12 DAYS OF MASTERING CREDIT - DAY 12

EIGHT IS ENOUGH

Everyday we spend our time and money in various places and with various people but what are we really investing in. The majority of people think credit repair is TOO expensive, but these same people will spend thousands of dollars filing bankruptcy. Then they will lose time, money and credit worthiness all in thename of doing it the safe way. Then others will allow incorrect and negative items to remain on their credit, hoping it will magically disappear.

 I'm sorry to tell you that it won't.

Even those items that are supposed to be legally removed after the 7 or 10 year period will remain long after that. A study in 2004 showed that almost 80 % of all credit reports contained errors. I did not say 8 % or 50 % but I said 8 out of 10 people have some form of errors on their creditreports. I hate to beat a dead horse but that number is too high to ignore.That number is high enough for me to take action and at least investigate my personal credit report. These errors are costing consumers millions of dollars every year and the credit bureaus, creditors and collection agencies are racking up off of it. A lot of this extra money that is being made is off of higher interest rates.

Let’s take for example mortgage rates. Most people are not aware of the fact it is really not that difficult to get approved for a mortgage. The difficulty usually comes in the amount of the loan the consumer is seeking. The higher the loan amount then the higher the loan risk for the lender. That's why you as a consumer must do everything in your power to minimize this risk for the lender which creates a easier and smoother transaction. I myself personally know lenders that approve people with credit scores as low as 580. Furthermore if I tell an individual that they have been approved for a mortgage and that their interest rate is going to be below 5% most people would believe that that is a great deal. However that's not the case. If a person with a 620 score gets a mortgage the interest rate should be around 4.6% with a payment of $765 and pay $126,000 interest over the life of the loan versus a person who has a 720 w/a interest rate of 3.1% monthly payment of $647 total interest of about $83,000.

The scenario above paints the picture of a good deal versus a great deal or either a good deal versus a better deal. I mean if you get an interest rate below 5% that is not particularly a bad deal but there is a better deal available if that person is willing to make the proper investments in getting their credit score higher. When I go shopping, when I decide to use my hard earned money to do anything, then I want the best deal available.

So let’s look at the numbers again, not only will you save $118 per month, which is $1,416 a year but also you will save $43,000 over the life of the loan. If we calculate $1416 a year times 30 years which is the average life of a mortgage then that brings the total amount to $42,480. Now if we add the amount you have saved on your monthly payments over 30 years $42,480 plus the interestsaved which is $43,000 that amount equates to $85,480. When we look at that amount that is a pretty good amount that's saved, can you picture if that amount is saved or placed in an interest earning savings account. This is only what a person can save on the mortgage rate; imagine what you can save in autorates, credit card interest, etc.

Consider this if a man goes to the gym every day and plays basketball that doesn't make him a good basketball player and that certainly doesn't guarantee you will see him on the same team as LeBron James. There are a lot of people who say they repair credit but that doesn't make them a PROFESSIONAL. Just because a company says they repair credit doesn't make them good and an expert at what they do. We have been in the business for over 13 years.

Growing up I had a Boy Scout troop leader run off with my money but I still believe in teamwork. In high school I had a substitute teacher run off with our field trip money but that didn't stop me from believing in education. So what am I saying? There may have been those in your life who have disappointed you, even lied to you but know this there are bad apples in every bunch. Bad cops, bad presidents, bad doctors and bad restaurants. Does this mean that we stop living? Does this mean that we stop trusting? None of this changes the fact that in order to get where you want in life it's going to take TEAMWORK and some form of EDUCATION.

There are several companies that take advantage of consumers desperate for a higher credit rating. Perhaps this is the reason most people are skeptical of dealing with credit repair companies. Here is a quick section of the law to familiarize yourself with.

 

Section 404 ("Prohibited Practices") of the Credit Repair Organizations Act (CROA) reads, "No person may make any statement,or counsel or advise any consumer to make any statement, which is untrue or misleading with respect to any consumer's credit worthiness, credit standing,or credit capacity to... any [credit bureau]... or any [creditor]."

 

A well-strategized credit repair plan begins with these three essential foundations. Make sure to look for these strategies when deciding to deal with any company : a) simple requests, b) explanation of information, and c) legal demands.

