RentTrack Review

How does RentTrack work?

When you sign up with RentTrack, you don’t pay the landlord directly. RentTrack will deduct your rent from your checking account and send a check to your landlord. The company will then report your rental payments to all three credit bureaus – Experian, TransUnion, and Equifax.

Cost

Renters pay $6.95 per month to use RentTrack. It doesn’t cost landlords anything. If you want to report past rental payments, it costs $49.95 to report 12 months of past rent and $89.95 to report  24 months of past rent.

RentTrack only helps improve FICO Score 9 and VantageScore

Though RentTrack reports to all three credit bureaus, rental payments are treated differently from other payments such as credit cards, auto payments, and mortages. Rent payments are reported under FICO Score 9 and VantageScore. FICO Score 9 and VantageScore are not widely used by creditors (they use other FICO scores)  but can still be useful if you are trying to build credit.

FICO 9 differs from other credit scoring methods in a few ways. Collection accounts paid in full are disregarded and unpaid medical collection accounts are treated differently (favorably for consumers) compared to other unpaid nonmedical collections. FICO 9 scores also include rental payment history if the payments are reported to the credit bureaus. But landlords are not legally required to report them to the credit bureaus.

VantageScore is a credit score developed by Experian, TransUnion, and Equifax. It is a competitor to the FICO score.  It considers non-traditional credit information such as utilities and rent in its model.

RentTrack includes credit monitoring service

As part of its subscription, RentTrack includes credit monitoring services to the reduce risk of identity theft. You will get alerts when a new credit application is submitted or when a hard inquiry is made in your name. You will also get alerts when a new address is associated with your credit profile and when new employment has been added to your record.

Is RentTrack worth it?

Paying money to improve your credit score is usually not worth it. FICO Score 9 and VantageScore are not widely used by lenders.  But if you are interested in improving your FICO Score 9 and VantageScore, it may be worth paying for RentTrack.

Other options to improve your credit score

There are other ways you can improve your credit score. The following options will improve FICO scores which are more widely used by lenders.

Become an authorized user on someone else’s credit card

When you become an authorized user on someone else’s credit card and they have excellent credit, your credit scores go up as well. You can ask a good friend or a family member whether they are willing to add you as an authorized user on their card.

Get a secured credit card

If you don’t have a credit score or if your credit scores are low, you can get a secured credit card by paying a small deposit. As long as you keep the account in good standing, your credit score will improve.

Bottom Line

RentTrack allows you to improve certain credit scores by considering your rent payments. Tenants pay RentTrack for the reporting rent payments to  the credit bureau. RentTrack will deduct your rent from your checking account and send a check to your landlord. Reporting rent payments to the credit bureaus helps you improve your FICO Score 9 and VantageScore but these scores are not used widely by lenders. But if you are interested in building credit, RentTrack may be worth it.

But people with a thin credit history and those recovering after a financial mishap struggle to increase their credit scores. But even if these people pay their utility and phone payments on time, credit bureaus don’t give them credit by increasing their credit scores.

What is Experian Boost?

Experion Boost is a free service that helps consumers improve their credit score by showing on-time payments for their utility and phone bills. Utility bills include gas, water, and electric bills. Phone bills include internet, wireless, and phone bills. Netflix was recently added.  Experian has plans to add other streaming services in the future.

Experian claims that 100 million consumers will benefit from this service. The average credit score went up by 10 points as a result of using Experian Boost.

How does Experian Boost work?

You must give access to your bank account so that Experian Boost can check your bank transactions for utility and phone payments.  The on-time payments for utility and phone bills will be reported on the Experian credit report.  The on-time payments will also be used to calculate credit scores.

Experian Boost only uses positive data points that boost your credit score. If you had missed a utility payment, that will not be reported.  This is different from how credit scores usually work where on-time and missed payments are both reported.

Note that this product works by pulling data from your bank account. If you pay your phone bills or utility bills through a credit card, Experian Boost will not work for you.

How to get your updated credit scores through Experian Boost?

Here are the steps you need to follow to get your updated credit scores

• You sign up for an Experian Boost account
• Connect your bank account
• Give a few minutes to scan bank account for utility and payments
• Get updated scores in real-time (it took me 5 minutes)

Experian Boost can be removed anytime

If you are not comfortable with the Experian Boost, you can remove the service anytime using the website.

Experian Boost does not work with all credit scores or models

Experian Boost works with FICO 8, FICO 9, VantageScore 3, and VantageScore 4. If your lender uses a different model or report, then the lender may not see your improved scores.

