Of all the late payers out there, which cities’ residents are struggling the most to make on-time payments? Credit Sesame dug into data taken from more than 8 million members to see who has the highest number of delinquent accounts and why their residents can’t seem to dig themselves out of the red.

While you constantly hear about Americans addiction to plastic (according to Credit Sesame’s internal data, the average Credit Sesame member has about $5,218 in credit-card debt), it’s not Visa or Mastercard that’s preventing people from paying their bills in a timely fashion. Shockingly, however, is the fact that it’s student loan debt — 47 percent of all education loans are late — that are driving people to fall behind on their disbursements.

Fortunately for citizens in the following 10 cities, it’s possible to remove late payments from their credit report and rebuild their credit.

10. Memphis, TN

Number of accounts that are late: 3.80%

Median household income: $37,099

Unemployment rate: 6.8%

With only a quarter of its population holding a Bachelor’s degree (or higher), it’s not much of a surprise that the home of Elvis Presley has the highest unemployment rate of 10 cities on this list. Interestingly, despite its poorly educated population, two-thirds of all late accounts held by Memphis residents are student loans.

9. Tulsa, OK

Number of accounts that are late: 3.85%

Median household income: $48,926

Unemployment rate: 5.3%

Only an hour and a half separates Tulsa from Oklahoma City, yet the economic situations faced by residents in these two cities couldn’t be more different. Those living in the state capital don’t seem to struggle paying down educational debt since their incomes exceed their outstanding loan balance. In Tulsa, however, more than half of late payments are a result of school debt — despite these Sooners earning higher take-home pay than anyone else on this list.

8. Philadelphia, PA

Number of accounts that are late: 3.86%

Median household income: $37,460

Unemployment rate: 6.4%

Sure, it’s home to the Eagles, Benjamin Franklin, cheesesteaks and the 2016 NCAA basketball national champion Villanova Wildcats. But well-paying Lockheed Martin, IBM, GlaxoSmithKline and numerous top-notch medical facilities also reside in the City of Brotherly Love. So why do so many of its residents have difficulty paying their bills on time? High unemployment and a quarter of the population living below the poverty line make citizens struggle to pay down their top two types of debt: education and credit card.

7. Columbia, SC

Number of accounts that are late: 4.09%

Median household income: $48,674

Unemployment rate: 5.1%

Insurance technology and services and tech manufacturing fuel Columbia’s economy, yet residents working for top employers like Westinghouse Electric and Blue Cross Blue Shield still struggle with paying their bills on schedule. Workers at these companies may earn a decent salary, but as with all of the cities on this list, it’s student loan debt that drives Columbia residents to be tardy with their payments.

6. Richmond, VA

Number of accounts that are late: 4.23%

Median household income: $41,331

Unemployment rate: 4.1%

A third of residents earn a college degree and 12.2 percent hold graduate degrees, yet this Virginia city seems to miss out on much of wealth centered in our nation’s capital to its north. As a result, citizens find themselves weighed down by student debt: 67 percent of accounts that are late are education loans, a percentage that’s tied for second highest (with Toledo, OH) in these rankings.

5. Mobile, AL

Number of accounts that are late: 4.26%

Median household income: $43,844

Unemployment rate: 6.7%

In Mobile County, home to Alabama’s third largest city, 32 percent of African Americans and 31 percent of children live below the poverty line. (Overall, a fifth of county residents live in poverty.) With median household income more than $20,000 lower than the national average, residents clearly grapple with paying for necessities, including transportation. Of accounts that are late in Mobile, 13 percent are auto loans — higher than the national average.

4. Milwaukee, WI

Number of accounts that are late: 4.35%

Median household income: $43,385

Unemployment rate: 4.7%

Citizens in this Wisconsin town manage student loan debt better than those living in other cities on this list — only 50 percent of delinquent payments are on education loans. The Cream City has experienced 68 consecutive months of year-over-year job growth, yet a quarter of residents find themselves not paying their utility bills (electric, gas, water) on schedule.

3. Toledo, OH

Number of accounts that are late: 4.44%

Median household income: $33,485

Unemployment rate: 4.6%

Living in just one of many economically stressed Rust Belt cities, 21 percent of Toledo citizens’ accounts are in collections. (Nationally, 17.5 percent of accounts are in chargeoff status.) While the cost of living is cheaper than the national average in Toledo, only 18 percent of residents have a college degree, making it difficult (or even impossible) for many to land jobs at top employers like Owens Corning, Promedica, GM, and Marathon Petroleum — severely limiting earnings potential.

2. Jackson, MS

Number of accounts that are late: 5.10%

Median household income: $44,894

Unemployment rate: 5.4%

Poverty is heavily concentrated in the Southern U.S., but it’s headquartered in Mississippi, the poorest state in the union. Largely rural, many Mississippi residents work in its top industry — agriculture — growing cotton, corn, and rice. Those living in poverty in Jackson, the state’s largest city and the capital, have an even harder time paying their bills on-time than those living in other states because there’s no minimum wage law. So many residents have to attempt to cover all their financial responsibilities making just $7.25 an hour.

1. Detroit, MI

Number of accounts that are late: 5.58%

Median household income: $26,095

Unemployment rate: 6.1%

Thanks to the booming American auto industry, the Motor City prospered for decades. But racial tensions and a reliance on GM, Ford, and Chrysler to drive the economy became Detroit’s downfall. After declaring bankruptcy in 2013, the city and its residents continue to suffer financially — averaging a delinquency rate that’s nearly twice as high as the national average. Unfortunately, high-interest credit-card debt, high unemployment, and extremely low household incomes make it even harder for citizens to get ahead.

Methodology

To formulate our study, we used proprietary data from a subset of Credit Sesame’s 8 million members. The cities listed in the study had a minimum of 350 Credit Sesame members with the highest number of late payments for mortgages, student loans, credit cards, personal loans and auto loans.

