Bad Credit Loan Articles and Blog Posts

Submitted by Alice Bryant  on Fri, 10/10/2014 - 13:59
If you don’t take care of their finances, how hard will it be to get a credit card with bad credit? Learn what things can affect your credit and how it may be very possible to get a credit card even with bad credit. 
 
Can a Person Get a Credit Card with Bad Credit?
 
There was a time awhile back when it was almost virtually impossible to get a credit card, or any type of credit for that matter, if you had bad credit. For awhile the financial crisis experienced around the country made credit availability very limited. Banks and financial institutions were tightening their belts and only giving credit to borrowers with very good credit. 
 
Once the credit card markets started to open up again, it became easier for those with less-than-desirable credit to get credit cards. More and more credit cards became available to people with poor credit. Although credit card limits and interest rates are based mostly by the applicant’s credit scores, the applicant may still get a card. 
 
The downside is that the card may come with high interest rates and a low credit limit, at least until the consumer can prove his or her creditworthiness by continuously making the payments on time. 
 
What Type of Credit Cards are Available for Those with Bad Credit?
 
Today there are various credit cards available to consumers with bad credit, both unsecured and secured. The secured credit is very common for consumers with poor credit. With a secured card, the consumer must make a deposit, which goes into an account. The amount of the deposit is generally the amount of the credit limit. 
 
Secured credit cards are an ideal way for consumers to rebuild their credit. Once the credit scores are better, the individual can get an unsecured credit card, close out the secured card and get the deposit back. There are other credit cards for consumers who have bad credit; these credit cards are actually referred to as bad credit credit cards. 
 
What is the Best Type of Credit Card for a Person with Bad Credit?
 
People with bad credit sometimes have such a difficult time getting a credit card that when they do find a credit card company that will issue them a card, they grab the first card they can get without reading the fine print. This can be a bad idea because often these cards result in the following.
 
Very high interest rates
Low credit limits
High annual fees that eat up a lot of the credit limit
Possible over-the-limit fees resulting from the other fees
 
Despite their eagerness to get credit cards, consumers with bad credit should still be selective when choosing a credit card. Secured cards are often the best option because they may offer interest rates lower than unsecured cards. 
 
With the credit card industry extending their limits to include those with bad credit, consumers would benefit by researching cards to find the best one for their financial situations. However, they should not apply for several cards with the hopes of getting approved for one because each new inquiry into his their credit report is lowering their credit scores. 
 
How Your Credit Scores are Calculated
 
Consumers are often confused as to why their credit scores are not as high as they'd hoped despite paying all their debts on time. This is because credit scores are calculated by more factors than just how diligently they are about paying their bills on time. Here are the factors that FICO uses when calculating a consumer’s credit and how important each part is. 
 
Payment history – Thirty-five percent – Paying bills on time is the best thing a consumer can do to have good credit.
Amounts owed – Thirty percent – The more available credit a consumer has, the better it will help their scores. 
Length of credit history – Fifteen percent - Paying on the same credit card for several years will do more for credit scores than closing it and opening several new cards.
New credit – Ten percent – Opening up new credit lines may have a lender believing the consumer is getting additional credit. 
Types of credit used – Ten percent – When a consumer to have a mix of credit such as credit cards, loans, mortgage, etc. rather than several of just one it tells a creditor more about how a consumer handles different types of credit. 
 
What Things Affect Your Credit Scores
 
Although consumers may be aware of the different things that determine what their credit scores are and what role they play, they may think they know what to do to improve their scores. However, it’s an even more complicate process than what one might think. 
 
In addition to specific things contributing to the credit scores given by FICO, there are also other factors that affect credit scores. In other words, some things that are not only more damaging to a person’s credit but also stay on their credit report for a longer period of time. 
 
Late payments
Closed accounts
Charged-off accounts
Collection accounts
Bankruptcy
Judgments
Tax liens – These may stay on a credit report indefinitely. 
 
Another thing consumers don’t realize is how harmful certain inquiries into a credit report can be. There are “soft inquiries” and “hard inquiries”. For instance, if a person already has a credit card with a company and the company does an inquiry into the person’s credit perhaps for the purpose of increasing their credit limit, this is a soft inquiry and doesn’t hurt their credit scores. 
 
When a person applies for new credit and the company does an inquiry into their credit history for the purpose of new credit, this is a hard inquiry and shows up on the person’s credit history. When several hard inquiries show up on a person’s credit report in a short amount of time, it can damage the person’s credit and make it even more difficult to get new credit. 
 
This is why it’s very important that consumers trying to get credit cards do NOT apply with several credit cards companies in a short period of time. All it will accomplish is to give them even worse credit. Although it may seem like a vicious cycle, there is light at the end of the tunnel for consumers with bad credit.
 
Submitted by Alice Bryant  on Fri, 10/03/2014 - 07:22
While many individuals are unaware of their credit scores, having bad credit can truly have some nasty implications in today's world. To take out a mortgage or borrow a car, individuals will need to have established credit. Credit can also impact an individual's ability to find a job. Finally, studies have shown that people with poor credit scores often have a difficult time finding a spouse. Below is a full explanation of how bad credit can ruin your life.
 
