30 Mar
2010

Bad credit is something that on the surface seems fairly easy to repair. After all, basic credit repair consists of paying down your debts, paying your bills on time, and reading your credit report for mistakes. However, it sometimes seems that bad credit tends to follow you around. There are a few reasons for this:

1) There is a time lag. Even if you are doing everything right, it can take six months or more for your credit rating to start to reflect your new financial habits. If you have very poor credit or have been through bankruptcy, it can take years to repair your credit. Be patient and continue your habits to see results.

2) Lenders may see those bad credit loans and try to offer you the same interest and terms. If you have bad credit debts on your credit reports, some lenders may see you as a poor credit risk, even if you have turned your finances around, and offer you more bad credit loans. You will want to find lenders willing to consider your new financial progress or you may wish to apply for prime rate personal loans once your credit improves.

3) It’s easy to fall back into bad habits. Even if you are serious about repairing your credit, it can be all too easy to let bills go unpaid and it can be easy to let your credit card balances inch upward again, especially since you can’t see your credit score dropping as you do this.

30 Mar
2010

If you don’t already have a buffer fund or an emergency fund, please get one this week. Few things have the power of an emergency fund, and this is a step you can take financially in minutes. Today, determine one thing you can give up this week – maybe you can rent a movie or borrow one from the library. Maybe for one week, you can avoid dining out, getting fast food, or entertainment costs. Put the money you save into your emergency fund.

Today, call your bank and find out how to establish a savings account. Look for a savings account that has a low monthly fee. Some banks offer online accounts which are less expensive than many traditional accounts. Ask your bank whether they offer you the option of rounding up purchases you make on your debt card purchases and depositing the difference in your savings account. If your bank offers this service, sign up for it. It’s a great way to build up your savings account without missing the money. While you’re talking to your bank, ask them about their interest. Look for the highest interest savings account you can. Now, commit to adding to your emergency or buffer fund each month, even if you can only contribute a small amount some months.

30 Mar
2010

Between 2007 and 2008, reports of mortgage fraud increased by 37%, according to the FBI. Experts believe that this spike in fraud is the result of an economic downturn. Mortgage fraud is, quite simply, and misrepresentation or dishonesty designed to trick homeowners, mortgage holders, or lenders. It can take many forms:

1) Involved fraud schemes involving dishonest lenders and investors. In this type of mortgage fraud, investors purchase a low-cost property, complete some poor quality repairs and sell the property back and forth among themselves at an inflated price, making the property seem more valuable than it is. These fraudulent investors may also have mortgage brokers and assessors on the scheme. When the investors find an unsuspecting buyer, they sell the property at an inflated price and the buyer is encouraged to use the dishonest lender as well. The buyer gets a property worth far less than the asking price and usually a mortgage with an inflated interest rate as well.

2) Lying on a mortgage application. Whether you are applying for a fixed rate or adjustable rate mortgage, you need to be honest about your income, assets, and other financial details. Trying to be dishonest and getting a mortgage under false pretenses usually counts as fraud.

3) Identity theft. In this type of mortgage fraud, someone posing as a homeowner takes out a mortgage on someone else’s property. The homeowner is left with a hefty mortgage they need to pay off as well as a lowered credit rating.

29 Mar
2010

Your net worth is the total amount of your assets (including bank accounts, savings, stocks, retirement funds, and property) minus your debts. From time to time, it is fun to calculate your net worth. However, it is important not to reduce yourself to just a number.

If you determine that your net worth is low or even a negative number, don’t panic. It is possible to turn your net worth around by paying down your loans and by building up a good savings account. You can also improve your net worth by investing in stocks, CDs, or other assets and by contributing to a retirement fund. You can also save for a home, which can increase your net worth.

However, keep in mind that your net worth is not usually as important as your credit score when you apply for a loan. Your lenders will be more interested in seeing that you pay your bills on time than on seeing that you have plenty of property. Working on improving your credit score and your net worth makes the most sense financially.

29 Mar
2010

Equity refers to the value of a property – usually a house – minus any loans or liens against that property. For example, if you own a home that is worth $200 000 and you have a $100 000 mortgage on it (and no other debts using the home as collateral) you have $100 000 in equity in the home.

Equity is important for a number of reasons. First, it is considered a type of asset. That is, if you need to, you can borrow against the equity in your home. Homeowners interested in debt consolidation loans, for example, often use the equity in their homes to secure the consolidation loan. As well, lenders will consider your equity in a property when offering you a loan. If you have no equity in your home or property, you are less likely to get a great interest rate on a personal loan or personal loan. Therefore, working on paying down your mortgage is important for protecting your financial future.

29 Mar
2010

Getting out of debt is vital if you want to save money, develop a healthy financial life, and store up good savings. For many people, however, getting rid of debt is very difficult, and it seems that after effort, debts remain. There are many reasons for this:

1) Not developing an emergency fund. If you are trying to pay down payday loans, credit cards, personal loans and other types of debt without an emergency fund, you are not setting yourself up for success. Without savings, any financial emergency you run into will result in more debt as you take out payday loans and cash loans to pay for the emergency. Set up an emergency fund first, so that you can stop taking on new debt and pay down the debt you do have.

