Low credit score – Killer Kash http://killerkash.com/ Sat, 19 Nov 2022 06:14:47 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://killerkash.com/wp-content/uploads/2021/07/killer-150x150.png Low credit score – Killer Kash http://killerkash.com/ 32 32 Credit card: what you need to know if you use the method this Christmas | Personal finance | Finance https://killerkash.com/credit-card-what-you-need-to-know-if-you-use-the-method-this-christmas-personal-finance-finance/ Sat, 19 Nov 2022 04:01:00 +0000 https://killerkash.com/credit-card-what-you-need-to-know-if-you-use-the-method-this-christmas-personal-finance-finance/ Last year the average consumer spent just over £1,100 at Christmas, according to a YouGov survey and with inflation driving up the cost of almost everything in the UK, this year people are expected to spend more even if they aim to spend less. The holiday season has always been a time of year when […]]]>

Last year the average consumer spent just over £1,100 at Christmas, according to a YouGov survey and with inflation driving up the cost of almost everything in the UK, this year people are expected to spend more even if they aim to spend less. The holiday season has always been a time of year when people rely on more than their regular monthly income.

If shoppers plan to use credit as a way to cover costs this year, Salman Haqqi, personal finance expert at money.co.uk, urges them to take the time to understand the different types of credit so they can choose the right one. better. option for them.

He told Express.co.uk: “December is an expensive month and with the costs of Christmas presents, decorations, food, drink and parties looming, we are likely to be spending a little more than the normal during the holiday season.

“Even if you’re comfortable with the cost of Christmas, if you’re going to spend a lot on credit, it’s worth considering a card that rewards your spending.”

Mr. Haqqi’s first recommendation that people might want to consider is to use a zero percent shopping credit card.

READ MORE: Barclays issues warning after man targeted in cruel online scam

He said: “If you’re worried about how much you’ll spend over Christmas, you might want to consider a zero per cent shopping credit card.

“It will give you a fixed period, up to two years or more in some cases, to repay the money you borrow without interest.”

The main advantage of this type of credit card is that if someone fully reimburses the expense before the end of the period, the debt will bear no interest.

However, the downside of this card is that it can take several weeks to process the application and receive the card. So if anyone wants this card soon, or before Christmas, timing is crucial.

DO NOT MISS

If someone pays off the balance at the end of each month, it will start to show that they can be a responsible borrower, and their credit rating should improve over a period of four to six months.

Mr. Haqqi explained that people can determine how much they can spend with their credit limit and can then plan based on that instead.

Finally, Haqqi recommends people take a look at reward credit cards or cash back credit cards, as these cards can benefit someone in the future the more they spend on the map.

He said: “Rewards credit cards earn you something every time you use them. These can be loyalty points, airline miles or vouchers for shops and restaurants. Choose the one with the rewards that will benefit you the most.

Mr. Haqqi pointed out that the rewards programs with these types of credit cards are different from each other. Before subscribing to a specific card, people should first check which reward vouchers are offered and for which retailers or restaurants and tailor their choice to their shopping habits.

The same goes for airlines, as these rewards cards only offer deals on select airlines and hotels. Users should therefore ensure that they are happy to use this one.

Before signing up, people should research if the policy of the card meets their expectations, some cards pay monthly, while others will make someone wait until the end of the year.

Mr. Haqqi added: “Cashback cards will give you back a percentage of what you spend on the card. Some offer a bonus period for the first few months, so if you get it in time for your Christmas shopping, you might get more cashback on your spending.

Mr Haqqi urged people to remember whichever credit card they have, they will have to pay for all the money they have spent.

He said: “It’s so important that you pay off those credit cards in full every month. If you can’t afford to pay a big bill in January, the interest charges will quickly wipe out your rewards benefit.

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Benefit from a credit card against fixed deposits? Know the details here https://killerkash.com/benefit-from-a-credit-card-against-fixed-deposits-know-the-details-here/ Wed, 16 Nov 2022 04:45:50 +0000 https://killerkash.com/benefit-from-a-credit-card-against-fixed-deposits-know-the-details-here/ New Delhi: Secured Fixed Deposit Credit Card is the best option for low income people with bad credit, irregular income, no proof of income, elderly and stay at home moms. There have been numerous reports of companies refusing credit card claims for various reasons. If the applicant does not have a good credit history or […]]]>

New Delhi: Secured Fixed Deposit Credit Card is the best option for low income people with bad credit, irregular income, no proof of income, elderly and stay at home moms.

There have been numerous reports of companies refusing credit card claims for various reasons. If the applicant does not have a good credit history or has a low credit score, the bank may refuse to issue a credit card to the user.

On the bright side, we are all aware of the many benefits that come with a credit card. They are not only necessary in times of financial emergency, but they also help in improving a credit score for future loan applications. Additionally, some e-commerce sites only accept credit cards for specific goods purchased in equal monthly installments (EMI).

