When you Google “Best Credit Repair Company in Miami, Florida” and other surrounding neighborhoods, your top search (even above Yelp) should be for Build Worth Strategies. As a Miami credit repair company, we are frequently asked what are the credit account types you will find on your credit history.
There are revolving credit accounts, charge cards, service credit and installment loans. Having a mix of these accounts, informally called your ‘credit mix’, accounts for 10% of your credit score with the credit bureaus, so it is essential to understand the difference. Our team can fix your credit, but helping you understand precisely what is going on with your credit report will help you keep your credit score high and your interest rates low.
Revolving Credit Accounts
A revolving credit account is most commonly a credit card. These accounts work like this: a lender gives you a set amount to spend, known as your “credit limit.” Let’s suppose that limit is $1000. Every month you will be able to ‘charge’ up to that amount to make purchases. Once your balance crosses $1000 (or whatever your limit may be) you will need to make a payment to be able to use your card again.
You may make a payment on any portion of the amount you owe on your revolving credit account, as long as it meets the minimum payment requirement. This is where a lot of our Miami, Florida neighbors get into trouble. These accounts usually have very high-interest rates, and carrying a balance on them can and will become costly. It would help if you always tried to pay your balance off every billing cycle and avoid the dreaded charge off should you budget or income begin to spiral.
We would also like to let you know about secured credit cards. These are credit cards that almost anyone can qualify for because you make a deposit equal to the card’s limit into a savings account. The loan is “secured” because you give the lender permission to take that money from the account if you fail to make payments. You can withdraw the funds at any time, but it will usually reduce your limit to the savings account balance and repair bad credit.
Installment Credit Accounts
Installment and Revolving credit accounts make up the majority of credit used today. An installment loan is where you are given a loan for a fixed amount and then make payments on that amount. Installment loans are usually on cars and homes, but they can sometimes be used to purchase home repairs and consumer goods.
The amount of money the purchase costs is called the “principle.” The number of months you have to pay it back (or the number of monthly payments you will make) is called the “term.” The cost of the loan is your interest rate multiplied by your term.
Charge Cards and Service Credit
These two types of credit are uncommon, but it’s still good to know what they are to avoid late payments. Charge cards are often confused with credit cards. The difference is that charge cards need to be paid off at the end of every month to avoid late payments. With service credit, you receive a service, but don’t have to pay for it until the month after it is rendered. Both types of credit impose hefty fees and penalties if you do not make your payment on time.
At Build Worth Services, we specialize in credit repair in Miami as well as Fort Lauderdale, and will happily answer any questions about credit repair service, consumer laws, inaccuracies and your negative items while keeping your personal information secure. We work to help new home owners clean up their FICO score for the lowest mortgage interest rates with some of the lowest credit repair cost in the nation. We can also help existing home owners strategic ways to clean up their tax liens. Please be careful of other firms who offer “money back guarantees” since this is never the case and makes it an easy way to spot a scam company or worse be prayed upon for identity theft.
Please do not hesitate to call our friendly team at 855-532-8453, for a one on one free consultation