I am sure many of you have encountered credit repair methods which are strictly illegal. These vary from certain e-books and individuals who will advise you to do any and everything under the sun. It can be as outlandish as requesting that you identify establish credit by simply making up a Social Security number in accordance with some geographically-based insider information regarding the numbering scheme, all the way to acquiring an IRS Taxpayer Information Number (TIN), which looks like a Social Security Number, and establishing credit with that. “Live by the sword, die by the sword” In other words there are grave consequences for being caught doing anything illegal.

  Identity theft is another reason to check your credit report for errors. The FBI has deemed “identity theft” as the FASTEST growing crime in America. This is due to several reasons, accessibility of personal information, the consumer’s lack of awareness of the consequences of not protecting their identity and last but certainly not least profitability. Once the government realizes that there are profits to be made then their antennas go up and the start to crack down, just like in the case of Napster. Therefore thus the crackdown on credit repair companies. The government is being pushed on both sides. On one side by the credit bureaus to stop credit repair companies because they are cutting into their profits by having negative items removed. Then on the other side by consumers who understand their rights to dispute the unfair practices of the credit bureaus, creditors and collection agencies. Below are a couple of true and false questions to bring clarity to some of the most common misconceptions.

Anyone with a credit score 720 or below MAY benefit from credit repair. TRUE

Credit bureaus and your creditors would like you to believe there is nothing you can do about your credit score. FALSE

There are some that believe credit repair is illegal. FALSE

It took TIME for you to mess up your credit & it is going take TIME to restore your GOOD credit. TRUE

FTC warns about using credit repair companies. TRUE

The greatest investment is one that you can make in yourself. Having a basic knowledge of the laws governing the credit repair industry is a good step towards avoiding a credit repair scam. Be sure to steer clear of any company that ignores these laws. Decide to make an investment in your future today. Contact us today 1-888-824-7622 or The Credit Genius.
             

12 DAYS OF MASTERING CREDIT - DAY 11

If you're Bill Gates or Warren Buffett then you probably don't need to read this article. This means that you are probably too rich or too smart or perhaps both, so you have this one financial trick under control.

However for the rest of us, making, and especially adhering to a budget is essential to ensure that our money gets used the way we need it to. Perhaps you are in the best situation possible financially, you have great income you pay all your bills on time each month. Nevertheless you may find that you are spending more than you wish on items that may seem like necessities but are really luxuries.

The one mistake I've seen beginning budgeters make is becoming financial party poopers. You have to keep in mind that you do not want to cut out ALL the fun, you have to make room for entertainment and splurges or your plan is doomed to fail.

Remember its like a financial diet, moderation is the key. If you like to eat out everyday of the week, it doesn't have to stop. You can still eat out but perhaps just not every day of the week. Here are 10 steps to budgeting.

1. Budgets are a like flies

Nobody likes them around and we all find ways to get rid of them when they show up. Unfortunately they are essential to our financial ecosystem.

2. The budgeting two step

You can dance around this issue for months or even years you are going to need a budget. The key is to identify how you're spending money now.

- Evaluate your current spending and set goals that take into account your long-term financial objectives.

- Track your spending to make sure it stays within those guidelines.

3. Don't try to be a whiz kid

If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.

4. Driving Mrs. Crazy

Some people find that once all the info is on their computer they become money control freaks. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Don't call the plumber

If money leaks from the ATM machine without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.

6. Watch the spending limits

Spending limits should be observed just like speed limits.When they are not adhered to then it can be dangerous. Surveys show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you shoe-in for bankruptcy, but it's definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries dressed up as necessities.

If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.

8. Tithe yourself.

Most people tithe to churches or other charitable organizations. In addition the only way you are ever going to see a significant amount of money saved up is to tithe to yourself. That means taking 10% off the front end of your income and placing it in a savings account. Also I suggest that you have an account that doesn't have an ATM or debit card attached to it.

9. Don't count your chickens before they hatch.

When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.

10. Save until you can't save anymore

As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.

