Oct 23rd 2006
Debt consolidation financing allows an individual to combine all of their outstanding bills into one monthly payment. Usually this is done through a debt consolidation company, who works with the creditors in question to reduce interest rates and set up a financing arrangement that allows the debtor to pay the balance in full over a specified period of time.
Consolidation of loans can help decrease immediate pressure of repayment. It is a strategy of combining all existing debts under a single loan by a consolidation agency. The company pays off all existing debts and you have to pay them under a new distinct loan. There are many companies who do this. Pros and cons of selected companies must be weighed before going in for consolidation.
Oct 18th 2006
The most commonly used credit score is the Fair Isaac Corp. score, or the FICO score. The score runs from 300 to 850. A score above 750 is generally considered good and a score below 620 is considered risky. The range between the two depends on the lender looking at the score. FICO uses information from your credit report, which is compiled by three major credit reporting agencies, to calculate your credit score.
Credit scores are only part of the information that lenders look at when making a lending decision and a low score is not necessarily a fatal blow. Each lender has its own strategy and level of risk and each has its own cut-off point below which it will not extend credit at any price. But knowing the hows and whys of credit scoring is essential to anyone thinking about a purchase money mortgage, a refinance, or a home equity loan in the near future.
Oct 16th 2006
In choosing a credit card, think about how you plan to use the card. If you intend to use the card for current expenses and pay it off each month, you’ll want a card with no annual fee and a grace period. If you intend to use the card for large purchases that you over time, then you should look for a card with a low APR (annual percentage rate). No matter what your plans are, you will want the lowest cost credit card you can find, so shop around before requesting a card.
Before applying for a credit card ask yourself these questions:
- Why do you want/need a credit card? – Maybe you need one credit card with a special interest rate to transfer balances from multiple accounts or perhaps you need a card specifically for business purposes.
Oct 13th 2006
One of the great things about using a credit card is that you can buy now and pay later. But some consumers take the pay-later concept to an extreme — they pay only the minimum amount due on their card’s outstanding balance each month and end up paying the maximum costs. The minimum monthly payment on most credit cards is usually calculated as a certain percentage (often around 2 percent) of your total balance.
Your payments include both interest and principal (the amount you borrowed). When you pay only the minimum payment, most of it goes towards interest, which is why it takes so long to pay off the original debt. You wouldn’t pay $7,000 for an item that is clearly marked with a $2,000 price tag, would you? Yet that is exactly what you’re doing when you buy it using a credit card with an 18% interest rate and then only pay the minimum balance each month. Credit card interest is wasted money that you could have used instead to help reach your financial goals.
Oct 8th 2006
A credit card is a form of borrowing that often involves charges. Credit terms and conditions affect your overall cost. So it’s wise to compare terms and fees before you agree to open a credit or charge card account. The following are some important terms to consider that generally must be disclosed in credit card applications or in solicitations that require no application. You also may want to ask about these terms when you’re shopping for a card. Broadly speaking, there are three types of credit card accounts. They are: bank cards (such as Visa and MasterCard), store/priority cards (such as the Bay and Sears) and travel/entertainment cards, also called charge cards (such as American Express or Diner’s Club).
Before you submit a credit application, get a copy of your credit report to make sure it’s accurate. The three major national credit bureaus are: