Does Income Affect Your Credit Score? [2021]

A lot of people wonder whether or not their income affects their credit score. The answer is a little bit more complicated than a straight “yes” or “no” since there may be indirect effects on your score and people are often asking this question as it relates to pursuing some form of credit.

Below, I’ll dive into the details.

Does income affect your credit score?

Your credit score is not directly affected by your income but income definitely comes into play when pursuing and obtaining credit.

Credit scores explained

As I further explain in my beginner’s guide to credit scores, your FICO credit score is determined in the following ways:

  • Payment History (35%)
  • Utilization (30%)
  • Credit History (15%)
  • New Credit (10%)
  • Mixed Credit (10%)

As you can see, there’s no category where income fits in.

“Income isn’t even on your credit reports so it cannot be considered in credit scores because credit scores only consider what’s on your credit reports,” John Ulzheimer, formerly of FICO and Equifax stated to CNBC.

“In fact, no wealth metrics are factored into your credit scores.”

Why is that?

Well, lenders are more concerned about your ability to borrow funds and pay them back than how much money you make.

Just because you make a certain amount of money, that doesn’t mean that you’ve established a track record of paying your bills on time.

In fact, you might make a lot of money but have little to no experience in managing credit lines and in that case, you could pose a much higher credit risk than someone making a third of your salary but with a long payment history. 

A study by the Federal Reserve found that the correlation between income and credit scores is not as strong as many believe.

“Our analysis indicates only a moderate correlation between income and credit scores,” the study found.

Yet, with that said, income still often indirectly affects your credit score. This is largely because people with higher incomes are typically better suited to have lower utilizations, since they can access higher credit limits or more rapidly pay off debt.

People with higher incomes may be less likely to miss a payment because they can’t afford to make the payment.

However, those with higher incomes might be more likely to forget to make a payment, as WalletHub found, “People with high income are almost twice as likely to miss a payment due to forgetfulness as people with low income.”

This could be true because high income individuals may not feel the financial pressure that low income individuals feel.

Since utilization is 30% of your FICO credit score and payment history is 35%, it’s sometimes the case that people with higher incomes have better credit scores.

Although income does not directly affect your credit score, it is still a very important factor when a lender is making the decision to extend credit to you, especially when it comes to installment loans. 

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Specific credit scoring models

Many banks and lenders have their own type of scoring model which they use to determine your credit worthiness.

These typically utilize your credit score along with other factors, such as your income, housing status, etc.

So for example, a bank issuing a credit card will consider your FICO credit score but will also incorporate your stated income into its algorithms to determine if they can offer you credit and if so, how much credit you can be offered.

Some premium credit cards may have income cut-offs where below that your odds of being approved for that credit card are close to zero, but often a lower income just means a lower credit limit issued by that bank.

So income is often a secondary consideration for many credit card issuers and your credit score is what is much more important. 

However, for many models used to determine eligibility for installment loans, income plays a much more significant role, and one way it does that is by measuring your debt-to-income ratio.

Related: Can You Get a Credit Card with No Job?

Debt-to-income ratio

Your debt-to-income ratio looks at how much income you have coming in each month versus how much debt you’re required to pay off each month.

To find it, you divide your monthly income by your total amount of monthly debt payments (car note, student loans, minimum credit card payments, etc.).

 This should be distinguished from your credit card utilization (credit-to-debt ratio), as they are two completely different concepts.

Although it has nothing to do with your credit utilization, there’s a similarity between the two in that they both should be kept in check in order to maximize your chances of being approved for better credit lines and/or loans.

I recommend to keep your debt-to-income ratio between 15% and 36%. The lower the better, although it’s beneficial to have some level of installment debt so that prospective lenders can see that you can handle making payments and it also helps bump up your credit score. 

Keep in mind that, subject to certain exceptions, 43% is the maximum debt-to-income ratio you can have while still meeting the requirements for a “qualified mortgage.”

You can still have success with lenders even with an income-to-debt ratio over 50% but things get much tougher for you in that scenario, so try to remain much lower than that. 

What specific level of income-to-debt ratio is right for you depends on what type of credit you plan on pursuing and your own comfort level with making payments for your debt.

Some prefer to keep it closer to 15% to maximize savings while others may prefer levels closer to 30% so they can enjoy certain comforts, like living in a nicer loft, area, etc.

You should also make sure to factor in unexpected changes to your income that could occur in the future, since that could affect your ratio significantly. (I’ll write more on this topic later since there’s plenty to cover about it.)

Tip: Check out the free app WalletFlo so that you can optimize your credit card spend by seeing the best card to use! You can also track credits, annual fees, and get notifications when you’re eligible for the best cards!

Verifying income

So when your income does matter in certain scenarios, how do banks verify your income?

The answer differs. Believe it or not, for credit card applications, it’s often the case that a bank never requires you to verify your income. (If you have a very high stated income of a few hundred thousand dollars, that might be a different story.)

Every now and again, a bank may require you to submit pay stubs or bank statements for a financial review or for a credit card application, but these instances are very rare and are definitely the exception.

Related: What Does “Accessible Income” Mean on a Credit Card Application?

However, for installment loans, such as mortgages, you can guarantee that you’ll have to prove your income by submitting pay stubs or tax forms.

And that makes more sense.

For one, installment loans typically involve much higher sums of money so the stakes are higher.

But practically speaking, an installment loan issues you a monthly bill every month that does not depend on the previous month’s spending like a credit card.

Thus, it’s even more important for a lender to see that you’ll have a steady flow of funds coming in each month since you’re also guaranteed to see a steady flow of those bills coming in.

FAQs

Does income show up on your credit report?

No, your income does not show up on your credit report.

What is a good debt-to-income ratio?

I recommend to keep your debt-to-income ratio between 15% and 36%. 

Can you have a good credit score with a low income?

Yes, it is possible to have a very good credit score while having a low income as long as you don’t miss payments and keep your utilization low.

Is there a correlation between income and credit scores?

A study by the Federal Reserve found only a moderate correlation between income and credit scores.

Final word 

Your income does not affect your credit score, at least not directly. Having a higher income often allows you to decrease your credit utilization and that can indirectly benefit your score but there’s no category for income when determining your FICO score.

On the other hand, your income often comes into play when lenders make their decision to extend your credit and for installment loans, such as mortgages, you should always expect your income to be relevant since your debt-to-income ratio is such a significant factor.

How Credit Mix Affects Your Credit Score [2021]

Credit mix is a category that accounts for 10% of your total FICO score. It’s an often overlooked category and probably the least discussed category of your score.

While it’s likely the least important factor in determining your score, it’s still beneficial to understand how this category is determined so that you can eventually reap the benefits of having a good credit mix on your credit report. 

What is credit mix?

Credit mix looks at how diverse your different credit lines are. There are two major types of credit lines: installment and revolving credit lines. (Also discussed are open lines of credit.)

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Installment credit lines

For installment credit lines you usually pay a fixed amount each month until you pay down an entire balance due. These loans are typically financed for years (and sometimes decades) at a time.

You can often pay these off in advance or expedite the pay-off process by making things like double payments.

Common examples of installment loans are:

  • Home loans
  • Auto loans
  • Student loans
  • Personal loans (can often be revolving)

Because the payments for these loans remain the same each month, your income and income-to-debt ratio can play a large role in obtaining these.

Revolving credit lines

Revolving credit lines offer you a credit limit that you can utilize at whatever pace you want to. So, for example, you might have access to a $10,000 credit line but you can choose to only use $500 of that if you’d like.

Because of that, your monthly payments can vary which is a key distinction between revolving credit lines and installment lines.

Your income is not quite as important in determining your approvals for revolving lines (it’s more about your credit score).

Common examples include:  

  • Credit cards
  • Store credit cards (Macys’ card, GAP card, etc.)
  • Trade lines (credit line at a jewelry store)
  • Personal loans

Open lines of credit

Open lines of credit are credit lines where you’re given an unspecified amount of credit usually on a monthly basis and expected to pay that balance in full each month.

Many open lines of credit will not reflect on your personal credit report (unless you miss a payment). Other open lines like charge cards do report on your credit report but don’t affect your credit card utilization.

Examples of these include:

  • Utilities
  • Charge cards

How much does credit mix affect your credit score?

Your credit score is determined by the following categories:

  • Payment History (35%)
  • Utilization (30%)
  • Credit History (15%)
  • New Credit (10%)
  • Mixed Credit (10%)

It would appear that mixed credit carries the same weight as new credit but according to Creditcards.com, Barry Paperno, a consumer operations manager at myFICO.com stated that, “[f]or the most part, it can be considered the least important of the five main components.”

That seems a bit contradictory since new credit is allocated the same 10% as mixed credit but that information is coming straight from an operations manager at myFICO, so it’s safe to say it’s probably accurate. 

Why is mixed credit important?

Creditors want to see that you can successfully manage different types of credit. 

Barry Paperno also stated that “FICO’s research has found that, all things being equal, consumers with a ‘mix’ of credit types on their credit reports tend to be less risky than those who have experience with only one type of credit.”

Presumably, the better you are at managing an array of different credit lines, the more responsible of a borrower you might be.

Statistically speaking, this probably is accurate as you can imagine that a typical profile of someone with a mortgage, car loan, student loan, and a couple of credit cards would on average be more stable than someone with only five department store credit cards.

Of course a lot of other correlative factors probably come into play here like income and education, but I don’t doubt what the statistics probably show about consumers with mixed credit profiles. 

Why is credit mix important to the consumer?

Practically speaking, mixed credit is important because FICO says having a variety of loans is necessary for earning a perfect credit score, according to creditcards.com.

Ethan Dornhelm, principal scientist at FICO reiterated that the change in credit score is around “10 to 20 points, not 100,” according to FoxBusiness.

So this category is probably more for the over-achievers seeking perfect or near perfect credit scores.

In other words, if you’re just starting to build up your credit or rebuilding your credit, I wouldn’t prioritize diversifying your credit mix.

Instead, focus on lowering your utilization and building up your payment history since those things make up 65% of your credit score. 

If the credit diversification happens on its own then great, but I wouldn’t go out of my way just to pull out different types of loans for a bump in my score.

It’s probably best for most people to just let it happen naturally. Plus, it’s possible that the effect from your credit mix is interrelated to a number of other factors on your credit report like your payment history, utilization, other accounts, etc., so it would likely be difficult to accurately predict what kind of boost you’d receive from taking out a given loan in any event.  

