5 Effective Habits of People With Good Credit Scores

It does n’t take a fat bank account to secure your financial status. All you need is a shrewd mind for money and a good credit score to boot. Don’t worry if you’ve got a lousy score right now. Here’s a list of effective habits to help you recover from bad credit.

1. Pay your bills on time. You can easily set up an automatic payment system for your credit card bills and utility bills. If possible, don’t just stick to the minimum payment. If you’ve missed some payments before, make up for it and stay ahead.

2. Avoid the credit limit. Don’t max out just because you’re allowed to max out. Keep your balances low. In fact, most financial experts suggest that you should use your credit at no more than 30% of your total credit card limit.

3. Experiment with a long credit history. Credit scores are also based on longevity or your experience in finances. The longer history you have of paying your bills on time, the better your credit risk will be.

4. Apply ONLY for credit cards that you need. At the very least, have three: one for shopping, one for emergencies, one for utility bills.

5. Think ahead. Save for the future. Regardless of how secure you are with your job or how stable your financial expenses are, you definitely need to be financially prepared for emergencies. Separate a savings account with an emergency savings account; that way you’ll have pools of accounts to choose from.
Ready to start saving yet?

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Disasters That Lead You Straight to Bad Credit Scores

Want to keep your credit score in good shape? Here are the scenarios you definitely want to avoid:

1. Maxed out credit card limit. You got carried away shopping at Forever 21, grabbing the latest handbags and platinum pumps you could get your hands on. But then, your next purchase of a double tall Starbucks latte was declined because you’ve maxed out.

Tip: Remember to avoid reaching the limit of your credit cards because they can drastically affect your score. A certain percentage of your available credit is used to ascertain your credit score, so a low or zero balance can definitely work against you.

2. Missed payment deadlines. You received your credit card bills a week ago, but chose to ignore them because you were busy getting your nails done or catching up on the latest episode of Orange is the New Black. Now, it’s past three weeks since you got your mail and, unfortunately, you missed a payment deadline and you’re being fined a ridiculous amount.

Tip: Keep a reminder on your app, an alarm if necessary, so you’ll have weekly reminders or warning about an upcoming deadline for credits or loans.

3. Stopped using credit cards. You have been warned of the rigors of keeping a credit card and have experienced some speed bumps yourself. But stopping your use of credit cards altogether can still work against your score.

Tip: Manage your use of your credit cards wisely. If you have multiple credit cards, use them for separate expenses to avoid maxing out, i.e. one for shopping, one for emergencies, one for car maintenance, etc. Do these tips sound good to you? Share with us your thoughts!

Do you want to avoid bad credit scores, visit www.rebuildingyourfuture.com

Rebuilding Tips: Loan vs. Lease

　

Loan vs. Lease Here's a quick guide to the key differences of using a loan to purchase a vehicle versus leasing it.

Terms

Lease:

Lease terms are usually between 2 to 4 years. Loan: Loan contracts are usually signed for 4 to 6 years.

Type of vehicle

Lease:

The shorter term and lower monthly payment of a lease agreement allow you to drive a new and more expensive vehicle every 2 to 4 years. Loan: Higher monthly payments make driving a new or expensive vehicle every 2 to 4 years unpractical.

Ownership

Lease:

Unless you decide to purchase, you must return the vehicle at the end of the lease. Loan: You own the vehicle.

Up-front costs

Lease:

Up-front costs include a monthly payment, security deposit, down payment, taxes and registration fees. If you take into consideration the total cost of the vehicle and the monthly payment you want, the sum is usually less than the up-front costs of purchasing. Loan: Up-front costs include down payment, taxes, registration fees, and other charges. This amount is usually larger when compared to lease, especially if you want an expensive vehicle with low to moderate monthly payments.

Monthly payments

Lease:

Monthly payments are calculated based on the vehicle's depreciation during the lease term, rent charges, taxes, and other fees. Lease payments are usually lower than loan payments. Loan: Monthly loan payments are based on the total amount of purchase price, plus interest charges, taxes and other fees.

Insurance

Lease:

The insurance premium is usually higher. Loan: The insurance premium is usually lower.

Early termination

Lease:

You are responsible for early termination charges, as stipulated in the lease contract. Loan: You are responsible for paying off the loan.

Vehicle return

Lease:

You need to return the vehicle at the end of the lease. There may be some end-of-lease charges. Loan: You keep the car.

Future value

Lease:

The lessor bears the risk of the vehicle's future market value. Loan: If you decide to sell or trade-in the vehicle at the end of the loan term, the risk is yours.

Maintenance

Lease:

You are responsible for the maintenance of the vehicle during the lease term. Loan: You are responsible for the maintenance of the vehicle.

Mileage

Lease:

Most leases impose a vehicle mileage limit. There will be extra charges if actual mileage exceeds the contract limit when you return the vehicle. Loan: No limit.

Excess wear

Lease:

You might need to pay extra charges when you return the vehicle if the lessor determines that vehicle wear and tear is over the contract limit. Loan: No limit. Like mileage, however, more wear and tear equals lower resale or trade-in value for your vehicle.