12 DAYS OF MASTERING CREDIT - DAY 10

DAY 10

INTEREST RATES

Credit Cards

What’s considered a good APR?

Generally speaking, low-interest-rate cards drift around 10 %. There are some cards that offer low rates like the Simmons First Visa Platinum features an ultra-low 7.25% variable APR and Atlanta's Associated Credit Union offers its Visa Platinum Preferred with a 9.9% APR. However both of these cards are going to require credit scores over 680 with the Simmons requiring in some cases scores in the high 700’s.  

Bad APR?

There are cards that carry APRs well above the 22.99% mark, with First Premier Bank being the worst offender at 36% APR. As you might assume high-interest credit cards target those who have credit scores less than 650. Several industry experts recommend that once you go over the 23% range then you should consider getting a secured card.

Secured cards necessitate that consumers put down a sum of money that is usually equal to the available credit line that they will offer to you. Secured card APRs can range from 8.99% to 22.99%, which is more than reasonable considering the lack of consistent credit integrity displayed by its applicants. Remember the secured credit cards are stepping stones to get you back in the credit card game, if you uphold your end of the bargain then other credit card companies will begin trusting you by extending credit to you.

Mortgages

Remember to notate that your credit report is not the same as your credit score. In addition to viewing credit reports from the three major reporting bureaus, you also should obtain your FICO^® score.

FICO^® Scores range from 300 to 850, with the mean value score being right at 725. In all actuality, the most favorable credit rates are typically extended to those with scores of 720 or above but you can expect good mortgage interest rates at the 720 to 760 level and up.

Homebuyers who pursue an FHA Loan one of the most common loan types for first-time purchasers, can usually secure a loan if their credit is 630 or over.

If you are applying for a "stated income" loan, whereby you forego providing income verification to the lender, the lender will be looking for a minimum FICO^® score of 680 or higher. Banks don't like to assume all the risk, so your good credit history is key.

Seventy to 80 percent of mortgage lenders use FICO^® as their means of determining your interest rate and the types of loan you qualify for; as interest rates creep up, this difference can be significant.

Conversely 15 year rate will be lower than a 30 year fixed rate.

Auto Loans

The higher the credit scores the lower the interest rate. Jack Gillis, public affairs director for the Consumer Federation of America, estimates that only 15 percent of car buyers qualify for zero percent offers from automakers.

Banks, Credit Unions and dealers are the primary sources that perspective car buyers obtain their loans from. The dealer often serves as a intermediary and can still offer loans from all of the sources mentioned above.

Car dealers borrow money at wholesale interest rates, which they then mark up and pass on to you. Because the dealer's rate is lower, the rate you get may be no higher than one you arranged yourself.

Credit Unions make up the smallest percentage of auto loans nevertheless they still offer the best rates for consumers. Typically credit unions are one to two whole points lower than the bank rates. The rates are generally higher on both ends if you finance a used car versus a new car.  For a further comparison of bank and credit union rates, check websites like E-Loan or Lending Tree.

If at first you don't succeed, please don't try again until you have properly researched why you were declined or rejected. Many loan applications automatically trigger a credit check, each of which can knock a few more points off your credit score, making what might have been a bad situation even worse.

Credit unions are a great option usually because they're more likely to examine a subprime applicant's circumstances and make exceptions if problematic credit history results from one-time medical expenses, unemployment or divorce.

Check Cashing Services

Check cashing services or payday loans are new sources of money lenders that have recently entered the market. Hopefully none of us will ever have to use these modern day loan sharks but I understand life happens and there may be no more plausible options available. This is why I included the below information, so that you make a more informed decision before deciding to deal with these companies.

There are several advertisments that make payday lenders seem friendly and easy to deal with. However we've compiled six reasons to debunk this myth.

 

1.      The astronomically high interest rate. The interest rates are between 264% and 1,000%.  

 

2.      High payments due within days of signing the loan. If you cannot make these payments no matter how fair you deem that they are, you may soon find yourself in a never ending cycle.

 

3.      Extra, illegal fees and costs are often charged. Need I say more?

 

4.      Compounding interest. This translates to renewal fees and other illegal fees that you will owe and will be forced to pay by any means necessary. This compounding interest makes it almost impossible to pay off a pay day loan, because this causes rates to swirl way above 1,000%.  