Don’t worry, there is another way to get a credit card. You can apply for a credit card with the guarantee of your fixed deposits. Fixed deposit investments are extremely popular as many banks offer competitive rates and allow their customers to earn significant returns. If you’ve been looking for a credit card for some time, you should consider applying for a secured credit card, which is secured by your fixed deposit.

How to get a credit card against fixed deposits?

As the name suggests, a bank will issue a secured credit card to a consumer in exchange for an FD which they guarantee as security or collateral for the card. It is suitable for consumers with no credit history or with a low credit score.

Secured credit cards are offered to customers who have FD accounts at banks and other financial institutions and want to establish their credit. When a secured credit card is issued, the bank attaches a lien (a claim or legal right) to the FD until the credit card is returned.

If you already have an FD account, you can apply for a credit card at your local bank. You can also do this by visiting the bank’s website. If you do not yet have a savings account, you can open one by going to the nearest bank branch. When you open an FD account, some banks offer you a bonus credit card. If you don’t have one, you can apply online.

Benefits of availing a credit card against fixed deposits

Banks frequently check a consumer’s credit history before issuing a credit card. Those with bad credit or no credit history, on the other hand, can still get a secured credit card. On the other hand, you can improve your credit history or your CIBIL score by making timely payments with a secure credit card.

Second, banks prefer to issue credit cards to customers who have consistent sources of income. However, this is not the case with a secured credit card. Banks do not require customers to provide proof of income as time deposits are considered proof of financial security. In fact, low-income people can use their fixed deposit money to qualify for a higher credit card limit.

In addition, applying for a credit card with your fixed deposit as a guarantee is much easier and faster. The amount of documentation required is minimal as you already have a bank account which contains the majority of the required documents. Other documents, like proof of income, are less important with a secured credit card because your fixed deposit serves as a security deposit.

Additionally, regular credit card holders receive a variety of benefits such as free travel insurance, bodily injury coverage, reward points, and more. In this case, you can take advantage of the advantages of the credit card as well as the advantages of investing in a fixed deposit. Banks offer the best FD rates and the interest you earn on your deposits increases the value of a credit card.

Fixed Deposit Secured Credit Card is the best option for those with low income, bad credit, irregular income, no proof of income, seniors and stay-at-home moms. However, if you do not pay your credit card charges with interest over a period of several months, the bank may seize your fixed deposits in order to recover the credit amount. Moreover, since the fixed deposit is linked to the credit card, you cannot withdraw it in advance, even in an emergency.

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4 ways rent-to-own can help you buy a home https://killerkash.com/4-ways-rent-to-own-can-help-you-buy-a-home/ Sat, 12 Nov 2022 13:00:26 +0000 https://killerkash.com/4-ways-rent-to-own-can-help-you-buy-a-home/ Image source: Getty Images Lease-to-own arrangements are coming back into fashion as interest rates rise. Key points Lease-to-own gives those with low credit the time to build their credit. Each part of a lease-purchase agreement is negotiable. Buyers should hire a real estate lawyer to review their contract before signing. Although home prices in some […]]]>

Image source: Getty Images

Lease-to-own arrangements are coming back into fashion as interest rates rise.


Key points

  • Lease-to-own gives those with low credit the time to build their credit.
  • Each part of a lease-purchase agreement is negotiable.
  • Buyers should hire a real estate lawyer to review their contract before signing.

Although home prices in some parts of the country have fallen, the median price of a single-family home still rings in at just under $385,000. With mortgage rates hovering around 7%, the monthly payment alone is pushing many potential buyers out of the market. For these buyers, an alternative like rent-to-own may be worth considering. Here, we outline how rent-to-own works, how it can help buyers get into a home now, and some red flags to be aware of.

What is hire-purchase?

Rent-to-own, sometimes called “rent-to-own”, is an agreement in which you rent a house for a fixed period of time with the option of buying it when your lease expires. While the lease is active, a portion of each rent payment goes toward a down payment on the home.

4 ways rent-to-own can help you buy a home

For some, rent-to-own is an alternative to buying a home. Here’s how it might work for you.

1. Approval May Not Be So Strict

If your credit score isn’t up to snuff but you desperately want to buy a home, it may be easier to qualify for a rent-to-own arrangement than a traditional mortgage. In fact, the seller may not even perform a credit check. That’s because they know that if you decide later that you don’t want to buy the house or can’t qualify for a traditional loan, they can keep an option fee collected along with the rent credits. collected each month (more on those in a moment).

2. Rent-to-own saves you time

Let’s say you sign a three-year lease. This gives you 36 months to get your credit score in shape. It also gives you time to save more money for the eventual purchase of the house.

3. Everything is negotiable

Everything related to the lease-purchase is negotiable. You work with the seller to determine, for example, if there will be any option fees due and which party will pay for repairs to the home (costs are usually shared).

A rent-to-own agreement involves dozens of details, but these are all things that you can negotiate in your favor. Additionally, hiring a real estate attorney to review the contract before signing further protects your interests.

