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How You Can Become CreditworthyJust a short four years ago, my finances and credit score were horrible. Multiple bad decisions left me with a credit score that was in the 500’s. As someone who was nearing thirty years old, that was not good. I got a better job and decided it was time to get my credit in order. In January 2015, I officially started working on bettering my credit. By August of that year, my credit score had gone up by 168 points. It was unbelievable. Who knew that by making a few changes that my credit would go up? Today, I want to go over some things that you can do that will help you become creditworthy.

Better Job

As I stated earlier, I got a better job. Yu should do that as well. I had been working two part time jobs for six months. I wasn’t making enough money to do anything except for getting by. The next job was just what the doctor ordered. I was able to make more money. This was actually the highest paying job that I’ve ever had. My stress levels went down. I was able to start saving money finally. I also devised a plan on what to do with my debt.

Making more money meant that I was able to get current on every debt that I had. I had been months behind on a few of my bills. To have enough money to get current was great. For some of them, it took me a couple of months to get current because I was so far behind. I was able to get there though. I learned that 35% of your credit score is your payment history. That was more than a third of my score. If you aren’t making enough, it’s time to consider getting a better job. More income will help you.

Pay On Time

The second thing that you can do is pay your bills on time. As I stated earlier, there were times where I was late. That was one of the reasons that my score was so bad. Whatever you need to do, make sure that you pay your bills on time.

Stop Using Credit Cards

The third thing that you should do is to stop using your credit cards. I used to use my cards all the time when money was low, which was a lot back then. At one point I was using 95% of my available credit. That wasn’t smart. The credit bureaus don’t like that. You are looked at as higher risk customer. The ideal credit utilization is 30%. I was nowhere near that amount, so I stopped using my cards. If you’re in a similar situation, you should stop using yours as well.

Doing those three things that I discussed above will help you become more creditworthy. You just have to have a little discipline. I know that anybody can do those things. I was horrible with money a few short years ago. Now, I’m not. Don’t let your past be an excuse. Decide that you want a better score and make it happen.

What is your excuse?

What is Debt Consolidation?A lot of us are in debt. Many people feel helpless when it comes to the debt they have. If you’re flooded in debt, one option that you might have heard about is debt consolidation. There are pros and cons to using a debt consolidation program. In this post, I will be going over how debt consolidation works.

Debt Consolidation 101

Basically, debt consolidation works like this. Let’s say you have four different debts. They total up to $1400 a month in payments. You simply can’t afford the payments anymore.

Instead of going into bankruptcy or going into default, you decided to go to a debt consolidation company. The debt consolidation company will go to your lenders and negotiate a deal to pay off all your loans for you. Typically they will get you a deal for between 25% to 75% off.  That’s a heck of a deal.

The debt consolidation company will pay off the loan; then you will owe them the money instead of your lenders. Instead of having to make four payments, you only need to make one now. Your monthly payment is much lower than your previous monthly loan payment amount.

They need to make money too

Remember, debt consolidation companies, even if they are a non-profit company, need to make money as well. Some companies will structure their program in a way that you will end up paying more at the end of the day. For example, they can lower your $1400 payment down to $900 a month while extending your loan terms by 24th months. This is something that you must consider if you are thinking about going the debt consolidation route.

Your monthly payment may be less, but in terms of the full loan, you may end up paying a couple of thousand dollars more. For the debt consolidation company, it’s a trade off. They need to make money, but if you can’t afford the higher monthly payments, then a smaller monthly payment, with a higher overall payment might be the lesser of two evils. Consider all of your options befoe you make that decision.

How does it affect your credit?

This is the million dollar question. Does debt consolidation affect your credit? Settling a debt is not as good for your credit as paying it off in full. It is better than ignoring it or not paying it off at all.

How it affects your credit depends in part on how delinquent you were before the consolidation. It also depends on if the creditor charged off the debt to a collection agency. If that has happened, the charge-off will appear on your credit report even if the consolidation company reaches a settlement with the collection agency. Timing is everything.

Working with a debt consolidation company does not lower your credit. Getting your debt charged off, settling for a lower amount than you owed and being delinquent on your debt can negatively affect your credit report. Is that something that you want?

Debt consolidation isn’t for everyone. If you are struggling and or near bankruptcy, it may be the option for you.

