How to Get a Loan with Bad Credit

Having poor credit is like having bad in-laws; every time you try to do something it’s there trying to make your life miserable. The good news, however, is that more and more lenders are starting to give loans to people with poor FICO scores. In fact the increase in lending to subprime consumers (i.e. people with bad credit scores) rose by 41% in the last year.  Experts predict that this trend will continue to increase as banks ease up on their lending restrictions. Considering that millions of people also have less than stellar credit it’s really no surprise that the banks are starting to cozy up to them again.

No matter who you go to you’ll want to get your credit report in order before you do. If you have mistakes that are dragging your score down you should fix these problems first by getting a copy of your credit report and going over it with a fine toothed comb to make sure everything is correct and in order. The 3 main credit reporting agencies are required to give you 1 free report per year.

One of the first places that you’ll want to try and get a loan is of course your own bank.  They know you and may be able to lower their restrictions for you, especially if you have a good relationship with them over a long period of time.  Of course if you overdraw your account all the time and have a history of rubber checks you might not want to start there.

Your local Credit Union may be able to help if none of the banks will.  They are non-profit organizations that are in place to help their members in the community (that would be you) and may just be able to give you a loan at a competitive rate even if your credit score isn’t a shining beacon of purity.  Most towns have a credit union and you can find yours by visiting them online at the NCUA website.

Not that we highly recommend this but one final option is to ask a trusted relative with good credit to co-sign for your loan. This is risky for not only you but your relative as, if you stop paying or start paying late, their credit will suffer as well as yours.  That would be a real bummer during the Holidays so make sure you can pay back what you’re borrowing with no problems before you decide on this option.

 

Why Your Credit History is so Important

 

To the average person a ‘lender’ is a bank or other large institution that is faceless, nameless and all powerful.  While it may seem that banks and other lenders are heartless (and indeed some are) it helps if you know a little about credit institutions and how they work before you go off all half-cocked trying to figure out why you can’t get a car loan with a credit score of 163.

The simple fact is, lending money is a tricky business. Let’s look at in for a moment on a much smaller scale.  Say your friend Jim asks to borrow $100.00 and you say yes but as long as he pays you back by next week Friday.  Now let’s say that Jim never actually pays you back because, unknown to you, Jim borrows from friends all the time and has a nasty habit of never paying them back. If you would have known that simple fact you might not have lent him the money, am I right?

It’s exactly the same for a large bank or lender.  If you go to them asking for a loan they want to be sure that you’re going to pay them back.  It is, after all, only fair that you do.  If they were to not check your history they’d be pretty stupid, don’t you agree? If you have a clean bill of health (meaning your credit report is in good shape) they will certainly lend you some money, but if you don’t you can appreciate why if your credit history is riddled with more holes than a piece of Swiss cheese.

That’s why your credit history is so important. If you have ever owned a credit card or gotten a loan for anything (home, boat, motorcycle, lemonade stand) you have a credit history and the banks would be crazy not to use that history to see if you will pay back the money they are thinking about lending you.  It only makes good business sense, and that’s why you should protect your history by always making sure you pay bills on time.

Credit reporting agencies were formed for this very reason, to give lenders the knowledge that they need to make important business decisions like lending you money for a home or car. If they see that you credit report is strong they will lend to you.  If it’s not great (but not a complete mess) they may still lend to you but at higher interest rates.  Again it only makes good business sense for them to do this because there’s a risk that you might not pay them back.

So make sure to take care of you credit your entire life.  It can and will affect you in many ways even if you don’t like it. If you do take care of your credit history you’ll also find that banks are very happy to lend to you for whatever reason you give them

 

 

How to Manage and Pay Off Debts

Debt is something that no one wants to think about, but unfortunately, for many people, it is not only unavoidable but also inevitable. Poor spending habits coupled with a lack of willpower to avoid making purchases can land people in debt much quicker than they realize.

 

There’s only one thing to do, though, when you find yourself in debt: get out. Because of that, there are a few important tips that everyone needs to know about how to manage and pay off debts easily and efficiently.

 

Avoid It In The First Place!

This may sound simple, but it’s an obvious tip for those who have been in and struggled through debt. While it’s no fun to manage, the easiest way to deal with it is by staying out of debt in the first place. Learn to manage your finances with resources from expert companies.