Tip: Check out the free app WalletFlo so that you can optimize your credit card spend by seeing the best card to use! You can also track credits, annual fees, and get notifications when you’re eligible for the best cards!

How to perfect your credit mix

One interesting quote about the effect of mixed credit comes from Paperno at FICO and states that, “The number of each type of account is not as important for a person’s score as simply having experience with both types of accounts, either currently or within the recent past.”

There are two take-a-ways from this quote for me.

First, it’s important to note that the number of different accounts doesn’t matter much. This makes a lot of sense since a lot of people probably don’t have more than one type of home loan, auto loan, etc.

Second, the quote stresses that what is most important is having experience with “both” types of accounts.

That’s important to me since it seems to imply that what’s most important is just having a mixture of both installment loans and revolving credit, since those are the two major different types of credit lines.

Open lines of credit may not matter as much.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Different weight for different types of accounts?

There’s conflicting information on how much having different types of installment and revolving accounts affects your score.

Obviously, the quote from Paperno states that the number of each account type isn’t as important as having both types (installment and revolving accounts).

But the quote also doesn’t state that having a good mix of different types of installment and revolving credit lines is not important or not considered.

Since FICO doesn’t release exactly how they calculate their credit scores, it’s hard to know exactly how important it is to have a variety of each type of credit line. My guess would be that it’s not very important to your overall score.

That’s because the mixed credit category is the least important factor and what’s most important for this factor is merely having both types of credit: installment and revolving.

Thus, if you have a little bit of both revolving credit and installment credit, you probably are reaping the majority of whatever little benefit “mixed credit” is having on your overall score. 

Still, some have stated specific guidelines about maintaining a proper mixture of credit.

For example, Streetdirectory.com claims that “When it comes to maintaining a good mix of credit, most advisers recommend that you have one loan for every 3 to 5 credit cards.”

I don’t exactly know who these advisors are that recommend that but I do think it makes sense that the overall make-up of your mixture of credit is considered to an extent.

For example, I could see why a home loan would make you appear more responsible on paper than having an auto loan, since those who obtain home loans probably have a better track record on average than those with just auto loans.

And don’t forget, there’s many different models of your FICO score, some of which are specifically tailored to different industries.

It’s very possible that a FICO model designed for the auto industry would give more weight to credit mix that has a history of auto loans and the same with mortgages. Again, that’s speculation on my part but I think that it makes sense. 

Mixed credit FAQ

How much does mixed credit affect your credit score?

Mixed credit is 10% of your FICO score and experts state that it will typically only impact your credit score by a matter of around 10 to 20 points.

What is a good credit mix to have?

Some advisers claim that you should have one installment loan for every 3 to 5 credit cards. However, others believe that it is important just to have at least one type of installment and at least one type of revolving credit line.

Why is mixed credit important?

Research shows that consumers with a mix of credit types tend to be less risky than those who only have experience with one type of credit.

What are open lines of credit?

Open lines of credit are credit lines where you’re given an unspecified amount of credit usually on a monthly basis and expected to pay that balance in full each month.

What is a revolving line of credit?

Revolving credit lines offer you a credit limit that you can utilize whenever you want.

What is an installment credit line?

An installment credit line is a line of credit that you usually pay a fixed amount each month for until you pay off the entire balance over time.

How is your FICO score determined?

Your credit score is determined by the following categories:

Payment History (35%)
Utilization (30%)
Credit History (15%)
New Credit (10%)
Mixed Credit (10%)

Final word

Overall, establishing your credit mix should not be a major priority since it is the least important factor in your credit score and it’s easy enough to naturally diversify your credit with both installment and revolving credit lines. However, since it could end up bumping up your score 20 to 40 points, it’s worth it to keep an eye on it and monitor how your credit mix is developing as you continue to pursue different types of credit. 

Should You Pay off Your Credit Card Balance Each Month? [2021]

For a lot of beginners, there’s some confusion regarding whether or not you should pay off your credit card balance each month.

A lot of people actually think it harms your score to pay off your balance in full each month and others swear you should pay off your balance each month to avoid interest.

So which is it?

In a way, both sides are correct, it’s just that there needs to be some clarification about when you’re paying off your balance. I’ll explain why you should pay off your balance each month and how you can benefit your credit score in the process. 

Before I jump into whether or not you should pay your bill, it helps to understand how this question fits into the broader scheme of improving your credit score. So here’s a quick refresher. 

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Your credit score 

When we’re talking about the pros and cons of paying off your credit card balance, we’re talking about the “utilization factor” of your credit score.

Your FICO credit score is determined in the following way: 

  • Payment History (35%)
  • Utilization (30%)
  • Credit History (15%)
  • New Credit (10%)
  • Mixed Credit (10%)

Your utilization is also called your “debt to credit ratio.”

So for example, if you have a $10,000 total credit line and you are using $3,000 of that credit line then you have a 30% utilization.

Utilization makes up 30% of your total credit score, making it the second most important factor for your FICO score. So it’s vital that you understand how paying off your bills will affect it. 

The ideal utilization 

Ideally, you want to keep your utilization under 30%, although I actually recommend striving for ~5%.

Generally, the lower your utilization the better, until you get to 0%. And this is where the confusion usually comes in. 

You want to keep your utilization somewhere above 0% to maximize the benefit to your credit score. Why does it hurt your score to keep it at 0%? After all, doesn’t that mean you’re taking care of all your debt as opposed to just some of it? 

The answer is that your credit score is meant to reflect how big or how little of a credit risk you are (i.e., how likely you are to pay back what you are borrowing). If your utilization is at 0% then from the perspective of a lender, you look like someone who does not use your credit. 

This means that you may not be experienced with borrowing and repaying credit and may only be experienced with not borrowing available credit. While the latter still makes you responsible, the former makes you appear even more responsible and experienced (and not to mention profitable). 

That’s why having more than 0% utilization but less than 10% (or 30%)  is ideal. It shows that you can borrow money and still keep yourself in check and pay it back (i.e., be responsible). 

Related: How to Improve Your Credit Score Fast

Tip: If you have maxed out credit cards, get added as an authorized user to someone that has a high credit limit and you can instantly improve your credit utilization.

How does it affect your credit score? 

In the end, only employees and officers privy to FICO’s algorithms know exactly how a 0% utilization affects your credit score.

According to MyFICO, Barry Paperno, consumer operations manager for FICO, stated that a tiny reported balance can trump a zero balance.

 “In short, the lower a consumer’s credit utilization, the better, but having a small balance is slightly better than having no balance at all.”

Thus, it’s clear that having a small balance will benefit your score but if I had to guess, it’s not by a whole lot. But if you are shooting for a perfect credit score, it could probably help you get there.

One thing to remember is that lenders often have their own systems that work in conjunction with FICO scores.

It’s very possible that their systems factor in credit card usage on others cards because that would indicate to them that you are a more profitable customer (remember, these banks make a lot of money on interchange fees).

When applying for a credit card, I’ve even had bank reps on the phone bring up the fact that I have a card that wasn’t getting put to use.

Thus, even if the benefit to your FICO score is minimal, I’d still try to show usage on my credit cards so that other lenders will view you more favorably.

So should I pay my credit card off each month? 

Now that you see why having a balance each month is beneficial, you may think you shouldn’t pay off your balance each month. But that’s not how it works. 

After your statement closes each month, your balance is then reported to the credit bureaus. Once it’s reported, that’s the figure that determines your utilization. 

Of course, after your statement closes and that balance is reported, you then receive your bill.

So you can pay off your bill 100% to avoid all interest payments and still have that utilization reported to the credit bureaus and benefit your score.

This is the ideal way it should work: make your charges, wait for your bill to come in, and then pay it all off. 

Related: How Does Payment History Affect Your Credit Score?

What if I pay off my balance after each charge?

Some people like to pay off their credit card balance after each charge or alternatively they might run up a a maximum balance and then pay off that balance multiple times a month (usually called “cycling” your credit card line).

Both of these are usually not beneficial, except under certain exceptions. 

For one, if you pay off your balance after each charge or before your statement closes then you will be given a 0% utilization when your statement closes.

Thus, you will not be maximizing your FICO score. Also, I believe some banks may even limit you on the amount of payments you can make each month. 

Second, some banks become weary of you cycling your credit limit. This is especially true if your stated income is not very high and you’re cycling a high credit line multiple times a month.

Perhaps you have an authorized user who is also racking up charges so your total amount of spend comes close (or may even exceed) your stated income.

In this scenario, this can raise red flags and your account can come under investigation and in some cases even be shut down. 

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

When it makes sense pay off your balance before closing 

Those two instances aside, sometimes it would make sense to pay off your balance (or at least most of it) before the statement closes. 

This would be a situation where you have a low overall credit limit. Let’s say you are still in the process of building your credit and only have access to $1,500 worth of credit.

You may easily exceed that on spend each month such that if you didn’t pay down your credit card, your utilization would be reported to the credit bureaus as nearly maxed out, which is not good! 

In that case, I would recommend trying to pay down the balance once or twice a month but try to keep something on your balance when it’s time for your statement closes. Even keeping $150 would give you an ideal 10% utilization. 

In many instances, once banks see you doing this a few times they will often increase your credit limit for you (Chase is really good about this).

This is different from the other situations where you’re cycling a high credit limit because the banks can see that you’re operating with a low credit limit and know that you don’t really have much breathing room. 

Finally, if you’re operating with an extremely low line of credit, such as a $300 line of credit, I wouldn’t stress about trying to keep a small balance before the statement closes.

If it’s not an issue for you to keep around $30 on your balance each month before closing then sure, do that. But if that’s causing you stress, I would probably just pay the whole thing off before my statement closes, so that my utilization is 0%.

I’d do that for several months to build up my credit report and then once I was ready to apply for another card, then I would go out of my way to keep around 10% on the card with that month’s closing statement. 

FAQs

How much does utilization affect your credit score?

Utilization makes up 30% of your FICO credit score, making it the second most important factor. It can drastically impact your credit score if it is too high by bringing it down over 200 points.

What is credit card utilization?

Credit card utilization is what percentage of a given credit line you are using.

What percent of credit card utilization should I have?

