Finance Tips

The recent recession hit many people hard. Many lost their jobs and those who managed to maintain their jobs probably had to have their pay cut significantly. My cousin Jay was not immune to the recession either. He was an accountant at a local firm. Although he did not lose his job, he felt the strain of increasing living cost due to the price hike of daily items like groceries and petrol. During a recession such as the recent one, Jay knew one of the ways that he could avoid making things worse was by managing his credit card debt. Basically he had to find ways to reduce the amount he already owed on his credit cards by paying them off and at the same time reduce the amount he spends on his cards every month.

Jay started by planning a budget of his expenses and comparing it to his expenses in the previous months. He realized that to manage his credit card debt he would have to make some changes in the way he spends his money.

Basically there would be expenses to be cut and adjustments to be made in order to reduce his monthly debts. If he was lucky, he probably could end up saving some money in the process. Jay looked at his previous bills and prepared to make sacrifices. He realized that the changes he would have to make would have to start with small steps. So he started writing down the three major ways or items that he could immediately cut back like the gold-plated cable plan he had. He changed his cable plan and reduced the number of channels he would be getting. Of course, it would probably be more effective if he simply cancelled his cable TV subscription but a gradual change would be easier to maintain than a drastic one.

Jay also thought that the recession would probably be a good time to start living healthy and at the same time avoid credit card debt.

Jay always used one of his credit cards to pay for gas even though his work place was just several blocks away. To reduce the amount he spends monthly on that particular card, he started to walk to work. Of course, he was huffing and puffing on the first few weeks but soon after his body adapted and walking to work did not turn out to be such a task after all. He even found that he liked walking to work because he would meet up with more people along the way like the cute brunette at the bakery. Jay also used to smoke. Now that cigarettes were turning out to cost almost as much as a luxurious item, he decided it was probably the best time to quit smoking. He went cold turkey and he succeeded. It also saved him about a hundred dollars a month now that he was not spending on cigarettes.

As an accountant, Jay also knew that overspending would probably end up causing him to have to enroll into a credit card debt consolidation program. So he ended up making one of the biggest changes in his life; he started living on cash. He did not cut up any of his credit cards as he knew he would have to maintain using and paying them in order to rake up a good credit score. He simply tried to live on cash for as long as he could and for as much as he could. Generally whenever he had cash in the bank he would pay for whatever he needed in cash. He also started separating the purpose of each of his credit cards. For example, one card was strictly for petrol, one card for monthly bills and one card for work related expenses. By doing so, it was easier for him to monitor his spending and also cut his credit card expenses significantly.

Staying away from using credit cards may probably be as difficult for a man as it would be for a woman. Jay also took quite some time to adapt to the new lifestyle he adopted. However, he was focused and rather persistent to avoid burying himself in debts that he managed to withstand any difficulties and continued to pursue his debt cutting methods with perseverance.

Homeowners have a strong belief that undergoing a short sale would lessen the damage created to their credit scores. This is true. Compared to foreclosure, the effects of short sale is less harsh. Points may decline severely with a maximum of 200-300 points drop, but the effects are short term. One can even re-apply for a loan after 2 years. Sometimes when credit is redeemed fairly within these years, application of loan may be allowed less than 2 years.

It is not much of a wonder how credit scores can be affected with short sale. The drops of points are based on the factors that can affect the FICO scoring system. To understand more about it, here are the possible reasons why credit scores decline in a short sale:

Payments for mortgage is 30 late or more (in other words: PAST DUE)

This is usually referred to as delinquency in payments.

It will primarily hurt the portion of your FICO Scoring, which is the payment history. This comprises 35% of your credit score. The drop would differ according to the period of delinquency (how long was it delinquent?) and how recent was delinquent payment, before the short sale was done. Therefore the decline in scores for a loan that was past due for more than 30 days is different from the ones that have been delinquent for 60, 90 and 120 days. If short sale was done without any missed payments, technically there should be no deduction in this category.

Remaining Amount Owed in relation to Income

If you say you are in such hardship, it would mean you have a hard time paying because you do not have income or your money has been used up for something else. Therefore it is expected that you will have a hard time paying off the difference in short sale too.

Owing too much would negatively impact credit scores. A higher debt to income ration would also have the same effect. However, if you decide to refinance the difference and pay-off the remainder, no deductions should apply in your score.

Presence of Public Record or Collection

Public record is usually known as a Public Derogatory File. On the other hand, collection means the account has been transferred over to the collection agency. These two things can greatly hurt credit scores as described in factor score 22. So even if your lender indicated that the “debt was paid but settled for less”, this can impact your scores badly since it is considered a derogatory event.

Decline in points for short sale may be as low as 75-100 or 120 and may be as high as 200-300. This is better compared to the drop in points in foreclosure. But the drop will be highly affected by the number of times payment was missed. Besides, short sale has easy redemption of credit. In fact, the borrower will be qualified for a loan within 24 months.

