Why Debt Free Living is Dangerous: The Truth You Won't Hear from Experts

The debt free scream is all the rage but may be dangerous to your financial life. It’s not that managing your debt or debt free living is dangerous, but here Joseph Hogue talks about how not managing your credit score is more dangerous than you might know.

How to Increase Your Credit Score in Less Than a Year

Step 1: Pay your bills on time

Your payment history accounts for approximately 35% of your credit score more than any other factor. If you have a history of paying bills late, you need to start paying them on time. If you've missed payments, get current and stay current. Each on-time payment updates positive information to your credit report. The longer your history of paying bills on time, the higher that portion of your credit score will be.

Step 2: Review your credit report

* Errors happen, so review your report closely for: 

* Accounts that aren't yours 

* Accounts with the wrong account date or credit limit listed 

* Names and Social Security numbers that aren't yours 

* Addresses where you've never lived 

* Negative information, like late payments, older than seven years. (Late payments can only legally stay on your credit report for seven years.)

Under the Fair Credit Reporting Act, the three national bureaus - Equifax, Experian, and TransUnion - and your creditors are responsible for correcting errors on your report. The Federal Trade Commission (FTC) website has detailed steps for correcting errors, as well as a sample dispute letter. If you find accounts that aren't yours and suspect you've been the victim of identity theft, you'll need to place a fraud alert on your credit report, close those accounts and file a police report and a complaint with the FTC.

Step 3: Pay down your card balances

The amount of debt you have is heavily scrutinized for your score. Your total reported debt owed is taken into account, as well as the number of accounts with outstanding balances and how much available credit has been used. The total reported debt is compared to the total credit available to determine your debt-to-credit ratio. Your credit score can suffer if those numbers are too close together. Your best plan for lowering your debt is to make a plan to pay it off. While it may seem like a wise move, don't consolidate debt onto one lower interest card. Credit inquiries and opening new credit can lower your credit score, at least in the short term. Closing old cards with high credit limits can also throw off your debt-to-credit ratio. If a new credit offer is too good to pass up, keep your total amount of credit available high by not closing any old credit cards.

Step 4: Use Credit

You must use credit regularly for creditors to update your credit report with current, accurate information. While paying with cash or a debit card may make it easier to keep to a budget, a cash-only lifestyle does very little to improve your credit score. The easiest way to use credit is with a credit card, especially if you're trying to improve your score to qualify for an installment loan. If you have an old credit card, start using it responsibly again. A long credit history is a positive determining factory for your credit score, so making an inactive account active again may be advantageous. Although you need to make a point to use credit regularly, only charge as much as you can pay off. Keep your credit balances low so as not to damage your debt-to-credit ratio.

Step 5: Monitor your report

Keeping a watchful eye on your credit report will let you see if your hard work is paying off. Credit monitoring allows you to keep tabs on account activity. You'll also be immediately tipped off about any fraudulent activity. The credit bureaus and FICO offer credit monitoring services, which typically cost about $15 a month to monitor all three of your credit reports and scores. You can also use Credit Karma or other free sites alike.

Step 6: When You're shopping for a loan, do it quickly.

This is a hack due to the lag time between the lenders and the 3 bureaus.

When you apply for a loan, the lender will "run your credit" ---that is, send an inquiry to one of the credit rating agencies to find out how creditworthy you are. Too many such inquiries can hurt your FICO score since that could indicate you're trying to borrow money from many different sources. Of course, you can generate a lot of inquiries doing something perfectly reasonable--- like shopping for the best mortgage or auto loan by applying to a number of different lenders. The FICO scoring system is designed to allow for this by considering the length of time over which a series of inquiries are made. Try to do all your loan shopping within 30 days, so the inquiries get batched together and its obvious to FICO that you are loan shopping.

I am a professional credit consultant that enjoys helping people reach their long-term credit goals by educating consumers on how they can improve their credit scores. A low credit score can cost a consumer thousands of dollars a year in mortgage/personal loan interest fees.

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Obtaining a Loan With a Bad Credit Profile

Most people need to apply for credit from a financial institution at some stage of their lives, whether it is to buy a home, furniture or other necessities. Some people may find it easy to obtain that loan whereas others may have trouble to qualify for credit. Many clients may want to apply for loans with a bad credit record.

No two clients share the same financial background. There are various reasons why certain clients may be considered to be less credit worthy, and therefore regarded as more risky in terms of credit worthiness than others. Some may have defaulted once, others more than once, some may have credit judgements against their names, whereas others may even have become insolvent.