According to Barry Paperno, consumer operations manager for FICO, you want your credit card utilization to be low but not zero for an optimal score. 5% utilization would be a good target to shoot for.

Should I pay my credit card off each month?

You should pay your credit card bill off in full in order to avoid any applicable interest. However, you want your balance statement to close with a small balance so that your utilization is not 0%.

Can I pay my credit card bill multiple times a month?

You can pay your credit card bill multiple times a month but some banks limit the number of payments you can process.

Final word

So in conclusion: 

  • You want to keep your utilization somewhere between 1% to 5% when your statement closes to maximize the benefit to your credit score.
  • By paying your balance in full after your statement closes you will avoid interest and allow the lender to report your utilization to the credit bureaus. 
  • Unless you have a low credit limit or some other circumstance, there’s no reason to pay off your bill before your credit card closes

How Does Payment History Affect Your Credit Score? [2021]

Payment history is the most heavily weighted factor in the FICO credit score formula. It’s very important to understand the effect that a late payment will have on your credit score and to do everything you can to avoid making late payments.

With that said, mistakes do happen, and so it’s helpful to understand exactly how late payments are factored into your credit score and what can be done to help if you’re ever hit with late payments.

How your credit score is calculated

FICO determines your credit score in the following ways:

  • Payment History (35%)
  • Utilization (30%)
  • Credit History (15%)
  • New Credit (10%)
  • Mixed Credit (10%)

Payment history is the number one factor for your credit score. This makes sense considering that the point of a credit score is to provide potential lenders with a way to gauge whether or not you might be a credit risk.

Viewing payment history would usually be the most telling way to measure how likely you are to manage future credit.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

What is payment history?

According to FICO, payment history is your track record for previous payments made on all loans and credit lines and includes the following: 

  • Credit cards (Visa, MasterCard, American Express, Discover, etc.)
  • Retail accounts (credit from stores where you shop, like department store credit cards)
  • Installment loans (loans where you make regular payments, like car loans)
  • Finance company accounts
  • Mortgage loans

Public record and collection items

  • Bankruptcies
  • Foreclosures
  • Lawsuits
  • Wage attachments
  • Liens
  • Judgments

Although many utilities, cable, internet, and phone companies often perform hard pulls on your credit, your monthly payments don’t usually show up on your payment history (I believe it has something to do with different state and regulatory laws).

However, if you go delinquent and a service provider has to charge off your account that can definitely be reported on your payment history, so always follow up with late payments! 

As an aside, FICO scoring model 9 will implement changes that will really help a lot of people with their payment history.

First, these “nontraditional” payment histories with utilities, rent, etc. are going to be considered for your payment history.

Second, medical bills in collections (whether paid or unpaid) will no longer hurt your credit score.

You can currently get some utility bills reported to your credit report by signing up for Experian Boost. If your payment history is lacking or a little suspect but you have made a lot of qualifying payments, Experian Boost can be well worth it.

How long do late payments stay on your credit score?

Late payments will remain on your credit report for 7 years, although some bankruptcies will remain on your report for up to ten years.

Keep in mind that the negative effect of the late payment will be lessened over time, as discussed below.

How much do late payments affect your credit score?

How much a late payment affects your credit score depends on a mix of factors, including:

  • How late they were and the number of past due items listed on a credit report
  • The amount of money still owed on delinquent accounts or collection items
  • How much time has passed since any delinquencies, adverse public records or collection items

A) How late they are

Creditors usually report late payments in one of these categories:

  • 30 days late
  • 60 days late
  • 90 days late
  • 120 days late+ or “charge off” (meaning they’ve signed off on considering your debt a loss).

How much does the “lateness” time period matter?

If you have a late payment right now do whatever you can do to pay that off because the later your payments are, the the bigger the negative impact will be.

If you have a late payment of 30 days or 60 days, the impact from those late payments will generally only be felt temporarily (unless you have an entire track record of late payments).

However, when it comes to payments of 90 days or more the effect can be much more severe.  

According to Credit.com, “from a scoring perspective, a single 90-day late payment is as damaging to your credit scores as a bankruptcy filing, a tax lien, a collection, a judgment or repossession.”

Once you get into the 120 days+ late or charge off period, you risk getting additional marks on your credit report like collections and lawsuits/judgments, so there’s potential for even more damage to your score.

Thus, it’s very important that if you slip up, to immediately do whatever it takes to keep your payment from becoming even later. 

Credit scores are not affected the same 

Another thing about late payments is that the negative impact on your score works a little backwards from how you may have thought.

For example, one late payment could have a more significant impact on higher credit scores.

According to FICO data, “a 30-day delinquency could cause as much as a 90 to 110 point drop on a FICO Score of 780 for a consumer who has never missed a payment on any credit account.

So if you are going for a perfect credit score of 850, one late payment could set you back dramatically.

In comparison, a consumer with a 680 FICO Score and two late payments (a 90-day delinquency on a credit card account from two years ago and a 30-day delinquency on an auto loan from a year ago) would experience a 60 to 80 point drop after being hit with another 30-day delinquency.

Thus, if you’re really trying to preserve your high credit score then you’ve got to stay on top of your due dates because one slight slip-up could affect you dramatically.

B) Amount still owed on the accounts or collections

Your credit report will usually reflect how much is still owed on an account or whether or not you settled the amount.

If you pay off an overdue account in full the late mark will remain on your credit report. (Sometimes, you can negotiate with a collections agency or lender to remove the late payment entirely when you become up to date but that’s an entirely different matter.)

Some people are reluctant to pay their overdue payments since the negative marks still remain on their credit report. However, unless they are about to fall off very soon, it’s usually a good idea to pay those off for the following reasons:

  • The FICO 9 model doesn’t factor in collections that have been paid but will punish you more unpaid collections. 
  • Some lenders won’t feel comfortable if you have amounts owed on your accounts or to collections for obvious reasons
  • If the statute of limitations hasn’t passed in your state you could be sued for the debt which in addition to being a hassle to deal with, could add additional negative remarks to your credit score.
  • Collection agencies may continue to sell your debt to other agencies which can cause future negative remarks to post (I discuss that below)

I’ve heard somewhat conflicting reports of whether or not the amount in collections matters to your credit score.

First, it all depends on the credit model being used. FICO 8 excludes amounts less than $100 and it’s said that the amount won’t matter if it’s more than $100.

However, I know for a fact that banks will sometimes consider the amount in collections, so that’s always something to think about. 

C) How much time has passed

Even though your late payments will remain on your credit report for 7 years, they will slowly lose their negative impact on your score over time.

After about two to three years a late payment should have a substantially lessened negative impact on your score, assuming you don’t have a report littered with negative marks or new late payments. 

One thing that I don’t think is justified is that some lenders will consider the date that a debt or collections was sold when making their determinations.

If you’re not familiar, some collection agencies will sell off your debt to other collection agencies (for pennies on the dollar). When that happens your credit report will reflect the date that the debt was sold (the new opening date) and will also show the date of first delinquency (when you became late on a payment).

Some lenders will go by the new opening date and not the date of first delinquency which I think is a huge injustice. This is why I mentioned paying off your overdue accounts is often a good idea. 

Warning: If the date of first delinquency (as opposed to the new opening date) is changed this is against the law and you should report it ASAP!

New FICO 10 Model

Bigger impact from late payments

Per Experian, with the FICO Score 10 Suite, “the impact of late payments is more pronounced than with prior FICO Score versions.”

It’s not clear yet exactly how much worse late payments will be with the new FICO Score 10 model but it is clear that you will be penalized harder for late payments. 

Therefore, it is going to be more important than ever to make your payments on time.

Trended data

It’s worth noting that the new FICO Score 10Y model considers trended data. This means it will analyze your outstanding balances over the past 24 months.

According to Experian, “[t]his allows the credit scoring model to differentiate consumers who pay their credit card debt in full each month (known as “transactors”) from those who carry over, or ‘revolve,’ a balance from month to month.”

What is more, credit card debt is going to be treated more severely with FICO 10 than before.

So in the future it will be even more important to not just have on-time payment history but to show banks that you responsibly manage your credit lines.

By paying off your credit card balance in full each month you will look like a more responsible consumer and less of a credit risk.

How credit cards can help

Getting into the “credit card game” can actually improve your credit score because it can help you to build your payment history and potentially dilute any negatives on your report (or just continue the trend of making on-time payments).

For example, if you were to open a hand full of credit cards in a few months and make on time payments for a year, you’d be able to accumulate around 60 or more on time payments and from there continue to build up a positive payment history.

And so long as you keep your utilization low, your credit score should be improving since 65% of what determines your score will be benefited.   

How authorized users can help

If you are in need of a payment history you can always try to become an authorized user on an account that has a long payment history. You may not experience a huge rise in your score but it should still help you.

FAQs

Do paid collections hurt your credit score?

Paid third-party collections should help your credit score for lenders using FICO Score 9 and FICO Score 10.

Should I pay my unpaid collections?

Paying your collections is a smart move that can help you avoid lawsuits and prevent a negative impact on your credit score for lenders using FICO Score 9 and FICO Score 10.

Final word

Your payment history should always be a top priority for you when it comes to your credit score. It is the category that carries the most weight and can be the hardest to fix since it sometimes just requires the passage of time.

Always do whatever you can to pay your bills on time and if you miss a payment try to mitigate the damage done by paying it as soon as you can. 

Chase Business Checking Accounts: (Requirements & Documents Needed) [2020]

Are you thinking about opening up a Chase business checking account but you’re unsure which type of checking account is right for you? Do you also have questions about all of the documents you will need to open up these accounts?

I’ve opened up several business checking accounts over the years for various types of entities like LLCs and corporations so I can help you out with everything you need to know.

In this article, I will walk you through how to open Chase business checking accounts. I’ll show you all of the differences between the accounts and show you everything that you need to know about the requirements before stepping into a Chase Bank to open your account.

Chase business checking accounts

There are three main types of Chase business checking accounts that you can choose from.

  • Chase Total Business Checking
  • Chase Performance Business Checking
  • Chase Platinum Business Checking

I will discuss the details of each of these checking accounts below. But first, I will explain to you how to open up a business account and some important factors you will want to consider.

Tip: If you are thinking about opening up a business account, make sure that you go for one of the top business credit cards like the Chase Ink Business Preferred. With that card you can earn 3X per $1 on the first $150,000 spent in combined purchases in categories like advertising, shipping, and travel.

