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8 Steps to Build Credit Fast

Your credit score can affect many areas of your life.

A poor credit score can make it harder to buy a car, get a job, purchase a home, rent an apartment, have the utilities turned on, and even get a cell phone.

It can also cost you money, since credit card companies and lenders typically consider your credit score when determining your interest rate.

Fortunately, if your credit is less-than stellar–or you haven’t yet had a chance to establish much, or any, credit history–there are some simple steps you can take to build or boost your score quickly.

While you can’t typically establish exceptional credit overnight, you may be able to improve your credit score in a matter of months by putting a few good credit habits into practice, building a positive payment history, and avoiding credit-damaging mistakes.

Simple Steps to Build Your Credit Faster

Here are some strategies that can help you establish or improve your credit profile ASAP.

1. Understanding What Goes Into Your Score

One of the most commonly used credit scoring models is the FICO® Score .

FICO has five factors it considers when calculating its credit scores.

•  Payment history: 35% of this score is related to your history of payments on credit cards, student loans, mortgages, and other loans. The algorithm looks at the frequency and severity of missed and late payments.
•  Credit utilization: 30% of this score is based on how much of your available credit you are currently using.
•  Length of credit history: The amount of time you’ve had each credit account open makes up 15% of this credit score. That’s why it’s nearly impossible to have perfect credit when you’re new to credit.
•  New credit: 10% of this credit score has to do with opening new credit. (However, opening several new credit accounts at the same time isn’t typically a good way to bump up your score, because that can look like you’re in financial trouble).
•  Credit mix: The final 10% of this credit score is based on the different types of credit you have and how you’ve managed them.

2. Checking Your Credit Report and Disputing any Errors

Credit scores are calculated on the information in your credit reports.

That’s why it’s a good idea to get copies of your credit reports from the three major credit bureaus–Equifax , TransUnion and Experian –and to make sure all the information is accurate.

According to the Consumer Financial Protection Bureau (CFPB), one in five people have an error on at least one of their credit reports.

Everyone is entitled to see their credit reports for free once a year at the government-mandated site.

When you get your reports, it’s a good idea to comb through them carefully and to look for any inaccuracies, such as payments marked late when you paid on time, wrong account numbers, incorrect loan balances, or accounts that aren’t yours.

If you find an error in one or all your credit reports, you can reach out to the credit bureaus directly to dispute the information.

If you see accounts in your name that you never opened, and believe you may be a victim of identity theft, you can report it to the Federal Trade Commission at or 877-438-4338.

A mistake on one of your credit reports could be pulling down your score. Fixing it can help you quickly repair your credit.

3. Paying Bills on Time Every Time

Payment history is the single most important factor that affects your credit scores.

Not only that, a past due payment can stay on your report for seven years.

Setting up autopay, either through each provider or company, or through your financial institution, can be a great way to ensure you never miss a bill.

If you do miss a payment by a few days, all is not necessarily lost, however.

There is generally a small window of time to make up a missed credit card payment before any damage to your credit happens.

That’s because late payments are typically not reported to credit bureaus until the payment is at least 30 days late.

The key is to get it in as soon as you can.

4. Becoming an Authorized User on a Credit Card

If you have no credit or a low credit score, you may be able to build it up by becoming an authorized user of a credit card that the cardholder uses responsibly.

An authorized user has permission to use an account, but does not have any liability for debts.

If a friend or family member adds you as an authorized user to their account, the card issuer will then typically report you as an authorized user to the credit reporting companies.

In this way, you gain a credit history from the credit usage of your friend or family member.

5. Opening a Secured Credit Card

Some credit card companies offer “secured” credit cards, which allow you to build credit history with little risk to the credit card company.

Here’s how it works: You pay a cash deposit up front that is equal to the limit of the card. For example, if you put down a $500 deposit, you would have a $500 limit on the card.

You can then use it like a regular credit card.

Using the secured card responsibly–being mindful of the amount you’ve charged in relation to the card’s limit–and paying your bills in full and on time will all be reported to the credit bureaus.