Avoid buying what you don’t need, be very careful buying on credit, and stay away from purchases involving high interest rates. Debt only comes around if you let it, and if you manage it by staying away, well, you’ve taken care of a huge problem before it even starts

Be Wary of Collection Companies

Know that collection companies often buy your debts off of the company you owe for very, very little money. Because of that, these collection companies are keen to settle your debt very cheaply and for much less that what you initially owed.

Realize that when you are dealing with them, and do not be afraid to offer significantly less than your debt is worth to get the matter settled simply and immediately. You never know; they may just take you up on it!

Know Your Credit Score and Repair

When you work to pay off and manage your debts, make sure that the collection company and the credit bureaus are on the same page, and that your credit score is changed to reflect that you paid off your debts. Get it in writing, and work so that your credit score is reinstated and solid.

Doing this will allow you to apply for future jobs, make future down payments on homes and other investments, and live a much happier financial life.

Managing debt is not easy, and for many people, it is certainly not fun, but once you are in debt there is not much to do but work your way out of it. Manage your debts wisely, take it slowly, and look at all your options before committing to a single path.

Before you know it, you will be on a realistic payment plan, and you will be working your way to a debt free life. Your finances, and your stress levels, will thank you for the hard work!

A Snobbish Collection: November 2012

Welcome to the Snobbish Collection of Novembers most elite articles by my many blogging cohorts.  We accept only the best, and as such you will find the most thought provoking articles available on the web.  Finance, particularly that of the “personal” variety, can be a bit difficult for the average consumer to…well…consume. As such we created this monthly compilation to help educate you, the reader!

No person in their right mind puts an item on layaway, there are simply no benefits to it.  Paying Debt Down understands this concept, and I wish more would as well.  Potentially losing the down payment you place, or paying even the lowest of fees is enough for me to say that you just need to simply save your money into you have enough to go in and purchase the item outright.

The Financial Samurai has realized my dream, and that of many others, of becoming financially independent! Read up on how he feels since he made the leap from working for the man, to working for himself.

I am a bit diversified when it comes to income streams.  I wouldn’t call myself a freelancer exactly, but some of my monthly revenue and expenses are treated as such.  The Money Principle offers us a helpful guide on how to budget when faced with the uncertain financials of a freelancer.

Too often investors take the “set it and forget approach” to investing.  Once the money has been investing in a stock, fund, real estate, etc., they never think to rebalance their portfolio.  Times change, and so does the soundness of certain investments, as well as the amount of risk you should incur as you age.  Financial Ramblings has a nice post reminding us of such.

So Over Debt explains how her credit cards are plotting against her! It seems that credit cards can have a drawback regardless if you carry a balance or not.  Interesting read, and one that reminds me of why I hate credit cards so much.

How to Get the Most Out of Your Tax Return

Tax time is a stressful time of the year, no matter who you are or what you may owe. It is complicated, anxiety-inducing number crunching that everyone except for accountants dreads and tries to put off when it comes time.

 

But you can get great benefits from your tax returns, and if you know what you are doing, can see a great return on your taxes that you can put towards that big purchase you’ve been eyeing. Here are a few tips.

 

Talk To An Accountant

Instead of trying to do your taxes on your own and saving a few bucks this year, talk to an accountant. They can point you in the right direction and maximize your deductions and more, so that when it comes time, they can find a great chunk of money that can come your way in the form of a return.

 

Plus, they know their stuff inside and out, and a good accountant can ensure that you won’t miss anything on your taxes, or be penalized for any misfiling or late filings. In short, an accountant can make your life much easier for just a few hundred dollars in investment.

 

File Early

File early and get it out of the way! Don’t wait until April 15th to file your taxes. Instead, quit dreading the day and get it done early and easily with no problems in January or February.

 

Plus, when you file early and get an accountant, you can be sure they are available for work in January or February. Too many people dump their taxes all on their accountant in April and expect them to be ready then; avoid that trap by getting it out of the way, for both you and their sanity!

 

Look For Deductions Before You File

Check out what you are purchasing, spending money on, and investing in, and find out if there is something you can add to your list that will qualify you for a deduction. If you go through the year with the right mindset on taxes and deductions, it becomes much more obvious come tax time what you are allowed to deduct and what can benefit your overall tax burden.