Household income data was taken from the U.S. Census Bureau and unemployment rates from the U.S. Bureau of Labor Statistics.

The post Top 10 Cities Where Residents Struggle to Pay Their Bills appeared first on Credit Sesame.

Despite that staggering amount, however, not everyone graduates from college with an Alps-size mountain of debt. In fact, almost a third receive their diploma without accruing any debt at all.

Credit Sesame looked not just at the cities whose college grads have the least amount of debt, but the 10 cities where residents make more each year than their outstanding loan balance. Not surprisingly, four cities in California make the list — likely a result of the more affordable Cal State University network and the extremely well paying salaries of Silicon Valley.

Here’s an interactive map of cities where student loans exceed median income and cities where incomes are higher than student loan debt.

Here’s how the well-educated, well-paid stack up against each other.

10. Oklahoma City, OK

Average student loan balance per person: $42,054
Median earnings (Bachelor’s degree): $45,834
Debt to income ratio (Bachelor’s degree): 92%

Oklahoma’s overall unemployment rate is on the rise in 2016, but those with a Bachelor’s degree living in the state’s capital city don’t seem to be affected. OKC’s big employers — including INTEGRIS Health, Paycom, American Fidelity, and Oklahoma Gas & Electric — keep annual salaries above the average amount owed by those with a four-year degree.

9. San Antonio, TX

Average student loan balance per person: $44,267
Median earnings (Bachelor’s degree): $48,829
Debt to income ratio (Bachelor’s degree): 91%

Located in the economic hub of south central Texas, San Antonio is home to a booming biomedical and biotechnology sector. Yet it’s the large supermarket chain H-E-B that employs 20,000 workers and Lackland Air Force Base and Fort Sam Houston that provides satisfactory incomes for another 69,000 Texans.

8. Sacramento, CA

Average student loan balance per person: $45,694
Median earnings (Bachelor’s degree): $51,685
Debt to income ratio (Bachelor’s degree): 88%

Named as one of nine “Hot Startup U.S. Cities That Aren’t San Francisco or New York” last year by Entrepreneur, the California capital treats college graduates well. While those with only a Bachelor’s degree carry a total debt load that’s almost as much as their annual salary, Master’s degree earners’ debt is only 65% of their take-home pay.

7. San Diego, CA

Average student loan balance per person: $45,078
Median earnings (Bachelor’s degree): $53,572
Debt to income ratio (Bachelor’s degree): 84%

World renowned for its zoo and delicious Mexican food, San Diego’s top employers are in the government and education fields. The University of California, San Diego; the County of San Diego; the U.S. Navy; the City of San Diego; and the San Diego Unified School District provide jobs to more than 100,000 residents.

6. Fort Worth, TX

Average student loan balance per person: $43,611
Median earnings (Bachelor’s degree): $52,420
Debt to income ratio (Bachelor’s degree): 83%

Turns out that Fort Worth is a bit of a rebel. As the classic saying goes, everything’s bigger in Texas, yet that doesn’t apply to student loan debt of Fort Worth residents. Perhaps its largest employers American Airlines and Lockheed Martin have something to do with it.

5. Portland, OR

Average student loan balance per person: $47,596
Median earnings (Bachelor’s degree): $61,971
Debt to income ratio (Bachelor’s degree): 77%

Citizens of the City of Roses with a post-graduate degree can earn around $23,000 more than those who earned just a Bachelor’s degree. An advanced degree, however, isn’t necessary to earn a decent wage in this northwestern city. A booming housing market (prices rose 20% in the past year) combined with large real estate and construction industries generate tons of lucrative jobs for Portlanders.

4. Milwaukee, WI

Average student loan balance per person: $45,421
Median earnings (Bachelor’s degree): $61,971
Debt to income ratio (Bachelor’s degree): 73%

Home to MLB’s Brewers and lots of breweries, Milwaukee should also be proud that its residents have some of the lowest average student loan balances in relation to their annual incomes. The top three employers are healthcare companies, so graduates moving to the fifth-largest city in the Midwest can expect to take home decent wages immediately after earning their diploma.

3. San Francisco, CA

Average student loan balance per person: $45,884
Median earnings (Bachelor’s degree): $65,233
Debt to income ratio (Bachelor’s degree): 70%

The City by the Bay ranks closely behind New York City as the urban area with the second highest cost of living. But with well-paying industries like technology, healthcare, and banking dominating the job scene, so those carrying student loan debt can easily manage the load.

2. Las Vegas, NV

Average student loan balance per person: $41,873
Median earnings (Bachelor’s degree): $$61,971
Debt to income ratio (Bachelor’s degree): 68%

Once the center of the housing crisis, the City That Never Sleeps is remaking itself as an urban area that’s friendly to 20-somethings. (No, it has nothing to do with endless rounds of drinks served poolside or scantily-clad showgirls.) Six of Las Vegas’s top 10 employers are in the hospitality field, providing a steady income to young residents of the desert.

1. San Jose, CA

Average student loan balance per person: $37,942
Median earnings (Bachelor’s degree): $70,478
Debt to income ratio (Bachelor’s degree): 54%

Some might think that it would be tough for this northern California city to live in San Francisco’s shadow. But as the “Capital of Silicon Valley,” it’s home to numerous tech companies, including Adobe, PayPal, and Cisco that employ thousands of recent computer science and engineering grads (paying them extremely high salaries) from nearby universities like Stanford and the University of California, Berkeley.

The post It Pays to Be a Grad: 10 Cities Where Annual Income Exceeds Average Student Loan Debt appeared first on Credit Sesame.

The other half of the population, however, continues to have the unwanted reputation of being addicted to credit card debt. Which got us wondering, which cities’ residents are most dependent on credit?

In developing our list of the top 10 cities with credit card debt, we used Credit Sesame’s internal data and considered the following factors:

• The average credit card balance per card (not per resident)
• The credit utilization ratio per card (this means the amount of debt vs. how much overall credit is available)
• The median household income

Many cities with residents carrying high credit card balances also earn above average household incomes, perhaps because those with high salaries tend to be big spenders as well. But low-wage earners aren’t exempt from racking up credit card debt either. Here’s how the biggest plastic addicts stack up against each other.

