Archive for August, 2011
Given the well known significance of the credit scores, it is evident that one links up this feature with all other aspects of financial living. In simpler terms, most often try to find out if their scores can affect some financial dealings entered into. More specifically, we shall discuss the relation that the credit score shares with the insurance that you pay for. The first importance of the score comes into effect while an insurance company goes over your application. In case the score is too poor, the insurance application is not deemed as worth sanction. Insurance premiums need a bit of devoted financial planning and healthy financial habits. Therefore, it is important to have a healthy credit score.
Impact on the Insurance premium
It has been seen that those with problematic credit are given to filing insurance claims. This brings in the angle that such people end up paying more for insurances. Thus, companies often deny them insurances or give them low amounts of coverage.
The higher the credit score, the greater chances of landing a better deals on the insurance. A score of 700 and more are excellent and this aids in helping individuals earning the best rates on insurance premiums.
Even if an individual has a score between 650 to 700, the insurance rates they get their hands on are fair enough. Until the score of 600, the process of obtaining insurance is not impossible but below this range, the difficulty crops up. Generally, one fails to get a competitive rate on the premium with such poor scores.
Are there ways to improve a credit score?
This is a common query that comes from most insurance seekers. The answer lies in the affirmative. You need to negotiate with the companies from where you have obtained credit from. Read on.
Start with collection agencies and see if they can remove the entries on the credit reports if the amount is settled as a whole. Make sure that all agreements are made in writing. Next, try to make it with closing of the credit cards, which are not being used. Instead of paying the minimum amount on the credit cards, pay more. See if the credit limits have been crossed and settle these. All these steps help in getting a better score, and eventually, a better insurance premium.
Scan the report for any mistake in it. This is the reason why monthly checks from the credit bureaus online are suggested. Once any error is located, immediate steps must be taken to get it rectified. The insurance companies too must be notified of the correction and the updated scores so as to get the best deals.
Now that it is clear that what the in and outs of the credit scores and the insurance premiums are; go head and see what schemes are apt for the credit score you have. Maintain a good credit score throughout- because there are chances for changes in the terms of an insurance company.
The benefits of a credit report and the credit card is a well known fact today. With the power to change the status of employment and loan sanctions, the credit reports are all too important today. Therefore, it is well evident that keeping track of the credit report is vital for an individual. Regular monitoring of the reports helps to eliminate the probable mistakes and entries in the report. Moreover, it also helps individuals to understand their spending habits and their credit worthiness. To encourage this understanding, the federal authority has allowed citizens to check their credit report for free once a year.
Where to find the free report?
The free credit report is to be found on the notified website of the government. If you have been wondering about the need for credit cards for the same, then there is no cause to worry. You need no such thing for getting a free copy of the credit report online from the free federal website. However, one important point to be noted here is that despite an annual free check, one is encouraged to go order credit reports from one of the three private online credit bureaus. The Experian, Equifax and the TransUnion have credit reports against a small fee available per month. This is better then a mere single check annually.
Are All the reports same?
This is a common question most have. The information that the credit reports show are same but the way the scores are calculated by the information of each bureau are different. Therefore, you may get a score from TransUnion that may be different from the score obtained from the Experian bureau. Mainly every credit report contains:
- Employment details
- Status of all credit accounts
- Loans in the individual’s name
- Arrears and dues
- Repossession details
The Significance of the reports
The significance cannot be belittled in the present economic scenario. The reports and the score are taken as a way to adjudge the credit worthiness of a person. This leads to passage of loans and the like as mentioned before. Moreover, it helps to protect against ID theft. Sometimes, due to online theft the accounts of a person are misutilized by somebody else. The credit reports show all entries of account activities. Thus, this helps in understanding if there is identity theft associated with an account.
Most people think that a credit report is synonymous with the credit score. Well, though, the latter is based on the report, it is not synonymous. Moreover, the credit report does not have the score printed anywhere. The scores are available against order and a price. The FICO is the governing authority over this aspect. Experian is a bureau the gives FICO scores but for the others you need to order from the FOCO website. The score that is considered the best is above 700. Every authority has its own requirements in terms of scores.
People do not realize this sometimes, but verifying your credit report in order to check its accuracy is very important. It is especially important if you want to get the absolute best rates for loan, credit cards and other services. If you have errors in your credit report and they are seen by someone who is reviewing your credit report, then you can potentially have problems getting these types of consumer services, especially for good rates.
