Category: loan

Four unexpected situations where bad credit hurts

It is a common misconception that if you do not have any plan to get a big loan in the next few years, you probably need not be concerned about your credit scores.This is not actually the case. Regardless of whether you have any plan to get a big loan or not, it is advisable that you must keep your credit record free of inaccuracies. You might know that your loans will be affected by your credit score. The higher the score the lower the rate you will get on mortgages, car loans and credit cards. What if you do not have any plan to get a mortgage or car loan? In this case, does your score matter? Yes, it does matter.

Four unusual situations where the bad credit or an inaccurate report is likely to harm you are discussed in detail below:

Prospective Employers:
Employers, while making decisions about your hiring, firing and promotion, may make inquiries into your credit report. If you have bad credit score then it is most likely to leave a bad impression on your employer and may affect your career.

Federal law gives you protection against the adverse decisions that the employer may make against you. You will be immune to such adverse decisions only if you file bankruptcy (Title 11, Bankruptcy, of the U.S. Code), otherwise every other negative item may be used against you. If you are a loan defaulter or you have missed a payment of your loan then this puts you in a vulnerable position. In this case the employer can use that information against you. It is known that government runs routine background checks on your personal records like criminal history and credit history. If you have a low credit score then this may weaken your position. Such a person could be considered a potential security risk because, due to his financial constraints, he is more likely to be bribed or may easily be exploited. Credit history information may help establish the credibility of a person.

It is most commonly used for sensitive positions and those that deal directly with money. Your credit history may also help confirm other facts that you presented about yourself. For example, if you said you spent five years working for a firm in North Carolina but your credit history does not confirm that you ever took up residence in North Carolina, then it is a matter of great concern for you and you could be in a serious trouble. Such contradictions in your credit history information need to be rectified on priority basis.

Landlords:
This case is little less common because landlords routinely run checks on your credit history information. Your credit history information helps them establish your financial credibility.It portrays to them a complete picture of your financial dealings with others. Looking at your credit history information they may easily assess financially how trustworthy you are and how good you are in meeting your financial commitments like paying your monthly rent on time. Your credit history information is a record of all your late payments and evictions. These are the two categories landlords are most concerned about. It also portrays a good picture of renter’s debt burden and debt profile. This can help a landlord decide which renter may be a pain in the neck and which renter is most likely to cause very little troubles.

Insurance Companies:
For evaluation of your premium ,insurance companies rely on your credit history information.Their actuaries have experienced that a person with low credit score is most likely to make higher claims on insurance. There are theories that support the truth of this proposition. Apart from this statistical data also supports this policy. The lower your score, the higher your premium will be. This proposition applies to all sorts of insurance policies from auto to home to renters.This policy will also apply to medical facility if you seek out independent health insurance. If you avail yourself of medical facility through your employer then this policy is not applicable to this particular case, because as an employee you are treated as part of a “class”, rather than an individual.

Cell Phones:
Cell Phone companies also rely on your credit history information while offering you service. If you have a bad credit and want to get a cell phone connection, you may be surprised to learn that the cellular company will demand you to deposit some amount as security before they could offer you service. With bad credit history, you will also have no access to a great many special offers and free equipment that many companies offer for a new customer. The reason companies do this is because your bad credit history leaves a very bad impression on them and this reflects to them that you are not good in meeting your financial commitments on time and are most likely to delay payments of your phone bills. Cell phone companies actually offer you a month’s service on credit for which you are supposed to pay ate the end of the month.If you have a low or bad credit then you are not considered creditworthy person. This may develop a trust deficit between you and your cell phone company. So you are not expected to pay on time and that’s why the cell phone companies demand a deposit. This explanation holds true for other monthly service providing companies like cable television and internet service.

