A Review Of The Fingerhut Credit Account

A Review Of The Fingerhut Credit Account

August 7, 2019         Written By Bill Hardekopf

The is a credit account that can only be used at Fingerhut.com or to purchase items from the Fingerhut catalog. Consumers with less than perfect credit may want to consider applying for a Fingerhut Credit Account since it may help build or re-establish your credit. The account can be used to buy any of the 450,000 Fingerhut items on credit.

What Bank Issuers The Fingerhut Credit Account?

The Fingerhut Credit Account is issued by WebBank. This bank was founded in 1997 and is based in Salt Lake City, Utah. It is FDIC-insured. WebBank offers a number of financial products either through strategic partnerships or directly to consumers via savings accounts and time deposits.

About The Fingerhut Credit Account

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If you shop on Fingerhut.com or purchase items through the Fingerhut catalog, then the gives you a way to buy these items on credit. Since the issuer reports to all three major credit bureaus, the monthly activity on your account will be reported to the agencies and can help you rebuild or improve your credit profile. But it is important to make your payments on time and keep within the designated credit limits you are given. Once an application is submitted, consumers will find out very quickly if they are approved for the account. The Fingerhut Credit Account has fairly low fees for a financial product meant for people with low credit scores. Consumers will not have to pay an application fee when applying for a Fingerhut Credit Account, and there are no monthly, annual or one-time fees with an account. Because it is an unsecured account, there is no security deposit required.

There are two main drawbacks to the Fingerhut Credit Account. The APR on this financial product is very high so consumers need to do all they can to avoid these interest penalties and not carry a balance from one month to the next. In addition, applicants need to be fully aware that the Fingerhut Credit Account cannot be used with other merchants—it can only be used to buy goods on Fingerhut.com and through the Fingerhut catalog.

Is The Fingerhut Credit Account Right For Me?

If your credit score is fairly low and you shop on Fingerhut.com or through the Fingerhut catalog, opening up a Fingerhut Credit Account may be something you want to do. Prudent use of the account may help build your credit profile since the issuer reports monthly activity to the three major credit bureaus. But it’s important to know that the account is only good with Fingerhut and the interest rate on the account is extremely high, so the balance needs to be paid off completely each month.

 

Steps To Improving Your Credit Score

Consumers should always be working on improving your credit score. This will increase the probability of getting approved for various loans, credit cards or financial products such as the Fingerhut Credit Account. Here are some suggestions on how to help get your financial house in order:

Step 1: Create a Budget

One of the best ways to start is to take an objective look at yourself and how you handle your finances. The foundation of any financial plan is the creation of a budget. This takes some detailed work, but the benefits could be significant. Track all of your spending for several months. Every single dollar. You need to find out where you are spending your money. From this, you will be able to determine where you might be able to slash some of your expenses. Also, take a look at how you are earning money. This may be fairly easy if you have a full time job. But if you have a number of side gigs, make sure you track how much you are earning from each job.

Step 2: Take Stock of Your Current Credit Score

Next, take a look at your credit report. We all have the ability to get a free credit report every year from each of the three credit reporting bureaus: Experian, TransUnion and Equifax. These can be obtained from annualcreditreport.com or directly from the three bureaus. Go through each report in great detail. If you find an error or suspicious account, have it removed or corrected on your report as soon as possible.

Studying theses reports will also give you some insight on how your credit score is determined. If you know what goes into your credit report, you may be able to find ways to improve your financial situation. Here are the five factors that make up your credit score: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). Let’s take a look at each one:

Payment History
Payment history is the number one factor in a credit score. The most important step you can make in improving your score is to begin making on-time payments on every one of your bills. If you’ve had some problems in this area, take advantage of some tools available to you. Many issuers will send text messages or email alerts before a payment is due. It is imperative to make at least the minimum payments by the due date each month.

Amounts Owed
Your debt utilization is the second-most important factor in calculating your credit score. This is the amount of debt you have divided by your available credit. Consumers should not use more than 30% of your available credit if you’re looking to increase your credit score. As an example: if you have $10,000 available on your credit cards, you should not carry a balance over $3,000. If you find yourself above this threshold, start paying off as much of your debt as possible. The budget you created will be helpful in seeing how much you can pay toward your debt each month. If you have additional funds remaining at the end of one month, then put this extra money toward your debt repayment. And you don’t have to wait until your bill is due to make a payment. Small payments throughout the month, called micropayments, can help decrease your debt in a more timely fashion.

Length of Credit History
Another important factor in your credit score is the length of time you have had each one of your credit accounts. Credit bureaus analyze how long you have had your accounts and establish an average age. If  you find that you’ve had a credit card for a long time and are not using it very often, you may think that it would be better to close that account. But that is not the case. Keep your accounts open and simply use the account for a minor purchase every so often. If you were to cancel the account, you would instantly lose the credit limit on that card which would lower your available credit and raise your debt utilization. That would end up harming your credit score. So keep your older accounts open and just use the account wisely.

New Credit
If you have a low credit score, you should avoid opening up a number of new accounts all at once. So if you need a new credit card, do not apply for a several cards at the same time. Carefully analyze the cards you are considering, and apply for one. When you apply for a card, the issuer does a “hard pull” on your credit report. Having too many hard pulls in a short period of time could lower your credit score.

Credit Mix
Credit mix is the final factor in your credit score. Loan officers and issuers like to see a good mix of credit accounts on your profile. Having a variety of loans or accounts can help enhance your credit score.



The information contained within this article was accurate as of August 7, 2019. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


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About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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