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The Esoteric World of Understanding Credit Scores

dvThe Jackson family just recently lost their only means of transportation when the family’s SUV engine died rendering it useless. The family’s SUV met its surmise in the morning as the Jackson’s were heading out to work and school. Mr. Jackson, the sole breadwinner, worked as a fireman and was usually dropped off at the firehouse right after their three kids were dropped off at school. On this particular morning the vehicle never made it out of their driveway. The children became frantic as they wondered if they would be able to make it to school. Each kid wanted to know why, what, and how as they inundated their parents with a flood of questions. Mr. Jackson began interrogating Mrs. Jackson about the last time she took the SUV in for an oil change. Mrs. Jackson began to feel as if she was being blamed for the vehicle breaking down and became irate. Mr. Jackson raised his voice as he expressed to his wife the importance of vehicle maintenance. Mrs. Jackson, who was usually always calm, unknowingly began shouting in an attempt to be heard. Simultaneously, the children all started yelling amongst themselves while their parents jousted in an attempt to knock the other down with insults. The ruckus reached a fever pitch then abruptly stopped as Shelly, the youngest of the children, began to cry.

That morning the Jacksons all made it to their destinations because of the support of their friends. After having the vehicle looked at by their mechanic, a decision was made to purchase a new SUV because the cost of repairs outweighed the cost of acquiring a new vehicle loan. Besides, the SUV was six years old and the couple figured it was time to get a new one. The Jacksons knew that they both had excellent credit and getting a loan through their credit union would be a cinch. So, Mrs. Jackson gathered their information and applied online for a new vehicle loan through their credit union. They were instantly approved for the auto loan and they were awarded the best rate available because of their excellent credit scores. When Mr. Jackson was dropped off at home later that evening, Mrs. Jackson greeted him with the good news. With the loan already approved, the couple decided that they would go shopping for a new vehicle on the weekend.

When the couple arrived at the first dealership, they were bombarded by salesmen asking them if they needed any help. Mr. Jackson knew that he held a slight advantage over the dealer because he already had funding for his loan. He figured that he could go in and shop around and not worry about being approved for a loan or haggled on the price. The couple finally decided on a vehicle they both liked and was ushered into an office to close the deal. When the salesman sat down he instantly began to tell them about the benefits the vehicle offered. He talked about the upgrades they could get and the importance of adding an extended warranty to protect the vehicle. Mr. Jackson denied all of the offers and said that he already had financing. Without breaking a sweat the salesman asked Mr. Jackson if he did not mind telling him what rate he was getting. Mr. Jackson said sure and told him the rate. The salesman then told the Jacksons that he could get them a much lower rate than the one their credit union was offering. Mr. Jackson quickly said, “No, we are going to stick with the one we currently have!” Then the salesman gave them an offer they could not refuse, he said that he could knockdown the rate by up to 2 percentage points. The salesman then left the office to give the Jacksons some time to think about it.

Mrs. Jackson was really hesitant about using another lender and did not want to go through the trouble of applying somewhere else. Mr. Jackson was intrigued by the lower rate and wonder how much he could save per month. They both worried about having their credit pulled again because they did not want their credit scores to go down. The salesman came back in and asked them if they had made a decision.

Hesitantly, the Jacksons decided to see how much lower of a rate they could receive. When the salesman came back with the numbers they were blown away by the difference. The biggest variance was that of the credit scores. The Jacksons wanted to juxtapose their scores with that of the dealer. Mrs. Jackson pulled up their current credit scores through an online site and told the salesman what their scores were.

The salesman showed them their scores and it was almost 100 points higher than the online site scores. Mr. Jackson decided to call his credit union and ask them what their scores were. The credit union scores showed a difference of almost 50 credit points. Feeling flabbergasted and frustrated the Jacksons decided to hold up on the auto loan until next week. When they arrived at home, Mr. Jackson immediately went online to order his FICO credit scores. Again, these scores were also different. The Jacksons decided to wait until Monday so they could talk to their banker about the varying types of credit scores.