 

5.       The dreadful second payday loan. Most people will be forced to take out a second payday loan because of varying extenuating circumstances. This can include lawsuits, predatory collection efforts and those payments that seem to come all too early for anyone to get back on their feet. A lot of consumers find themselves with payday loans all over the city. Now you are robbing Peter to pay Paul, James and John.

 

6.      Lenders put clauses in their loan documents which keep you from suing them if they do something illegal. This means the pay day lenders can almost do everything they want to make you pay the money without concern they will be sued for illegal practices.

 

Make sure to check your credit score for accuracy before applying for any loan. If you have any more questions or concerns contact us at your earliest convenience at 1-888-824-7622 or The Credit Genius.

12 DAYS OF MASTERING CREDIT - DAY 9

DAY 9

GOOD COP, BAD COP (GOOD DEBT, BAD DEBT)

Some debt is good. Some debt is bad. Seems simple enough, right?

Good cop, bad cop refers to a law enforcement investigatory technique, which may or may not lead to a confession from a suspected criminal. Basically one cop presents themselves as the bad cop, belligerent, unrelenting to any of the suspect’s requests. Then the bad cop is relieved by the apparently good cop who usually goes over and beyond to be nice to the suspect. This is all done in hopes of getting a confession. The good cop or the bad cop has any true regard for the well-being of the suspect beyond the cooperation with law enforcement to further their cause. Good cop, bad cop scenarios are frequently represented in crime shows like Law and Order and most recently CSI.

In wake of the financial fallout of 2007 and on the horizon of a seemingly looming fiscal cliff it seems as though all creditors are out to get us. One company offers us a credit card then the next company comes right back and offers to consolidate all our debt and magically fix our debt issues. In this day and age many people are living by the financial rules that were handed down from generations ago. Facing such uncertainty, people are saving money, sitting on piles of cash hoping things will settle down. The problem with this strategy is that savers are often losers because as the Fed prints record amounts of money savings lose value, especially as inflation kicks in and grows faster than the interest paid on savings.

Others, the financially intelligent, are making a lot of money and borrowing more of it. Why? Interest rates are at the lowest in history and many assets are priced at bargain bin prices.

Those who have a high financial IQ are borrowing money to offset their existing debt then taking the money they are borrowing and using it to capitalize on various investment vehicles.

Making good debt work for you

Good debt, if there is such a thing, is defined as this, money that is working for you rather than working against you.

For instance, if I’m using debt for a business deal, I won’t do the deal unless the cash flow from the deal pays for my debt payment and expenses while providing a good return.

This assures that cash comes into my pocket each month, providing a continual income that allows me to enjoy liabilities. The great thing about debt is it allows me to leverage my existing cash into many assets.

For example, in real estate, I can buy investment properties with debt. I can then go down to my bank and secure a loan for 80 percent (I must put down the 20 percent) of the purchase price of the investment property. In order for this to become classified as good debt I must make sure this investment deal covers my payment that is due every month on the loan from the bank.

I can use the income from my properties to either invest in more assets or I can buy something nice for myself or for my family knowing that more cash will come next month from my investments.

Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates. This can be an excellent investment strategy when you have great credit.

Some debt is bad

Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there's something you really want, but it's expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it's due and avoid interest charges.

Pay off your highest-rate debts first

The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.

Don't be so quick to pay down your mortgage

Don't pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)

If you have any additional questions then contact us today at 1-888-824-7622 or The Credit Genius.

12 DAYS OF MASTERING CREDIT - DAY 8

DAY 8

AUTO LOANS

When you walk into a car lot or a car dealership you must realize that the final decision rests in your hands. If the terms, price and rates do not meet your predetermined criteria then you must know that you have the option to walk away from the deal. However it helps that if you do all that you can before you go to the dealership to position yourself in a place of power. This includes knowing what your FICO^® Score is, knowing the value of the car, also possibly securing your own financing through a credit union or your own bank.