 

Remember for Next Year

Don’t forget everything you did right this year, just to screw it up again in twelve months! If you like the service you got, use the same accountant next year. As they become more familiar with your situation, they can greatly help you with any finance-related questions that may come up through the year, and can work wonders for you come tax time when it rolls around in a few short months.

 

Saving Money on Clothes

Clothing can eat up a very large chunk of your paycheck, especially if you need specialized clothes for work or need to ‘dress to impress’ every day for work.  If you have kids then all bets are off as they need new clothes seemingly every other week.

If you’re in the position that you need to buy clothes on a regular basis then this article is for you.  It is chock full of great tips and tricks that will help lower your monthly clothing bills and keep some of your hard earned cash where it belongs; in your wallet.

Make a list of all the clothing sizes of all your family members so that, when you’re out shopping, you won’t buy something that will be too big or too small and won’t be used.

Consider making a monthly clothing budget for your clothing. Having a clear amount set will keep you from splurging and will show other family members that you’re serious about your spending.

Shopping at thrift stores, especially if you have little children that won’t make a fuss about having to wear ‘used’ clothes.  The simple fact is, most children’s clothes get tossed before they’re barely even used and are perfectly fine to use (if sometimes a little stained).

Speaking of thrift, Goodwill usually has an amazingly well stocked clothing area where you can find some incredible deals on many items that are practically brand new.

Purchasing clothing out of season is an excellent way to save money on new clothes.  Buying jackets in the spring and summer clothes after summer has ended for example is a great way to get new clothes ate a fraction of their original retail price.

When you’re buying used always make sure that the size, color and style are something that you or the family member you’re buying for are going to like.  If you buy clothes at a great price that are never used you’re still wasting money.

Wherever you like to shop always check out the clearance racks for some extra special deals. Make sure that you check the items your buying thoroughly to make sure that they’re not stained, ripped or otherwise damaged.

Check back soon for part 2 of this 2 part series about saving money on clothes and good luck in your search for good, cheap clothing.

 

How to Lower an Expensive Water Bill

One of the easiest ways to save money in your home is to use less water. Not only will it reduce your water bills every month but it will also help conserve water, something that is becoming ever more important. Reducing your water use will also reduce the amount of electrical energy used by water treatment plants and produce less toxins that are released in the air when water is cleaned.

By taking some of the small steps below every single day you will not only save money but you will save a precious resource that is fast running low all over the country. With that in mind let’s take a look at some tips that will help you do just that.

One of the easiest things you can do to reduce your water bill is to reduce the amount of water that is leaking down the sink all over your house.  Did you know that a typical home loses nearly 300 gallons of water every year just from drips? It’s true, so get those leaky faucets, toilets and taps fixedASAP.

Upgrading your toilets and shower heads will save you a lot of water.  In the shower a new head can save upwards of 2 gallons a minute and a high-efficiency, low-water toilet can greatly reduce the amount of waste water in your bathroom.

Another great idea is to reduce your shower time and take fewer baths. The typical 5 minute shower uses approximately 25 gallons of water compared to a bat that uses 70.  Also, getting wet and then turning off the shower while you wash your body and your hair is an excellent way to cut way down on water use.

Only wash full loads in your washing machine and your dishwasher. This will greatly reduce waste and you’ll use less detergent too.

Turn off the water while you’re brushing your teeth and you could save 2 gallons of water every single time.

Flush your toilet only when it’s absolutely necessary.The old saying goes, ‘if it’s yellow let it mellow, if it’s brown flush it down’.  Sounds silly, saves money and water.

There you go; plenty of great water saving tips that you can put into effect today and start saving money and water tomorrow.

 

How You Can Save on a Rental Car

The average traveler is under the very false impression that car rental prices and car rental companies are pretty much all the same. With that false pretense they also believe that shopping around is not only unnecessary but also a waste of time.

That couldn’t be further from the truth however as rates can vary greatly from 1 company to the next depending on where you rent and where you’re going. If a rental car looms in your future then read on as we take a look at some excellent tips for saving money on your next rental.

One thing to keep in mind; generally speaking, car rental companies reward people who make it easy for them as far as the renting procedure is concerned and definitely make it hard for people that don’t.

Tip 1- Never agree to let the car rental company fill your tank when you bring it back empty.  They normally charge 20 to 30% higher for the same gas that you could pump in yourself around the corner. Instead always fill it yourself before you drop it back off unless they make an excellent offer to fill it for you for less (which rarely happens).