1. Loans and Leases
 
The ability to borrow is one of the primary reasons why modern society has become so advanced. Without loans, businesses would be unable to get funded and individuals would have to save for a lifetime in order to purchase a home. However, lenders are rational individuals who are not going to let someone borrow their money unless they have a likely probability of paying it back. Since collection costs can be very expensive, lenders are constantly looking for new ways to avoid bad borrowers. In today's world, the credit system is key for helping lenders to identify borrowers that could potentially have a difficult time paying loans back.
 
While many people worry about how the credit system could hurt them, the reality is that can help as well. Individuals with good credit scores can expect to get better rates on new loans. Instead of paying heavy interest rates each year, individuals can pay a more affordable rate that takes into account their credit history. In some cases, credit cards may even be available with rates as low as just a couple of percentage points. In contrast, borrowers with bad credit can expect their interest rates to be astronomically high. In some cases, it is not uncommon to see interest rates as high as 30 percent for borrowers with bad credit.
 
In order to take out a loan or sign a lease, individuals will need to demonstrate that they have a good credit score. Studies have shown that this is the most important factor that lenders tend to look at. Since accounts in default can be very expensive to the lender, credit score is considered to be extremely important. Without a good credit score, it may be impossible to borrow just about anything. While cosigners can be of assistance, individuals should aim to build up their own credit in order to depend on themselves.
 
Many borrowers often wonder why credit score is weighed so heavily in the lender's willingness to agree to a loan. The reason for this is because credit scores are remarkably indicative of an individual's ability to pay back a loan. Borrowers who fail to make their payments on time also tend to be the same individuals who see nothing wrong with walking away with the creditor’s money. In order to avoid these types of individuals, lenders carefully evaluate credit scores and historical information presented by credit agencies.
 
2. Finding a Job
 
Businesses looking to stay competitive in today's world are increasingly searching for new opportunities to find better talent. In most employment applications, individuals are required to provide their Social Security Number. While this is primarily used for compliance purposes, businesses are increasingly taking advantage of this to run credit checks. Since these cost just a couple of dollars, businesses are viewing the credit system as a cost-effective way to filter out bad job candidates.
 
On a statistical basis, individuals with bad credit tend to be less ethical and more likely to commit fraud. In contrast, individuals with good credit are often more worthy of higher positions and less likely to engage in questionable behavior. Bad credit scores can also make individuals more distracted in the workplace. Since this can lead to reduced productivity, businesses want to hire employees that are less likely to have problems with their personal financial situations. As a result, businesses view hiring individuals with good credit scores as a key to organizational success.
 
It may seem very discouraging to an individual with poor credit to consider the possibility that this could make finding employment difficult. However, individuals should keep in mind that this can be an advantage as well. When job candidates with poor credit scores are being filtered out, there will be more positions available to individuals with good credit. This means that prospective employees should make sure that they take every step possible to maximize their credit score. Individuals should always make their payments when required and satisfy the obligations of old accounts. By consistently doing this, it can be much easier to find a job in an employment environment mandating that individuals have good credit scores.
 
3. Getting Married
 
Studies have shown that 79 percent of women view a steady job as the most important attribute of a man. The reality is that poor credit scores can actually be indicative of whether an individual maintains a job in the long-run. Men who engage in behaviors that often lead to poor credit scores could therefore be more likely to potentially lose their job. The same study also showed that a majority of men viewed a steady income as the most important attribute of a female. Especially with employers increasingly viewing credit scores is important, individuals with bad credit could have a difficult time holding down a job. For these reasons, bad credit could truly jeopardize the longevity of a marital relationship.
 
There have also been studies conducted that measured the importance that marital partners placed on their spouse's credit score. The study found that 53 percent of individuals were at least somewhat less likely to date a person with a bad credit score. Since trust is key to a good relationship, it is inevitable that both partners will need to disclose their credit scores. If an individual has bad credit, they will probably have a difficult time finding a relationship and staying in one. Since long-term dating is key to a lasting relationship, it is therefore unlikely that individuals with poor credit scores will eventually get married.
 
The increasing importance of credit scores in the modern world means that all individuals need to do everything that they can to improve their credit scores. 
 
Submitted by Alice Bryant  on Fri, 09/26/2014 - 07:49
Many Americans may not be aware of the new scoring system for credit scores called FICO 9. The new system, coming this fall, could potentially affect millions of people whose scores are negatively impacted by certain collection debt information. For people who have negative information related to medical collections, paid off debts or collections or who have limited credit histories, the new FICO 9 scoring model has the potential to raise credit scores by as much as 25 points according to Fair Isaac Corporation. 
 
New FICO 9 Announced by Fair Isaac Corporation in August 2014
 
Fair Isaac Corporation, the San Jose, California-based company that provides credit scores, announced their new credit scoring system, FICO 9, in August 2014. The new scores are supposed to help people whose primary problematic credit issues have been medical collections or who have limited credit histories. The new system also treats collections that have been paid off differently than those collections that have not.
 