Conclusion
From above discussion, it may easily be concluded that your credit history information and your credit score are likely to affect all aspects of your life even if you don’t have any plan for getting a loan. Therefore, it is deemed seriously important to regularly check on your credit history and your credit score. If you see some inaccuracies in your credit history, you are advised to rectify them at your earliest convenience. The only place where you can get a free copy of your credit report is at www.AnnualCreditReport.com. This is a government sponsored website and offers free credit history information.… >>>

9 Good habits to survive a deep recession

The recession is here and will stay with us for a while. No one really knows how long this financial crisis will last but one thing is certain, it will be the worst financial crisis of our lifetime. People have lost jobs, homes and life savings. Banking system is under lot’s of pressure so are consumers and companies. All news is bad news these days.

Still for some it is time for learning the most valuable life skill. The skill to manage finances in bad times is what every one needs.vSo we thought we should do our part in helping you get started with some tips.

Here are 9 tipsvthat will help you urvive a long and deep recession.

Stay Calm
Don’t panic or sell all your investments. Keep a cool head and don’t let your emotions take over. Think about long-term profits and stay calm.

Pay off all your debt
Pay off all your debt as soon as you can, as this can be your biggest enemy during recession. This includes your payday loan, car loan and all your credit card bills. Use the highest-interest first or the snowball method, but become debt free.

Keep a track of your spending
Keep a record of where all your money goes. There are many ways to track your spending and make a budget. Online solutions, such as Mint.com and Wesabe.com, and others like Quicken and Microsoft Money are also available. Just make a budget and stick to it.

Eliminate Extra Spending
Once you’ve made a record of your spending, Remove all the extra expenditure from your budget. Things that you don’t use very much, or you can survive without, should be eliminated from your budget.

Buy Smart
Think before you buy. Make a list of your grocery and you’ll be surprised by how much you save just by thinking ahead a little.

Buy Used Stuff
It is better to buy a high quality used item rather than a cheaply made new one as the higher quality lasts longer. Look for used cars, clothes, furniture and anything else that you want to buy. A late model used car is a better value than a new car. If you are going to buy a new item, buy a high quality product and do some research on it before you buy.

Tidy Up Your Finances
Make sure that your credit score is good and your finances are in order as the next year might be a good time to refinance. You are entitled to one free report per year from each of the credit bureaus; so if you need to check your report, contact your credit bureau.

Understand Your Investments
Before you invest in anything, make sure you find out all the details and understand the risks completely. Also, if you are working with some financial advisor, ensure that he is not a fraud.

Keep Cash In Hand
It is always good to have some cash in hand. You should have at least 3-6 months of living expenses in a savings account for emergency use. You can also save money by paying cash, as during recession, cash is your friend.… >>>

Beware the repo man

I’ve owned quite a few old junkers in my life and a few brand new cars as well. I seem to alternate between the two. Sometimes it’s because I don’t have the money to buy a new car and sometimes it’s because I just get tired of making the monthly payment. When I was young, it was a steady stream of junkers for both of those reasons.
Once I save up my money and bought a car from a car lot named USA Used Cars. In the town where I live there are a bunch of these types of places, the ones that usually have “Buy Here, Pay Here” in huge bright neon letters pasted across the front window. Of course, they’ll finance anyone whose breathing but that person probably won’t be breathing that long because the payments and interest they charge will suck the life out of him.

OK Used Cars was just like the rest of them, but a lot bigger, taking up a good two city blocks filled with expensive junk. But they did have a limited warranty on most of their vehicles and they only charged a flat 10% interest, so they were probably the best in town.

My friend and I looked around and finally found a car in the price range that I could afford. It was an old Chevy that was kind of rusty and had a dent in the side, but it started right up and ran smoothly and the tires were good. I intended to pay cash for the car so I didn’t have to mess with a monthly payment and the interest. One thing I’ll have to say for OK, they didn’t give you the hard sell like some lots do. The salesman literally ran past us. I shouted that I’d give him a couple hundred dollars less than what was on the windshield and he yelled back “Fine, see the sales manager inside.”