Eye candy is bad for your health

All of our dentists warned us when we were younger not eat too much candy because it is bad for our teeth. Shopping for a car is the same way, we have to be mature and not necessarily purchase the first thing that looks good to our eyes. Don’t fall to the susceptible tactics that a lot of dealerships use and that is to get you to focus on the monthly payment rather than the total amount financed. Any loan can have an affordable monthly payment if you extend the term long enough, but that can add significantly to the total cost of the car. Focus on the total amount financed rather than on the monthly payment alone.

Consider your options

New, used or certified pre-owned? Coupe or sedan? SUV or minivan? Figure out what vehicle types and models fit your price range and needs. The more you're willing to consider, the wider the range of prices you'll get and the better bargaining position you'll be in when it comes time to buy.

Brace yourself to deal with Dr. Evil

Dr. Evil is the fictional character from the Austin Powers movies. He always hatches a plan to take over the world but fails miserably in the end. A lot of people believe that all car salesmen are evil and have ulterior motives. We have to be honest if the car salesman does not sale any cars then he cannot provide for himself and will probably be out of a job soon for not meeting sales quotas. Conversely that does not mean that we do not do all we can to thwart their evil schemes of loading us up with unnecessary upgrades and payments we cannot afford.

Find the right car for you

You should now be confident and prepared to find all the best vehicles for sale in your area and to arrange test drives of the most promising ones. The internet has made it a lot easier to get in touch with dealers or private-party sellers. There are a lot of dealerships that specialize in providing vehicles to out-of-state buyers. Now that you have found the right car, how are you going to pay for it?

Cash, Lease or Finance

Cash Payment

Cash is king right? Paying cash for your car means no car payments, which is a welcomed stress-reliever. When you pay cash you eliminate the haggle and the hassle of trying to get the right monthly payment and the right rates. Also you instantly get the title which is almost worth it all by itself.

However you must ask yourself, how this will deplete my savings and what else could I do with this cash. Particularly how could I invest it and create a profit.

Leasing

Leasing is like renting an apartment: Your monthly payments give you rights to drive the car, just as rent gets you a place to live. Vehicle leasing is available through banks, credit unions, finance companies and automakers.

If you are the type of person that like to get a new car every couple of years then perhaps leasing is the best option for you. Leasing a car almost always ensures you a warranty for the duration of the time the vehicle is in your possession.

In addition, lease payments can be deducted from your taxes if you use your car for business more than 50 percent of the time, according to Allstate Leasing. According to credit agency Experian, people who lease typically drive away without making a down payment, whereas financing typically requires a 10 percent to 15 percent down payment.

Another bonus is that you do not have to worry about trying to sell your car, you just pull up to dealership and drop it off. On the other hand the downside to this is once you turn it in, what do you have to show for all the money, time and gas that you have invested into the vehicle.

Yearly mileage on a leased vehicle is typically limited to a range of 10,000-15,000 miles a year, so make sure you know your driving habits before committing to lease terms. Exceeding the limit typically results in stiff fines, so if you drive more than 15,000 miles a year leasing doesn't make much economic sense.

Make sure to read the entire leasing contract to consider all the details of the dos and don’ts of the vehicle agreement, as you may find some of the terms unreasonable. One more thing to note, if your credit score is not up to par you may find it harder to qualify for lease terms.

Financing

Most Americans choose to pay for their car through financing. Like leasing, financing is available through credit unions, automakers, banks and financial companies. The best thing about financing is that you are using other people’s money to pay for something that you will one day own. Unlike a lease, once your loan agreement matures, you own the car for good.

If your credit score is below 600 you'll probably be offered a shorter loan term at a higher interest rate — if you get approved at all.

There are also tax deductions for financing a business vehicle, but they're not as great as lease deductions, especially for more expensive vehicles. That's because you can deduct a certain percentage of your lease payments no matter how high those payments are, according to Allstate Leasing. Financing deductions have set limits.

Once you've been approved for financing, you should realize that you won't actually own the car until you're done making your payments. If you decide to sell your car while someone else still holds the title, the process can be difficult and usually requires your creditor's involvement.

Unlike lease deals, where it's common to make no down payment, financing deals often require a substantial down payment. If you can't qualify for a no-money-down deal, creditors often ask for 15 percent down.

