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Archive for January, 2011

Looking For A Way To Increase Your Credit Score?

Written by Toi Williams on Jan 31st, 2011 | Filed under: credit score

Being able to increase your credit score is a very important part of today’s financial environment and many people are seeking to increase their credit score to improve their personal financial situation.  Making the choice to increase poor credit scores can save you a great deal of money and knowing which methods to use to increase poor credit scores will take time and research to determine.  To find a way to increase your credit score, there are several things that you should keep in mind. 

Can I Increase My Credit Score?

The ability to increase your credit score will depend on your personal financial situation and previous credit history.  Many people that need to increase their credit score have a high number of blemishes on their credit report.  Your credit report is used to determine your credit worthiness and your record of repaying money that you have borrowed from lenders.  If you have not added any negative information to your credit history for the last few years, a credit score increase will be much more likely

The best method to increase the poor credit score of one person may not be the best type of method to increase the credit score of another person.  The ideal way to increase your credit score will have the highest results with the least amount of difficulty in the shortest amount of time.  It is very important to read all of the terms and conditions associated with the method to make sure that you understand what you need to do to complete the process.

How Much Effort Is Needed?

The amount of effort needed to increase a poor credit score can vary from person to person.  Some people can accomplish the task by making a few phone calls and submitting paperwork while others may have to negotiate directly with creditors and make repayment arrangements for delinquent accounts before increasing their credit score.  Some people choose to purchase financial management software to help keep track of all of the financial steps that need to be taken on the path to a higher credit score.  There are a number of different methods you can use to increase your credit score and the method that is chosen should be the one that works the best for you and your financial situation.

How Do I Know If I Need Money Management Assistance?

Written by Toi Williams on Jan 29th, 2011 | Filed under: mindset

Many people know that needing money management assistance can affect their lives in many negative ways but the majority of people that need money management assistance are unaware that their financial situation is as bad as it is.  The credit status of an individual is not one of the things that people see on a frequent basis, so it is difficult for many to determine whether or not they fall into the good, fair, or poor credit categories and whether they need to improve their credit profile.  There are several different ways that you can use to make an adequate determination of your financial situation and where you fall on the credit scale.

Estimating Your Financial Situation

The first method to determine your financial situation is basic estimation.  Using this method, you take the amount of debt carried and any financial actions taken over the last several years to determine whether your actions have led to your financial situation improve or worsen. 

If you have been able to pay off your credit cards, put some money in a savings account, and have not been late on any of your bills for the past several years can expect to have your financial situation improve.   If you have missed some payments and have used more than 50% of your available credit, it is an indication that your financial situation has worsened and you may need money management assistance.

Although this method of determining whether you need money management assistance is imprecise, it will give you a reasonable estimate of what your financial situation may be.  As long as you are honest about your actions over the past few years and accurately remember how much of your available credit you are using, you may be able to judge your current level of credit worthiness and whether you need money management assistance. 

Obtaining Your Credit History

Another method of determining whether you need money management assistance is to obtain your actual credit history and score from one of the three major credit reporting bureaus.  This method takes time because you will have to verify your identity to the company before your personal credit information can be released.  It may take up to two weeks to obtain the information that you are looking for because of the high number of requests made to these companies each day from businesses and individuals. If there is any issue with the information submitted, it can take even longer to find out your financial history.

Finding Specific Information On How To Reduce Your Debt

Written by Toi Williams on Jan 28th, 2011 | Filed under: debt relief

Are you interested in ways to reduce your debt to get debt relief fast?  There are many resources available that can help you reduce your debt and the type of resource that is chosen by you will depend on how much time you are willing to spend on the lessons and what resources are available to you to help you reduce your debt.

Books On Debt Reduction

There are many books written by financial experts available to show you how to reduce your debt.  These debt reduction books teach the basic techniques and give tips for identifying the best methods for different situations. There are even books that show you how to reduce your debt without paying a dime to financial planners or debt reduction companies.  These books show different debt reduction methods and the best way of utilizing each method in an easy to follow layout and each method will have different techniques associated with it.

Many libraries will have a variety of debt reduction books available.  Different books are designed for different financial issues, such as too much credit card debt or failure to budget money, so you should choose books that match your specific financial problems.  Another option is to obtain the books on debt reduction as e-books on the internet because of the numerous sources available.

Finding Debt Reduction Information Online

There are a number of sources of financial information on the internet that offer specific debt reduction information for people that would like to reduce their debt.  These websites offer debt reduction programs created by financial experts that would like to share their expertise with interested people and teach them how to use great debt reduction program.  These websites teach the basics of debt reduction using step-by-step instructions and set an easy to follow pace that should not cause further financial hardship to the individuals using the program.

