Over 30 million people in the U.S.A. have credit scores low enough (less than 620) to make shopping for low mortgage loan rates very difficult at best. The major credit reporting agencies use a slightly different system to arrive at a credit score. The best known is called the FICO score, developed by Fair Isaac and Company (FICO). A FICO credit score can range from 300 to 800. Most borrowers fall into the 600-800 credit score range.
A high FICO score is your reward for paying bills on time. This is one of the most important factors that determine your California home mortgage loan rate
If you’ve had a few credit “bumps in the road” recently, and you’re asking yourself, “How can I improve my FICO credit score”? Here are 5 ways to boost your FICO credit score.
1. Paying your bills on time is the first step in improving your FICO credit score. Late payments can have a big negative impact on your FICO score, 30 days or more late on one account can lower your FICO score 50 points or more.
If you don’t like writing checks, go online and automate your bill paying.
2. Don’t max out your credit cards. The smaller balance gives you a wider difference between your balance and your credit limit.
Also, if you are planning to purchase a new car or other major item, wait until you get that low mortgage loan rate.
3. If you are sincerely interested in improving your FICO credit score, bankruptcy MUST be avoided! Bankruptcy is more negative than late payments or collection accounts.
4. Get credit counseling if you have too much debt and begin to fall behind, or can’t see a way out.
5. Keep old paid off accounts in an open status. If you close an account, it won’t help your FICO score but it could lower your credit score.
If you close an old account it could make you look like a “rookie” in the credit world. A factor in obtaining credit is how long you’ve had credit.
If your FICO credit scores are over 620, but you want to raise it, obtain a copy of your credit report and request that the credit bureau remove any errors.
About www.GoldMedalMortgage.com
GoldMedalMortgage.com provides a variety of mortgage solutions including first time home buyer home improvement loans, home equity loans, and debt consolidation loans through their partners.
For more information about California home mortgage loan rates or to improve FICO credit score please call 866 398 4664 or go to ==>http://www.goldmedalmortgage.com
How to Repair a Bad Credit Rating…The Right Way!
If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished.
Once you have a bad credit rating, it might seem like there’s nothing that you can do about it… but you don’t have to believe that. It’s not as difficult as you might think to get by with a bad credit rating; with a little work and time you can even repair it! Of course, before you do that it’s important to realize exactly what a credit rating is.
Every time a lender or other creditor makes a report concerning your payment history to them, this report affects your credit score.
Your credit score is a numerical indication of the positive and negative reports that you’ve received from creditors and lenders; if the number is high then you have a good credit rating, and if it’s low then you have a bad credit rating.
Basic credit repair
Get organized! Make a folder for all your correspondence offline and online. You will have to do some snail mailing but in most cases you can work your repair online.
In the U.S. a 630 rating will qualify you for a mortgage. You can still get credit with a lower score but not at a premium interest rate.
The important thing to do is obtain your credit report and study it. Mark all the negative items.
Most unsecured credit, mostly credit cards, can stay on your report for 7 years. If you find any over that, write to the credit bureau and ask them to remove it. They are required by law to research and report back within 30 days.
If they don’t, you can threaten them with a letter to the Better Business Bureau or
Federal Trade Commission.
Find any other negative items and determine they are correct. If not, write the bureau and tell them its not your debt.
Even if you aren’t sure, ask the credit bureaus to investigate. Many times, they will not be able to verify the debt because the credit card company, auto loan company or other creditor won’t get back them within 30 days (required by Fair Credit Act).
Copyright 2005 MHG Consulting
Dan is the owner of Repair Your Credit…The Right Way!. For the contact information on credit bureaus as well as samples of letters to send to them, go to:
http://www.repair-credit-right.com
Finding the best balance transfer credit cards is not as difficult as you might think. In fact, there are a number of balance transfer credit cards to select from, making the most difficult part deciding which one of the great deals you should take advantage of.
Balance Transfer Credit Card Interest Rates
Since you are looking for a card to transfer your current balances to, you most likely do not intend to pay the balance off in full at the end of the billing cycle. Therefore, you want a card with a low interest rate. Ideally, you should find a card offering a 0.00% introductory rate. The longer this introductory period lasts, the better. Be aware that the interest rate can go sky high on some cards after the introductory period is complete. So, pay special attention to what the interest rate will be after the introductory period is over. The best balance transfer credit cards will keep the introductory rate on your transferred balanced until you pay it off in its entirety.