4. Can lock your price

If you live in an area of ​​the country where home prices never seem to go down, locking in a sale price at the start of your lease means you don’t have to worry about what the market is going to do over the next few years. Peace of mind lets you focus on what’s important, like paying off debt and saving money.

This fact cannot be overstated: There is rarely a Real estate agent involved in a lease-to-own situation. And if there is a real estate agent, he normally represents the seller. As the buyer, it’s up to you to carefully check the details of the deal and hire a professional to make suggestions.

How it works

Let’s say you find a neighborhood you like and a landlord willing to make a rent-to-own deal. The process goes like this:

  • You will provisionally agree to the terms. One of these conditions implies that you will accept the sale price now or at the end of your lease. There are pros and cons to both. If you agree on a price now, you don’t have to worry if the value of the house increases during the term of your lease. If you wait to agree on a price, the value of the home may decrease and you may get a better deal.
  • Find out if option fees are required. This is also called “option money” or “option consideration”. If the seller charges a fee, you will have to pay the money when you sign the lease. Option fees are generally between 2.5% and 7% of the value of the house. Let’s say the current value of the house is $200,000. This means that option fees could vary between $5,000 and $14,000.

A note on option fees: The option fee may or may not go towards the price of the house. If not, you might want to walk away. Naturally, the owner wants to keep the money, but it’s in your interest to make sure it goes towards your down payment if you decide to buy. This is just one example of why you want to hire a real estate attorney to review the contract before signing it.

  • You will also want to contact a mortgage lender. Since you want your option fee (if you pay one) and a portion of each monthly payment to go towards the down payment, you will need to request a mortgage lender the best way to structure the down payment so you won’t have trouble getting a mortgage when you’re ready. Some lenders are nervous about approving a loan when the down payment has been made as part of the rent and it can be helpful to have a lender on board before you close the lease.
  • Once the details are settled, you will sign a lease for a period of one to three years (or more if you accept it).
  • Each month you will have pay more than other tenants in the area, but a portion of each payment is allocated to the down payment. For example, while others are paying $2,000 a month, you might be paying $2,300, of which $300 goes into a deposit fund. After one year there will be $3,600 in the fund and after three years there will be $10,800. If you also paid an option fee, hopefully you’ve structured the contract to serve as your down payment as well.

Even if you totally fall in love with a home, you can walk away from any deal that doesn’t benefit you financially. Although rent-to-own homes don’t come on the market often, it’s worth the wait for the right one.

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Compare personal loans ([Year] Options) – Forbes Advisor https://killerkash.com/compare-personal-loans-year-options-forbes-advisor/ Wed, 09 Nov 2022 23:15:50 +0000 https://killerkash.com/compare-personal-loans-year-options-forbes-advisor/ Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors. Although personal loans are a convenient way to fund just about any legal personal expense, they come at a cost. However, finding the best personal loan can mean the difference between hundreds […]]]>

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

Although personal loans are a convenient way to fund just about any legal personal expense, they come at a cost. However, finding the best personal loan can mean the difference between hundreds or thousands of dollars in interest.

Use this personal loan finder to compare the best options and find a loan that meets your needs.

Average Personal Loan Rates

A good interest rate on a personal loan is one below the national average. Current personal loan rates range from around 4% to 36%, with the average hovering around 10% throughout 2022. That said, available APRs vary between lenders and only the most qualified borrowers can access rates. the lowest.

Types of personal loans

There are two main types of personal loans: secured and unsecured.

Secured Personal Loans

Secured personal loans require collateral, which is something of value that the lender can take back in the event of default. Lenders typically offer flexible qualification requirements and lower interest rates because collateral reduces the financial risk posed by potential borrowers.

Secured personal loans are most often offered by traditional banks and credit unions. However, a few select online lenders may offer them.

Unsecured Personal Loans

Unsecured personal loans do not require collateral, which means you do not have to pledge any personal property to secure the loan. However, this means that lenders generally charge higher interest rates and apply stricter qualification requirements.

You can find unsecured loans from banks, credit unions, and online lenders.

How to Compare Personal Loans

Consider these factors when comparing personal loans:

  • Permitted loan uses. Although you can generally use personal loans for any legal personal expense, some lenders impose restrictions. For example, you generally cannot use funds from a personal loan for business or higher education.
  • Qualification requirements. Lenders consider your credit score, income, debt-to-income ratio (DTI), and overall credit history to determine your eligibility. Be sure to confirm a lender’s minimum qualification requirements before applying to understand your chances of approval.
  • Loan amounts. Loan amounts vary by lender. When comparing lenders, make sure your preferred lender offers loan amounts that cover your needs.
  • Repayment Terms. Just like loan amounts, different lenders also offer different repayment periods. Shorter terms can help you pay off your debt faster and save money on interest. longer terms make monthly payments more affordable, but you’ll pay more interest over time.
  • Interest rate. The interest rate you receive determines the overall cost of your loan. Some lenders offer a prequalification process, which lets you see what rates and terms you may qualify for without affecting your credit score. The best personal loan rates are usually reserved for those with the highest credit ratings.
  • Loan fees. In addition to interest rates, check to see if your preferred lender charges any other fees, including origination fees, administrative fees, or prepayment penalties.
  • It’s time to finance. Some lenders offer fast personal loan with funding as fast as same day while others may take up to a few business days to disburse your funds. Consider how much money you need immediately when applying for a loan.
  • Customer support options. Review the lender’s customer service resources and read reviews from past and current borrowers to make sure this is right for you.

