Archive for the ‘Credit’ Category

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Credit Overview

Friday, March 5th, 2010

Finance—with so many banks, building societies and supermarkets offering money, which is the better offer if you need to borrow? A closer look at your own finances and age should determine which category of borrower you fall into—Prime, Subprime, Tenant, Homeowner etc.


Your income must not be lower than your outgoings and your debt to income ratio should be healthy (e.g. if you earn £10,000 per year and you owe £20,000 in unsecured debt, your debt to income ratio is 200% and most lenders will not be keen to lend you more, unless you can show that you are capable of and intend to repay it— maybe by using the equity on your property or increasing your income.

You must be able to show your lender that you are a good credit risk with the ability to repay the debt and that will mean also having a good credit profile. Credit scores judge you on many facts and different lenders look at these with different priorities – your age, name, location, job, years at address, years in job, credit payment history, volume of current and many other factors to assess your ability to repay and whether you are a good or bad risk.

Its worth checking out your credit score (use the link on this page) to see if you are good or bad risk, Experian and Equifax are the trade standard sources for information held, although by no means the only source of information, and the score isn’t merely on loans and credit cards. Other items such as council tax, mobile phones on contracts, electricity etc also contribute to your score.

These companies make the reports available to you for a fee and so its worth having a look to see how your profile looks to a potential lender. If you do not make a payment each month, your credit payments go from showing 0 to 1, 2, 3 etc for each month you fall behind a payment, until you finally default at status 8.

If you were ever bankrupt, bankruptcy is also shown on your credit profile at which point you may not apply for credit for the term specified (e.g. 3 years). You will then need to rebuild your credit profile with the smaller borrowings, e.g. store cards and slightly higher APRs with low credit card limits to regain your credit profile. Make those payments on time or you will be penalised, since some of the major lenders will view one late overlooked payment as a sign of possible future problems.

It is worth setting up direct debits or standing orders for the minimum amount to avoid unnecessary fees and tainting your credit profile unnecessarily. Although credit is tempting, you are spending your future earnings early, therefore tread carefully and only ever borrow what you know you can comfortably afford to repay and at the most competitive interest rate you can find without any hidden penalties.

Research is king and ALWAYS read the terms and conditions!

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Credit Information

Friday, March 5th, 2010

Your income must not be lower than your outgoings and your debt to income ratio should be healthy (e.g. if you earn £10,000 per year and you owe £20,000 in unsecured debt, your debt to income ratio is 200% and most lenders will not be keen to lend you more, unless you can show that you are capable of repaying it— maybe by using the equity on your property or increasing your income. You must be able to convince your lender that you are a good credit risk and that will mean having a good credit. Credit scores judge you on facts – your age, name, location, credit and many other factors to assess your ability to repay and whether you are a good or bad risk.


Its worth checking out your credit score (use the link on this page) to see if you are good or bad risk, Experian and Equifax are the trade standard sources for information held, and the score isn’t merely on loans and credit cards. Other items such as council tax, mobile phones on contracts, electricity etc also contribute to your score. These companies make the reports available to you for a fee and so its worth having a look to see how viable you look. If you do not make a payment each month, your credit payments go from showing 0 to 1, 2, 3 etc for each month you fall behind a payment, until you finally default at status 8. Bankruptcy is also shown and you may not apply for credit for the term specified (e.g. 3 years). You will then need to rebuild your credit profile with the smaller borrowings, e.g. storecards and low credit card limits to regain your credit profile. Make those payments on time or you will be penalised, since some of the major lenders will view one late overlooked payment as a sign of possible future problems.

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A Summary of Building Positive Credit

Monday, January 4th, 2010

Increasing your credit score will require that you build positive credit. By doing this, you will become eligible for low interest credit products.

