What Your Credit Says About You

Posted on June 6, 2011 by admin

Each day, companies rely on the information in your credit report to help them decide whether to trust you with their money. With this information they decide what interest rate to give you and also what the loan terms will be.  Because the bureaus keep track of your credit information, your credit report has become a means of information. You credit report is an important device that serves different purposes for different people.

For a VA lender, your credit report is used as a device to determine if you are worth the investment, and how likely you are to repay the loan. It will also show how much your interest should be, and what fees to charge you based on the risk you represent. For an insurance company, your credit report is used as a tool to help anticipate how likely you are to have an accident or file a claim. For an employer, your credit report is a tool to predict whether you’ll be a dependable trustworthy employee. For a landlord, your credit report is a tool to determine whether you’re likely to pay rent on time. For you, your credit report is a tool to help you understand how you’ve handled your finances in the past and how you’re likely to handle them in the future. It can also allow you to know what you qualify for. If reaching certain financial goals is attainable or not.

Your credit report may also indirectly foresee your potential behaviors in other areas of your life. The fact that you have a history of making credit-card payments late may tell a landlord that you’re likely to be late with your rent, too. A history of bad loans may suggest to a boss that you aren’t someone who follows through with commitments.

Your credit history can tell others what type of a person you are. If you are a person that follows through with commitments. This is a trait important to most people, whether they’re looking for a reliable worker, a responsible nanny, or a dependable renter. Needless to say, a person or company considering lending you a sizeable sum of money will want to know the same. Remember lenders don’t like to gamble they are in the business of making money, and they can’t do that if the borrowers won’t pay.

Depending on large part on your history of following through with your financial promises, you’ll be assigned a credit score.  People with higher scores generally get the best terms, including lower interest rates and reduced minimum down payments. People with low credit scores can usually get credit in today’s economy, but they pay higher interest rates and possibly additional fees or insurance. Lenders will not put themselves into a position where they will lose.

When it comes to your credit score, following through with your promises is only half of the battle. The other half is doing it on time.  It’s a fact in the lending business that the more overdue the payment, the more likely it will not be paid at all, or paid in full. This is why, as you get further behind in your payments, lenders become more anxious about collecting the amount you owe. In fact, if you’re very delinquent, the lender may want you to pay back the entire amount at once rather than as originally scheduled. So the longer you take to do what you promised, the more it costs you and the more damage you do to your credit score.

Posted in Credit Bureaus, Credit Report, late payments | Tagged , , | Leave a comment

Knowing what’s on your Credit Report

Posted on May 31, 2011 by admin

Some of us make the big mistake of not thinking about our credit report. We usually don’t think about it or know what’s going on with it. We don’t  think it is relevant to our day to day life. That is until we we start looking to buy a home, a car, or apply for a loan. Than we worry about what shape our credit history is in. Unfortunately, we couldn’t be more wrong. I want you to understand how important it is for you to know what is going on with your credit at all times. You check your bank accounts on a regular basis and you should do the same for your credit report.

I want to give you an example about how important your credit is. And what type of information it provides about you.

Let’s say you’re applying for a job. Based on your resume, your salary, job title, and the size of your office will be decided for you.  But what if you didn’t write your resume? What if your old boss did, and he accidently mixed you personnel file with the file of that person who was fired?  Can you imagine walking into that job interview without any idea what your former boss may have reported whether it was correct?

Getting married, landing a great job these situations are ones in which you have a great deal of personal investment and interest in a successful outcome. Kind of like getting a good mortgage rate so you can afford that dream home.

I’m not saying you’re guaranteed to like the outcome of the job interview, but at least you know it’s based on information you’re aware of. Just like you should know what’s on your credit report. You can’t rewrite your own credit history, but you can have the knowledge of what is on it. Knowing this information will help you in your future purchases.  You will know if you are eligible for a loan, and if you are, knowing your credit rating will help you know what interests rates you qualify for. Knowing will give you an upper hand as you try and negotiate your way through the financial life. Being smart and aware of your credit standing will help you in situations that could cost you thousands of dollars more or deny you opportunities. Knowing what’s on your credit can also help you catch inaccuracies on your report and correct them.

Your credit report doesn’t come into play just when you want to borrow money. A bad credit report may affect what you pay for insurance, whether you can rent the apartment of your choice, or whether you’ll be hired for certain jobs.

There is no excuse for not knowing what’s in your credit report. You should have a current copy of your credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion). You can now request your credit report from each credit bureau once a year for free.