How to find a personal loan

Although you can get personal loans from traditional institutions like banks and credit unions, online lenders usually offer the best personal loans. Online lenders often offer more flexible qualification requirements than traditional banks and can disburse funds within 24-48 hours. You can expect to find loan amounts between $1,000 and $100,000 and terms between one and seven years.

Additionally, some online lenders tailor loans to applicants with scores below 670 and sometimes as low as 560. These are also called fair personal loans and personal loans for bad creditrespectively.

Your credit score, income, and desired loan amount can help you determine which lender and loan is right for you.

*Prequalified rates are based on the information you provide and a soft credit request. Receiving prequalified rates does not guarantee that the lender will provide you with an offer of credit. You are not yet approved for a specific loan or rate. Lenders will make a firm credit application when you submit your application. Hard credit draws will impact your credit score. The lowest advertised rate is not available for all loan sizes, types or purposes, and assumes a highly qualified borrower with an excellent credit profile.

Compare personal loan rates

Find the best rates from the best lenders

Frequently Asked Questions (FAQ)

What is the easiest loan to get?

The the easiest loan to get is usually that of a lender who caters to borrowers with bad credit. For example, some personal lenders allow credit scores as low as 560. However, borrowers with such low scores generally receive high interest rates.

Is there a limit for a personal loan?

Personal loans come in different amounts, usually ranging from $1,000 to $100,000. The loan amount you receive depends on your creditworthiness and the offers of your preferred lender.

Can I get a personal loan with bad credit?

Yes, you can get a personal loan with bad credit. However, this usually comes at the cost of higher interest rates and potentially lower loan amounts.

What is a personal loan origination fee?

Some lenders charge an initial personal loan origination fee between 1% and 8% of your loan amount, which covers the cost of processing your loan. This is usually deducted from your loan amount, so be sure to take this into account when applying for a loan.

For example, if you qualify for a $10,000 loan and your lender charges a 3% origination fee, $300 would be subtracted from your debt, leaving you with $9,700.

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Should we consolidate our credits in 2023? https://killerkash.com/should-we-consolidate-our-credits-in-2023/ Sun, 06 Nov 2022 12:32:00 +0000 https://killerkash.com/should-we-consolidate-our-credits-in-2023/ Image source: Getty Images If you’re like most people, you probably have some ready that you repay each month. Of your mortgage from your car loan to your credit cards, it can be difficult to keep track of everything and make sure you’re making your payments on time. Wouldn’t it be nice if there was […]]]>

Image source: Getty Images

If you’re like most people, you probably have some ready that you repay each month. Of your mortgage from your car loan to your credit cards, it can be difficult to keep track of everything and make sure you’re making your payments on time.

Wouldn’t it be nice if there was a way to consolidate all those loans into one easy payment? Well, there is – it’s called consolidation of credits. As 2022 draws to a close, is this the right move for you next year? Here are some of the pros and cons of consolidating your loans.

Discover: These personal loans are the best for debt consolidation

More: Prequalify for a personal loan without affecting your credit score

The benefits of credit consolidation

There are a few key benefits to consolidating your loans. First, it can help you save money on interest. When you consolidate your loans, you are essentially taking out a new loan with a lower interest rate and use it to pay off all your other loans. This can result in significant interest savings over time.

Second, consolidating your loans can make it easier to keep track of your payments since you only have one to worry about each month. This can allow people to streamline their finances and focus on managing one monthly payment.

And finally, if you have high-interest loans, consolidating them can give you some much-needed breathing room if you’re struggling to make ends meet each month. Consolidating your loans can even improve your credit score. Paying off your other debts can reduce your credit utilization ratewhich represents 30% of your credit score.

Overall, credit consolidation offers many benefits to people struggling with high levels of debt. Whether you’re looking to get out of debt faster or just want to manage your financial commitments more simply, loan consolidation may be the right option for you.

The disadvantages of credit consolidation

Of course, there are also some downsides to consolidating your loans. First of all, it’s important to remember that consolidating doesn’t necessarily mean you’ll get a lower monthly payment – it just means you’ll only get one payment instead of many. Consolidating a loan usually means you’ll have a longer period of time to pay it back, which means you could end up paying more interest in the long run.

Additionally, consolidating your debts can cause you to accrue additional fees and charges for missed payments. You may not get a better interest rate, especially if you have a low credit score. This means you pay additional fees and more interest over the life of the loan. Finally, if you have a spending problem, then loan consolidation can make matters worse. You could find yourself more in debt if you are not disciplined with your money.