Tip 2- Always take a look at the ‘fine print’ and look at the additional charges before you make a decision.  A ‘great deal’ can begin to look mighty average once a ton of extra charges and taxes are tacked on.

Tip 3- Don’t rent at the airport.  The ‘airport charges’ that can and usually are tacked on can increase your rental fees by 25% or more!  Better to take a shuttle to the car rental place near the airport as most have them for free.  An extra ride in a fee shuttle bus can save you gig bucks.

Tip 4- Don’t let them hype you into taking extra insurance.  The simple fact is this; your auto insurance will cover you while you rent.  The amount of extra money you will pay for insurance is ridiculous and the odds are super slim that you’ll ever need that extra coverage.

Tip 5- Ask to rent a subcompact car. The chances that they will have one when you arrive to rent (no matter where you rent) are low because nobody likes to rent subcompacts and the rental companies know this. If they don’t have one they’re obliged to give you an upgrade to whatever they have which could mean a 1 or 2 car class upgrade for you for free.

 

Budget Beauty Tips

If you’re really on a tight budget even going to the pharmacy for beauty products might be out of the picture.  If so don’t panic because there are actually quite a few ways to turn normal kitchen leftovers into all the tools you need to look great.  As an extra bonus they’re all natural and biodegradable!

Baking soda, for example, is very versatile and can be used as a facial scrub if you mix a half teaspoon in with your favorite cleanser, a shoe and foot powder that absorbs stinky foot smell and even a toothpaste that you can use every day. (Dip your toothbrush lightly and voila!)

If you’re in need of some hydrotherapy to revitalize you and give you a healthy glow, the next time you take a hot shower turn on the cold for the last 15 to 20 seconds. If you can take it, go back and forth from hot to cold 4 or 5 times for 15 seconds each.  When you get out you’re going to look and feel awesome, but watch out for high water bills and don’t do this every day.

Using witch hazel as a toner or astringentis easy and cheap and there’s no need to dilute it. Better yet, use apple cider vinegar which will make you look great by balancing the ph. of your skin.

This is a big one; use less product that the manufacturer recommends.  Hey, they want to sell you more product when the fact is that you can easily get by with 50% (or more) less shampoo, conditioner, toothpaste and so forth than they say you need.

See that!  A bunch of great beauty tips that will stretch your budget while still keeping you gorgeous and ready to take on the world!  Use them and start saving big on beauty today!

 

 

 

How to Raise Kids on a Budget

Let’s face it, raising children is expensive, there’s no 2 ways about it. If there’s one thing that you need to do when you have children is to maintain a budget or else those little brats will eat you out of house and home.

I’m joking of course but maintaining a budget when you have children is important, and that’s no joke.  If you do it right however you will have the money that you need to buy them everything they need without going broke at the same time.  Read along below and I’ll explain how and give you some Tips on raising kids on a budget.

One of the first things that you’re going to need to do is determine as closely as possible exactly what you need for food, clothes and other basic needs, and then stick to a number based on what you can afford and still be able to pay your bills and put aside 10% in your savings. While you’re doing this you can also talk to your children about it and explain why you, and they, need a budget. Don’t make it too technical but be firm.

Once you know that amount it’s time to start cutting back to

When it comes to food, there are a lot of ‘lower-end’ markets where you can get meats and more expensive food items at wholesale prices, and there are of course wholesale clubs. Buy store brand everything in your favorite supermarket.  They’re the cheapest and the products are all very similar in quality.  Trust me, the kids will never know.

For children’s clothing, if you’re really on a budget, there are thrift stores and 2nd hand stores everywhere today.  If you’re on a moderate budget stores like Kohl’s and others normally have the best deals and Wal-Mart is the king of cheap but decent quality children’s clothes.

Use the children’s furniture as long as you can and take good care of it.  If you need something else there are places online like Craigslist where you can find tons of used furniture and other items like bikes, toys, clothing and much more for incredible bargains which makes up for them not being pristine. Yard sales and estate sales are also a great idea when you need stuff for the kids.

Remember that it doesn’t mean you don’t love your kids just because you don’t buy them ‘new’ things.  Used, in most cases, is a very close 2nd and will save you a ton of money.  They kids will get used to it after a while too and the experience may even teach them a valuable life lesson. Good luck.

 

 

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