Is Debt Relief Better Than Bankruptcy?A lot of people have debt. Some are struggling, while others including myself are working hard to pay it off. If you’re struggling with your debt, I know that you possibly have considered bankruptcy or debt consolidation before. Do you consider debt relief a better option than bankruptcy? Do you think bankruptcy will help you out? There are arguments for both sides. It depends on your situation. There are a few things that you should consider.

Pros & Cons of Debt Consolidation

We all know what debt consolidation is right? It is taking one big loan to pay off your other debt. One drawback of debt consolidation is that you are not out of payments. You will still owe money.  You still have to make a debt payment every month. It may be a smaller payment so it might be more manageable.

One key benefit of debt consolidation is that it can address other kinds of debt that bankruptcy can’t eliminate. Some of those types of debt are alimony and child support. With debt consolidation, you’ll have someone that will take you by the hand and guide you through the debt repayment process. That can be a good thing especially if you’re stressing about payments.

One of the main things you need to ask yourself about any debt consolidation program is if you can stick with it or not. Certain statistics show that only 55% of the people who sign up for a debt relief program make it all the way through. So, 45% of people will spend months or years going through the debt repayment process and then give up. That’s crazy. Not only does that cost them money, but it could slow the process of them getting better credit.

Pros & Cons of Bankruptcy

People have different thoughts when it comes to bankruptcy. Some say they will never file for it. Others don’t mind. If they get into a financial situation, they will do what they have to do. The main benefit of bankruptcy is that you basically owe nothing once it’s done. As started earlier, with debt consolidation, you still have to make payments every month to the consolidation company. If you file bankruptcy, you don’t have to pay any more.

The next thing is a huge con. A bankruptcy will knock your credit score down by 200 to 250 points. That’s not something that I’d want to happen. I’ve worked very hard over the last couple of years to raise my credit score to over 700. I wouldn’t want one decision to mess it up.

If you decide to go the debt consolidation route, it is usually reported, but creditors as settled on your credit report. It will impact your score by only 50 points. Your bankruptcy will not only mess up your score; but it will also do something else. Future creditors who see a bankruptcy on your credit report will know that you ran away from your debt. Some of them would be less likely to trust you in the future.

If you have a lot of debt, you want to try to pay if off. If you are struggling, then debt relief may be the better option for you. Just make sure you can stick to the plan. It takes discipline. If you really are having problems, then you may be better off filing for bankruptcy. Before you make any decision review your situation.

credit-card-851502_640A lot of people have a bad history with money. Maybe they took out a loan that was too large to pay back or maybe they lost their jobs and had trouble just getting by, causing their loans to default. Either way, if you have a bad history with money, you may think that you will no longer be able to qualify for a good credit card.

The good news is that there are things you can start doing today to fix your credit so you get approved for those credit cards you may need. It takes time and it isn’t a cakewalk, but if you try hard enough, you can rid yourself of your bad money history and move forward financial. Here are a few tips to establishing credit and get back on track.

Look at Your Credit Report

The first thing any financial institution does before approving loans or a line of credit is to look at your credit history, so you need to know exactly what they will find so you can be prepared.

There are plenty of websites that you can use to look at your credit history, but the important thing is that you look at it thoroughly. There could be mistakes or items that should be expunged from your record but are still on there. These will hurt your chances of improving your credit, so should dispute them with the credit reporting companies. If the same thing appears on all three reports, you need to dispute it with all three companies to make sure the mistakes are expunged properly.

Start With Outstanding Debt

Once you know what’s on your credit history, then you can start fixing it. It will take some time, but you need to start with the largest debts on your report and try to get them taken care of.

You can often negotiate a price that will take care of defaulted loans. You will need to pay a lump sum, but you may be able to settle for pennies on the dollar, saving you money in the long run. Start with the biggest debts and work your way down until all of your outstanding debts are cleared.

Keep Up With Payments

Just one missed payment can affect your credit score, so make sure to keep up with any payments you currently have so the problem doesn’t get worse.

Make sure you pay all of your current bills before you throw money at outstanding debt. This way, your score won’t get any lower and it may even improve a little if you are constantly on time with payments. Pay off all of your credit cards each month if you have any with balances and never be late with payments on things like utilities, car loans or mortgages.

Again, your credit will not improve overnight: it’s a long process that takes time. But if you have a plan and stick with it, you’ll be approved for those new credit cards sooner than you think.

Nicole Humphries works in the personal finance sector and contributes to a selection of blogs with her articles on personal finances.

How to Become a Credit Card ProHello, everyone. Some people can live with, while others can’t. Credit cards can be good for helping you manage your finances. If you use them the right way, they can be useful for building good credit. Even though I wouldn’t do this, they can also be used as a backup plan if you have an emergency. Keep reading to get more info about credit cards and their use.

