Tips To Achieving an Excellent Credit Score

In the world of credit scores, 850 is the lucky number and the perfect score. This is clearly not a result of accidents. This is not just achieved by making timely payments of bills. This requires strong determination and dedication to increase a credit score, the knowledge on how to increase it and the time. Here is a personal experience of a 23 year old associate who was able to obtain this excellent score.

Joshua Duvachelle, an associate editor of a nonprofit organization takes pride of his 736 credit score. At this very young age, he attributes this achievement to the way his parents raised him. That is, to be a person who practices strong work ethics and someone who knows how to save beginning at an early age. He shares having seen the way his parents enjoyed abundance and suffered scarcity. This led him to build a strong foundation for his financial future.

He took his knowledge of building good credit from working on full-time credit projects. He also studies financial magazines. At age 18, he opened his own credit card. Currently, he checks his scores monthly by subscribing to any of the three credit bureaus. Annually, he also obtains a free report from these three reporting agencies. Experian, Trans Union, and Equifax are the main reporting entities.

Mr. Duvachelle boasts of having a perfect history of payments. Through all these time, he experienced having an incorrectly sent account but he gave time to dispute it for many months until it was fixed. Even his student loan that amounted to $15,000 was all paid down until the last few amounts of the loan. This unpaid amount was purposely done to maintain an installment form of debt which credit bureaus consider in giving a high score. Aside from this, Duvachelle spends only about 30 to 40% of the total limit in his credit cards. He knows that this is the maximum amount he can consume to maintain his credit rating.

Expenditures that will exceed 40% of the credit limit will cause a decline in the credit score.
From this personal experience, it is easy to point out the factors that contribute to a good credit standing. This include proper financial management, constant checking of one’s credit reports, disputing errors, making timely payments, creating a perfect payment history, paying down debts, maintaining different types of loans and limiting credit card usage to a maximum of 40%.

More Credit Score Resources:

www.myfico.com/crediteducation/creditscores.aspx

www.nytimes.com/…/credit-scores/primerscores.html

Bad Credit Loan : Can I Get a Loan if I have Bad Credit?

A bad credit loan is a type of loan accorded to a borrower with poor credit standing. The reason for obtaining a bad credit history is usually a default in the loans of the individual. Most creditors do not approve loans made by people with poor credit because of the high possibility of default. However, if creditors have to lend money to these people, the interest rate charges are usually high.

Bad credit loans are of two types, secured and unsecured. Secured bad credit loan is the type of loan with collateral like a house or any other asset owned by the borrower. On the other hand, unsecured bad credit loan does not have any tangible collateral that is why it is not easily granted.

Obtaining an unsecured loan can be the only way to obtain a loan for people with bad credit standing. However, getting this type of loan can be a disadvantage. The drawback of getting a bad credit loan must be considered before applying for an unsecured credit loan. High interest rate that can aggravate the existing financial challenges of the borrower is the primary disadvantage of an unsecured credit loan. The average rate of interest for bad credit loans is 15 points higher than the premium loan value.

Another disadvantage of obtaining a bad credit loan is that the borrower can get trapped to a cycle of loans. Many people who get a high interest loan end up having difficulties paying for it that they tend to apply for another one. This cycle goes on and on until the loans and interest rate charges pile up and become difficult to pay.

In order to avoid getting a bad credit loan, explore some possible alternatives to borrow money. Friends and family members can help without the interest charges. Organizing one’s expenses to avoid unnecessary expenses may also become necessary. Of course, saving money must be on the top list of things to do in order to prevent loaning.

Bad credit loans can be avoided if a good credit standing is maintained. However, if there is no other choice left, it is best to look for the best loan from the many available loans provided by lenders. Look for lower interest rates and make a bigger down payment if possible to lighten the payment terms.

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Unsecured Personal Loans Vs Payday Loans

In the past few years, many Americans have been struggling with their personal finances. This led them to get trapped in bad credit. Because of this, it is no surprise that most of these people are trying to find ways to meet their needs.

They have two options to do this. One is by obtaining a bad credit unsecured personal loan. Another is getting a credit check payday loan. Before choosing from these two, it is important to thoroughly understand their difference.

