Ty Kiisel tackles small business and bad credit at Forbes.com 'Entreprenuers' blog:
Ty Kiisel tackles small business and bad credit at Forbes.com 'Entreprenuers' blog:
Posted by Steve Johnson at 8:42 AM
Steer clear of these wrong turns when buying a new car
This article still focuses on knowing what's in your credit report BEFORE you go shopping for your next ride:
Buying a car is like an epic adventure. There are heroes (you), sidekicks (your wingmen who accompany you to the dealership), foes (the sales manager who just won't give up on the undercarriage rust-proofing) and even a prize at the end (your shiny new vehicle). And like any journey, buying a car can be fraught with perils and wrong turns.
Fortunately, a few simple steps can help ensure your car buying experience is a great adventure that doesn't turn into a detour to financial disaster. Here are some common wrong turns and how to avoid them:
1. Failing to check your credit before going to the dealership.
Unless you're paying cash - something many people cannot afford to do - you'll be financing your vehicle purchase. You need to know what's on your credit report and how strong your credit score is before you apply for financing. This will give you an idea of what loan terms you might qualify for. Websites like www.creditreport.com can help you understand your credit. A membership to CreditReport.com includes daily monitoring of your credit report to help you manage your credit, know your score, and catch potential fraud quickly.
2. Not having financing lined up before you shop.
Once you have a handle on your credit, it's important to explore your financing options before you ever set foot on a car lot. Yes, virtually every dealer can help you with financing, but there's no guarantee they will be able to offer you the best terms. You may be able to qualify for a lower interest rate through your bank. Having checked a couple financing options before you shop ensures you know exactly how much you can spend, and gives you more bargaining power at the dealership.
3. Not knowing what the actual price of the car should be.
There's the price the dealer puts on the car - the sticker price - and then there's the price you should actually pay. Most automotive experts agree, you should start your negotiations based on the invoice price, which is what the dealer paid for the vehicle, and pay only a few percentage points over that price. Fortunately, online resources like Edmunds.com and KBB.com can help provide an idea of what you can expect to pay for any vehicle you're thinking of purchasing.
4. Looking at the monthly payment, rather than the actual price.
When you're car shopping, it's easy to take the wrong turn and focus on how the monthly payment fits into your budget. But that doesn't give you an accurate picture of the true price of the car you're financing. You may think you're getting a good deal on the sale price, but if you're paying thousands in interest over the life of the loan, that deal may not be as good as you think. For example, if you finance a $25,000 vehicle with no money down and no trade at 7.5 percent interest over six years, you'll pay nearly $6,200 in interest, according to onlinecalculator.org. That means you haven't bought a $25,000 car, you've bought one that actually costs you more than $31,500.
5. Buying costly add-ons or features that you don't need.
Remember the sales manager who just won't take "no" for an answer when it comes to the rust-proofing? Add-ons - services or products that the dealership tries to sell you after you've chosen your vehicle - are a significant revenue stream for car sellers. Often, however, the items are ones you really don't need. For example, if you're buying a new car, do you really need the extended warranty plan? In most cases, the manufacturer's warranty should be sufficient. Be sure to read all the fine print on your sales contract before signing anything. If the dealer has included add-ons you don't want or need, ask to have them - and their costs - removed. If the dealer balks, threaten to walk; there are just too many car dealers out there to settle for less than the best deal possible.
(Article courtesy of ARAContent.com)
More free 'how-to' tips at FindHow2.com
Posted by Steve Johnson at 6:30 AM
Updates from Answers.USA.Gov reports:
"Length of Time Negative Items Stay on a Credit Report"
It still holds true: If the information in a credit report is accurate, the only way to have it removed is the passage of time. There is no way to avoid the fact that negative information can generally stay on your report for seven years. There are some exceptions, namely:
- Information about criminal convictions may be reported without any time limitation.
- Bankruptcy information may be reported for 10 years.
- Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
- Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
- Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
More information on how to fix your credit report can be found free at FindHow2.com .
Posted by Steve Johnson at 7:28 PM
It sounds so simple: you pay a fee to a company that promises they can fix your credit score. For a fee.