How FICO 9's Scoring Model Differs from the FICO 8 Scoring Model
 
FICO 8 is the credit scoring system that has been used by lenders for underwriting purposes for the past six years. The scoring model is used to determine an individual's creditworthiness and is used by Experian, Transunion and Equifax, the three major credit reporting agencies, in determining their own credit scores. The FICO 8 scoring model accords equal weight to both paid and unpaid collections of over $100 dollars for seven years. The scoring model does not take into account the different types of debt collections or credit information from other sources, such as rental history and utility payment history. FICO 9 will differ in that regard in several ways.
 
1. Medical debt collection account information
 
The FICO 9 scoring model will accord less weight to medical debts and collections. Millions of Americans who have had a major medical event resulting in difficulty paying medical bills could thus benefit by receiving higher scores. For the best mortgage rates, most lenders require FICO scores above 740. Since the weighting difference for medical debt could result in scores higher by up to 25 points for some people, this could potentially be a significant help, especially for individuals whose only negative information is due to the inclusion of a medical collection debt account.
 
2. Score consistency across credit reporting agencies
 
Fair Isaac Corporation will release the FICO 9 scoring system to all three major credit reporting agencies, allowing for better score consistency across the board. Fair Isaac will release FICO 9's scoring model to the three agencies later this year for them to test and validate the system before it is implemented by them. There is no word on how long the testing and validation process will take, however, before the new model will be used by the three agencies. 
 
3. Paid off collections account information
 
Unlike the FICO 8 scoring model, FICO 9 will treat collections and debts that have been paid off differently than those that have not. Previously, paid off collections still appeared on credit reports and were taken into equal account as non-paid collections and debts, appearing for seven years. FICO 9 will give paid off collections much less weight than those that have not been, lessening their negative impact and thus potentially raising credit scores for affected individuals.
 
4. People with limited credit histories
 
Many people have limited credit histories which in turn result in lower scores. In weighing credit histories, the length and number of open accounts determines overall scores with longer accounts providing more information regarding individual's payment histories. 
 
FICO 9 will look at more information to include in its scoring model. People who have few credit accounts but who have always paid their rent in a timely manner will now have that included in their credit scores. Other types of credit information, including such things as timely payment of utilities, will also be factored in. This will allow greater flexibility in the provided credit scoring model and could help people obtain loans.
 
Mortgage Lenders and Their Use of Fico 9
 
Although FICO 9 could potentially benefit millions of Americans, there is no guarantee lenders will adopt it. Lenders have automated underwriting systems in place for determining loan creditworthiness of individuals. Incorporating FICO 9 will be expensive as those systems would need to be updated. Lenders take more than an individual's credit score into account when making underwriting decisions as well. Fannie Mae and Freddie Mac have both indicated they do not plan to use FICO 9 anytime soon. Major private mortgage lenders, including banks and mortgage companies, also do not appear to be ready to adopt the new scoring model soon either.
 
It is unlikely that mortgage lenders will not use FICO 9 for quite some time, at least until Fannie Mae and Freddie Mac change their own underwriting programs to use FICO 9's scoring model. Some lenders already insist they discount medical collection debt already and so do not see a need to adopt FICO 9 as the benefits, according to them, will be small. People may thus not realize the full benefit of the consumer-friendly changes of FICO 9 for several years. 
 
Information Will Still Appear on Credit Reports
 
Although the scoring model will weigh medical collections and paid off debts differently, consumers must still understand that the collection information will still appear on their credit reports for seven years in most cases. Lenders look at both credit scores as well as information appearing on credit reports in making their decisions. When paying off a collection, it still makes sense to try to get an agreement with the company in writing that they will remove the negative information from the credit report upon payment of the account. Although the debts will not be accorded equal weight under FICO 9's model, there is nothing preventing lenders from using the information on the credit reports in making their determination separate from the score itself.
 
Conclusion
 
Fair Isaac's new FICO 9 scoring model provides some new consumer-friendly credit protections. Potentially, many people could realize an improvement in their individual scores and be able to obtain better loan rates as a result. The benefits may not be realized by Americans for several years, however, as lenders and banks will first need to update their automated underwriting systems to incorporate FICO 9 and none have announced any plans to do so in the foreseeable future.
 
Submitted by Alice Bryant  on Fri, 09/19/2014 - 10:08
Anyone hoping to get a car loan or mortgage will need to know what's on their credit report. This is what creditors use to determine the borrower's eligibility because it lets the creditor know whether a borrower is trustworthy and will pay back the loan. 
 
Everyone should check their credit report once every twelve months. There are three agencies that provide credit reporting; Experian, TransUnion and Equifax. The three credit reporting agencies provide a free copy of the consumer's report once per year at AnnualCreditReport.com. Borrowers should take advantage of this fact and request a report once per year. Each company's report may be different or have inaccuracies that should be disputed. 
 
Credit reports can be used in job applications, apartment rental applications as well as loans and mortgages, so an inaccurate entry can have consequences in many areas of a consumer's life. 
 
Some consumers might be eligible for a free credit report more than once in a 12-month period. If they have had an application of credit denied, the consumer can request a report to check the problem. In cases of identity theft, credit agencies can allow a consumer free reports to keep current with an investigation. Otherwise, the requester will have to pay for a report. 
 