It is highly advised that careful research is done before choosing a lender that gives loan to people with bad credit. Together with this, the borrower must also understand the process in lending. Researching carefully and understanding the lending process can help cut loan costs, fees and interest rates.

Unsecured personal loan obtained by borrowers with bad credit requires a credit check from the lenders. This is the lender’s way to determine the amount of interest to be charged from the amount of loan. Usually, an interest rate of at least 20% is charged to loans of borrowers with poor credit standing.

There are instances when lenders do not require a credit check. This type of loan is known as payday loan. Lenders compensate for the lack of credit check by charging additional upfront fees. The average range of these fees is $15 to $35 for every $100 borrowed. Take note that this amount is charged over and over again each time a borrower receives a paycheck but do not give a full payment for the loan amount.

Before taking any of these two loans, always be prepared with a plan on where to get the payment. Without it, the financial condition can become much worse. It can lead to more and more debt that can become very difficult to settle.

more information on personal loans and paydayloans:

http://en.wikipedia.org/wiki/Payday_loan

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm

Considerations Before Taking a Loan

Despite what analysts are saying that the economy is somehow improving, many Americans are still applying for a bad credit loan. This can either be an unsecured personal loan or a cash advance payday loan. Before taking out either of these two loans, always think about the interest rates and high fees that come with these loan types.

As summer 2011 begins, many economists are predicting for the improvement of the whole economy. This will result to higher interest rates and mortgage rates. To prepare for this, it is best to pay all debts with high interest rates before another increase happens. Without doing this, debts may become higher.

Bad credit unsecured loan requires a credit check and is usually charged with higher interest rates. The interest rates are most likely relative to the credit status of the borrower. Thus, the worse the credit background, the bigger chance of getting a higher interest rate. As an example, some lenders charge almost 20% for borrowers with very poor credit standing.

The other type of bad credit loan that does not require a credit check is the cash advance payday loan. The trade off for not having to go through a credit check is the payment of upfront fees. The average fee is from $15 to $35 for every $100 of loan. This may seem to be a small amount. However, when the loan amount is too high, the fees can easily add up to hundreds of dollars.

Regardless of the type of loan to take, always determine how to pay them. Applying and getting a loan without any idea how to come up with the payment may result to a bigger debt problem. Much worse, it can lead to a credit crisis that can turn one’s credit score from bad to worse.

Should I Refinance My Home Mortgage Loan?

 

Why is it Time to Refinance? Is it the best time to get a Mortgage Refinance?

Interest rates on mortgages have continuously declined to reach its lowest level in recorded history. This is a strong proof that it is already the best time for homeowners to consider refinancing in order to generate some savings.

The rate for a 30-year fixed mortgage was at an average of 4.39% during the end of the Aug 4 week. Similarly, the rate for a 15 year fixed mortgage decreased to 3.54% despite the reduction in bond yields and signs that show a weaker economic standing than what is expected said the Primary Mortgage Market Survey of Freddie Mac.

The president of Metropolitan Boston Real Estate, Nebury Street brokerage, said that this is good news because this will serve as a motivation for anyone who is considering refinancing knowing that the low rates won’t stay very long.

Here are the possible savings that homeowners can generate: for a mortgage of $250,000 with 5% interest, they could save about $160 monthly and $2,020 yearly if they refinance the loan for 4.39%. These savings provide a guaranteed cash in the bank during these present times when traditional savings account have nearly zero percent in returns and the gyrations in the stock market have exhausted the investment accounts.

Bankrate.com’s senior financial analyst Greg McBride said that anybody who decides to refinance at these very low rates are sure beneficiaries of the economic concerns and Wall Street challenges.
The three lenders listed in Bankrate.com that offers 30 year fixed loans with less than 4.39% interest are AimLoan.com at 4.19%, Loan Depot at 4.25% and American Interbanc.com at 4.35%. All three are offered with zero points.

Albano said that even if the low rates are great news for most mortgage owners who pass the requirements of credit and equity to qualify for refinancing, potential buyers will still not leave the sidelines. He thinks that people who are observing the rates and decides that they are not ready to purchase at 4.5% will change their mind when the rates fall at 4.3%.