There are both paid and free debt reduction services available on the internet.  The free programs contain basic information and offer minimal assistance if a problem occurs or you have a question about a portion of the program.  The paid programs offer more assistance and will have more features available to help you reduce your debt quickly.  Most paid programs require a monthly or annual membership fee payment but some may be found that can be purchased with a one-time payment.  The choice of which methods to use will depend on your personal preference and current financial situation.

Tips For Removing Negative Information From A Credit Report

Written by Toi Williams on Jan 26th, 2011 | Filed under: credit score

Having a good credit report has become very important and it is advised by experts to do everything possible to maintain a good credit rating.  Many people are concerned about the information in their credit report because it can affect their ability to obtain credit in the future.  Negative information in a credit report can trigger higher interest rates for many types of credit, can impact a person’s ability to rent a home or obtain a job, and can lead creditors to require a deposit from the person to open an account.

Removing negative information from a credit report can be difficult, especially if the negative information is due to negligence or overspending on the part of the person whose actions are detailed on the credit report.  For some items, the only thing that will remove the information is the passage of time, as many credit reporting agencies will only list information that is less than 7 years old.  Negative information that is due to mistakes on the part of creditors is much easier to erase.

Carefully Review Information In Credit Report

The first thing that must be done to erase negative information from a credit report is to review the credit report carefully for any negative information that may have been entered in error.  Experts estimate that nearly a quarter of all credit reports have errors contained within them that could negatively impact a person’s ability to obtain credit at a reasonable interest rate.  Finding these errors and correcting them could add a significant number of points to the person’s credit score.

Reporting Errors

Knowing exactly what needs to be corrected is the first step in removing negative information from a credit report.  The second step is to alert the credit reporting bureau and the creditor that the information the creditor reported to the credit reporting bureau is inaccurate.  In some cases, the creditor will be able to review their records and recognize that a mistake was made and needs to be corrected.  In other cases, the credit reporting bureau will investigate the claim and will remove the information if it cannot be validated. 

By law, a credit bureau is required to investigate any allegations of incorrect information on a credit report and fix that information if it is found to be incorrect.  All information regarding the account or transaction should be copied and sent with a letter documenting the error.  If you are correct, the credit bureau will correct or remove the information as required by law.

The Pros And Cons Associated With Retirement Plan Loans

Written by Toi Williams on Jan 24th, 2011 | Filed under: loans

If extra money is needed, obtaining a loan against the money that has been placed in a retirement plan may be an attractive suggestion.  When a significant amount of money has been invested in a retirement plan and the person is not planning to retire in the near future, a retirement plan loan is an easy method to obtain the amount of money desired.  There are several things that must be kept in mind when deciding whether this option is right for your situation.

Retirement Plan Loan Pros

The biggest pro associated with retirement plan loans is the ease of acquiring the loan.  When the loan is based on the balance of a retirement account, lenders rarely deny the loan because the retirement plan funds are used to pay off the loan in cases of default, guaranteeing that the lender will get their money.

Another pro of retirement plan loans is the swiftness of loan application approval.  Traditional loans based on income and debt levels involves the need to verify income or provide documents detailing your net worth, while applying for a retirement plan loan rarely involves these steps.  If the total borrowed with the loan is less than the balance of the retirement plan account, the lender should need very little additional documentation for loan approval.

Retirement Plan Loan Cons

Most retirement plan loans have a strict limit on the amount that can be borrowed against the retirement plan.  Most lenders state that the loan amount cannot be more than 50% of the vested balance of the account.  For example, if the vested balance of the retirement plan account is $50,000, then the maximum loan amount will be $25,000.

Another problem with retirement plan loans is the reduction of capital in the retirement plan account if the person defaults on the loan.  Traditional loan options, such as renegotiating the interest rate or refinancing the loan, are not available with retirement plan loans because these loans become payable almost immediately after default and the amount owed to the lender is subtracted from the balance of the retirement plan account. 

This balance reduction can be tremendously hard to replace due to annual deposit limitations on retirement plan accounts. If the loan goes into default, the amount of money withdrawn from the plan to pay off the loan is treated as taxable income and the taxes must be paid in the same calendar year.

It is important to understand the positives and negatives associated with retirement plan loans before making a final decision.  In some cases, taking out a retirement plan loan is the best option while in others, it may be better to look for other sources of funding.