Disadvantages of using Experian Boost

Some lenders may see phone and utility payments on your credit report and assume that those are part of your debt. Experian says that it is working with lenders to make sure that they see these payments as positive payments rather than debt.

UltraFICO Vs Experian Boost

Both UltraFICO and Experian Boost both improve credit scores by including data not previously included to calculate credit scores.

UltraFICO score is based on how responsible you are with your checking, savings, or money market account. The credit scores are based on your account balances, how long you have had the accounts, and whether there are any overdrafts on your accounts.

Experian Boost is based on your on-time bill payments of utility and phone bills.

Experian Boots and UltraFICO, though they use different consumer information, can give lenders a better understanding of the consumer’s finances. UltraFICO tells lenders about the cash flow information whereas Experian Boost informs them about additional payment history.

Here are a few common reasons why credit card applications are denied. Few are easy to fix with a phone call while some can be harder.

You recently moved to a new address

This is one of the most common reasons credit card applications get denied.  You apply for a credit card with your new address but that address doesn’t match what is on your credit report.

People applying for store credit cards such as Lowe’s or Home Depot run into this issue often. They are ready for their big home improvement project on their new house and their credit card application is denied because they just moved.

You have a freeze or lock on your credit

Credit freeze or lock restricts access to your credit file.  When you freeze your credit at the three credit bureaus, lenders cannot see your credit file. This prevents anyone from opening a credit account in your name.

Many people apply for credit forgetting that their credit is frozen or locked the three credit bureaus.  Unfreezing or unlocking your credit resolves this problem quickly.

Too many credit inquiries in recent months

If you have multiple hard inquiries in a span of a few months, it shows that you are trying to get credit desperately. Banks are likely to think that you are a risky borrower and hence decline your application.

You got tripped by Chase’s 5/24 rule

If you applying for a Chase credit card, you need to understand Chase’s 5/24 rule.  If you have opened 5 or more new credit cards in the past 24 months from any issuing bank Chase will not approve your credit card application.  Chase uses a rolling count to determine the number of credit cards opened in the last 24 months.

What can you do about it?

Under the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA), creditors are required to provide you a notice outlining reasons why your credit was denied.

Many banks have a “reconsideration line” that you can call and ask for a second look on your application. Though there is no guarantee that your application will be approved, you can provide additional information that may lead to approval.  I know many people who have been approved for a credit card after calling the reconsideration line.

Time is of the essence when calling the bank to reconsider your application. You should call within 30 days of the denial in most cases. When you call, the credit card representative will review your case and ask you a few questions. If you recently moved or had your credit frozen, you will want to mention this to the representative.

Bottom Line

Getting declined for credit when you have an excellent credit score can be frustrating.  Find out if you got tripped up by any of the factors listed above.  Try calling the reconsideration line of the bank and explain your reasons.  There is a good chance you will get approved for your credit card.

First, let us take a look at the basics.

What is a hard pull or hard inquiry?

When you apply for a credit card, home or auto mortgage, the lender will typically check your credit before making a decision on loan approval and your interest rates.  These are hard pulls and affect your credit score.

A single hard pull decreases your credit score by a few points and stays on your credit report for two years.  But if you apply for too many credit cards or loans in a short period of time,  these hard inquiries can have a big negative impact on your credit scores  Too many loan applications in a short period tell lenders that you are looking to add debt and that you may be a potential high-risk customer.

You will typically know when a hard pull is made. When you apply for an auto or home loan, lenders will give you a form to sign giving them permission to run a hard inquiry.

One way to manage this is to spread out our loan applications – especially loans of different types (that is spread out your applications for home loans, auto loans and credit cards as much as you can)

What is a soft pull or soft inquiry?

A soft pull happens when an employer or a lender checks your credit as part of a background check.  Credit card companies run soft credit checks before sending you offers in the mail.  Soft inquiries can sometimes happen without your permission as in the case of credit card offers.

Soft pulls or inquiries don’t affect your credit score. Some credit bureaus don’t even record it because it is not tied to any application for credit.

Managing credit pull requests

If you concerned about too many hard pulls on your credit. ask the lender, cable company, or your utility company if the credit check is a hard or soft pull.

Try to keep the number of hard inquiries down.  When you apply for a home or car loan, you are likely to be “rate shopping” – requesting rates from different lenders.  Though this will likely trigger multiple hard pulls, credit bureaus understand that consumers shop to get the best rate. So they group these hard requests into one hard pull or request in your credit report.  Note that these inquiries must be in the same category (eg. home loans).  If you apply for a home loan, a car loan, and credit cards, all at the same time, they will be treated as different inquiries and will affect your credit score negatively.

