Ways your credit score can be an issue

Ways your credit score can be an issue

When we think of credit scores, the first thing that comes to our mind is how will it impact our access to lines of credit. However, that is not all that your credit score accounts for.

Your banks and financing companies are not the only ones who look into your credit history and dig up your reports. There are more people interested in your reputation in the credit world. Whether you are opening a retail account, renting an apartment, or even having a car financed, our credit score will always be at the forefront here.

Your credit score is more than a three-digit number. It determines the course of your life in many ways. Here are a few ways in which a poor credit score can be an issue for you;

You May Not Get The House You Desire

Your credit score can be an issue when the time comes for you to buy or rent your apartment or a house. When renting a house, the first thing the house owner sees is your income, so he can judge whether you would be able to really afford it or not.

The second consideration is your credit score! A house owner would not want to rent out to someone who does not have a proven track record for timely payments. So yes, your credit history and your credit score matters here.

You Don’t Get Your Loans Approved

Whether it is a student loan, or a business loan or even a mortgage, if you have a bad credit score, you are less likely to be approved as your credit score would indicate irresponsibility when it comes to making payments. It is not that you will not get the loan. Maybe you will. It is not entirely off the table for you. However, you will not be in their good books, which is why they will charge you higher than usual interest rates just in case.

It Affects Your Bills

You may not have thought about your credit score affecting something as trivial as buying things. But it does. The purchases you make, your monthly subscription, your club memberships, things you buy online, they all will probably charge you higher prices just to make sure they don’t face loss at your hand in case you can’t make the payment.

Your Next Job Might Not Be As Easy To Come

It is not a common practice in every state, but research shows that almost 46% of companies look into the candidate’s credit reports while considering hiring them. It is to make sure that you will not be likely involved in any kind of fraudulent activity, any embezzlement, or any property theft.

Your credit score has the power to affect even the most trivial aspects of your life. A bad credit score is always an issue. Over time it has somehow become the standard to measure a person’s credibility not just limited to banking but anywhere in life.

HOW YOUR CREDIT HISTORY AFFECTS YOUR CREDIT SCORE

HOW YOUR CREDIT HISTORY AFFECTS YOUR CREDIT SCORE

Bygones are not bygones in the world of banking and finance. What you do in the past, always comes around and determines the course of the future for you. In the world of credit, your worth is determined by a magic number called a Credit score. This is a mathematical way of expressing the creditworthiness of a person who is applying for credit approval.  A credit score is determined by taking five elements into consideration.

  • Amount you owe
  • Length of time you have been using credit
  • The credit mix you have
  • New credit accounts you open
  • Payment history

Every element has a different weightage when it comes to evaluating your credit score. However, your credit history takes the big chunk of it and has the most significant impact.

The first thing a creditor looks at is your credit history, to get an idea of whether you are good at keeping up your end of the bargain or not. Whether you made the payment at a time or not.

The type of accounts, which the creditors consider when checking your credit history, are;

  • Primarily your credit card.
  • The retail accounts you have.
  • All the installments that are due every month including your car installment or any appliance you got on installments. And how regularly you pay them.
  • Your history with other financing companies.
  • Your mortgage payments history.

Your credit history is like a report card that a creditor sees. If he sees that you have made late payments, it will not immediately affect your score but if there are late payments for consecutive months, you will have to face some consequences and those consequences will then have an affect your credit score.

First, you will be charged with late credit fee. Then your interest rate will be increased. That increased interest rate is never a good sign. It shows that they have reservations when it comes to trusting you with credit.  It will also make it more difficult for you to stick to credit then because it will become more expensive and therefore increase the risk of late payments or no payments at all. This stays on your report for a significant amount of time, maximum for seven years.

Other than this your credit score is also negatively affected by any foreclosures you have against you, any lawsuits that were filed against you, wage garnishments, or if someone has withheld any of your property till the time you pay them off. These all factors are also taken into account including bankruptcy in any form as well.