The credit report will list many items such as the consumer's current and previous addresses. Other items include:
 
  • The consumer's full name
  • Account number
  • Company name
  • Date the account was opened
  • The date it closed
  • The highest balance on the account
  • Payment Status
  • Account Status
This may take some investigation, but any inaccuracies should be challenged with the credit reporting agency as well as the company that reported the account information. 
 
Correcting Errors
 
The government requires that the credit reporting agency as well as the company that reported the information make changes if there is an error. The information provider has to supply complete and correct information about its customers. 
 
First Step
 
After obtaining a credit report from all three credit reporting agencies, the consumer should go over the details carefully to ensure accuracy. The dates of the accounts might seem unimportant, but they could play a large role later when a debt has expired and should be removed. It's essential that every detail be completely accurate. 
 
When finding an error, the consumer should send the reporting agency a dispute letter. This letter will detail exactly where the error occurs, and what the correct information should be. Any documents that can help illustrate the mistake should be sent with the dispute letter. The consumer should keep the originals and send copies in case the letter gets lost. The report should be sent back to the agency with the disputed areas circled or highlighted. The letter should be sent by certified mail, so the consumer will know it was received. 
 
The credit agency has to investigate the error unless they consider the person's dispute frivolous. As long as there are documents to support the consumer's argument, it won't be considered frivolous. All the information provided will be sent to the company that reported the information. The company must investigate the potential error and report back to the agency within a certain time limit. 
 
After completing its investigation, the agency will make a determination regarding the reported error. If there is a change made to the person's credit report, the agency must provide another report free of charge. If the error is proven, the agency cannot put the error back into the credit report. 
 
If the reporting company reports that the information they provided is accurate, the agency may decide to leave the disputed charge on the account. The consumer can ask to have the dispute recorded on the account too. There's a fee for this service, but it might be worth the extra money. 
 
Second Step
 
The consumer can also contact the company that provided information about the account and provide copies of documents that bolster the consumer's argument. Credit report errors can be removed by contacting the reporting company. Even if there are no errors, the consumer can contact the reporting company and ask that late payments or collections are removed. This can work if the customer is current active with the reporting company. The company might want to keep the customer's business and will remove the late payments. 
 
If the company refuses to remove the offending entry, the consumer can negotiate to pay the amount to have it deleted from the account. This is a step many people use when trying to clean their credit. Often, the reporting company can work with the consumer to remove the debt if it's paid immediately. The consumer should contact the company in writing regarding this option and request that the entry be removed after payment. This negotiation can be the best way to resolve an entry on the credit report that isn't an error but is negatively impacting credit status.
 
When negotiating with the reporting company, the consumer should ask about a partial payment as well as removal of the entry on their report. Companies can be eager to resolve the issue and will take a partial payment instead of paying more money to take the person to court. Consumers should explore this option with the company in writing to ensure that the company sticks to the promise.
 
Third Step
 
After seven years, debt should be wiped from an account because the statute of limitations has run out for the company to get a judgment against the consumer. These debts might still remain on the credit report unless the consumer requests they are removed. This is why the date of the accounts is important. Negative account information that has been on the consumer's account for years might be removed, but consumers can't expect that to happen naturally. The reporting agency should be contacted in writing to have the entry removed. 
 
Consumers should ask to receive their free credit report once every twelve months to check for inaccuracies and to guard against identity theft or fraud. The sooner the consumer sees an error, the quicker the error can be disputed and fixed so it doesn't impact the person's credit score.
 
Submitted by Alice Bryant  on Thu, 09/11/2014 - 12:12
People spend most of their daily lives in the pursuit of money, thinking about money or spending money. It's tied into a sense of self-worth and happiness for most people, so when there's a problem with money, it can impact their emotions negatively. 
 
While everyone has money problems at one time or another, the majority of people in debt find themselves under huge pressure. Serious debt is a big problem, and some people don’t learn how to manage it until it’s too late. Recognizing these emotional signs of debt can help you acknowledge the problem so you can get back on the right track to financial success.
 
Denial
 
Denial is the easiest way to deal with any problem. It's a coping mechanism that allows people to look past many problems, including debt. It can be too difficult to deal with the consequences of bad spending, so people rack up high credit card debt and use various ways to avoid paying their old debt. They'll borrow from one person to pay another and believe they have it under control. They may not look too closely at their expenses or may deliberately avoid facing their problem head on and dealing with it. 
 
Signs of Denial
  • Not having exact numbers of what's owed
  • Rationalizing the debt and purchases made while in debt
  • Paying the minimum on credit cards without having a budget
  • Not opening bills
  • Avoiding disclosing purchases to friends or family
Solutions
 
A person in denial has to learn how much debt they actually have. Before they can hope to dig out of the hole of debt, they have to know how deep the hole actually is. A listing of the bills and amounts is the first step to confronting the debt. This will involve dismissing the habits of denying the amount of debt and that there is a problem. 
 
Anxiety and Fear
 
As a person in serious debt tries to confront their debt, they might experience anxiety and fear. They'll see the problem without the shroud of denial. It can be a daunting and scary task to confront the debt. They fear that the debt is too heavy, and there won't be a way out of it. This can cause them to move back into the stage of denial.
 