I hope that this helps you understand the importance of knowing what’s on your credit report. Below I will list information on how to contact the bureaus for a copy of your report.

Equifax – P.O. Box 740241 Atlanta, GA 30374 1-800-685-1111

Experian – P.O. Box 2002 Allen, TX 75013 1-888-397-3742

TransUnion – P.O. Box 1000 Chester, PA 19022 1-800-888-4213

 

Posted in Credit Bureaus, Credit Report, FICO Scores | Tagged , , , , | Leave a comment

Being a Responsible Credit User

Posted on May 18, 2011 by admin

We use credit in our everyday lives, so I thought it would be a good idea to go over some guidelines for being a responsible credit user.  There are some many other responsibilities that we have in our lives, and we sometimes don’t realize how being a responsible person affects our personal and financial life. Being a good person goes hand in hand with being good in all aspects of your life. A good parent, citizen, wife or husband, sibling, and a borrower too.

The reason that we have laws in our society that everyone has to live by is to keep us safe and out of trouble. You should have similar rules in your financial life. Applying these rules will keep you on the right track, out of trouble, and safe.

Being a responsible credit user means being, responsible to yourself and those who share your life. This starts with goals, a future vision of your life and knowing which financial tools to use, in what measure, and when.

Here are a few ideas that may help you on your road to being a responsible credit user.

Set goals. Make sure that you have short term as well as long term goals. This will help you know what to do. These goals will serve you as a guideline.

Have a spending plan or budget. This is another guideline to keep you on the right track. Try not to see your budget as something that hinders you, instead see it as a tool that will help you reach your goals. Budgets are a good thing.

Use long term uses. Don’t use a home-equity line to buy sneakers or eat out. Be smart about how you spend your money. If you can’t afford it you don’t need it.

Save money for future goals and needs. You never know when something will happen. Make sure that you are always putting a little bit of money aside for your long term goals and for a rainy day.

Pay your bills on time. It is important to show that you are responsible in your life. Paying your bills on time is one way to showcase how reliable you are. This will help keep your credit in good standing and help you in the future if you ever need to apply for loan.

Pay at least the amount due. Always set a time by which you will pay off a debt. This can qualify as a short or long term goal. Remember the longer you take to pay something off the more money you are giving them in interests. Try and payoff things as soon as possible. It is important that you pay even a small amount towards the principal of your loan.

Using military credit cards for daily expenses and not paying the balance every month is a bad thing. Remember credit cards are not meant as extra income. You should not use them if you can’t pay them. Again if you can’t afford it you don’t need it.

Know how much you owe. This will help you set goals too. You can try and payoff one or two accounts every month. Knowing this information will help you keep a real perspective of your financial life.

Using cash advances to pay credit card bills or for daily expenses is a huge mistake. This is a red flag that are living out of your means. You need to make changes and seek help.

Getting calls from your creditors is another red flag that your credit is in trouble. Again sit down make a budget and cut back. Get help as soon as you think you may need it, not as a last resort.

I hope that this helps you understand what you need to do to be a responsible credit user. Understanding what the red flags are is also important and will help you realize when you are in need of help.

Posted in Credit Report | Tagged , , , | Leave a comment

Setting Credit and Fico Goals

Posted on May 9, 2011 by admin

It is important to be able to take charge of your credit. I want to go over a few ideas on how to do that. Remember that having good credit means that you are able to take advantage of good opportunities. I want to give you some ideas on how to take advantage of these opportunities and to be able to use the power of credit to your advantage.

One of the conveniences of having good credit is being able to borrow when it suits your needs without paying outrageous interest rates. When you have good credit you are able to take advantage of worthwhile lending offers. I’m sure you have heard tons of ads from various stores offering you deals such as “same as cash” and “no money down” offers. For the most part these offers only apply to people with a great credit history.

This is when financial goals come into play. Your financial goals should serve as a guide to you and keep you on course. You have to have clear objectives when it comes to how you want to spend and save your money, you risk falling off course and into bad credit if you don’t have clear targets. No matter how big or small your goals are they will help you keep your eye on the finish line. These goals will be your guide. Make sure your list of goals that include short and long term. They can be anything from buying a new appliance in the near future to purchasing a home or starting a business in the far off future.

A budget is a very important part of this plan too. Make sure to see your budget in a positive light. Think of it as a tool that will empower you to reach your bigger goals, instead of a barrier. It is not meant to restrict you, just to keep you on course. Always remember that the purpose of the budget is to get you to arrive at your goal.

When setting your budget make sure and start with knowing of how much income you have to work with, and then designate it as necessary for living expenses. If you have debt, set aside part of your income to get rid of that debt just as quickly as you can.