6. Using your credit card regularly

One way to build credit is to display a history of responsible borrowing.

For that reason, you may want to place monthly bills and other expenses on your credit card–being sure to pay the bill in full each month by the due date.

7. Keeping Credit Card Balances Low

This can help move the needle on credit utilization, or the amount of debt you have compared to the total amount of credit that is available to you, and is expressed as a percentage.

After payment history, this is typically the second most important factor that influences your score.

The rule of thumb is to use no more than 30% of your total credit at any time. This includes access to all credit lines, as well as the percentage on individual cards.

One way to do this is make multiple payments on your credit card throughout the month.

If you’re able to keep your utilization low, instead of letting it build toward a payment due date, it could quickly benefit your score.

8. Keeping Credit Cards Open

It might seem to make good financial sense to close credit cards you never or seldom use.

But from a credit score perspective, it may not be a wise move.

That’s because closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lower your credit score.

A better bet might be to keep the card open and to use it occasionally so the issuer won’t close it.

The Takeaway

A credit score in the good to excellent range could provide you access to the most competitive interest rates for loans and credit cards, and also make it easier to rent an apartment, get a cell phone, and land a new job.

Some ways to improve your score quickly include having active open accounts that you are consistently paying on time, keeping your loan balances low, and disputing any errors on your credit reports.

Building good credit is also a matter of establishing good financial habits, such as tracking your spending (so you don’t come up short at the end of the month), and make sure all of your bills are posted by their due dates.

One move that can help you stay on top of your finances is signing up for SoFi Checking and Savings®.

SoFi Checking and Savings is a checking and savings account that allows you to earn competitive interest, spend, and save–all in one account. And you’ll pay zero account fees to do it.

SoFi Checking and Savings also allows you to track your weekly spending right from the dashboard in the SoFi Checking and Savings app.

You can also use the app to set up all of your bill payments to help ensure that payments are never missed or late.

Check out everything a SoFi Checking and Savings checking and savings account has to offer today!

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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Is It Possible to Delay Credit Card Payments?

For people who cannot make their credit card payments, credit card debt can quickly pile up, resulting in long-term financial difficulties, and they might be wondering if it’s possible to delay credit card payments.

Fortunately, there may be options depending on a person’s financial situation.

Credit Card Relief Options

Some credit card companies are providing financial relief programs to their customers in response to financial hardships related to COVID-19. The cardholder can get information about these programs by asking the credit card company about their offerings.

Because of the increase in the volume of information requests, some credit card companies may request cardholders to visit their website for details on each program.

Although programs may vary by company, here are some of the relief programs that credit card companies may offer.

Decreasing or Deferring Payments

Many credit card companies allow cardholders to reduce or delay credit card payments for a specific amount of time by offering emergency forbearance. Once the forbearance period ends, cardholders will need to make up any skipped or postponed payments.

While the credit card company may not require cardholders to make up payments right away, they will need to begin to make at least the minimum monthly payment. Depending on the new credit card balance, the minimum payment required may have changed.

Refunding or Waiving Late Payment Fees

Usually, when a cardholder misses a credit card payment, they are charged a late fee. Due to the pandemic, many card companies are refunding or waiving late fees if the customer requests so due to financial hardship.

Lowering the Interest Rate

Some credit card companies may reduce the interest rate on an account during the pandemic. However, this rate may increase after the specified term ends.

Establishing Payment Plans

Some credit card companies help cardholders repay their credit card balance by offering payment plan options. Cardholders may be able to secure a better repayment plan that works for their current financial situation.

Keep in mind, all of these options may vary by creditor.

Consequences of Missing a Credit Card Payment

Increase to the Credit Card Balance

Making a late payment may increase a credit card holder’s balance in several ways. First, credit card companies can charge a late fee of up to $28, even for the first occurrence. If a cardholder misses a payment after that, the late fee could increase to $39. It’s important to note that this fee may not exceed the minimum balance due.