Signs of Anxiety and Fear
  • A feeling of hopelessness and the desire to shove more unopened bills out of sight
  • The inability to dig deeper into the level of debt
  • Unwillingness to call creditors with repayment plans
Solutions
 
The level of debt can be overwhelming when it's been ignored for so long. Most people have no idea where to start, and they'll want to go back to denying the debt exists. It's hard to confront failings, but there are ways to make things feel more manageable by creating a budget based on a realistic accounting of what's owed. A budget is the first step. Canceling credit cards is another step in the road to financial and emotional recovery. If buying excessively brought about the debt, selling most of those extra things can help pay off some debt too. 
 
Stress and Anger
 
Once a budget is in place, the stress of sticking to that budget and finding ways to make repayments can be extremely stressful. Many people don't want to face the fact that they created this situation themselves, and want to find another to blame. 
 
Signs
  • The urge to throw up their hands and go back to what's easier
  • Each bill adds another bit of stress to their lives
  • They start to take out the stress and frustration on others
Solutions
 
It's hard to analyze the anger while still in the middle of it. Anyone angry about bills and money should take a moment to think about why it's been a problem in the past. It's important that anyone who is that angry not to take it out physically or emotionally on those around them. It's stressful for anyone associated with the person in debt, especially family members. 
 
Depression
 
When living in a state of negativity for a length of time, the weight of it can cause depression. Money worries are depressing for many people. There's a feeling of hopelessness like the debt will never be lifted, and it will last forever, and while that may be an exaggeration, it feels very real to the person impacted by debt. The thought of bad credit for the rest of their lives can bring about depression too. 
 
Signs
  • The person withdraws from their friends and family
  • They turn to drugs or alcohol to numb the pain
  • They sleep more than normal
  • It's hard for them to drag themselves out of bed
  • The person doesn't care about things they once loved
Solutions
 
Depression treatment for debt is the same for any other reason for depression, and the person may need to seek professional help. They should see their doctor to discuss the depression and talk about solutions. If a family member sees a person who is depressed, they should intervene and discuss seeking medical help. It can help to set small goals and stay positive in the face of debt. 
 
The fifth emotion is relief. After all the stress, depression and struggle, there comes a point when there's a light at the end of the debt tunnel. It could come when the person feels like they have a proper plan in place, or when they are almost free of their debt. They have happier and healthier interactions with family and friends. There's no more denial of the debt because the debt is close to being repaid. They have a proper plan in place, but they also have the tools to keep themselves out of further debt.
Submitted by Alice Bryant  on Fri, 08/22/2014 - 09:55
There are several websites touting the easiest ways to get rich as gambling and playing the lottery-- but how much would you have to spend on these highly addictive behaviors to earn what might be only a little money? And perhaps develop a gambling addiction. 
 
See the easiest way to immediately get richer is to save, save, save on literally everything you spend money on. 
 
In truth, the easiest ways to get rich, or richer, are right under your fingertips-- just take them OFF your cash and try to do one or all of the following. 
 
1. Save Your Money.
 
Get a savings account--not just a checking account--one that will earn some interest and start saving for your future TODAY. Tomorrow comes much quicker than you think. Figure out the minimum amount you need to live every month, add perhaps $50 to $100 dollars to that and live off of this and this only. Try this for six months. Then you will be motivated to save even more. 
 
Look into a bank that will give you maximum interest and look for any monthly fees that will take it right back away from you first. Then start saving. 
 
2. Pick up a second job.
 
Pick up a second job you can do from home, perhaps. Look into crowd sourcing. You only have to do this four hours a day several days a week and it pays well. There are all types of crowdsourcing sites hiring now. You can make as much as $15.00 an hour and set your own hours. Perhaps come home from work., log in some hours, rest, and work some more!
 
Or, pick another job that is not heavy work. Most library clerk jobs are just sitting at a desk, for example checking out books. You could rest up from your first job and work at the same time! Think of a job like this that is low effort for at least minimum wage. You can put that extra money directly into your savings account and watch it add up. 
 
3. Renting Out/Selling Belongings.
 
Consider how much money you could make renting out that extra bedroom to the elderly or perhaps someone single--A basement could work really well as well. You could actually set up your basement in such a way that you and the renter could rarely see each other. 
 
Renting out room can your rent/mortgage and you could save more of your money. 
That could pay your rent Do you have a pressure washer or other large tools that are just taking up space out in your garage? Those rent out for big bucks! 
 
On that note, round up old belongings -- old tape recorders/players, old VCRs old Walkmans and have a garage sale or sell them on EBay. Look at the best ads and model yours after theirs. It's surprising what people will pay just to have these items to use for parts!
 
4.Cut back on expenses.
 
There are all kinds of ways to cut back on expenses, especially those for all those luxury items you could be just as happy without. 
 
Do you really need all of those cable channels? Cut back wherever you can and watch your savings grow. Learn to embrace free hobbies instead of wasting away in front of the TV. Start reading more, creating more. You'll be happier and richer too. Make your own instant cappuccinos or buy a reasonable cappuccino maker--that four dollars you're spending on fancy coffee every day could be going in your savings account. 
 
If you're renting or leasing a car, consider turning it in now and either purchasing a good, reasonable used car or even cheaper means of transport, such as carpooling, riding your bike, taking public transport, and walking places in easy distance. 
 