Another very important part of your budget that’s just as important as your expenses and debt commitment is your savings plan. Be sure you assign money to your own savings plans. You should have two parts to this savings plan. First part is an emergency fund (in case of job loss or illness). The second part is for your goals (your kids, your retirement). Make saving as automatic as possible, the money can come right out of your paycheck. Use payroll deduction as an easy way to do this too. Getting started is the hardest part, but once you make it automatic you won’t have to even think about it.

Posted in FICO Scores | Tagged , | Leave a comment

Identity Theft and the Veteran Military

Posted on April 29, 2011 by admin

It is one of the largest and fastest growing of crimes in the United States.  Identity theft is a serious problem that can hurt your financial and personal life. It can hinder your ability to get loans, employment, insurance, licenses. And don’t forget the stress it can cause on you and your family. You will also you have to be defensive, in order to prove to creditors and collection agencies that you are not the one that they are after. Trying to prove that is a heavy burden.

To avoid the problems caused by identity theft, your best bet is to avoid being a victim of identity theft altogether. Make sure and protect all of your financial information at home. Don’t leave credit- card numbers and statements, Social Security information, bank-account information, and other financial information unprotected. Most identity theft is carried out by people you know like friends, relatives, acquaintances, coworkers, and people you invite into your home.

Protect yourself. Shred statements before putting them in the trash and lock your sensitive information away. Using your computer is a good way to avoid theft.  Make sure you password protect everything.

Watch your mail. Sending and receiving financial statements and bills in your household mail can be risky. Most of us think that no one is watching our unprotected mailboxes. And most of us are right, but that leaves the rest of you with sensitive account numbers and documents containing your social security number sitting all day in an unlocked mailbox outside your home.  One solution to this problem is to rent a P.O.Box at your local port office. You can have all of your sensitive information sent there.

If you’re a victim of identity theft, you are most likely to find out through a collection call on an account that you never opened or unusual activity on your credit cards or credit report. If you suspect your identity has been stolen, respond immediately.

Write down everything. This process may not be quick or simple, but it is important. This will help you keep track of all the activity on your cards. Call any creditors affected and close your accounts. Don’t forget ATM and debit cards. You have higher limits and liabilities for these than you do credit cards. They are very important.  Call a credit bureau and place a fraud alert. The bureau you contact will inform the other two bureaus.  That bureau will also send you a copy of your credit report after you make the call. If you’re in a state that allows you to freeze your credit report, do it. You can unfreeze it later. If you live in a non-freeze state, you can add a victim’s statement to your credit report. This tells anyone getting your report that there is a problem with your file. Call the police and make out a report. Some creditors and collectors require this to take action. Be sure to get a copy of your report.

I hope that these tips help you to identify if you are a victim of identity theft, what to do if you are, and how to prevent it.

Posted in identity theft | Leave a comment

VA Credit Solutions turns Bad Credit into Good Credit

Posted on April 18, 2011 by admin

We have helped many families with their credit situations. We have assisted many of them in reaching their goals to refinance, and purchase their homes. We have been witnesses to bad credit turned good. It is important for you to get help from someone that understands how lenders and bureaus work. Someone that can guide you back, and advise you on what can be disputed, what needs to be paid off, and what needs to be settled. With our past experience and knowledge we continue to see great results.

I want you understand the meaning of bad credit. Of course there is the obvious increase in borrowing costs and it’s also harder to get a credit card. But there are other more real and serious costs that come with bad credit.  The extra interest you’ll have to pay is only the beginning.  The real cost of bad credit is in reduced opportunities, family stress, and having to associate with lenders who, more often than not, will take advantage of your situation.

One of the major downfalls of bad credit, are of course the FEES. From your perspective as the borrower in trouble, this doesn’t make any sense.  You’re having a short-term problem and it seems that instead of helping you they add on more fees to your account. The reason that they do this is because they want to get your attention and have you focus on their bill, instead of another one. The other reason they get compensated by charging you fees is because you became an extra risk to them.

As bad as the fees can be on your credit cards, they can be even worse on your secured loans. If you fall behind in your house payment, you can be hit with huge fees.

Secured lenders tend to be a little more low key. They don’t have to be as loud as credit card lenders, because they can just take your home or your collateral. Keep this in mind, just because they are not as loud as the other lenders it doesn’t mean you should take them less serious. Pay attention to them, and take action.