Financing a vehicle is not like financing your bedroom suite; most times it is a considerably larger chunk of change that you are financing. That being said, you can look at the fact of paying those monthly payments for a longer duration of time.

The Rubik’s Window Sticker

All the different colors, shapes and sizes can be truly enticing. Growing up my friends and I wanted a Rubik’s Cube so bad but honestly not many of us could crack the code to solve this puzzle. The window sticker is a similar enigma. Of course we look for the price of the vehicle and perhaps the amenities that are included versus optional amenities but how many other things are displayed on the window sticker. Let’s look at what is all detailed on this seemingly harmless piece of paper

When a car or truck is built, it's issued a window sticker. Information on this sticker verifies its make, model and year and provides its suggested retail price — thus, its "sticker price" — and a comprehensive list of its standard and optional equipment. Each vehicle also has a vehicle identification number on its sticker; all of these statistics officially identify the car or truck for shoppers on a dealer's showroom floor.

The sticker is a rich source of essential information about a new automobile. It lets you know exactly what's included with any particular vehicle, as well as helping to ensure that you're getting the exact options you're paying for.

Failure to display one can result in a fine of $10,000 per vehicle to the dealership.

The stiff penalty for their absence underscores the value of window stickers for car shoppers. Of particular value are several pieces of vital information: the manufacturer's suggested retail price; engine and transmission specifications; standard equipment, including warranty details; optional equipment; and fuel economy information.
If you are ready to get started working towards getting the car of your dreams then contact us today at 1-888-824-7622 or The Credit Genius.

12 DAYS OF MASTERING CREDIT - DAY 7

DAY 7

MORTGAGES

Find the types of mortgage loans that fit your lifestyle

Whether you’re buying your first house or your fifth, there are many different types of mortgages to choose from. When it comes to financing your new home, it’s important to understand the differences between each type of mortgage so that you can choose the right offering for your budget, but also feel confident in your decision. Most banks offers several types of mortgage loans to fit your needs, whatever they may be, and help you pay less on what you borrow. Find below the most common types of loans offered to consumers.

Fixed-rate mortgage

Considered a traditional type of mortgage, a fixed mortgage offers borrowers a fixed interest rate over the term of the loan, whether it is 10, 15, 20 or 30 years, with monthly payments that remain the same. In the beginning of the loan period, the majority of monthly payments will serve the purpose of paying off the loan’s interest. During the latter part, you will be paying more toward the loan’s principal.

 Why a fixed mortgage may be right for you:

Why a fixed mortgage may be the right choice:

You are planning to stay in the house for several years

You want the security of knowing your interest rate will not change

You like having a predictable monthly payment so you can better budget for other expenses

Why a fixed mortgage may not be the right choice:

You are locked into the same interest rate for the term of your loan and cannot take advantage of lower rates unless you refinance, in which case you could have to pay additional closing costs, appraisal and title fees

Interest rates are usually higher for this type of mortgage

Adjustable-rate (ARM) or variable-rate mortgage

An adjustable rate mortgage (ARM) is a type of mortgage with set adjustment periods in which the interest rate may increase or decrease, depending on current market conditions. Rate caps are put in place so that the interest rate can never increase or decrease by more than the determined percentage over a predisclosed period of time

Why an adjustable rate mortgage may be right for you:

You expect to live in a home for a short time period, respective to the term of your ARM

Interest rates are usually lower than other types of mortgages for the first few months to first few years, depending on the terms

Why an adjustable rate mortgage may not be the right choice:

Your payments may increase once the loan’s introductory period ends

Monthly payments will be harder to predict, making it more difficult to budget for other expenses

FHA (Federal Housing Administration) loan

Why a FHA loan may be right for you:

Allows buyers who may not qualify for a home loan to obtain one Low down payment.

Why a FHA loan may not be right for you:

The size of your loan may be limited.

VA (Veterans Administration) loan

Why a VA loan may be right for you:

Guaranteed loans for eligible veterans, active duty personnel and surviving spouses Offers competitive rates, low or no down payments.

Why a VA loan may not be right for you:

The size of your loan may be limited.