5. Spend a little now to save great money over time.
 
All the following ways can save you money in the long run even if they cost a little now. 
 
Buy yourself some CFE light bulbs. These new, highly energy-efficient lightbulbs never need replacing and save you some $.66 per bulb per month. Add that up for all the bulbs in your house and you're saving some $20 dollars a month, maybe more for a very large house. 
 
Get a Programmable Timer for Your Thermostat. Put your heat and air on a programmable timer--these timers can be adjusted when you are not at home to keep your heat and air from wasting while you're gone or simply turn them off or down when you'll be gone from several hours to several days. You will have to modify this slightly if you have pets. 
 
Air seal your home. This is an important task as you can waste a lot of money trying to heat rooms where cold air is seeping in or, in the summer, where your cool air is seeping out. If you get your home air sealed you can immediately see savings on your electric bill. 
 
Grow your own vegetables. All it takes are seeds and water and you could be growing those vegetables you pay dearly for at the grocery store every week. Vegetables, such as onions, lettuce, tomatoes, squash, and spices are very easy to grow while the grocery can charge you $1.00 or more for one onion. You can save as much as $40 dollars a week this way. 
 
Conclusion
 
In short, the easiest ways to get rich are by saving the money you are already earning and refusing to waste those hard-worked-for dollars on a myriad of unnecessary expenses every month. With perseverance over time, you can experience great rewards. Like gambling, saving money is addictive. The more you save, the more you will want to save, and this domino effect is one that is health as well, for you, your family, and your future. Save now so you can live well later, in your golden years. You must do it. 
 
Submitted by Alice Bryant  on Fri, 08/08/2014 - 15:00
Education is one of the primary ways to increase your lifetime earning potential exponentially. Based on 2000 Census Data, a bachelor's degree increased lifetime income by $1 million, while a master's degree increased lifetime earnings by $2.5 million. Thus school remains a great way to transform your life.
 
But what if you have bad credit? Here is how to pay for education with bad credit.
 

Just Out of High School

High school graduates have become adults with the opportunity to either start working immediately or continue studies at a higher level. In order to fund their education, students usually have four (4) primary sources: 1) Themselves, 2) Family, 3) Private or 4) Government. If a student has athletic or academic talent or is a member of a special group, like the Sons of the Revolution, then he or she could qualify for special scholarships and grants. These scholarships and grants do not need to be repaid.
 
Loans must be repaid. In years gone by, a student would need to depend on himself or herself to find the necessary money for college or university. Some students worked a part-time job or entered work-study programs to help them pay for books, room and board and tuition. This can be a very solid option because it helps build up good job skills while paying off debt gradually. 
 

Government Loan Programs

The United States government realizes that well-educated citizens are a valuable asset to the nation as a whole. There are many government scholarship, grant and loan programs available for students to improve themselves. It is usually free to apply.
 
Interested students can go online and look for a website offering the Free Application for Federal Student Aid (FAFSA). They can fill it out online or print out a paper copy. This will ask the student about his or her personal finances, credit score, family resources and university of choice. Some of the loans do not have required credit checks, they are "Needs-Based."
 
The Stafford or Perkins programs are the primary loans for students. There are many different terms and conditions for these loans with variable or fixed interest rates. The PLUS loan is a government program for parents. The wisest education funding plan usually involves a combination of programs.
 

Plan for Paying with Bad Credit

Students with bad credit also have a number of options for paying for their education. The federally-funded, needs-based student aid programs may not run credit checks. Private loans may have higher interest rates, but still be available. Finding a co-signer can also help. The final option is to clean up your credit.
 
Many modern financing packages have early repayment penalties meaning that the banks want you to continue in debt as long as possible. There is usually a six-month grace period after graduation before you must start making payments on your student loan. This can help you keep up with the repayment schedule.
 
Credit repair will increase the number of loans available and allow for better terms and conditions. Better credit can lead to longer repayment schedules for loans. People with poor credit can concentrate on ensuring that they make more payments on time. They can talk with their banks about options for increasing their scores. Students with bad credit can still fund their education, it just might be a little more difficult.
 
Submitted by Alice Bryant  on Fri, 08/01/2014 - 08:39
Despite all the warnings we get about credit cards and ways to not let them take over our lives, millions of people still use them on a daily basis. An almost equal number of people find themselves way over their heads in debt. While some don’t know where to turn, others turn to consolidation loans. The big question seems to be if consolidation loans are actually helping or if they can hurt credit. Learn some startling facts below. 
 

What is Debt Consolidation?

Debt consolidation, also known as debt relief, is what its name implies. It’s when an individual combines or consolidates all his or her debts into one big loan of some type. Debts can be consolidated in several ways. The borrower can use a consumer loan, a debt consolidation loan, a home equity loan or a low-interest balance transfer credit card. 
 
However, the credit card is usually the last and must undesirable option, especially if credit cards debts are the reason behind the consolidation loan. Debt relief loans are popular because they typically charge a much lower interest rate than credit cards, and they allow borrowers to make one monthly payment as opposed to several payments. Let’s look at an example of how a debt consolidation loan might work. 
 