Another downfall that you will have to deal with if you have bad credit is higher interest rates. Lenders look at your credit report before approving you for any sort of loan. After they have reviewed you credit they decide based on your history what kind of risk you represent. The higher the risk the higher your interest rate will be.

Here are a few other downfalls: Sub – prime loans. These are really expensive loans that they offer to people that are considered a high risk, and that don’t qualify for prime rates.  You don’t want a sub –prime loan if you can avoid it!

You can also run into lost of employment opportunities.   Now a day it is very common for employers to run credit and background checks. If you have a bad credit history this might keep you from getting the job or promotion that you seek.  If the employer sees late marks, collections, and a lot of debt this might be a red flag for them. It can make you look like you are not a responsible, trustworthy person.

I hope this will help you realize how much you have to lose if you have bad credit. Start taking accountability and be responsible for all of your accounts. This will greatly improve your life in many ways!

Posted in Credit Repair, Credit Report, va loans | Tagged , | Leave a comment

Why Businesses Encourage the use of Credit

Posted on April 18, 2011 by admin

Have you ever walked into a store and been offered a credit card before checking out? It happens to everyone, sometimes a few times in the same visit. Businesses make money when you use credit; they encourage you to use it as often as possible. In order for creditors to make as much money as possible, they would like you to spend as much as you can. Their plan is to help you spend your future earnings. There are many types of credit available to consumers today. You probably get dozens of offers from different credit companies in the mail. But even though there seems to be an endless amount of options of different variations and terms, most credit can be classified into one of two types First let’s look at Secured credit.

The name states that there is security involved in this type of credit. This means that the lender has some sort of protection if you happen to default on your loan. Your secured loan is backed by property, not just your word. Because there is something else backing up your loan, the interest’s rates are lower and your loan term can be longer. The reason the lender offers this is because they are able to take back whatever you bought. That is their security. Secured loans are typically home loans, and car loans. Now let’s look at Unsecured credit. This type of credit is usually more expensive, the terms are also shorter, and they are considered a higher risk by the lender. Because it is backed by your promise to repay it, and that’s it.

There is no property to back it up. Lenders are more vulnerable if you default. Credit cards are considered unsecured credit. We normally look at credit from our point of view. But have you ever thought to look at it from the view of the lender? We represent good and bad to the lender. Yes, we help their business by buying items from them. We take advantage of the great deals and all the sales that the stores have. But we also represent a risk to the lender. Because the lender is taking a chance with us by giving us something now that we promise to pay later. If we don’t pay the lender loses. This is the risk with all unsecured credit. Because the lender is taking a risk with you, he has to make sure and “grade” you to see if he will make or lose money with you. He needs to know if you do what you promise. With this “grade” he gives you he will also determine the interest rate and the term of the loan, and if he trusts you.

The lender needs to know three things about you to figure out the risk you represent: 1. Your character: Do you do what you promise? Are you reliable and honest? 2. Your Capacity: How much debt can you handle given your income and other obligations? 3. Your collateral: What cash or property could be used to repay the debt if your income dries up? The way the lender figures out this “grade” for you is simple. He looks at your credit report history and scores. That is the only thing he has to go by. Depending on how your credit history looks and what your overall scores are he will decide if he wants to extend to you a credit line, and the terms that come along with it. It is important for each of us to know what our credit looks like. This information will help us know if we qualify for certain lines of credit, and also keep you from being taken advantage of. Because creditors are in the business of making money sometimes they will try and charge you more than the market price for the credit you want. This is why it is so important to know your credit and also do your homework before applying for a line of credit to see what the interest’s rates are and what they should be offering you.

Posted in Credit Report | Leave a comment

Are you finances private?

Posted on April 4, 2011 by admin

Someone’s watching every move you make with your money! You probably think you personal finances are just that: personal. But every purchase you make on your credit card, every mortgage payment you send, every doctor’s bill you pay, and every insurance application you submit is being monitored, reported, and scored. That’s the nature of our credit centered financial system.

Of course, you could just use cash for all your purchases. But how would you buy a home, rent a car, or make hotel reservations? Having good credit and using it wisely is essential these days.

It’s so easy to get off to a bad start. Few schools teach kids about money. Their first lessons come from sitting in a car seat and watching mom put a card into a machine in the bank’s drive-thru. Money doesn’t grow on trees anymore; it comes out of ATMs! By the time teens are ready for college, they’re handed credit-card applications along with their books and school sweatshirt.

We have all heard the sad stories about lives ruined by debt. Bankruptcy has become an epidemic – and new, more –stringent laws haven’t stemmed the tide. After all, if our federal government runs budget deficits, and our largest companies file for bankruptcy, how is the average consumer supposed to resist the dangers of debt?

