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Myths And Truth About Credit Score

(category: Credit, Word count: 348)
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Credit score is the key factor determining approval of almost any type of credit. It is based on the information contained in your credit report files. The widely used FICO score was developed by Fair Isaac Corporation, and it is a formula which assesses your potential credit risk.

The information used to calculate credit score can be broken down into five major parts. Your payment history with banks and other lenders will account for 35% of the score, the amount of money you owe for 30%, and the length of your credit history for 15%. New credit and a statistical assessment of how healthy your credit mix is will both account for 10%.

Credit score is not based in any way on the following information:

- references to debt management or credit counseling programs.

- person's marital status.

- current employment status, including how long with the same employer.

- credit report inquiries made by you, employers, insurance companies, or banks if made without your knowledge.

- what interest rates are charged on your credit cards, etc.

- public assistance received.

- person's age.

- child or family support received.

You can increase your score by:

- always paying bills on time.

- paying off or reducing credit card and other debt.

- keeping old, unused credit cards, departments store cards and other "revolving" credit accounts open, even if you don't use them.

- not applying for credit very often.

- correcting mistakes on your credit reports.

Banks decisions are made according to their own standards.

While the majority of lenders use credit score as a key factor in approving credit, other facts play their parts as well, among them: your income, employment status and length of time at present address, to name a few. Each bank has its own standards. What score is acceptable for a particular loan or credit product depends solely on a lender. The person's credit score might not be high enough to get credit with one bank, and perfectly acceptable with another.

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Credit After Bankruptcy Getting A Mortgage With Seller Financing

(category: Credit, Word count: 412)
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After a bankruptcy, getting approved for a mortgage loan is possible. However, those who apply for a mortgage should anticipate higher rates. To avoid this common pitfall, many choose to delay buying a home until their credit score increases. If you are eager to buy a home, there are other options available that may not involve high interest rates.

What is Seller Financing?

If attempting to get a home loan after bankruptcy, it is helpful to establish credit beforehand. This may include getting approved for a secured credit card or obtaining an auto loan. By doing so, you will increase your odds of getting approved for a reasonable rate mortgage.

Of course, there is always the option of seller financing. Also known as owner financing, this methods entails the new homebuyer making payments to the seller, and not a bank. This way, the homebuyer does not have to undergo the hassle of trying to get approved for a mortgage loan. With seller financing, the person selling the home establishes the interest, terms, and payments.

How Does Seller Financing Work?

If a homebuyer and seller agree to seller financing, consulting a real estate attorney is essential. To ensure that nobody gets the raw end of the deal, specific terms must be established, and a contract signed.

Seller financing is ideal for self-employed people and those with poor credit. Self-employed individuals have a difficult time proving their income. Thus, it may be harder for them to get traditional financing. On the same line of thought, those with bad credit may need time to boost their credit rating before applying for a traditional mortgage loan.

With seller financing, the home seller will agree to finance the home for a specific length of time. The loan term for seller financing are much shorter than traditional loan terms. On average, the seller will finance the home for five to seven years. At the end of the loan term, the buyer will agree to pay the seller a balloon payment. This allows the home buyer enough time to rebuild their credit and qualify for a loan with a mortgage lender.

Upon the conclusion of the seller financing agreement, the homebuyer must make a balloon payment to satisfy the agreement. The balloon payment is financed with a traditional mortgage lender. Thus, the original seller receives their money for the home, and the buyer begins making payments to the new lender.

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Paying Your Debts Off With A College Student Credit Card

(category: Credit, Word count: 790)
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Entering college is both exciting and daunting since it's the start of your journey to adulthood. College actually opens up a lot of opportunities like finally being able to live independently away from your parents and then being able to budget your own monthly allowance sent by your parents. Most parents open a credit card account in their children's name or provide them with a second card on their personal credit card account. Parents do this in anticipation of some future emergency that their children might meet or if ever they failed to send their children's monthly allowance at least the card can help their children in purchasing for the meantime some of their needs.

Another financial assistance available for students is the student credit card which is issued in their own names.