As with any major financial decision, there are pros and cons to consolidating your loans. Ultimately, whether consolidation is right for you will depend on your particular financial situation. If you’re struggling to make ends meet each month or paying high interest rates on multiple loans, consolidation might be a good option for you. However, if you’re comfortable with your current monthly payments and don’t mind having several different payments each month, consolidation may not be necessary.

The Ascent’s Best Personal Loans for 2022

Our team of independent experts have pored over the fine print to find the select personal loans that offer competitive rates and low fees. Start by reviewing The Ascent’s best personal loans for 2022.

We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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How Your Credit Score Affects the Cost of Financing a Car https://killerkash.com/how-your-credit-score-affects-the-cost-of-financing-a-car/ Thu, 03 Nov 2022 19:09:07 +0000 https://killerkash.com/how-your-credit-score-affects-the-cost-of-financing-a-car/ Tim Boyle | Bloomberg | Getty Images Although new car prices are moderating a bit, financing the purchase of a vehicle has not become cheaper. With the Federal Reserve latest interest rate hike — the sixth this year — car loans are about to get even more expensive. The Fed’s decision has a ripple effect, […]]]>

Tim Boyle | Bloomberg | Getty Images

Although new car prices are moderating a bit, financing the purchase of a vehicle has not become cheaper.

With the Federal Reserve latest interest rate hike — the sixth this year — car loans are about to get even more expensive. The Fed’s decision has a ripple effect, typically causing rates to rise on a variety of consumer loans and lines of credit (and some savings accounts).

The average price of a new car is around $45,600, according to a recent estimate from JD Power and LMC Automotive. This is down from the July high of $46,173.

Learn more about personal finance:
How investors can keep FOMO at bay
Tips to help you extend your salary
Here’s what it takes to build wealth

However, rising interest rates further drive up the overall cost to consumers financing their purchase. The average rate on car loan fell from an average of 3.98% in March to 5.60% in October, according to Bankrate.

And depending on a buyer’s credit score, the rate could be in the double digits.

“On a car loan, the difference between good and bad credit can add up to several hundred dollars a month,” said Ted Rossman, senior industry analyst at Bankrate.

Your credit score is one of many variables taken into account

The higher your credit score, the lower the interest rate you may qualify for.

This important three-digit number typically ranges from 300 to 850 and is used in all kinds of consumer credit decisions. Lenders also typically use information such as your income and other monthly expenses.

A good score is usually above 670, a very good score is above 740, and scores above 800 are considered exceptional, according to credit reporting company Experian. Scores below 670 are considered fair; anything below 580, poor.

The difference in interest rates available between different credit ratings can be striking.

By way of illustration: With a credit score in the 720-850 range, the average interest rate for a $45,000 five-year auto loan is just under 5.8%, according to the latest FICO data. This translates to monthly payments of $865 and the amount of interest you will pay over the term of the loan would be $6,890.

Compare that to what someone with a credit score between 660 and 689 would pay. That same loan ($45,000 over five years) would have an average rate of almost 9.4%, resulting in monthly payments of $942 and $11,514 in interest over the life of the loan. (See table below for other credit ratings.)

While it’s hard to know what credit score a lender will use – they have options – having a general goal of avoiding bumps on your credit report helps your score no matter which one you use, experts say .

“Many tips for building credit are more like a marathon than a sprint: pay your bills on time, keep your debts low, and show that you can successfully manage different types of credit over time,” Rossman said.

“That said, there are some things you can do to improve your score quickly,” he said.

Tip: Reduce your use of credit

His best advice? Reduce your credit utilization rate. “It’s the amount of credit you use on your credit cards divided by your credit limits,” Rossman said.

He said that even if you pay off your balances every month, credit reporting companies — Experian, Equifax and TransUnion — often receive balance data before you’ve paid it.

“It’s usually reported on your statement date, so consider making an extra payment mid-month and/or requesting a higher credit limit to lower your ratio,” Rossman said.

Check for errors on your credit report

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How to choose a credit card for you https://killerkash.com/how-to-choose-a-credit-card-for-you/ Mon, 31 Oct 2022 22:05:48 +0000 https://killerkash.com/how-to-choose-a-credit-card-for-you/ Credit card debt is booming in the United States as consumers struggle to cope with inflation and rising interest rates. Owning a credit card can be financially risky, but if you choose a credit card wisely, you can get benefits you can’t get without a card. No card is right for everyone, and there probably […]]]>

Credit card debt is booming in the United States as consumers struggle to cope with inflation and rising interest rates. Owning a credit card can be financially risky, but if you choose a credit card wisely, you can get benefits you can’t get without a card.

No card is right for everyone, and there probably isn’t even a best card for you. The key is to start by understanding where you are now; what is your credit profile and what is your main objective when you have a card? Do you need to improve your credit? Are you planning a large purchase or hoping to transfer the balance from another credit card with high interest rates? Or do you have your eye on cash, travel, or other rewards? A little soul searching before your credit card search pays off in the long run.