Learning How Credit Affects Your Life

Written by Toi Williams on Jan 23rd, 2011 | Filed under: mindset

There are many individuals today that have difficulty learning how credit affects their life and the problems that can occur with negative credit reporting.  Negative credit problems can affect many areas of your life, including your ability to be hired for certain employment positions or to purchase a vehicle.  Negative information on your credit report will stay there for many years and cause problems for years after the mistakes have been made.  It is important to learn how credit affects your life and take steps to improve or repair your credit.

Negative Consequences

Learning how credit affects your life is important because a negative credit history or low credit score has the ability to wreak havoc with many different aspects of your life.  Many people have no idea that negative information on their credit report can result in disqualification from an employment position, cause them to be passed up for a promotion, or be turned down for housing.  If an individual has a great deal of negative information on their credit report, many problems could occur as a result. 

Any person with a low credit score may not be able to buy a car or home because they will be unable to find a lender that will finance the transaction.  These people may not be approved for an apartment or rental home because rental companies will see a risk of non-payment of rent when the lender reviews their credit score and sees that it is low.  Negative information on your credit report may also take you out of contention for a number of employment opportunities, including government jobs or jobs that include responsibility for money or safety. 

How Do These Problems Occur?

Negative credit problems are typically the result of one of two actions.  The first action is a high number of late or missed payments reflected in your credit report.  Many payment defaults on your credit report can be an indication to creditors that you are not acting responsibly regarding your obligations and may be spending above your means.  This also indicates to creditors that they may not receive their money back if they extend credit to you. 

The second action that commonly cause negative credit problems is using all of your available credit or going over the credit limit on one or more of accounts.  This indicates that the individual is using their credit irresponsibly.  This may cause creditors to deny credit or charge a higher interest rate to compensate for the risk that they are taking. 

Learning how credit affects your life can help you avoid common credit report mistakes that may trouble you for years.  Most information reported to the credit reporting bureaus remain on the credit report for seven to ten years.  By learning how credit affects your life and avoiding negative credit problems, you will be able to maintain a good credit report that will be financially beneficial to all areas of your life.

How To Find A Great Savings Account

Written by Toi Williams on Jan 22nd, 2011 | Filed under: saving

When looking for the best savings accounts available today, it can be hard to pick a bank account that has the features that you need.  There are many different criteria that you should consider when picking a savings account because there can be many variations between the bank account features available at different banks.  By considering all of the different options available, a person will be able to obtain a savings account that fits their needs perfectly.

Choices To Make

The first choice that will need to be made when picking a savings account is which bank account features you like the best.  Many people pick a bank account that is basic because they do not have a great deal of money to put into the account and do not need the additional services available for savings accounts with large balances.  Most banking institutions have a tiered service plan where banks accounts with the highest balances get the highest number of free services and savings accounts with the lowest balances are the most restrictive.

The amount of fees required to keep the bank account open is another thing that should be weighed when picking a savings account.  Some savings accounts from larger financial institutions require more fees than accounts opened at regional banks or credit unions, making them more expensive.  Some accounts from major financial institutions charge a monthly or yearly fee just for keeping the account open.  Many people avoid opening a savings account at a large banking institution for this reason and choose to place their savings in a smaller, local bank instead because of the reduction in fees. 

Where To Apply

A savings account is a very popular bank account choice because it is very easy to find.  There are many different banks that have a wide variety of bank accounts with various features and will often have several savings accounts available to choose from.  The number of different features available will mean that anyone should be able to find a savings account that has the feature they desire.

If no banks in the area have a savings account choice that is desirable, the person can always find a savings account with the features that they want online.  Many physical banks across the nation will also have an online website where an individual can manage their bank account online and will allow the person to open the bank account over the internet.  Although this option may not be for everyone, it is a good way to get the exact type of savings account that you want.

Are Student Credit Cards A Good Idea?

Written by Toi Williams on Jan 18th, 2011 | Filed under: credit cards

Enrolling in college can be a difficult time for most college students.  They no longer live with their parents and can no longer easily obtain money from their parents if they run out of cash.  The financial needs of these students are the reason why many lenders offer credit cards geared towards students.  These cards work in the same way as conventional credit cards, but the terms, rates, and payment plans may be different depending on the lender issuing the credit cards.

The Interest Rate

There are several features that should be reviewed prior to applying for any credit card.  The first is the interest rate applied to credit card, which can differ significantly between credit card issuers.  The interest rate for these credit cards can range from 7% to as high as 30%.  Many student credit cards start with a 0% interest rate that increases to 20% or more after the first 12 months that the account is open. 

It is important to read the credit terms and conditions carefully to be certain that the credit card is charging an interest rate that is fair and that the original terms will not change dramatically after a specific period of time.  The average interest rate for student credit cards is around 15%, so avoid applying for a credit card with an interest rate that is higher.

