Category: Personal Finance (Page 7 of 8)

      Three Things That Can Severely Damage Your Credit Score

      July 23, 2011 /

      Debt and credit score: even the words themselves are ugly and somewhat scary. Whether it’s our general fear of being graded on anything or the short, staccato sound of the word “debt,” many of us would rather not include those words in our vocabulary. Unfortunately, we have to. Understanding what our credit score is and what factors can negatively impact us can help ensure a healthy financial outlook for our entire lives. Even if you’re currently in debt, it’s a good idea to understand how these three factors can negatively impact your credit rating in a massive way.

      Just a Little Late Is Too Late

      When you consider your credit score, one of the biggest factors that goes into the calculation formula is your payment history. 35% of your overall score is actually based on your payment history. Generally, being late on payments will quickly impact your rating negatively. Luckily, one of the best ways to address a poor credit rating is to make regular, on-time payments. If you have a chance to run your credit report and see multiple entries for late payment, it’s time to figure out a better way to pay your bills on time. Visit plaingreenloans.com whenever you’re in danger of making a late payment. Remember, while not all companies report on late payments, credit companies and many utility companies do.

      Charge Off Doesn’t Mean Gone

      Most people find themselves in the difficult position of being unable to pay one or more bills at some point in their life. Failing to pay your credit card bills has a negative impact on your rating, but it doesn’t stop there. After a predetermined period, companies will “charge off” your debt. This doesn’t mean the debt goes away; it simply means the company does not believe it’s collectible. Having one or more charge off accounts on your credit rating is a red flag for any financial institutions you’re hoping to borrow money from. Instead of not making your payments, visit plaingreenloans.com to help get you back on track.

      Foreclosure – More Than Just Losing Your Home

      With foreclosures reaching epic numbers in the country, more and more people are faced with the word “foreclosure” on their credit report. Unfortunately, it’s one of the most negative items that can appear. If you’ve had a foreclosure, there isn’t much you can do about it, so it is important to work closely with your loan holder to rehab your loan before you get to the foreclosure point. If you are having trouble making a mortgage payment, visit plaingreenloans.com for temporary cash relief.

      Having a bad credit score isn’t the end of the world, but it can make things very difficult. Stop being afraid of the words “debt” and “credit score” and start taking control of your financial future.
       

      Personal Finance

      4 Ways to make sure your credit actually stays credit

      June 4, 2011 /

      Credit cards can be useful, but they are also potentially dangerous things. When provided with a credit limit that on the surface doesn’t appear to affect their bank balances, many consumers can end up overspending on their credit cards and go into debt. Credit cards are only really useful when they are used in an emergency or when making especially large purchases. Bearing the following pieces of advice in mind will help you make sure that you don’t overuse your credit privileges and end up getting into financial difficultly later on.

      Pay Your Balance Quickly

      One of the quickest ways to get into trouble with a credit card is by accruing interest. Credit card companies require a minimum amount to be paid off each month. If you continue to add purchases to a card that already has a deficit, then your minimum repayment figure will go up and up. Pretty soon, you may find that you are only paying off the interest each month and not making a dent in the overall balance. Make sure you keep up monthly payments of a sizable figure to help take large chunks out of your debt in one go. If possible, pay it all off at once.

      Don’t Pay Late

      This is another common problem with people in debt. Putting payments off because of poor cash flow or bad financial planning can lead to serious problems. Paying a balance late reflects badly on your overall credit score. If you consistently pay bills later than 30 days after their due dates, then you may be the subject of an investigation. Even if you can’t pay off the entire balance on time, at least try to pay some of it off.

      Use a Prepaid Credit Card

      One way to avoid the regular mishaps of having a credit card is to use a prepaid card. These cards keep you out of financial trouble because you can only spend the money that you have, rather than using credit that you don’t have. You can control spending with the REACH card to help you keep out of financial trouble.

      Keep Your Old Credit Cards

      A good way to build a strong credit rating is by using a card that you have had for a while. The longer you have owned your credit card, the more trust you will have with the banks because the chances are that you have been paying off debts for a long time. This means that the chances of your become a risky investment for them further down the line are smaller.
      Banks will be more likely to reward you with bonuses such as a higher credit limits and lower interest rates.