The best way to avoid these errors from creeping into your credit reports is to order a credit report from a certified company that deals with these types of things. They will help you double check your credit report and see if there are any errors in it. Also, once you get your credit report back from them, there are things that you are going to have to verify as well.
What to look at
Here are the things that you need to double check on your credit report to make sure that they are all correct. Of course, you will need to check that all of your personal information is in order. That means that you will have to check your name, your address and your social security number to see that everything is in order. Also, check your previous or former addresses, your employers, and your status – whether you are married, divorced, separated, single, etc.
You need to now look at your credit information now that you have checked all of your personal information. The credit report will usually should all of the credit lines that are open from the past ten years and the creditors are usually listed chronologically from the most recent to the oldest. You really need to be diligent and review every single entry and all of the information on accounts as well. This means that you need to be looking not only at bank accounts, but also deposits of another nature, credit cards, loans for homes and cars, and even student loans that you have taken out. For every single loan that is listed, you need to check to the name of the creditor, their address, your credit limit, the balance that is owed, and the payment status.
When you are looking at the payment status, you need to be looking for the term “paid as agreed,” unless you are not doing a good job of this and you are missing payment and making late payment. You really need to make sure that all of the information listed there is correct, and of you do stumble upon some information that is incorrect, you will need to contact the credit bureaus and let them know as soon as possible.
Finally, you should also keep an eye on the public and legal records that are listed as well. You need to see all of the listings related to possible bankruptcies, foreclosures or any other legal proceedings of note, and see if all of that information is correct. Also, it is important to note that these inaccuracies that you come across could be a sign of identity theft.
With the establishment of the CFPB or the Consumer Financial Protection Bureau, one aspect of modern financial systems has come under the scanner. In simpler terms, the bureau now has come to dominate over the concept of credit scoring and reports. This has led one to research into what possible things the CFPB can do in this aspect. Read on for a brief understanding of these two integral parts of our lives and the relationship that links both.
The main aim of the CFPB, as has been revealed, is the ensuring of clarity in the terms of agreements of financial companies and the like. Along with framing laws related to market and consumer behavior, the agency shall have a vital role to play in guiding financial service providers as well.
Few important functions that the CFPB has taken under its purview are:
- Creation and supervision on consumer protection laws
- Reduce the percentage of abusive practices
- Maintain an active consumer complaint cell
- Study the market trends and research into consumer behavior
Other than these functions CFPB also has taken upon itself the supervision of all the three credit bureaus. The credit scoring authorities like FICO too has come under the supervision of the new, all powerful agency. Amongst the large number of things that have already started in relation to the working of CFPB, the one thing most awaited are the measures to be launched for regulation of credit scoring and reporting bureaus.
If you are looking to rent an apartment but you do not have enough money for a down payment or to pay for the first couple of months, then you can consider getting a personal loan. A personal loan is really good to help a person meet a financial goal when they are just starting out. Perhaps you just got a new job and you want to move out of your uncle’s basement as soon as possible. Instead of waiting a couple of months to save up enough money to get your own place, you can take out a personal loan and do it immediately. Moving into an apartment is obviously not as expensive as buying a home, but the payments and other financial aspects to tend to add up. You have to give a security deposit, perhaps a deposit for a pet, and the first and last month’s rent as well usually.
What to do
Here is what you are going to have to do if you want to get a personal loan to cover these initial costs of renting out an apartment. You will have to make a list of any financial expenses that you expect to have when renting out the apartment. This includes the rental fee for the month, utility bills, security deposits, and anything else you can think of at the moment. Moving expenses and even living expenses should be included in this. Then you should contact a local bank and ask for the mortgage and loan department. When you get someone on the phone, ask them about personal loans and tell them why you want to get a personal loan – because you want to rent out an apartment. They will then give you the details of the loan, including the annual percentage rate, how long the loan will be good for and how quickly you will have to pay it back. If this sounds good to you, ask them to send you all of the pertinent information to your home address or your email so that you can look it over and decide whether or not you want to take this loan out.
You can do the same with other financial institutions, such as credit unions and private lenders. When you have gathered all of the information from each, then you need to decide which option is best for you. Have someone who is familiar with loans and other financial matters that are similar help you out and give you some advice so that you know you are making the best decision and getting the best deal. It is important to look at which offer gives you the smallest interest rate and the longest amount of time to pay back the debt, amount other things. You then need to fill out a loan application once you have decided. Once you hand in the application will all of your other relevant documents, personal documents like a driver’s license or passport, then you wait for your loan to be processed. Hopefully, the bank will approve your loan and you will be given the money you need to begin renting your own place immediately.
