A Quick Look into Credit Scores

The credit score is a unique number that helps lenders and others concerned to decide what are the chances that you will pay your debts.  One kind of credit score is the FICO score (English acronym for Fair Isaac Corporation Inc., the company that developed a common method of scoring).  The FICO score ranges from 300 to 850.

When you apply for a mortgage, it evaluates your credit score.  This score can also be used to determine the interest rate on your mortgage.

Your credit score is based on various types of information contained in your credit report:

  1. Your payment history – Late payments will decrease your credit score.
  2. The amount of debt you owe – If your credit cards have reached the limit, your credit score may decrease, even if the amount you owe is low.
  3. The time you take your credit use – The time you used credit is important.  If you demonstrate that you manage your credit wisely and keep low balances on credit cards and pay your bills on time, your credit score will be affected positively.
  4. The frequency with which you are applying for new credit and new debt is accumulated. If you have applied for several credit cards at the same time, your credit score may decrease.
  5. The types of credit you currently use. This includes credit cards, retail store cards, installment loans, finance company accounts and mortgages.

Your credit score is only one factor when considering a loan to buy a house. Mortgage lenders also study your credit report, employment history, income, the ratio between your debt and income and the value of the house you want to buy.

What Do The Numbers Mean?

FICO does not offer the public the specific statistics related to credit scores. However, it does provide some general numbers that can help you understand how to interpret your credit score:

Credit scores between 770 to 850 are considered very good, and usually the best loan rates are available to borrowers within this range.

Credit scores above 700 are considered good, according to FICO, and most borrowers have credit scores in this range.  The average credit score is around 725.

If credit scores are below 650, lenders receive higher interest rates when applying for credit.

It is important to remember that credit scores are like a snapshot of your credit at any given time.  The “snapshot” shows your credit based on information available at that time. By using credit wisely, you can improve your score over time.

Fast Personal Loans Easy Approval

If you find that you need a quick and easy personal loan or signature loan lender there are plenty on the net that can help you. Regardless of your credit history and even if you're self-employed; there is probably a loan plan available for you.

In most cases, you'll be able to be qualified online instantly and have your money within 24 hours. You can get a personal loan for any need, just look at some of the ways lenders can help tailor a loan scheme to suit your needs:

Debt Consolidation Loans

Using a personal loan to pay off high-interest loans and credit cards can be  huge in monthly savings. This can not only reduce the interest and payments, but you'll avoid paying multiple bills, taxes and fees.

Home Improvement Loans

A personal can also be used to improve housing, necessary repairs or even fashionable amenities that increase the market value of your home. This will increase as well the equity in your home, which allows you to borrow extra money against it.

Loans for Education Faculty and Students of expenditure

A personal loan can be used to pay for education or the necessary expenses when you find yourself short of money. There are Student loans but when not approved for one you may want to consider a personal loan.

Business Loans

If you own your own business and run into a difficulty for the flow of money, a personal loan can help to make ends meet while waiting for revenue to strike. Whether you need new equipment, have opened the bills you want to pay, or otherwise, a small loan can often provide the bridge you need.

Loan bill payment and other expenses

Sometimes you can get a little behind on the bills that aren't related to loans or credit cards. A quick and easy personal loan can help grip less common expenses for payment of utilities to immediately help a family member or friend.

Money Management: Teaching Children the Basics

Child Sculpting Hand
Try thinking back for a moment, do you remember the first time you understood what the value of money is?

I was a child, maybe 5 or 6 years old, I asked my mom for 99cents for some candy or baseball cards, I don’t remember what it was exactly that I wanted to have, but, I know for sure that I needed a specific amount of money to get something I wanted, from a shop. At that point in my life I started understanding what money is.

My 2 year old niece uses the word money as part of her vocabulary. For example: when she hears coins hitting the floor she would say immediately, money! We both know that she has no idea of what money is, but, I guess as far as she is concerned the word is important enough for her.

Managing Money at Home

By being a good role model you are in fact teaching the child with out talking too much, what money management is. Once they see you involved with managing money they will be curious and if your child acts responsible and even for a moment asks you anything related to personal finance never push them away. Tell them the answer to their question in a way they can understand. Try not to use the phrase “This is for grown-ups”; they might just wait to grow up before they ask you again…

The main idea is to let your children help you with managing money by letting them manage their own and at the same time making it fun and worthy for them and for you. So every child at a certain age should have a money management plan for his capabilities, remember, we are trying to implement the habit of managing money, so that in time it will be a lifestyle and a good one too.

Hoping School will do the Work

What ever your child studies at school is necessary. The books that the child learns history from or worksheets that he takes home to study with will help your child get a degree, but they won’t help do his monthly budgeting or manage his cash flow, will they?

As a child, did you have a class that teaches finance or even basic money management? If you did than you’re lucky, that’s the way it should be.

I think more than just teaching your children at home how to manage money there should be classes at school, just like math and science, which teach personal finance and money management. That’s something your child will use for life!