2) Not taking care of revolving debt first. Revolving debt – such as credit cards and lines of credit – tends to keep growing and can last for years or a lifetime. You need to tackle this type of debt to stay debt-free. It is especially important to pay down credit card debt, because of the high interest rates.

3) Not changing underlying issues beneath the debt. Usually, there is something fuelling your debt. It could be a sudden health problem, a shopping addiction, or living above your means. It is important to target and change this issue in order to break free of debt forever.

28 Mar
2010

Car insurance varies widely and there are so many options available that it can be hard to determine what insurance is right for you. You don’t want to be underinsured but you also don’t want to pay more for insurance you do not need. The first thing you will want to consider are options. All states require liability insurance, a coverage that covers damages to the other car involved in an accident. However, you may want to protect your car as well. If you rely on your car, have a car loan, or have a newer or more valuable car, you will want comprehensive and collision coverage for your own car. Comprehensive insurance covers theft, vandalism, and other non-accidental damage. Collision insurance covers your costs for repairing or replacing your car in the event of an accident. How much coverage you should get will depend on the value of your car. If you have a newer car or a car loan, you may also want to get uninsured motorist coverage, which covers you in the event that you are in an accident with someone who does not have adequate coverage.

You will also need to determine your deductible. This is the amount you will pay out of pocket in case your car is stolen, damaged, or in an accident. The more you are willing to pay in deductibles, the lower your premiums will be. Also, look for other ways to lower your car insurance costs. In many cases, you can get a better price just by calling around to different insurance companies. Some companies will also offer hefty discounts if you insurance multiple cars with one insurer or you insure your home and car with the same insurance provider.

28 Mar
2010

Resources are tools that can help you keep track of your finances and can help you get out of financial problems fast. In addition to checking out our suggested resources, you will want to have these resources on hand:

1) An emergency fund. This is hands-down your most important financial resource. Having an emergency fund ensures that in case of an emergency you have the cash you need without turning to a cash loan or payday advance.

2) All your emergency documents in one place (a safe, preferably). The agreement you have signed with your bank, the deed (or lease) for your home, your insurance documents, your bank statements, your income tax returns, and other financial documents should be stored safely in your home in a safe or in a bank in a deposit box.

3) Financial emergency numbers. In your home and wallet, you should have a list of numbers you can call in an emergency. These should include the numbers you call in case your credit cards are stolen, someone you can call if you need an emergency personal loans, and other important numbers.

4) A written financial emergency plan. You should have a written financial plan, outlining step by step what you need to do in case you lose your job, are suddenly unable to work, or sustain a huge debt in some other way. A written plan lets you start taking the right steps at once.

28 Mar
2010

Owing money on medical bills can be stressful and can ruin your credit rating. In some cases, health care facilities even go to court to recover unpaid bills. Unfortunately, many patients who are covered under insurance may still end up owing hundreds or even thousands of dollars in uncovered medicine and treatments. If you owe money, there are several things you can do:

1) Check to see what is and what is not covered. Read the fine print on your medical insurance carefully and check with your employer to see whether you are covered for anything. Check your homeowner’s coverage and any other insurance you have to see whether your expenses may be defrayed in any way.

2) Talk to an expert. There are many charitable organizations across the country committed to providing reasonable care and coverage. Find such an association in your phone book and see whether any of your expenses might be covered through some other means. Also, contact your hospital to see whether there are any forgiveness programs. Some hospitals forgive part of some hospital bills, based on patient income.

3) Pay your medical bills monthly. Contact the billing department of your hospital or clinic and see whether you can develop a repayment plan that allows you to make affordable monthly payments until your debt is repaid. Many hospitals are willing to do this.

4) Take out a personal loan. If nothing else works, you may need to take out a loan to pay your medical bills and slowly repay the loan.

27 Mar
2010

Losing your home is one of the most painful experiences homeowners can go through. Home foreclosure not only affects your credit and takes away your major asset, but it also creates many expenses – such as moving expenses and rental expenses — which may be difficult to meet when you are in a financially vulnerable position.

If you have lost your home or are about to lose your home to foreclosure, the first thing you will need to do is to create a plan. First, go over the foreclosure documents you have received and see whether there are any mistakes made. Consult an attorney if there are, since mistakes in your filed documents can give you more time to sell or refinance your home before foreclosure.

If there is no way to stop foreclosure, your immediate concern is to get back on your feet financially. It may be a good idea to speak with a non-profit group in your community to get some financial advice. You will also need to find a new place to stay. You may need to move your possessions into storage for the time being, until you find a new place. You may need to rent initially. This means you will need to find the funds for a security or damage deposit for your new home. You may be able to sell some of your furniture and possessions in order to defray moving costs. As well, consider reducing your moving costs as much as possible to keep new debts very low. Once you have settled into your new home, focus on rebuilding your emergency fund and increasing your income.