Getting overloaded with debt is so easy. It’s like quicksand: easy to walk into and very tough to pull yourself out. And if you aren’t careful, you could fall into it and even worse traps.

We want this blog to help you understand, we will give you honest answers to credit questions you might have. Whether you are starting out in life, or feeling overwhelmed by financial problems, this is a resource that will guide you to the correct answers.

You deserve credit- that unique institution embraced by Americans that protects one of our most inalienable of rights: the pursuit of happiness, Credit, defined by Webster as “permission for a customer to have goods or services that will be paid for at a later date,” allows you to realize major life goals, such as owning a home, having a car, or getting an education- goals you might never achieve in a lifetime if it weren’t for credit.

As a hard working, responsible citizen you deserve credit.  What you don’t deserve are the disastrous consequences of bad credit. The confluence of many forces has created a challenging landscape for the American consumer: the advent of new technology makes online bill-paying and financial transactions easier than ever- at the same time it makes it easier than ever for unscrupulous types to hack into your personal data, imperiling your credit information and increasing the possibility of identity theft. New laws protect consumers and increase your rights to your credit information; other laws make bankruptcy a nearly impossible option for many credit strapped individuals. And despite increased restrictions on direct – mail solicitations and telemarketers. You’re bombarded with more offers for credit than ever before.

 

Posted in Credit Report, FICO Scores | Tagged , , | Leave a comment

What is on Your Credit Report?

Posted on April 1, 2011 by admin

Knowing what is on your credit report can be important for several reasons. In today’s society you always need to be on the lookout for identity theft. Of course you have seen the commercials and laughed thinking it could never happen to you, but the fact is that identity theft affects thousands of people every day.

All of your personal information can be found on your credit report. You should check your report often to make sure the information is accurate. You will need to make sure your name is correct including married names. Make sure your social security number and birth date are correct. Little mistakes like this could prevent you from qualifying for certain types of credit. Your report will also state your current and previous addresses and current and past employers. Verifying all of this information at least once a year is crucial.

Another reason to keep track of your credit report is to make sure information is being reported adequately. If you are trying to raise your credit score, you need to make sure your creditors are reporting your on time payments. This is the best way to raise your score and qualify for a better interest rate the next time you need a loan. Of course this will also affect your credit score if you make late payments or file for bankruptcy. Negative information will usually stay on your report for about seven years although serious delinquencies like court ordered collection and bankruptcy could stay on your report for ten years.

You need to be proactive when it comes to knowing what is on your credit report. Checking the information often will alert you if there are strange inquiries or accounts showing up that you do not own. You will have to contact the specific credit bureaus to notify them if there is incorrect information on your credit report. This usually needs to be done in writing and the sooner the better. Do not let a poor credit score keep you from buying a great new car or renting a luxury apartment. Know what is on your credit report and how your credit score affects your financial future.

 

Posted in Credit Report | Tagged , , | Leave a comment

Basics to Understanding Your FICO Score

Posted on March 28, 2011 by admin

If you are hoping to take advantage of the buyers market in real estate, understanding your FICO score is important. Not only does the FICO score affect the interest rate you will pay, it may also affect whether you qualify for a loan at all. To determine if your score is in an acceptable range the first thing you need to do is request a copy of your credit report. There are three main credit bureaus that financial institutions check, but the FICO score is specific to TransUnion and Experian.

Evaluating your score will be the next step. If your score falls at 751 or more you have excellent credit. You should be able to get any type of loan you are looking for at a great prime or less than prime rate. If your score is right on the fringe from 721-750 you will still be able to get an awesome rate. There are some lenders that may still give you a rate lower than prime. The average American usually falls in the 660-720 credit score. This is a good score and you will be able to find prime financing for most purchases. If your rate is 620-659 you will be looking at a bit higher interest rate depending on the type of loan. People who are looking at a 330-619 credit score will have a much harder time securing the financing they need at an affordable interest rate. It does not mean you cannot find a loan – it just may be harder and you will pay a much higher interest rate than if your credit score was better.

Of course obtaining a VA loan does not always depend just on your FICO score. Your job history, payment history and yearly income will also play a part. You can raise your FICO score by paying your bills on time and making sure you do not have a lot of credit card or other debt. Understanding your FICO score can help you secure a low interest loan and even help you pay less for insurance. A low score could affect your ability to get a job or even rent a great apartment. Make sure you understand your score and work to keep it in the above average range.

Posted in FICO Scores, va loans | Tagged , , , | Leave a comment