If you are a 6th – 12th grade teacher you might find this money management lesson to be fun, interesting and refreshing for yourself and your students.

Here is a great site I found that will help you teach your children how to manage money.

What other blogs say about children money management

» Should You Pay Your Kids for Good Grades? @ fivecentnickel.com – @Nickel:. Maybe you could make more clear the exact reason you are giving the allowance for. Although from the article, I gathered you do it as a way to train your children in the ways of finance & money management. DebtFreek! …

Money Management for Kids: Tips to Raise Money-savvy Children – Parents can cultivate good money habits in children by encouraging them to spend and save money wisely from young.

Pantagraph Blogs & Columnists » Several things can help teach kids … – Several things can help teach kids money management skills. Filed under: Hearts at Home — Jill Savage @ 12:00 am. Every child has a financial personality. Three of our children are savers. Two are spenders. Of course, they take after …

Shaping Youth » Money Management for Kids: Chores, Allowance … – Money Management for Kids: Chores, Allowance & Digital Nagging. Part Two of our interview with PAYjr CEO David Jones includes one of the rarely used aspects of PAYjr’s chore and allowance program (only 5% evidently) where parents can …

Teach Children about Money Management at a Young Age – If you have children it is important that you give them the knowledge they need to succeed. And while “book smarts” are very important, you must remember to teach your children about money as well. This is not a subject that is always …

Good Debt vs. Bad Debt – Simplified.

When planning a debt free life it is important you understand the types of personal debts you owe and see things in a right perspective.

Good Debt

Any debt that is a result of borrowing money for any purchase that has future value built in, for example: a home purchase, investment or a student loan for college education. These types of debts are known to be “good” because they can help you build wealth and success.

A mortgage loan is the most popular personal good debt! You take a loan, which will financially help you build or buy a home. It is considered as an investment because the home will eventually be yours only!

Bad Debt

Debt that can be turned over to debt collection agencies such as credit card debt, personal loans and other unsecured debts are known to be bad debts. These debts often carry high interest rates as well.

In essence anything you purchase with credit or can be financed, that is unsecured (doesn’t require collateral) and devalues with time, is bad debt. Even food and clothes, that are essential, which were purchased with a credit card, are bad debts. Put your effort in keeping bad debts to a minimum while paying the full balance of these debts on time.

Tackle them both.

Keeping good debt apart from bad debt is a wise decision. Don’t make the mistake of consolidating unsecured debt with a mortgage loan, which is secured, by taking a bigger loan and using the difference to pay of bad debt. Not in all cases it is profitable and it can put your asset in risk.

When managing your monthly payments, paying off higher interest rate debt first is highly recommended by most financial experts. By doing so you are reducing the bad debt faster giving you more financial freedom in the future to pay off more debt, in larger sums.

Recommended Reading: Good debt, bad debt at WiseBread.com

A Cure for Credit Card Telemarketing Fraud

Thousands of dollars are charged to victims credit card and in some cases scammers apply for a loan under the victims’ names. Unfortunately, credit card scams are rising every day.

Con artists use various methods to deceive and manipulate you, making you believe they are legitimate and convincing you they can help solve your financial situation. For now, we will focus only on one of them, but, once you understand how to apply this Telemarketing Credit Fraud Prevention Formula you will be able to identify if the offer you are given is fraudulent or not.

The Scam or, One of Them!

With the financial situation these days and the competition among credit companies, more and more people are applying for lower interest rate credit cards. Criminals take unethical advantage of the situation.

A recent method identified by the Federal Trade Commission shows con artists pretending to be financial institutions offering you a lower interest rate on your credit cards. Striving to live a financially balanced life and with temptation of the “best deal till now”, you decide to take action. Unknowingly you are caught in the “fraud net” and before you realize what really went on, you get your monthly bank statement only to see that you’ve applied for a $5000 loan without a dime left in your account, bought a car that you never drove and even paid for expensive gourmet meals that you’ve never tasted.

A Recorded Scam Attempt

The video below is a recorded fraudulent conversation where the criminals offer a consumer a low rate interest card offer. View to see how the criminal “phishing” for the victims private credit details.

Developing the Formula

After doing proper due diligence and by researching governmental, educational websites, this and other videos over the internet covering the topic of credit card fraud, I’ve identified specific patterns con artist use to disguise themselves, gain your trust and “phish” for credit information.

One of the most interesting things I found is that scammers will always find excuses to why they can’t give you there office phone number or in some cases they’ll give you a cellular phone number (making sure they can’t be traced). A trustable and respected financial institution will have a toll-free number 99.9% of all times.
Besides if it were a legit offer the company could supply you with alternative ways of entering your credit details rather than just shooting out “so, what your credit card number?”

These facts opened my eyes! I decided to create a formula anyone can apply to reduce and prevent telemarketing credit fraud – guaranteed!

Ask These Questions to Prevent Credit Card Fraud.