It is a common misperception that if you charge massive amounts on your credit cards and then pay them off each month, you will be building positive credit. In addition to not being necessarily true, this, in actuality, can hurt your credit standing. The reason for this is that credit providers want to know how much credit you have available to you and, of that amount, how much credit you have used. So, let’s say that you have applied for credit and, during the approval process, your credit provider sits down to view your credit report. He finds that your credit report shows that almost all of the credit limit on your credit cards has been used, because you have not yet paid that month’s bills. This will give a skewed picture of your finances and make you look like a bad credit risk.

Also, you don’t want to give the impression that you are spending over and beyond your means. Even though this may not be the reality of your situation, it may still appear that way. You may want to rethink the “charge everything and pay it all off at the end of the month” strategy.

It is also best not to have large amounts of unused available credit. So, what is an acceptable amount of credit to use? Well, a good guideline would be to use somewhere between 10% and 20% of your available credit. Credit providers will take this to mean that you can refrain from running your credit cards up while, at the same time, making your payments on time and as agreed.

You should try to have at least one credit card. If you suffer from poor credit, there are credit card providers that issue credit cards to people who have poor credit. Once you obtain your credit card, be sure to maintain the 10% to 20% guideline discussed above. By doing this, you should not amass huge amounts of monthly interest. Lastly, it is important to make sure that any credit cards you obtain or already have report to TransUnion, Equifax, and Experian, the three major credit reporting agencies.

In order to build positive credit, never be late in making your monthly payments and always pay at least the minimum amount due. Your credit score should increase if you follow this strategy.

If you would prefer not to apply for a credit card or would prefer to use another way to build positive credit, you could apply for a small low-interest personal loan. Again, make the payment on time each month and pay at least the minimum due. The fact is, any credit product can help to build positive credit if it is used appropriately and responsibly.

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Debit Loan Consolidation: Absolutely Necessary To Plan Your Way Out

Tuesday, December 29th, 2009

Loan debt consolidation will take all of your existing debts that you haven’t been proactive with and could not have the ability over time to repay. What happens next is that it will be put into a single loan that you don’t have to worry about. The bank that processes your request will pay off all of these debits for you. In return, you just have to pay the bank a single loan. As of today companies and banks are generous enough to offer debt consolidation loans. The best bet are the banks that offer the quickest relief.

Debt consolidation can give you some great programs that will help consolidate any debt and pay off large debt owed plus also lower your monthly payments so you can make the a commitment easily. Don’t get bound by bank that will offer you a transfer of the whole unpaid amount for a new credit card. While this is a misconception this will never work out correctly. With regards to your monthly payment it will not reduce at all with such a transfer. Another fall out can be with such an offer that would drop a credit rating very low and can disqualify you from receiving any loan due to the black mark against your name. The best debt consolidation loan company is the one that can provide you a great priced plan for reducing your total debt. This will have a great positive psychological effect on you as from now on you will have the satisfaction that your debt burden will begin to reduce gradually. Surely, this will be a great morale booster in these times of extreme pessimism.

Remember do not opt-in to companies that give out superficial solutions about lowering your monthly payment but raising your overall debt. This will overtime increase your payments and can become unmanageable. Also, it’s very important to remember that the overall purpose of getting help from the bank is to stop debt within a short time and lower the overall interest rate. When you have decided to go in for debit consolidation, the company offering debit consolidation loan should provide their quotes for free. Most importantly, it should show a pleasing outcome within a short time period which is the basic purpose of debit consolidation. It’s important not to go to a bank that’s going to charge for calculation the loan up and this scheme and there’s no real value in this. Ideally, what you’d like to see is calculations done by taking your account options and what terms can be set for the total duration of the actual debt consolidation loan.

It’s important not to go to a bank that’s going to charge for calculation the loan up and this scheme and there’s no real value in this. Ideally, what you’d like to see is calculations done by taking your account options and what terms can be set for the total duration of the actual debt consolidation loan. You must understand that to make sure that you do not end up paying more then what your monthly payment statement says.

The monthly outcome of your payments to a company that has provided debt integration will be much less and better if you selected a consolidation loan that works toward your advantage.

Next, for more great information check out the simplest debt consolidation loan for bad credit or easy and smart refinance loan for bad credit

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