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Month: March 2019

Creating Good Credit

Creating Good Credit

Pay Your Bills On Time

Lenders only have your past payment history on which to decide the type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.

Don’t Use Too Many or Too Few Credit Cards

How much is too much ? How little is too little ? Many credit experts and financial planners suggest two to four credit cards is just the right mix.

Pay At Least The Minimum Due

Always pay at least the minimum due payment, but never less. And remember, just paying the minimum payment means it will take you years and years to pay off that credit card.

Example: Paying off a $2,000 credit payment at 18% APR with a minimum monthly payment of 2% ($40 dollars or less) will take you 30 years to pay off the amount plus interest.

Review Your Credit Report Regularly

Monitor your credit report from all three major credit bureaus – Experian, TransUnion, and Equifax – on a regular basis. Check your credit profile at least annually. Review it carefully and make sure that any past mistakes or disputes have been corrected.

Also, if you notice an account listed that you know that you have not personally opened, contact that creditor and the credit bureaus immediately. This could be a sign that you’ve had your identity stolen. Request to have a fraud alert placed on your profile and account to protect yourself and your credit. Identity theft is the fastest growing consumer crime in America, with an estimated 1 million people victimized each year.

Choose Your Credit Card Application

Choose Your Credit Card Application

Excellent Credit Reports Qualify For:

If you are among the elite few who have managed your credit cards and other loans responsibly the bank will reward you with added perks such as airline points cards or low interest credit cards. There are many card offers that will reward your good financial habits with low or no annual fees, some great reward points as well as introductory rates of 0% APR with ongoing low interest rates. Typically the interest free period is 6 months but in some cases will be awarded to you for a full year. Since your credit is in excellent standing the interest free period might not be of concern to you as you are probably the type that pays your credit card balance in full every month. If this is the case you should make your credit card comparisons based upon the rewards and extra perks offered by the bank – if you are paying your balance in full a 0% APR is really of no value to you.

Good Credit Reports Qualify For:

The good credit range is where the majority of people are with their personal finances. You will still qualify for a card offer that provides some great perks such as airline or gas rewards. You may also qualify for credit applications that have an attractive introductory rate, with some credit cards you may get a 0% APR for a few months however the ongoing rate will be a bit higher than what you could get with an excellent credit rating.

Before you select which credit card applications to review for yourself you, need to be honest with your spending and bill payment habits in order to make the best choice. If you know that you are likely to carry a rotating credit card balance, you should select your card based upon the ongoing APR. Having a low interest credit card is much more important than seeking a rewards program as the interest charges will likely offset the rewards. Another cost you need to take into account is the annual fee. Several banks will try to lure you into applying for a card that offers rewards and lower rates but they will charge a hefty annual fee.

Poor/Fair Credit Reports Qualify For:

If your credit is in bad shape, I recommend staying away from credit cards completely. It is likely that you need to learn how to manage your spending first and come up with strategies to get yourself back on track. The last thing your personal financial future needs is another credit card.

If you do legitimately need a Visa or MasterCard I highly recommend only prepaid credit cards. Why? Again, get your finances and money management in order otherwise you may end up in a worse situation than you already are in.