On time payments

Pay your credit card bill on time each month. If you are the type of person, who may forget the due date, set up a reminder or two. If something happens that doesn’t allow you to pay your credit card on time, don’t freak out. You should call your credit card company as soon as possible and let them know your situation. There is a chance that they may be able to help you out. They might be able to delay your due date, set you up with a repayment plan or work with you in other ways that won’t mess up your credit as much.

Pay the credit card in full

The next thing that you should do is pay the credit card in full every month. I’ll be the first person to say that I haven’t been able to do that. I’ve had credit card debt for years. There were times where I had to use my credit card when I didn’t have a job. It wasn’t possible to pay it in full. Now, I’m doing much better. I’m able to pay more money on it. If you use your credit card for ordinary expenses such as for gas or paying a utility bill, you should proceed to pay off the balance at the end of the month. Doing this will help you build your credit. You will also gain rewards from your card. Lastly, you won’t be getting any debt because you paid off the card.

Watch out for free

Credit card companies target people with freebies. I’ve seen different companies give away shirts, bags and even beach towels. I can’t lie, I’m a fan of free, but you have to be careful and pay attention to any free offer. The freebies that you are offered can be considered traps. The credit card company may lure you in. That could end up costing you a lot of money down the line.

Practice Discipline

It can be easy just to swipe that credit card without thinking. Don’t fall into that trap. Many folks lack the discipline to handle credit responsibly. The world tells you to spend, spend and spend again. Heck, you can get a “Black Amex Card” which is seen as a status symbol if you use a credit a lot. By having discipline, you can avoid getting into debt and possibly messing up your credit score.

Multiple credit cards

If you have multiple credit cards, you have to pay attention to them carefully. You don’t want to mix up the due dates. When you have a moment, review the balances and figure out which credit card you want to pay off first. Paying off the balance of the card with the highest interest rate is a good way to save more money in the long run. If you don’t want to go that route, you can also pay the credit card with the smallest balance.

Credit cards can be great to have. You just have to make sure that you don’t abuse them. They can help you build up credit. They can also make your credit horrible. Practice common sense and discipline when using them.

What Credit Score Does Everyone Start With?Hello, everyone. Good credit is something that everyone strives for. Whether yours is good or bad, you had to start somewhere. Have you ever thought about what credit score everyone starts out with?

What is your beginning score?

Everyone starts out the same. No one has a credit score at all. Nobody starts out with a credit report. Credit scores are based on the info on your credit reports. Those reports are not created until you have had credit in your name for at least six months. Some people think that you magically get credit once you turn 18 years old. It doesn’t work like that, though. However, you can apply for a credit card once you 18.

Build from scratch

Since everyone starts with no credit score, we all have to build it from scratch. You first credit report will have information on the initial amount of money that you borrow. When starting out, you should get a credit card with a low limit. You also need to use it responsibly.

Your first account

When you apply for your first credit card or loan, the lender may pull your consumer report. If they do that, they will find nothing. Everyone will experience this the first time that he or she applies for credit the first time. Once you get that first credit card or loan, there are a few things that you should do to make sure that your credit score goes up.

Watch the amount

If you are taking out a loan for the first time, don’t take out too much money. You don’t want to start a debt cycle that you are not ready for. The same goes with your first credit card. Try not to get a credit limit that is too high. My first credit card had a limit of $500. That was alright with me until they started raising it higher and higher. It went from $500 to $3000 within a couple of years. That’s one of the ways that messed up my credit. That leads me to the next step.

Use your credit card responsibly

I didn’t do that back in the day. I used my credit card for things that I shouldn’t have. I don’t regret it because it was a heck of a learning experience. If this is your first credit card, you should only charge a small amount to your credit card. Then you should pay the full balance each month. This will speed your credit building process. Doing that shows the lenders that you can use the credit that has been offered to you in a responsible way.

Pay on time

Make sure you pay your loans and credit cards on time. Your payment history accounts for about 35% of your credit score. That is more than a third of it. You can see why paying on time is important. If you think you may miss the dates, set a reminder on your phone or in Google calendar.

If you practice good credit habits, your score can go up after six months. If not, it can go as low as 300. You’re in charge of whether your credit goes up or down.

