Better Credit...Better Interest Rates

I was thinking about a past post I did and wanted to repost it. It was about how better credit translates into better interest rates. Check out the details below…


If a person with a 620 score gets a mortgage the interest rate will be around 4.6% with a payment of $765 and pay $126,000 worth of interest over the life of the loan versus a person who has a 720 with an interest rate of around 3.1% which calculates to a monthly payment of $647 and total interest paid over the life of the loan of about $83,000. This calculates to about $43,000 saved during that time. Now imagine if you took that extra savings and placed it in a Money Market account or a high-yielding savings account.

NUMBERS NEVER LIE

What do numbers really mean? There are all kinds of numbers. License plate numbers, numbers when we visit our favorite fast food restaurants, #5 or # 1 please. Gas stations have numbers can I get $20 on pump 7 and of course we all know about social security numbers. I have been thinking about our numbers a lot lately and here is what I came up with. I thought I would share them with you. Perhaps they mean something, perhaps they don't. Nevertheless numbers are all around us, from our shoes to our scales, they are there to give us a measure of where we are, where we are going and where we want to be. Below we've compiled some numbers of our results over the last four months.

68 new clients since June 1, 2013

90% completed (we expect to have these 10% completed within next 30 days) these were very large scale clean up's all with more than 40 items per bureau to dispute!

43 clients with a 780 FICO score on at least 1 credit bureau.

62 clients with a 750 FICO score on at least 2 credit bureaus.

68 clients with a 700 FICO score on all 3 credit bureaus.

We work directly on your behalf to update your credit profile to read accurately. 

We provide FULL services on a FULL 1 YEAR TERM assisting YOU AS A CLIENT in removing negative and inaccurate items from your credit report. 

Once you enter our program you will start seeing exciting results in the first 30 days. 

Most of our clients will be completed within the first 30 days! 

The faster we can get you completed the better for us!!

We will continue to work with you for 12 months if necessary; for NO ADDITIONAL FEE until we have your file complete. 

In MOST cases we can remove all disputed items within 30 days.

Contact us TODAY!

Blessings to you all today...

Tradelines

Tradelines are the accounts that are on your file. Tradelines help aid the 70% of your credit report that lenders and under writers review which is credit history and utilization. Our tradelines have great credit/payment history and low utilization ( which means very low balances). 

However if you do not have many tradelines on your file regardless to whether you have any or no derogatory information you may still be declined because credit is based off of your current consumer traits, even though you may have alot of paid off accounts with no lates or just a few lates if you do not have any open and active accounts seeking approval will be difficult and will bring about high interest. 

Below are several guidelines you should go by when you are in the

market for auto loan, funding or mortgage :

MORTGAGE : 4-5 accounts & at least 1 account open at least 12months

*Self Help Tip - get a secure card and 2 seasoned authorized user

AUTO : Need a minimum of 2 accounts with a minimum of one account at least 12 months with at least 5K for auto

in the 10-17K range, 

- 17K - 26K you will need at least one 10K plus with one being open for 12 months 

-26K - 45K you will need at least two 10K plus lines with one open for 12 months 

*Self Help Tip - get a secure card and 2 seasoned authorized users

FUNDING : Need at least 3-5 accounts with two account both opened for over 12 months

*Self Help Tip - get a secure card and 2 seasoned authorized user

FYI DIY Day 5

This is our last installment on Do It Yourself Credit Repair. Finally you need to build some muscle. In other words its good to see if you can enhance your remaining credit profile. After you have removed all the negative items that you can off your report. Also this is a reminder that you need to start repairing your credit as soon as possible because you can not predict the time-frame involved in getting yourself to the point that you want to be. As you increase your score you decrease your interest rate, which in turn reduces your monthly payment. 

Check with your family members first to see if anyone has a credit card that they are willing to add you on as an authorized user. This gives you the benefit of all their payment and credit history on the particular card. Consequently this means that they should not have ANY late payments, if they do then you are just working against yourself. The higher their limit and the lower the balance the better it is for you. Next check with your bank to see if they offer secured credit cards. If they do then this is a great tool to help your overall credit profile. 

Also you can document your history of paying your rent, health insurance, or even child care bills on time, every time, for at least 12 months, talk to your mortgage professional about whether you can use any of these accounts to prove yourself creditworthy to mortgage lenders.

Remember start early, stay patient and you'll be able to see great results. 

Day 4 "FYI DIY"

Perhaps up until this point you've been working alone. You've been tackling the task of getting your credit cleaned up. I suggest if you haven't by now, to enlist the help of your mortgage broker. 

Allow the mortgage broker to go ahead & pull your a trimerger or a full credit report from each of the three major credit bureau. The report may or may not be identical to the one you have access to. However the one thing you don't want to do is to wait until the last minute to allow your lender to pull your credit. You and your lender will have an opportunity to catch any item that may keep you from getting the house (or car) you desire.

Finally break down the results in to long-term & short term. The lender also may have access to Rapid Rescore or similar programs that will have your report and credit score updated within a day or two after you complete all credit boosting techniques. 