10. Tarzana, CA

• Average credit card balance: $1,300
• Credit utilization ratio: 28%
• Median household income: $66,951

Once part of the San Fernando Mission established by Spanish missionaries in the 18^th century, Tarzana is now a part of Los Angeles. A popular hideaway for numerous celebrities (Demi Lovato, Maya Rudolph and Paul Thomas Anderson all call Tarzana home), it appears that city residents use their plastic to fund their champagne wishes and caviar dreams.

9. Gainesville, VA

• Average credit card balance: $1,302
• Credit utilization ratio: 24%
• Median household income: $130,944

Virginia may be for lovers, but Gainesville is for plastic users. The small town with a population of 11,481 is a suburb of Washington, D.C., making it an expensive place to call home. A median sale price for Gainesville homes is $436,200 doesn’t leave residents a lot of extra cash to put towards their credit card balance.

8. Friendswood, TX

• Average credit card balance: $1,319
• Credit utilization ratio: 34%
• Median household income: $95,120

Everything is bigger in Texas — including the average credit card balance and utilization ratio of residents in Friendswood. Located just outside of the Houston metro area, this small city was named one of the best affordable suburbs in the United States by Business Week in 2009. Since then, it appears that citizens spend a little too freely at the nearby Baybrook Mall and on tickets to root for local teams Astros, Rockets and Texans.

7. Brentwood, TN

• Average credit card balance: $1,330
• Credit utilization ratio: 21%
• Median household income: $138,395

Teeming with country music singers and professional athletes, this secluded haven is nestled in the rolling hills just south of Nashville. A decade ago, the Council for Community and Economic Research ranked Williamson County (where Brentwood is located) as American’s wealthiest county, when considering cost of living. But high housing costs —median monthly housing costs run $2,626 for those that own their own homes and median rent costs $1,964 — likely drain the disposable incomes of residents, even though household income is almost triple the nation’s average.

6. San Juan, PR

• Average credit card balance: $1,360
• Credit utilization ratio: 26%
• Median household income: $33,848

Before the U.S. Congress issued a bailout, the island territory of Puerto Rico found itself approximately $2 billion in debt. Residents of the capital city aren’t nearly that much in debt, but they’re still carrying four digits’ worth of credit card debt while earning a household income that’s almost $20,000 less than the U.S. average. Adding to the financial pain is the loss of manufacturing jobs in Puerto Rico. While manufacturing grows in the U.S. (adding 9,000 positions) in July 2016, the ending of tax incentives a decade ago crippled Puerto Rico’s manufacturing base, and it’s never recovered.

5. Bowie, MD

• Average credit card balance: $1,364
• Credit utilization ratio: 35%
• Median household income: $106,396

Employees at the town’s largest employer — Inovalon, a cloud-based technology company — report receiving higher-than-average salaries. Approximately only half of residents are college graduates, stifling their chances for higher wages and long-term savings growth and making it more likely they need to rely on credit cards to buy necessities.

4. State College, PA

• Average credit card balance: $1,503
• Credit utilization ratio: 27%
• Median household income: $26,627

“Happy Valley” is the nickname of this college town (which houses Penn State University), but the financial situation of most residents is quite gloomy. The average household income is only slightly higher than the poverty level for a family of four — and half of the city’s residents officially live in poverty. The university is by far the largest employer, but many positions are part-time and employees must work an average of 15 hours a week the entire year in order to qualify for retirement benefits and an average of 30 hours a week to gain access to an employee-sponsored healthcare plan.

3. Wayne, NJ

• Average credit card balance: $1,512
• Credit utilization ratio: 27%
• Median household income: $72,062

With New York City just 20 miles away, the allure of the shopping, eating and sightseeing in the big city tempts Wayne residents to rack up high balances on their credit cards. Its proximity to the Big Apple also means that commuters make up a large portion of this suburban community. Workers can command higher salaries by traveling into Manhattan for their jobs, but monthly train passes will set them back a whopping $298.

2. Tujunga, CA

• Average credit card balance: $1,542
• Credit utilization ratio: 32%
• Median household income: $59,358

Once home to a temporary Japanese detention station during World War II, this suburb of Los Angeles today houses one of the largest percentages of Vietnam veterans. Despite residents of Tujunga earning higher household income than those living in Los Angeles, household values are lower so residential mobility is decreased as well. And while the number of local jobs has increased during the past decade, there’s still only one job for every four workers, so the town’s economic base is fairly weak and many travel to nearby Burbank, North Hollywood or Glendale for employment instead.

1. Beverly Hills, CA

• Average credit card balance: $2,052
• Credit utilization ratio: 38%
• Median household income: $87,366

Known for Rodeo Drive, plastic surgery, extravagant living, and fashionable ladies who lunch, it’s not really a surprise that the most famous zip code (90210) would top this list. The entertainment and hotel industries employ the most people, but few, if any, of those workers command the same salaries as top-earning actors like Kevin Hart and Ellen DeGeneres. With the average home value exceeding $4.8 million and residents averaging only a five-figure household income, it’s easy to understand why BH residents opt for credit over cash on a frequent basis.

The post 10 Cities Where Residents Are Addicted to Their Credit Cards appeared first on Credit Sesame.

According to a recent survey about millennials from Capital One’s ShareBuilder survey on CNN, 93 percent of Gen Ys say that they’re less confident about investing in the stock market and only 16 percent use a financial advisor.

A relatively new way to invest, robo-advisors are a tech-based advice source (think website or mobile app) that skeptical Millennials are willing to try. Instead of having a financial planner create a portfolio of investments, robo-advisors use complex computer algorithms to determine your holdings.

Start-ups and large brokerage houses now offer the service, so there’s a robo-advisor for just about every investor under the age of 35.

