Tag Archives: Credit Score

Bad Credit History – Improving Your Credit Score Is the Key

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You don’t pay much attention to the things around you as long as they don’t matter to you. When you don’t have any financial responsibility, you can do whatever you want. But once you start taking responsibility, you support your family, it all starts making sense.

Each one of us desire for a trouble free life especially when it comes to our financial matters. You may have a safety net to fall on whenever you are in trouble but in this unsteady economy it doesn’t take much to get your best laid plans go away. Therefore it is always a smart thought to understand how to save more money and start early for that matter.

Questions, questions, questions!

Questions like why am I in this situation, what led me here, could this have been avoided, plagues your mind.  Do these questions sound familiar? If it does then let me tell you “this is LIFE”. Sometimes it sucks but you can do nothing about it. Expect bad things to happen financially even if you have a strong plan in place. Nobody is immune in these turbulent times.

Encountering some financial stress is nothing to be ashamed of. Believe me, you are not the only one out there. If you have ever gone considered trying a payday loan investor, there certainly can be a sense of embarrassment or failure that goes with it.

Credit score is a number based on the statistical analysis of the credit report. Basically credit score shows a person’s creditworthiness – the capability of a person to pay his her debts. The credit score is based on the credit report of a person that he or she receives for free from the credit bureau annually. Whenever you apply for anything your credit history including your credit score is checked to assess the potential risk involved for lending money to you.

Even organizations like mobile companies, your employers, home insurers and landlords check your credit score as a part of your background check. Your employer checks your credit score to see your level of responsibility.

A credit score of 660 is considered as good and the person is entitled to good interest rates. But late payments and mounting dues can damage your credit score. Even a student loan can affect your credit score for that matter. Bad credit score and high debts can be very stressful for a person. Often the question of how to improve credit score in this situation arises.

Follow these simple steps and fix your credit score with ease:

1. First and foremost go to the annualcreditreport.com to get your free credit report. Annualreportcredit.com is a joint website by the three major credit bureaus of the United States.

2. Go through your credit report thoroughly. Check for any wrong and disputable figures. Write to the concerned creditors pointing their errors. The letter should be certified. You can also do this online. The chances are that the creditors will definitely fix the errors and remove it from your report. If not then wait for one or two months and then again send the notice, this time with the threat to hire legal help.

3. If there is no error in your report then check the reason for your bad credit scores. Is it the outstanding debts? If yes then try to pay off all your debts as soon as possible. If it’s very bad then take professional help that will do all the dealings on your behalf as they will try to reduce the financial charges. Pay off the debts with the highest interest rate first. This will improve your credit score.

4. Close your unnecessary credit accounts and cut up on your cards and spending. Only spend money on your essential needs. Spend the rest of your income to pay off your debts.

5. Set a strict budget for yourself and stick to it. Do your payments on time and increase on your savings.

6. Once you have paid all your debts, apply for a new card and use it responsibly to build a good credit history and don’t ever repeat the same mistakes.

Leave the embarrassment at the door

It does not matter that you are trying for a personal loan with a bad credit for an emergency and there is nothing wrong in it. People can tell you whatever they want but they are not paying your bills or supporting your family, YOU ARE!

Asking for money from a friend or a relative can be sometimes embarrassing especially if they say NO. But some personal loans are possible with a bad score; you get quick money at a time of emergency without having to beg for it, you just have to repay it in time.

You must have a good credit history to be eligible for certain financial advantages in life like taking a bank loan when required. Having a good credit score is great for your records and provides you a stress-free life therefore you must improve your credit score as that is the key to a financially comfortable life.

11 Financial Decisions You’ll Regret Down The Line

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No matter what your long-term financial goals are, there are some financial decisions you will come to regret. Fortunately, you can head these decisions off now that you’re reading this.

As you make your daily, monthly, and annual financial decisions, be sure to avoid making these incredibly regrettable choices. In ten years, you’ll thank yourself.

Failing to save enough money

Many people don’t realize the value of putting money in savings until it’s too late. There are several excellent reasons to put as much money into savings as possible.

First, you’ll need money to cover emergencies and other unexpected expenses. If you ever have a job loss or reduction in household income, savings can help supplement the income loss until you’ve replaced it. Savings can be used for a down payment on a home or car, to pay for a child’s college tuition, or even to start a new business.

Buying a house before you’re ready

For years, owning a home has been an essential part of the American Dream. But, rushing to make that dream come true can turn into a nightmare, particularly if you have to take out a mortgage for your dream home.

A mortgage is a major long-term obligation. With homeownership, you’re also responsible for property taxes, insurance, and home maintenance and repairs. Buying a home before you’re ready can derail your financial progress and delay some of your other financial goals. Make sure you’re following sound advice when looking to buy a home, and not acting on impulse.

Not building a good credit score

Credit scores are a numerical representation of the information in your credit report. The three-digit number measures the likelihood that you’ll default on a new credit or loan obligation. Many businesses – creditors, lenders, and other businesses – use credit scores to decide whether or not to approve your application and to set the price they’ll charge when they do approve your application.

Waiting too long to start building your credit means you’ll often have trouble getting approved. When you are approved, you may have to pay a higher interest rate or security deposits. Once you build your credit score, the lender’s requirements will be more lenient.