Credit history constitutes 35% of your credit score, thus a good credit history guarantees that you have a good credit score and more options of credit available to you. A low credit score lowers your credibility as it implies the presence of unfavorable information on your credit report.

What Makes a Good Debt Consolidator?

What Makes a Good Debt Consolidator?

5 Things You Must Look For in a Debt Consolidator

Tight economic conditions, inflation, and rising expenses can lead anyone to sign up for some loans. It is almost impossible in today’s times to spend a lifetime without ever getting a loan of any kind. The banks and other creditors know this very well and therefore, they compete with each other to provide different loan products catering to different areas of life.

You can easily find yourself applying for some of these attractive loans and before you know it, your loan bills go through the roof. In case of inability to repay those loans, you are left with a huge amount of debt and debt ultimately translates into financial crisis. Therefore, it’s important that you try to clear your debts as soon as possible using the services of a debt consolidator.

A good debt consolidator helps you get out of your bad financial situation and lead you towards stability. However, you must research well on what kind of debt consolidator is required to meet your needs.

While you are at it, we list here a few things that you must look for in a debt consolidator.

1.     Financial and Legal Knowledge

A debt consolidator must be knowledgeable regarding all the matters of loans and debts. They must be able to direct you towards how you can effectively combat your specific debt issues. They use their knowledge to guide you to carry out better negotiations with creditors. This is definitely among the top qualities of a debt consolidator.

2.     Empathy

Any debt consolidator who is arrogant, rude, or judgmental towards you while handling your matters will not be able to help you. Good qualities of a debt consolidator include empathy and understanding. Falling in debt is normal and a good debt consolidator knows this well. They will assist you on practical grounds after understanding the nature of your debt and other financial circumstances.

3.     Ability to Be Reasonable With Plans

The first and most important thing your debt consolidator will do is come up with a repayment plan. It’s important that the plan your debt consolidator suggests includes an affordable interest rate. If those interest rates are still beyond your budget, that plan will fail. Therefore, the ability to get the full picture of your current and future potential finances while laying out a plan is among the most valued qualities of a debt consolidator.

4.     Flexibility

A certain debt problem can be tackled through different approaches. For example, Canadians have multiple methods and options for consolidating their debt, such as Debt Consolidation Program, Debt Consolidation Loan, Home Equity Loan, etc.  Not all options are available to everybody and that’s where a good debt consolidator will provide you with expert advice. One of the key qualities of a debt consolidator is that they are flexible with options.

5.     Experience

Nothing can beat experience. A debt consolidator who is well-experienced in this field will give you better advice and lead you to the solution in a quicker and effective way. Do some research on how long that debt consolidator has been in the business and how effectively they have been able to help their clients. The economic cycle of the organization will give you an idea.

These are some of the qualities of a debt consolidator that you must consider if you want to avail the best of services.

Money Saving Tips for Online Shopaholics

Money Saving Tips for Online Shopaholics

Online Shopaholics – Read This to Save Money!

As if being a conventional shopaholic wasn’t enough.

Online shopping has made shopping ‘cool’. This is an industry that is booming like no other. The idea is simple – why go to a mall to buy things when you can shop from the convenience of your home using your credit card? The convenience online shopping offers is commendable. There are countless shopping websites surfacing every day. Some are legit, some not. And they all contain a large variety of products for you to choose from.

However, convenience comes with a problem. People who were not so much into shopping are buying stuff regularly and those who loved shopping are turning into online shopaholics. The funny thing is that most online buyers are also the biggest critic of the system, as some products don’t turn out how they looked on the website, especially the clothing products.

Nevertheless, the craze is real and so is the compulsive spending of online shopaholics. If you are one of those people, you probably know that the craving for shopping costs you a great deal of money and when there is a mess-up (which is usual in case of online shopping), you end up losing money for no benefit.