How to open a Chase business account

It is pretty straightforward to open a Chase business account, but you will need to pay attention to these special requirements when it comes to the documentation needed for your business.

Schedule an appointment

The first thing that you will likely need to do is to schedule an appointment since most cannot set these accounts up online and must visit a branch. To locate a Chase Bank branch office click here. The search results will also pull up a phone number you can use to schedule your appointment and ask any questions.

It is possible that you could try to be a walk in in-branch but you will likely need to schedule an appointment ahead of time to make sure that there is a business banking agent available, since all branches do not always have banking agents on-site.

When you call, you can ask for a Chase Business Relationship Manager (BRM). These are special business representatives that often work with businesses that are established but they also work with newly established entities as well.

Gather your documents

Once you have your appointment scheduled, you will need to make sure that you have the required documentation to open up your account. The documents that will be required will depend on the type of business entity that you have set up and I go into detail about all of these below.

Tip: Be sure to call the bank ahead of time and verify the requirements for your bank account. Often times a business bank agent will reach out to you to verify your appointment and clarify any questions you have about the documents.

Create a cheat sheet

Regardless of what type of entity that you have set up, I highly recommend that you create a cheat sheet with facts about your business.

This might include the following information:

  • Full legal name of your business
  • Business address
  • Phone number
  • Number of business locations
  • What/where products and services are sold
  • The nature of your business
  • Annual sales, revenue, and profit
  • Number of employees
  • The types of transactions in the volume of transactions that you expect to be running through your business account

You may not need to provide all of this information for every type of business account that is open, but it will be very helpful to have this information easily retrievable. This is especially true if you apply for the Chase Ink Business Preferred and have to sit through a reconsideration phone call.

Narrow down your focus

Before you waltz into a Chase branch, you should have a good idea of which Chase bank account is best for you.

If you are just starting off for you or have a really small business, then it is usually pretty clear that a Chase Total Business Checking account will likely be the best route for you.

However, if you have over 100 transactions per month going on in your account or you’re cash depositing over $5,000 dollars per month, then you might want to look into other options.

If you have a growing business or a midsize business then it could be a little bit more difficult to determine which one is best for you.

The Performance and Platinum accounts are pretty similar but there are some key differences.

  • The Performance Account allows for 250 transactions with no fees while the Platinum account allows for 500 transactions with no fees.
  • The Performance Account allows for $20,000 in cash deposits with no fees while the Platinum account allows for $25,000 in cash deposits with no fees.
  • The Performance Account allows for two free outgoing domestic wires while the Platinum account allows for your four most expensive for wires to be free.

So it will be really beneficial if you can get a grasp on your transactions, cash deposits, and wiring needs before you ever step foot into a Chase Bank.

Check for bonuses and coupons

Chase will often be offering special bonuses for opening up Chase business checking accounts. These bonuses might be $200, $300 for $500 — it all just depends on the offer and coupon available. Typically, the $500+ offers are going to only be for the Performance Account or above and they may not always be available.

The requirements for meeting these bonuses can be very easy to obtain. For example, you may only have to maintain a $1,000 daily balance and process a few transactions per month.

Opening up these accounts is typically only a soft pull on your credit report, so opening up these accounts is often worthwhile. You will usually need to keep your account open for at least six months to qualify for these bonuses so keep that in mind.

Get versed in Chase business cards

While you are setting up your business account, you might get asked if you are interested in a Chase business credit card. There are three main Chase branded business cards that I would look at. The Chase Ink Business Preferred is my number one business card.

The Chase Ink Business Preferred earns 3X per $1 on the first $150,000 spent in combined purchases on all of the following categories:

  • Travel, including airfare, hotels, rental cars, train tickets and taxis
  • Shipping purchases
  • Advertising purchases made with social media sites and search engines
  • Internet, cable and phone services

If you are looking for a no annual fee business card then you might look at the Chase Ink Unlimited or the Chase Ink Cash. Both of those are solid options.

Below, I will go into detail about each of the different type of Chase business accounts. I’ll then go into detail about the necessary documentation that you will need to bring in for setting up discounts.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Chase Total Business Checking

Chase total business checking account are ideal for small businesses and for those that are growing.

Requirements

  • $25 minimum deposit to open
  • $15 monthly service fee

The monthly service fee is waived when you maintain a minimum daily balance of $1,500 or more if you maintain a linked Chase Private Client or Chase Sapphire Checking personal account. Otherwise it is only $12 when you enroll in paperless statements.

Features

  • 100 transactions per month at no charge
  • Unlimited electronic deposits
  • $5,000 in cash deposits per statement cycle without an additional fee
  • Domestic and international wiring
  • Send and receive funds with wire transfers, Chase QuickDeposit, Chase Online Bill Pay and more
  • Access to Chase Online Banking and Chase Mobile Banking
  • Chase Business Debit, Deposit and ATM cards offer owners control and provide options for signers and employees to access ATMs and make purchases
  • Access to 16,000 ATMs and 5,100 branches

Chase Performance Business Checking

The Chase Performance Business Checking account is good for those businesses that are starting to take off a bit with their growth.

Requirements

  • $25 minimum deposit to open
  • $30 OR $0 monthly service fee
    Monthly service fee can be waived when you maintain a combined average daily balance of $35,000 or more in qualifying business deposit accounts. You can also get the monthly fee waived with a linked savings account.

Features

  • 250 transactions per month at no charge, plus unlimited electronic deposits and incoming wires
  • $20,000 monthly cash deposit without an additional fee
  • All incoming wires and two outgoing domestic wires at no charge per statement cycle
  • Access to Chase OnlineSM Banking and Chase Mobile® Banking
  • Chase Business Debit, Deposit and ATM cards offer owners control and provide options for signers and employees to access ATMs and make purchases
  • No additional charge for Positive Pay and Reverse Positive Pay Protection services at chase.com
  • Interest option available
  • Personal account benefits available
  • Monthly service fee waived on a linked Chase Business Premier Savings account
  • Access to 16,000 ATMs and 5,100 branches

Chase Platinum Business Checking

The Chase Platinum Business Checking account is most suited for established businesses who have large amounts of transactions and wiring fees.

Requirements

  • $25 minimum deposit to open
  • $95 OR $0 monthly service fee
    Monthly service fee can be waived when you maintain a combined average daily balance of $100,000 or more in qualifying business deposit and business investment balances. You can also get the monthly fee waived with a linked savings account.

Features

  • 500 transactions without a fee, plus unlimited electronic deposits and incoming wires
  • $25,000 monthly cash deposits per statement cycle without an additional fee
  • All incoming wires and your four most expensive outgoing wires at no charge per statement cycle
  • Access to Chase OnlineSM Banking and Chase Mobile® Banking
  • Chase Business Debit, Deposit and ATM cards offer owners control and provide options for signers and employees to access ATMs and make purchases
  • No additional charge for Positive Pay and Reverse Positive Pay Protection services at chase.com
  • Personal account benefits available
  • Reduced balance requirement for Chase Private Clients
  • Monthly service fee waived on a linked Chase Business Premier Savings account
  • Access to 16,000 ATMs and 5,100 branches
  • 24/7 customer service

Tip: If you are thinking about opening up a business account, make sure that you go for one of the top business credit cards like the Chase Ink Business Preferred. With that card you can earn 3X per $1 on the first $150,000 spent in combined purchases in categories like advertising, shipping, and travel.

Switching

You should note that if you would ever like to switch the type of business accounts that you have opened with Chase, that is possible. So don’t worry to much about making the right decision for the long term because you don’t always know what might end up being the best route for you to go in the future.

You can click here to learn more about switching your account types.

Documents required for a Chase business account

Here are the different entities that you might set up in the required documents for each.

Sole Proprietorship required docs

Who needs to be present

If you are the sole member of your proprietorship then only you have to be present.

However if multiple people are involved in the ownership, the following applies:

  • Spousal Sole Proprietorships — both owners
  • Sole Proprietorship Living Trust – the trustee(s)
  • Sole Proprietorship with a Power of Attorney – the agent
  • If you need to add authorized signers to the account, they must also be present

Two forms of personal ID

One ID must be a Government Issued ID, such as a State Issued Driver’s License, State Issued ID card, Passport, etc. The secondary form of ID can be something like a credit card/debit card with embossed name, employer ID, utility bill, etc.

Tax Identification Number

You will need to supply them with a tax identification number. This can be your social security number (SSN) or ITIN (for non-US citizens), or an Employer Identification Number (EIN).

Business documentation

The business documentation that you will be required to bring in will depend on the state that you reside in.

An assumed name certificate may be required if your business is operating with a DBA (doing business as). For example: Jim Jones DBA Jones Professional Painting.

However, this will not be required in AK, AL, HI, KS, MD, MS, NM, SC, TN, WI, and WY and not required for Sole Proprietors operating a business using the owner’s last name in CA, IN, KY, and TX.

It is usually pretty easy to get an assumed name certificate by going online or by visiting the local country courthouse. Each state will have different requirements for getting these but in many states you simply pay a small fee and fill out a form and you can get these issued instantly.

Trust documentation will be required if you have set up a trust.

Supplemental documentation

It is possible that you may be required to submit additional documentation which could include:

  • Assumed Name Application or Filing Receipt
  • Application to publish the assumed name in a newspaper
  • Published newspaper entry
  • Business License

Click here to read more about required sole proprietorship documents.

Partnerships required docs

Who needs to be present

  • All general partners must be present
  • If one of the general partners is a business then an authorized representative of that business must be present

Two forms of personal ID

One ID must be a Government Issued ID, such as a State Issued Driver’s License, State Issued ID card, Passport, etc. The secondary form of ID can be something like a credit card/debit card with embossed name, employer ID, utility bill, etc.

Tax identification number

You will be required to submit a tax identification number and this will require you to submit an EIN. Since this is a general partnership, you will not be able to simply submit your Social Security number.

Business documentation

The business documentation required will depend on the type of partnership that you have.

For general partnerships you will need the following:

  • Written partnership agreement
  • Joint venture agreement
  • Personal identification (in some states)
  • Website validation

If your business is organized in another state but operates in the state that you are opening up an account you might need documentation for both states. This could include a foreign partnership registration. You may also need to provide an assumed name certificate, depending on the state that you are in.