Waiting too long to start investing

Investing can seem intimidating, but once you understand how investing works, you’ll be upset with yourself for not getting started earlier. When you start investing earlier, your money has more time to grow.

You can build up much more money over a longer period of time by starting earlier rather than waiting for some point in the future. Not only that, when you’re younger and have fewer family and financial obligations, you have much more flexibility in how you spend your money. That is one of the best times to get started investing.

Not getting health insurance

Forgoing health insurance may sound like a good way to minimize your expenses and keep more money for yourself. However, not having health coverage is risky, even if you’re healthy.

You could have an accident or fall ill at any point, without warning. Without health insurance, you’re financially responsible for all your medical bills. If you can’t afford to pay medical bills, it could push you into bankruptcy. Medical debt is one of the biggest causes of bankruptcy in the United States and it often stems from a lack of health coverage.

Even if you get hurt at work, disability will not take care of everything, and often, it’s an incredibly hard process to navigate. Most people need a lawyer to get through the Social Security disability process.

Don’t get caught with your pants down trying skating by without the medical care. Your future self may come to regret it.

Carrying high interest rate debt

If you don’t get rid of your high interest rate debt now, ten years down the road, you’ll look back with much regret over the amount of money you wasted on interest payments. It’s money that you can’t get back, that you could have spent on something far more beneficial.

Focus on getting rid of high interest rate debts now, even if you have to make some sacrifices. The money you save on interest and finances charges will be far more productive being invested or saved.

Not diversifying your investments

The idiom “Don’t put all your eggs in one basket” is perfect to describe why you should diversify your investments. Diversifying means you’re investing your money in different places to hedge against risk.

That way, if one investment drops in value, the money in other investments will keep you from suffering a total loss. Diversifying is about more than putting money in different stocks. You should also invest in other types of securities and accounts.

Not Diversifying Your Career Skills

The workforce is changing. Automation is eating up administrivia, and some people are left jobless. You’re out of your mind if you think what you do with your career is not a financial decision.

Everyone wants to “do what they love,” but very few people love what they do. They do it for money, plain and simple. Apart from the obvious ones, automation software is already taking hold of marketers, project managers, IT professionals, AP clerks, and the list goes on. It’s taking aim at more careers too.

If you want to stay employable, start embracing technology, and getting used to managing it. You should also be familiar with whatever higher-level tasks are available in your career vertical. This will be a huge help down the line.

Living above your means

Spending more money than you make will quickly lead to financial disaster. There are only two ways to fund this lifestyle – either by dipping into savings or by creating additional debt – and they’re both disastrous.

You can ensure you’re living within your means by using a budget to plan your spending. Reduce your expenses so they fit within your income rather than stretching your spending outside of what you can afford.

Loaning money to friends or relatives

Most of us want to help a loved one who’s in a tough spot, but too often, these situations backfire. Loaning money to a friend or relative turns your relationship from personal to business.

If they can’t afford to pay you back, it can put a strain on your relationship and possibly even end it for good. That’s not to suggest you can’t help out, but considering your help a gift rather than a loan can keep your relationship from falling apart.

Not educating yourself on personal finance

It’s your job to learn as much about personal finance as you can so you can work toward a secure financial future. There’s a wealth of free information available on the internet. You can also check out books from the library or purchase books if you prefer to own them.
Investing in your own personal finance education will prove to be invaluable when you look back 10 years from now.

How to Rebuild & Fix Your Credit Score – Steps to Follow

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What score is considered bad? Well, anything below 600. The more your score dips down, the greater effort you should put in to fix the issues. A quick fix is a must; otherwise endless will be the suffering when it comes to applying for loan. You will be driven from the pillar to post but the neat result will be zero because you will come back empty handed from every lending house. Even if some want to extend financial help, you have to pay through your nose for interest payment. Here are some steps regarding how to rebuild & fix your credit score.

Get two types of credit cards

It is important to open both lines of revolving credit cards. If your credit score is far below 600, you will less likely to get a store credit card. Those roaming in the 300 range must try to get two secured credit cards. Yes, you need to deposit a goodly sum but at the end of the day, you will realize that it is worth paying that much.

Pay off all dues on credit card

It is not a new suggestion; you must have read it before. Still, the online authors reiterate the same line because no effort to improve credit score will be fruitful if this point is neglected. Besides clearing the outstanding dues, it is also important to pay off the scheduled installments if you take loans in future, otherwise it will be a dirty picture and you will be in complete debt mess. How quickly you clean your dues accounts for 35% of your credit score improvement.

Maintain zero balance

A zero balance is ideal for building and maintenance of a good credit status. High balance does a damaging act to your credit rank and pulls it down by 30%. Pay off the high balances as fast as possible. And until the balance comes down to zero, stop purchasing unnecessary staffs.

Patience is important to build/rebuild your credit

Whether you are building it for the first time or rebuilding it from the verge of ruin, no good turn can be experienced overnight. At least six months’ waiting is a must to enjoy some improvement. And it may take one or two years to bring back your credit score to its former glory.

Be committed to your purpose

No fits and starts but an uncompromising dedication is needed for credit recovery. And once it gets back to the normal level (ideal status), the banks will approve your loan application. The banking authority will definitely ask about your credit history. Though it dipped down once upon a time, but now it is quite stable, so you won’t have any problem to convince the authority.

To turn around credit score, you need to be committed, hard working and patient; the desired result will definitely come your way……….