What is a student credit card?

It is a type of credit card that is designed for high school and college students. These cards function in the same way as any credit card issued by any financial institution. However, they have a few restrictions.

Some of the restrictions are as follows:

1. Some issuers require for a parent or guardian to co-sign meaning that the student's parents must agree to be the guarantor in case a student fails to repay part or all of the outstanding credit card balance. This is advantageous in some point since parents will have the control over the limit of available credit to be given to their children.

2. A much lower credit limit is provided to students. Issuers are aware that students have very limited sources of funds that is why they also offer a lower credit limit. Aside from that, students don't have yet any credit history so issuers don't have any basis in terms of their capacity to pay off debts. A low credit limit is provided to get students started building their own credit scores and the same time limiting the risk of loss of the issuer of the credit card.

3. The interest provided for student credit cards are much higher. This is the issuer's way of decreasing their risk of loss. The higher interest provides a way for credit card issuers to spread the losses over the entire student credit card population.

Why student credit cards are important?

Student credit cards offer great benefits if and only if responsibility is practiced in the using the credit card. A student credit card can help teach students responsibility and money management. Learning the benefits of building a good credit rating is important to help students understand the significant role that credit history will play in all their future endeavors.

Before signing any credit application or contract, a student needs to understand that they are fully responsible for paying the bills. Here are some rules of credit management that aims to guide you in avoiding future credit card problems:

1. Try to read carefully all information written on the application most especially the fine print because some of the important points of the application are stated there.

2. Before you sign for a credit card try to consider other options like debit cards. For debit cards, money are directly deducted from your checking account so can't spend beyond your deposited amount.

3. Be sure that when you apply for a credit card you will be able to repay the debt or else you will just submit yourself to an ever increasing accumulation of interest charges that will haunt you even after you graduate. Remember that when it comes to credit cards, it's just not possible to run away from your debt.

4. For your sake please avoid impulse shopping which tends to max out your credit card.

5. Make use of your credit card only for emergencies. If you are planning on using your credit card to pay off your spring break vacation then be prepared to pay the price because it's sure going to be higher than any waves you experienced on the beach.

6. To avoid temptation, it is much better if you refrain from always carrying your credit card. Bring it only with you if there is any important monetary emergency.

7. Always try to pay your bills early so you get to keep other charges to a minimum. Aside from that, some banks provide discounts for early payment that provide additional savings for you.

And lastly by using your student credit card wisely can help you in establishing a strong credit history that can lead to good mortgage rates and lower rates on some of the future loans which you are likely to apply for like car loans, housing loans and other types of loans.

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Credit Card Used By Teens Needs Control

(category: Credit, Word count: 397)
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Credit & Debit cards are a way of an important perspective of an individual in the society. The proper use of credit card early in life can help build confidence and begin good financial decision-making that will ultimately provide benefits for living a good debt free life. In addition teens would build an upgraded knowledge on balancing the need of credit card in future especially in the process of their studies and other car / home buying processes.

It has been recently estimated that the teenagers have been targeted consumer segment having in hand credit card solicitations as early in their teens. Credit card issuers never mind the fact that youngsters must be 18 to have a credit card of their own. Credit card holders are prominent among college students. College credit card surveys shows that at least 80% of the undergraduate students have at least one credit card under their own name without any other person being responsible for the payment. It has been observed that the students carry higher unpaid balances on their accounts. This ends in students opting to work for extra hours to keep their bills closed. This will gradually cut their study time.

The credit card company representatives have encouraged credit card offers to teens. In no way the credit card companies are responsible for the unreasonable risks after they offer credit cards to college students solely under their name. In such cases parents should be forced to take up with the responsibility for the sake of their children because the children take some more time to grow up and learn to deal responsibility with the credit.

To overcome all these shortcomings due to credit card for the teen's parents should expect their children to be trained properly in using a credit card. It's been surveyed that the children will learn lot by watching the parent use the credit card wisely. The parents can best do this by letting their children help them with the bills and match the receipts to the statement. This will give an idea for the children about the interest charges, penalties imposed for late payments, etc., it's also important to give the children about the different types of credit available and their purpose. Finally it's necessary to demonstrate responsible credit card use for the children in their life.