Can credit repair companies really fix bad credit for a fee?
It depends. Credit repair companies promising to fix your bad credit often discovered to be operating as scams that hurt consumers.
Removing legitimate negative items from your credit is not possible, not matter what they tell you. The key word is "legitimate."
Yes, some key derogatory entries may get deleted from your credit report for awhile. But, sadly, legitimate bad debt and credit history boo-boo's will re-appear once an old debt gets sold to a new debt collector or your creditor updates credit reporting.
It's almost like flushing money down the drain.
It is important to be skeptical of "credit experts" who want to sell you their advice. Most of what they offer can be found for free on FindHow2.com and other free credit and debt relief informational websites.
Fixing a bad credit score requires discipline, patience, and action to follow-through and get better credit.
Live within your means. Watch your credit utilization, don't exceed 25% of credit usage. Pay all your bills before they are due. Stop buying with plastic. Pay off debt. Save money.
The one and only way you can establish a good credit rating is to practice good credit habits for a long time, and use credit wisely.
Credit repair companies may like to trick you into thinking that what they do is complicated. It's not. You can do everything they can do, and probably better, by yourself for free.
And, some firms practice shady tactics which might do more harm than good for your credit!
If you do find outdated or incorrect information on your credit report, follow the credit bureau's website instructions on how you can then dispute those derogatory remarks yourself. It can be done. But wishful thinking is what credit repair scammers sell: If negative information on your credit reports is indeed correct, it cannot be legally removed. Only good credit habits going forward, prompt payment of credit obligations, and the passage of time can help you then.
5 simple ways to start rebuilding your credit rating yourself
Create and stick to a budget of your regular and every-so-often monthly expenses. Determine how much you will net each month, and plan how to spend it to reach your credit restoration goals. Some expenses that you can avoid should be deleted, or at least suspended, while you are in this credit recovery mode.
Pay all bills on time. Better yet: pay them early. Don't wait until the last minute to pay. It's a good idea to pay at least 3 days early, then check the firm's website to ensure your payment has been applied on time. Always keep copies of checks and online payments to dispute late payments.
Pay a little more on each credit card and installment loan you have. This will help you pay down your debts faster. At least pay what you've charged that month, plus a debt reduction amout (say, 5% of the total credit card balance due), and pay off all interest charged to your credit card that month.
Get a new credit card that has a low interest rate, if you qualify. Use it only to rebuild your credit score by making small charges every month, then paying off the total amount in full each month to demonstrate good credit habits. You may also need to use a secured credit card which is connected to your savings account. The value of this is that you will be able to start building a good credit history even if your credit is so bad that you cannot qualify for a regular, unsecured credit card account any longer.
If you are carrying a large balance on credit cards, consider selling a second car, property, jewelry, collectibles, items stacked away in the attic, to raise cash to pay-off your credit card debts in a big way. Once you've gotten that credit card balance paid down, don't resort to using it again and run up the balance. Stay in control of your spending.
By following these five simple tips, you can restore good credit and enjoy peach of mind when it comes to your monthly bills.
Find more ways you can restore good credit at FindHow2.com.
Posted by Steve Johnson at 8:08 AM
Bad credit is no fun. When you check your credit report and find derogatory entries on your credit report listed as "charged off," you may wonder what this term means, and if you even have to repay these debts since the original creditor is no longer trying to collect from you.
Second question first: Yes, you still owe the debt.
First question: A charge off refers to a particular debt that a creditor has determined to be uncollectable, and has therefore written off the books. Generally this debt ultimately gets sold to a collection agency. They may buy the debt for pennies on the dollar and use every dirty trick in the book to shame you into paying up.
If a creditor hasn't received the payment you owe him after three months, the account is frequently charged off and sold. But sometimes the length of time taken before an account is charged off extends for much longer than three months, especially when it comes to medical debt.
And, as stated earlier, just because your credit report shows this debt as 'charged off' that fact does not relieve you of the legal responsibility to repay what you owe. Until the statue of limitations has run its course in the state you live in (sometimes in as little as five years), you will still be legally indebted to repay this debt.