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3 reasons not to listen to Dave Ramsey https://killerkash.com/3-reasons-not-to-listen-to-dave-ramsey/ Sat, 29 Oct 2022 10:10:16 +0000 https://killerkash.com/3-reasons-not-to-listen-to-dave-ramsey/ Image source: Getty Images Dave Ramsey is a well-known financial guru who has built his career helping people get out of debt and improve their financial situation. There is no doubt that he had a great impact on people and helped them get out of debt. If you don’t know how to manage your money […]]]>

Image source: Getty Images

Dave Ramsey is a well-known financial guru who has built his career helping people get out of debt and improve their financial situation. There is no doubt that he had a great impact on people and helped them get out of debt. If you don’t know how to manage your money and seem to be constantly in debt, these methods might be right for you. But some of his advice can be quite extreme and impractical. Here are some reasons why you should rethink some recommendations given by Ramsey:

Ramsey’s investment philosophy

Ramsey’s primary investment recommendations are to invest in four equally-divided mutual fund categories:

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  • Growth
  • Growth and income
  • Aggressive growth
  • International

Ramsey does not recommend investing in bonds, CDs, real estate investment trusts or cash. Even if you are about to retire, he recommends that your retirement funds be invested in all stocks. Investing involves a lot of risk. The closer you get to retirement, the less risk you want to take. If you were to retire in 2009 with 100% of your retirement in stocks, your portfolio would have dropped by about 40%.

To avoid market volatility, it is important to diversify your investments with bonds. Bonds are an important part of any investment portfolio. They provide stability and security and can help offset some of the volatility associated with stocks. Ramsey is right that bonds won’t give you the historic 12% return of stocks. But in exchange for a lower return, you take on less risk. This is called the risk-reward trade-off. This principle states that the more risk you take, the greater the potential reward and vice versa.

If you’re nearing retirement and don’t have time to wait for your investment portfolio to recover, it’s important to allocate your investments to more conservative investments like bonds. If you had allocated your portfolio to 60% bonds and 40% stocks in 2009, your portfolio would have fallen 10%, compared to 40% if you were all in stocks, as Ramsey recommends.

Ramsey’s philosophy on mortgages

Ramsey says if you can’t afford a 15-year mortgage, you can’t afford a house at all. Ideally, he recommends that you save longer so that you can buy your house with cash. The median income is nearly $55,000 per year and the an average house costs around $500,000. It would take over 55 years to save for a house if you cashed out 15% of your income. It is not practical for the vast majority of people to pay for their house in cash.

It also states that if you have a mortgage, you should pay it off as soon as possible. He recommends that you focus on paying off your mortgage rather than investing. There are several reasons why this may not be the best advice. If you were lucky enough to buy a house or refinance Over the past two years, you’ve probably received a rate as low as 2.68% for a 30-year mortgage. If your interest rates are this low, it may be a good idea to invest the extra money you have, especially if you have a 401(k) with matching funds. If you prioritized paying off your mortgage over investing, you would be leaving free money on the table.

Plus, Ramsey says you can get 12% annual returns in the stock market. By investing in the stock market, you make the difference between the 12% and 3% mortgage you have. That compound 9% can add up, and under new tax laws, the mortgage deduction is one of the few deductions you can take. If you have a high interest rate on your mortgage, yes, paying it off makes sense. But if you have a rate as low as 3% to 4%, you might want to reconsider, especially if your employer matches your 401(k) contributions.

Ramsey’s philosophy on credit cards

Ramsey says no to credit card. He recommends people cut up their credit cards and live on cash only. This is good advice if you are undisciplined and have difficulty managing your credit card debt. However, this may not be possible or practical for everyone. The problem is that a credit card is one of the main ways to get a credit score. And your credit score is one of the most important financial numbers.

If you are able to pay off your credit cards each month, you can increase your credit score and earn great rewards along the way. If you have the money to buy a house, your credit score won’t matter. But for the vast majority of people, the difference between good and bad credit can be tens of thousands of dollars over your lifetime. For me personally, I’ve earned enough credit card rewards to travel around the world multiple times.

David Ramsey has good advice. It’s not wise to live a lifestyle you can’t afford. You need to take responsibility for your finances and be disciplined. Ramsey is also right about giving back to the community and living a life of contentment and gratitude. That said, like all advice, it may not be practical for everyone. Your personal financial situation is unique. Ramsey’s advice is for people in debt who need to get their finances in order.

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6 tips you can use to improve your credit score https://killerkash.com/6-tips-you-can-use-to-improve-your-credit-score/ Sat, 22 Oct 2022 22:56:12 +0000 https://killerkash.com/6-tips-you-can-use-to-improve-your-credit-score/ Credit scores are complicated, and because rating agencies consider many factors, the process for improvement can be different for everyone. When 68-year-old Willard Carpenter wanted a ready to open a new business, he realized that his credit rating was not high enough to be approved. After checking his credit history, he discovered several issues that […]]]>

Credit scores are complicated, and because rating agencies consider many factors, the process for improvement can be different for everyone.