Another way the credit card company may increase the balance is to increase the account’s interest rate. For example, if the cardholder hasn’t made a payment for 60 days, the credit card company may increase the APR to a penalty APR.

Increasing the interest rate can also increase the revolving balance on the credit card. However, not all creditors may charge penalty interest.

Credit Scores May Be Impacted

Since payment history and account standing are some of the factors used to determine a cardholder’s credit score, making late payments may negatively impact it. But the amount of time a cardholder’s credit is affected can vary depending on the situation.

In general, creditors send the payment information to credit bureaus. They use codes to identify the standing of the accounts. But since there is no code for a payment that is 29 days late, they may use a credit code to show the card is current. After the payment passes the 30-day threshold, however, the creditor may use the late code instead.

Using the late code is considered a delinquent payment to the credit bureaus.

It’s important to note that different creditors may use different codes at different times. So it’s hard to determine when a credit score may be affected by a late payment.

While missing a payment may not impact a score initially, it may appear on a cardholder’s score and stay there for several years if it’s a continued occurrence. Of course, this depends on the situation and the other factors credit bureaus use to figure the credit score.

The Balanced Could Be Charged Off

Another consequence of making a late payment is that the creditor may not allow the cardholder to use it for other purchases until the card is in good standing.

Additionally, if the payment is 180 days late, the creditor may close the account and charge off the balance. If a creditor charges off the balance, it means that the creditor permanently closes the account and writes it off as a loss. However, the cardholder will still owe the outstanding balance remaining on the account.

In some cases, creditors will attempt to recover this debt by using their collections department. In other cases, they may sell the debt to a third-party collection agency that will try to get payments from the cardholder.

Creditors have some flexibility when it comes to working with their customers. For customers who have had financial setbacks such as losing a job, creditors may help them get back on track under FDIC regulations. Usually, this type of flexibility is available for consumers who show a willingness and ability to repay their debt.

Alternative Options

For consumers who find themselves struggling to make their credit card payments and don’t have creditor relief programs available, there are a few other options to consider that may reduce the financial burden of making credit card payments on time.

Balance Transfer Credit Cards

A balance transfer credit card is a credit card that offers a lower interest rate, or even a 0% introductory interest rate. This could allow a consumer to transfer a high-interest credit card debt to a card with lower interest and potentially pay off the debt faster. Usually, balance transfer credit cards have introductory periods that last anywhere between six and 21 months.

Using this method can potentially be a money saver if the consumer no longer uses the high-interest rate credit card and continues to pay down the transferred debt at the lower interest rate.

In general, consumers need a solid credit history to qualify for a balance transfer credit card. If approved, consumers can use the new credit card to pay down high-interest debt. Therefore, this can be a solution for credit card debt repayment, as long as the cardholder can pay off the debt before the introductory period ends.

However, if the balance isn’t repaid before the introductory period ends, the interest rate typically jumps up. At this point, the balance will begin to accrue interest charges, and the balance will grow.

Home Equity Loans

With fixed-rate home equity loans, some homeowners may qualify for a lower interest rate using their home as collateral rather than using an unsecured loan (a loan that’s not backed by collateral). Like other types of home equity lines of credit, the terms and interest rate a borrower might qualify for is based on a variety of financial factors.

It’s important to note that borrowing against a home doesn’t come without risks, such as leaving the homeowners vulnerable to foreclosure if they don’t pay back the loan.

Credit Card Consolidation

For borrowers who may not want to use their home as collateral, but are struggling to pay down debt, debt consolidation with a personal loan may be a better fit for their situation. Essentially, borrowers use a personal loan with better terms and a lower interest rate to pay off credit card debt.

Using a personal loan to consolidate credit card debt can make monthly payments more manageable and potentially lower payments. Although a credit card consolidation loan won’t magically make debt disappear, getting the debt paid off might make a difference in a person’s overall financial outlook.

Recommended: What is Credit Card Consolidation?

The Takeaway

Whether your credit card company offers debt relief programs you qualify for, or you want to explore alternative options for getting out of debt for good, taking steps toward debt repayment may give you peace of mind.

