annual fee.

Pay Attention to Your Credit Score

If you've never checked your credit score, you might want to now to see where you stand. It's important to be aware of exactly what your score is to decipher whether you need to make financial changes in your life to improve your score or to continue what you're doing in order for your credit score to grow. There are plenty of free and easy credit report websites available now that are safe and accurate to use.

Understand Your Credit Utilization

In case you've never heard of this term, credit utilization measures the amount you're spending of your available credit limit from all of your credit cards combined. So let's say you have three credit cards with individual credit limits of $1,000, $4,000 and $8,000. This would mean that your total available limit on these three cards is $13,000. Depending on what your current balances are on each of the three cards, you can divide the total by $13,000 to get your credit utilization. When it comes to your spending, in order to keep an optimal credit utilization ratio, you want to keep this spending under 30 percent at all times.

Pay Credit Cards in Full

This is like the golden rule to a positive credit score. When you have a charge on your credit card, always pay it in full. Don't allow debt to rack up over time. By paying in full every time you make a charge, you can avoid additional charges for late fees and you will most importantly develop a positive history of on-time payments, which will boost your credit score.

Patience Is a Virtue

When you're a recent graduate, it's common to become a little credit happy. New clothes, a new apartment or even just frequently dining out can cause you to blow through your new paychecks and even rack up some debt. To avoid getting in too deep too quickly, be patient about applying for credit cards. Start out slow and just aim for one or two credit cards, and then add on after a couple of years. It's important to get a feel for what it's like to use a credit card and get in the swing of paying them off in full before you add more credit cards to the pot. Be cautious and patient and you'll build a stronger credit card much faster.

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Second Chance Checking Accounts – What You Should Know About Fresh Start Checking

If you are like most people, you certainly aren’t perfect when it comes to handling your personal finances. You may miss a payment here and there, end up with a late fee, or you may even overdraft your bank account from time to time. Usually, this isn’t that big of a problem, but if you fall seriously afoul of the banking system it can end up causing you serious problems. Mess up badly enough, and you could find yourself on a list that is circulated between all major financial institutions that can make it difficult or impossible for you to do things like open checking or savings accounts, or deal with a banking institution in general.

In principle, this sounds fine, but in operation it unfortunately doesn’t work this smoothly. One of the worst things about this system is that many of the people who are on the ChexSystems ‘unreliable customer’ list really don’t belong there. With the way fees and penalties are structured by many financial institutions, it’s easy for them to have an account they thought was closed incur some fee, which can then spiral into hundreds of dollars, account closure, and registration as a bad bank customer.

Once on the list, you may find yourself unable to open traditional checking or savings accounts, making your day-to-day financial life a serious hassle. Regardless of how you ended up there however, you still have alternatives that can help you access most of the financial tools that you will use on a regular basis. You simply have to be a little more creative in looking for them. You will find that there are plenty of second chance checking banks that offer fresh start checking accounts, and there are some other alternatives as well.

Think about it for a minute; ironically, even as checking accounts themselves are more popular than ever before, most people don’t really write checks anymore. An increasing amount of transactions are handled online or with debit or credit cards. Besides the ability to pay your bills, shop at vendors, and receive pay from your employment, what more do you really need a bank for?

That brings us to the first alternative you have if you are in need of second chance checking accounts or an alternative financial tool for your life: prepaid debit cards.

There are several advantages cards have that make them a great alternative to dealing with second chance checking banks. One of the biggest is that due to how the infrastructure of credit and debit card processing is constructed, all of them can accept ACH payments, which means you’ll be able to receive direct deposit, your pay from your employment, and other sources of income.

Another big benefit is that many of them don’t have any approval or application process at all; no credit check, nothing on ChexSystems, and nothing to stop you from getting your card and being able to use it quickly. Once you’ve added money into the account, you’re good to go. As long as the prepaid card you select works with Visa and MasterCard, you should also be able to use it almost anywhere.

However, some people still want the full functionality of a traditional checking account, or their finances are complex enough that simple ACH receipt and payment processing won’t fully cover their needs. For these individuals, they will want to investigate full second chance checking banks, and see about opening one of those accounts.

The idea behind second chance checking accounts or any other form of fresh start checking is that banks need to offer them to the community at large, to prove their goodwill and fulfill their federal charters. This is a way of demonstrating to regulators that the financial institution is dedicated to developing a community, and that it doesn’t discriminate against low income people (who tend to disproportionately need second chance checking accounts in the first place).

While every program is of course different when it comes to minor details, in general most second chance checking accounts work almost exactly the same as a traditional checking account, with one major difference: fund availability is extremely curtailed. What this means is that any sort of deposit, other than one made in person in cash will take significantly longer to process and be made available to the consumer, as the financial institutions on both ends will fully wait for clearance before disbursing any funds, as a guard against possible fraud or default. There may be other limitations as well, such as the number of times one can use an ATM card, or services at the branch as well. Here is a list of reputable national second chance checking banks that offer second chance checking accounts:

VIEW BANK LIST HERE

If you can bring yourself to deal with that major limitation, you should be able to locate second chance checking banks or credit unions that offer fresh start checking programs or second chance checking accounts that suit your needs and circumstance. Alternatively, if your financial situation is clean and uncomplicated enough, you can apply for a prepaid debit card as we discussed earlier. Regardless, you should be able to find a solution that works for you with a little time and research.