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6 Ways To Improve Your Credit Score

July 2nd, 2009

Biz Man

Having a bad credit can be detrimental to your financing and places a number of hurdles in front of you when it comes to availing loans. Having a poor credit score can happen to anyone for a number of reasons ranging from not paying debts off to missing payments on bills. Luckily, there are ways that you can go about improving your credit score.

1. Pay on time
This is by far the most obvious way to improve your credit score, yet is still worth mentioning. It doesn’t matter if you’re only a few weeks late or a few months late, paying your bills late will result in a lower credit score.

2. Pay down debts
This is tricky because you want to have debts paid off almost to its entirety, but not completely. Your credit score is a reflection of how well you manage your credit, but if you pay off your debt completely you have no credit. The best way to approach this is to pay off most of your debt, but leave a little extra to manage.

3. Assortment of credit cards
Similar to paying off your debt is showing that you can manage different types of credit cards. This is not to say that you should have 10 different credit cards, but having a few different kinds will improve your credit score. Having a Visa, MasterCard, Sears and/or gas card will show that you can manage short-term and long-term credit cards.

4. No new credit
Unless it is completely necessary, it is vital that you stay away from getting any kind of new credit. Every time you get new credit an inquiry is added to your report, which drops your credit score to some degree.

5. Don’t file for bankruptcy or foreclosure
Filing for either of these can kill your credit score because of the fact that they stay on your credit report for 10 years. Not only that, but they also decrease your credit score over time. The good news is the closer you get to the end of your 10 years, the less of an impact it has on your credit score.

6. Delete errors in 48 hours
This is the quickest and most efficient method to correcting any errors from your credit report and raising your credit score. There is a lot of paperwork that is required to do this, but it will save you the hassle of having to deal with much more later on.

No matter how you opt to improve your credit score, it is vital that you get a jump on it as soon as possible. Having a poor credit score can kill your financial status and will make it extremely difficult to acquire any kinds of loans down the road.

Posted in Credit Card, Personal Finance, Wealth Building

Tags: credit report, credit score, improve your credit score

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5 Things To Look For When Buying Health Insurance

June 26th, 2009

Biz Man

The comfort and security of knowing you can see a doctor whenever the flu strikes or when you’ve broken your leg on the ski slopes is a privilege that many take for granted. Whether you have to select health insurance through your job or need to choose an independent company, there are plenty of factors that can affect your final decision. Weighing the pros and cons of various options is the best way to choose the health insurance that will accommodate your needs as an individual or family. Below are a few points to consider as you search for the best health insurance plan for you:

Know Your Choices

There are many different kinds of health insurance plans offered to the public. Knowing the various options you may qualify for will help satisfy your needs in the future. There are five type of health plans to consider: traditional indemnity, health maintenance organization (HMO), Preferred Provider Organization (PPO), Point of Service Plan (POS), and Health Savings Account (HSA). You should familiarize yourself with each option.

Know the Advantages and Disadvantages

Out of the five main types of health insurance plans, each one contains their own set of advantages and disadvantages. For example, with a traditional indemnity plan, individuals seeking complete freedom in the medical providers they can select should choose this option. But freedom comes with a price; the insurance plans produce higher rates and costs. This means individuals will face few restrictions, but also have to cope with no financial incentives that lessen patient financial responsibility.

Coverage and Benefits

An important factor to consider when choosing a health insurance plan includes the type of benefits offered and whether or not they will accommodate your needs. Some of the coverage capabilities to ask about include maternity, prescription, childcare, immunizations, emergency visits, and annual checkups.

Costs

Seeking information on the premium or employee contribution associated with a particular health insurance plan is important to make an effective decision. The cost you are responsible for will depend on the type of plan you choose; the deductible, coinsurance and co-payment; lifetime maximums, and the limitation of plan benefit coverage.

Are You Considered “Hard to Insure?”

If you are labeled as a “hard to insure” case, you may not find the most cost-efficient or accommodating health coverage. A few things to keep in mind include: avoiding lifetime maximums of less than $500,000, straying from plans that only offer hospital and surgical benefits, seeking out an HMO plan that tend to be the least expensive, and researching health insurance coverage provided by professional organizations, school alumni programs or unions.

“Using Personal Loans For Credit Card Debt…”

June 12th, 2009

Biz Man

Credit card debt is widespread amongst the average American household and seeking ways of consolidating debt usually means utilizing the equity in ones home or seeking a personal loan to service the credit card payments. Using the equity in your home to apply for an equity home loan and directing the funds towards debt management is an excellent method for getting your house in order in regards to your finances.

A personal loan without collateral may sound inviting but rest assured any financial institution or broker is going to want a higher return for the added risk. Using the equity in ones home has become a popular form of liquidity to finance and consolidate existing credit card debt, however not without its risks. Be sure you read the fine print & beware of the risks of defaulting on any repayments when using the equity in your home for a equity home loan as you could end up losing your family home to your creditors should you fail to meet the repayments!!!

Consolidating debt for some means digging into their 401K for immediate relief to the detriment of their future well being. Immediate relief from credit card debt and the high fees and interest associated with such debts is a huge incentive for some to look for the 401K alternative. The compromise to such action is that you are forgoing future savings and security for immediate relief, but if the timing is right and you are confident of repaying the loan it certainly is a viable proposition. It is a very appealing short term debt solution which has its benefits as well as draw backs.

It is always wise to stack the advantages against the disadvantages in anything dealing with your finances and when formulating a wise debt management strategy. Any unforeseen event which can disrupt your repayment schedule could mean penalties due in the form of tax installments or the fulfillment of the principal on the borrowed loan.

Tax perks when saving with a 401K account are reduced when borrowing off your retirement, as you are reimbursing the account with after-tax dollars.

Be sure to negotiate a better interest rate on any repayments with any loan whether it be a personal or a home equity loan. The higher the interest rates, the higher the repayments, the less disposable income that is left for savings or other pleasures of life so ensure you manage your credit card debts first as they carry the highest interest rates of any form of credit.

The rate you are able to negotiate your interest will be fixed for the duration of your personal loan and you will be required to make monthly installments to service the loan which will be at a rate much lower than any credit card debt you are carrying. Undisciplined habits of making late and overdue credit card payments tends to incur extremely high fees and even higher interest rates which can become a major problem to most budgets.

A savings account allows you the luxury of redirecting resources to areas of debt which have the potential to erode ones worth very quickly if left unchecked!!! When you compare the interest rate you earn on a savings account and the cost of credit card debt it makes little sense not redirecting funds from you savings account towards servicing debts elsewhere??? Be smart and service your credit card debt before setting up any high yield savings account, you will be thankful you did in the long run.

Posted in Credit Card, Personal Finance, Wealth Building, debt consolidation

Tags: Credit Card Debt, home equity loans, personal loans

2 Comments »