To help you get started, I break down the top robo-advisors for the eager Millennial ready to invest, but may be in a different stage in his/her life or have different financial goals in mind.

For the Millennial who just received a first paycheck: WiseBaynan

Wages have been stubbornly stagnant in recent years, so some entry-level salaries are modest. For newbies in many industries, that probably means that once you pay the rent on your tiny studio apartment and make your student loan payment, there’s not much left over. Still, it’s important to start building savings once you’re earning a regular paycheck, so you need an investing option that offers low fees and no account minimums to maintain.

Unlike most other investment firms, you only need $10 (!) to open an account with WiseBaynan. And in keeping with the low-cost theme, it doesn’t charge management or trading fees to automatically rebalance your ETF portfolio when it gets out of whack. But if you want to dump a holding that’s taken a nose-dive and reap the tax benefits (what’s called tax-loss harvesting in finance-speak), wire money into your account, and receive trade confirmations or paper statements, expect to pay fees.

The downside? A waiting list that you must endure before officially enrolling. (I was number 3,011.) For those without patience, there’s an easy hack to avoid it: Refer five friends.

For the Millennial who’s saving for a Serengeti safari: Schwab Intelligent Portfolios

In light of morbidly low interest rates for savings accounts and CDs, it’s understandable that some adventurous Gen Ys want to try and reach their smaller financial goals faster by investing. This robo adviser gets to the point on the first question it asks — what you’re saving for (and it doesn’t have to be retirement or for an emergency account).

A user-friendly interface generates an easy-to-comprehend chart tho show how your different savings goals affect your portfolio’s holdings.

For the Millennial who’s eyeing an MBA or who’s already panicking about the higher cost of education in 2030: FutureAdvisor

The ever-skyrocketing cost of college is out of control. Whether you’re looking to go back to school yourself or need to start saving for your child, investing money designated for school is easier and more affordable with Future Advisor than  with other automated services. (Future Advisor charges no management fees, only low-cost ETF investment fees.)

Once you’ve answered several questions about future college plans, the service calculates how much money you should aim to have and informs you which investments options are best for you to reach your goal. FutureAdvisor then manages your accounts, which are held at brokerage firms Fidelity or TD Ameritrade.

The main downside to the site is the sign-up section, which isn’t as user-friendly as others. You’ll be required to upload information about any existing retirement accounts before you can start building a college savings plan.

For the Millennial who needs an incentive to stop buying shots and start saving: Betterment

Gen Y is also known as the “participation trophy” generation — a designation that Betterment goes along with. How so? This robo-advisor has a tiered fee structure, rewarding those that save more. For account balances under $10,000, you’ll be charged 0.35 percent or $3 a month in management fees; for portfolios worth between $10,000 and $100,000, that fee shrinks to 0.25 percent.

It also gives you some “candy” early on during the enrollment process. Once you’ve input just a few personal details, Betterment lists specific investment recommendations for your three financial goals: a safety net, retirement, and general investing. The full disclosure gives you a level of comfort with the process right off the bat.

Betterment also does more work for you than other investing services, offering the unique tool called SmartDeposit. Tell it the maximum balance you want to maintain in your bank account. Weekly, it’ll check your account and suggest via email that excess funds are moved to the retirement section of your portfolio.

For the Millennial who’s not into monogamy: SigFig

If you’ve dabbled in investing and have money stashed in various places, this robo-advisor can help you get organized and stay that way. It syncs all your info, presents it in one location, and automatically rebalances when necessary.

The enrollment process can be a bit confusing (expect to take advantage of the live chat), but with no management fees on your first $10,000 and low investment fees of 0.07 to 0.15 percent, it’s something that can be overlooked, especially when you see some of the cool charts it provides, like comparing your portfolio to various indices.

For the Millennial that’s got a great workplace-sponsored retirement plan, but a crappy benefits department: Blooom

Whereas most robo-advisors provide guidance for IRAs and taxable investments, Blooom focuses exclusively on employer-sponsored accounts, like 401(k)s, 403(b)s, and the like. Since your workplace determines what investments you have the opportunity to invest in, this automated adviser analyzes your existing holdings for free and suggests any needed rebalancing.

If you want investment recommendations, you’ll need to enroll and pay a flat fee of $1 a month for portfolios under $20,000 and $15 a month for balances over $20,000.

With its modern language, quirky graphics, fun pop-ups, and clear fee structure, this robo feels better suited for Millennials than all the other options. Now if only they’d manage all types of investment accounts…

The post 6 Millennial-Friendly Robo-Advisors for Investing & Growing Your Money appeared first on Credit Sesame.

Unfortunately, this act of goodwill (which allows someone to borrow money that he or she might not have been able to otherwise) has its drawbacks and is something you need to think through and consider carefully. Read on to learn of the hazards.

When a bank requires a borrower to have a co-signer, it’s typically because that person has bad credit or some other financial reason that prevents them from qualifying for a loan. When you co-sign, you’re essentially assuming full responsibility for the loan in the event the primary borrower is unable to pay. This means that if the borrower can’t afford to make payments, you’re on the hook to come up with what’s due each month—regardless of whether or not you’re living in the home, or driving the car that the money may have been borrowed to pay for.

And you’re not just responsible for a month, or even a few months’ worth of payments, either. If the borrower defaults on the loan and never resumes making payments, you could end up paying out the full amount of the loan.

When Co-Signers Don’t Pay

But what if you can’t afford to make the payments for the co-signed loan yourself? If the lender can’t collect from the primary borrower, their next course of action is to come after the co-signer in order to collect. This means the lender could sue you for nonpayment and garnish your wages depending on your individual state laws. When this happens, the collection is reported in both the borrower’s and the co-signer’s credit report summary. Needless to say, if you have great credit, the last thing you want reported in your credit report is a collection. A collection can wreak havoc on your credit score. (Not sure where your credit score stands? You can get your free credit score right here at Credit Sesame.)