In addition, short sale is reflected as “pre-foreclosure in redemption”. This means it is not reported in the credit report. Sometimes lenders would reflect that the debt was settled. Nevertheless, this status will have lower impact on your credit rather than foreclosure

You’ve been driving around in that old clunker your dad gave you when you went off to college for years and now you can finally afford a new car. You’ve finished college, started your new career and worked your way up the ladder enough to finally get the salary you deserve. You’ve had your eye on a particular model and you happily go off to the dealership to buy one. While you are there, the dealer may offer to sell you a paint protection system that is designed to keep the paint on your car looking new. After driving an old car that saw a new paint job over a decade ago, you want to do everything to maintain that beautiful look and what the dealer is saying may sound quite enticing. Beware, because what sounds too good to be true usually is.

Dealers get paid a substantial profit by selling you expensive car paint protection systems. How much they charge you will depend on how much they feel they can get out of you. Don’t forget that these salespeople know all about your finances from your application and credit report. They know how much you make, how much you pay in housing and how much credit debt you have. This gives them a general idea of how much you can afford to pay. They may offer a debt laden person the system for $500 dollars and offer it to a person who has a lower amount of debt for $1500.00. Either way they are making a super profit and they do it under the guise of doing you a favor.

Admittedly, car paint protection is essential to any new car. Car paint can be damaged by the sun, hail, and dirt that are blown on a car. Wax can certainly keep a car shiny but can also allow dirt particles to stick to it. This means that when you go to wipe it down, the dirt or sand can actually cause damage to the paint job, since wiping the car will grind them into the paint.

The sun will also fade paint over time and if you live near the ocean, salt water will also harm the finish. This is why it’s important to get a good car paint protection system. Just don’t get it from a dealer. Part of the warranty may include having to bring the car in every 2 months to have the protection renewed. If you don’t come in, then the warranty will be voided and you’ve lost the money that you invested in the system.

There are plenty of quality paint protection systems on the market that you can purchase for a fraction of the cost that the dealers offer them for and you can apply and maintain them yourself. Visit your auto supply store or go online to research and find the best one for you.

A wild guess here, but I’m assuming you’re reading this article because you have some type of problem with debt. Am I psychic? I wish! So, naturally, you’re going to want some advice on how to get freedom with debt relief. Believe it or not, that’s the easy part — because keeping yourself out of debt is actually the only hard part.

While you could certainly try to budget yourself into submission until you’re eating cereal for breakfast, lunch, and dinner, it makes a lot more sense to seek professional help. (I’m speaking from experience here.) I just thought of it as an investment: I hired an experienced, specialty firm to comb over my details and do what they do best. After all, did I really think I had the worst situation out there? Obviously not. These companies wouldn’t be in business if they didn’t have success.

While it’s not about cutting back on everything you can think of, you do have to realize why it’s so important to make new habits for yourself. Discipline is paramount here, and organization is a close second. Paying off your debt and gaining freedom with debt relief just won’t insure that you don’t get caught up right back in the debt trap. Studies have shown that the majority of people who do reach that heralded “debt free” zone eventually end up right back where they started, thanks usually to credit card debt.

Go to a reliable debt relief specialist and get your bills paid off. After that, make lists, make budgets, and use your credit card in moderation. Open a savings account with intentions of actually growing it instead of just emptying it to pay for presents for yourself every weekend.

debt consolidation program has emerged as one of the best credit repair tools in the last few years. With the rapid increase in the number of people suffering from various kinds of debts, there was a dire need of a financial program that could not only help people repay their debts but could also help repair their credit scores. The biggest advantage of such programs is that they are widely available at no extra cost. You can easily find a bad credit debt consolidation program that will not require you to pay even a single penny and you can get out of your dilapidated financial crisis.

How does debt consolidation program improve your credit score?

When you choose to go for a debt consolidation program, the debt consolidation company will negotiate with your creditors to reduce the rate of interest and merge all the debts into one single consolidation monthly payment. It all happens in such a way that you eventually pay an amount considerably lower than the amounts you have been paying individually to each of your creditors. If you like, the debt consolidation company will also try to extend the period of repayment. This will give you enough time to manage your finances and put them back on track. Meanwhile, the credit counselor assigned to you will educate you regarding how to improve your credit score.

Did you know that various kinds of debts determine thirty percent of your overall credit score? The more outstanding debt you owe, the lesser will be your credit score. Since a bad credit debt consolidation program helps you pay off your outstanding payments at a much faster pace, you can improve your credit score simultaneously at the same speed.

Debt-To-Income Ratio

The debt consolidation program also helps lower down your debt-to-income ratio. The debt to income ratio is used to determine the financial stability of an individual. The ratio is the division of the monthly amount of repayments by monthly gross income. Obviously, the lower the debt-to-income ratio, the better it will be for you. A lower debt-to-income ratio means you get a better chance to handle your overall debts. The free debt consolidation program will help you lower down the debt-to-income ratio.

This way