If you are dealing with a limited partnership, limited liability partnership, or limited liability limited partnership, Then you will be required to bring in a certified partnership agreement and will also be subject to the website verification.

There are also additional documents that might be required if you have a 10% or more ownership.

Supplemental documentation

You might be required to bring in the following supplemental documents:

  • Amendments to your partnership agreement or joint venture agreement
  • Letter on company letterhead listing the current general partners
  • Meeting minutes listing the current general partners
  • Annual report or statement of information

Click here to read more about required partnership documents.

Limited Liability Company LLC required docs

Who needs to be present

The individuals who need to be present depends on the type of LLC.

  • For a member managed LLC, all of the members must be present.
  • For a manager managed LLC, all of the managers must be present.

If one of the managers or members is a business then an authorized representative of that business must be present. If you would like to add an additional authorized signer then that person must also be there.

Two forms of personal ID

One ID must be a government issued ID, such as a State Issued Driver’s License, State Issued ID card, Passport, etc. The secondary form of ID can be something like a credit card/debit card with embossed name, employer ID, utility bill, etc.

Tax identification number

You will be required to submit a tax identification number and this will require you to submit an EIN. Single member LLC may use their social security number for their ITIN.

Business documentation

The required business documents are going to depend on the state organization. However, you can expect to be required to bring in the following:

  • Certified articles of organization (certificate of formation) filed with the state agency
  • Website validation
  • Assumed name certificate

Supplemental documentation

You might be required to bring in the following supplemental documents:

  • Certified amendment to the articles of organization or certificate of formation
  • Operating agreement
  • Letter on company letterhead
  • Meeting minutes
  • Annual report or statement of information
  • Members with 10% or more ownership may be required to submit additional documents

Click here to read more about required LLC documents.

Corporation required docs

Who needs to be present

  • And authorizing representative must be present.
  • This could include:
    • President
    • Secretary
    • Assistant secretary
    • Acting secretary
  • If you would like to add additional signers they must also be present

Two forms of personal ID

One ID must be a Government Issued ID, such as a State Issued Driver’s License, State Issued ID card, Passport, etc.

The secondary form of ID can be something like a credit card/debit card with embossed name, employer ID, utility bill, etc.

Tax identification number

You will be required to submit a tax identification number and this will require you to submit an EIN. Since this is a corporation, you will not be able to simply submit your Social Security number.

Business documentation

You may be required to bring the following documents:

  • Certified articles of incorporation or articles of formation
  • Website validation
  • Active status verification
  • Corporations that came into existence over one year ago will need to have verification that they are currently in good standing, or a status report, or a long form standing or short form standing.

Click here to read more about required corporation documents.

Chase Business checking accounts FAQ

Do I need an EIN for a Chase business checking account?

You will need an EIN for your some Chase business checking accounts.

It is very easy to obtain an EIN and it often only takes minutes to complete the application and receive your number. The entire process can be done online for many people.

Do I need an EIN for an LLC Chase business checking account?

If you are a single member LLC you can use your Social Security number and you will not need an EIN.

What is the best Chase business credit card?

There are some great business credit cards offered by Chase but my top choice would be the Chase Ink Business Preferred.

What is the “website validation” for a Chase business checking account?

Chase may validate your entity via a state website prior to you opening up an account.

In some cases, this means you don’t even have to supply the documents to verify your entity because it will be done by Chase.

What is the monthly fee for a Chase business checking account?

The monthly service fee depends on the type of account that you opened but it can range from $15 to $90.

However, you can get the fee waived by maintaining a certain average balance or by having certain types of linked accounts.

What documents do I need to open up a Chase business checking account?

The type of documents needed to open up your account depends on the type of entity that you have.

What is considered a secondary ID for a Chase business checking account?

A secondary ID would be something like a credit card or debit card with your name embossed on it. It could also be something like an employer ID, utility bill, bank statement.

If you are in doubt simply call up your local Chase branch and ask if your secondary ID is good enough.

When do I get my business debit card?

Some banks may issue your debit card right on the spot but other times you may have to wait around a week for it to arrive in the mail.

What type of certificate of active status verification do I need for a corporation?

Your active status verification can be a certificate of good standing, status report, and a longform standing or short form standing.

Just make sure that your documents are certified to open up your account.

Can I open up an account for an out-of-state entity?

Yes, you can open up a Chase business bank account for an entity that is formed out of state.

If you are doing business in the state that you are opening up a bank account in, you may need to register your out-of-state entity in that state.

This is usually called a foreign entity registration and it might be necessary before you can open up your bank account.

How long does it take to open up a Chase business bank account?

The appointment to open up your Chase business bank account can be finished in under 30 minutes.

Do I need to set up an appointment to open up a Chase business bank account?

It is recommended to set up an appointment because a lot of bank branches do not have business account managers.

How much do I need to deposit to open up a Chase business bank account?

The minimum deposit amount is $25. You can make this deposit with cash or send money from your bank account via QuickPay with Zelle.

Final word

Setting up a Chase business checking account is relatively straightforward.

However, to make the process much more efficient and to make sure that you were selecting the right type of account, I highly suggest that you have a detailed overview of your business and that you don’t forget to check on the ongoing bonuses.

If you have all of your business figures rounded up, and you have organized all of your necessary documents, the process should go very smoothly and you should have your account up and running very quickly.

Are Credit Cards Safer Than Debit Cards?

Many people still wonder whether or not credit cards are actually safer than debit cards. Lots of individuals don’t know about the differences in liability protection that exist between credit and debit cards and don’t factor in a lot of the lesser known protections offered by many credit cards. 

In this article, I’ll break down which is safer to use and give you some insight into why you should choose one over the other. 

Are credit cards safer than debit cards?

Generally, credit cards are safer than debit cards because there is no risk of depleting your bank account and they offer less restrictive liability limitations along with more protections for purchases and travel.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Better financial security

For the most part, using a credit card will provide you with better financial security. This is primarily because you will have better liability protection and also because you won’t have to risk going without access to your funds in your bank account for quite some time. I’ll explain more about these below.

Liability protection

Contrary to what many people believe, both credit and debit cards have limited liability protections. In fact, if your credit, ATM, or debit card is lost or stolen, federal law limits your liability for unauthorized charges.

The limit on your liability works different for credit cards and debit cards, though. That’s because there are two separate laws that govern debit cards and credit cards when it comes to unauthorized use.

Liability limitations for credit cards

Liability limitations for credit cards, under the The Fair Credit Billing Act (FCBA), limit your liability for unauthorized use of your credit card to $50 (many banks won’t even charge you this $50 amount).

But if you made a report of your lost credit card before it is used, the FCBA says you are not responsible for any charges you didn’t authorize. Now, if your credit card number is stolen (but not the card) then you will not be liable for any of the unauthorized use.

You just need to make sure to contact the creditor within 60 days after the first bill with the error was mailed to you. The creditor must acknowledge your complaint within 30 days after receiving it and they must resolve the dispute within two billing cycles (but not more than 90 days) after getting your letter.

Liability limitations for debit cards

The limitations for liability are a little different for debit cards.

If you report an ATM or debit card missing before someone uses it, the Electronic Fund Transfer Act (EFTA) says you are not responsible for any unauthorized transactions. If someone uses your ATM or debit card before you report it lost or stolen, your liability depends on how quickly you report it.

The chart below provided by the FTC breaks down your maximum potential loss:

If you report:Your maximum loss:
Before any unauthorized charges are made.$0
Within 2 business days after you learn about the loss or theft.$50
More than 2 business days after you learn about the loss or theft, but less than 60 calendar days after your statement is sent to you,$500
More than 60 calendar days after your statement is sent to you.All the money taken from
your ATM/debit card acount, and possibly more; for example, money in accounts linked to your debit account.

If someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you.

So when it comes to limiting your liability for debit cards, you need to be more on top of the activity on your account in order to limit your liability.

For a debit card, if you don’t act within two business days of learning about the loss, you could be liable for $500 or more but for a credit card as long as you report the loss within 60 days of receiving your statement, your maximum liability is $50.

Another big takeaway here are that if your card number is stolen but your card is not lost, you get the most flexibility with limiting your liability.

If you are ever in doubt about your coverage, just check the terms and conditions for your bank. In some cases, the banks may provide better liability protection than required by law. 

For example, Wells Fargo states: 

Zero Liability protection: Your Wells Fargo Debit Card comes with Zero Liability protection at no extra cost. You will be reimbursed for promptly reported unauthorized card transactions.

If you dive into the terms and conditions, Wells Fargo states:

Your Card comes with Wells Fargo’s Zero Liability protection, which provides you with more coverage than what Regulation E requires for consumer cards (see “Liability for unauthorized transactions according to Regulation E” above).

With Zero Liability protection, you will have no liability for any Card transactions that you did not make or authorize, so long as those transactions occurred before the end of the 60-day period described below.

So both credit cards and debit cards have limited liability protection but debit cards have more restrictions for limiting your liability.

But that’s not even the biggest negative when it comes to using a debit card.

The biggest problem with debit cards is that its protection kicks in after the fraudulent activity has occurred which means that your funds will not be in your bank account.

No depleted bank account

One of the biggest reasons for using a credit card over a debit card is that you do not run the risk of your bank account getting depleted.

Let’s say somebody steals your debit card and was able to also obtain your pin. And now they make a $5,000 purchase from your account leaving you with virtually no funds left in your bank.

Now you go to file a dispute.

Well, the financial institution has 10 business days to conduct an investigation of the claim. 

If the bank takes longer than 10 days to conduct the investigation, they have to give you the disputed money until the process is over which could last up to 45 days.

But still, that’s potentially 14 total days (weekends included) where you could go without your funds in your bank and there would be nothing you can do about it based on what the law states. 

And just think about all the bills and expenses you might have to pay in a two week span. Not having the funds to cover those bills could be a complete disaster!

Now consider if that original fraudulent activity was done on a credit card and the crooks purchased $5,000 worth of goods. You would not be without cash. Instead, you would now only have a $5,000 bill that you would be able to get sorted out by claiming fraud with your credit card company.

And according to the FTC, “[y]ou may withhold payment on the disputed amount (and related charges) during the investigation.”

It’s worth noting that the the disputed amount can be applied against your credit limit, so the fraudulent activity can still affect your finances.