When 68-year-old Willard Carpenter wanted a ready to open a new business, he realized that his credit rating was not high enough to be approved. After checking his credit history, he discovered several issues that he needed to address.

Carpenter’s credit was hit hard by credit card debt that his father left in their joint account after his death more than a year and a half ago. He also hasn’t had credit cards for at least 10 years – he stopped using them after declaring bankruptcy due to credit card debt.

Now he’s working with a financial advisor to erase his father’s debt from his history and start building his credit safely.

Here are some tips for doing the same:

#1 Know your starting point

The first step to raising your credit score is knowing your current score and what’s showing up on your credit report, said Kristin Myers, editor of The Balance, a personal finance website.

“You can’t fix what you don’t know,” she said. “Check if there are any errors or if you have already made a dispute and it is still showing up.”

Once you see what’s in your report, you can begin to identify where you might have weaknesses. For example, if you have a large debt on one of your credit cards, start paying off that debt to reduce credit usage that affects your credit score.

#2 Manage your debt, as much as you can

Ideally, you pay off your credit card every month. But, if that’s not possible for you, making small payments can help you maintain or increase your credit score.

If you can, pay a little more than the minimum monthly payment so you pay less interest over time.

A well-known method of payment is the “debt snowball” where you pay off your debts from smallest to largest, to build momentum and good habits. Once the small debts are paid off and you get into the habit of paying off your debts, the money you used to put aside each month can then be used for larger debts. NerdWallet Offers a calculator to use this method.

Another small way to tackle debt is the Consumer Financial Protection Bureau recommendation to “use cash when it’s under $20” to avoid spending too much on your credit card.

#3 Avoid more debt, if you can

Not taking on new debt is another way to boost your credit score, Myers said. If you haven’t repaid the debt you currently have, it’s best not to open any other lines of credit. If you are in a situation where you rely on credit due to economic circumstances, try to avoid unnecessary purchases which could significantly increase your debt load.

#4 Use credit cards, but in moderation

Many people’s first instinct is not to use a credit card to avoid getting into debt. However, this is not a good tactic if you want to have a good credit rating. It’s best to have at least one credit card, but the key is to use it in moderation, said Colleen McCreary, consumer finance advocate at Credit Karma.

“You don’t want to use more than 30% of the credit that’s available to you, but you want to use those cards even a little to prove that you can be trusted,” she said.

When you use your credit card, be sure to pay on time each month and try to use it only for purchases you already intended to make and can afford.

#5 Don’t close your old accounts

After paying off your credit card, you might think it best to close the account to avoid using it again.

It actually hurts your credit score. Since one of the factors in your credit score is the length of your credit history, if you close your oldest credit card account, you also erase it from your credit history.

“Keeping the length of that credit history open is extremely important because the length of time you’ve had a loan or line of credit is going to increase your credit score,” Myers said.

#6 If you have no credit history, start safe

If you’re just starting out and want to grow your credit, there are several ways to secure this process so you don’t get into debt. One of the most recommended ways is to open a “secured card”, which are credit cards that require a deposit that is usually equal to the amount of credit given to you.

The deposit is there in case you can’t repay the credit, but it’s returned to you after you switch to an “unsecured” card. Secured cards are reported to the credit bureaus, which means that this line of credit appears on your credit file and can help you build or fix your credit score.

This is how Carpenter plans to increase his credit rating.

“It will allow me to start with a low limit and pay it off every month, and then I can apply for a higher limit,” said Carpenter, who lives in Bismark, Arkansas. Carpenter plans to open three credit cards and use a maximum of 25% of authorized credit, he said.

By Adriana Morgana

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are intended for general informational purposes only and should not be construed or construed as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other personal finance advice. Epoch Times assumes no responsibility for the accuracy or timeliness of the information provided.

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Bad credit score: what does it look like? https://killerkash.com/bad-credit-score-what-does-it-look-like/ Mon, 17 Oct 2022 21:59:34 +0000 https://killerkash.com/bad-credit-score-what-does-it-look-like/ Bad credit can make life difficult in many ways. Getting new credit cards or loans approved can be difficult, and you may end up paying higher interest rates. Having bad credit can even prevent you from getting certain jobs. But what exactly is bad credit? And how can you improve your credit rating? Let’s take […]]]>

Bad credit can make life difficult in many ways. Getting new credit cards or loans approved can be difficult, and you may end up paying higher interest rates. Having bad credit can even prevent you from getting certain jobs.

But what exactly is bad credit? And how can you improve your credit rating? Let’s take a closer look.

Generally, having fair or poor credit (as measured by your FICO score) means you may have difficulty getting new lines of credit approved. Your credit limit may also be lower and you may have to pay higher interest rates.

Several factors go into your credit score, including payment history, outstanding debt, length of credit history, and more. You can improve your score by paying your bills on time, keeping your existing account balances low, opening new lines of credit, and then managing them responsibly over time.