Bottom Line

When you apply for a line of credit, the credit inquiry is likely to be a hard pull.  Hard pulls stay on your credit report for two years.  Though a single hard inquiry will not affect your credit score, too many hard inquiries in a short period of time will lower your credit score.

A soft pull on the other hand is a background credit check run by an employer. It doesn’t affect your credit score.  When dealing with lenders or services, always ask if the credit inquiry will be hard or soft.  Sometimes you can get by with just a soft inquiry.

What is a tradeline?

A tradeline is a fancy term used by credit reporting agencies to describe your credit accounts.  Your credit accounts could be your credit card, car loans, home loans, or any other loan you may have.

If you have a credit account, you have a tradeline.  It’s as simple as that.  When people talk about tradelines, they are usually talking about selling tradelines on their credit card – that is adding authorized users to their credit card.  This allows the authorized user to benefit from your good credit history.

How can you make money using your tradeline?

First, you need a “seasoned” tradeline, which is a credit card older than two years.  You should not have any late payments on the credit card.  Once you meet these two conditions, you can sign up with a reputable tradeline company and start making passive income.

A tradeline company will act as a middleman between you and the authorized user.  These companies find the buyers and run credit and fraud checks on the buyers.  They also collect money from the buyers and direct deposit your cut after a couple of months.

You can add an authorized user to your credit card for 1-3 months and get paid for it.  People with poor credit will pay to be authorized users on your account to get a quick boost in their credit score.  They get to piggyback off your good credit and pay you for it.

All you have to do is log in to the tradeline company’s website, get the buyer’s information such as their name and date of birth, and add them as authorized users on your credit card.  All this can be done on a computer in about 5 minutes.

Who is buying tradelines and why?

Millions of people have poor credit.  These folks have to pay higher rates on credit cards, mortgages, and auto loans. One way to quickly improve credit is to piggyback on someone with good credit.

How to find reputable tradeline companies?

There are a lot of tradeline companies.  Find one that is reputable by asking friends who have used them in the past for buying and selling tradelines. A reputable tradeline company will run fraud and background checks on the buyers. It will also pay you fair compensation for selling your tradelines.

I personally use Tradeline Supply to sell tradelines. I have multiple credit cards registered with them. They sell authorized users on my credit card and I get paid $125-$250 per authorized user.

Isn’t selling tradelines risky?

You may think that the authorized user will run up huge bills on your credit card. But that’s not true.  In fact, the authorized user may not even know who you are.

The card will be mailed to your home address and you will be in possession of your physical card.  In fact, you don’t even have to activate the card.  So the chances of misuse are very small.

How much can you make selling tradelines?

How much you can make depends on how “seasoned” your credit cards are (that is how long you have had your credit card) and how many tradelines you are willing to sell.

Many credit cards allow you to add 4 or more authorized users.  Let’s say that you have 3 credit cards.  You have 12 tradelines to sell (3 credit cards and 4 authorized users on each card).

Each tradeline can be sold 3 to 4 times per year.  So continuing our example, you can sell up to 48 tradelines per year.

You can typically make between $150-$250 per tradeline depending on how seasoned your cards are. That’s about $12,000 per year for a minimal amount of work.

Is selling tradelines legal?

Buying and selling tradelines is legal. But there is always a chance that your bank will close your account if they find that you are selling tradelines too often.  One way to minimize the risk of your credit card company closing your card is not to add and remove authorized users too often.

Bottom Line

Selling credit lines is a nice side gig and a quick way to make $10,000 a year for very little work. All you have to do is find a reputable tradeline company and start adding authorized users to your card a few times a month.  Just be mindful of not adding and removing authorized users too often. Otherwise, you risk having your card closed by your credit card company.

Parents can help kids develop core beliefs about money.  It is these core beliefs that drive financial behaviors. Core beliefs include saving money, spending money based on your values, having low debt, and having an emergency fund to meet unexpected expenses.

Where Does Money Come From?

Kids need to understand that mom and dad make money by working and investing. They need to understand that money doesn’t come from credit cards, banks or wallets.

A few basic ideas on money that every kid needs to know.

Things Cost Money

We need to help kids understand that things cost money.  They need to understand that parents can’t afford everything, and that money must be spent wisely.  When you take your kids to the store, pay with cash so they understand that money was exchanged for a certain item at the store.

