27 Mar
2010

Many people take a pretty casual attitude about bad credit, but having a poor credit score can hurt you in many ways. A bad credit score shows that businesses and lenders find you to be a poor credit risk because you have made some mistakes in the past. Bad credit can affect many things in your life. If you want to apply for a personal loan or a refinance loan, you may be charged extra interest rates or be offered worse terms if you don’t have a strong credit history. You may have a hard time securing any loans – even bad credit personal loans – if your credit score is low enough. This means that you may not have access to cash loans when you need them or that you pay more than you have to for personal loans.

Even if you do not need a personal loan, bad credit can still harm you. Landlords sometimes look at credit scores when screening tenants. If you want to rent a great apartment, especially in a competitive rental market, you may have a hard time renting with a bad credit score. Employers also sometimes check credit scores when hiring new employees, especially if those employees will be working with money or financial information. Having a poor credit score, therefore, can cost you that great career.

27 Mar
2010

Bounced checks are a serious problem that can drain money from your account. Bounced checks occur when there is not enough money in your checking account to cover the amount of checks you have written. If you write a check for $51, for example, and you only have $49 in your account, your check will bounce. That is, your check will be returned to you and the person you have written the check to (let’s say a utility company) will not be able to get their money. Usually, both the bank and the business (in this case, the utility company) will contact you about the bounced check. The utility company will generally charge you hefty fees for the bad check and your bill will be unpaid, which can affect your credit score and can lead to late fees. In addition, your bank will usually charge you extra fees due to the bounced check.

It pays to avoid bounced checks at all costs. The easiest ways to avoid bad checks is to keep careful track of how much you have in your account and how much you have coming out in automatic withdrawals and checks. Keeping track ensures you always have enough in your account to cover expenses. You can also borrow money in an emergency in order to cover a check. Many banks offer overdraft protection. This protection ensures that even if you write a check for more than is in your account, the bank will cover you (as a type of loan) so that you do not get a bounced check charge.

26 Mar
2010

If you decide to rent an apartment or house, you’ll need to find the cash for a deposit on your new home. Many landlords charge first and last month’s rent, but in very competitive rental markets, some landlords charge up to three month’s rent as a deposit (first month’s rent, last month’s rent, and one month’s rent as a damage deposit. If you are moving, you might have moving expenses to consider. Some utility companies may be charging hook-up fees as well, so finding the money for three months of rent can be challenging.

Hopefully, you have the cash for the security deposit in an emergency fund. You may also have the damage deposit returned to you from your previous rental, which you can put towards your new apartment. If you are moving, you should have a garage sale to clear out everything you don’t need. This will help you raise funds for the move and will help you avoid larger moving fees, too. Try to defray your moving expenses as much as possible. This way, even if you have to borrow to get the money for your security deposit, at least you’ll have to borrow less.

26 Mar
2010

Foreclosure is major concern in many communities across the country, where homeowners are losing their homes because they can no longer afford to pay their mortgage. While the number of foreclosures is a little lower than late last year, many families are still facing this painful process. Quite simply, foreclosure is a repossession process that a bank can initiate when a homeowner fails to pay their loan. State laws vary, but generally lenders start repossession about three months after non-payment.

There are many ways to ensure that you never have to go through this process. The first thing you should do is to buy a home you can afford comfortably. Many homeowners buy a home that they can barely afford. If they get into financial trouble or if interest rates increase, they can no longer afford the property. Second, make sure you get a good home loan – one that is affordable. If you already have a home loan you can barely afford, consider refinancing. Next, make sure you set up an emergency fund that has at least six months of income in it. This way, if you do lose a job or suffer another problem, you can still afford to make your mortgage payments for half a year (which should be enough time to refinance, move, or otherwise solve the problem. Finally, make sure you keep plenty of equity in your home.

26 Mar
2010

Have you ever read those news stories about people downsizing radically (often living on $5000 or so a year) and wondered whether you could do it? Even if you have no intention of tossing out all your belongings and starting over, it’s a good question to consider for a number of reasons. If you are downing in multiple payday loans or personal loans, slashing your living expenses by 50% or more can mean getting out debt fast. If you are suddenly in a big financial emergency (such as debt or divorce), knowing how to drastically reduce your finances can help you survive financially. Thinking up ways to reduce your expenses drastically will also make you appreciate what you have and may give you some inspiration to cut back your spending even a little.