Mr. Brown makes payments on six different credit cards each month. With a balance of $2,000 on each card and each one requiring payments of $75 per month, Mr. Brown is paying out $450 each month in his attempt to pay off his $1,2000 credit card debt. Mr. Brown goes to his local bank and takes out a consolidation loan for five years at ten percent interest. His new monthly is $254, which is substantially lower than the $450 he was paying. While the consolidation loan helped his immediate financial situation, how did it affect his credit? 
 

Credit Scores vs. Credit Rating

Before one can understand how credit is affected, it’s important to understand what actually goes into a credit report. Many consumers think that credit scores and credit rating are the same, but they’re actually two different things. A consumer’s credit score is the number used by lenders and credit card companies to determine the creditworthiness of a consumer. 
 
Credit scores are determined by the following five factors, and each factor carries a certain weight towards making up the total score. 
 
Payment history – 35%
The amount the consumer owes – 30%
Length of credit history – 15%
New credit – 10%
Type of credit – 10%
 
Credit rating is determined by the lender or a professional who’s trained to look beyond the consumer’s score and determine how creditworthy the individual may be. The rating may be determined by several factors. 
 
•Employment
•Job stability
•Ability to use dormant credit scores
 
When a consumer applies for credit, the lender looks at the credit scores as well as the credit rating. Even though the credit scores may be low, the credit rating may determine that the low scores were from the past, and the consumer’s current rating look positive towards his her ability to repay a loan. However, it can also go the other way and not in the consumer’s favor. 
 

How Consolidating Debts Can Affect Credit

How debt consolidation affects your credit is dependent on several factors. When a consumer applies for a credit card or a loan, the lender is going to look into the consumer’s credit report. This is referred to as a "hard inquiry", and hard inquiries can cause a credit score to drop. This can be particularly harmful if a consumer goes to several lenders to see which one offers the best deal because this may result in several "hard inquiries". 
 
Lenders like to see a long credit history, and if the consumer makes all his or her payments on time, this is going to be reflected in a good credit score. On the other hand, credit scores are also determined by how a consumer utilizes his or her credit. This is referred to as a consumer’s utilization ratio. The amount of credit that’s available is compared to the amount of debt the consumer has. In the case of Mr. Brown, let’s say he opened up an additional credit card. 
 
Because he now has more credit available, his credit score may go up a bit. However, if a consumer opens up a new credit card and pays off all the other credit cards by putting them on the new credit card, the credit score is probably going to take a hit because there will be a high balance on one account. 
 

Can a Debt Consolidation Loan Hurt Credit?

Consumers who take out consolidation loans to pay off credit cards are improving their utilization ratio because they have increased their amount of available credit. This in turn will typically increase the credit score. However, this will only work if the consumer keeps the credit cards open even after paying them off. 
 
The reason for this is because the consumer now has more available credit. Unfortunately, consumers who take out consolidation loans are generally doing so to get rid of credit cards and don’t often wish to keep them open. However, when a consumer takes out a consolidation loan to pay off credit cards and leaves the credit cards open, the ole credit rating vs credit scores scenario comes into play. 
 
While keeping the credit cards open may improve the individual’s credit scores, a lender may not look favorably on this because the credit cards are there to use once again. Because it can affect the consumer’s ability to pay debts in the future, the credit rating may go down. It's very easy to see that the credit rating and credit scores can almost act as a seesaw. One goes down and the can go up. 
 

Make Debt Consolidation Loans Work for You

Despite the negative affect debt consolidation loans can have on a person’ credit scores, they can also be a lifesaver to the consumer that’s deeply in debt. The key is to make sure the consolidation debt pays off the credit cards or other debts and that they stay paid. 
 
Submitted by Alice Bryant  on Fri, 07/25/2014 - 08:01
Whether it's a major car repair, a house fire or a sudden loss of income, emergencies can put an enormous strain on your finances. If you go into debt to tackle the situation, you could be digging out of it for years to come, and heaven help you if you have two emergencies back-to-back. However, there are a lot of strategies you can employ to avoid going into debt when disaster strikes.
 

Ask for Help from Your Support Network

 
Your parents and family members may be able to help you, if you have a plan for paying them back in a timely manner. Figure out a plan for repayment before you approach family for a loan and you are more likely to be successful. You can also use social networks and crowd-funding sites to raise funds, as well. Look into sites like GoFundMe for a way to solicit help from those you know who may be able to help you out.
 

Find a Better Price for Your Emergency

 
If it's a car repair, have you called around and put out feelers for a cheaper quote? If you need emergency home repairs, call several contractors for quotes. Sometimes, the urge to deal with the problem is so strong that you may not look for less-expensive solutions. Everything from veterinary bills to towing charges can be negotiated, so don't be afraid to haggle.
 

Sell Items for Cash

 
For those who have the option, selling some of your possessions for cash makes a lot more sense than going into debt. Gather up your old MP3 players, video game devices, e-reader and other electronics and sell them online through a site like eBay or CraigsList. If you have an extra car, quad, motorcycle or moped, sell it. Unless you are desperate, avoid pawn shops as you will not get fair value for your items.
 

Rent Out Your Belongings

 
If selling certain items is impractical, consider renting them out. That extra bedroom could be rented out to a college kid or a spinster for hundreds of dollars a month. Your lawn tools, power tools and recreational vehicles can also be rented out. Research your options carefully and make sure you are properly insured before taking this route, but definitely consider it.
 