If they are too persistent about your credit card details or your personal information try to find out if you can get in touch with them directly by phone.
A polite, yet straight forward question to ask would be something like:

You caught me at a really busy time, let me get back to you in a few minutes – What’s Your Telephone Number?

That alone will catch them off guard. Make sure you get a number!
A legit company would naturally have a 1800-, or fixed land line telephone number for customer service, wouldn’t they?

In other words… if the crook’s answer resembles anything like “you can’t contact us”, or, “we contact you” their offer is 100% Bull S*** and even if the offer were legit, I personally wouldn’t want “long term financial services” from a company that doesn’t have a customer care center, would you?

If they did give you a 1800 number most likely the company is legit. However, make sure you write down the number and call them back. It’s very important that you call them, this way you know that you can really get in touch with them.

I don’t give away my credit card number or credit details over the phone, what solution do you have for people like me?

I love the 21st century everything is digital. Just to let you know today: you can touch tone your details keeping them safe, 128 SSL Encryption online or the old fashion way of visiting the office. You must get an alternative than just shouting out your credit details over the phone.

I want you to really grasp this! Credit card companies pay thousands of dollars for alternative ways there clients can enter their credit details and keep them safe.
So there isn’t any reason on earth you should deal with a company that doesn’t offer you safer ways to enter your credit details, right?

The company would, at a bare minimum, give you an address where you can visit them as well. If you didn’t get one after asking, or, got a cluttered answer, I advise you to hang up the phone, what do you think?

Conclusion: Control

The whole idea behind this credit fraud prevention formula is to identify weather the offer is legit or not. By asking questions you are doing 2 things at once:

  1. Taking control of the conversation
  2. Showing the Crooks that you won’t be fooled

Remember you don’t need to be polite when you feel someone is trying to take your money, stand up for what belongs to you and ask the questions with full confidence. A legit company would appreciate you asking these questions. It only shows that you care about yourself and your financial well being.

By now you might have a few questions that you see better to ask, if you do, by all means, post them. Your questions can help more people prevent credit card debt!

Why Bother With Mortgage Payment Protection Insurance?

Knowing you have to pay back your mortgage over a period of 25 years may leave you restless until you get used to the idea. The thought of your house being repossessed due to defaulted payments may even keep you awake at night. Why should you torture yourself? Get some sleep! Get Mortgage Payment Protection Insurance.

So What Exactly is Mortgage Payment Protection Insurance (MPPI)?

Mortgage Payment Protection Insurance reimburses you in cases where you cannot make one or several Mortgage monthly payments. This sounds great but, needless to say, is limited to the terms and conditions.

MPPI will pay your mortgage payments if you lose your job resulting in involuntarily unemployment, illness or an accident that prevents you from working or in case of death. There are other situations where MPPI will reimburse the borrower however; the ones stated here are the most comment ones.
My Health Plan Covers Me from any Loss That Results from Health Issues I Don’t Need MPPI Then, Do I?

In most cases you won’t need MPPI if your health insurance plan reimburses you with any loss that might arise from illness or accidents, however, make sure to check your policy and verify all the conditions including Mortgage, by reading the fine print or calling up your agent.

If your health insurance or other type of insurance covers your assets from any loss make try to see if Mortgage Payment Protection Insurance will add any value. If you find that MPPI adds value, negotiate a discount with the lender or insurer by omitting the coverage a different insurance policy takes care of.

Shopping Around for the Best MPPI Offer

You don’t have to rush into it right away when getting a mortgage, but, when you feel the time is right and you know you are eligible for a MPPI get the best offer possible by comparing offers online. You might want not to work with your mortgage lender. In fact, you might even find an insurance company offering you a great Mortgage Payment Protection Insurance offer.

Getting a Home Equity Loan to Renovate and Then Sell Your House

People apply for home equity loans for several reasons. Amongst the most common ones is for renovating a house. In order to keep a home at the highest market value, people renovate at a certain period. Some renovate to see a change or to improve, while others renovate because they plan on selling the house.

How Can a Home Equity Loan Help Renovate?

We aren’t always in a position to take care of sudden expenses. A home equity loan will be found useful to any one in need for extra cash to renovate and then sell the home. A balloon mortgage plan will be great when you have a buyer waiting to buy once the house is completely renovated. You can apply for a home equity loan with a balloon payment and once it is sold you pay back the loan.

Home Improvements at the Best Rate

Credit ratings dramatically influence the home equity loans rate. The higher your credit score is the better rates you will be getting. Bad credit has a negative impact on the loan’s interest rate; if possible, repair your credit before applying for the loan. If you have a buyer waiting for the renovation to be completed, make sure you have a signed contract with him and have gotten a down payment.

Avoiding Home Equity Loan Scams

While home equity loans are a great source of cash, there are fraudulent activities in the equity lending market. To avoid them, compare rates from various equity lenders. By doing so you will get a better idea of how rates are determined and when you find a too good to be true rate, chances are it is just that!