If you do choose to get a balance transfer credit card that has a low APR for a limited time, be sure to pay off the balance before the introductory period is over. This way, you won’t have to pay finance charges on the higher APR. Also, hold out for a balance transfer credit card with a 0.00% APR. With so many great introductory offers out there, you are bound to find one with a 0.00% APR that meets your needs.
Balance Transfer Credit Card Fees
The majority of credit cards assess a fee to your card when transferring balances. With balance transfer credit cards, this fee should be waived. If the balance transfer credit card you are considering does not waive the fees, you should move on to a different card. There are too many cards out there that are willing to allow you to transfer balances for free - take advantage of them.
Additional Benefits of the Balance Transfer Credit Card
There is absolutely nothing wrong with getting a credit card solely for transferring balances. If you do this, you should only transfer your balances, set the card aside, and use another card for your purchases. If, however, you want to transfer balances and still use the same card for your routine purchases, pay attention to the other benefits associated with the card. For example, some cards offer purchase protection, extended warranties, fraud protection services, auto rental insurance, travel insurance, and more. In addition to looking at the APR and balance transfer fees, consider the additional benefits associated with the card. Don’t just apply for the first card with a 0.00% APR and free balance transfers.
Don’t be Fooled by Balance Transfer Credit Cards
In addition, to choosing the card with all of the right benefits, don’t let yourself be fooled by balance transfer credit cards. Several have great introductory offers on balance transfers, but the interest rates on purchases are high. Be careful to find out what the interest rate will be on purchases if you choose to use your balance transfer credit card for regular purchases. You might be disappointed. In addition, keep in mind that the credit card company can choose to apply your payments toward any portion of your balance that it wishes. Therefore, while you might have a 0.00% APR on balance transfers, you might have a 19.99% APR on purchases. Every dollar you send toward your credit card balance can be used to pay off the balance transfers before the balance for purchases is even touched. So, basically, you are paying off the 0.00% balance while the 19.99% balance goes untouched - and accumulates finance charges.
Bert Wills recommends that you visit CreditCardAssist.com to find out more about the best balance transfer credit cards.
Poor credit is such a common thing among Americans that the three major credit bureaus have introduced a method for helping consumers to get out of debt. The VantageScore system was introduced in March of 2006 and made available to all merchants who report to the three major credit agencies. Essentially, the point of this new system is to provide a more accurate and consistent credit ranking system for consumers.
In the past, the only credit scoring system was the FICO system, which is calculated on software developed by Fair Isaacs Corporation. The problem with the FICO scoring system was that you could have a very different score from all three bureaus as they each use their own method of calculations.
The new VantageScore system is supposed to create a more uniform method of determining credit risk. It combines new technology and the expertise of industry leaders on credit data to get an easier to understand and more consistent score for use by merchants and consumers alike. The score will be more like academic grading and range from 901-990 for the best credit and 501-600 for the worst.
The best thing about the new scores is that if you have little or no credit history, you can still get a decent score. To improve you VantageScore, always pay your bills on time. The payment history section of your credit report is an important factor in your VantageScore. So be sure that you do not take on more debt than you can handle
Also try to pay more than the minimum balance on credit cards and loan balances. Doing so will keep the principle down and prevent you from maxing out a card or defaulting on a loan. Even five or ten dollars extra per month can make a big difference down the line.
And check your credit report at least once a year for errors. You are eligible for a free report from all three agencies once per every twelve months. You would be surprised at how many errors there can be on your report. So get the facts straight so your VantageScore will be based on accurate information about you and your spending habits.
Rebecca Spitzer recommends Credit Card Blog for reading more about Vantage Score. See www.findcreditcards.org/articles/2006/03/vantagescore_credit_scoring_sy.php for more information
What is a balance transfer ?
A balance transfer can be explained simply as a balance transfer! When a balance is transferred usually from a credit card, but possible from a bank account or loan to a credit card with a offer interest rate (usually 0%) for a set period. It does not have to be the entire amount. The card receiving the balance will an interest rate for a set term, normally 6 months, but can be 9 months or even a year. Take a look at the current balance transfer deals currently available. This will give you a flavour of the typical kind of deal available.
Should I apply for a balance transfer ?
It is important to remember that a balance transfer does not mean that the debt has gone away. It just means you are not paying interest on it. You will still have to maintain payments.
This may seem obvious but many people do not get this straight in their mind.
The basic criteria for getting a balance transfer is when you regularly have an outstanding balance after making your monthly payments. This is the amount you should look to transfer to another card. This will mean that for the period of the offer you will pay no interest on the balance (provided you make the minimum payments).