That Monday morning the Jacksons came into my office with an abundant amount of questions about their credit scores. I sat them down and offered them some water or coffee; but they both refused because they were focused on getting down to business. I explained to them that the rate we gave them was the best rate that we offered and we did not negotiate on our rates. They wanted to know why their credit scores were so different with each pulling. I told them that their credit scores depended on what credit scoring system was used when it was pulled. I told them that there are three credit reporting agencies and each of them has different scoring ranges for their credit scores. Equifax score ranges are from 280 to 850; Transunion are from 300 to 850; and Experian are from 330 to 830. Each of them may have different information being reported to them from different sources and creditors. Thus, because of these differences the credit scores could be different by several credit points. In addition, FICO has its own scoring system. Contrarily, the information FICO use is being pulled from the three major credit reporting agencies. So, your FICO Experian score may be different than your FICO Equifax score. On top of that, the three major credit reporting agencies has joined together to create their own unique scoring system to challenge the dominance of the FICO scoring system. Their new system is called the Vantage Scoring system and they scores range from 501 to 990. I also explained that each of the credit reporting agencies have specific scoring systems for auto lenders, mortgage lenders, and other lenders of different loan types. I also told them that most of the free online credit score sites may use different reporting agencies as due lenders.

They looked more confused when I finished than when they arrived in my office. I told them that the best way to be at ease about their credit is to pull all three credit reports and make sure that all the information is correct. Some information may not be reported or some may be fraudulent. In any case you may want to dispute some of the erroneous information or file a police report for the fraud. I told them to not worry about the inquiries because the scoring systems are intelligent enough to know that you are car shopping and not just randomly having your credit pulled. For instance, with FICO, an applicant can do 30 or more inquiries in a two week period and they will count it as one. Also, many underwriters know when someone is shopping for the best rate and will not look at the inquiries as a negative thing when making their decision.

Before they left my office, I told them to contact a credit professional because understanding how your credit work can be quite confusing. They both stood up and shook my hand and said that they felt better since I had explained to them why they were seeing different credit scores. As they left, I could sense that they still had a lot of questions, so I recommended to them some credit consultants who could help them. They thanked me and because I was so helpful and nice to them, they decided to keep the loan with us as a show of their loyalty.

Understanding how your credit work can be quite tedious. I would recommend that you pull your credit at least once per year. If you have any questions or don’t understand how to fix or repair your credit, please contact a professional

How to Get Your Teen Started With Credit Cards

rtyRecently, college students were offered credit cards on campus and thus often get into debt before actually earning an income. Although, now there is a Card Act of 2009 that no longer allows credit card issuers to advertise or promote their products and services on campus. Anyway, students still face potential pitfalls. The thing is every teen thinks that he or she needs a credit card just as well as a cell phone. So, it is a smart move for any parent to use these ubiquitous devices as teaching tools meaning that they should be monitored while explaining how valuable credit may be. And this will help to protect teens from abusing credit.

The following tips will help you to get started.

Check the teen’s credit report together.

It is not a secret that you can simply do this online. At first there should be no credit. Parents should explain that the use of the credit card will be reported to the major credit bureaus, thus any late payment will stay on the credit report for seven years. Teens should know and understand that credit reports are very important and they affect the cost of loans, mortgages, auto insurance as well as it impacts the decision of a potential employer or a landlord.

Parents can add a teen to their cards as an authorized user.

It can be useful to open a new account together with a teen. Just use a low credit limit and set up an online access to monitor spending.

Parents can consider student credit cards.

They are now offered by the major card issuers. They are provided with rewards including free FICO scores.

Secure credit card can be a good alternative.

These cards require a savings deposit in the bank that issues a card. So the credit limit is actually the amount of the deposit. Thus, teens can start building a good credit report while using the card regularly as well as paying on time and in full, of course.

There is a special card that is built for parents and teens – VisaBuxx.

It’s linked to the account of the parent and both (teens and parents) can monitor all the transactions online. Besides, this credit card can be automatically refilled if there is no money.