Delayed Gratification

Teach them delayed gratification.  Teach them that impulse is not good. Start with small things such as asking them to wait 15 minutes before they can open a candy.  Invest money with your kids, and show them how money grows over time.

Compound Interest

Compound interest is the foundation of investing.  Even Albert Einstein called compound investing the eighth wonder of the world.  Help your kids understand how money grows over time.  For example, show how a stock of a company they like (such as Disney or Google), has appreciated over time.

Saving, Investing, And Giving Back

Kids need to understand that they cannot spend all the money that comes in.  Part of it needs to saved and invested.  You can also encourage them to save, and give money to charity because giving back is a key part of handling money.

Here are some practical ideas you can use to teach kids about money.

Using a Piggy Bank

Ask them to save their money in piggy banks when they are very young.  Ask them to have multiple piggy banks – one to spend, one to save and invest, and others to give to charity.

Bank account

Open a bank account in their name when appropriate, and ask them to manage the account.  Managing a small amount of money early will prepare them for the day when they will have a full-time income, and need to manage a big balance in their bank account.

Part-Time Jobs

When they are ready, encourage them to get a job.  This will give them hands-on experience on making, and managing money.  When they get the first paycheck, and 30% goes to taxes, they will understand that paying taxes is a part of life.

In addition to teaching them about money, jobs give them an opportunity to work and learn to get along with others.

Make A Budget and Ask Them To Manage Their Money

Even if the kids have only a small amount of money, ask them to make a budget.  This will give them an opportunity to plan their savings and expenses.

Show By Example

Kids follow our habits.  When we overspend, they are likely to overspend too. Be wise when spending your money, and talk about your money decisions with your kids. Involve them in family budgeting when it’s appropriate.  When you are about to make a big purchase, ask for their opinion and let them see how you arrive at a decision to buy certain things.

If you live a simple, and frugal life, they will too. If you are content with your life, so will they.

Understanding the Dangers of Debt

Staying away from too much debt is key to financial independence.  Kids need to understand the dangers of carrying credit card debt. Too many kids get in credit card debt early and struggle to pay back for years.

Bottom Line

Just like building any habit, building good financial habits takes time.  Parents have the opportunity to get kids on a good path early.  Teach them the principles of delayed gratification and compound interest early.  Allow them to set a budget, and manage small amounts of money.  They may fail a couple of times, but by the time they become adults, they will have the experience necessary to manage money on their own.

Nearly three in 10 Americans have no emergency fund.  For even those who have an emergency fund, the situation is not rosy.   Most do not enough money to cover three months’ worth of living expenses.

What can you do to be better prepared?  Here are some tips.

1. Have A Plan

This may sound very basic.  You will be surprised how many smart people don’t have any idea how much money comes in, and how much goes out every month. If you don’t have a good understanding of your financial condition, it is very hard to put the other financial pieces in place.

Make a list of all your income and all your expenses.  Include annual or semiannual expenses such as insurance, gifts, etc.  First, do you make enough to meet all your expenses?  Hopefully, you do and you have some money left over.  If not, come up with a budget you can stick to.

2. Track Your Expenses

It’s easy to spend money mindlessly by eating out every day or forget that you have some subscriptions on auto-renew.  Track your expenses closely.  Know where your money is going.

I take a look at my expenses when I pay my credit card bill at the end of the month. Sometimes, it’s eye-opening to see I am spending the money.  I make minor adjustments to my spending when I see that I am off track.  If you don’t catch your excessive spending habits early, it becomes very difficult to make changes because big changes are painful.

I also like to plan my expenses.  Whether it is a grocery trip or a week-long vacation, I like to plan ahead.  This ensures that there are no surprises and I don’t end up spending money on things I hadn’t planned.

Review expenses periodically, especially recurring expenses.  Do you need to subscribe to a magazine you haven’t read in months?  Do you still need a cable TV subscription?  Be ruthless in cutting spending where possible.

3. Save Money First

Set up an automatic transfer from your checking account to an investment or saving account every month.  That way, you save first before you spend any money. It comes right off the top, and you won’t even see it. I do this for not only my 401(k) but also my discretionary investing account.

Save at least 10% of your earnings, and invest it.  Max out your 401(k) if you can.  At a minimum, contribute enough to get your employer’s match.

4. Avoid Consumer Debt

Don’t carry debt except for your mortgage.  Especially stay away from credit card debt. Most credit cards charge interest rates north of 10%, and once you get into debt, it’s tough to get out.