If you need help getting started, think back to your college days. You likely survived on a very small student loan or budget. What did you do to save money and spend less? Consider what you would do if your income was suddenly cut by 50%? Where would your income go? What changes in your life would you have to make?

25 Mar
2010

Too much of anything is bad for you, and too many payday cash advances are definitely not a good thing. While the occasional payday loan in an emergency should not harm your finances, multiple unpaid payday advances can have serious financial consequences. Too many payday loans can leave you at risk of nonpayment and huge penalties. More than one payday loan usually also means hefty interest rates. Unless you have substantial savings or a very hefty paycheck, it can be very difficult to repay multiple payday loans.

If you have this problem, see if you can consolidate your loans or take out a personal loan to repay your payday loans more affordably. Consolidating can help you pay off your loan faster by saving you on interest rates. If you cannot repay your loans or get consolidation, you will need to find ways to boost your income in order to generate more cash so that you can put more money towards your payday loans. Check out our tips for boosting your income to get started.

25 Mar
2010

Off the books loans are any loans which do not show up on your credit report. Generally, most types of loans do show up on your credit score. This way, potential lenders can see how much debt you have, how reliable you are in making payments on that debt, and how much of a credit risk you make. Your credit card debts, personal loans, mortgage, car loans, and other personal loans are all listed on your credit report and reflected in your credit score. Generally, if you have a lot of debt, your credit score is a little lower.

However, there are some types of loans which are not listed on your credit report. If you borrow from friends and family, for example, this is not listed on your credit report. Certain types of hard money loans from private lenders are not listed on your credit report. In some cases, these types of loans may have higher interest rates or other disadvantages, but there are some advantages to getting off the books loans, too. These loans will not affect your credit score, so if you need to apply for multiple loans (to start a business, for example), off the books loans can help you get all the financing you need. If you are trying to repair your credit and need to borrow money, these loans will not pull down your credit more.

25 Mar
2010

When you take out a secured loan, you are using an asset as collateral. For example, with a mortgage, your home is collateral. With a car loan, the car you are purchasing is used as collateral. Collateral is an extra bit of reassurance for the lender that you will pay your loan. This is because when a borrower defaults on a secured loan, the lender can legally repossess the property being used as collateral and even resell it to earn back the money lost on the unpaid loan.

There are many ways to avoid repossession. The first, of course, is not to take out too many personal loans. The more loans you have, the harder it will be to repay all of them and the more vulnerable you will be if you suddenly cannot work. Next, make sure that you read the terms of the loans you do have. What sorts of penalties are there on non-payment?

If you do get behind with paying your loans, you will need to act fast to avoid repossession. As soon as you know you will be late with a personal loan payment, contact your lender. Try to work out a repayment schedule. If your loans are simply too unaffordable, consider refinancing your loans or reselling your assets. Remember: if your property is repossessed, you will get no cash for it. You may as well save your credit score and get money for your property by selling it if it is no longer affordable.

24 Mar
2010

A buffer account is a savings account that is a place to collect money “just in case.” Your buffer account is literally your buffer between you and payday cash advances or cash loans in an emergency. When the economy is bad, especially, having savings can help you avoid bankruptcy, foreclosure, and excessive reliance on personal loans.

If you lose your job, your buffer account may replace your income until you find new employment, so it is important to make your buffer account as generous as possible. Try to put 10% of your monthly income into your buffer account. Consider your buffer account as a type of insurance. You pay into it now so you are protected in the future. Try to have at least six months of income in your buffer account. If you have plenty of debt, try to have even more in your account. Even if you lose your job, you will still need to make payments on your personal loans, so you will need cash for this as well.

24 Mar
2010

You may have read those articles that pop up in magazines from time to time, outlining all the millionaires and famous faces who never got a college degree. Yet, many people who are affluent do have an education. Is there a link between education and financial success?

The simple answer is “yes.” An education teaches many key skills, including language skills. Language skills are important when you are trying to set up a bank account, apply for a personal loan, or buy a home. Language skills can also affect where you work and therefore how much you earn. Education in general is also important. If you have a good education and have developed good research and thinking skills, you may be better equipped to research and compare personal loan options or develop a plan to get out of debt. A formal education may also be recognized by employers and may affect your chances of getting a good income.

Of course, even if you do not have a formal education, there are many ways that you can succeed financially. Many banks have staff members who can help you understand personal loans and other financial issues. There are also books, magazines, and newspapers that can help you understand your finances and can help you get the education and financial skills you need to succeed.