But I think most people would agree that having funds removed from your bank account up to ten days is much more detrimental than having some of your credit limit diminished temporarily with no obligation to pay. 

I should point out that certain payment networks offer better guarantees when it comes to replacing your funds. For example, Visa’s Zero Liability Policy requires banks to replace funds taken fraudulently from your account within five business days of notification but this doesn’t apply to certain commercial card and prepaid card transactions.

Having your bank account emptied for up to 10 days can be extremely stressful.

More reasons to use a credit card over a debit card

Purchase protections

One area where debit cards typically cannot compete with credit cards is when it comes to things like purchase protections. Credit cards often provide you with valuable protections after you buy something that can end up saving you a lot of money.

Purchase protection

If your purchase is lost or damaged within a couple of months of the purchase date, you can often get reimbursed for that amount. For example, the Sapphire Reserve purchase protection offers up to $10,000 in coverage for up to 120 days after your purchase.

Return protection

Return protection allows you to get reimbursed for an eligible item that a store will no longer allow you to return. In many cases, this acts as an extension of the return policy’s deadline. 

Price protection

Price protection will reimburse you for the increase in the price that occurs after you purchase it and within a certain window of time. So if you purchased a TV for $2,000 and it dropped down to $1,700, you could be entitled to recover the $300 difference. (Many price protections on credit cards have been eliminated or reduced in coverage.)

Extended warranty protection

Extended warranty protection will add a year or two onto the manufacturer’s warranty.

Cell phone protection

More credit cards are now offering special cell phone protection that reimburses you for damage to your phone. Usually, all you have to do is pay a deductible and use your credit card to pay your phone bill and you trigger the coverage.

As you can probably guess, all of these protections can offer you thousands of dollars of potential savings and value.

And that is not even factoring in all of the travel protections that many cards have as well. With benefits like rental car insurance and trip cancellation and delay protections, credit cards can save you tons of worry and stress in addition to just extra money.

So from a protection standpoint, credit cards often blow away debit cards.

Rewards

Most credit cards come with much better rewards than debit cards.

With credit cards, it’s easy to get 1.5% or 2% cashback with many cards that don’t even have an annual fee. And then there are the travel cards that earn high multipliers like 4X on dining and allow you to rack up some serious value with your spending.

Many debit cards don’t even come with any rewards.

But you can find some that offer some pretty cool perks. For example, the Disney debit card from Chase can offer some cool discounts and special perks that you can take advantage of when visiting Disneyland or Disney World. 

Better spend the flexibility

Have you ever checked into a fancy hotel and have them tell you that they are putting a huge hold on your card during your stay? Or perhaps, you have an expense come up that requires you to dip further into your wallet than you initially anticipated.

When you have access to a fair amount of credit via your credit cards, these instances do not affect your financial life as much. You can have greater flexibility with your spending, especially with charge cards that have no preset spend limit. 

Building up your credit

A lot of people out there don’t realize that opening up a few credit cards can provide a huge boost to their credit score.

Simply by getting approved for a couple of cards and making on-time payments while keeping utilization at a minimum over a period of a few years, can greatly increase your credit score and allow you to get approved for a better mortgage rates, car loans, etc. 

If you simply rely on debit cards instead of venturing into credit cards, you might never build up your credit score in a way that could benefit your life much better.

When a debit card is better than a credit card

There are a couple of instances where I could see a debit card being better for someone than using a credit card and here they are. 

Risk of overspending

If you are somebody who struggles with overspending then a credit card can be less safe in the sense that it could lead you to make horrible financial decisions that could ruin your credit.

With a debit card, if you don’t have money in your bank account, in many cases your purchase will not go through. This typically limits you to purchasing items that you actually can afford.

But of course if you have access to credit then you can purchase items that you don’t have enough money to immediately pay off. This could lead to huge interest payments over time and cause you to remain in debt. 

For some people, this temptation is too real and it’s why, financially speaking, a debit card could be safer than a credit card.

Getting cash

Debit cards can also be considered safer in the sense that you can pull cash out by using them. Many times, especially when traveling, instances come up where you really need to have some cash on hand.

Credit cards can provide you with cash by utilizing the cash advance feature but you will have to pay high fees and interest on those transactions so it is generally not recommended.

On the other hand, many credit cards come with no foreign transaction fees and so by putting a simple travel notice on your credit card, they can be great to use when going abroad.

Final word

Credit cards offer superior advantages over debit cards because they have better liability protection that is less restrictive, they don’t pose a risk of going without funds in your bank account for up to 10 business days, and because they offer much better protections and benefits.

The only advantage that debit cards have over credit cards is that they typically can keep you from overspending which is a real concern for many people. But outside of that, credit cards will be superior in nearly every way.

Chase Credit Journey Review (Free Credit Scores) [2020]

Keeping up with your credit score and report is crucial given all of the different ways that your credit score can impact your daily life.  Luckily, there’s a number of different ways that you can keep tabs on your credit score and report.

One way to do this is to utilize the free service known as Chase Credit Journey. In this article, I’ll tell you everything you need to know about Credit Journey, including why you may want to NOT use this service.

What is Chase Credit Journey?

Chase Credit Journey is a free online tool you can use to check your credit score and monitor your credit report for changes. The service is provided by Chase but you don’t have to be a Chase customer to use it.

What type of credit score does it provide?

Chase Credit Journey does NOT provide you with a FICO score. Instead, it provides you with a TransUnion Vantage 3.0 score. This is the same type of credit score provided by Credit Karma.

Vantage calculates their credit scores differently from FICO (though there are a lot of similarities). Sometimes the scores can be the same or similar but in many cases, the credit score differences can be quite extreme for some people. For this reason, you want to use some caution before relying on the Credit Journey credit score.

It’s very possible that your FICO score could be higher or lower than your Vantage 3.0 score so I would advise to check your FICO score, since most lenders use a FICO score to determine your credit worthiness. Below, I’ll show you how you can check your FICO credit score.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Where can I get accurate FICO credit scores?

There are a few ways that you can get a FICO score.

Many find it easy to sign-up for Experian.com and utilize that to get their FICO score (they offer a free 30-day trial membership). If you are just in it for the free score, make sure that you cancel your membership. 

Sometimes MyFICO offers a free trial so be on the lookout for that.

You can also get one free credit report from each of the three major credit bureaus (TransUnion, Equifax, and Experian) once every 12 months from annualcreditreport.com. But note that that is usually just the report (though I’ve been given the score once in the past before).

What about Chase Slate cards?

The Chase Slate card is one of the best balance transfer cards that you can get. And this card also provides you with a free FICO score so it’s an option to consider for checking your FICO score for free.

This means that if you have the Chase Slate you can check your FICO score and your Vantage score at the same time and easily compare the differences between the two models.

How often will my score be updated?

Your score will be updated on a weekly basis but you can check it as often as possible. Also, checking your credit score will not result in a hard pull so it won’t impact your credit score at all.

How are Vantage scores calculated?

The VantageScore Model is pretty similar to the FICO model but it has some key differences. It uses the same FICO range of 300 to 850 for the score and stresses many of the same factors as FICO — it just gives them different weight and has some slightly different criteria for calculating them.

Here are the 3.0 factors according to Credit Karma:

  • Payment history (about 40%)
  • Age and type of credit (about 21%)
  • Credit utilization (about 20%)
  • Balances (about 11%)
  • Recent credit (about 5%)
  • Available credit (about 3%)

Here are the factors for the FICO model.

  • Payment History (35%)
  • Utilization (30%)
  • Credit History (15%)
  • New Credit (10%)
  • Mixed Credit (10%)

So as you can see there is a lot of overlap between the two models. One of the key differences between the models is that closed accounts continue to age for FICO models but they don’t for Vantage models. This can result in huge differences in account history for folks like me who have opened and closed quite a few cards over the past few years.

Another big difference is that the Vantage models will combine related inquiries within a 14 day window. Meanwhile, newer FICO versions count multiple credit inquiries of the same type within a 45-day period as a single inquiry. 

Therefore, if it took you 3 1/2 weeks weeks to find an auto loan and you had multiple inquiries within those weeks, that could have had a bigger impact on your Vantage score versus your FICO score.

So Chase Credit Journey can be a nice way to see where your credit score stands generally but given the differences in the formulas, I would be hesitant to rely on it for any major credit decisions.

How to sign-up for Chase Journey

  • You can visit this link right here to enroll in Chase Journey

If you’re not a Chase customer, you’ll need to input your personal details, choose a username, and set your security questions and answers. After that, you’ll need to verify your identity

If you’re an existing Chase customer, you simply need to log-in using your Chase credentials. You’ll be asked to verify your email address but after that you’ll be able to log-in to your main dashboard area and click on an area to check your credit score on the right of your screen that looks like the image below.

Note: If you have a Chase Business account you will not be able to log in to Credit Journey through your Chase account.

Once you pull up Chase Credit Journey, you can view your credit score and an overview of your credit score. If you want to view a more in-depth look at your score then click on the “Credit Report” tab, which will then allow you to view all of your accounts.

Credit Journey disputes

There’s even a dispute center where you can follow links to initiate disputes for errors on your TransUnion, Equifax, and Experian reports.

Here’s what they recommend for disputing errors:

Step 1: Contact the creditor associated with the account

  • You should begin the dispute process by contacting the creditor responsible for the inaccuracy.
  • You can find the contact information for each of your creditors on this credit report.
  • Your financial institutions will be able to correct most minor errors over the phone and will prevent them from recurring.

Step 2: Contact each of the credit reporting agencies

You can dispute online with TransUnion.

You can also file a dispute via mail.

TransUnion
2 Baldwin Place
P.O. Box 2000
Chester, PA 19022

You can dispute certain items online with Equifax, if you have an active Equifax credit report file number.

You can also file a dispute with Equifax via mail.

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241

You can dispute online with Experian.

Credit Journey score simulator

The tool also has a score simulator that allows you to plug in variables to see how your score might be impacted in the future. For example, you can see what the effect would be if you had a credit card completely paid off. This isn’t a sure thing, however, because there are many different variables that go into calculating your credit score. Each factor can be impacted by many different factors so take the results with a grain of salt.

Credit Journey Alerts

Credit Journey will alert you to changes to your credit report that could indicate potential signs of identity theft, fraud or inaccuracies that could damage your score. These will be things like new accounts, hard inquiries, address changes, and other relevant changes.