You should be very wary of taking up a balance transfer, if your overall debt is increasing. A balance transfer is not a green light to spend more money. The money you save should be used to decrease your debt.
What should I look for in a balance transfer ?
You need to be aware of the following when looking for a balance transfer card
Good things
- Length of offer period.
- Offer Interest Rate.
- The zero or low interest rate charged on the balance.
- Possible transfers from loans and overdrafts.
- On some cards you can transfer from existing loans and overdrafts and still get the offer.
Bad things
- Cut-off period for the balance transfer offer.
- Hidden Charges on transfers.
- Some banks will charge a handling fee on the balance transfer.
How long the offer is valid for ?
There is usually a cut off point from the account opening when the offer is no longer valid. Be very aware of this otherwise you could end up transferring a balance to a higher rate !!
What about new purchases ?
Unless there is also a 0% interest rate on new purchases then you should avoid making new purchases on a balance transfer card. This is because the banks will look to reduce the balance transfer debt quicker than the new debt. Provided your credit history is reasonable, there is nothing stopping you having several cards for different purposes. A good way is to have a card, which specialises in 0% on new purchases and another card for balance transfers.
What happens when the balance transfer period finishes ?
When the balance transfer offer period finishes the debt will revert to the typical variable APR. The lenders hope at this point that the cardholder will retain the card and some of the debt, so they can then start charging interest and making some money! So take into consideration the low interest rate credit cards. However, there is nothing stopping the disciplined credit card holder from switching to another balance transfer deal and closing the account. The cycle then starts again. Always allow 6 weeks to 8 weeks before the end of the offer period to apply for a new card. This means you can get the balance transferred to the new card before the lender can start charging the higher rate. You have to be organised to do this, but if you are it does work. People who regularly switch balances are know as card tarts.
The Golden Rules
There are three things to look out for with a balance transfer card
- As mentioned previously, the unsuspecting can get caught out when spending on a balance transfer card.
- Maintaining regular payments. If you miss a payment you incur some penalty, so be aware. To be safe set up a direct debit.
- The interest rate applied when the offer period finishes.
Good luck with your choice.
Neil Brown is a freelance writer and regular contributor to the credit card sites Choose A Credit Card and Search4 Credit Cards.
Like most other UK borrowers do you also wish for a debt-free life this Christmas? So what do you do? You hang a bigger pair of stockings and then pray really hard! Guess what! You don’t have to rely on Santa Claus anymore to get rid of your debts. You can do it yourself too.
All it takes is a bit of planning and you are all set to start life afresh. Just chalk down a budget and draw an estimate of the amount you will need to pay off all your outstanding bills. Thereafter, apply for a debt consolidation loan and then keep your fingers crossed.
What happened? Your loan application got turned down and your low credit score was considered responsible for it! Well then you can count yourself among those countless UK borrowers who are refused loans for the same reason.
Now let us give you a low down on what credit score is and how it can affect your chances of getting a debt consolidation loan.
Credit score is a numerical figure that is a measure of a person’s creditworthiness. It is calculated after taking into account several factors like your repayment ability, your outstanding loans and even the length of your credit history. If you have ever missed any payments or have had arrears, CCJs, or bankruptcy reported against you then your credit history is likely to be blacklisted. This credit report is compiled and maintained by three major credit bureaus namely Equifax, Experian and Transunion. So, arrears in your credit record mean a low credit score, which in turn implies an unimpressive credit history.
What makes things even worse is that now banks are going to run a more extensive background check than ever before. The British Banker’s Association is pushing banks to share all kinds of information about customer’s indebtedness including the amount of time that they have been holding credit and how aggressively they are pursuing new lines of credit. In other words, a person who has had no defaults against his name but carries four or five credit cards, all maxed out will also come under the bankers’ scanner.
What heightens the pressure on UK borrowers is that most remain unaware of their credit status until their application gets turned down. Moreover, most often these credit liabilities are incurred under unavoidable circumstances like unemployment, divorce or redundancy etc.
Every now and then you hear of people being refused loans on account of their bad credit scores. However, you must take heart in the fact that there are a lot of lenders who specialise in lending to people with unimpressive credit reports. These lenders see in you the earnestness to settle your debts and hence extend to you their offers on debt consolidation loans.
About the Author: The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting http://www.adverse-credit-debt-consolidation.co.uk as a finance specialist.