The point is parents and students (or teens) should cooperate. Credit cards are the first steps for any teen to start managing his own financial life. Parents should be patient. Don’t bail your teen up when he had reached his credit limit. Everyone makes mistakes and there are actually a lot of adults who fail with their credit and budget management. Let him consider a part-time job to get some extra cash for paying down the balance. Talk to your kid and explain the major points. Monitor his spending together and stay patient while paying attention to his mistakes. The truth is the earlier teens learn those financial lessons, the easier time they will have in their future life.

3 Popular Credit Myths!

tyMyth #1: You share a credit score with your spouse.

This is a myth! Both spouses have separate profiles. If you have joint accounts they will show up on both of your reports. If you call your credit card provider and add a spouse as an authorized user then that will also show up on both your reports. BUT, if you have no joint or authorized user accounts then there will be nothing that will affect your score from each other.

I ALWAYS suggest keeping separate credit profiles. The reason is simple. If you have a joint credit card and forgets to pay the bill, then both will incur a 30 day late. This along can easily reduce a score from a 750 to a 650. So there is no benefit to having a joint account. Keep separate profiles in case one spouse makes a mistake.

Myth #2: Your credit score only counts when you’re applying for a loan.

Our score is looked at for almost everything you do, such as:

*Applying for a job
*Applying for auto insurance
*Homeowners insurance
*Life insurance

Don’t fear the past. We all have made mistakes! It’s important to take control of your credit sooner rather than later and we hope this tip helps!

Myth #3: Paying off your credit cards in full will give you the best credit.

This topic is a huge debate! Some will say to keep a small balance (less than 10%), others will say to pay off your balance entirely. You see, these are both correct. Let me explain the difference.

Keeping a small balance: It’s no secret that FICO hits us dramatically for maxing out our credit cards. You will hear people say to keep your balance at 50% less than your limit, others will say 30%. Ideally the correct answer is between 1-9%, or in other words less than 10%. The theory on this is FICO will reward you for making payments per month which gives us great payment history. Payment history is a large part of our score so there is truth to this strategy.

Keeping a $0 balance: The argument here is that if you are not carrying a balance then you are not showing any payment history. Payment history is a large part of our score.

My opinion: I’ve changed my opinion on this strategy throughout the years and what I came up with after years of testing is this. I will suggest paying off your cards in full and have a zero balance. BUT I will suggest charging something small once every 3 months. For example, you can simply charge a pack of gum, or like I do, a tank of gas every 3 months. This will report as positive payment history.

The big caution here is to keep a 0 balance for a long period of time. By charging a small item every 3 months it’s enough to keep positive payment history.

This strategy will also be easier to remember compared to worrying what balance you are carrying over each month.

This entry was posted on May 24, 2016, in Finance and tagged .

Improve Your Bad Credit History And Get Better Interest Rates, But How?

deWhy Credit History Is Important?

You are in need of an urgent loan and the bank is reviewing your application. Well, that’s procedure and every lender will do the same thing. But what they are also going to evaluate is how your past history has been, regarding the payment of loans. Have you paid your bills on time, how long have you been using credit, how many credit cards have you obtained in a specific period of time and what is the current amount of your credit? These are some common questions that your lender might ask you when you apply for a loan.

The lender will then use your credit background and the credit scores to help determine whether you are eligible for a loan or not. So having a good credit background is critical if you plan on applying for a loan in the future. You would need to work on your habits to ensure that your credit background remains good but if there are some flaws in your credit background, there’s no need to worry. Although they cannot be completely erased; but with time, your good credit scores will cancel out the negative aspects.

But what should you do to ensure that your credit history remains untainted?

Review Your Credit Reports

The credit reports can be changed once they have been made so just go through the whole document and look for any errors. There are chances that some information might have been missed. Rectify any errors by notifying the authorities.

Get Rid of Bad Credit Habits

Some of these habits affect your credit more than others, but it’s better that you avoid them all. Indulging in these activities is going to do nothing but lower your credit scores. So Beware!

Delinquent Payments even only for a few days will reflect badly on your credit history.

Missed Payments will lower the FICO Scores and it’ll take some time increasing the scores, so it’s better to set up payment reminders to keep you from missing any payment.