You should be notified if they find anything but you can also check the Alerts tab when you log-in to see if there are any findings.

Credit Journey App?

While there is no Credit Journey App, you can view Chase Credit Journey in the Chase App. This means that you’ll need to be a Chase customer in order to take advantage of this feature.

How to unenroll

Final word

Overall, Chase Credit Journey can be a useful tool to see where your credit score is but it’s not a FICO score so you don’t want to rely on this score for the majority of lenders since they don’t use the Vantage model. Since it’s free, there’s no harm in checking it out and perhaps using it monitor your credit report for any unexpected changes, though.

Avoiding Coronavirus Financial Scams

 

Avoiding Coronavirus Financial Scams: Everything You Need to Know

The coronavirus pandemic has found a way to affect our lives in almost every imaginable way. But one often overlooked area is in the realm of financial scams. Unfortunately, some fraudsters have taken advantage of vulnerable people during these times in order to benefit themselves financially.

So in response to these threats, we decided to put together a well-researched and comprehensive resource that sheds light on all of the major types of coronavirus financial scams facing the public. 

The infographic below will explain the different forms that the scams occur in and offer you practical advice on how to avoid such scams. And in the unlucky event you find yourself a victim of one of the scams, we’ve provided all of the relevant authorities that you can reach out to in order to get assistance.

COVID-19 FDIC AND Bank Scams

 The Federal Deposit Insurance Corporation (FDIC) has received reports of fraudulent communications that have the appearance of being from this agency. Fraudsters know that people trust the FDIC name, so scammers use the FDIC’s name and logo, and even the names of actual employees, in perpetrating fraudulent schemes. 

These scams may involve a variety of communication channels, including emails, phone calls, letters, text messages, faxes, and social media. The messages might ask you to “confirm” or “update” confidential personal financial information, such as bank account numbers. In other cases, the communication might be an offer to help victims of current or previous frauds with an investigation to recover losses.

Prevention Tips Against FDIC COVID-19 Scams

 Tip – The FDIC Does not send unsolicited correspondence asking for money or sensitive personal information, and will never threaten you.

Tip – No government agency will ever demand that you pay by gift card, wiring money or digital currency.

Tip – The FDIC would never contact you asking for personal details, such as bank account information, credit and debit card numbers, social security numbers or passwords.

COVID-19 Stimulus Check & Economic Payment Scams

 The IRS recommends financial institutions to remind their customers about the importance of practicing sound personal cybersecurity, to remain vigilant to illicit account use and creation, and to report potential crimes to either federal, state or local law enforcement officials. Scammers are using stimulus payments to try to rip people off. They might try to get you to pay a fee to get your stimulus payment. Or they might try to convince you to give them your Social Security number, bank account, or government benefits debit card account number.

IRS Prevention Tips for avoiding COVID-19 Stimulus Payment Scams

Tip – Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text or email.

Tip – The IRS won’t contact you by phone, email, text message or social media with information about your stimulus payment.

Tip – The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.

Tip – Regarding Website Scams – If you find a website that claims to be the IRS and suspect it is fraudulent, send the URL of the suspicious site to phishing@irs.gov with he subject line “Suspicious Website”.

Tip – Watch for any unexplainable charges to your financial accounts. If you believe your accounts may be compromised, contact your financial institution immediately and close those accounts.

Tip – Regarding Email Scams – If you read an email claiming to be from the IRS, do not reply or click on the attachments and / or links. Forward the email as-is to phishing@irs.gov and delete the original email.

Tip – To keep up-to-date on the latest scams go to consumer.ftc.gov/features/scam-alerts and click on the “get email updates” link.

COVID-19 Gift Card Scams

Gift card scams are one of the most common types of money stealing scams. Criminals will impersonate a person of authority, government official, or charity service and use social engineering techniques to persuade their victim into buying a gift card and providing the codes on the back in order to steal its value. It is important to never supply any person or agency the gift card numbers on the back of the physical card, or the electronic claim code that comes along with an online gift card purchase. Government officials and law enforcement will never ask for a gift card code to cover any expenses. If a supervisor or colleague requests a gift card purchase, don’t respond to the email. Instead, contact the individual through a known good email address or phone number.

Tip – According to the FTC, if you paid a scammer with a gift card, report it as soon as possible. Call the card company and tell them the gift card was used in a scam. Then tell the FTC about it – or any other scam – at FTC.GOV/COMPLAINT Your reports may help law enforcement agencies launch investigations that could stop imposters and other fraudsters in their tracks.

COVID-19 Financial Scam Reporting and Assistance Contacts

FBI – Internet Crime Complaint Center

URL: ic3.gov

Description: The IC3 provides the public with a reporting mechanism to submit internet-facilitated COVID-19 financial scams to the FBI. Submitted information is analyzed and disseminated for investigative and intelligence purposes to law enforcement and for public awareness.

FTC Complaint Assistant

URL: FTCcomplaintassistant.gov

Description: Report COVID-19 financial scams through the FTC complaint assistant. There, you will be asked to choose a category and sub-category for your complaint.

FBI – Field Office Locator

URL: FBI.gov/contact-us/field-offices

Description: The FBI has field offices located in metro areas across the U.S. and Puerto Rico. Each office is overseen by a special agent, except for offices in LA, NYC and D.C., which are headed by an assistant director in charge.

U.S. Secret Service Domestic Field Offices

URL: secretservice.gov/contact/field-offices

Description: Secret Service agents, professionals and specialists work in field offices around the world to fight financial crimes. The Secret Service investigates credit card fraud, wire and bank fraud, computer network breaches, ransomware, and other cyber-enabled financial crimes.

Treasury Inspector General for Tax Administration

URL: treasury.gov/tigta/coronavirus.shtml

Description: The TIGTA provides quality, professional audit, investigative and inspection and evaluation services that promote integrity, economy, and efficiency in the administration of the Nation’s tax system.

National Center for Disaster Fraud (NCDF)

URL: https://www.justice.gov/disaster-fraud

Description: the mission of the NCDF is to improve and further the dection, prevention, investigation, and prosecution of fraud related to natural and man-made disasters, and to advocate for the victims of such fraud.

The U.S. Department of Health and Human Services Office of Inspector General

URL: https://oig.hhs.gov/fraud/report-fraud/

Description: OIG accepts complaints from all sources about potential financial fraud.

Chase QuickPay with Zelle Guide: (Limits, Enrolling) [2021]

Have you ever needed to transfer funds over to friends or family but did not want to hassle with wiring fees or with sending in checks or cash deposits? Or have you ever wanted to split up a bill and have your friends pay you so you can reap the rewards with a great rewards credit card?

Chase QuickPay with Zelle is a great solution to these issues that allows you to freely transfer funds to different bank accounts.

In this article, I will tell you everything you need to know about Chase QuickPay, including how to enroll and how to send payments to recipients. I’ll also talk about things like the transfer limits and answer other common questions.

What is Chase QuickPay?

Chase QuickPay is a feature that you can use online or through the Chase mobile app that allows you to send funds to other bank accounts and receive funds as well. It is an extremely convenient feature and is free to use so I highly recommended it to a lot of people.

In the middle of 2017, Chase revamped its QuickPay feature and now it is powered by Zelle. Zelle Pay allows you to transfer funds to other people who do not even have a Chase bank account. So now, Chase QuickPay is even more useful than ever.

Tip: Use the free app WalletFlo to help you travel the world for free by finding the best travel credit cards and promotions!

What if my friends don’t bank with Chase?

If your friends or family do not bank with Chase, you can still use Chase QuickPay with them. They just need to sign up for person to person payments. Non-Chase customers can sign up with their bank’s person-to-person payment service or visit zellepay.com to sign up.

In addition to Chase, Zelle members include many major U.S. banks, such as:

  • Ally
  • BB&T
  • Capital One
  • Citi
  • HSBC
  • Morgan Stanley
  • Navy Federal Credit Union
  • Wells Fargo
  • U.S. Bank

There are also plenty of regional banks such as:

  • Amegy Bank
  • Bank of Hawaii
  • California Bank & Trust
  • Central Bank of Oklahoma

You can find the full list of eligible banks here. If your bank or credit union doesn’t offer Zelle yet, just download the Zelle app to get started.

Enrolling in Chase QuickPay

To enroll in Chase QuickPay, head over to the Chase website here.

Once you are at that website, click on “Enroll in Chase QuickPay with Zelle.” You will then need to link your email address or your phone number to your Chase account in order to complete the enrollment process.

A security code will be sent to your phone or email account and then you will need to verify your account. Once you do that, you are ready to use Chase QuickPay.

How to use Chase QuickPay

You can use Chase QuickPay either on the mobile app or through the website. If you are using it through the Chase website, then you just need to log in and then go to the top of your screen where you should see “Pay & Transfer.”  Click on that and then click on Chase QuickPay with Zelle.

You will then be taken to a menu for Chase QuickPay that we’ll have options for you to manage your account.

You can choose to:

  • Send money
  • Request and split (You can pick up to 15 recipients)
  • View your QuickPay activity
  • Manage your QuickPay recipients
  • Manage your QuickPay settings

The request and split feature is pretty cool because you can select up to 15 recipients to split up payments with. You simply select their accounts and then input the total amount of money that you will be requesting from all of them. You can enter the amount of a bill and then request for the amount to be split evenly among all the recipients or you can request money from them individually.

How to send payments

If you are ready to send funds to a recipient then all you have to do is:

  • Select the recipient
  • Input their email address or mobile number
  • Input the amount of the funds to transfer
  • Select the date to transfer
  • Select the bank account to send funds from
  • You can also enter in information for a memo but that is optional
  • Lastly, you can choose to make this a repeating payment if you would like

After you send a payment, the recipient should receive an email or text message telling them how to receive their payment. (Message and data rates may apply.)

Recipients who are new to Chase QuickPay must sign up first and verify the email address you used to send money. This should only take them a few minutes to do so it is a pain-free process.

However if they are not a Chase Customer then they will have to complete a few additional steps.

  • Follow the link in the payment notification email or goes directly to Chase.com/QP and click “Sign Up Now.”
  • Create a User ID and Password.
  • Add a bank account.
  • Verify the email address you sent money to using a one-time activation code we send by email.
  • If your payment is under $250, accept payment.
  • If your payment is over $250, verify the non-Chase account using trial deposits before accepting payment. (This takes one to two business days.)