In order to qualify for any type of credit, a client has to meet certain lending criteria. Financial institutions make their decisions based on a client's credit record, his or her past performance in terms of paying back debt. To obtain loans with a bad credit record, is more difficult than getting finance with a clean, or good, record.

Therefore financial institutions such as banks and other lending firms will look more carefully at a client's credit history before agreeing to lend them money. Every client's past credit history is checked carefully and based upon past performance the institution will either lend the client money or refuse them. They will look at various issues that may influence their decision.

Your credit record is one of those; they may also consider all public records that could influence your profile, as well as all past financial account information. Therefore bad credit loans are not easily obtained. Some institutions will also check whether or not you have any serious defaults against your name, such as a home or car repossession for example.

However, all may not be necessarily lost, since some institutions may consider loans to clients with negative or bad credit records. It depends on who you get in touch with. There are some institutions that understand people sometimes experience bad times and may find it difficult to honour the repayments on their debt.

They understand that clients may be rehabilitated and build up credit worthiness again in future. Bad credit loans are therefore not so unusual, because certain lenders understand that many clients with a bad credit history may be able to turn their financial position around and may be able to service their future debt.

This applies to various categories of debt, whether the client wants to borrow money for personal reasons to acquire some essential items or to buy materials to update his house, for example. These personal loans are considered in many cases and obtained by clients.

The same may even be true for the client who needs a cash injection to keep his business going. Lenders look at every case individually. Bad credit loans are granted more often than people realise, because certain lenders actually specialise in assisting clients with a bad credit history.

Of course clients with a less positive credit history will pay more for their loans and their repayments will attract higher interest rates since lending companies want to protect themselves. It is not considered to be a personal issue; it is simply standard industry practice.

Every case is considered on its own merits and different clients are treated according to their specific profiles when loans are considered. That is why bad credit loans may be charged at higher than normal interest rates.

Once a client finds that it is too difficult to obtain a loan the traditional way, they should look at those lenders that may consider doing business with them even though they are considered high risk.

These lenders advertise their services in the press and also on the internet where their websites often explain in detail how they assist clients. Another popular source these days is the broker who acts as a middleman and introduces the client to lenders. This broker puts the client in touch with the most likely lenders who may be able to help them with a loan.

About Us

At We Find Any Loan we help clients to get in touch with money lenders that can assist them with loans, even when they believe they do not qualify for credit. Although we do not act as money lenders ourselves, we introduce clients to Monevo Ltd. who works with a panel of lenders. They study every client's profile thoroughly and make a quick decision about credit. Various types of credit may be applied for through our online service that uses Monevo's advanced technology to match clients with possible lenders - all in a matter of a few minutes. Our free introductory service is available to UK residents only. For more about us and our services, please visit http://www.wefindanyloan.com/

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5 Important Tips to Get a Personal Loan Approved

You might have a smooth running life, but that in no way means that there won't be a problem with you. You can face an emergency situation at any point of time. So, for that, you need to be careful enough. A loan at this point of time can be a savior for you. It can help you meet a financial crisis. Through a loan, you are going to get some cash that will be helpful to meet the personal needs. But getting a loan is not that simple. There are certain steps that you need to abide by so that your loan plea gets approved.

Check the Eligibility Criteria

Most of the loan providers do have an eligibility criterion. Some prefer the borrowers to be within a particular age group, generally between 21 to 65 years. Another thing that they might be checking about you is a minimum amount of earning per year. Maintain that you are not a defaulter on any of your previous loans or credit card bills.

Verify Your Credit Score

A credit score is what the lenders are going to determine before they give you a loan. So, before you apply for the loan check for the credit score so that the loan plea does not get rejected. If your scores are not good enough rectify them. This will increase your chances of getting the personal loan approved and also might fetch you attractive interest rates.

Provide Genuine Details

When you are applying for the loan, make sure to provide all details that are true to the best of your knowledge. The lenders will doubt your intentions and will cross check everything. They might consider visiting you or giving you a call personally to verify the information you have provided. So, giving them genuine details will increase your chances of getting the loan approved.

Avoid Several Applications

Aim for a realistic loan amount that is payable by you. So not ask for huge amounts because in that case the plea might get rejected. Another mistake that most people make is applying at several places. The lenders will doubt your intentions and your probability to get the loan approved will be reduced. Also, multiple applications will affect your credit scores.

Have a Stable Source of Income

Having a stable work history is sure to impress the lending institutions. If you are having a minimum of two years of experience that will be an added advantage. Try to avoid switching jobs and maintain a stable source of income.

These are some of the factors the loan providers take into consideration. So, before you apply for a personal loan, consider having a proper knowledge about the terms and conditions and work according to get the loan approved.

To know more about personal loan interest rates, please check our website.

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