A credit card consolidation loan might be worth considering if you have been making on-time payments on more than one credit card debt and meet the lender’s income and credit score criteria. While credit card debt consolidation is only one solution for accelerating debt repayment, this solution may be what you need to eliminate your debt for good.

With a SoFi credit card consolidation loan, you can check rates and terms you may qualify for without affecting your credit score. And, SoFi loans come with no origination, prepayment, or late fees that can increase the cost to borrow funds.

Ready to pay down your credit card debt? You may be able to combine debts into one SoFi credit card consolidation loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.


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What is Consumer Debt, and How Can You Get Out of It?

While most of us don’t aim to go into debt, if you’re an adult in America, chances are you’re in at least a little. Personal debts held by private individuals are called “consumer debt”—and since you probably have some, it’s a topic worth getting familiar with.

What is Consumer Debt?

Consumer debt, as its name implies, is the amount of total debt held by consumers, meaning private individuals as opposed to governments or businesses.

In other words, “consumer debt” covers pretty much all the debt you might be in (though not any debts you’ve incurred as a business owner, if you are one): credit cards, student loans, auto loans, payday loans, and even mortgages.

Americans carry quite a lot of consumer debt: according to the New York Fed, total household debt sat at $14.27 trillion in the second quarter of 2020—which, shockingly, represents a decrease of 0.2% ($34 billion). Mortgage balances comprise the largest portion of that total, accounting for $9.78 trillion, more than half of American consumer debt, on their own.

Student loan debt takes the silver medal, accounting for another $1.5 trillion of the total, while credit card debt accounts for about $820 billion.

Types of Consumer Debt

While “debt” doesn’t tend to have good connotations when brought up in conversation, some consumer debt is just about impossible to avoid in our society, and it’s not always a financial emergency.

On the other hand, some kinds of consumer debt are predatory and should almost always be avoided.

Here’s the scoop.

Mortgage Debt

Given that the average sale price of a home in the U.S. tops $380,000 these days, most of us have to take out a mortgage if we want to become homeowners. Saving up a cash down payment can be challenging enough!

As mentioned above, mortgage balances make up the largest portion of the U.S. consumer debt total by a wide margin—and mortgages have long been considered a “good” kind of debt to get into, thanks to the tendency of real estate to appreciate in value.

Although paying a mortgage every month might not be fun, doing so can help consumers slowly build equity in their homes, and over time, the asset might be worth far more than they initially paid for it.

That said, most of us remember what happened in 2008. Nothing is written in stone! So although mortgages may represent a safer form of debt, they’re still not totally without risk.

Student Loan Debt

Student loans are a reality for millions—as mentioned above, they’re the second-largest component of the U.S. consumer debt total. And while going into debt to get educated certainly sounds like a noble cause, unfortunately, the burden of student debt can wreak larger financial havoc on borrowers.

For instance, some studies show that students with loan debt have, on average, half as much money in the bank as those who don’t, and 75% less net worth.

Fortunately, there are ways to minimize the impact of student loan debt both during school and after. Applying for scholarships and grants can go a long way toward helping a student fund their studies, and graduates might consider refinancing their student loans if they qualify for a lower interest rate or preferable terms.

Refinancing won’t be right for everyone and it’s important to note that refinancing federal student loans eliminates them from borrower protections and benefits like Public Service Loan Forgiveness or deferment or forbearance.

Auto Loan Debt

Auto loans are another common kind of consumer debt—and they’re tricky, because vehicles tend to depreciate in value. That means it’s easy for a borrower to find themselves owing far more on their vehicle than its current value, even with relatively low interest rates (which hover at about 4-6% for those with credit scores over 700).

Buying used vehicles can help mitigate this effect, as brand-new cars generally depreciate at a steeper rate than pre-owned ones do. According to Carfax, a factory-floor vehicle could lose as much as 10% of its value in the first month!

