What is Credit?
July 23, 2008
Ever wondered what is credit? Credit is more than just a plastic card you use to buy things - it is your financial trustworthiness. Good credit means that your history of payments, employment and salary make you a good candidate for a loan, and creditors - those who lend money or services - will be more willing to work with you.
Having good credit usually translates into lower payments and more ease in borrowing money. Bad credit, however, can be a big problem. It usually results from making payments late or borrowing too much money, and it means that you might have trouble getting a car loan, a credit card, a place to live and, sometimes, a job.
A bad credit history can haunt you for a long time - seven years or more. That’s why the best thing to do is learn how to maintain good credit before there’s a problem. While this might seem complicated at first, it gets easier once you understand the basics of credit and how it works.
Did you know that there are companies that keep track of whether you pay your debts and if you make payments on time? Then these companies make this information available in the form of a credit report and score.
Home Equity Loan - Is It For You?
July 22, 2008
A Home equity loan has become an easy way to not only pay off other non-deductible debt, but to come up with large wads of cash for remodeling projects, vacations and more. People have financed college educations with a home equity loan, so your imagination is your only barrier. There are few if any restrictions on a home equity loan because in essence you’re using your own money. With housing markets booming over the last several years, and no definitive end in sight, the higher prices we find attached to our homes has sent the equity soaring too. It’s no longer necessary to gamble in the stock market if you’re looking for large returns: just own a house, and then use a home equity loan to fund your particular needs.
My Student Credit Card Adventure
July 21, 2008
And some practical advice too!
My first credit card?
I remember my college days when it seemed there was a credit card advertisement on practically every bulletin board on campus. The banks would travel to the college and set up application booths on registration day. Hundreds of students would apply for a credit card. As an enticement, we were offered freebies like T-shirts, water bottles, and key chains. So I took whatever they were handing out. You can’t beat free. The next thing I knew, I had signed on the dotted line. It wasn’t long before that little plastic card arrived in the mail. It was time to establish my credit history. I was off to the mall. Life was good!
Stuff happens?
I made my student credit card the solution to all my financial emergencies when I attended college. Needless to say there were plenty of them. There were tuition bills, school supplies, car repairs, and midnight pizzas to pay for. The old saying was true. "When they’ve got you, they’ve got you". That little piece of plastic bailed me out of more financial predicaments than I could count. I honestly don’t know what I would have done without it. The student credit card "thing" was a pretty cool idea.
Mortgage Loan Information - Know The Basics When You Refinance or Purchase a Home
July 20, 2008
If you are currently looking for a new home, chances are that in all the excitement you won’t really give any thought to the type of home loan mortgage you take out, instead going with the first one offered to you. This could be a serious mistake ? costing you thousands, if not tens of thousands. Make sure you know all about the different types of home mortgage loans before you starting looking for that new dream home!
Here are some of the basic types of mortgage loans:
Fixed-rate home loan mortgage -
As the name suggests, this is a plain-vanilla home loan. Basically you borrow a certain amount over a certain period at a fixed rate of interest. You then pay the same monthly installments for the life of the home loan. The benefit of a fixed-rate home loan is that you can easily budget for the repayments. The downfall of a fixed-rate home loan is that you could end up paying a higher rate of interest than everyone else ? no one knows what interest rates will be in 15-20 years time!
Adjustable-rate home loan mortgage -
Budgeting Your Way to Financial Freedom
July 19, 2008
Financial freedom cannot be achieved without budgeting. Budgeting involves tracking your sources of income and more importantly tracking your expenses. It is novel tool for controlling your expenses and making you aware of how you spend your money. At the outset, budgeting may seem to be onerous and boring, particularly for those of us who hate numbers. But once you realize the benefits emanating from it, you will find it an interesting exercise. Even businesses, whether small or large, use budgeting as a tool to achieve their financial goals. It is, in fact, an integral part of managing an organization.
Benefits of budgeting:
Helps to control impulse buying.
Helps to control your expenses.
Ensures that you pay your bills on time.
Helps you to borrow money when you need it.
Helps you by not defaulting on your loan repayments, thus, protecting your credit rating.
Helps you to save money which can routed to different investment vehicles that can in turn help you build your net worth over a period of time.