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Frequenting Hilton Hotels Go For The Hilton Hhonors Platinum American Express Card

(category: Credit, Word count: 480)
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The American Express Hilton Honors allows the cardholders to benefit from the Hilton HHonors signature benefits and rewards program. If you frequently stay at the Hilton Hotels and are also enrolled in the Hilton HHonors program, then the Hilton HHonors Platinum American Express will let you win points for free stays at the HHonors Hotels and making purchases. The card also makes you eligible for travel rewards and other benefits.

The Facilities Of The Hilton Hhonors Platinum American Express Card

The points on the card never cancelled or invalidated as long as the card is active. There are no set limits on the points that can be earned annually. The card also comes without any annual fee or pre-set spending limit. The card offers a low introductory APR (2.90%) and balance transfers; it makes you eligible for the regular platinum benefits from the American Express.

The card's reward program depends on the points you earn through your purchases, which can be solely used at the Hilton chain of hotels. You will gain 5 points (along with 3 points for hotel stays in future) on your card for every dollar you spend. You can also earn 5 points on your card, if you make buys from gas stations, restaurants, drugstores, supermarkets, and the likes. Moreover, with qualifying hotel stays, the cardholder stands to gain points as well as frequent flyer miles. You can use your points when they have added up to a minimum of 7500 points. The category of the hotel will determine a free night (ranging between 10,000 points to 40,000 points).

You must be informed that the purchase of the Annual Percentage Rate (APR) is high. However, for the initial six months, the introductory APR appears to be low. Though, later on the rate shoots up. The card also does not have any annual fee.

Additional Benefits

The Hilton HHonors Card promises you a host of facilities. The card provides protection from fraud and also offers you extended warranties and purchase protection. The Hilton HHonors Platinum American Express Card also gives you travel benefits like car rental insurance, roadside assistance, medical referral services, a global assist hotline, no liability for unauthorized Internet transactions, legal referral services, up to $100,000 travel accident insurance, various discounts, year-end financial statement, Internet account related services, access to special events, emergency cash replacement and guaranteed hotel reservations.

If you are a frequent visitor to the Hilton family of hotels, then the accumulated points from this card will save your money quicker than the other hotel reward cards on offer. However, it will be advisable to think twice before opting for this card, if you happen to carry balance every month, especially after the low introductory rate ceases; the high interest rate will considerably reduce the savings you earn through the points.

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Bad Credit Auto Loan Financing Should You Arrange Private Financing

(category: Credit, Word count: 375)
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Should you arrange for private auto loan financing when you have bad credit? The simple answer is yes, if you want to save money. Relying on dealership financing makes you the victim of high rates and limits your car buying options. By securing your car financing before you shop for a car, you get the chance to find the best available car loan.

Limited Options With Dealership Financing

Dealerships would have you think that there are very few financing options if you have poor credit. They let you pick a vehicle at what you think is a reasonable price. Then they turn around and charge you excessively high rates and fees to finance the purchase. Dealerships make thousands with these poor loans.

With dealership financing, you don't have the power to negotiate a better deal on your car or loan. You have to take what they give you, which isn't very good.

Take Control Of Your Financing

To get the best deal on your auto loan, check out private lenders ahead of time. Use the internet to search across the country for lenders who are willing to work with your adverse credit rating.

You can also request car loan quotes, so you can better compare lending companies. Without hurting your credit score, you can ask for estimates on a number of loan terms, helping you decide what is your best option in regards to loan terms.

Getting pre-approved for your car loan also gives you more control during the car buying process. You can go to any dealership or person to purchase your car. Sellers treat you like a cash buyer since you have a blank check ready to sign over to the dealership or individual. So not only do you get a better deal on your loan, but also on the car's price.

Quicker Results Online

Shopping for car financing only takes a few hours. And the loan

application just takes minutes to complete over the internet. In just a few days, your application can be approved with a blank check and contract express mailed to you. For the savings you'll see, time spent searching for online car loan lenders is well worth it.