Using credit cards will ultimately increase your debt and if you are not able to pay it off on time, the scores on your credit history will become quite low. So avoid using credit cards. Instead use cash or debit cards for purchases. Cancelling them will only decrease the amount of available credit, so it’s better to just keep them safe at home.

Changing your money habits might be tough work but you’ll need to distinguish between the things that you really need and the things that you just want. Adding expenses into an already crammed budget will only increase your debt. So keep your unnecessary expenses to the minimum so that it doesn’t reflect negatively on your credit history.

Building good money habits will surely change your bad credit history and put you out of the financial depression that you were sinking in. So improve your credit history and get better quotes for your loans. Best of luck!

If You Have Bad Credit, You Need to Read This

dfMany consumers wonder is credit repair legal? YES, actually it’s your right as a consumer to make sure your credit report is accurate, so there is nothing illegal about it!

There is also a huge misconception that credit bureaus are some type of government entity, they are not. In fact your local bar is just as much of a government agency as a credit bureau. A credit bureau is a business pure and simple, they have one purpose, which is to make as much money as possible. They don’t want to help you- they just want to make money! Making sure you have a low score helps them make cash, how?

Credit bureaus are essentially a lead source for lenders. They get paid by lenders so they can run your credit files when you want credit. They also sell thousands of leads everyday to lenders all over the country.

You know those “pre-approved” credit card offers you get in the mail? Well those are directed to your mail box from information sold by the credit bureau to the credit card companies.

I’ll give you one guess what type of consumer commands the highest lead price?

No it’s not the ones with excellent credit, they already have a good credit card and probably have money! You guessed it, lenders earn the highest profit off consumers with bad credit! Why?

If you have between a 580-680 you are the most profitable client for a credit card company or lender because you can still qualify for a loan and usually your willing to pay high interest for the privilege.

You might think this sounds crazy, aren’t those with bad credit a higher risk? Well not really because these lenders take out insurance to cover their loss in the event you don’t pay. If you have over a 600 FICO score they can get insurance on your account. Then if you don’t pay they collect the insurance and sell the debt! When you take into consideration the high interest rates you will pay most likely the lender would never lose a cent on your account.

Lets compare the lenders income possibilities for the following clients:

Good credit: Paying Bills on time, low interest rates, no late fees, low risk but low profit as well!

Bad Credit: Paying late fees, paying higher interest rates, needing more credit, cash advance fees. Higher risk but way higher profits!

As you can see over the life of the customer the bad credit client will always be more profitable. So its sad but the credit bureaus actually have an incentive to keep your score low!

You have the legal right to challenge anything you might feel is not accurate on your credit report. There have been laws written regarding your credit: how it’s reported, how long it can be reported, the accuracy of the reporting, and so much more. These laws are written to PROTECT THE CONSUMER!!!

Here are the main groups of laws and a short description of some of what they do:

The Fact Act (FACTA) – This act entitles you to a free credit report every year. It also forces the credit bureaus to disclose the factors that are affecting your FICO scores.
The Fair Credit Reporting Act (FCRA)-This act forces the credit bureaus to maintain accurate information on all its clients.

The Fair Credit Billing Act (FCBA) – This act is for original creditors. It forces them to bill correctly, notify the consumer correctly, handle disputes properly, and report accurately.

The Fair Debt Collections Practices Act (FDCPA) – This act is for debt collection companies. This act spells out exactly what collectors can and cannot do when attempting to collect a debt.

So as you can see credit repair is totally legal. It’s your right to make sure you have an accurate credit report. Have you been denied for a loan? Are your interest rates too high? Well its only for one reason, your credit report! You owe it to yourself to make sure the information is accurate.

How to Improve Your Credit Score to Find Better Employment

sdIf you know your résumé and cover letters are stellar and you perform well in employment interviews, yet you keep falling short of your goal to be hired in your chosen profession, your credit score/credit report could be holding you back. That is because employers view your credit score as a measurement of how well you fulfill all the financial promises that you made to lenders. It is a known fact that employers want employees with integrity, character and enough social skills that they will fit in well with the employer’s existing team. That is in addition to plenty of industry experience. You could also be held back by the results of a criminal background check, but normally you would know if that were the case.