Even if the borrower does happen to fulfill the full terms of the loan and is able to pay off the the debt, your own financial situation may still be impacted by the borrower’s payment history. If he or she accidentally misses a payment, or pays late, it will be reported to the credit reporting agencies — in both your credit report and the borrower’s —and your credit score will take a hit as if you missed the payment yourself. Consider too, that if you co-signed or applied for a joint credit card account, your score will also take a hit if the borrower over utilizes the card and carries a large balance from month to month.

Additionally, once a loan is open, it’s extremely difficult to remove a co-signer from it without closing the account and having the primary borrower refinance the loan in their name alone. Keep in mind too, that if you’re looking to apply for a loan or sign up for a new credit card, lenders view co-signed loans as your own debt—which could impact whether or not you qualify because the lender may not want to extend even more credit to you.

When you co-sign a loan, you also have to consider what happens in the unfortunate event that the primary borrower loses their job, becomes disabled or unable to work — or worse, the primary borrower dies. It’s not something any of us want to think about but it does happen and we can’t predict what life throws our way. Bottom line? If you’re considering co-signing a loan, make sure you’re comfortable taking on the loan as your own in the event the unexpected happens.

The post Co-Signing Dangers: Why You Should Think Twice Before Co-Signing a Loan appeared first on Credit Sesame.

It’s your credit score. This powerful three digit number can be your best friend or your worst enemy. You may already know that a poor credit score can keep you from borrowing money to purchase a house or getting a credit card. But there are numerous other ways that having bad credit can negatively affect your life.

It is a fact of life that things get hard now and then, financially speaking, for most of us. During these times, running up a credit card balance might seem more desirable an option than buying your children fewer Christmas gifts. Or, faced with a layoff or unexpected large expense, you might consider skipping a credit card or loan payment. Worse still, you might simply stop paying a debt and let it go completely into default.

Unfortunately, the momentary relief of the financial obligation will be repaid a hundred or thousand-fold in negative financial consequences. Having poor financial health takes its toll. How much does bad credit cost you? Read on for surprising answers.

Don’t think bad credit can hurt you? Here are 17 ways that show otherwise.

[cta button=”text for button” image=”http://override-default-image-url” link=”http://override-default-link/”]Get your free credit score—no credit card required![/cta]

1. Employment Troubles

What does your credit history have to do with your job performance? You may think that the answer is nothing — but that’s not how a lot of employers see it. Federal law allows workplaces to pull both employees’ and applicants’ credit reports. If you earn more than $75,000 per year, your employer will see even more information than any lender who checks your credit. For high earners, the report will contain liens, collections, judgments and bankruptcies outside the normal reporting window of seven to ten years.

Not only that, but the information contained in the files can be used to make hiring choices or as a reason to take disciplinary action or even terminate someone. Currently, only 10 states restrict an employer’s ability to access your credit report or use it when making employment decisions. According to a 2013 study by Demos, 10 percent of people have been denied a position due to information contained in their credit report.

In all states, the employer must have your written permission before accessing your credit report. And in most cases, they won’t tell you if something on your credit report caused them to decline to offer the job.

2. Lack of Means to Pay for Emergencies

Did your furnace bite the dust? Or maybe you had a car accident and your insurance coverage left you on the hook for a large portion of the expense? If you have bad credit, it’s unlikely that you’ve built a proper emergency fund. And without that, you’re going to have difficulty paying when something unexpected crops up. Even worse, having poor credit will likely keep you from qualifying for an emergency loan.

3. More Stress

Poor credit can wreak havoc on all areas of your life — including your mental state. If you’re financially strapped and worrying about maxed out credit cards, struggling to manage overwhelming debt, and dreading phone calls from debt collectors for unpaid bills —the financial stress and sleepless nights can really take a toll on your mental and physical wellbeing.

4. Unhealthy Lifestyle

If you don’t have good credit, it’s likely that your bank account is always running on empty. Which means that you’re probably going without things you might need in life, such as doctor’s visits, medication or even food.

5. Expensive Car Insurance

Bad news: Many states allow insurers to charge drivers with low credit higher rates to insure their personal vehicles. (They also allow denial of coverage.) That’s because some insurers think that if you’re irresponsible with your finances (like you don’t pay your bills on time), that you’re also more likely to be irresponsible behind the wheel.

6. Effect on Professional Standing

Because of the Fair Credit Reporting Act, workers who receive professional licenses (think: medical professionals, teachers, contractors) can have their credit checked by the government agency issuing the certificate. If yours is poor, it’s possible that your license could be withheld.

7. Relationship Drama

Awful credit can have a detrimental effect on your personal relationships. CNN reports that up to 30 percent of women and 20 percent of men say they will not marry a person with bad credit. And 75 percent of women say they consider a potential date’s credit score in dating decisions. Even worse, marriages can take a beating if bad credit is involved. Research conducted by Jeffrey Dow at the National Marriage Project confirms the commonly held belief that financial troubles can cause major marital problems. His work found that couples that accumulated debt become more unhappy than those that those that pay off debt together. (The rate of discontent increases with the amount of debt accrued.) But credit troubles don’t just stop with arguments and nights going to bed mad at your partner. In fact, money messes more frequently lead to divorce than any other marital troubles — including infidelity.

So word of advice: If you love your spouse, show your credit some love, too.

8. Higher Interest Rates

If your FICO score is between 680 and 720, you’ll be approved for financing to some extent. But you’ll always pay higher rates.

In the case of a mortgage, even a one percent difference will cost you tens of thousands of dollars in extra interest charges over the life of the loan. If you borrow $187,000 at 5 percent, your monthly payment will be around $1,000. The same amount at 6.25 percent costs $1,151 per month. With today’s current market a borrower with stellar credit could pay as little as 4.24 percent, for a monthly payment of $918.*

Average credit, therefore, costs the borrower about $30,600 in additional interest charges over the life of the loan. Poor credit costs the borrower an extra $83,721.