Choose the Right Travel Credit Card

Choose the Right Travel Credit Card

  1. A good sign up bonus – most cards come with different types of sign up bonus and in the case of travel credit cards, the cardholders are offered with free air miles or a free air ticket when they use their card for the first time after receiving it. You should make sure that the card you opt for will offer you with a huge sign up bonus preferably in form of air miles so that you can redeem the same for your travel bookings.
  2. More air miles for your money – earning air miles is one of the main reasons behind applying for a travel credit card and so the card that you opt for should apply you with more air miles for your credit card expenses. For example, every time you spend a dollar on the card, you should be able to earn at least 1 air mile. If the credit card cannot offer you with sufficient air miles for your expenses, it will not be very beneficial to you.
  3. Airport lounge access – the travel credit card should also offer you with complimentary access to Airport Lounges so that you can travel with luxury and comfort. Since most of the top credit cards for traveling offer complimentary lounge access to the customers, it will not be very difficult for you to apply for such a card.
  4. Travel Insurance – another feature that you should look for when applying for a new travel credit card is free travel insurance. If you are provided with travel insurance coverage, you can travel in peace as you will be assured that the insurance policy will provide you with the required support in case something bad happens when you are on a trip.
  5. Low annual fee – even if the card offers you with a wide range of features, it will be futile to opt for the card if it comes with a high annual fee. The annual fee charged for the travel card should be low so that you will not end up spending a lot of money to avail the benefits offered with the card.
  6. Wide acceptability – it goes without saying that the travel card has to be widely accepted so that you will not have any problem using it when you are on a vacation or a business trip. The acceptability of the card should not be limited to only a handful of merchants.
When Taking A Loan

When Taking A Loan

There are more things to know about loans and factors to consider before making one. Keep in mind that debt, if unpaid, can lead to bigger financial problems and this is why it is important to determine your needs first before going to a bank to ask for money.

Secured and unsecured are two types of loan. When it comes to secured debt, banks would need assurance that you have to financial capability to pay them back. You can guarantee them by presenting some of your assets such as your house, car, boat, or stock certificates. It does not mean that you have to turn these assets over to them once you borrow money, as these are just a guarantee that they have something to seize when you fail to settle your debt in time.

Meanwhile, unsecured debt is mostly preferred by those who do not have assets to present to financial institutions or those who do not want to provide collateral. In this type, all you have to do is present a good credit rating for the institution to lend you money. Given these types, you have to determine which one better suits your current needs. You have to assess your financial situation and see which one is more feasible.

Financial institutions give a set of requirements that borrowers have to fulfill to be able to get money. While regular banks and other financial institutions conduct background checks on applicants, there are online lenders who are more lenient. These lenders offer fast cash to those who need money, as they no longer check the credit history and rating of the applicants. But if you need a huge amount of money, then it is still best to go to regular banks and meet all the requirements to receive the amount that you need.

Remember to borrow money only if it is really necessary. Moreover, borrow the amount that you just need so that you would not have a hard time repaying it. Keep in mind that ballooning debt would be just another problem for you and so, do not ask for money you know you can’t pay back. You should also go to a trusted financial institution. This way, you can ensure that you will be getting the kind of services that you need. Before borrowing money from a bank, do not forget to evaluate and assess different financial institutions first to determine which one offers the best deal for you.

Ways To Raise Credit Score

Ways To Raise Credit Score

Get a copy of your credit report

Obtaining a copy of your credit report is a good idea because if there is something on your report that is incorrect, you will raise credit score once it is removed. Make sure you contact the bureau immediately to remove any incorrect information.

Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax. It’s important to know that each service will give you a different credit score.

Pay Your Bills On Time

Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago.

Missing just one months payment on anything can knock 50 to 100 points off of your credit score.

Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.

Pay Down Your Debt

Your credit card issuer reports your outstanding balance once a month to the credit bureaus. It doesn’t matter whether you pay off that balance a few days later or whether you carry it from month to month.

Most people don’t realize that credit bureaus don’t distinguish between those who carry a balance on their cards and those who don’t. So by charging less you can raise credit score even if you pay off your credit cards every month.

Lenders also like to see a lot of of room between the amount of debt on your credit cards and your total credit limits. So the more debt you pay off, the wider that gap and the better your credit score.

Credit Card Reward Points

Credit Card Reward Points

In fact, using these points and offers will help you save money and a significant amount of it as well! But, in order to save some, you will have to spend first. So, how does the whole thing work?

For starters, the number of reward points you can collect depends on the type of card you avail. For instance, your reward points will vary if you have a gold or a platinum card and it’s different for a co-branded card. For instance, for every x amount you spend, you will earn a certain number of reward points. The value of x will across banks and also depend on the type of card you own.