The average credit score in the US is 705. An excellent credit is any score above 739. If your goal is to secure employment in a profession that pays well, you should be aware that every employment application that you fill out normally authorizes employers to check your employment history, references, background and credit report. Positions with more responsibility and higher compensation automatically require a more extensive background check, credit check and criminal background check. If the final two or three candidates are otherwise equal, results from a background check, credit check or criminal records check often makes the hiring decisions easy for the employer.

Here are the best ways to improve your credit scores:

    • Always pay all your bills on time, or preferably early. This is the highest weighted factor in calculating your credit score.

 

    • Start an automated savings plan so that you pay yourself first every month and live on the remainder. This can be done by setting up automatic deductions from your paycheck to your 401K/IRA/403B etc. or using the automated bill pay service with your online banking to contribute to a savings or retirement account each month. People with the discipline to keep six months of living expenses in a savings account are normally able to maintain an excellent credit history and make better financial decisions.

 

    • Keep your credit utilization rate under 30% vs. your credit limits; if possible, a 10% credit utilization rate vs. your credit limits is ideal.

 

    • In many cases, especially if you have consumer debt with high interest rates, you can use the equity in your home for a debt-consolidation loan (pay off debt with a cash-out refinance/home-equity loan). In many cases, this will improve your credit scores dramatically, but you must have the discipline to keep those credit card balances at zero by paying off your consumer debt each month.

 

    • Do not close down the credit cards/credit lines that you paid off, even if you will not use them anymore. The more open credit you have and the lower your balances on same, the better your score will be. The older your open credit lines are the better it is for you (stability).

 

    • Maintain stability in your job, profession and address. Frequent changes in your profession, job or address often lead to financial difficulties/unemployment because without stability you are a less desirable candidate for credit or employment.

 

    • Work a part-time job evenings or weekends to pay down your debts faster. Pay down the debt with the highest interest rates first for maximum impact.

 

    • If you have had financial struggles and you have the debts to prove it, write and ask your creditors to agree to remove your late payment record in exchange for paying off your debt in full. Let them know that if they do not agree to this in writing, you will have to focus your repayment efforts on other creditors who are friendlier because you have such limited resources.

 

    • Analyze your credit records carefully from each of the three credit bureaus because there may be mistakes that are holding your score down. These mistakes could be as minor as old late payments that are still on your credit history even though they are over seven year old. Follow the directions to dispute credit reporting errors carefully. Each agency has their own policies and procedures. I recommend you use certified mail with a return receipt on all correspondence, so you have official proof of delivery. If one of your creditors fails to respond within a reasonable time, you will automatically win your dispute.

 

    • Avoid bankruptcy whenever possible, including reorganization of debts bankruptcy because both are a public admission that you are financially inept. Everyone knows Lawyers are expensive and frankly, you could put that money toward paying off your debt and get a second job to accelerate the process of paying off your debts. Regular consumer debt with late payments will drop off your credit history automatically after seven years. A bankruptcy remains on your credit report under public records for ten years and many employers prefer not to hire candidates who filed bankruptcy.

 

    • Do everything possible to earn a promotion or raise at work, which will help you pay off your debts faster. If you are overdue for one, present your boss with an irresistible written proposal to make your raise or promotion a reality.

 

    • Hire a CPR or Tax Accountant to maximize all your income tax deductions. Yes, they are worth it because they normally generate more savings than their fees and you will learn from them!

 

    • Hire a Certified Professional Résumé Writer if you think that you are underpaid or ready to advance and test out the job market in your spare time. Passive candidates are greatly preferred by employers and in many cases, they pay up for them.

 

    • Get married, find a great roommate or rent a room out in your home to a college student, artist or professional to reduce your monthly living expenses.

 

    • Whenever possible, use public transportation in lieu of owning a vehicle and paying for car insurance. The cost savings is staggering, especially if you have to pay to park regularly.

 

    • Advance your education or skill set whenever possible, that way you will be more in demand in the event of a layoff and you will advance/receive pay increases faster.