The budgeting process
The first step in the budgeting process is to determine your net worth.
What is Credit Scoring?
July 18, 2008
Have you ever wondered what is credit scoring? Credit scoring is a system creditors use to help determine whether or not to give you credit.
How does a creditor decide whether or not to grant you credit? Creditors use credit scoring systems to determine if you’d be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans.
Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report.
Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points (a credit score) helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.
How To Avoid Becoming A Victim of Identity Theft
July 18, 2008
With identity theft statistics currently at an all time high, and climbing, it just makes sense that we should all be doing everything we can to protect ourselves.
One of the most prevalent yet overlooked ways your personal information and passwords may be being compromised is through the presence of Spyware on your computer.
Note these very disturbing Facts about Spyware and Identity Theft:
- 27.3 million Americans have been victims of identity theft in the last five years, including 9.91 million people or 4.6% of the population in the last year alone.
- Spyware infects 91% of all computers. That equates to an alarming 9 out of 10 computers!
Stop thinking Identity Theft can’t happen to you. It can.
Spyware is without doubt the most prevalent threat to online computer privacy and security.
You maybe wondering, exactly what is Spyware?
Spyware applications are programs and files that hide on your PC’s hard drive without your direct knowledge. They allow hackers and advertising companies to track your every move, both online and even when you work offline.
Mortgage Cycling May Be Your Best Bet For Equity Buildup and Investment Real Estate
July 17, 2008
Mortgage cycling is a system that relies on solid budgeting, equity lines of credit and use of an open credit card. Whether you use this on investment real estate or your own home, it can work for wealth building. If you are short on equity in your home and/or don’t have an open credit card, a decent-sized savings account or money market will get your mortgage cycling started just as easily.
Mortgage cycling is a legitimate method for fast mortgage reduction and equity buildup. This may be a strategy unknown to many people in investment real estate, as well as those who simply want to save thousands on their mortgage. Now, this is not the pay off your mortgage in six months to one year that some of the more unscrupulous programs boast. Successful mortgage cycling relies on disciplined spending habits.
The mortgage cycle involves the use of an equity line of credit to apply large lump sum payments to the principal balance on your mortgage. Although the mortgage cycling system is much more complex than this, it is not too difficult for someone who does not understand mortgage and equity loans.
What is Credit Insurance?
July 16, 2008
Are you wondering what is credit insurance? Very simply, credit insurance is an insurance policy that protects a loan on the chance that you are unable to make the repayments. The next time you have occasion to apply for a loan or mortgage, you will be asked if you want to buy credit insurance, or it might already be included in your loan proposal. If so, it will increase your loan amount and you’ll pay additional interest.
Credit insurance usually is optional, which means you don’t have to purchase it from the lender. Before deciding to buy credit insurance from a lender, think about your needs, your options, and the rates you’re going to pay. You may decide you don’t need credit insurance.
If you decide to get credit insurance be aware that it can be an expensive form of insurance. For example, it may be less expensive and more practical for you to get life insurance than credit insurance.
Before deciding to buy credit insurance, ask the lender the following questions:
How much is the credit insurance premium?
Will the credit insurance premium be financed as part of the loan?
Mortgage Advice To Make Mortgages A Really Smooth Ride
July 15, 2008
Mortgages are easy as long as you understand them well. But how many borrowers can be confident of their knowledge of mortgages.
With the list of terms and terminologies related to mortgages growing fastly, it is difficult to keep pace with it. However, ignorance of law is no excuse. Therefore, it is necessary to be updated in the field of mortgages.
This will not require a wide knowledge of mortgages. A basic understanding of the mortgage terms and the impact that every mortgage decision has on the overall financial condition of the customer will be desirable.
Once the need for mortgage advice is created, it is easy to get it. There are various articles on the topic. Newspaper clippings, seminars etc. can be valuable source of information. Friends and relatives who have taken mortgages too can provide valuable information. These explain the various terms associated with mortgage in easy to understand language.
Nevertheless, whether or not the advice given is independent still needs to be ascertained. Independence of the advice is an important criterion by which borrowers rate its value. Some sources are just selling their mortgage products in the guise of independent mortgage providers. It is important to stay away from these advisors. They tend to hide the disadvantages of the products while enumerating its advantages.
