Want a Car? Bad Credit Won’t Stand on Your Way

When you have bad credit, then you’re probably scratching your head right now, trying to figure out how you can get an automobile loan. But to worry is really not what you should be doing.

According to a field study by J.D. Power & Associates there has been a significant decrease in the FICO score in the credit worth of automobile purchasers this past two months. From the average of 737 in 2009, it has gone down to 725 this 2012. This also led to the decrease in the retail transactions of vehicles from $29,223 by the end of 2011 to $27,953 this February.

The recession that occurred in the United States in 2009 led to the bankruptcy of credit cards in the country, this also affected the sales of vehicle manufacturers. But the impact was not at all that bad since it also paved way for the credit criteria to be less demanding, and the auto industry was able to recover right away. Now, according to the study by Power, those with bad credit have better chances of getting a car compared to those with excellent credit scores.

The D tier, those with 0 to 624 FICO scores have the highest percentage of purchases at 23% compared to last year. The C tier those with score of 625 up to 649 grew at 19%, the B tier with 650-679 increase at 15%, the A tier, those with good credit at 680 to 719 at 11% and the most excellent credit the A+ tier with credit standing of 720 to 999 composed the least percentage at 7%.

As a result of this slide toward the least-able consumers, “C” and “D” buyers combined accounted for 15 percent of all retail sales in the first two months of this year.

Those who composed the C and D tier composed 15% of the retail purchasers in January and February. These customers are young people with lesser money than other car buyers.

This also took as an advantage with the U.S. automobile industry’s drive for creating fuel-efficient cars. These automobiles are less expensive and they will definitely take the retail market by storm.

Transaction price are what people pay for when they purchase new automobiles, other fees just follow. According to TrueCar.com consumers in the United States have spent roughly $30,091 for a single vehicle purchase in March. This estimation is slightly smaller than the price during November last year, and the record of General Motors had for March.

But Power has a different view on events, according to them if transaction prices continue to decrease then there will post a problem for the industry’s profit.

19,000 Children’s Identities Stolen by Thieves Last Year

Identity theft in the internet is a very common crime today. But imagine yourself as a parent checking your child’s credit account, only to find out it contains thousands of dollars’ worth of debts.

Yes, it is possible, in fact according to the Federal Trade Commission about a total of 19,000 innocent children’s identities across the United States have been stolen last year. Talk about stealing candy form a baby.

One victim of this offense is 7 year old Ian Umscheid. According to his parents, the incident started when one of the hard drives of their health care provider went missing.

Though the doubtful purchases made with the stolen identity were detected and reported immediately, the perpetrators were already able to steal an amount close to $15,000. Now, not only does the little boy have a bad credit, he also owes the Bank of America $5,400,the Ally Financial Bank $2,700 and the California jewelry store $4,500.

According to Ian, the perpetrators must have acquired the computer hard drive’s files, found his name and stolen his identity.Children are convenient targets because of their clean record from debt. Not only that, but according to authorities, the crime often gets discovered much later when the child becomes a teenager and would apply for a student financial assistance or other loaning purposes.

Simon Umscheid, Ian’s father, has been a district attorney for 12 years, but this does not exempt his family from the crisis.

If you are a parent, you never want this to happen to your child. Here are some precautions you should take in order to prevent this case. First, never carry around your child’s Social Security number unless it is very important that you do. Second, always watch over your child’s internet activities, you never know who might be taking advantage of them.

Trying to catch these perpetrators is not an easy task. In fact, you can try and trace these people for years but there is no guarantee that you would catch them.

Crime chooses no one. Criminals will strike anyone, in anytime, and in any possible way. Though parents do all they can to protect their child, there are just some dangers that even they can’t prevent.

Teens Should be Financially Literate

The month April has been declared as the National Financial Literacy Month. The purpose of this is to educate teenagers to be financially literate. It is very important for your young teenagers to know about credit rating before they are allowed to have credit cards. They have to know that lenders are investigating credit information before they issue credit cards. Educating teenagers to be financially intelligent would help them properly manage their finances in the future.