FYI DIY Day 3

Pay the things off that matter. You may ask how do you do that? Consult with your lender to get a good grasp on what they're looking for.  Most financial institutions will require that you settle, bring current or pay off certain things entirely before you can buy a home: 

accounts in collections

state and federal tax liens

past home loans or lines of credit in default that were not extinguished through foreclosure or short sale (e.g., second loans, home equity lines of credit, etc.)

defaulted federal student loans (for FHA loan applicants).

When you're in negotiations with creditors to make settlements believe it or not you are in a position of power. Ask the creditors if you can settle with terms. The terms being based on this payment you agree to delete the corresponding account off of my credit report. This method doesn't always work but its worth a shot. 

Another important thing is to prioritize the various items on the credit report. For example, some lenders might allow you to simply settle a tax lien at closing, while most FHA loans won’t allow for a credit pre-approval while you have a defaulted federal student loan on your report.

Nevertheless don't just go all willy nilly paying off debt. It may seem wise to take the opportunity to pay your debt off and close out old, unused accounts, thinking it will score extra brownie points with perspective lenders. However this is not the case always. Credit scores are calculated based on available credit and credit utilization. FICO score calculations are reportedly maximized when you have 30 percent of the credit available to you on your accounts.  So don’t pay them entirely off, and whatever you do, don’t close accounts that are open and/or current.  

Day 2 "FYI DIY"

Make sure you double-check your report for minor errors. Particularly things that should have fallen off due to statue of limitations requirements, incorrect remaining balances and limits listed as lower than they are, and inconsistent paid off dates. 

A lot of consumers we polled believed that paying their bills on time was the most important factor that influenced their credit score. However that is not always the case, even if you pay your bills on time and have a maxed out credit account (loan, line or card) it will have an adverse affect on your credit. Consequently, if your credit report shows your balances as higher than they are in reality or your limits as lower than they actually are, this by itself can severely impact your credit score.  

There is a biblical saying that "the small foxes spoil the vineyard." In other words these seemingly minor items can have a major impact on your credit score. The truth is that they are all too common and commonly overlooked by consumers, who are looking to point the blame at the bureuas or some identity thief.  

Delinquencies should age entirely off your report after 7 years, and bankruptcies after 10.  The precise date of a short sale or foreclosure can actually be the deciding factor in your ability to qualify for a home loan - so make sure it is reported accurately. 

Do It Yourself Day 1

1. The 1st step is to go to AnnualCreditReport.com and order your credit reports from all three reporting bureaus: Experian, Equifax and TransUnion. Also you can go to Equifax.com/freetrial and sign up for their credit monitoring service. Once you receive your reports, identify accounts that are not your accounts. Next look for accounts that are reporting erroneous information such as late payments listed as late that were actually on-time, modification listed as a foreclosure, etc. Each report will come with a detailed set of instructions on how to dispute the errors immediately. They will give you the option to dispute the items both online, over the phone and in writing. I suggest using the writing method, due to certain FCRA laws which are advantageous. 

Don't hold your breath or lose patience it might even take several rounds of disputes and submissions of documents to finally clear everything up. If you are planning on getting a home or car loan talk to the loan officer to see if the remaining items on your report even have a significant bearing on your interest rate or terms. Many consumers become overally concerned with collection items when they usually are the most insignificant items on your report. 

Life...

Life. It is what it is, a constant change of events, circumstances and situations. Raymond Feist said "Life is problems, Living is solving problems." In life there will be changes that occur but you must keep on living. Our goal is to help your transition through some of the changes that life throws your way, make them more manageable, less stressful and calculate your plan for recovery. Whether it was divorce, unemployment, foreclosure, whatever it might have been that swept the rug from under your feet financially; we may have a plan to help you get back on track. The first step is admitting that you need help. No this is not a 12 step program, however we do believe in being honest with yourself. Are you a bad money manager? Are you living above your means? Is fear holding you back? Second you must take action. If you never take action, absolutely nothing can change in your life. Third you must create a realistic plan to take back control over your life. There is nothing that can send you reeling backwards quicker than a poorly planned escape. We can assist you formulate a realistic plan that you can adhere to and commit to until your personal goals are accomplished. Last but not least you must make up in your mind that you are ready for change. You may ask, if I am honest, take action and create a plan, am I not already making a change mentally? No this is not always the case. You must make a paradigm shift that you will never go back. Whatever it is that caused you to go down this path, you will never go back down this path. Whether it’s a bad relationship, certain environment or addictive behaviors disguised as innocent pleasures, you can never go back down that road. We have all heard stories of people who make all of the afore mentioned changes but perhaps months, years or decades later are back in the same or worse predicament. You must never bring ANY of the negative stimuli with you into your new life. The ball is now in your court, it’s up to you to change. Change is indeed inevitable. You will either change for the good or the bad but I can assure you that you will change. The path you take is totally up to you.

Dangers of Foreclosures Pt 4

The bank will do little to assist you. I know this may seem like a moot point but you would be surprised the number of buyers who overlook or under value this portion of the deal. Your offer and the likely discounted list price (discounted from similar comps nearby) should already account for the risk you're taking on an "as is" property. They won't provide a disclosure about a leaky faucet, or the broken closet door upstairs.