Auto loan interest rates vary even more wildly, from 2 or 3 percent to 17 or 18 percent. A borrower with poor credit could easily pay ten times more in interest charges than someone with excellent credit.

9. Inability to Better Yourself

Want a better job? You might need to go back to school to obtain a higher degree. But if your credit is less-than-desirable, that’s going to be quite difficult (if not impossible), since it’s unlikely that you’ll qualify for a student loan.

10. No Power

If you’re getting ready to turn on your residence’s utilities (water, electricity, gas) — or you want to switch from one service provider to another — you need solid credit. That’s because utility providers often check it before providing service. If you’ve missed payments or made them late in the past, they could require you to put down a deposit, get a letter of guarantee from someone (putting them on the hook for your bill if you skip out on it), or deny you service completely.

11. Bigger Down Payments

If you have bad credit scores you’re probably going to be required to make a larger down payment — regardless of whether you’re buying a house, a car, or a boat. Why? Your three-digit number is an indication of your credit worthiness, which is the judgment of whether or not you’re likely to default on your debt obligations. If your score is bad, lenders will view you as a risky borrower and in turn, will require more cash up front before issuing you a loan.

12. Limited to Alternative Lenders

What are you going to do if you find yourself in a major financial pickle and need to borrow cash? If your credit is bad, and you can’t receive assistance from a traditional lender, you’re going to have to resort to other means, like borrowing money from lenders of last resort,  family and friends or trying to crowd source financial assistance.

13. Unfulfilled Aspirations

If you have the entrepreneurial spirit, opening a small business or launching a digital startup might be your ultimate goal. Bad credit can preclude you from achieving your dream since you may not be able to secure a small business loan or a home equity line of credit (even if you put your own home up as collateral).

14. Fewer Travel Options

A break from the stress of every day life is good for the mind and the soul. But if your credit is in the dumps, you may not be able to get away from it all. That’s right, you might not be able to take a vacation. You can’t purchase airline tickets with cash. And most hotels and car rental agencies require a credit card when making a reservation; not having one will be a red flag that you’re a credit risk. Some rental companies do accept a debit card, but it’s probable that they’ll perform a credit check, during which they’ll discover your poor history.

And the hits just keep on coming. Since your credit history is keeping you from getting a credit card, it’s also preventing you from using a rewards card and racking up those valuable points that can be redeemed for free travel, cash-back, and more.

15. Inability to Rent

Landlords want reliable tenants, which is why most conduct a credit check before handing over the keys. If late payments dragged yours down, you could have trouble getting a different property owner to give you a second chance.

16. No Refinancing Options

Mortgage rates have been at or near historic lows for years now. If your interest is higher than you’d like it to be, you might not be able to land a better one if you’ve neglected your credit since buying your home. Because of the Great Recession (and the flood of foreclosures that resulted from it), banks scrutinize borrowers’ credit more now than ever before. If they find it lacking, you’ll be left with your current loan terms.

17. Costlier Property Tax

A study reported in InsuranceJournal revealed that homeowners with bad credit pay a whopping 91 percent (!) more for their property coverage than residents with a great credit history. Forty-seven states allow insurers to hit those with poor credit with higher rates; only California, Massachusetts, and Maryland ban it.

Fortunately, it’s never too late to improve bad credit. To learn more, sign up for a free account with CreditSesame.com, where you’ll get access to your free credit score, a free summary of your credit report summary and a personalized action plan based on your individual credit profile. The service is 100% free and updated every month so you can track and monitor your progress along the way.

The post 17 Ways Having Bad Credit Can Hurt You appeared first on Credit Sesame.

[cta button=”text for button” image=”http://override-default-image-url” link=”http://override-default-link/”]Get your free credit score—no credit card required![/cta]

Based upon the number of solicitations that you receive in the mail (not to mention the countless eager salespeople trying to get you sign up for a store card), it may seem like every bank wants to give you a credit card. But that doesn’t mean that you should just sign up for one without giving it much thought. After all, getting a piece of plastic is a big responsibility.

Here’s what you need to know before applying for a credit card.

The Terms and Conditions

Details, rates, fees, rewards can vary greatly from card to card, so you’ve got to know what you’re signing up for. This means reading the terms and conditions (or “pricing and terms,” etc.,  some issuers use different names when referring to the terms of the offer) be sure you are also reading the fine print. Make sure and be aware of what your APR (annual percentage rate) or what’s commonly known as your interest rate is — even if you never plan to carry a revolving balance. That way, if something happens and you aren’t able to pay your bill in full, you aren’t shocked when you get hit with an interest charge of, say, a variable APR of 25.99 percent. It’s also good to know if that interest rate could increase if you miss a payment or make one late.

The Fees

Credit cards are notorious for having fees associated with them, but if you’re a responsible user, having plastic won’t cost you an arm and a leg. These are the most common charges that you should be on the lookout for:

• Annual fee: In general, credit cards that offer rewards programs are the ones that levy a yearly charge. (That’s not always the case, however, which is why it’s important to read all of the terms and any fine print.) While you may balk at paying it simply to have a credit card, it can be worth it if the rewards that you earn outweigh the annual fee; if not, opt for a different card. In some situations, a card issuer may waive this fee for the first year, or they may offer a $0 introductory annual fee for the first year, then after the first year they will charge you an annual fee.
• Late payment fee: Forgetting to pay your credit-card bill on time can have expensive consequences. While the cost varies from card to card, it’s easy to avoid by enrolling in auto bill-pay or putting an alert on your calendar several days before the due date.  Keep an eye on your credit card payment due date, so should it change you can make any necessary adjustments to any auto bill-pay or alerts you set up.
• Foreign transaction fee: Unless you have a piece of plastic that’s specifically geared towards international travelers, it’s likely that you’ll be charged extra (usually 3 to 4 percent of the transaction) as a   foreign transaction fee of each transaction made in a foreign currency or made in U.S. Dollars that is processed outside the United States.
• Cash advance fee: Want to borrow cash against your credit line? It’s going to cost you — around 2 to 5 percent of the advance — and that’s on top of any ATM fees you’ll be charged as well. Even more bad news? If you don’t pay your balance in full, the interest charged on the cash advance portion is often significantly higher than what you pay on purchases. Plus they will begin charging interest on cash advances on the transaction date.
• Over-the-limit fee: This charge is pretty self-explanatory. Thanks to the CARD Act, you have to opt-in for the ability to make a purchase that exceeds your limit — an option that you shouldn’t take advantage of. Take our word for it, having your card rejected is better than paying this fee.