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What You Can Do To Improve Your Credit Score

(category: Credit, Word count: 623)
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It is hard to watch television these days without hearing about credit scores. If you are not looking to get a loan or credit card, you may be wandering whether or not they are important. Your credit score is important, regardless of whether or not you plan on applying for a credit card or loan. In this article I will explain what a credit score is and why it is important.

What Is A Credit Score?

Your credit score will determine whether or not you'll be approved for a mortgage loan, and how high your interest rate will be. Your credit score will also determine the cost of your car insurance. Even certain jobs, which you apply for, will require you to have good credit. Having a low score will make things much more expensive, and you may find that some companies won't hire you. The easiest way to get a good score is to make sure you're responsible with making your payments on time. It is also important to understand what is used to calculate the score.

Calculating Your Total

The type of different loans you have makes up about 10% of the score. If you don't have an established credit history, the number of different accounts you have will be considered. Your payment history makes up 35% of your credit score. The number of different accounts you make payments on is considered, as well as number of late or missed payments you have. Any liens, bankruptcies, or judgments will be reviewed, and this information will be used to factor in your score. Services such as furniture rentals and car loans are included as well as credit cards.

The total amount owed makes up about 30% of your credit score. The number of accounts you have and the amounts you owe on all of them are reviewed. The closer you are to maximizing out your loans, the more likely it is that your credit score will be lower. How much you have paid back on your loans is also taken into consideration. The age of your credit history makes up about 15% of your credit score. If you have a long credit history your score will be higher if you don't have any negative marks in the past. The last factor that makes up your credit score is called new credit.

New Agreements

New credit refers to the number of new loans you have opened recently, and makes up about 10% of your credit score. The number of request you've made for credit cards or loans is also computed. Now that you know all of the things that are used to calculate your score, what can you do to improve it?

What You Can Do To Improve

One of the things you can do is make sure all of your bills are paid on time. If you are too busy to make sure your bills are paid on time, set up automatic payments so that the money is debited from your account on the day it is due. You also want to make sure you don't open too many accounts within a short period of time. It is also important to keep your balance low in proportion to the total amount of credit available on the loan. You should owe 25% less than the total available credit on your loan or credit card.

It is also better to pay off your credit card instead of moving over the balance to a card that has a lower interest rate. Constantly moving around your balances can cause your score to become lower, because the total amount you owe could fluctuate if you close certain accounts.

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Understanding Credit Repair Building

(category: Credit, Word count: 811)
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Before we begin to give you information on credit repair building, take a moment to think about how much you already know. This article should help give you more knowledge on building credit repair.

Building credit is more imperative now than it has ever been. If you have bad credit, it is regularly hard to get an apartment, a mortgage loan for a home, or any form of credit loans at all. Just the same, if you have no credit at all, it is regularly difficult to get a loan from most banks. As a result, it is critical that your credit rating is secure.

There are numerous ways to create credit, as well as repairing credit. Normally, if you are repairing your credit it takes about six months before a good number of banks will allow an individual to ask for a loan. Another way is to apply for credit cards that propose no yearly fees. Also, ensure the credit cards have low interest rates, because you do not want to get in further over your head.

Once you complete the application for a credit card, your credit will be checked which gives you the benefit of receiving all three of your credit reports free. Secured cards are normally for those who are seeking a resolution to reduce their bills and are more appropriate for those with good credit ratings. Though there are secured credit cards for those seeking to fix their credit. Cards with zero percent fraud protection insurance are good for those with bad credit, because it presents extra security for repair.

Anytime you own a credit card, it is subject to getting into the wrong hands. If you are building credit then cards are good because it presents you a means to enhance your rate. We all require currency to survive and sometimes when the funds are reduced, a helping hand comes in handy. Once you apply for a credit card, be certain to meet your monthly installments to help boost your credit rating and to keep away from depleting your rate.