Personal Loans

Personal loans are another type of consumer debt—and unlike an auto loan or a mortgage, the funds can be applied to just about any use the borrower wishes. For instance, people may take out personal loans to fund a home renovation or repair project, help pay for medical procedures, or relocate.

However, because personal loans are unsecured (that is, not tied to a physical asset like a house or a car), they’re riskier for lenders… which means they tend to have higher interest rates than secured loans do.

Credit Card Debt

Credit cards—and therefore credit card debt—are widespread because plastic is just so darn accessible and easy to use. In fact, it may be too easy: the average American holds more than $5,000 in credit card debt, which can be notoriously difficult to pay off.

That’s because credit cards have relatively high interest rates; the mid-September average was about 16% APR, according to , but it’s not unusual to find cards with rates over 20%.

What’s worse, most credit cards charge compounding interest, meaning you end up paying interest on the interest you’ve already accrued. That can quickly lead to a ballooning debt spiral it’s hard to get ahead of—which is why it’s important to pay off credit cards in full and on time each and every month. (And if that’s not possible, consider avoiding them!)

Payday Loans

Payday loans are a type of short-term credit offered to consumers looking to get access to cash fast. Generally, these loans are for relatively small amounts of money… but they come at a big cost to the consumer.

For instance, a two-week payday loan might carry a fee of $10 to $30 for every $100 borrowed—which might not sound like much, but equates to an APR of about 400%!

Although these fast-cash offers can be tempting, the high cost associated with them make them a last resort. Along with off-the-wall interest rates, many payday lenders also levy late fees or additional fees to roll over the debt for another period. If at all possible, try to find the money somewhere else!

Pros and Cons of Consumer Debt

There are some benefits to consumer debt—as well as, more obviously, some drawbacks.

Pros of Consumer Debt

•   Consumer debt is necessary to build a credit history that future lenders—as well as other important decision-makers, like landlords—may require to extend lines of credit, housing, or other valuable items.
•   Consumer debt can make certain purchases and lifestyle choices—such as owning a car, for example—possible, when they otherwise would not be.
•   Certain types of consumer debt, such as mortgage debt, have the possibility of creating more value in the long run. (That’s why these types of purchases are often referred to as “investments.”)

Cons of Consumer Debt

•   Being in debt can be, well, expensive—and can make it more difficult to meet other financial goals.
•   High-interest debt, and compounding debt, can make it easy to fall behind over even a minor budgetary shift or setback.
•   As seen above, even “safer” forms of debt, like mortgage debt, still carry risks.

Getting Out of Consumer Debt

For some consumers, the most pressing conversation about consumer debt is simple: how do you get out of it?

While dialing down debt can be challenging and time-consuming, it is possible with hard work, dedication—and, sometimes, a few well-made money moves.

For instance, if you find yourself drowning in high-interest credit card debt, two common approaches are the avalanche and snowball methods. (And no, neither requires a screening of Disney’s Frozen.)

The snowball method involves focusing on the lowest-balance debt first: make minimum payments on all other debts while throwing as much money as possible toward the focus account. Once that’s paid off, move on to the next-highest account, and so on. This method is popular and effective because it can feel easier to stay motivated when you’re reaping the psychological reward of paid-off balances.

The avalanche method, on the other hand, involves focusing on the highest-interest balance first. That way, borrowers are chipping away at the debt that may be acting as the heaviest anchor, freeing up more funds to help them tackle other loans afterward.

Specifically when it comes to credit cards, taking out a consolidation loan can be one option for those interested in simplifying their monthly budget. A consolidation loan may also potentially save a borrower money in interest, by helping them secure a lower interest rate.

To do so, borrowers take out a personal loan that covers the sum of all their credit card debt—and use the loan to pay off those accounts in full. Then, they simply pay back the loan, which is likely to carry a lower interest rate… and, importantly, doesn’t include compounding interest.

Although there are many credit card consolidation loans to choose from, SoFi’s line of personal loans offers a fixed pay schedule and carries no origination or application fees.

Find your rate and learn if SoFi’s Credit Card Consolidation Loans can help you get ahead of those high interest rates today.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.


