How to Stay on Top of Your Credit Cards

Many people have trouble managing their credit cards and as a result have a bad credit history and score. If you use your credit cards wisely, they can work for you and help you obtain a better credit rating, leading to a more financially secure lifestyle. To keep your credit score high, you must also … Continue reading “How to Stay on Top of Your Credit Cards”

Many people have trouble managing their credit cards and as a result have a bad credit history and score. If you use your credit cards wisely, they can work for you and help you obtain a better credit rating, leading to a more financially secure lifestyle. To keep your credit score high, you must also keep the credit active as well as following a few simple guidelines.

Credit expert Jenny Morgan from the company ACCION says that to keep your credit in check, you should always read the small print on about the conditions on the card. There may be a catch where you feel you are getting a great deal until the terms change after your probationary period. So be aware.

You should always pay on time too and try to pay more than just the minimum, over time you may end up paying thousands more than you needed to, simply because you only paid the minimum required amount each month. This will lower your credit score also.

If you have too many cards, you will be seen by credit companies as a risk so manage the ones you can handle and try to stay below 50% below your credit limit. Ideally no more than 30% but remember, if you max out your credit card, your score will drop dramatically. Five active credit cards at one time is generally the limit you should try to stick to.

You should also compare credit card and look at things like interest, benefits, transfer fees and annual fees. You can do this by visiting the website; Bankrate.com.

One more piece of advice that Jenny Morgan gives is that you should never treat credit cards as a long term option for financing credit. When you make your purchase, always make sure that the item you have purchased can be paid for in less than a year. If you don’t follow these guidelines, you may find yourself in a financial situation, far from ideal. So, follow these simple tips and enjoy a debt free life.

4 Steps to Buying a Home With Bad Credit

So, you have decided that 2012 will be the year that you will stop renting and take advantage of this current market of low priced homes and low interest rates? Buying a home with average to poor credit requires you to first do four things.

1. Check and monitor your credit

The price tag of a home will be one of the most expensive in your life time. Before you start that search for your dream home, the first thing is to secure your mortgage financing, as a “pre-approval letter” from your mortgage lender is required when you make an offer on that dream home.

If your credit is bad or if you have a few credit reporting issues ie: items or amounts being wrongly reported on your credit, these items are called “derogs” and they will pull down your credit score. You want to be proactive with your mortgage lender by bringing these issues up to him or her first, as opposed to being reactive when your lender states to you what you already had a knowledge of, but you try to pretend that you did not.

The more you know and take to your lender, the less time is wasted for you. If you disclose this information first and if the lender knows upfront, they will not be wasting time pulling your credit report, as multiple credit inquiries on your report can also have a negative impact. If you are more proactive, the lender will know if they have a mortgage program for your credit criteria prior to pulling your credit report.

2. Work on cleaning up your credit and enroll into a Buyers Workshop Class

Address your credit issues prior to putting a contract on a house is the first and foremost thing to do, this process will increase your credit score and lower your interest rates, making it possible to afford a little more house or maybe that perfect house you have your eye on. Consider contracting a credit repair services for those challenging derogatory items that are pulling your scores down, these services are often worth the money any your time to legally have erroneous items removed.

A Homebuyer’s Workshop is not just for the first timers, they are also encouraged if you have been a homeowner and have gone through a foreclosure or short sale. The topics generally discussed in these workshops are,

* What Are Your Rights As A Home Buyer-Brokerage Relationships
* Mortgage Prequalification-How much home can you afford
* Loan Programs-Which of the various loan programs best suits your needs

* Home Warranties-What are they and what do they protect
* Termite Issues-What you need to know about termites in Georgia
* Lead Based Paint Concerns-How does it affect me
* What is Title Insurance and Do I Need It

* What are Closing Costs and Who Pays Them
* What is the Sellers Property Disclosure

* How do schools figure into the equation
* What does a Home Owners Association Do
* Home Buying Tips

* The Contract and Important Timeframes

3. Get a Buyers Agent
A buyers agent will work exclusively for you, as the Sellers Agent will be working for the seller. Some real estate offices allow “dual agency”, that’s when an agent from the same office will be assigned to represent you, but still to whom do you think the loyalty will be to?

4. Get a mortgage lender.

Mortgage Broker or your Bank?

Some people may argue that the bank who has all your banking accounts and history will be your best place for a mortgage loan; but keep in mine the bank who has your money is not necessarily the best place for your mortgage loan, especially if you have bad credit. A mortgage broker generally are more creative with financing credit that has issues.

There is a concept that the bank you have all your accounts with would be your best bet for a mortgage loan, because there aren’t a lot of add-on fees and middlemen who touch your loan and get paid for it. The employees generally don’t get a commission, just an hourly rate, so they aren’t looking for ways to charge you extra. But this very bank that has all your checking accounts and money history are also the ones that will definitely decline your mortgage loan request if you have challenged credit. Being that the employees work on hourly rate or salary, they are not aggressive nor motivated enough to find a mortgage program for your credit criteria the way a mortgage broker would.

A mortgage broker have access to several different Bank’s programs for different credit criteria, where as a major bank may not. Although most have a minimum credit score of 620 or higher, some banks are beginning to relax the minimum score requirement to a 580. Beware, the lower the credit score, the more money down is required and the interest rate will be higher than the par rate.

Having a low credit score will not keep you from home ownership, but it does mean that you will have to buy a less expensive house than if your credit score was higher. There are several credit repair programs to assist with getting derogatory issues off your credit report, especially items that are reporting incorrectly. So first begin your journey to home ownership by working on your credit.

Maxed Out Your Credit Cards Over the Holidays? Learn How to Get the Balance Back Down

The holidays can be a very financially stressful time. We all know Christmas is not about the gifts or how much money we spend, but it’s hard not to buy those perfect gifts for our loved ones even if we really can’t afford it. In some cases, credit cards can be great especially around the holidays; it means even though we currently don’t have the money, it won’t stop us from being able to get those gifts. But now the holidays are over and you’re looking at your credit card statements saying, did I really spend that much?

Instead of putting your head under a pillow and avoiding the whole subject, why not take this time to start learning about your finances, your financial situation and your credit cards. Lets make it a News Years resolution to get your finances under control. Repeat after me, “This year I will take control of my finances; I will no longer allow my credit cards to control me.”

Start by making a list of all your credit cards, if you have more then one. Get out your credit card statements, and write down the balances and the percentage of interest that is charged on purchases and cash advances. Many people forget that credit card companies tend to charge more interest on those cash advances as well as withdrawal fee. These charges can add up quickly, so if you have to take out a cash advance from your credit card know which card is best to use will not only save you money but will also remind you that you are taking control. Remember that your finances and money is just a game and once you know the rules, you will become a much better player.

Now that you have your list see if it is possible to transfer any balances over to a lower interest rate credit card. If it is, go do that right now, the sooner you do, the more money you will save. You want to start paying more off on the highest interest rate credit cards first, just pay the minimum on the other ones.

If you do have a few credit cards with balances, another option is to see about getting a consolidation loan. Consolidation loans normally come with much lower interest rates and you save banking fees as you only have one payment to make.

The hardest part for most people when it comes to their finances is admitting that they will never have control if they don’t start educating themselves. Many of us tend to be avoiders when it comes to money and unfortunately, most things only get worse, when we avoid them. Finances, credit cards, banks, loans all these things really are not that complicated when we site down and take the time to learn. Try scheduling thirty minutes three or four times a week to read and learn about your finances. Once the thirty minutes is done give yourself a reward, and congratulate yourself on moving closer to your financial freedom.