 

    • Ideally, it is beneficial to have two credit cards, a vehicle loan/bank loan and a mortgage because this shows that you are responsible enough to have three major types of credit.

 

    • Resist the urge to splurge! Train yourself to be a saver not a spender by repeating this mantra, “Use it up, wear it out, make it do or do without.”

 

    • Request a free copy of your annual credit report every year from each major credit bureau. Search for “Annual Credit Report” with Google for the only online source of free consumer credit reports from all three credit-reporting agencies per federal law.

 

    • If any of your creditors have not reported your timely payment history, write to them and request that they report your good payment history to at least one of the major credit bureaus.

 

    • Use the online bill pay feature of your checking account to set up automated monthly/bimonthly payments for all of your debts. This way you will not forget if you have a car accident, mishap, long vacation or are hospitalized. An ounce of prevention is worth a pound of cure.

 

    • Have some type of Hospitalization insurance in the event that you are hospitalized with an illness, injury or sickness. AFLAC has several consumer friendly insurance options including one that pays you an income while you are hospitalized.

 

    • Avoid divorce if humanly possible, a healthy percentage of couples actually end up loving each other again after a separation. If you must divorce, I recommend using Divorce Mediators instead of Divorce Attorneys because you will benefit from a more amicable process, a more beneficial divorce settlement and significant cost savings.

 

  • Avoid co-signing any car loans, student loans, personal/business loans or mortgage loans/home equity loans for friends or family.

How to Choose the Right Travel Credit Card

rtTravelling is one of the passions shared by most people on this planet. People travel for the purpose of business and to explore new destinations. Traveling provides people with an opportunity to explore new cultures, cuisines and experience new languages. Given that traveling is an integral part of the lives of most people these days, many credit card issuers offer cards that come with a variety of travel benefits.

If you are someone who travels on a frequent basis, you will benefit from applying for a travel credit card as it will provide you with access to exclusive offers, promotions and deals that will make traveling a more rewarding experience for you.

It is a fact that there are too many travel cards available these days and so it becomes a daunting task to choose the right credit card for traveling. Here are a few tips that will help you in making the right choice:

1. A good sign up bonus – most cards come with different types of sign up bonus and in the case of travel credit cards, the cardholders are offered with free air miles or a free air ticket when they use their card for the first time after receiving it. You should make sure that the card you opt for will offer you with a huge sign up bonus preferably in form of air miles so that you can redeem the same for your travel bookings.

2. More air miles for your money – earning air miles is one of the main reasons behind applying for a travel credit card and so the card that you opt for should apply you with more air miles for your credit card expenses. For example, every time you spend a dollar on the card, you should be able to earn at least 1 air mile. If the credit card cannot offer you with sufficient air miles for your expenses, it will not be very beneficial to you.

3. Airport lounge access – the travel credit card should also offer you with complimentary access to Airport Lounges so that you can travel with luxury and comfort. Since most of the top credit cards for traveling offer complimentary lounge access to the customers, it will not be very difficult for you to apply for such a card.

4. Travel Insurance – another feature that you should look for when applying for a new travel credit card is free travel insurance. If you are provided with travel insurance coverage, you can travel in peace as you will be assured that the insurance policy will provide you with the required support in case something bad happens when you are on a trip.

5. Low annual fee – even if the card offers you with a wide range of features, it will be futile to opt for the card if it comes with a high annual fee. The annual fee charged for the travel card should be low so that you will not end up spending a lot of money to avail the benefits offered with the card.

6. Wide acceptability – it goes without saying that the travel card has to be widely accepted so that you will not have any problem using it when you are on a vacation or a business trip. The acceptability of the card should not be limited to only a handful of merchants.

Introduction to CIBIL Score in Changing Landscape of Loan & Credit

weThe landscape of loan and credit in India has drastically changed in the recent times. In August 2000, the country’s first credit information company (CIC) came into existence. This organization is named as Credit Information Bureau (India) Limited though it is more popular by its acronym CIBIL. The entity steadfastly collects as well as safe keeps credit records of both individual and corporate borrowers. The range of information includes both borrowing and payment, relevant to credit cards and loans. CIBIL is licensed by the country’s supreme banking authority the Reserve Bank of India (RBI). Moreover, the accredited organization is governed by the Credit Information Companies Regulation Act, 2005.

