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?’ »
Posts tagged ‘Bad Credit’
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’ »
Usually, those who have credit difficulties or have past bankruptcies on their credit history need to resort to non-traditional lenders in order to obtain an unsecured loan. Sadly, there are some dangers that those applying for unsecured loans with non-traditional lenders run. However, if you are well informed prior to applying, you’ll be able to avoid these problems and obtain your unsecured loan.
The main perils consist on running into unscrupulous companies that will take your money and give nothing in return. These companies are easy to avoid by following some suggestions. However, there are legit companies that do offer unsecured loans but the terms on those loans are far from advantageous and can easily lead someone to default or bankruptcy if the borrower is not careful enough.
Legit And Illegitimate Online Lenders
In order to identify an illegitimate online lender there are a couple of things that you need to be aware of: Online lenders should not charge you money upfront for a loan because any fee can be included into the loan’s payments. Thus, if you are required to send money in order to close on a loan deal, you should at least doubt the legitimacy of the lender. There are however some online companies that offer access and comparisons of different lenders and those can lawfully charge a small fee. Continue reading ‘Perils Of Certain Non Ttraditional Unsecured Loans’ »
If you look at your savings account and see it empty, it is time for a change. If you see that your debt keeps climbing, it is time for a change. Can you make a change and effectively help your financial situation? You bet you can if you want to make the change. Change is often not easy but it can be accomplished with dedication to the final outcome.
You must start by deciding what needs to be changed. Do you want to have an emergency fund built or do you want to reduce your debt? This question often gets financial advisors arguing. Which do you do first? My suggestion to you is to determine what you need to do first. Both of them are needed for a good financial future, but deciding which to do first is up to you. If you have a lot of debt but are managing it by paying it on time, then you might want to start working on your emergency fund. If you are having a problem paying on time or your balances are really starting to get up there, then reducing your debt should be your priority.
No matter which way you decide to go, the most important thing is to setup a budget. Once you have a good budget built and you are following it very closely, you will have that extra money to apply to either your emergency fund or your debt. Budgets are the key to getting a handle on your finances. There are many ways to start a budget and even quite a few software programs that can help you. You don’t even have to be a computer geek to use them. Any tool that you use to help you is a great tool. Continue reading ‘Time for A Change’ »
Given the economy these days a larger number of people are finding themselves with bad credit. Do you need to know how to repair bad credit? Since you’re viewing this article, then chances are you or someone you know has been troubled by bad credit scores and you are looking for a quick and real repair bad credit solution.
Like with most things you need to first research the facts about how to repair bad credit the best way before you begin.
First let me mention why I’ve chosen to write this article. As a career community banker I’ve assisted many hundreds of people over the years with their financial services needs. Too often people have had credit issues that limited their access to banking services and because of my desire and responsibility to assist I’ve learned a lot about how to repair bad credit. These days more and more people are asking me how to repair bad credit so I’m sharing my knowledge here as a ‘Pay it Forward’ action. Continue reading ‘How to Repair Bad Credit – Vital Advice You Need to Know’ »
Do you have a bad credit history? Do you need auto financing and have bad credit? If your answer is yes then you will be happy to know that there are several finance institutions who offer auto financing for bad credit. There are mainly two types of lenders who will offer auto finance and they include:
Subprime lenders: If you visit a subprime lender for auto finance for bad credit then you need to know that they will charge you a higher interest rate than the rate charged by conventional lenders or what is known as the “prime†rate. The main aim of a subprime lender is to help anyone with a bad credit get not only auto finance but also a good car. Of course, some people can afford the high rate of interest while others can’t. So you need to be mentally prepared and try and find out the rate of interest charged by different subprime lenders in your area for a comparative analysis. Continue reading ‘Auto Financing with Bad Credit’ »