The goal is to create or fix your credit so making the payments can only bring out rewards. If you are applying for an un-secure credit card be cautious because some stand for trouble. Be certain to check out the Better Business Bureau (BBB) at the start before applying for some credit cards because some will charge a excessive upfront fee. Forthright fees on credit cards regularly mean that the company is fraudulent. Keep in mind, you are building credit or repairing your credit rating, not attempting to get deeper in debt.

In the beginning of this article, we went over quite a bit of information concerning the building of credit repair and its importance. Now, we supply information about credit reports and how they can be important when building credit repair.

Credit Reports

Credit reports are papers that store important information about your credit history. If you have a bad credit rating and ask for a loan, the lenders will ask for copies of your credit report. Once they discover that your credit is low, you will probably get a "sorry, we can't help."

It is imperative to keep your credit rating high because this is the answer for obtaining what you want in life. Otherwise, you are proceeding to be out in left field attempting to find an answer to survive.

Once you apply for a loan and obtain your credit reports for free be certain to scope out the report cautiously to see where the problems rest. If you find any charges on your credit report that looks suspect be certain to apply for an application to challenge the charge. If you dispute the charges, you are taking responsibility of your credit, building your future, and fixing the issues at the same time. If you discover any charges that may have been overlooked when the bills came, be certain to take care of the charges right away. It takes a small number of time to ruin a life, but it takes a lifetime to rebuild a life.

It is imperative to create or repair your credit rating because nowadays you practically require perfect credit in order to get a car, home, personal loan, and so on. If your credit has any negligence nearly everyone will turn you down. If you require help with credit repair you might want to hire an expert that can get results. If you have skills then it is imperative that you deal with your credit issues immediately. Putting things off only includes more trouble. Then again, getting things done now brings forth results because effort is apparent.

Knowing the ins and outs of credit repair building will help you to fully understand the importance of credit repair.

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Putting Out With Business Credit Cards

(category: Credit, Word count: 564)
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Business credit cards have become popular as a source of financing for small businesses. The banks that issue business credit cards and many industry observers have identified small business credit cards as a potential area for significant growth. The personal credit card market is saturated, and the corporate business credit card market, is relatively small.

The small business credit card market presents financial institutions with a really good business opportunity. Those banks that do offer small business credit cards noted that business owners are spending more and more every month and that they carry higher annual balances than the average personal credit card holder. This holds the promise of higher fees and interest revenue.

Generally, the business credit card carries credit limits that are double the amount of the average personal credit card. But where the personal credit card is almost pushed to the maximum on its credit limit, the business credit card's outstanding balance is normally only about 75% of the credit limit. In spite of this, the risks on small business remain high. This is the reason why most business credit card issuers are very careful when processing and approving start-up businesses' applications for business credit cards.

In one bank that issues business credit cards, about four fifths of their business credit card holders have been in business for at least three years. Although this particular bank places a strong focus on developing their small business customer base, they have come to realize that there are higher risks associated with extending credit to small businesses. If you think about it, when in a bind, it would only be natural for people to default on payments towards their business credit cards before they default on personal credit cards. No one would want to impact their personal credit rating, although they might be willing to suffer some negative points on their business credit.

For this reason, most business credit card issuers will require that the business and the owner of the business accept joint liability for debt repayment on the business' credit cards. Although there may be some initial grumbling about the personal liability involved, most business owners end up agreeing to this term, because the resultant access to cash and the ability to separate personal and business finances, are of great value to them. Business owners also understand that securing a business credit card early on in the life of the business, helps it to build its credit track record; and that the sooner a track record is established, the sooner the business will be able to carry the business credit card's liabilities on its own.

Small business credit cards are convenient for travel and entertainment expenses. That is to be expected. But besides these, small business owners use their business credit cards to stock supplies, to supplement their inventory of products, and to cover other daily expenses.

For a time, the interest rates on small business credit cards were much higher than personal cards, as banks relied on traditional risk calculation methods and the absence of competitive pressure. That is not the case anymore. Business credit cards offering zero percent interest rates and reward rich incentives are advertised widely. According to issuers, the uptake is high. After all, business owners mind their costs, and low interest rates and affordable fees will always be key selling points.

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