The Fees

Another important piece of information to review is the fees charged for using the credit card.  The best credit cards geared towards college students will not have an annual fee that must be paid for the privilege of using the credit card.  The terms and conditions of the credit card will disclose the fees that are associated with the credit card and their amounts and there are many different fees that can be required by deceitful credit card lenders. 

The annual fee is the most prevalent fee for credit card accounts and it can range from $50 to $150 per year.  This fee is automatically charged to the account on the anniversary of the account’s opening or at the beginning of the next month, so there is no way for the student to avoid paying the fee.   If the annual fee charge shoots the credit card over the limit, the student will be responsible for paying those penalty fees as well as the annual fee.  By carefully reviewing the terms and conditions for using the student credit cards, any student can ensure that they are not being taken advantage of by unscrupulous credit card lenders and paying more than they should for a student credit card.

Protecting Personal Information Online

Written by Toi Williams on Jan 17th, 2011 | Filed under: scams

With the popularity of online retailers skyrocketing, protecting personal information while shopping online has become very important.  The number of consumers who have personal information stolen online grows each year and the amount of money lost to the thieves total in the millions of dollars annually.  Consumers need take steps to protect their personal information while on the internet and following these tips will reduce their risk of having their identity stolen.

Identity thieves continue to find new ways to obtain personally identifying information and credit card numbers.  Many of the tactics used are hard to identify as a scam and closely match legitimate services.  Because the payoff for the effort can be very large, these thieves put a lot of time, effort, and money into creating methods to get people to divulge personal information.  Individuals that are not paying attention can easily fall for these tricks without ever realizing what happened.

Email Scams

When using credit card numbers and personal information online, there are a few things to keep in mind to keep this information safe.  One important thing to keep in mind is that no company asks for personal information or credit card information in an email.  Most legitimate companies will only ask for credit card information when a purchase is made and no company requires a social security number to create an account.  If any of this information is requested by email, it is almost certain that the email is an attempt by a scammer to obtain your personal information.

The most common email scams duplicate emails sent from popular companies, such as Paypal, eBay, or Chase Bank.  The fake emails look like notifications and receipts that these websites email to individuals that have used their services.  There is typically a link in the email for the person to enter their account password and provide additional personal information.  This information is transmitted directly to the scammer’s computer for use in any way that they desire.

To avoid becoming a victim of this scam, never provide account or credit card information to any company by clicking a link in an email.  It is much more secure to go directly to the website using the URL associated with the company to see if there are any alerts attached to the account.  Most companies provide account holders with a copy of emails sent to them stored in a particular area of the account.  If the email does not show up in the inbox of the account on the website, that is a good indication that the email was fraudulent.

Debt Reduction With A Poor Credit Score

Written by Toi Williams on Jan 13th, 2011 | Filed under: debt relief

Many individuals are looking for debt reduction methods to decrease their debt load, especially when they have a poor credit score as well.  A poor credit score can result in having to pay a higher price for debt reduction assistance and the rejection of applications to debt reduction programs.  The method used will be based on the person’s credit history, payment history, and the amount of debt they are carrying. 

When looking for reduction methods, there are several things that the person must keep in mind in order to get the results that they desire. 

Reviewing All Options

When looking for debt reduction methods, the first thing that should be taken into consideration is that the method found first may not be the best one for your current financial situation.  In many cases, a person with a poor credit score can be so desperate for a solution that they will use the first method they come across instead of searching for the best solution to their problem.  It is best to review all of the options available before making a decision on which debt reduction solutions to use so that you will choose the ones that will offer the best results. 

Watching Out For Scams

It is always great to find debt reduction methods that involve little effort to succeed, but you must be careful to make sure that ease of using the program is not a trap to obtain your personal and financial information.  The creators of scam debt reduction programs have no interest in helping you eliminate your debt, the sole purpose of these programs is to coax people into revealing sensitive information that the scammer can use to open credit in their name or access the person’s bank accounts.  For someone that has a poor credit score and a high debt load, this can make the situation even worse and push the person over the edge into bankruptcy. 

When dealing with companies that offer debt reduction methods, it is best to be sure that you are dealing with a company that is reputable.  There are many scam artists and shady lenders waiting for unwary individuals to divulge more information than they should.

Avoiding High Fees

Some companies offering debt reduction methods include many fees in the price of the program.  These fees can add up to hundreds of dollars and is purely for using the methods offered by the company.  People that choose to use these companies can find themselves deeper in debt due to the high fees charged before they receive any assistance with the financial issues that caused them to seek out the services of the company in the first place.  Be sure to read the terms and conditions of any agreement carefully to avoid becoming the victim of deceitful business practices.