Balloon mortgage

Why a Balloon mortgage loan may be right for you:

Usually a fixed rate loan with relatively low payments for a fixed period.

Why a Balloon mortgage loan may not be right for you:

After an initial period, the entire balance of the loan is due immediately This type of loan may be risky for some borrowers.

Interest-only

Why an Interest-only loan may be right for you:

Borrower pays only the interest on the loan, in monthly payments, for a fixed term.

Why an Interest-only loan may not be right for you:

After an initial period, the balance of the loan is due. This could mean much higher payments, paying a lump sum or refinancing.

Reverse mortgage

Why a Reverse mortgage loan may be right for you:

Allows seniors to convert equity in their homes to cash; you don't have to pay back the loan and interest as long as you live in the house.

Why a Reverse mortgage loan may not be right for you:

Subject to aggressive lending practices and false advertising promises, particularly by lenders that prey on seniors. Check to make sure the loan is federally insured.

Remember there are different loans for different people for different circumstances. The best thing to do is to find a qualified mortgage broker, research your options and then make the best decision for you. Coming up on Day 10 we will go into more details of interest rates associated with various loans and the credit scores required to qualify for them. Feel free to contact us at 1-888-824-7622 or The Credit Genius.

12 DAYS OF MASTERING CREDIT - DAY 6

DAY 6

CONSUMER RIGHTS

Depending on your goals repairing your credit can be beneficial to almost anyone. Additionally you also have certain rights under federal law that the credit bureaus & your creditors MUST abide by. Credit repair is NOT illegal; as a matter of fact most high-profile positions use various forms of credit repair, including most newly elected government officials, corporate executives & professional athletes. The Federal Trade Commission (FTC) warns against using credit repair because unscrupulous companies are only interested in taking your money & not helping you achieve your goals.

We’ve listed below four of the main laws that govern and protect your credit as a consumer.

 

Fair Credit Reporting Act compels credit bureaus. The Fair Credit Reporting Act (FCRA), which in a nutshell informs the credit reporting agencies what they can and can't do. The FCRA guarantees access to credit reports. Regulates who has "permissible purpose" to acquire a consumer's report. Places statutory limits on how long information can be reported. Details how a CRA must handle disputes, including but not limited to those posed by consumers.

Fair Credit Billing Act compels original creditors. The Fair Credit Billing Act (FCBA), which undergirds the more detailed and exhaustive Truth in Lending Act, which was for all intents and purposes was created to “police” the original creditors. The FCBA requires creditors to bill correctly and completely, and it's the FTC's job to make sure that the statute is equally applied and complied to. The FTC condenses the statute's exclusions as follows: "unauthorized charges; charges that list the wrong date or amount; charges for goods and services you didn't accept or weren't delivered as agreed; math errors; failure to post payments and other credits, such as returns; failure to send bills to your current address provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification."
 
Fair Debt Collection Practices Act compels third party collectors. The Fair Debt Collections Practices Act (FDCPA), which regulates debt collectors. Provides behavioral standards for acceptable third-party collections behavior and specifies that Collection Agencies must always include several legal stipulations in their dealings with debtors. Allows the debtor to formally request that the CA "cease and desist" from communicating with the debtor further. Specifically details a consumer's right to request further information regarding an alleged debt. 

Quick Summary of FDCPA:

Collectors can't call after 9 pm or before 8 a.m. local time Section FDCPA 805 (a)(1)

Collectors can't telephone you at work if you tell them not to Section FDCPA 805 (a)(3)

Collectors should NOT give information about you to third-parties (friends, family, and coworkers)

HIPAA

Health Insurance Portability and Accountability Act of 1996 (HIPAA), which regulates health providers. Title 2.1 of The Privacy Rule took effect on April 14, 2003, with a one-year extension for certain "small plans". The HIPAA Privacy Rule regulates the use and disclosure of certain information held by "covered entities" (generally, health care clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.) It establishes regulations for the use and disclosure of Protected Health Information (PHI). PHI is any information held by a covered entity which concerns health status, provision of health care, or payment for health care that can be linked to an individual. This is interpreted rather broadly and includes any part of an individual's medical record or payment history.