By taking these steps, you can improve your chances of being approved for the financial products and opportunities you need.

What is a bad credit score?

The two most popular credit scores are the FICO score and the VantageScore. However, these rating models use different ranges to measure creditworthiness.

FICO scoring model

Bad credit score: what does it look like?  2

The FICO scoring model predicts the likelihood that a borrower will repay a loan. Scores range from 300 to 850, with higher scores indicating lower default risk. A score of 579 or lower is considered poor, which can make lenders hesitant to extend credit.

The FICO credit scoring system classifies credit scores on the following scale:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very well: 740-799
  • Exceptional: 800-850

The average FICO credit score for 2021 was 716 points, which is a good score. However, scores below 670 are considered poor or fair, meaning there are people with bad credit.

VantageScore scoring model

Bad credit score: what does it look like?  3

VantageScore is a credit scoring model that uses data from consumer credit reports. A score of 300 to 660 is considered bad, with scores below 500 considered very bad.

The VantageScore model breaks down its credit score ranges as follows:

  • Very poor: 300-499
  • Poor: 500-600
  • Fair: 601-660
  • Good: 661-780
  • Excellent: 781-850

5 factors that affect your credit score

Bad credit score: what does it look like?  4

Many factors go into calculating a person’s credit score. One of them is the information contained in an individual’s credit report. Each of the three major credit bureaus (Equifax, Experian, and TransUnion) has its own method of compiling a credit report based on how a person uses various credit accounts.

The following five factors are used to calculate your credit score according to the FICO model:

  • Payment history (35%): The speed of payments on credit accounts and credit history are important factors in determining a person’s creditworthiness.
  • Use of credit (30%): It is calculated by dividing the total outstanding balance of all credit accounts by the total credit limit of these accounts.
  • Credit history (15%): A long and positive credit history shows creditors that you are a responsible borrower who pays off your debts on time.
  • Composition of credit (10%): Lenders like to see that you can handle both revolving credit (eg credit cards) and installment loans (eg car loans).
  • Credit requests (10%): How often you request new lines of credit.

Even though you may not be strong in one of the five credit factors, you can still have a high credit score. For example, people new to credit may not have long credit histories or many different types of credit. However, if you make your payments on time, keep your balances low, and don’t ask for too much credit at once, you can still have a good credit score.

Consequences of having a bad credit score

There are several ways a bad score can negatively impact your life:

  • Bad credit can make it difficult to get approved for a loan or a credit card. Lenders view borrowers with bad credit as a risk, which means they are less likely to approve you for credit. This can make it difficult for anyone with bad credit to get the financing they need.
  • Some lenders are more lenient with borrowers who have bad credit and will approve them for credit products. However, these loans and credit cards often come with high interest rates and more restrictive terms. This can end up costing the borrower more in the long run.
  • In most states, insurers are allowed to check your credit scores when determining your risk level. They may charge you more for bad credit because they see you as more likely to file a claim.
  • It is increasingly difficult to find a place to rent these days. Many landlords now perform credit checks on potential tenants. This means they can see your credit score and payment history and use that information to decide whether or not to approve your lease. Thus, it becomes more difficult for people with bad credit to find housing.
  • Although some states prevent employers from reviewing credit reports and using the information in hiring decisions, other states have no such protections. This lack of regulation can limit career opportunities for people with poor credit history.
  • Utility companies are known to perform background checks on those seeking their services. A bad credit history can mean you have to pay a security deposit to establish utilities.

Don’t let your credit score hold you back. There are things you can do to improve it. Take proactive action now and see your score increase in no time.

How to improve a bad credit score

Credit scores are important for many aspects of our lives. A high credit score can be the difference between being approved for a loan and being refused or getting a lower interest rate on a loan. A low credit rating can lead to higher insurance rates or a complete denial of coverage. That’s why it’s important to keep your credit rating as high as possible.

  • It’s important to monitor your credit report and score. You can get a free credit report and score from each of the three major credit bureaus at AnnualCreditReport.com.
  • Pay your bills on time is crucial to maintaining a good credit score. Late payments can have a significant negative impact on your credit rating, so it’s important to stick to your payment schedule. One way to do this is to set up automatic payments for your accounts so you don’t have to worry about forgetting or falling behind.
  • A low credit utilization rate is the key to a high FICO score. Lenders like to see that you are not using your credit cards to the max and are only using a small percentage of your available credit. A good rule of thumb is to keep your balances below 30% of your credit limit.
  • Adding an authorized user to your credit card account is a great way to improve your payment history and boost your credit. You don’t need to use the card or even know the account number – just being an authorized user will help you build a good credit history. Pick someone with a high credit limit, low credit usage, and a strong history of timely payments to benefit from this strategy.

Final Thoughts

Bad credit can be frustrating and seem like an insurmountable obstacle, but it doesn’t have to be the end of the world. You can take steps to improve your credit and, with some effort, you can see results quickly. Good credit opens up more opportunities and has financial benefits, so it’s worth taking the time to improve your score.

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