The CFPB has been in the news since the last few days since its official launch that pronounces a new era for consumer protection. The passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act was hailed as an all-new development that was being seen as a breakthrough. Based on its recommendations, the CFPB (Consumer Financial Protection Bureau) which was a brainchild of Elizabeth Warren has been established.
Numerous agencies under the government have been in operation for a long time. However, most are curious about the differences that CFPB might have from all of these. In this regard, mention must be made of the fact that this agency is vested with many powers and is a unified federal consumer agency.
The CFPB is being hauled as a top agency to look into the product scams, market abuses and the like which have multiplied manifold of late. Here is why it is being seen differently:
- CFPB has the right to create laws in the aspect of consumer protection.
- Since the body is federal backed, it has the power to make laws, amend them and enforce them as well. Moreover, it is a central bureau and the main one to handle complaints from consumers.
- It is a strict body that shall deal with scams and deceptive products in the market with a strict approach.
- For all kinds of complaints, ranging from debt collection, credit scores to credit cards, the CFPB is the one authority. There is no need of running here and there for filing complaints and awaiting a response. Both consumer behavior and market trends shall be monitored by the authority.
Thus, it is obvious that consumer protection shall be receiving a boost and a fresh lease of life with the birth of CFPB.
It is true that most loans are granted by money lenders to people who have a regular salary. If you are someone who is not currently employed or you have bad credit, then you will usually need to use some different methods if you want to get a loan. You will usually have to send some tax returns as well for then to check up on you. Sometimes, it is good if you are able to offer an asset, this will enable you to get better rates if you are applying for a loan and you do not have a steady paycheck currently. This is known as collateral. If you sue collateral to borrow money then you are guaranteeing in a way that you will be able to pay it pay, which will look good to a creditor. But be careful, if you cannot pay back the loan, then they can take possession of your assets that you have set as collateral and pay off the debt that way. You will probably be able to get small loans if you are not employed, but if you want a bit of a bigger loan, then you might have to take some extra measures.
If you have been laid off, you are definitely not alone, especially not in today’s economy. There are hundreds of thousands of people that are going through the same thing. There are companies that will give you a loan if you do not have a job but more time than not you will have to be paying a much high interest rate with the loan, however, sometimes it really isn’t an option, especially if you need the loan to pay some of your most regular and necessary, everyday bills.
What to do
One thing that you can do is search for loan companies that claim that they are payday or cash advance lenders. A lot of them work over the Internet so there will be no reason for you to leave the house in order to do this. However, these companies do charge very, very high interest rates, so this might be a last option for many when nothing else seems to work out.
You might be able to get a home equity line of credit from your mortgage company if you just got laid off. If you have equity in your home that is. Also, it cannot hurt to talk to local unemployment officials and try to seek some cash assistance from the government.
You can also try to borrow money from your friend or relatives, it is a lot cheaper, but you really need to know that you will be able to pay it off, because this can easily ruin close relations if you end up losing their money and they never see it again. There are also online peer-to-peer lending clubs like Prosper and Lending Club. These should be last ditch options as well, because you are essentially borrowing money from stranger without any guarantees.
The necessity of a credit history is a well known fact. Given that most aspects of life, from bank loans to employment prospects base themselves to a huge extent on the credit status or history of an individual, one of the prime actions that an immigrant to the U.S needs to focus on is building a solid credit history. Many immigrants are bogged down with the thought of having to start building credit status from scratch despite having had a steady history back home.
Why does this need arise?
Most financial authorities in the USA are not open to accept deposits as a way of gauging the credit worthiness of immigrants. Moreover, the non-validity of previous credit reports can be attributed to the fact that international laws do not permit access to credit reports outside the country. This makes the institutions seek a new credit history that the immigrant must build during his stay in the USA.
3 tips to help build credit history
1. Get yourself a secured line of credit in return of an account at any bank you may apply for a secured credit card. Pay your installments and interests acquired on the card on time, every time. This is the first way to gain trust in the eyes of the lenders. This also goes on to make an entry into your new credit report. Paying bills and installments on products purchased also add to the credit score. Make sure that there is no negative credit being built up by your spouse as well. Joint credit cards are a great option if the other half also has a reputable credit history.