When buying a home, the contract makes certain provisions which will allow you to have an inspection, so get the biggest and best inspection available. Also inquire about an old inspection report, review that prior to making your offer.

If you are familiar with the buying process, don't expect any of the standard processes and procedures to be followed by the bank. The bank will have its own contract that protects its interests. This contract will be followed by dozens of pages protecting the bank from future lawsuits, referring to the sale as "as-is" and putting nearly all the burden on you, the buyer. In some states, if the bank requires the buyer to use a particular title company, then the bank would be required to pay the buyer's premium on the title insurance. This could translate into huge savings for the buyer. Whatever you do keep your eyes open and remember there is no such thing as a stupid question.

Dangers of Foreclosures Pt 3

Yesterday we touched on this subject very briefly. That is when you position yourself to purchase a foreclosure it may not be all as it seems on face value. A lot of your more expensive homes may be effected by this more than the lesser priced homes. This is due to the high-end appliances, fixtures and amenities used to build these homes. More often than not previous homeowners are blamed for the vandalism to these homes, however opportunistic vagrants are usually to blame for the damage.

Conversely, when homeowners are to blame it is usually due to resentment and unsuccessful attempts to keep the property. The previous homeowners usually have some form of emotional attachment to the property. They usually have looked at several homes before deciding on this one, took in to account their own careers, children's future and neighborhood suitability. Then we bring into the fact that they have to give this all up in a moments notice. They have invested time, money and dreams into this property and now they have to move.

This can cause some serious separation anxiety and disgust towards the lender. Consequently since they can do no harm physically against the mortgage company then they decide to take it out on the property. Ultimately, this will hurt the home's value and somebody will have to pay to replace and repair the damage that has been inflicted. Nevertheless, your goal is to ensure that you are not stuck with the bill, if you are make sure to include this in your negotiations and mention it to your broker.

Dangers of Foreclosures Pt. 2

Three letters you should become familiar with if you are in the market to purchase foreclosures, R-E-O. REO stands for "real estate owned." REO properties are owned by the bank after going through the foreclosure process.

Typically in a REO sale, there aren't any disclosures. Basicslly the seller is not there to disclose the in's and out's about the property. This includes but is not limited to pre existing issues about the property that may need repairing and/or replacing all the way to particular neighborhood association restrictions.

Make sure with your agent to learn as much as you can about the home and the neighborhood. If the property sold in the past five years, your agent may be able to obtain past disclosures or obtain city records. Also make sure to always double-check your title work.

Dangers of Foreclosures

Times have changed, a lot of people are still facing financial shortfalls. There was a time when people were so concerned about their image they would do anything to keep that image up. Allowing your home to foreclose & walking away from a mortgage was something that was almost unheard. When people do have their property foreclose they sometimes decide to take out their anger & frustration against the mortgage company by inflicting physical damage on the property itself.

Many realtors are pushing their clients toward foreclosed properties. However there are some challenges to purchasing them and some red flags to look for before deciding to purchase one.

1. Don't expect to make friends.

When you are purchasing a foreclosure then you are dealing directly with the bank. It's strictly business for the bank, they don't care about how good a neighborhood it is to raise your kids or about the school PTA. Nevertheless that could be a good thing because the bank is not in the real estate business. They want to move the property as quick as possible but they want to maximize their profits in the process.

Because you're dealing with a bank, not an individual homeowner, be prepared to wait for a few days, if not weeks, for a response. For the most part, the bank's agent doesn't even show the contract, the pre-approval letter, or any of the offer pieces to the bank. Instead, the bank's agent inputs the data into a website or piece of software. Remember for the bank, they are like Jerry Maguire "Show Them The Money."

Additional Factors that may effect your Mortgage Payment

Monthly mortgage insurance affects your house payment. With a less than 20% down payment, the lender will more than likely require the borrower to pay monthly mortgage insurance to ensure against the possibility of defaulting on the mortgage.

By paying something down or walking into the house with some equity will give you more leverage when borrowing funds.
Make sure to check and see what is the minimum credit score required for financing. If you don’t meet the minimum, look into other options you may before you apply for a home loan.

Assets/reserves — In most cases, you’ll need at least two months of PITI saved in the bank to meet the reserve requirement. However make sure to check with your lender for complete details.

How Monthly Liabilities Apply

Using the example from two days ago, let’s say you’re trying to decide how much house payment you can afford coupled with other monthly obligations: A vehicle payment for $300 per month & $80 per month in credit card payments. Assuming our example income of $5,638 per month, in order to purchase that same house for $350,000, the monthly income would have to be $6482 per month adjusting for total monthly liabilities (determined house payment + other debts) ÷ monthly income. The other choice is to reduce the purchase price to $300,000, with effectively $380 per month in other debts, which influences borrowing power by $50,000.

*Mortgage Tip: take 45% of your monthly income less monthly liabilities. This is the maximum house payment you can qualify for, then simply equate what the monthly payment is relative to how much you can borrow based upon using $725 per month for every $100,000.

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.