Credit utilization makes up about 30% of your total credit score and yet most individuals do not comprehend what credit utilization is. The concept is pretty easy to understand and is expressed as a percentage. Generally, the higher your credit utilization percentage the lower your credit scores. Every tradeline that is on your credit report has a figure assigned to what credit is available to you. This would be the beginning loan balance or the credit limit on a credit card your credit cards. Same with a credit card. Now if you have paid on that mortgage and your balance is only $50000 this remaining balance is considered your Credit Debt . So if you have a mortgage for $100000 and your remaining balance is $50000, your credit utilization is figured as follows:
Credit Available = $100000, Credit Debt = $50000, Credit utilization is 50%.
Simply put, keep your credit usage low and it will help your credit score.
This means that if you have credit card debt , and you can keep it below 30% that will be best and make lenders much more comfortable when deciding to provide you with credit.
Mortgage lenders that see you keeping your credit utilization number down are more likely to provide you with a loan because it will appear to them that you are able to manage your credit properly. Pencil out what your credit utilization percentage is and then focus on trying to lower that percentage. Continue reading ‘What is Credit Utilization?’ »
Archive for the ‘Credit’ Category
Cutting Back to Save My Credit.
A lot of people are learning that in order to improve their credit score, they need to get their spending habits under control. Many Americans learn the hard way that they need to learn how to cut back to help improve their credit score. Start with creating a budget that will help lower your expenses. Even if you are adding an additional $10 a month to reduce your debt, it will help. Once you see that you are not missing that $10 you can start to increase it a little more each month until you are making double payments to your balances. This will help you reduce your debt faster.
Pay attention to your credit cards and their interest rates. It is a good idea to pay down the credit cards with the highest interest rates first. By getting those credit cards paid down and possibly paid off you will save money on the interest you were paying. You don’t want to close out those accounts though because you may want to keep them for.
After you have setup a budget and started working on reducing your debt, you can start planning to save some money to help you build that financial nest egg. Medical emergencies, unemployment or simple accidents can cause major issues if you aren’t financially prepared. Factor in what you spend each month on your mortgage, food, utilities, and gas. Sometimes it will feel that you are attempting the impossible but if you start small and try to improve each month it will become easier as you go along. Continue reading ‘Save Money by Cutting Costs’ »
To improve your credit record, you need to show plenty of discipline. As your credit score plays a prominent part in loan approval and setting interest rates, it is your responsibility to ensure that your credit score is more than 600. For students, a good credit score is extremely important because a bad credit rating can have a negative impact on their post-studies plans.
Instant Credit Repair
When you search online for instant credit repair, you will find lots of websites offering solutions but there is no such thing as instant credit repair. By following the official rules and regulations, students can repair their credit but it is not going to happen overnight, it will take time. According to the Federal Trade Commission, consumers should stay away from any company that is promising instant credit repair.
Consumer credit reporting agencies collect details about individuals’ repayment and spending habits. Financial institutions get these details officially from credit bureaus. For credit repair, you need to provide accurate details to credit bureaus as there is going to be significant improvement in your credit score and you can get loans at low interest rates. Continue reading ‘Quick Facts about Credit Repair Success’ »
It was recently announced by the Internet credit card giant, Egg, that it was launching a credit card that came with a £1 monthly charge, which although not a huge sum amounts to an annual fee of £12 a year for cardholders. Following the announcement many industry officials have said that this could be the start of something big, and that as well as <a href=" Egg”>http://www.credit-card-comparison-online.co.uk/egg/default.asp”>Egg credit card, many other credit card firms may follow suit and start applying monthly or annual fees to cardholders. Consumers that are taking out credit cards should therefore be extra vigilant in checking whether there is any monthly or annual fee that comes with the card, and if so how much this fee is going to be. For many consumers the only important information is the obvious – interest rates, minimum repayment levels, and the like. A great many of us fail to check the small print to find out about things such as annual fees. One industry official recently stated: “Egg is the first major credit card provider to introduce fees on mainstream products, and this is only the tip of the iceberg. We are likely to see more providers follow suit as they try to claw back profitability following the launch of the Consumer Protection White Paper last week.” Those planning to apply for a credit card could benefit from bearing these comments in mind, and ensuring that they check any credit card marketing material to find out whether any annual fees are charged before making an application for the credit card. This will help to avoid any nasty shocks, and will help to ensure that you know exactly what you are signing up to when you apply for the card. Also, bear in mind that whilst some credit card firms may offer features and benefits that justify the annual or monthly fees some may simply be charging the fees to boost profits. As one industry expert stated: “Ever since credit card penalty fees were capped at £12 back in 2006 we have seen a hike in cash withdrawal fees, foreign usage fees and balance transfer fees – monthly fees on top of this will just be rubbing salt into the wound.”
Reno Charlton, award-winning writer, shares her financial expertise as a contributing columnist for www.credit-card-comparison-online.co.uk and www.personal-loan-comparison-online.co.uk.
Whenever you borrow money or settle your debt, you must have proper documentation. All the terms and conditions must be put in writing in order to protect the lender as well as the borrower. Bear in mind that a written document can prevent any confusion and it ensures that both parties have a viable paper trail in case of legal issues. Below are the important steps you need to take to settle a debt in writing.
Step 1:
Write to your creditor(s) informing them that you want to settle your debts. You are required to give a brief explanation as to why you need to settle your debt, such as being retrenched, facing financial hardship, suffering from illness or bearing an unexpected hospital expense due to accident, etc.
Step 2:
Inform the creditor(s) about the payment amount that you can afford and the expected date when the debt will be paid off. Continue reading ‘5 Steps to Settle a Debt in Writing’ »
Is it a crazy idea to settle your debts in writing? It is definitely not! In fact, it is the most ideal way to solve your debt issue on your own. Do you know that you can actually reduce your outstanding balances by writing a sound proposal? Moreover, you can also protect your credit by yourself without getting any assistance from any debt settlement companies. Let me show you the steps of writing the proposal.
Step 1:
Before writing the letter, find out whether your debt is with original creditor or debt collection agency.
Step 2:
After knowing your exact creditor, you are then required to determine the settlement amount you would like to propose based on your current financial situation. It is always better for you to offer to settle the debt in one lump sum. The best amount you can propose is around 40-50% of your total debt.
Step 3:
Start your proposal with all your basic information such as your name, address, contact information, your account number and your outstanding balance. Then, include a brief explanation on the financial hardship you are facing now. Continue reading ‘5 Steps to Write a Debt Settlement Proposal’ »