Cut Back on Your Expenses

 
Sit down with your monthly budget and try to trim the amount you need off of your spending. For example, dropping your cable, cellphone and Internet service to the very cheapest package for a month or two may give you all the cash you need. If you aren't tied into contracts, canceling services all together will save you even more. Also look for ways to trim your food budget, cut down on transportation expenses like gas and think about ways to get more for less in every aspect of your life. It is better to live very lean for a month or two to cover the emergency than deal with debt repayments.
 

Pick Up Side Work

 
If your budget simply won't stretch any farther, you can always make more money. With job markets being tight, you may not be able to find much more than retail work on a part-time basis. However, every bit helps. If you have skills with writing, drawing, coding websites or making crafts, the Internet allows anyone to make extra cash with sites such as Etsy, DeviantArt, TextBroker and Odesk. Picking up some extra work on the side can go a long way towards getting you out of financial hardship and back on the road to a secure future.
 
There are many ways to get out of a financial emergency without a ton of debt. By following these tips, you can find, make or borrow the money you need without being stuck paying it back for the next few years. The money you save in interest can be set aside in an emergency fund so that you will be even better prepared when the next emergency arises.
 
Submitted by Alice Bryant  on Fri, 07/18/2014 - 06:10
Having bad credit can negatively impact nearly every aspect of your life. You can't borrow money for the things you want or need, and when you can, you're paying a much higher price than your neighbor with the good credit score. A few mistakes in your early adult life can stick with you for a long time.
 
Three major credit bureaus -- Experian, Equifax and TransUnion -- are the companies that seal your fate. Using data regarding the amount of credit and debt you have and how quickly you pay that credit back, the companies give you a score telling lenders how likely you are to repay your debts on time. If the data shows that you use up almost all of the credit you have available and that you are late making payments, you'll have a bad credit score. Lenders will take note and act accordingly.
 

Borrowing Money

Perhaps the most frustrating part about having bad credit is that lenders just aren't interested in working with you. If your car dies and you want a new one, you're out of luck. You can't get a credit card to fall back on for little emergencies. Forget about getting a mortgage, even though the monthly payment on a home in your area would be less than your current rent. A lender who views you as a credit risk will simply turn down your application, even if you can prove that you have the ability to repay the loan.
 

Paying More

 
When you do find a company willing to give you a loan, it's going to be at a higher interest rate than what you'd pay with good credit. At first, it may just seem like a relief to be able to borrow the money you need, but then you realize that it's harder to pay this money back. With each monthly payment you make, a portion goes toward the principle and another portion goes toward the interest. When the interest rate is high, more of your monthly payment is going to pay that interest. If you're only able to pay the minimum payment, it's going to take longer for you to pay back than it would if you had a lower interest rate. You can help the situation out by paying more than the minimum; any extra money you spend will pay down the principal balance.
 
Additionally, you'll pay much more for the loan over the long term. For example, if you were to take out a 30-year $150,000 mortgage at 6 percent interest, you'd end up paying more than $173,000 in interest over the lifetime of the loan. With a better credit score, you might be able to secure a 30-year mortgage at 4.5 percent interest. The total interest paid on that loan is just over $123,000. That's a $50,000 difference!
 

Getting Housing

 
You have to live somewhere and when banks won't offer you a mortgage, you need to look into your rental options. Unfortunately, most landlords consider your credit report when making a decision about lending to you. In a hot rental market, you may find it extremely difficult to find a landlord willing to rent to you. To make a landlord feel more comfortable, you may have to pay several months of rent upfront, or have a family member willing to co-sign for you. This can be a big expense that you might not have been expecting.
 

Setting Up House

 
The additional expenses don't stop once you've found a place to rent. You'll also have to set up your utilities, like gas and electric, water, sewage and Internet. If you're lucky, some of these expenses will be included in your rent, but they are all possible extra expenses. These companies will also check your credit report when you sign up for an account, and with a bad credit score, you'll have to pay a deposit before the company will start providing services. Those with good credit do not incur these extra costs.
 

Getting a Job

 
Some employers will request a credit report before hiring you and a bad score might mean that you won't get the job. They'll worry that the irresponsibility you show in your financial life might be something that carries over to your professional life. If the position includes handling money, an employer might worry that you're more likely to steal from the company to take care of your finances. When all other aspects are equal, an employer is more likely to choose the candidate with a good credit score over the one with a bad credit score.
 

Digging Yourself Out

 
The good news is that you're not doomed to a lifetime of bad credit. Once you recognize where you stand, you can start taking steps to improve the situation. Initially, you might have to start with a secured credit card, or a loan with a higher interest rate than you'd prefer. However, simply making on-time payments will be enough to make your credit score increase over time. As long as you're using your credit responsibly -- keeping the balance low and making your payments on time -- you'll improve your score. Resist temptations to overspend and set up automatic payments if you're the type of person who might forget to make a payment.
 
Additionally, information on your credit report drops off after seven years. So while you'll see big improvements after just a year of using your credit wisely, once the seven years has passed, lenders will never know that you once had bad credit.
 
Last updated on Oct 25th 2:40 pm