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How to Freeze Your Credit

When it comes to keeping tabs on credit, many people monitor their standing by conducting a credit inquiry. Detailed credit reports outline a person’s borrowing and repayment history.

A credit score, however, sums up a borrower’s likelihood to repay debts. But, on top of knowing where one ranks (scores can range from ‘very poor’ to ‘excellent’), one extra thing to grasp is how to freeze your credit.

After all, credit cards and personal information can (and do) get hacked or stolen. So, knowing how to put a freeze on your credit can help individuals to prevent identity theft or obstruct bad actors from taking out new loans or accounts in a borrower’s name.

Freezing credit isn’t as scary as the term may sound. In fact, it can be quite useful in the right situations. Here’s an overview of how to freeze (and unfreeze) your credit:

What Is a Credit Freeze?

According to the Federal Trade Commission (FTC), a credit freeze, also known as a security freeze, lets individuals limit access to their individual credit report (which differs from a FICO® score).

By freezing their credit, the person makes it more difficult for an identity thief to open a new credit account or loan in their name. (Creditors like to review credit reports before okaying new lines of credit.)

However, freezing one’s credit does not prevent a person from viewing their free annual credit report. Moreover, it won’t restrict a person from opening a new account in their own name. They simply need to unfreeze their credit to do so (more on unfreezing later).

What Does Freezing Credit Actually Do?

A “credit freeze” does not actually freeze all outstanding accounts, such as credit cards and loans. Instead, it simply limits others from viewing a person’s credit reports. This means credit bureaus can’t give out personal information about a borrower with a frozen account to lenders, landlords, hiring managers, or credit card companies.

This typically halts the lending, renting, and hiring process, meaning anyone attempting to steal a person’s identity would likely be stopped in their tracks.

Freezing Credit: What’s the Process?

If a person wants to freeze their credit, they need to reach out to at least the three major credit bureaus: Equifax (1-800-349-9960), TransUnion (1-888-909-8872) and Experian (1-888-397-3742).

People can take it one step further by reaching out to two lesser-known credit bureaus, Innovis (800-540-2505) and the National Consumer Telecom & Utilities Exchange (866-343-2821).

Typically, the agencies ask for a Social Security number, birth date, and other information confirming a person’s identity prior to freezing the account. The bureaus will then give the person a password, which they may use to unfreeze their account. The person requesting a freeze may want to store this information in a safe place.

Does Freezing Credit Cost Anything?

Happily, it costs nothing to freeze and unfreeze one’s credit. In 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act , mandated that credit bureaus offer the service for free to everyone. This act also updated a few terms of service for requesting a freeze and unfreeze.

When a consumer requests a freeze, the credit bureaus must fulfill the request within one business day. When consumers request to lift the freeze by phone or online, however, the credit bureaus must do so within one hour.

Differences Between a Credit Lock and a Credit Freeze

All credit bureaus offer people the chance to either freeze or lock their credit. A credit lock works in much the same way as a credit freeze. But, a credit lock can come with a bit more convenience—as borrowers can opt to open and close their locked credit via an app (rather than needing to reach out to each credit bureau with their password to unfreeze).

And, while offering a credit freeze is complimentary thanks to the federal mandate, a credit lock may be offered for a small fee.

For example, Equifax offers credit locks for free. TransUnion offers a free lock with its TrueIdentity product or as an add-on to other subscription services. Experian offers credit lock as part of a paid subscription.

When to Consider a Credit Freeze:

It’s really up to individual consumers and their own risk tolerance to decide when it’s time to freeze their credit report. However, if a person isn’t actively shopping for a loan or a new credit card it may be a good idea to freeze credit preemptively. This way, a consumer could feel a bit more confident that their credit information is in safe hands.

Another time to mull over a credit freeze is when a borrower believes their data may have been breached (such as the 2017 Equifax data breach ) or if their social security number had recently been disclosed, made public, or stolen.