Late payments on credit cards, automobile loans, and medical bills can greatly reduce your credit score and give you a bad credit label. Years ago, it was extremely difficult to get approved for a home loan with bad credit. However, many lenders are offering a range of bad credit loans that make homeownership a reality for the millions of people living with poor credit.
How to Benefit the Most from a Bad Credit Mortgage Loan
Bad credit mortgage loans have several benefits. Many people avoid these loans because of the higher interest rates. Instead of focusing on the negative aspect of bad credit mortgages individuals should reflect on the fact that these mortgages can help improve credit rating. Higher credit scores will qualify you for better mortgage rates in the future.
Although individuals with poor credit have options, it is important to take necessary steps to help improve your credit score before applying for a home loan. Moreover, when the time comes to find a lender, shopping around is essential for locating the lowest rate.
Make Slight Credit Improvements before Applying
Improving credit score is a long process that requires determination and patience. If you are hoping to buy a home with past credit problems, it’s wise to fix credit issues before applying for a mortgage. Credit has a huge role in the approval process. Lenders prefer good credit applicants. Nonetheless, they are willing to work with those who have a low credit score.
Having good credit opens the door for many financing options. Furthermore, better mortgage rates are offered to those with a high score. There is a difference between having bad credit and terrible credit.
If you have bad credit, getting approved with a comparable rate is doable. However, you must search for a good lender. On the other hand, if you have very bad or terrible credit, it may be more beneficial to delay buying a home and make credit improvements.
Request Quotes from Multiple Lenders
Shopping around for the best mortgage rate is critical for homebuyers with bad credit. Too many lenders prey on individuals with a low credit rating because they have fewer options. The key to avoiding a lender’s scam involves shopping around and comparing quotes.
Visit www.abcloanguide.com/lessthanperfectcredit.shtml for a list of bad credit mortgage companies. View our recommended lenders for a bad credit home loan.
Using a credit card wisely is an important step in building a good credit rating. If you’re trying to re-build your credit or if you’re young and just starting out, pay close attention the next time you receive a new card offer in the mail. When you’re trying to build a positive credit history for yourself, using the right credit card makes sense. Making small purchases and then making your payments on time each month is a simple, reliable way to build an outstanding credit report.
What to Look For On a Credit Card Application
If you receive a credit card application that appears to offer a low monthly interest rate, don’t make a decision until you turn it over and closely examine the Disclosure Box. In it you’ll find a more important measure of credit terms - the Annual Percentage Rate, or APR. By federal law, the Disclosure Box will also tell you whether or not the card has what is called a grace period - a number of days, usually 25, until your purchase starts to accrue finance charges. If a card has a reasonable grace period and you pay off your balance at the end of each billing cycle, you won’t have to pay finance charges. It isn’t difficult to find credit cards that offer these grace periods, so if the Disclosure Box doesn’t declare one then throw the application in the trash and look for a better offer.
If you don’t have any credit history at all, a credit card company won’t want to give you a very high credit limit, but that’s probably best when you’re just starting out. You don’t want to be tempted to go into serious debt with your very first credit card.
Calculate Your Monthly Finance Charges
Ideally you want to pay off your balance each month to avoid paying any finance charges, but when that isn’t possible it’s important to know the actual cost of the items you purchase. The annual percentage rate, divided by 12 months, gives you the periodic rate that will be applied to your outstanding balance each month. You can estimate what your monthly finance charge will be by multiplying the periodic rate times the outstanding balance. It may sound complicated at first, but taking the time to learn this simple equation can make a big difference in how you use your credit card.
When you’re able to see how much you actually spend on an item that you don’t pay off at the end of the month, it might help you to resist the temptation to over-use your card. An item that you want to buy might be on sale at the time you purchase it, but if you don’t pay off your balance at the end of the month then those finance charges can dramatically increase the actual amount you’ll end up paying.
Use Your Credit Card as a Tool
Credit cards are only one of the tools available to help you build a positive credit history. Making on-time payments for other forms of credit, such as rent and utilities, are also important. Depending on your situation, within 1-2 years your credit rating will be improved enough that you no longer need to use your card for new purchases to maintain your good credit. Use these tools wisely, and they’ll help build your financial future!
This article courtesy of http://www.ult.net. You may freely reprint this article on your website or in your newsletter provided this courtesy notice and the author name and URL remain intact.
An investigation organized by Egg says consumers have greatly underestimated the amount that credit cards are used throughout the United Kingdom, what this means is consumers are spending a lot more than they think. The investigation revealed that when consumers thought they had spent was £236billion was in fact £437 billion, some difference!