Apart from the mortgage on my house, I don’t like to carry any debt.  I prefer to pay cash for everything else. I save money to buy a car and then pay cash. I don’t want to make monthly payments for 7 years while my car is depreciating.

5. Set Up Emergency Fund

Have an emergency fund with at least 6 months of expenses.  Unexpected things happen in life.  An illness, loss of a job, or roof leak in your house.  An emergency fund will allow you to handle these life disruptions without too much stress.

Ensure that your emergency fund is liquid, so you can tap it when you need it.

6. Don’t Try To Keep Up with The Kardashians

Peer pressure is real.  If your friends are buying a brand new luxury vehicle every 5 years, you would want to do it too.  Resist the temptation to keep up with them.  Have a financial plan and stick to it.  The rewards will be worth it.  Your friends are probably one or two payments away from losing their car or their house.

As your income grows, in most cases so does your lifestyle.  If you can keep your expenses flat as your income grows, you are on your way to financial independence.

7. Increase Your Income

Most financial advice is focused on avoiding expenses.  Very few people talk about increasing income.  Apply for a new job every so often, and see if you can earn more. Learn a new skill that will make you more valuable.  Get a side hustle.  Your side hustle may one day become your primary source of income.

8. Be Sensible – Don’t Be Too Frugal

It’s nice to be financially independent, and not have to worry about regular monthly expenses. But don’t be so frugal that you are not having any fun at all.  The goal is not to maximize your wealth at the cost of your happiness.  Be sensible and spend money where it’s appropriate.  Always have a plan, and stick to it.

Here are some strategies you can use.

1. Tap into emergency savings

Hopefully, you have an emergency fund with 3 to 6 months of expenses saved for situations like this. If you have an emergency fund, use funds from this account before exploring other options.

2. Ask Family And Friends

It is difficult to ask a friend or a family member for help. But as long as you ask for a  one-time financial need, most friends or family will be happy to help.  This is a much better alternative than borrowing from a payday lender or getting a cash advance from a credit card.

Always pay back as promised to keep your relationships strong.

3. Hold A Garage Or Yard Sale

Most people have things in our homes that we don’t use.  You can sell those items in a garage sale.

Buyers in a garage sale will try to bargain for a good deal, so you will not get the maximum value for your items.

4. Get A Side Gig

More people are working in the gig economy than ever before.  One in three US workers are freelancers. Depending on your interests and skills, you can make money with a side hustle.

Most common side hustles:

• Drive for Uber or Lyft
• Deliver for Postmates
• Sell services on gig websites such as Fiverr or Upwork
• Do micro tasks (surveys and other small tasks) on Amazon’s Mechanical Turk
• Tutor over Skype
• Walk dogs

5. Liquidate Investments

If you have liquid investments (stocks, bonds or mutual funds and CDs), you can sell them quickly to convert them to cash.

The downside is that once sold, these investments will no longer compound, and generate a return for you. It might take you a while to build your portfolio back to the original level.

6. Cash Advance On a Credit Card

You can borrow available balance on your credit card in the form of a short-term loan.  Know that your credit card may charge you cash advance fee (3% to 5%), and a higher interest rate (than regular purchases).

Taking a cash advance on your credit card can get very expensive due to high-interest rates, and daily compounding. It will also increase your credit utilization ratio, which can hurt your credit, and reduce the available balance for regular purchases.

7. Personal Loans

If you have good credit, you can borrow money from a bank without collateral.  The interest rates for personal loans are much lower than what credit cards charge.  You can pay off the loan over a set period of time.

Other Ideas

Cut Your Budget

Take a look at your budget to check if there are areas you can cut expenses.

• If you eat out often, consider cooking your own meals to save money.
• Do you have magazine or video subscriptions that you cancel?
• Delay high dollar purchases if you can.

Bottom Line

No one likes a financial emergency but the reality is that it happens more often than we assume.  Have an emergency fund, and have a plan in place in case it happens to you. Review your options and costs when considering an emergency loan, and ensure that you can repay the loan.

]]> https://mymoneyplanet.com/ways-to-raise-cash-in-an-emergency/feed/ 0 https://mymoneyplanet.com/credit-card-vs-debit-card-what-are-the-pros-and-cons/ https://mymoneyplanet.com/credit-card-vs-debit-card-what-are-the-pros-and-cons/#respond Tue, 19 Nov 2019 02:43:22 +0000 https://mymoneyplanet.com/?p=48 Credit Card Vs Debit Card – What Are The Pros And Cons? Read More »