The Perks

When it comes to credit cards, you have countless options, including numerous ones that offer various types of rewards. If you’re a globetrotter, you may want to consider a card where you earn miles or points that can be redeemed for travel-related rewards, like air travel or hotel rooms here are some options from our partners for airline and travel rewards. Or, if you’re looking for flexibility, a card that offers cash-back or other rewards might be better for your spending habits – here is a selection of rewards cards from our partners.

Redeeming rewards aren’t the only perk you can look for. Perhaps, you’re looking to benefit from a low interest rate credit card, check out these cards from our partners. For small business owners, there are business cards that may offer incentives that may be worth a look from you.

The Ability to Qualify

You may not realize this, but just because you receive something in the mail offering you a credit card doesn’t mean you’re automatically going to be approved to be a cardmember. In order to be approved for the card, issuers require you to meet certain qualifications — part of which your credit must fall into a predetermined range (think: “poor,” “average,” “good,” “excellent”) listed on the application. To know which range you fall into, you’ll need to know your credit score, which you can do for free at CreditSesame.com. For help on which classification your three-digit number falls into (and the best cards for each category), click here. Your credit score or range is not the only factor a card issuer looks at when they review your application so keep this is mind.

If your score is lower than what the card requires, you may not want to bother submitting an application. Why? Applying for a credit card could cause your score to dip slightly, and if it’s already low, you don’t want it to fall anymore.

After all, one beneficial aspect of having a credit card is building — not harming — your credit.

Advertiser Disclosure: Many of the offers that appear on this site are from companies from which Credit Sesame receives compensation. This compensation may impact how and where products appear (including, for example, the order in which they appear). Credit Sesame provides a variety of offers, but these offers do not include all financial services companies or all products available.

Credit Sesame is an independent comparison service provider. Reasonable efforts have been made to maintain accurate information throughout our website, mobile apps, and communication methods; however, all information is presented without warranty or guarantee. All images and trademarks are the property of their respective owners.

Editorial Content Disclosure: The editorial content on this page (including, but not limited to, Pros and Cons) is not provided by any credit card issuer. Any opinions, analysis, reviews, or recommendations expressed here are author’s alone, not those of any credit card issuer, and have not been reviewed, approved or otherwise endorsed by any credit card issuer.

Provider’s Terms: *See the online provider’s application for details about terms and conditions. Reasonable efforts have been made to maintain accurate information, however, all information is presented without warranty or guarantee. When you click on the “Apply Now” button, you can review the terms and conditions on the provider’s website. Offers are subject to change and the terms displayed may not be available to all consumers.

The information, including rates and fees, presented in this article is believed to be accurate as of the date of the article. Please refer to issuer website and application for the most current information. Verify all terms and conditions of any offer prior to applying.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

Reviews: User reviews and responses are not provided, reviewed, approved or otherwise endorsed by the banks, issuers and credit card advertisers. It is not the banks, issuers, and credit card advertiser’s responsibility to ensure all posts are answered. The Credit Sesame website star ratings are an average based on contributions from independent users not affiliated with Credit Sesame. Banks, issuers and credit card advertisers are not responsible for star ratings, nor do they endorse or guarantee any posted comments or reviews.

Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

The post 5 Things You Need to Know Before Applying for a Credit Card appeared first on Credit Sesame.

If you’re fortunate to have someone paying for your wedding—or at least cover a portion of the costs—you might not need to worry about sticking to a budget. But if you’re like many young couples and don’t have a ton of cash just sitting around (and borrowing the money from your folks is out of the question), you’ll need to pare down your ceremony and reception. Even then, you might need financial assistance in order to make your wedding day happen.

Our credit experts break down all of your payment options. See which one may be the right fit for you.

Tapping Your Home Equity

If you own your house, you may be able to get relatively inexpensive financing with a home equity line of credit (HELOC) to foot your wedding bill. Since this type of borrowing is backed by your home (i.e., a secured loan), it’s likely that the interest rate will be lower than what accompanies a personal loan.

Keep in mind, not all banks offer HELOCs these days. Shop around. In fact, sometimes local credit unions can be the best place to look for a HELOC.

One cautionary note: If you fail to pay back your loan, not only will your credit be damaged, but more importantly, the bank could initiate foreclosure proceedings against you.

Opting for a Personal Loan

If someone says that she’s getting a wedding loan, chances are, she’s referring to a personal loan. If you don’t have collateral—like a home—this may be a strong option for you. Most financial institutions, including local and nationwide banks, credit unions, and even some online banks, offer personal loans. To help determine the interest rate that you ultimately land, lenders will use your credit history. The higher your credit score, the lower your interest rate.

While rates for personal loans are fairly low, they are more costly than what you will pay for a mortgage or a home equity line of credit. That’s because a personal loan is unsecured—meaning that there is no collateral (like your home) held in exchange for lending you the funds.

While interest rates on personal loans run in the mid- to high-single digits, they’re still substantially lower than what you’d pay by charging your wedding expenses on a credit card. This explains why in just about every situation, it’s better to get a personal loan than to put the charges on your plastic.

You may also want to consider peer-to-peer lenders such as Prosper or Lending Club. These lenders often offer lower interest rates than a bank. Services like Credit Sesame can help you sort easily through various loan options by matching your credit profile with the lowest cost loans that suit your needs.