To cut a long story short, CIBIL provides mutual benefit to both debtors and creditors in dealing with debt issues. In one hand, it helps creditors to run their business more efficiently while on the other, its effort proves helpful for borrowers to seek loans faster and at lucrative interest rates. CIBIL generates a three-digit credit score for every borrower. This score usually ranges from 300 to 900 and a score of 750 and above is considered good. A good credit score equips a borrower with more bargaining power with credit institutions while seeking loans or credit card facility. A credit rating or the score aptly reflects extensive credit history of borrower. Borrowers with sound repayment history are less likely to turn defaulter.

Thanks to the dedicated effort of this premier organization, securing loans and credit cards is much hassle-free these days. As such, it is an undeniable fact that a good CIBIL rating is actually an excellent asset for borrowers to impress credit institutions. There are lots of benefits that good credit score provides. Banks and other credit institutions process loan applications of applicants having higher CIBIL ratings faster. In contrast, the same submitted by folks with low credit rating are usually processed later. Moreover, loans are approved with much lower rates of interest to folks who have impressive credit history. A good credit history also helps a borrower to seek mortgages and housing loans almost instantly.

Thankfully, it is possible to improve one’s credit rating. However, the process is time-consuming and it is mandatory to stick to certain norms and regulations to achieve the objective. There are quite a few dedicated online portals that categorically provide information on the particular aspect. Now, at this stage one may wonder how CIBIL collects the information relevant to credit history of borrowers. The eminent organization has an array of strategic partners, which mostly include banks and credit institutions. These entities are dedicated to furnish necessary information to the CIC on a regular basis.

India is home to a population nothing less than 120 million. Out of this vast populace only a handful few are actually knowledgeable about the world of finance and loans. Thanks to the dedicated and concerted effort of CIBIL, credit awareness among Indians is fast raising. This is an excellent precursor to the nation’s impressive financial prospect ahead. People even from the marginal section of the society are conscious about maintaining good credit rating these days.

This entry was posted on April 3, 2016, in Finance and tagged , .

Does This FICO Score Make Me Look Fat

dTHE ANDROMEDA EFFECT

I’ve heard it and I know you have, pretty people always seem to get a break.

I want to believe the opposite is true, but sadly, ugly people are screwed out of some perks just for being, well, ugly.

THE SKINNY (NO PUN INTENDED)

EVERY experience I’ve had during a traffic stop, no matter my disposition, is tense and I’m approached as if the stop sign or turn signal I omitted meant something personal to the officer.

My omission is followed by a ticketing to warning ratio of several to none. Even after ticketing, I am remanded again, “watch your driving, ya hear?”

My girlfriend on the other hand, fits the Andromeda mold.

She seems immune to the ills of the ticketed masses.

In fact, these “confrontations” become more of a social delay, and result in the officer giving helpful tidbits, and a warning that almost seems care more about her safety from other driver’s careless habits.

Why the score matters

If you want to join the ranks of the faceless ugly masses, try having a low FICO score.

In reality, it only takes a slightly blemished, neglected score to feel the pain of financial rejection.

Like the type of score that comes from not caring much about the facts, turning a blind eye–all while still paying the bills.

Really. I’m not kidding you.

You’ll be screwing yourself out of a ton of unseen perks, and out of your own hard earned cash. They won’t even have the gall or decency to say it to your face.

From credit approvals, to rates, to paying more for just about everything, a poor credit score keeps you down like nothing else financially.

The same product will cost you more. Period.

For example, a $20,000 car will set you back $21,248.95 at 48 months and 4 percent.

The same at 12%? $25,280. That’s a $4,000 difference on the exact same $20,000 car, all because your credit has a mullet.

For a house? It gets downright ludicrous. A 200,000 house, financed for 30 years.

Pretty FICO: 3% interest, pays 103,554.90 in interest alone.