That is where our guide will help you. Since your grandma probably won’t be able to give you some tips to save money while shopping online, let us do that for you. Here we go:

Know your battleground.

Not every online shopping website has your best interests in mind. Some of these websites are absolute scams and they tempt you with attractive packages. Online shopaholics sometimes tend to shop on whatever website they come across for a particular product. If the website is a scam, you will not only lose the money you have invested in that product, you can also face severe financial fraud as your credit card details and personal info you entered can be used against you.

Do not rush, do some research.

This one is among the most effective tips to save money – and even your grandma might have told you this. Compare the prices of the same product on different websites before putting it on the cart. There are some websites that only use the fancy portal to lure you into buying expensive stuff, while some other retail websites offer the same product at a cheaper rate. Some amount of research is only going to benefit online shopaholics.

Discount coupons are your best friend.

Look for the best discount coupons available and opt for a store that offers sale. This is among the most valuable tips to save money for online shopaholics. You are more likely to find sales on reliable online stores than actual retail shops in the mall. Still, make sure that the discount does not compromise the service or quality of the product.

Review your buys.

A lot of people check out from an online store in a hasty manner and then end up paying more for it. There is no lack of horror stories of people who received the wrong size or they clicked on “2” instead of “1” in the quantity section. Always be thorough with your review of the purchases.

Online shopaholics can cater to their shopping desires while also being smart. The above-mentioned tips to save money can be really useful. Happy (smart) shopping!

Your Guide To Budgeting For Holidays

Your Guide To Budgeting For Holidays

Budgeting For Holidays – Why it’s Important and How to Do It

Holidays are a great time to relax, retract and rejuvenate. These three R’s play a key role in anyone’s life and keep their sanity alive. That’s why the holiday season is considered as the happiest time of the year all over the world.

People leave no stone unturned while planning for the holidays. What they will do, what they will eat, where they will go, what they will buy and most importantly, what they will do to make these holidays different from last year’s. While all this seems pretty straightforward, it’s not all fun and games. Holidays come with a lot of expenses and no matter how strict you are with your money, you end up spending a little more than you would have liked.

Buying gifts, going for dinners, outings, picnics, and other things, all require you to spend a good amount of money. If you don’t have a plan to monitor your expenses during the holiday season, you will surely regret it later. That’s why budgeting for holidays is important.

Budgeting for holidays will require you to thoroughly assess your financial standing, including your debts if any, and your future expenses. If you are already going through a tough time financially, you should think about tossing the list of gifts out of your window.

Here are some effective steps that will help you in budgeting for holidays and be sticking to that budget.

1.     Make a list of all expenses

The first thing you should do is make a list of all your likely expenses in this holiday season. This list will include all the gifts, traveling expenses, wrapping papers, donations, decorations, and holiday cards. You can also add the outings you have planned. This is a crucial first step in budgeting for holidays because it gives you an idea of what things you need to cover.

2.     Set a spending limit

At this step, you need to determine how much money you can afford to spend on these holidays, especially Christmas. While budgeting for holidays, it’s important that you consider only the amount that you had as “extra savings” or the amount you had already set aside for Christmas.

3.     Allocate money to each category of expenses

Once you know how much you have in hand, you can start dividing and assigning that money to different categories. For example, traveling can be counted as a separate category and the same goes for dining, gifts, and decorations, etc.

4.     Make a shopping list

The next step in budgeting for holidays includes making a list of your holiday shopping. You must have some ideas in your mind about what gifts you want to give to specific people. The price range of these gifts should strictly not exceed your budget. Look for gift stores that offer sales.

5.     Finally, monitor your spending

It’s time for you to shop according to that list and while you are at it, track your spending. You should carry your budget sheet with you, cross off the things as you buy them, and makes sure you are not exceeding your budget. This will also help you make adjustments if needed. Also, keep an eye on your budget sheet as you go about other expenses throughout the season.

Budgeting for holidays will help you a lot in keeping your finances in control while having the fun that you deserve this holiday season.