      A little credit can be a dangerous thing, but if you pay attention to your finances and keep and eye on what your credit rating is like, you should be able to keep yourself out of financial trouble. How have you managed your credit? Have you encountered any difficulties not include above that other people should avoid?

      Personal Finance

      Basic budgeting for new graduates

      June 4, 2011 /

      The Cleveland Plain Dealer has a good article on basic budgeting for new college graduates, but this advice can apply to everyone. The advice might seem obvious, but unfortunately many people, let alone young people, have no idea about this stuff.

      A smart budget has three building blocks: the money you make, the money you spend and the money you save.

      Once you draft a budget, you may discover your plans outstrip your actual income. The good news: You’re only in debt on paper.

      The real value of a budget is it lets you spot potential money problems and fix them before they hurt you or your credit rating.

      Check out the whole article, and you’ll be on solid financial footing for your life if you learn the basic rules of budgeting.

      Budgeting, Personal Finance, Saving

      Collapsing home prices are good for the young

      May 9, 2011 /

      Robert Samuelson is usually bringing bad news. He’s a respected economist, but nobody will accuse him of being an optimist. In fact, he’s very bearish on our fiscal future and he believes that life will be more difficult for the next generation of Americans given our massive debt and the inevitable need for higher taxes or cuts in benefits like Medicare and Social Security.

      But he sees a silver lining with the collapse of housing prices. It’s terrible for anyone who bought a home in the past decade, but it’s good news for young people who home to buy a home some day.

      But housing’s troubles may have a silver lining. If you’re a homeowner, the steep fall in prices is calamitous. But if you’re a future buyer, it’s a godsend. What we’re seeing is a massive wealth transfer from today’s older homeowners to tomorrow’s younger homeowners. From year-end 2006 to 2010, housing values fell $6.3 trillion, reports the Federal Reserve. Assuming there’s no sharp rebound in prices — a good bet — that’s $6.3 trillion the young won’t pay.

      Up to a point, the lower home prices merely deflate the artificial “bubble.” But there’s evidence that the declines transcend that. The National Association of Realtors routinely publishes a housing “affordability” index, which judges the ability of median families to buy the median-price home at prevailing interest rates. By this measure, existing homes are the most affordable since the index started in 1970.

      Young buyers “will be able to enter the housing market at bargain prices,” argues NAR economist Lawrence Yun. When home prices again rise, increases will parallel income gains, meaning that the relative burden of housing costs will remain roughly stable, Yun says. He expects only modest increases in interest rates. (A rise of one percentage point — say, from 5 percent to 6 percent — on a $150,000 mortgage boosts the monthly payment about $95.)

      The important thing for young people, however, is learning to avoid credit card debt. If they don’t learn this lesson, lower housing prices won’t matter much as they wont be able to afford a mortgage payment if they’re loaded up with credit card payments.

      Frugality, Personal Finance, Real Estate, Retirement, Saving

      How much does net worth matter?

      April 18, 2011 /
      Donald Trump speaks to the press during an announcement that Trump is investing in the development of luxury properties in the country of Georgia at a press conference in New York March 10, 2011. REUTERS/Lucas Jackson (UNITED STATES – Tags: POLITICS BUSINESS)

      For shallow fools like Donald Trump, net worth means everything. Yesterday he was bragging that he was worth more than Mitt Romney, as if that mattered when judging someone as a businessman, let alone a President or a person.

      Net worth does not equal happiness, and it doesn’t always reflect ability. Of course we want to increase our net worth, as it helps to make your life less risky and more comfortable. But don’t fool yourself into thinking that net worth means everything. If you do that, you’ll neglect things like family and relationships.

      Also, as we’ve seen over the past decade, net worth can be the result of many things, including luck and sometimes fraud.

      Donald Trump has been a very successful real estate developer and self-promoter. He deserves credit for that. But he also started with significant resources from his father, and he happened to make a bet on New York City at the right time. That said, his business ventures outside of real estate have not fared very well (other than his turn as a reality TV star, and we’ve seen from the likes of Snookie that you don’t need much in the way of talent in that arena).

      Mitt Romney was a very successful business consultant. He was successful in a range of businesses, so Trump’s net worth crack is just silly and demonstrates how shallow some rich people can be.

      Personal Finance, Real Estate

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