Posted by admin On April 24th, 2015
Credit scores can be hard to figure out. They seem like this vague number, yet they have a large control over the things that happen in our lives. They can keep us from getting loans, a home, or even a mobile phone contract. You may know what your credit score is, but have no idea how it got to be that way. If this is you, we are here to help. Below are some of the factors that can play into a credit score.
- Length – First, your credit score depends large in part on how long you have been actively using credit. If you just got your first credit card, for example, you will probably have a bad credit rating. On the other hand, if you have been practicing good credit habits for many years, your score will probably be higher. Sometimes all it takes is waiting for your score to go up.
- Credit Cards – The next biggest factor is how well you manage your credit cards. Your credit score is supposed to be a numerical representation of how responsible you are with money, and each time you use your credit card, it is like taking out a mini loan. This is why your credit cards are so important towards your credit score. Make sure that you are paying off the balances each month, using the cards frequently, but not too often, and that you are keeping some of your older cards open (for the length reasoning mentioned above).
- Debt – If you owe a lot of money, it will look back on your credit score. Things like student loans, mortgages, and credit card debt will all factor into your credit rating. While paying back debt can be difficult, you should really make it a priority if you want to raise your credit rating. Until you do, your credit score is going to continue to suffer.
- Payment Times – Lastly, there is how promptly you make your payments, on anything from your bills to your credit card. If you consistently miss payments, it is going to drag your score down. On the other hand, if you have never missed payment, you will most likely have a very high score. Set up reminders for yourself when your payments are due so that you never miss another one. Your credit score will thank you.
As you can see, there are several factors that can determine your credit score. There is no one specific thing that will determine your score, and each thing will either raise or lower your number. Each person is different, and each factor will impact your score differently than others. If you are having trouble understanding your credit score, or why it is what it is, there are professional services out there that would be happy to assist you. You may not want to spend the money, but your credit score is such an important number, that it is really essential that you understand it fully. Hopefully we were able to shed at least a little bit of light on it so that you can work towards always having a good credit score.
Posted by admin On April 24th, 2015
When you are in debt, it can sometimes seem like it is impossible to get out of it. You owe so much money, and with interest charges, you just can’t seem to make any headway on the principal loan. Try as you might, the debt just lingers and becomes a burden you need to carry around everyday. While there are no quick fixes to get yourself out of debt, besides winning the lottery, there are some things that you can do to try and get ahead of it. One of those things is to create a personal budget. Having your money well organized will help you to pay off more of your debt and faster.
Here’s how you get started. First, either grab a pen and paper, or open up a new document on your computer. You are going to want to write down everything single thing you spend money on in a month, so make sure that whatever you use, you have plenty of room. Try and order the items from the most important to the least important. Things that would be considered important would be your electric bill and credit card payments. Less important things would be like your morning cup of coffee, or going to see a film. Once you have every single thing written down, add them all up. This is your standard expense for a month. On the other side of the page, write down what you earn in a month. If your income is lower than your expense, you have a problem.
Whether or not your income is higher or lower however, you are going to want to start cutting back. Look at those things on the bottom of your list, and see how many of them you can either reduce or cut out entirely. Even if it is a hard decision, you are going to need to cut out as much as you can. The lower that you can get that number, the better that this will work. Once you have gotten rid of everything that you can, add up those numbers. If your income was lower than your expense, subtract that difference from this amount so that the only number you have left is the extra money you will have at the end of a month.
Now you are going to want to take that extra money you just found and put it towards your debts. If you have several different debts, get out another sheet of paper and write all of those down, ordering them from the ones with the highest interest rates to the lowest. Calculate how much the minimum payment would be for all of your debts. Make sure you have enough to pay that minimum, and anything that you have left over should be used to pay off the debts at the top of your list.
With your budget set up, it is just a matter of sticking to it. Complete this process each month, always penciling in your debt payments to ensure that you have enough. Every extra dollar that you save should be put towards those debts with the highest interest amounts. Even if it is just a little bit, the more you can pay off, the quicker it will go and the more money you will save in the long run. It may feel like a slow process, but if you can stick with it, before long you will start to see progress. The important thing to do is keep up with your budget, as it will help you to make sure that your debts are always a priority, and that you always have money to pay for them. If you can do this, you should have no trouble paying off your debts in time. Good luck!
Posted by admin On April 24th, 2015
When it comes to your credit score, one of the largest factors are your credit cards. This is one of the reasons why it is so important to make sure that you get the best credit card for you. Each credit card is different, coming with different terms, rates and features. By knowing which card best suits you, you can properly manage your credit cards better, and in turn raise your credit rating. If you need some help picking out the best credit card for you, here are some things to consider.