How come there is such a big difference?
Well most of us usually pay for everything with the plastic card and find it hard to keep track of what we spend.
Most people have more than one credit card and a lot of them transfer their balances from time to time to get the best interest rate, so when you are working with two or more credit cards it’s easy to miscalculate how much you’re spending, and with so many different payment options for you to choose from you can see how there can be such a difference in what we spend, over £200billion! scary or what?
Another question you have to ask is, if we do not know what is in our accounts how do we know we are not getting ripped off?
Six out of ten consumers didn’t know how much was in their accounts so money could be taken out and they would have no idea. Mind you some would say (not me you understand) if you don’t keep track of your money you deserve to have it pinched.
The British Bankers Association revealed that by the end of September, credit cards sales had fallen for the last two months indicating that consumers are being careful, but with Christmas around the corner I am sure the credit card sales will be up and we will have another bumper spending spree with the plastic cards.
So the question was, are we underestimating what we are spending? well the facts definitely say yes!
So what should we do about it well keep a tighter grip on your accounts, double check what’s coming in and out and make sure everything balances at the end of the month.
good luck!
Some important contacts:
http://www.bba.org.uk
http://www.cccs.co.uk
Peter Kenny has been writing financial articles for the last five years and offers great advice on credit cards and loans more information can be found at creditcards-gb and moneywize.
The old adage “if you want something done right you have to do it yourself” applies very well to credit repair. You are the best person to ensure that the problem areas on your credit report are dealt with appropriately.
You may be asking yourself, “Where do I begin?” For starters you will need to have copies of each of your credit reports from the three national credit bureaus: Equifax, Experian and TransUnion LLC. For more information on how to get your credit report read the article “Getting Your Credit Report is the Key to Credit Repair” on Cashbuzz.com.
Once you have your credit reports in hand, scour them for any inaccuracies or negative financial information. This must be done for each individual credit report, as each of the credit bureaus may have been provided with different information on your accounts.
Highlight anything that may be negatively impacting your credit score. Any late or missed payments, loans in default or accounts close to or over their credit limits should be highlighted. If you also see any accounts listed on your credit report that you don’t remember opening, make sure to highlight those accounts.
The next step in repairing your credit is to pick up a phone and call the creditors who are reporting negative information on your credit report. You may be pleasantly surprised at how many creditors may be willing to help you after you’ve explained your situation.
If there is any negative information on any of your credit accounts that you don’t think is correct you will want to file a dispute with the creditors in question. You may need supporting documentation to support your claim. For example, your credit card company claims they received your monthly payment check late in June of 2004, but you have a copy of the check that was stamped as cashed by the company before the due date that month.
Even if you don’t have any supporting documentation but know the item in dispute is incorrect, you should still file a dispute. Through legislation enacted in the Fair Credit Reporting Act (FCRA), your creditors have 30 days to investigate any claim you make to determine whether the information is indeed incorrect.
If you know some past negative information posted by a creditor is correct, but your account is currently in good standing, you may be able to negotiate with the creditor to take the negative information off your report. By law, if you have any negative information on your credit report that is at least 7 years old you can get this information removed.
If there are any accounts on your credit report that you don’t remember opening you should try to get them removed from your report. Any accounts tied to your credit report that shouldn’t be there may bring down your credit score and indicate potential fraud.
A lot of identity theft scams involve crooks who open credit card accounts in other people’s names, build up a positive payment history and then max out the credit once the attached line of credit increases. Many consumers find out about this fraud after their credit has already been damaged or destroyed.
Not only can too many credit accounts negatively impact your credit score, but having too few accounts can be harmful as well. If you don’t have many established credit accounts your credit score may be much lower than you would expect. If you have any department store or gas card accounts that are in good standing you may be able to get these accounts added to your credit report, which may increase your credit score.
Your credit could also be negatively impacted by credit accounts that are close to their credit limit, over the limit or in default. If any of your accounts are close to or over their individual credit limits, you will be paying a lot of money in interest charges and other fees. If you can convince your creditor that you can no longer afford to make such high interest payments on the account, your creditor may be willing to lower your interest rate. If you have any accounts in default you need to contact the creditor and establish a new payment plan.
The one thing you must remember if you plan to repair your credit is to be patient! It may take a lot of time and effort on your part to get your credit score to where you want it to be.
The steps you take now to repair your credit will pay off in your financial future.
© cashbuzz.com
John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information, and active link are included.