This is why collection agencies are so quick to try and get you to confirm you owe the debt or get you to make even a token payment, as this reset the clock on your debt and the statute of limitations gets extended. You can learn more vital tips on how to fight collection agents trying to reage your debts.
Also, you may want to be aware of and avoid the 7 biggest lies told by collection agencies.
Posted by Steve Johnson at 6:42 AM
Piggybacking To Raise Your Credit Score -- Is It Still Legal?
We're updating this information on how the practice of "piggybacking" may still be a way to improve a negative credit score: FICO (Fair Isaac Corp.), which developed the widely-used FICO® credit scoring model, warned back in 2007 that it would end credit score piggybacking due to alleged abuses. The new scoring model labeled "FICO® 08" would put a stop to alleged abuses to the credit scoring system.
However, due to outcries from critics, the firm stepped back from the decision. Experts note that such a move would violate the Equal Credit Opportunity Act.
Some firms are still promoting and popularizing this method to boost a bad credit score.
"Piggybacking credit" refers to the practice of someone with a good credit score "renting out" their good score to someone else. Elsewhere, perhaps a parent or a spouse does the same thing to help a family member get better credit. Therefore, consumers who had no credit and people suffering from bad credit got a "credit boost" simply by being added to the accounts of credit cardholders who had legitimate good credit themselves. In effect they got to ride along 'piggyback' on the good credit account holder's account.
The website Boostmyscore.net details how this practice may still improve your credit score, though probably for a hefty price. (Note: we have NO affiliate relationship with this website; we merely link to it to give you an idea of the services available from them.)
More information on how an authorized user can get better credit is found in the forums here: http://www.fatwallet.com/forums
We're not certain it's worth the cost to piggyback onto someone else's credit, and it's definitely not ethical to do so if you're trying to hide poor credit from a lender, or worse, trying to scam the system in taking out a loan and destroying someone else's credit score in the process.
Bottomline, our opinion remains the same: Restoring good credit is a task you can do yourself, by yourself, without having to pay somebody else to do it for you.
Posted by Steve Johnson at 9:27 AM
Foreclosure was a frightening reality for millions of homeowners during the recent Great Recession. The aftermath is still being felt. Those who went through the gut-wrenching experience of foreclosure report that it takes quite a bit of time and effort on their part to correct their credit report after their foreclosure is completed.
It is common that banks are slow to investigate and correct charge offs in their credit report, and derogatory entries are allowed to keep appearing on credit reports -- until they are challenged.
You can improve your credit rating yourself. Write letters. Make the necessary phone calls. Don't quit. Track your credit repair progress. Remember to write down names and phone numbers and phone extensions of the customer service reps you speak with, and remember to never give up; you can fix bad credit.
Contact each of the 3 major credit bureaus in order, targeting the the single worst error on each credit report at a time.
You can find their address, phone number and website information here: http://www.findhow2.com/how-to-contact-credit-bureaus.html
Eventually, these homeowners report, credit history is corrected, and with the passage of time and better credit habits, their good credit is restored.
Their advice: watch your credit report closely after foreclosure. Never hesitate to dispute questionable negative entries that you believe to be incorrect. It seems that workers at these banks show little initiative to do their job with your best interest in mind, and remember, there is no incentive, nothing in it for them, to report correctly to your credit report. It's up to you to ensure that they do their job.
It won't cost you anything but some time, a little postage and aggravation to keep checking back with thse credit bureaus that you have successfully disputed with. Keep in mind that your old creditor might not yet have responded to your official dispute -- worse yet, since credit reporting is controlled by an automated reporting computerized system, the creditor might report it inaccurately all over again.
This is the importance of keeping all paperwork you have which states your old loan is in foreclosure. It's not a bad idea to give the credit bureaus a copy (never the original) with your dispute letter to buck up your claim and speed up the process of correcting your credit report.
More credit repair articles and e-books can be found at FindHow2.com.
Posted by Steve Johnson at 6:01 AM