2. Try talking over details of your previous history with the lending agency. In case your employer stands in as a guarantee for your credit worthiness, then the credit sanction takes place easily. Of course, the credit history needs to be built up simultaneously with this as well.
3. Most companies have their own set of ideas that help their employees build up fresh credit history. This could be something you could tap to get the maximum benefit. Above all, be prepared to give the ‘credit history build up’ some time. Though it might not happen overnight, waiting does pay. This is a tried and tested tip. Go apply for it without delay.
Immigrating has many responsibilities. Among these, the credit part calls for major attention. It is better to start building credit as soon as possible since the more you delay; there would be a longer waiting period for sanction of any finance related application. Conduct a research on what the nitty gritty of USA credit reports and histories are. This is an all-important step.
Everyone wants to invest in themselves, and that is why student loans are so popular. People figure that if they got to a better school and graduate from that school, they will have a better change of finding a better job, and then the debt that they got into in order to pay the tuition will be worth it. Usually, the fact is that no matter what kind of job you get coming fresh out of college, and no matter what school you went to, paying of your student loans will not be an easy task at all.
However, there really are practical ways that you can go about making the entire process of paying off student loans a little easier. First, if you want to nip the problem in the bud, you should probably consider going to a less expensive school in the first place. Also, you can look into borrowing at lower rates if possible, because that is something that is offered to many parents and students as an option, but many do not even know to ask. If you have $20,000 in student loans to pay off and you have an interest rate of about 7 percent, then it could take a little over ten years to pay off that debt if you are paying a monthly payment of about $250. If you are limiting the amount of money you use to pay back your loan to ten percent of your total income, then you will have to make at least $27,000, and that isn’t always easy coming straight out of college, especially not in today’s market.
What to do
Here are some tips that might be able to help you repay these loans more quickly and more effectively. One thing you can do is to try and postpone your payments. If you have a job that does not pay that well and you are having problems meeting the monthly loan payments, then you can lower the payments by stretching out the loan term. This will probably end up costing you more in the long run because there will be more interest, but it is a good thing to do if you are really struggling. Leave the payments for the, hopefully, near future when you will have a better job and be able to set more aside for loan repayments.
Another option is to try to get someone else to pay it for you. You can do this by joining the AmeriCorps or the Teach for America program, which will pay back your loans in return for your participation in their programs. If you are teaching in low-income schools, that might qualify you to have all of your loans paid back. There are also many occupations that use the repayment of loans as recruiting tools, so you can look into those options as well. In the end, you can always ask for some help from you parents as well and then pay them back when you have a better paying and more stable job.
Unemployment can be one of the worst aspects one ever faces in life. However, with the global economic crunch it is not a very rare occurrence anymore. Most people are wary that it may take place with them at any moment. However, one important factor to consider, if there is a lay off waiting to happen, is the state of the credit status then. Yes, this is a reference to the credit history and the score. Here are four easy ways to protect your credit in the face of unemployment.
• Money Management: With not having a fixed income coming your way, you do not need to go reckless with your money. You are sure to have had saved some money. The trick is to manage what you have, instead of trying to incur more money by gaining loans. Plan out your expenses. Demarcate between necessities and the luxuries. Being prudent in the spending of money prevents any missed payments or negative entries to appear on the credit report. This will not lead to a drop in the credit score.
• Obtain unemployment Schemes: There are federal and state laws that sanction providing of unemployment checks to those facing layoffs out of the company policies. Although the checks are not actually hefty but at least lets you stay afloat in times of the crises. Moreover, having an unemployment benefit gives you a ground to seek negotiated rates for repayments on the credit card and similar loans. Talk out with the concerned authorities. If a negotiation is arrived at, then your credit score does not drop down because of arrears.
• Avoid incurring credit card debt: This is a very important means to avoid lowering of credit scores in times of unemployment. Stop using the credit card for purchases that are not absolutely necessary. Simply keep paying the minimum interest that is mandatory.
• You need to keep track of your credit report at frequent intervals. One annual free check is not sufficient. Order a monthly report against a small fee from the credit bureaus. Check for any minor errors in the report and order immediate dispute claim. However, as a precautionary measure, do not go in for measures like unsecured lines of credit and the like, in order to repair the credit score. Unemployment phases are not the best times to do so.
These tips can go a long way to help you fight unemployment without leading to a drastic drop in the credit score. Be wise with your finances and watch what you do with the money you have. All the best! Unemployment is a difficult phase, not an entirely inescapable one.