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Amazon Aims to Help People Build Credit + Credit Knowledge to Keep You on the Right Track

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Amazon is opening up its rewards credit cards to people with no or bad credit. The tech giant and Synchrony Financial are launching “Amazon Credit Builder” for people who don’t qualify for the company’s other reward cards. The cards will offer Prime customers 5% cash back on Amazon purchases, with the person’s credit limit equal to the size of the deposit they make before receiving their card. Since 11% of the U.S. population have credit scores below 550, the move could increase Amazon’s customer base, says CNBC.

This seems like a good move for those who are unbanked or underbanked but without being of how to manage or maintain good credit this effort might exacerbate the problem. Many people are aware of the important role the credit rating plays in their lives. However, understanding what goes into a credit score (the credit score breakdown) might present some difficulty. There are several different methods of scoring, but most lenders and banks rely on the FICO method that has been in existence since the 1980’s when it was developed by the Fair Isaac Corporation. The three prominent credit bureaus (TransUnion, Experian, and Equifax) all worked with Fair Isaac in order to come up with the FICO algorithm.

Your credit score may be any number from 300 to 850. The average American falls at about 690 which is deemed relatively good credit. However, while this score should secure you a loan, it will not get you the very best interest rates on a loan. In fact, 300-640 = Bad Credit, 641-680 = Fair Credit, 681-720 = Good Credit, and 721-850 = Excellent Credit. Excellent credit should be the aim.

Following is the credit score breakdown:

Payment History

The biggest chunk of your score (35%) is derived from your payment history. This score is influenced by how well (or not) you pay your bills on time, how many have been sent to collection agencies, bankruptcies, tax liens, etc. Keep in mind that missing a payment is worse than making a late payment and that being late or especially missing a mortgage payment is a bigger blow to your credit score than missing a credit card or utility payment.

Usage Ratio

The amount of debt you have (compared to the amount of credit you have not used) accounts for 30 percent of your score. Try not to max your credit cards out. In fact, it is recommended that you only use 25 to 50 of the credit that is available to you. A way to balance this out is to obtain more lines of credit and not use them. However, you do not want to apply for a bunch of credit cards all at once as this is marked against you. If your credit is in good standing, apply for a reputable card every six months or so and save it for a rainy day.

Length of Credit History

Fifteen percent of your credit score is based on how long you’ve established credit. This is common sense. The longer your credit history, the better your overall score will be. More data about your past leads to a more accurate prediction of your future credit worthiness.

Credit Mix

Having several types of credit will actually boost your score if they are managed well. This counts for 10 percent of the overall rating.

New Credit

As mentioned earlier, opening new credit accounts all at once will negatively affect your score in the short term. It’s also important that you are aware that your score can be lowered for too many “hard inquiries” about your status. A “hard inquiry” is one that you have authorized a lender to perform. If you are inquiring about your own score, this will not count against you.

Understanding what goes into the credit score breakdown is the first step in improving your score and what will allow you to design your score and begin you on the journey to financial freedom.

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Hip-Hop Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is also a speaker, and bestselling author of six books. Ash has established himself as a thought leader and trusted voice with Corporate America, Colleges, Churches, and Community based organizations. Ash is best known for helping people maximize their full potentials by giving them the inspiration, tools, and resources needed to live their best lives. For more info on Ash please visit www.IamAshCash.com

Personal Finances

Charlamagne tha God says Joe Biden May Spark Voter Depression and He’s Right!

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The Breakfast Club radio host Charlamagne tha God on Sunday warned that Democrats could face a “voter depression” on Election Day because people still aren’t enthused by presumptive Democratic nominee Joe Biden.

Biden came under heavy fire on Friday after he defended his record during a conference call interview with Charlamagne, at one point telling the black radio host that if he has a problem “figuring out whether you’re for me or Trump, then you ain’t black.” The former vice president later apologized for the remark, saying that “no one should have to vote for any party based on their race or religion or background.”

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Joe Biden is taking on President Trump over the economy.

The former vice president’s campaign believes he has an opening with voters on an issue that has been a strength of Trump’s given the economic harm caused by the coronavirus pandemic, which has locked down businesses and led to skyrocketing unemployment.

They plan to argue that Trump handled the pandemic poorly, is mishandling the economy, and that their candidate is the better leader to shepherd the country to recovery.

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Personal Finances

Trump Says he’s Taking Drug that Could Cure Coronavirus + Is Covid-19 About Population Control?

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President Donald Trump claimed Monday he is taking daily doses of hydroxychloroquine, a drug he’s long supported as a potential coronavirus cure even as medical experts and the US Food and Drug Administration question its efficacy and warn of potentially harmful side effects.

Speaking at a meeting of restaurant executives, Trump said he began taking the drug after consulting the White House doctor.

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Personal Finances

Stimulus Checks will Now Be Distributed on Debit Cards! Is this Safe?

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The Treasury Department announced that it will start issuing some stimulus checks and debit cards.

Until now, payments had been either directly deposited in an individual’s bank account or sent as a paper check.

About 4 million payments will be sent on a debit card. It could mean that those people receive their money faster than if they had to wait for a check.

The Visa debit card can be activated immediately and can be used to make purchases, to get cash at an ATM or to transfer funds into a bank account without being charged a fee

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