Financing from Friends and Family

Many years ago, asking for cash gifts to help pay for your dream day was considered taboo. These days, it’s increasingly acceptable to ask for cash in lieu of a wedding gift. In fact, there are several online services such as OurWishingWell.com that allow couples to set up a registry where guests can easily gift cash.

Not comfortable with asking directly for cash? Consider crowdfunding your wedding (heck—people are using it for everything!). Tilt, for example, is a crowdfunding site that allows you to leverage your social network to fund just about anything, including weddings. And there are other options like GoFundMe.com which allow friends and family pay your way to your big day.

And who wants to start their marriage off on the wrong foot?

The post 3 Smart Ways to Fund Your Dream Wedding appeared first on Credit Sesame.

[cta button=”text for button” image=”http://override-default-image-url” link=”http://override-default-link/”]Get your free monthly credit score—no credit card required![/cta]

1. Be flexible.

If you can avoid traveling on the weekends, do so. That’s because you can often land deals by flying midweek. Booking an itinerary with a stop, as opposed to a direct flight, can also be another great way to lower your costs.

2. Use an airline credit card.

These days, there are à la carte charges for everything: extra legroom, early boarding, checking luggage, eating a meal on-board. While some of these fees are inevitable, others are avoidable simply by using an airline credit card to book your travel. For instance, an airline credit card may offer cardmembers no-cost priority boarding and the ability to check one bag for free (up to four people per reservation), which could be a savings of up to $200. And it’s most likely a rewards card too, so, since you may earn miles for each purchase you make, it’s easy to rack up miles to use towards a ticket for travel.

 3. Understand what’s a deal.

Instead of hitting up numerous websites trying to figure out a decent price for, say, a flight from Chicago to Savannah, Georgia, simply enter the departure and arrival cities at Hopper, which takes much of the work out of shopping for airfare. Not only does this new website tell you what’s a good deal for the route, but it also informs you when the best times to travel are and whether demand is increasing.

4. Take all fees into consideration.

Before making a reservation, it’s wise to research the cost of any fees you’re likely to pay and calculate your total cost. Otherwise, you might pay less for the actual ticket, but more overall once you’re billed for fees to carry on a bag and check another one, for instance.

5. Clear your computer’s browser history.

This may sound strange, but some travel websites keep track of online searching and raise prices if they see you searching repeatedly but not buying. By cleaning out your cache as you shop, you could land a flight for the price you originally spotted it at — or even lower.

6. Book your ticket on a Sunday.

There’s no guarantee that buying a seat on this day will always net you the best deal. But a recent study from the Airlines Reporting Corporation, a ticket tracking organization, found that you’ll pay, on average, $110 less than the average ticket price when making a purchase on a Sunday.

7. Request a refund.

Some airlines offer cash back if the ticket price drops below what you paid for it. (Details vary, so check with each carrier for specifics.) Sign up with Yapta, and the site will track your flight, notifying you if you’re entitled to a refund. And while that doesn’t make flying pain-free on your wallet, just the possibility of getting some money back does make it just a little bit friendlier.

Disclosure: Credit Sesame is an independent comparison service provider. Reasonable efforts have been made to maintain accurate information throughout our website, mobile apps, and communication methods; however, all information is presented without warranty or guarantee. Please visit the provider’s site for current information and verify all terms and conditions of any offer prior to applying. The editorial content on this page is not provided by any company or credit card issuer. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, not those of any company or credit card issuer, and have not been reviewed, approved or otherwise endorsed by any company or credit card issuer. The offers that appear on this site are from companies from which we may receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all companies or all available products or all available credit card offers. All images and trademarks are the property of their respective owners.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

The post 7 Easy Ways to Save Money on Airfare appeared first on Credit Sesame.

If you can’t put that much in savings, don’t beat yourself up. You can still work on maximizing your savings contributions with what you do have.  And considering that one of the biggest financial fears is not having enough money to retire, finding a way to boost your nest egg can help alleviate some of the worry behind the fear. So try one, or several, of these simple strategies for building your retirement savings.

Save a little more each year.

Many finance companies make it easy for you to save more for retirement. All you need to do is enroll in their annual increase program, which bumps the pre-tax amount deducted from your paycheck by one percent each year. Say you’re putting six percent of your salary in your 401(k). Enroll in one of these programs and come January 2015, seven percent of your pay will be directed into your savings. The following year? Eight percent. Forbes reports that the number of savers currently using this tool is low, but that it’s responsible for a substantial number of account increases.

Get money from your employer.

Hands down, signing up for your employer match is the easiest way to sock more money away for retirement. Doing so rewards you with free money simply for the act of saving yourself. For example, an employee making $50,000 annually that puts five percent in her 401(k) and participates in a dollar-for-dollar matching program will receive an additional $2,500 each year. Employer matches do not go towards annual contribution limits, so if you’re able to put away the full $18,000, participating in one of these programs could net you some serious cash.

Don’t throw away your savings.

A 2014 paper written by Ian Ayers, a Yale University law professor, and Quinn Curtis, a law professor at the University of Virginia, found that many savers are paying large amounts in account fees. Examine your retirement plan’s offerings and make sure you’re investing in the low-cost options like index or target-date funds, as opposed to actively managed funds.

Find other sources of cash.

Borrowing money from your 401(k) or 403(b) might sound like a good idea since you’ll be, in essence, paying yourself back — complete with interest (that’s usually lower than what banks charge). In reality, however, this is a loan that you should never take out. That’s because when you borrow from your retirement account, you miss out on the potential growth your money would have if it were invested in the stock market. Plus, if you’re not able to pay it back, not only are you out your retirement savings, but you’ll also have to pay income tax and a penalty if you’re under 59 ½ years of age, too — depleting your savings instead of boosting it.

The post Simple Strategies for Building Your Retirement Savings appeared first on Credit Sesame.