Ugly FICO: 6% interest (good luck even getting that), pays 231,676.38 in interest alone.

That’s 128,000 more in interest!!

Same house, same time. Ugly credit. Pay twice the interest.

Again, this isn’t even looking at really ugly, or even kind of ugly credit either.

It’s looking at slightly blemished credit. If that doesn’t scare you, it should.

You can extend this scenario to everything purchased on credit. That should shock you… even more than looking into the mirror each morning.

With a moderate interest credit card, say 15%, making the minimum payment, you can expect your original balance to DOUBLE in as little as 3-5 years. Still reading?

The good news, your FICO can be sexy… and they said you can’t fix ugly!

NOW, THE IMPORTANT STUFFWHAT DO THE NUMBERS MEAN?

800+

Exceptional, less than 1% of people in this range are likely to be seriously delinquent on payments in the future.

These people are WELL ABOVE the average US consumer’s score, and will experience easy access to credit, and RECEIVE THE BEST RATES from lenders.

740-799

Very Good, approximately less than 2% of people in this range are likely to be seriously delinquent on payments in the future.

These people are ABOVE the average US consumer’s score, and will experience relatively easy access to credit, and MAY QUALIFY FOR BETTER RATES from lenders.

670-739

Good, approximately 8% of people in this range are likely to be seriously delinquent on payments in the future.

These people represent the MEDIAN US consumer’s score, and will experience decent access to credit, and are considered “ACCEPTABLE BORROWERS” by lenders.

580-669

Fair, approximately 27% of people in this range are likely to be seriously delinquent on payments in the future.

These people are BELOW the average US consumer’s score. They are considered SUBPRIME borrowers, and obtaining credit may be DIFFICULT. If these borrowers are approved for a loan, IT WILL BE AT A MUCH HIGHER RATE.

579 and below

POOR, approximately 61% of people in this range are likely to be seriously delinquent on payments in the future.

This is considered poor credit. Most applications for credit will be DENIED. If you are approved for a credit card, it is likely to require a FEE and/or DEPOSIT. A score this low is usually a result of bankruptcy or other major credit problems.

WHAT AFFECTS YOUR SCORE?

35% – Payment History

30% – Amounts owed on credit and debt

15% – Length of Credit History (Don’t close old accounts!)

10% – New Credit (Don’t open new accounts!)

10% – Types of Credit Used.

Choose Your Service Provider Wisely

erThese days, e-commerce is on the rise and people are using different ways to provide their customers convenient and easy ways to shop. Credit card processing is the best way to take your online business forward. It not only helps your business to grow but also entice customers to buy products or services from your business.

If you want to expand your small business and aspire to become a business giant, it is crucial to find a trustworthy payment gateway for your credit card. If you fail to do online sales management, hit the brake and ask yourself – ‘What’s stopping to do it properly?’ May be you cannot manage your online sales because of the inefficiency of the service provider you have chosen. But, you still have time in your hand and it’s better to change your service provider before any mishap. When your service provider is genuine, it will ensure you secure credit card processing. All you have to do is to ask some simple questions while picking your service provider. Check out the questions you should ask.

What are their fees? The fees of the merchant services for website are inclusive of the application and set up fees, monthly statement fees, interchange fees, and early termination fee. Your service provider should clear all the doubts regarding the fees and check whether they have any hidden cost.

What are their types of accepted payment? If you are an owner of a retail business, you will want to ensure that your chosen payment processor accepts all kinds of cards such as Visa, MasterCard, etc so that none of your customer has to face any problem during the payment.

How long will they take to complete the entire process? Many service providers of online merchant accounts complete their job within a quick turnaround time. Ask them directly how long they will take for your account set up and for the installation of the equipment so that you can chalk out your plans. If you have selected the right service provider, they will assist you with patience in every step.

There are dozens of credit card processing companies, some of which includes major players. However, you have to be very critical while choosing your processor. Look for a company which provides solutions to low-risk and high-risk merchants. Moreover, companies that provides onshore and well as offshore services can be a good option to make a choice.

This entry was posted on March 17, 2016, in Finance.