These points will accumulate from the time you start using your credit card. The longer you save these points, the more will be their value. And, yes you needn’t worry about these having a validity date. You can make use of them, until the time your card expires.

The types of credit card rewards mainly includes; cash or points.

For some of us, it wouldn’t be saving if it wasn’t in the form of cash. This is precisely why a cash back offer makes perfect sense. Now, to avail these offers easily, you must first have used your card for sometime now (at least 6 months) so that you may be eligible for such offers. Also, ensure that you are prompt in paying your bills, some banks tend to cancel your rewards if your bill remains unpaid. How much you can get back depends on how much you have spent and you will find the same as part of your monthly bill statement. It will give a summary of how much you have accumulated till date.

If saving is not your only aim of earning credit card rewards, then take a look at the reward points you have earned till date. Most banks offer reward point facility to either purchase a gift of your choice from their very own catalogue or if they have partnerships with various merchant outlets, you can very will have the option of using your points there. For instance, if you have shopped for Rs.2000, and you have earned points worth Rs.500 you sometimes have the choice of using these points to get some discounts on your bill. You can avail some attractive offers when you shop online.

Or, if you have a co-branded card, wherein your bank has issued a card for exclusively one bank such as petrol cards or air mile cards and so on. This means that you can get the offers and points only for that particular brand of petrol or from a particular airline company only. Miles are usually calculated for every air mile travelled. These are indeed popular forms of saving up on air travel.

In order to make the most of these benefits, you will first have to sign up a redemption form available from each bank. These are simple, online forms. Once that’s done all you have to do is keep a track of your points that get accrued till the time you want to redeem them.

Credit card reward points are definitely a good idea, but does that mean you will need to use your credit card more often? That is definitely one thing you need to keep in mind, because at the end of it all, you will be paying your bills and not to forget those high interest rates that come with it.

Loan Modification

Loan Modification

Some believe that they must be behind on their mortgage payments in order to qualify for a loan modification program. This is not true. It is true that those who are behind on their mortgage payments are often moved to the top of the queue, but delinquency is not necessary to qualify for a loan. In fact, falling behind on payments can lead to a lower credit rating. If a homeowner falls behind over 90 days on their payments, the black mark can stay on their credit for up to seven years, just like a foreclosure.

There are cases of people being told they must be delinquent on their payments to obtain a loan modification only for their homes to be foreclosed on as soon as they fell behind. While not necessary, homeowners often choose to retain the services of a loan modification attorney. An attorney can ensure that proper keeping of records and assist with drafting the necessary hardship letter.

Those seeking to modify their loans are surprised at the amount of paperwork that must be submitted. They are even more surprised the third time they are asked to submit the same information. It is crucial that those seeking a modification request a letter detailing what the lender requires. A loan modification attorney can be of assistance in making sure that the lender is supplied with all the required documentation. It is a good idea to send all documents via registered mail.

There are many reputable services available to homeowners in distress, but there is an equal amount or more services that are disreputable. Services that guarantee approval should be avoided. These services can help ensure that paperwork is properly filed and payments are made in a timely fashion, but they cannot guarantee approval. Only the bank can do that, and there approval is based entirely on the numbers. Either a homeowner qualifies or they do not.

The services should never cost more than a few hundred dollars up front. There may be additional fees, but those should only be paid after the modification is approved. Under no circumstance should a mortgage payment be sent directly to a credit repair agency. If an escrow account needs to be established, the homeowner should establish it.

Loan modification is not the only option for homeowners with distressed mortgages. In fact, some homeowners fall behind on their payments even after having their loans modified. Sometimes the burden of debt is just too much to overcome, and homeowners find themselves behind on their payment again. A better option might be a short sale. This is when the lender allows a home to be sold for less than the amount owed. There are always options. A homeowner should make sure they have explored all of their option before making a decision.