Posts Tagged: credit score

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6
Oct 10

Three Major Disadvantages of Debit Cards – Things to Consider

Debit cards can be a great alternative when it comes to making payments as they allow you to easily get the needed amount from your bank. However, debit cards also provide several disadvantages that you should be aware of as this might cause unwanted problems that are hard to solve once you get to face these disadvantages.

It Is Linked to Your Account

One major disadvantage of a debit card is that it is linked to your high interest savings account. If ever your card gets stolen or there are debit card payment related disputes that occur, there is a great chance that the funds on your personal account linked to the debit card can get potentially drained. That is why it is important that you use a debit card wisely and as much as possible, try to avoid any uncompromising situations.

Transactions are Real Time

This means once you make a payment with your debit card, the money on your personal account gets deducted instantly. Unlike credit cards where a floating period is present which allows a time for you to earn interest, your bank funds are deducted in real time once you decide to use a debit card for payment. This can also be a problem if you are not that good when it comes to tracking your spending habits using your debit card. If you are not careful enough, you might be surprised when you end up draining a huge amount of your funds.

Not a Good Solution for Boosting Credit Scores

Unlike credit cards, transactions made in debit cards are not reported into credit agencies. This can be a downside if you are aiming to improve your credit score through good spending habits with your debit card. Since most financial matters nowadays base a lot of important factors on a person’s credit score, a debit card might not be a good place to start boosting your own score. Take all the disadvantages of debit cards into consideration.

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24
Aug 10

Get Your Credit Score Higher to Increase Odds of Getting a Loan

Getting a loan when you have bad credit isn’t the easiest thing to do. In fact, with the economy the way it is now, banks aren’t too quick to loan out money. Even if you have decent credit, you may still have a hard time. So what can you do to help increase your chances of qualifying for a loan? Here are some tips that may help.

The first thing you will need to do is to look at your current situation in terms of your credit history. In order to improve anything, knowing where you are right now is the first step. What you will want to look for is any errors that may be on your report. If you find any, then you will want to get it removed as soon as possible since it will adversely affect your credit. You can do this simply by writing a letter to the credit bureaus.

After that, you will want to take a look at your budget and finances. Ideally, you will want to bring your debt to under 20% of your credit limit. If that isn’t possible, then at least try to get it under 50%. Not all debt is bad but when you have too much, it will only bring your score down. In terms of budgeting, you will need to see where your money is going and figure out where you can cut spending. The point of this is to be able to allocate more money to paying off your debt.

This may take some time but with patience and discipline, you will be able to set yourself up to qualify for a 5000 loan or any other amount of loan a bit easier. If you need a 5000 dollar loan right away, then what you can do is have someone with great credit co-sign for you.

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5
Jan 10

Factors that Impact Your Chances of Loan Approval

With so much talk of the credit crunch, most people are aware that qualifying for financing of any kind is becoming more and more difficult.  Banks and lenders are going out of business on what seems like a weekly basis and those that are left standing are requiring more stringent underwriting criteria.  While you certainly need an above average credit score, this is not enough.  We will be looking at some of the other factors that impact your ability to get credit.

Income

After your credit history, your debt to income ratio is the second most important thing that impacts your chances of being approved for a loan.  While every lender has different criteria, the key thing to keep in mind is that you need to keep your overall debt level low.

Job Time

How long you have been on your job is viewed as a good indicator of your personal stability.  Ideally, you want to have at least two years in the same line of work.  The only types of job changes that are looked upon favorability are ones that are in the same line of work made for career advancement.

Citizenship

Loans for Foreign Nationals were once fairly easy to come by as long as you had a limited or clean credit history.  Yes, they required a slightly larger down payment, but provided you had this you could still get a loan at a fairly reasonable interest rate.  Due to the credit market implosion, loans for non-citizens are almost impossible to find.

Bank Accounts

Having a bank account is an important criteria that almost every lender has.  Ideally, you will have both a checking and savings account.  Unless you have a bank account that has been charged off, your bank accounts will not appear in your credit report.  For this reason, the fact that you have banking relationships is more important than how you have handled the accounts.  The exception to this would be when applying for a mortgage.  Be prepared to do some explaining if you have some bounced checks in the bank statement that you are required to provide.