Save Money – Ensure a Top-Notch Credit Profile Before Applying for a Loan

Posted by, Alicia Lyttle

The decision if you are going to get a loan approval or not and at what interest rate, depends a great deal on two essential factors – Details given in your free credit report and your credit score.

This is why it is important that when you are planning to apply for an auto loan, mortgage loan, or any other major credit, it is better to stay proactive about it and analyze your credit situation beforehand.
Checking on things in the last few days hardly leave you any room for amendments in your credit profile. And leaving everything onto the lenders can often end you in a puddle of disappointment. Hence, there are a few things you must do around three to six months before you plan to forward your loan request.

Estimate Your Credit Standing
Credit scores accessed from any of the three major bureaus (Equifax, TransUnion, and Experian) can seal your fate for a loan approval. So, you must know what latest scores have been awarded to you by all three bureaus. This will help you understand your creditworthiness from a lender’s point of view and will also give you a fair idea of the type of credit you are most likely to qualify for. Also, in case you happen to have a poor or average credit score, you will know that you need to work diligently to be eligible for better financing offers in future.

Get Your Credit Report Copy
The details listed in your credit report are utilized to determine your credit score. Being proactive about reviewing your credit file well in advance can help you check through any inaccuracies in the report beforehand or see credit accounts that needs a little work on your part.

Checking Harmful Credit Habits
There are a few seemingly harmless financial habits that can hurt your credit and you must be on guard to recognize and ward them off without any delay. For instance, having huge credit card balances is not a good idea, even if you pay them in full in every billing cycle. Similarly, applying too often for new credit lines can also mar your credit report and score. To begin with rebuilding your free credit score and making up for such mistakes, you can start with paying off credit card balances and small loans, as well as avoid applying for any new credit lines, at least until you are approved for your loan request.

Also, supposed actions, like closing previous credit accounts or getting rid off credit cards you do not use anymore may supposedly be believed to increase your credit score when it actually brings down your score further. So, it is better to leave them open and not use them.

Removing Inaccuracies in Your Credit Report

It is important that you obtain credit reports from all the three bureaus in order to check for any discrepancies or inaccuracies in the report and see that the report from all three bureaus report the same information. By law, you can get a free copy of the three-bureau credit report only once a year. If you have already availed your free copy for the year, you may have to pay a small amount to obtain your latest credit scores and reports.

Bankruptcies, liens, collection accounts, judgements, and foreclosures can slash off more than 100 points from your credit score that weakens your chances of getting the approval for your financing even more. This is why it is essential that you check your reports thoroughly and stay alert about any false details mistakenly reported by the lender, or any inaccuracies in your reports. In case any error is found, be sure to dispute that item with appropriate evidence. Credit bureaus are then required to investigate the matter within 30 days. If the dispute is found to be correct, the item is removed from your credit report. You can then request for another free credit report to check the removal of item.

Making efforts to clear your credit report and amend your credit score can save you huge bucks as higher credit score assure lenders of minimal risks of default. Consequently, they are willing to extend the loan amount with fewer conditions and lower interest rates.

Alicia Lyttle is a professional writer from Chesapeake, Virginia. She has contributed content to print publications and online publications on topics, like credit reports, personal finance, and credit scores. She has earned her Bachelor of Arts degree in English/journalism from Old Dominion University.

8 Ways to Consolidate Credit Card Debt

Posted by, Guest Post

Debt can be a stressful financial burden and if you do not manage to get control of your debt it will certainly get control of you. Instead of taking a reactionary stance when it comes to debt, meaning, interest, late payments, and fees have ballooned your outstanding debt to something you can not manage; why not be proactive when it comes to dealing with debt. Starting with debt consolidation. Debt consolidation allows you to combine all of your outstanding debt so that you only have to pay one lender or creditor instead of many and typically it is at a much lower interest rate.

Please continue reading for the eight of the most popular ways to consolidate debt. The application of one of these methods will be unique to your personal financial situation.

Home Equity Loans
A home equity loan means that you are borrowing against any equity that you have established. Your home then becomes collateral for the loan, what this means is that if you do not pay back the loan, the bank could take your home.

Balance Transfers
Credit card debt is one of the leading causes of financial debt. The most favorable balance transfer will allow you transfer any balances you have from all the major credit card companies but at a lower rate. Many times these low rates will be an introductory rate so be careful to read the fine print.

Retirement Funds
Typically you can make withdrawals from a qualified retirement plan. The IRS stipulates that your have five years to pay back the loan before penalties are assessed. Any interest is paid directly to the retirement account.

Life Insurance Policies
Life insurance policies allow you to borrow against whatever monies you have paid toward your policy and without penalty. The only liability with borrowing against a life insurance policy is the money you borrow reduces the amount that will be paid to your beneficiaries.

Credit Counseling
Credit Counseling organizations can either be non-profit or for profit groups that have relationships with creditors to help lower interest payments or renegotiate terms. They also help you restructure your finances so that you are able to better manage your debts.

Credit Unions
If you want to obtain a personal loan in order to consolidate debt, credit unions generally offer better terms. The interest rates and fees associated with a credit union loan are considerably lower than traditional banks. The only caveat is you have to be a member.

Relatives and Friends
It may be in your best interest to ask a relative or friend for a loan in order to consolidate debt.

Renegotiate
If all else fails go directly to your creditors and see if the terms of your loans can be worked out in light of any financial difficulties or hardships.

Continuing Education to Better Your Finances

Posted by, Money Tips Staff

Paying for school can actually better your financial situation? Sounds hard to believe, but being proficient in basic accounting or personal finance practices can actually save you thousands.

Not everyone is a born budget balancer. There are simply people with different types of intelligences and many just don’t do well with numbers. Not to mention, many of us had poor spending habits passed down to us by our parents. For people who don’t do well with numbers themselves, going back to school might be a good option to get future savings on track.

While you don’t need to pursue a full blown online mba to gain control of your finances, taking a few online courses in personal finance or accounting may actually be beneficial when trying to determine how to best balance your budget. The University of Phoenix and other online colleges offer a wide variety of courses that will help you gain control of your budget and learn how to properly manage numbers.

What is even more convenient is that you are allowed to take these courses when you actually have time to do so. No need to rush across town to sit in a classroom. With an online accounting or finance course, you can complete your homework or take a quiz after the kids are in bed or when you just happen to find yourself with some extra free time.

Colleges courses can be expensive, and their price tag can be a major deterrent for families with already tight budgets. However, there are several tax credits in place that allow families to write off continuing education expenses on their taxes. If you don’t already have a degree, you may also be able to obtain free federal aid or scholarships to cover the costs of you courses.

Trying to determine how much you need to save for retirement, how much money you need to make to reach your goals, and simply how to keep yourself in the black each month is no easy task – especially if you aren’t good with math or numbers. However, you don’t want to find yourself at age 65 without a dime to your name. If you need help getting yourself on track, don’t be afraid to seek further education so that you can take charge of your finances. You just might find that investing in your education was the best investment you ever made.