- Interest Rates – This is probably the most significant factor. While your specific interest rate (or APR) will vary depending on your current credit score, most credit card companies will provide you with a range that it will fall in between before you sign up. You can use this range to try and guess where your APR will fall. If you have a good credit rating, it will be on the lower end of the range, while if you have a poor score, it will be on the higher end of the range. This is the amount of interest you are going to need to pay on balances, so you want to pay close attention to it, and try and get the lowest possible rate.
- Perks – Another thing you want to think about when getting a credit card is the perks that come with it. Does it offer you cash back points? Maybe travel rewards? Or does it give you discounts at certain stores? Think about what comes with it, and if these perks are at all beneficial to you. If they are, then consider getting that card. Make sure you use the rewards however, or they are just going to go to waste.
- Credit Limit – The fourth thing you want to consider is the credit limit. This is the amount of money you are able to spend with this card. This number will also vary depending on your credit score, but the higher this number is, the better. Credit limits will generally go up over time as you use the card, but if you can start with a higher limit, that would be good. There is not much point in getting a credit card if you can only use it for a couple of purchases before it is maxed out.
- Fees – Next, look at what fees come with this card. What are the charges if you miss a payment? Is there an annual fee? What if you spend more than your limit allows? Credit card companies try and charge a fee for everything that they can, so you want to know about these in advance. Think about how they will affect you, and if you are going to be able to afford them. You don’t want to be hit with so many fees that you can’t pay them when the bill arrives, so doing your research is vital.
- Introductory Benefits – Lastly, most credit card companies will offer bonuses to people who are new. Things like no interest for a year, or waiving the first annual fee are common. So for example, if you have a large purchase that you need to make, you could get a card with no APR for a year, then take your time paying it off since there won’t be any interest charged. Look at the benefits that come with signing up, and think about how you can best use these before you decide on a card.
Posted by admin On April 24th, 2015
When you have a bad credit score, knowing that you have other options out there in terms of getting a loan is a comforting thought. Banks have probably turned you down, and you might have thought that there was no where else to turn. Getting a bad credit loan can be great, some of these loans are better than others. In fact, some types of bad credit loans are downright dangerous. To help you avoid the bad ones and go with the good ones, below is a quick list of the best bad credit loans, and which ones you should avoid.
- Guarantor Loan – When you are applying for a normal loan, at some point you probably wished that you had someone else’s credit score. If you did, then you could use it to secure the loan that you wanted, and get a loan at a reasonable rate. Well, with a guarantor loan you can do just that. With a guarantor loan you find someone, usually a family member, to act as your “guarantor”. This person then uses their good credit score to get you a loan, while you still make all of the payments. Guarantor loans are great if you have someone willing to be your guarantor, as you can get a much better loan rate than you normally would. However, the downside is that if you fail to make your payments, the responsibility will fall to the guarantor, and this could potentially harm your relationship with them.
- Logbook Loan – If you don’t have a great credit score, you need to find another way to show a lender that you can be trusted to repay the loan. One way of doing this is by putting something up as collateral. With a logbook loan, you use your vehicle as this collateral, and you can borrow an amount relative to the value of your car. Logbook loans are a great way to get a loan quickly, at a pretty reasonable rate, and without interfering in your life. Since you can continue driving your car while you have the loan, there is nothing that will impact your day to day life. The biggest downside with logbook loans is that if you fail to meet payments, you do run the risk of losing your vehicle. However most lenders will work with you to ensure that this does not happen.
- Payday Loan – This is the type of loan that you should probably look to avoid. Payday loans can be tempting because they are easy to get, and they pay out relatively quick. However, since they are giving loans to people with bad credit scores, and because they are not asking for any collateral, these lenders will charge very high interest rates. This is how they protect themselves from people who might not pay back their loans, by charging a large amount to those people that do. In fact, the interest rates are so high that many people find themselves needing to take out a separate loan just to pay back their first payday loan. Unless you have a perfectly planned budget prepared, and you know for sure that you can pay back the payday loan, we recommend looking for an alternative.
- Doorstep Loan – Lastly, there are doorstep loans. Doorstep loans are essentially a type of Payday loan, but with a few differences. For one, the interest rates are sometimes better, depending on the lender. Secondly, with a doorstep loan, you get more of a personal touch. Instead of conducting all business online, a doorstep loan lender will send a representative from their agency to your home to discuss the loan with you. They will deliver the loan, come back to collect payments, and discuss any financial problems that you may be having. If you want a more personal approach to borrowing money, you may want to consider a doorstep loan.