How to Transfer MoneyFrom a Bank Accountto a Credit CardHello, everyone. Hopefully, all is well with you. Today, I have an excellent post for y’all. Many people need money quickly. Someone asked me a question the other day. Is it possible to transfer money from a credit card into a bank account? I sat there and thought about it for a minute. There are a few ways that you can transfer money from a credit card to a bank account. Today, I want to go over three of those ways.

Money transfer card

The first way that you can transfer money from a credit card to a bank account is to consider a money transfer card. A money transfer card is not to be confused with a balance transfer card. The big difference with a money transfer is that it allows you to transfer cash to your bank account. Balance transfer cards don’t do that. When looking for a money transfer credit card, make sure you review the fees. Most of them have a transfer fee. Some don’t charge interest on the cash, though. The money transfer card will give you a length to pay the money at 0% interest. It might be cheaper to do this instead of repaying a debt on your current interest rate.

ATM cash advance

The second way that you can transfer money from a credit card to a bank account is by using an ATM cash advance. An ATM cash advance is when a cardholder withdraws money from their credit card via an ATM. The cash advance will be a percentage of your credit limit. For one of my credit cards, my credit limit is $3600. I could only get $1100 with a cash advance. Cash advances typically have a fee of 3 to 5 percent. To complete a cash advance on an ATM, you will need to know your PIN code. If you don’t have your PIN, you should contact your credit card, provider. They will be able to get the info to you. Once you have that cash, you will be able to deposit it into your bank account.

Credit card checks

The final way that you can transfer money from your credit card to your bank account is by using a credit card check. A credit card check is a check that your credit company offers as a way to write yourself a check for whatever you need at the time. I recently paid off one of my credit cards, and I’ve been receiving credit card checks from the provider for the last three months. I haven’t used them and I probably won’t. The interest rate is very low, but I’m not looking to attain any more debt at the moment.

In review, there are three ways to transfer money from a credit card to a bank account. Using a money transfer card, an ATM cash advance, and a credit card check can help you get those funds into your bank account.

Have you ever used any of these ways to transfer money from your credit card to your bank account?

pier-440339_640Most people don’t think about taking loans out for their vacation and discovering exactly where is NYC, because they’re using loans for things like college educations, homes and cars. But it’s a perfectly legitimate way to go if you don’t have a lot of other major expenses and you know you’ll be able to pay it back. Though, really not many people fall into that category.

Vacations add up after a while, and it can be incredible just how much those tours, meals, late-night drinks, speeding tickets (although dismissible by taking a defensive driving course), will end up costing. So, if you happen to be dead set on going to one of the more expensive places in your budget, keep these tricks in mind.

The Debate

On the one hand, you’ve got a lot of responsibilities. You may have a car payment, car insurance, phone bills, and a mortgage. On the other hand, it’s freezing where you are and not freezing in places to the South of you. On the one hand, you may get sick later this year and lose your source of income. On the other hand, your city doesn’t have a roller coaster next to an ocean. Maybe you’re planning a wedding soon or want to have a child in the future. On the other hand, if you don’t get a helicopter ride over the Grand Canyon, is life really worth living? These are just a few of the major concerns you should have you on your mind before you go about getting your vacation loan.

Credit History

A loan is a loan, so you probably saw this coming. You can probably just file this under any type of personal loan, thought there are companies that specifically will make loans for travel. Your credit score will be just one factor they’ll look at before you’re granted the loan. They’ll also look at things like your collateral and general assets. There is one major warning about all this: taking out a vacation loan is going to increase the amount of debt you have, and it will likely end up costing more than you think if you can’t pay it off in a timely manner. So, that means that if you’re borrowing a loan of $5,000 at 12%, you’ll end up paying close to another $1,000 if you take the maximum amount of time to pay it off. That sounds like a raw deal to us, and perhaps not worth going to Spain for. You may even get a better deal through your credit card, depending on your carrier.

Can You Pay?

This is a pivotal question to ask before you sign on the dotted line. Because chances are, if you’re going for a vacation loan, you may not be the best at managing your finances. Which can likely make things pretty awkward when you think about the rest of the bills that will add up over time in addition to the one that made your skiing dreams come true. Maybe you don’t care that only 2% of those who take out personal loans say they do it to finance their vacation. You do your own thing, regardless of how society tells you to live your life. While we support that, there are a lot of reasons why Americans as a whole own an astonishing level of debt, and vacation loans certainly aren’t helping. In the end, you’ll likely get someone who can help you get a loan, even if you must borrow at ridiculously high rates. It’s not so much a question of how to but a question of should you.