How to Unfreeze Your Credit:

Unfreezing credit can be simple. All a consumer has to do is reach out to the credit bureaus by phone or via the internet and plug in that password or the PIN number provided to them when they first froze their credit. Generally, it takes a few minutes for the account to become unfrozen.

A person can choose to unfreeze their report at one or all of the credit bureaus, but they will have to contact each individual credit bureau separately. They also need to go through the entire process again if they want to re-freeze their credit down the road.

Individuals can ask to unfreeze their credit for a specific amount of time, if they are applying for a new loan or need someone else to access their account temporarily. Then, the freeze should return automatically when the time period ends.

Alternative Options to Freezing Credit:

While not overly complex, freezing and unfreezing one’s credit can be time-consuming. Additional options are available to consumers. Here are some alternatives:

Setting Up Credit Monitoring

Those not interested in freezing their accounts might instead want to sign up for credit monitoring services (typically for a fee).

With a credit monitoring service, a user will be alerted about any and all activity on their credit report. So, any time someone requests information, the person will be informed and can confirm or deny its authenticity.

This could help stop any potential identity theft in its tracks. Still, it should be noted that this service cannot fully prevent theft and the consumer may not know their identity was stolen until after the fact.

Requesting a Credit Report

For those interested in monitoring their credit for free, it’s possible to request a no-cost copy of one’s credit report each year from all of the major credit bureaus. The consumer might then review the report, in detail, to ensure they recognize all of the activity and accounts described therein.

If the consumer spots anything out of line, they can then take steps to flag and fix it.

Consolidating Credit Card Debt

Another way some consumers choose to keep track of their credit is by consolidating credit card debt with a personal loan from a private lender.

Taking out an unsecured personal loan with SoFi could help substantially lower how much a person pays each month to different credit card companies, while collapsing multiple bills into one easy-to-track repayment.

By consolidating credit card debt into one personal loan, a borrower may be able to take advantage of a single fixed-rate debt rather than juggling several high-interest rate cards.

Having a single loan to repay each month could also make it easier to monitor their payment activity.

Individuals who consolidate their credit card debt with SoFi personal loans can also sign up for SoFi Relay—a money and goals management app, where users can see all their financial accounts in one place. They can even use the app’s free credit score monitoring tool to keep track of their credit.

Want to keep all of your debt in one easy to understand place? Learn more about consolidating credit card debt with a SoFi personal loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


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Using Your Credit Card During a Crisis—Pros & Cons

Even under so-called “normal” circumstances, some people may have an ambivalent-at-best relationship with credit card use. A person’s first card likely represents freedom and independence—as an adult, those cards might instead symbolize great stress.

Credit-reporting company Experian® says credit card debt is the second-fastest-growing debt behind personal loans, and that the average credit card debt for Americans is $6,194 (with an additional $1,155 on retail credit cards). And 43.9% of credit card holders are referred to as “revolvers” by the American Bankers Association, meaning they carry at least some debt from month to month.

Unfortunately, with the global coronavirus pandemic, there’s no doubt economic circumstances are not normal right now. Should the approach to using credit cards change during a crisis? Here are some ins and outs of using—and rethinking how to use— credit cards:

Is It Smart To Use Credit Cards Now?

Just as in pre-coronavirus times, credit cards aren’t magical “buy anything and worry about it much, much later” tickets. Many of the basics for using a credit card are still in effect: Don’t make purchases just to get reward points, report missing or stolen cards immediately, be in the habit of checking your statements every month, etc.

That said, many banks and lenders are offering relief in the form of rolling out new policies to ease the burden for card holders who are struggling with their payments. Some are waiving fees, offering payment deferral or forbearance, or increasing credit lines—some banks are even offering these three forms of support, and more.

Of course, it’s unwise to assume a bank or credit card company is focused on looking out for you during this time—the better option might be to contact your card issuer for information and any fine print that might go along with these possible perks. And while the ability to increase your credit line might sound good, it could also cause more headaches down the road.

Making minimum payments on credit cards can lead to four times the price of purchases paid back over decades. The interest—especially compounding interest, which is essentially interest on interest already due—can often be the big killer with credit cards. But there are ways to potentially avoid interest on credit cards, such as paying off a balance in full each month.

Even if your income seems stable, if there’s one thing we’ve all been learning through COVID-19 it’s that one can never really predict what is about to happen a week or two later. Now, more than ever, it might be a good idea to use your credit cards responsibly. Part of that responsibility now means knowing what responsibility means for you and your situation—while being one of the revolvers the American Bankers Association tracks isn’t necessarily something to be thrilled about, the costs might be worth enduring if it means you have the necessities you need for survival now. It obviously isn’t irresponsible to charge things you truly need to survive—after all, priorities shift during a crisis. But only you will know what you need.

Planning for the Future—Starting Now

Conversations about using credit cards, global pandemic or not, are really about responsible saving and spending. There is no blanket yes or no answer to whether it’s a good idea to use credit cards right now—although it’s certainly possible to be a little wiser about using a credit card.

FINRA, the Financial Industry Regulatory Authority, reported in 2018 that nearly a third of households would struggle to cover an unexpected $2,000 expense—and while credit cards might be a source of uncertainty or stress, it’s also true that they are not necessarily bad. After all, credit cards might be a key component of establishing and maintaining a credit history, and they of course come in handy for unexpected (and some expected) expenses.

If you’re looking to be spread less thin in the here and now, however, it might be worthwhile to hunt for credit cards that might offer more reasonable rates than your current cards. A good place to start might be with your current card issuers and see if they can lower the interest rate. These calls usually take just a few minutes, so it might be worth a shot. Even if a credit card company can’t do it now, they might be able to do it later—and if you do get a rate decrease, it’s possible to use that when negotiating on another card for a rate to at least match it.

Another alternative might be to consider a cash-back credit card, one that offers cash rewards in a small percentage back on each transaction. Depending on the issuer, the card might offer higher rates for certain categories of purchases, so it might be worth doing some research and strategizing if there is a big purchase you want to make. But, of course, it is not recommended to spend on purchases just to earn a little bit more. The idea with these cards is knowing that cash reward is there versus, say, points that can be redeemed from a catalog of items that might not be essential for survival right now.

There are also balance-transfer credit cards, or a card you would transfer existing card debt to, usually at a lower (or maybe even 0%) annual percentage rate (APR). The rationale and incentive for these cards is to lock your credit card debt in at a lower rate than it would be currently, to therefore make it less burdensome to work on paying it down.

There are wrinkles to employing this strategy, however, so you might want to consider reading the fine print. The idea is you can pay off that balance with no interest on a more compressed timeline than you might otherwise. That lower rate might change after the introductory period, which must be at least six months according to the Credit Card Act of 2009, but can last longer. If you are unable to pay your debt off before the introductory period is over, you may be saddled with an APR that could be even higher than the one you had to begin with. Also, you might want to watch out for any balance transfer fees. Usually, these cards have to be issued by a different company than one you already bank with.

Just be forewarned that while signing up for new cards can make things slightly easier right now by increasing purchasing power, it might only be worthwhile if it helps pay required monthly expenses. Extraordinary times can call for extraordinary measures.

Putting the Cards Down—For Now

If the idea of getting more plastic feels more like a problem than a solution, another route might be to consider a loan to consolidate your current credit card debt. Similar to balance-transfer credit cards, one common use for unsecured personal loans is to consolidate revolving and/or high-interest debt into one loan, ideally with lower interest rates and fees.

Personal loans might make it easier to manage debt all in one monthly bill, with a set end date when your debt will be repaid, and it could end up helping you save money in the long run. SoFi has fixed rate, unsecured personal loans with no fees that can be used to help cover expenses and keep moving forward. And if you’re looking to find ways to tame those credit card bills, SoFi also offers credit card consolidation loans, with no application or origination fees and no pre-payment penalties.

Ready to start vanquishing your credit card debt? Learn more about personal loans and consolidating credit card debt with SoFi.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


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