If you are looking to refinance your mortgage, then you may want to consider doing it soon. As you may know, last Friday, Standard and Poor’s downgraded US treasuries from AAA to AA+. This is the first time in history that the U.S. has had a downgrade.

Then, on Monday, Standard and Poors also downgraded Fannie Mae and Freddie Mac. While it is unclear as to the final effects of the downgrade, many financial experts are prediciting that the cost of money will go up, effectively raising interest rates.

If this happens, it could be problematic for an already sluggish economy,a nd could further depress the already lagging housing market. Higher interest rates would effectively make home ownership more expensive.

As for those with bad credit or poor credit, these changes could put you completely out of the market. While the agencies push to regain their credit ratings, they may be forced to be even more conservative with lending practices, and that would make credit or loans for people with bad credit almost out of reach.

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More Homeowners Consider Refinancing

More Homeowners Consider Refinancing

Because of the decrease in mortgage rates to record lows, homeowners’ demand for refinancing has increased across the nation.

According to lenders and mortgage experts, all types of homeowners are attempting to decrease their monthly payments especially with the rates for 30-year mortgages decreasing to less than 4 percent ever since October of the previous year.

Mike Fratantoni, vice president of research for National Mortgage Bankers Association in Washington, D.C., said that nationwide refinance volume is at a three-year high in the past few weeks while mortgage rates stayed at record lows. Fratantoni added that the number one cause for the increase in refinances is interest rates.

Together with months of interest rates at record lows, some of the other factors that push the refinancing boom include the competitive lending market and modifications in a few federal refinancing programs intended for distressed homeowners.

There are advantages in refinancing a mortgage and some of these include reducing the monthly payments, eliminating the uncertainty of an adjustable-rate mortgage by changing it to a fixed rate, opening home equity cash to cover home improvements or college costs, and most importantly, shortening the loan term can result to thousands of savings in terms of interest.

According to John Winters, a wealth adviser at Morgan Stanley Smith Barney, he recommended all his clients to consider refinancing their mortgages, especially those who find it hard to live with little returns on CDs and bonds that have low interest because it can free up monthly income.

When considering refinancing a mortgage, you basically look at how long you think you are going to stay in your present home and whether or not the upfront costs offset the monthly savings. Greg McBride, senior financial analyst at Bankrate.com, said that you are not going to earn back the closing costs if you’re not staying in your home for a year or two.

How to Become Eligible for No Documentation Loans

How to Become Eligible for No Documentation Loans

The usual problem that people encounter, especially those with poor credit, is that their application for a loan is rejected by the bank after a credit check is done. In addition, even if you were already approved for a loan, there is still a possibility that you will be charged with a high interest rate. If you are facing these kinds of problems, the best thing to do is find the right kind of loan from an equitable lender.

If you are having difficulties qualifying for a loan, consider applying for a no doc loan, which is a loan that does not require any documentation. In other words, they do not run a credit check on you or require you to present any proof of income. The most popular examples of these are payday loans and cash advance loans.

Although the process of qualifying for such a loan varies depending on your lender, it is essentially fast and leads to immediate approval. Basically, you will be asked to fill out an application form including your name, address, and contact information. Moreover, you might be asked to write down your account and routing number if the lender offers a transfer of funds straight to your bank account.

On average, you can be approved for the loan in minutes after answering the application and receive the money within the day. Thus, these loans are appropriate for those who need quick cash and who are capable of paying the loan plus interest in a short term.

It is important to note that you will more likely be charged a high interest rate and other fees so make sure to never borrow more than what you can pay for. It is also recommended to look around through various lenders to know which will offer the least interest rate and most suitable repayment terms for you.

Save Money by Shortening the Term of a Mortgage Loan

Save Money by Shortening the Term of a Mortgage Loan

The majority of people refinance in order to save money, which typically entails jumping to a lower rate. However, you can also save lots of money by cutting down the term of your loan even at the same low interest rate.

According to Karen Mayfield from Bank of the West, nowadays, there are lots of lenders that offer the same 30-year rate on mortgages with terms ranging from 20 to 29 years. Also, the majority of lenders offer the same 15-year rate on loans with terms between 8 to 15 years.