Avail of your free credit report. You can get a free credit report from the three big nationwide credit bureaus, Experian, TransUnion, and Equifax. These three bureaus have a common website at www.annualcreditreport.com. The free credit report is provided once every 12 months. You can also link to the Federal Trade Commission website at www.ftc.gov for free credit report.

Review with your teen the credit report. Evaluate your own credit report with your teen. Discuss with him or her every detail of information reflected in the report so that he or she can avoid financial pitfalls in the future. Discuss   most especially the importance of paying on time.

Essential information you need to discuss:

The credit report compiles the following information: Payment behavior of consumers, current balances and other information related to consumers’ credit cards and loans. Bankruptcies and liens are also compiled in the credit report. This information is reported by financial institutions to the three big credit bureaus.

What is the purpose of credit report? Credit report is the basis of lenders in approving or denying a loan or a credit card. It is also the basis of determining the rate of interest. A good credit history allows borrowers to get a new loan at favorable interest while a bad credit history requires a higher interest rate or it can even lead to a loan rejection.

Pay your bills before the due date. Credit report records every payment made. Payment made on or before the due date is a major factor in building an excellent credit rating. When the credit rating is excellent, consumers get the best interest rate for future loans, credit card and mortgage.

Practical Advice for Those with Tax Refund

There are some practical financial tips on how take make use of your tax refund of $1,000 or more. These tips will help you in your different financial issues.

The Stark Federal Credit Union’s management team headed by its CEO Nino Gemma has designed five recommendations for those who are asking for practical advice on what to do with their tax refunds.

In addition to the five recommendations, Nino Gemma said that a tax refund could be a big help to repair a bad credit score.

He said that instead of spending a tax refund unwisely, it is best to deposit it and then borrow against it. By doing   this, you are getting a loan that is secured by your tax refund deposit. Moreover, every payment you make for the secured loan is recorded for your credit rating.

The tax refund can also be used as security to get a Visa card which is processed through credit union.

According to Tod Lackey, the marketing manager of Stark Federal l, if you have a substantial amount of tax refund, it simply shows that the amount withheld from your monthly paycheck is more than what should be deducted from your paycheck. This money is used by Uncle Sam to get a loan without you getting interest it. Lackey further said that many people do not mind it because if the money is in their paycheck they would just spend it.

Gemma reminds those with tax refund to avoid spending the money but instead deposit it in an account which is separate from their current or savings’ accounts. This move will make it hard for you to get the money easily. Do not use the account to get a debit or credit card. Reserve the money and make it grow and use it for your emergency fund. Emergency funds have diminished because of the economic crisis. This is why we have to learn our hard lessons to give value to set aside something for our savings, Gemma said.

Learn More About Financial Intelligence

Several surveys show that many consumers do not have sufficient knowledge about financial intelligence or issues.

These surveys have good intentions. The purpose is to design programs to make consumers understand the importance of financial literacy, the bad effect of having too much debt, and to avoid being trapped by scams.

The month of April has been declared as National Financial Literacy Month. According to President Obama it is very important that consumers should have time to study more about handling finances so that they could make wise financial decisions to avoid negative consequence that poor decision s may create. Due to the lack of information about financial issues from Wall Street to Washington, financial crisis resulted which greatly affected many Americans. There were so many consumers who became victim of loans which charged high interest rates and other hidden fees and penalties. Instead of helping the consumers to recover from their financial burden, their financial situations have become worse.

It would help you to observe the National Financial Literacy Month. If not, you have other options through the web site of the Consumer Financial Protection Bureau at www.ConsumerFinance,gov. Through its program “ask us anything” you can ask any financial question that deals with credit cards, debt collection etc.

According to CFPB Director Richard Cordray through “Ask CFPB” the consumers could have answers in plain language that they could easily understand to help them make sound financial decisions.

The Ask CFPB focus on answering questions about credit cards and mortgages but in the next coming months it is expanding its database to accommodate queries about other range of financial products like student loans, car loans and other financial issues.

There are other webs sites you could have access to deal with your financial questions. You can check www.MyMoney.gov.or call 888-MyMoney(696-6639) toll free. You can get recorded answers in English or Spanish. If you want, you can also order a MyMoney toolkit where you can have printed materials to help you become more intelligent in dealing with financial issues.