The sales manager was a heavyset fellow with a southern accent who was sitting at his desk having lunch and talking on the phone about a hunting trip that he had just gotten back from. We told him which car we wanted and he pulled a big stack of paperwork out of his desk. He took down the basic information like where I lived and my employment. then he started asking really weird personal questions like where could I be found late at night and did I have a girlfriend? I finally asked him why he needed all of this personal information and he replied “So we can track you down and take the car back if you default on the loan.”

He then started going on about how many people try to screw him out of his money. I interrupted and told him that I wanted to pay cash for the car. His face brightened and he said “Well, in that case all you need is to sign the title” as he proceeded to tear up all the papers.

According to the St. Louis Post Dispatch, more and more cars are being repossessed in these tough economic times. It seems like tough times are good times for the repo man. According to the paper, most repo men do towing also. I guess that it’s only natural that the two businesses go together.

But it can also be dangerous work. One repo man here in St. Louis told how he was shot at a couple of times and struck with a baseball bat. And most repo men, like their cousins the bail bondsmen, aren’t totally cold-hearted about their jobs. It’s hard to take away what is sometimes essential to their livelihood, their car. One repo man drove the woman whose car he just possessed to work. He felt so bad about taking her car, he picked her up and drove her home too.… >>>

Is it wise to get debt consolidation refinance service?

If you are wholly dependent on paychecks and living from paycheck to paycheck then be sure you are not alone. Many people, living in such a way, hardly have enough money to buy essentials on a week to week basis. Most of them cannot even remember where they used their money. Just the thing they remember is that it’s all spent now, before receiving their next paycheck.

People lacking the financial wits go in need to file for bankruptcy as it is the only way to relieve themselves from their huge debt and financial obligations. The thing many people don’t have knowledge about is that this way of eliminating their debts also destroys their credit rating and any possibility for gaining a sound financial status. On the contrary there may be some other alternate way – A debt consolidation refinance is just what the doctor has suggested to come out from your current financial confusion.

The main reason anybody could think about opting for a debt consolidation refinance service is because it normally helps ending the annoying telephone calls coming from the creditors and in keeping away the debt collectors employed there. It helps in consolidating all of the bills into one monthly payment, which becomes bit lower then what you had earlier paid in an attempt to relieve some of the financially caused pressure. One more good benefit is that a debt consolidation refinance will not let you file bankruptcy; it means you will ever be recognized as a credit worthy consumer.

Now you may ask; when should I consider looking for a debt consolidation loan or refinance? Normally, the time to consider a debt relief loan is whenever it really becomes hard or impossible to pay your monthly bills. This timely intervention by taking a debt refinance loan will save you from many problematic situations like paying higher interest rates, late payment fees and charges; these are the factors which will just make your already shaky financial status more complicated. Another right time to look for a debt relief loan is when you only give the minimum payment amount payable each month and when all of your credit balances are at same level even after paying monthly dues.

Homeowners take extra advantage over non-homeowners. They can benefit from the facility of asking for a debt refinance loan mentioning the equity in their home or house. Using this option involves the rule to pay off your consolidate bills each month and to avoid receiving any kind of new bills. Never put your house as collateral except when you plan to pay for your new debt consolidation loan.

Make it sure to do your research online so that you can reach a highly reputed debt refinance and Consolidation firm. Most of the companies give an impression of being the great business deal on the outside but it probably can be a loan shark in disguise. These organizations should and must be avoided because these companies can put you under strict monthly payment terms and will obviously demand a much higher rate as compared to any other real lender. Professional debt refinance companies include many non-profit lenders who can offer you many great opportunities and ways in a job to refinance your current debt.

if you research properly you will be able to find a reputable debt refinance company having the ability to help you in lowering your current monthly payment total, eliminating the probability of filing bankruptcy, saving you from being charged with higher interest rates and helping you in maintaining your credit worthiness ranking among consumers.… >>>