How to add recipients

To add recipients to transact with, click on “QuickPay Recipients.” Then simply click on “add a recipient” and then input their information which will include either their phone number or their email address. You can also add up to 45 recipients to a group.

Note that the recipients will not see your personal banking details and you will not be able to see their details.

Using QuickPay through the Chase mobile app

You can also use Chase QuickPay through the mobile Chase app. Be sure not to confuse Chase Pay with Chase QuickPay. Chase Pay is a separate mobile wallet app that allows you to have express checkout. Meanwhile, Chase QuickPay is a feature built into the main Chase mobile app. That means you do not have to download any additional app to use Chase QuickPay. 

Once you log in to the mobile account, all you need to do is click on the three horizontal bars in the upper left corner of the app. You will then see the option for choosing “QuickPay with Zelle.” Once you click on that, you will see the options for sending money, requesting and splitting money, viewing your activity, and managing your recipients.

Sending money through the app involves the same process of inputting the amount you’re trying to send and selecting the bank account and the date

One interesting feature of the mobile app is that you can do a hard press on the icon of the Chase app, and pull up the send money and requests and split money Features for Chase QuickPay.

If you have an iPhone you might need to allow the Chase to access your contacts if you want to get full use out of the app. That will allow you to simply select from the list of contacts on your phone.

Tip: Use the free app WalletFlo to help you travel the world for free by finding the best travel credit cards and promotions!

What are the Chase QuickPay transfer limits?

The transfer limits depend on what type of account you are sending funds from. Most people will probably be limited to $2,000 per transaction with a maximum of $2,000 dollars per day.

Chase checking accounts

You may make transfers from External Accounts or consumer Chase checking accounts in amounts of up to $2,000 per transaction with a maximum of $2,000 per day, $8,000 in any seven (7) day period, and $16,000 in any thirty (30) day period, from all your combined accounts registered with Chase QuickPaySM.

Chase business checking accounts

You may make transfers from business Chase checking accounts in amounts of up to $5,000 per transaction with a maximum of $5,000 per day, $20,000 in any seven (7) day period, and $40,000 in any thirty (30) day period, from all your combined accounts registered with Chase QuickPay.

Private banking customers

If you are a Private Banking client, transfers may be made in amounts of up to $5,000 per transaction with a maximum of $5,000 per day, $8,000 in any seven (7) day period, and $16,000 in any thirty (30) day period, in the aggregate from all your combined accounts registered with J.P. Morgan QuickPay.

How long does it take for Chase QuickPay funds to transfer?

If your recipient is another Chase customer or their bank is a Zelle member and supports real-time payments, they’ll typically get their money within minutes. For the quickest results, make sure that they accept the payment before 10 PM EST.

Being able to send virtually instant payments is great for those people who you may not always necessarily trust 100% that they will get their funds over to you so you can use this for your friends that are a little on the “shady” side.

If you are sending funds from a Chase account to a non-Chase account, then it could take 1-2 business days after the business day that the recipient accepts, subject to the processing times of their bank. For the quickest results, make sure that they accept the payment before 8 PM EST.

If you have funds coming in from a non-Chase account into a Chase account then it could take 4-5 business days after the business day the recipient accepts. For the quickest results, make sure that you accept the payment before 8 PM EST.

How long do they have to accept payment?

The recipient will have 10 days to accept the payment. If the payment is not accepted within 10 days then the transaction will be canceled and the money will be refunded.

Can you send QuickPay payments internationally?

No, these transactions can only be done with U.S. banks.

Chase Quick Pay Versus Venmo in PayPal

Venmo and PayPal are two other popular ways to send payments to other people. Those services will charge a transaction fee of 2.9% or 3% for credit card transactions. With QuickPay, you may only make a credit card payment when paying an invoice to a business Managing Chase QuickPay who accepts credit cards through Chase QuickPay

Cancelling payments

You can only cancel a payment if the recipient hasn’t yet enrolled with Zelle. If they are already enrolled then that means that the transaction will likely be completed and your only way to get the funds back is to ask them to send the funds back to you.

If you have more questions about Chase QuickPay then you can click here.

Final word

Chase QuickPay is a great feature for easily moving around funds. It makes it really easy to make transfers between family and friends and to do things like split up payments and bills for dining and other activities.

If you have friends who are willing to split the bill or tab with you then you should consider putting the entire bill on a great rewards card like the Sapphire Preferred or Sapphire Reserve which earns bonus points on things like dining and travel.

How to Improve Your Credit Score Fast

The reality is that in most cases, there’s no quick fix to your credit score. When you make a mistake like missing a payment or falling into delinquency, you often just have to rely on time to pass in order for you to get your credit back on the right track. With that said, sometimes there are some relatively quick fixes. Here’s how to improve your credit score fast.

How long does it take to improve your credit score?

It generally takes a couple of months to see improvements to your credit score. But you can definitely improve your credit score in 30 days or less depending on factors, such as when statements close, new accounts report, disputes get resolved, etc.

Anything that happens within 30 days is generally considered “quick” for credit repair purposes. But more likely, rebuilding a credit score is going to take several months to a year (or longer) depending on what is holding your score back the most.

Get a “starter” credit card

Secured credit cards can help out tremendously.

If you have a poor credit credit score, you’ll likely struggle to get approved for many credit cards.

However, there are many credit cards available for people with bad credit like store credit cards, such as the Zales credit card.

You might only be able to get a secured credit card or a card with low limit, but if you successfully manage the card by making on-time payments, your score will begin to improve relatively quickly, depending on what factors are holding you down. Find out more about credit cards for bad credit scores.

Tip: Use WalletFlo for all your credit card needs. It’s free and will help you optimize your rewards and savings!

Get added as an authorized user

Adding yourself as an authorized user to a credit card can be a great way to raise your credit score immediately (relatively speaking).

Becoming an authorized user can improve your credit score by doing these things:

  • 1) Lowering your credit card utilization
  • 2) Improving payment history
  • 3) Increasing the average age of accounts
  • 4) Diversifying your credit (this factor plays a very limited role).

To maximize the benefits of being added as an authorized user, your goal should be to get added as an authorized user to an account that:

  • 1) Has as close to 0% utilization as possible
  • 2) Has flawless payment history and no negative reports
  • 3) Is older than your average age of accounts.

Depending on which of these factors is bolstered by being added to the new credit card, you score may jump anywhere from a few points to up to 20 points. I’ve even seen reports where some scores shot up by 50 points! In my experience, scores don’t improve much more than 20 points, but it all depends on the specific factors of your score that you’re addressing.

It’s really difficult to boost your credit score overnight but you can expedite the benefit of being added as authorized user by requesting the credit card to be expedited (if it’s free) and by activating it as soon as it arrives in the mail. You also should make sure the social security number is added so that it will report to the credit report.

Balance transfer to business credit card

The strategy here is to transfer a credit card balance to a business card because most business card balances to not report to your personal credit report. So while you’re still responsible for paying the balance, it’s almost like that balance doesn’t exist for purposes of your credit report.

A perfect example of this is the American Express Blue Business Plus Credit Card. It’s a business card offering 2X on all purchases for the first year, no annual fee, and best of all 0% APR on balance transfers for a limited time.

You’ll need to have decent credit to get approved for this card. However, if you have a low overall credit limit that has high utilization, this could be perfect for you, since it will effectively wipe away that utilization from your credit score. Again, just make sure that the business card won’t report to your credit report.

Consolidate your revolving credit into an installment loan

This is my #1 trick I offer to people who have high credit utilizations and are trying to learn how to improve their credit score fast. I’ve seen it work wonderfully for many people, too.

This is how this trick works.

Revolving accounts and installment accounts

For the most part, there are two different types of accounts you can have. Revolving accounts and installment accounts. Revolving accounts are going to usually be accounts from credit cards, department store cards, trade/credit lines at retailers, some personal loans, and so forth. Installment loans are typically large loans like student loans, car loans, home loans, etc.

The difference between these two is that revolving accounts directly affect your credit utilization while installment accounts do not. This is very key because your utilization makes up a whopping 30% of your FICO score.

So you may already see what can be done here.

Transfer from revolving to installment

By transferring your debt from revolving accounts to an installment account, you effectively remove your debt from the equation that affects your credit score utilization and therefore can often raise your score substantially if your credit utilization is what was holding you back. I’ve seen people raise their credit scores by 100 points overnight with this method by bringing maxed-out credit utilization down to 0%.  

I generally recommend for people to do this by going into local credit unions or banks that they have good relationships with. If you have a decent score, somewhere in the upper 600s, you probably won’t have a problem getting a personal loan for debt consolidation or just for “personal use.”

Make sure that you’re getting an installment loan and not a revolving line of credit. 

Goodwill letters

Your payment history makes up 35% of your score and is therefore the most important factor in your credit report, so it’s vital to take care of this factor.

If late payments or delinquencies are holding you back, then trying a goodwill letter might be one of the best ways to quickly improve your credit score.

Goodwill letters are short letters you send to the lender explaining to them your situation of why your payment was late. Whatever hardships you were experiencing at the time should be mentioned.  The success rate on these is mixed, but it’s worth giving it a try, since you have nothing to lose.

  • You can read my guide on writing goodwill letters here. 

If you have a late payment in collections, it’s rare that a collections agency is going to entertain your good will letter. In these instances, it pays to negotiate. I was able to get on the phone one time with a collections agency for a client and get the them to agree to remove the late payment entirely from the report and in exchange for a payment, which was about 40% of the total debt due. Again, this is another route that is met with mixed success and it can also be a little bit pricey, so it’s not for everyone.

However, if you go this route, I suggest you get something in writing from them guaranteeing the complete removal of that late payment from all credit bureaus that they have reported to. Otherwise, it’s your word against theirs.

Get errors removed

An Federal Trade Commission (FTC) report found that 21 percent of a representative group of US consumers found a “confirmed material error” in one of the credit reports issued by the big three credit bureaus. This means that you should also check your credit reports for errors. If you see anything you suspect is not accurate, you should definitely attempt to dispute it.

Depending on the severity of the error, you could see a major change in your credit score.

Final word

Overall, it can be difficult to raise your credit score fast. Often time is the only healer for your report. But I’ve seen these options work effectively to improve credit scores quickly for many people, so I know that they can work if you’re able to give them a try.

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