 

Remember these laws are in place to protect consumers against unfair credit practices like billing statement errors, debt collection, credit repair, and credit reporting. These laws do not guarantee that an individual will be granted credit by a potential creditor nor does it ensure that a consumer will have good credit. Finally these laws are in place to guarantee that the credit bureaus, creditors and debt collectors do not run amuck with your credit and your credit reports.

 

If you want to get started on your new future by rehabilitating your credit then contact us today at 1-888-824-7622 or The Credit Genius.

12 DAYS OF MASTERING CREDIT - DAY 5

DAY 5

CREDIT CARDS THE BIG “C”

The Big C is commonly associated with cancer, the word that everyone hates to hear and no one likes to repeat. Of course I am in no way making light of cancer, my Mom is an 18 year survivor of lymphoma and my Dad is a 14 year survivor of prostate cancer. Consequently I am intimately aware of the pains of cancer, treatment and its effect on families. However what I want to discuss today is credit cards.

There has been a long standing debate over whether a consumer should possess a credit card or not. Credit cards are feared and misunderstood by many just like cancer. The average American household with at least one credit card has nearly $15,950 in credit-card debt (in 2012), according to CreditCards.com. Multiply that times the over 300 million people that are in the US and you get the picture. Nevertheless there are some good reasons for having credit cards and we thought that we would assemble a few of them below.

Renting A Car

While it may be possible to rent a car without a major credit card, it is very difficult and probably something that you should not do as you would probably be running the risk of dealing with unscrupulous individuals in the process. Rental car companies will require a deposit, several forms of identification, and proof of insurance. If you have ever had to wait in line behind a renter who did not have a credit card, then you already understand how time-consuming this process can be (If not consider standing behind someone writing a check at thegrocery store). Furthermore, try to choose credit cards that already include some form of rental car insurance, which will save you time and money in the long run.

 

Checking IntoA Hotel

Like rental car agencies, hotels are designed around customers who hold a major credit card. Without a credit card, guests will need to place a deposit on their room in order to insure against damages and to cover any incidental expenses. These deposits are often made as a hold on a debit card, which can take several days to clear. Other alternatives will be to pay for the entire visit for cash upon checking in, which can be expensive depending on the length of the trip. If travelers need to visit multiple hotels within a week, these holds can add up to several thousand dollars.

In AnEmergency

This is probably the least desired reason to “own” a credit card but probably the most obligatory reason to actually hold on to the plastic fiend. Since it simply isn’t safe or practical to carry large amounts of cash at all times, a credit card is an ideal form of payment for emergencies such as car repairs and travel disruptions. Additionally, many credit cards offer travel assistance and concierge services that can be very useful in the event of personal crisis or a natural disaster. For instance, credit card issuers were able to help cardholders in the aftermath of Hurricane Sandy.

Credit Card Perks

Baggage Fees

American travelers have grudgingly grown accustomed to paying for checked bags on flights. However there is some hope as some credit card companies give allowance for travel fees to its cardholders.  For instance, American Expressoffers a $100 annual airline fee allowance on its Blue Sky preferred travelcard.

Personal Concierge

American Express Platinum Card, Discover More Card, VisaSignature, and World Elite MasterCard customers enjoy access to specially trained concierge teams, who can recommend and reserve hotels, restaurants, and special events.

American Express notes that its team has helped arrange honeymoons and organized house painting chores for vacationing cardmembers.(You can see why American Express is the most desired and perhaps one of the top three most difficult cards to qualify for).

Brand Rewards

Like airlines, major cruise lines offer their own branded travel rewards cards that can offer significant rebates on luxury vacations. Delta,Royal Carribean, Disney, and Southwest Airlines all partner with major banks to extend special financing and bonus rewards for cardholders.

If you have more credit card debt than you can manage, get help before your debt causes you to go into a financial tailspin that can take you years to recover from. There are reputable debt counseling agencies that may beable to consolidate your debt and assist you in better managing your finances. But there are also a lot of nonreputable agencies out there. Make sure to do your due diligence before making a final decision.

 

Ifyou have additional questions contact us today at 1-888-824-7622 or The CreditGenius.