End of term Lease: At the end of lease, you can return the vehicle and walk away, lease another vehicle or purchase it for the residual value. Loan: The vehicle is yours.



For more financial education visit www.rebuildingyourfuture.com

Do I need an Agent to Buy a House

Buying a house is a tricky process made complicated by the local housing regulations, changing market prices and the attitudes of the sellers. Because of these inherent factors that complicate the buying and selling of real estate properties, many investors and first-time property buyers get the services of real estate agents to simplify the process. 

The common understanding is that since these professionals have the experience and education, then they can help simplify the process. So is it time to tap into the services of a real estate agent should you decide to buy your own residential property?

If you are willing to do the legwork and you want to save up on the broker fees, then it’s best to represent yourself. There is no need to worry about insider information and  market data like real estate listings and median sales prices for certain properties since most of these details are now available on the web. 

There are also a number of websites that offer detailed and in-depth resources on how to approach a property for sale. In short, even if you are not trained in the business you can now easily tap into the market and purchase the property that you want. But this approach can be risky and labor-intensive and you have to make the right decisions every step of the way. If you want to lessen the risk and make informed decisions, then it’s best to get the help of an agent for a fee. The services may come for a fee but you can be sure of informed decisions every step of the way.

If you would like to know more about the home buying process, visit www.rebuildingyourfuture.com

What is Considered an Average Credit Score?

The three major credit bureaus in the United States—Experian, TransUnion, and Equifax—use their own version of the FICO score in calculating a person’s credit score. Since scoring systems of every credit bureau are slightly different, a single individual can have different scores. To avoid confusion, most lenders use the person’s middle score for reference.

The factors that affect your credit score are the following:

• Payment history

• Outstanding debt

• Length of the credit history

• Type of credit received

• Frequency of new credit applications

Your payment history accounts for 35% while your outstanding debt makes up 30% of your score.

Average credit scores based on FICO Score

If you want to know your average credit score, you have to factor in the total value of all your credit scores and divide it with the number of scores you’ve ordered. The FICO score provider, on the other hand, makes use of a scale ranging from 300 to 850. A score of 320 can be very disappointing while a credit score that’s between 850-900 seems to be very healthy. The average credit score is 678, though many lenders consider those scores that are around 670’s reasonable.

However, you have to bear in mind that what’s considered as an average credit score in some states may not be of great use in other states, so it’s advisable that you strive to get a reasonably high score. This way, you’ll have better chances of getting approved for any loan or credit card application. You can also have access to the best deals and offers the lenders may give.

More tips on how to rebuild your credit visit, www.rebuildingyourfuture.com

Rebuild Credit After Foreclosure

The real estate business in the United States is one of the industries that are greatly affected by the country’s economic downturn. This is the reason millions of Americans have experienced either short sales or foreclosure. If you’re one of them, you might have headaches thinking how you can rebuild your credit score after a foreclosure. Here’s what you need to do:

1.         Find out what causes the foreclosure.

It will be easy for you to solve the problem if you know what leads you to foreclosure. It’s important to understand why it happened and what can you do to prevent it from happening again.

2.         Check your credit report for inaccuracies.

Every year, you’ll get a free credit report from the three national credit bureaus. Get your copy and review it thoroughly. Should you discover errors or any inaccuracy, dispute it. If you noticed old and unsettled debts, pay them so they won’t be dragging down your score.

3.         Avoid late payments.

Your payment history has the greatest weight in your FICO score. Hence, it is important that you settle your bills on time. If after several years, your report or history shows that you’re already capable of paying all your bills and owning a home that means you’ve already recovered from all the circumstances caused by the past foreclosure.

4.         Change your spending habits.

Start budgeting your income now, as it can help alleviate financial stress. Budgeting means making decisions about how you’re going to spend your money. Start adjusting your spending habits and make sure you stick to your budget.

More tips on how to rebuild your credit visit, www.rebuildingyourfuture.com

How to stop eviction in Massachusetts

Not five but four guaranteed guides to stop eviction in Massachusetts

1.    Read over your lease and if the rent is due on the first of the month? Pay on the first day of the month!!!!!

2.     How can you make sure you have the money to pay on the first of the month?

Do not wait until the first of the month to find funds to pay the rent.

Yes it’s magic to have the the rent on the due date and stop eviction in Massachusetts

Example:  You receive a weekly payment of $500 from your employer.

Rent is $1000 per month and today's date is January 1, 2013

Week one: save $250 from the weekly check of $500

Week two: repeat step one

Week three: repeat step two

Week four: repeat step one, two or three the choice is yours.

Abra Cadabra $1000 to hand over to the landlord on February 1, 2013

3.   If you are late on your monthly obligation and you decide you want to Facebook-ball (a.k.a living a façade in social media)  stop and think! There’s a small chance that your landlord also has access to Facebook and doesn’t appreciate you spending his/her money at cheesecake factory.

4.   Do not tell your landlord that you are a Kansas City Chiefs fan and you don’t miss any of their games! This might tip him off that you subscribe to the NFL Sunday ticket on direct TV and paying the rent late.

More tips on How to stop eviction in Massachusetts and becoming  a responsible adult, visit www.rebuildingyourfuture.com