Although you may not instantly save money in terms of your monthly payments but you could save a lot from interest over the shorter term of your new mortgage.

However, the possible negative aspect of this shorter-term mortgage is that you might have a lesser tax deduction for your mortgage interest, but it’s still an uncertain disadvantage.

In addition, mortgage interest is not a dollar-for-dollar write-off. Instead, the deduction is dependent on your income-tax bracket. Thus, if you are in the 15 percent bracket, then you will receive only 15 cents for every dollar in mortgage interest.

Furthermore, there is the question whether or not mortgage interest will stay deductible. While it’s going to be a long time from now before the Congress would remove that benefit, it will be on the table if and when the policymakers amend the tax code of the nation.

For instance, you have a 4-year-old, 30-year mortgage with interest of 6.5 percent, and monthly payment of principal and interest for a total of $1,896. If you refinance at 4 percent into a 30-year mortgage of $288,000, your monthly payment will decrease to $1,375, which means monthly savings of as much as $521. However, you’ll be paying an extra $206,984 in terms of interest over the term of the new loan.

Mayfield advises that although not everyone agrees with shortening the term of their mortgage, you might as well consider doing so if you are wealthy enough make the same payment as you do at the moment.

Bill Proposed that Would Increase Limit on Payday Loans

Bill Proposed that Would Increase Limit on Payday Loans

Supporters of payday lenders are advising the state Legislature to increase the restriction on the high-interest loans, allowing distressed borrowers to be in much deeper debt. It is not a good idea and lawmakers must not think about increasing the present restriction on lending without more meaningful consumer protections than the sponsor of the bill has suggested.

When getting a payday loan, a person can borrow as much as $300 but actually receives less than 15 percent of the face value of the loan, which is the lender’s fee. The term of payday loan is typically two weeks after the borrower’s next payday.

However, the problem with these loans, besides the excessive interest rates of over 400 percent annually, is that the short repayment period disables borrowers to distribute the cost over time. Consequently, a few borrowers take on loans one after the other, and find themselves in a debt trap.

The bill, AB 1158, which was proposed by Assemblyman Charles Calderon, would increase the restriction to $500. Supporters claim that the state’s restriction is out-of-date and that borrowers who need more cash are turning to unregulated lenders online.

The Pew State Small-Dollar Loans Research Project discovered that state limits on payday lenders don’t bring about would-be borrowers to look around for other lenders. Moreover, the increase in the state’s restriction would only cause borrowers to be in deeper debt, especially without real protections against repeat borrowing – such as a restriction of six payday loans annually and a centralized record of loans released to assist in implementing the restriction.

Calderon was asked by AARP’s California branch, Consumers Union and Western Center on Law and Poverty to discontinue the bill except if he includes a six-loan restriction, a longer repayment period and an order that lenders evaluate a borrower’s ability to repay prior to giving a loan.

Be Smart with Payday Loans

Be Smart with Payday Loans

There comes a time when money is so hard to come up with and a person becomes caught in a dilemma caught in a web of bills. In these times, payday loans and instant loans become your only hope. When you need money in less than a day to help you in meeting your emergency and needs then you will not have to wait for payday, all you need to take on is a pay day loan.

These loans are easy to get however; they also charge disciplinary interest rates since they are not very secured. People who are not very good at saving will be finding themselves in turmoil of debts. You can take many steps in getting over a debt, one of which is to research and learn a lot of information about the loan you want to get. Different states have different laws and rules for moneylenders and you have to find what is most suitable for you. You have to make sure you find the most trustworthy company in order to avoid fraud and being harassed when you are not able to pay your debts on time.

If you apply for the right loan in the right company, you will be able to get the money you will need to take care of your emergency needs until you are free of your stress.These lenders will roll off your debt if you are not able to pay without adding high interests that will ruin your financial life in the future. So before you sign a contract with a lender you have to be very familiar to the terms of the contract you are getting into. Be careful of the terms that will work to your total disadvantage in the future. Once you get a loan that you need, you have to make sure you use it well because if you spend away the money in for things that you do not need you will be flailing back to the same desperate spot you were in before you got a payday loan.

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