Category: Credit Tips
“Set a goal to become a millionaire for what it makes of you to achieve it. Do it for the skills you have to learn and the person you have to become.” ~ Jim Rohn
I learned about the incredible time-value of money when I was close becoming 40 years old. The time-value of money explained simply is that a small, insignificant amount of money invested over a long period of time can grow into a significant and life-changing amount of money. The key is that the more time you have, the more your money can grow.
So naturally, when I learned about this simple concept so late in life, at first I was mad. Why didn’t anyone teach me this sooner? But I realized that thinking this way was very selfish of me. I mean, most people go through their whole lives never knowing or taking advantage of the time-value of money and I am just so grateful to have learned this simple yet elusive concept. I began to realize that I still have plenty of time to take advantage of this powerful concept, and I thought, What if I applied this concept to my kids who have even more time than myself? Then I thought, What if I share what I’ve learned so that others don’t have to possibly learn this too late in life or to possibly never learn this in the first place?
So, when I learned this concept, my kids were 3 and 7 and I wondered how much they needed to invest to have a million dollars by age 65. Now when I talk about investing, I am not talking about saving in an account at the Bank or Credit Union – I’m talking about getting some Mutual Funds and actually investing that money in the Global Economy. So, the first thing I did was help my son earn some money and by the time he was 8 years old he had a whopping $335.00 to invest! As unexciting as this might seem, my son still had lots of time on his side, 57 years to be exact, until he would turn 65. And, would you believe that while invested over that period of 57 years, that insignificant $335.00 would grow to over $300,000.00! So, I figured worst case scenario, my son only had to invest $335.00 per year for only 4 years between the ages of 8 and 11 and without adding any more money, it would be very possible to accumulate over one million dollars by the age of 65! And that could all be done by only a total investment of $1340.00!
Now, if you think that is incredible, my daughter was younger, so she would have even more time for her money to work for her than her brother. My daughter was 5 at the time she started investing. Comparing apples to apples, if we were to just take the same $335.00 her brother made and invest it, but she had 60 years until age 65, that would grow to over $400,000! So the money, working only 3 years longer than it did for her brother would grow an extra $100,000! Now that’s the time-value of money! Again using worst case scenario of only making $335.00 per year and investing it, she would only have to invest for 3 years between the ages of 5 and 7 and have over a million dollars by the age of 65 – all from a total investment of only $1005.00!
So do I have your attention now? Do you see the importance of understanding the time-value of money? – Not only understanding it but taking advantage of it. Isn’t that exciting? And that wasn’t that hard, was it?
But remember these are our kids and it is not just about the money, it is more important about the good habits they are forming and the people they are growing into along the journey. Keep this in mind and you can make this a fun experience with your kids as well as a learning experience. Now my kids are 13 and 9 and I am happy to say that over the years they have exceeded the worst-case scenarios of only investing $335.00 per year and they are well on their way to becoming future millionaires.
Posted in Business, Credit Tips, Insurance, Tips Finance
Business Credit is credit that is obtained in a Name. With credit, the business builds its own credit profile and credit score. With an established credit profile and score, the business will then qualify for credit. This credit is in the name and based on the business’s ability to pay. Since the business qualifies for the credit, in some cases there is no personal credit check required from the business owner.
A starts building a brand new credit profile much the same as a consumer does. The starts with no credit profile. The business gets approved for new credit that reports to the business credit reporting agencies. The uses the credit and pays the bill timely. A positive business credit profile is established. As the business continues using the credit and pays bills timely it will qualify for more credit.
A cell or home phone number as your main business line could get you “flagged” as an un-established business that is too high of a risk. DON’T give a personal cell phone or residential phone as the business phone number. You can forward a virtual number to any cell or landline phone number.
Credit providers will research your company on the internet. It is best if they learned everything directly from your company website. Not having a company website will severely hurt their chances of obtaining business credit. There are many places online that offer affordable business websites so you can have an internet presence that displays an overview of your company’s services and contact information.
It is important to get a company email address for your business. It’s not only professional, but greatly helps your chances of getting the thumbs up from a credit provider. Setting up a business email address is just too easy and inexpensive to neglect.
One of the most common mistakes when building credit for your company is non-matching business addresses on your business licenses. Even worse is not having the “required” licenses for your type of business to operate legally. You will need to contact the State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business.
A business credit report can be started much the same as a consumer report commonly is, with small credit cards. The business can be approved for small credit cards to help them build an initial credit profile. These types of initial cards in the business world are commonly referred to as “vendor credit”.
A vendor line of credit is when a company (vendor) extends a line of credit to your business on “Net 15, 30, 60 or 90” day terms. This means that you can purchase their products or services up to a maximum dollar amount and you have 15, 30, 60 or 90 days to pay the bill in full. So if you’re set-up on Net 30 terms and were to purchase $300 worth of goods today, then that $300 is due within the next 30 days.
Always apply first without using your SSN. Some vendors will request it and some will even tell you on the phone they need to have it, but submit first without it. When your first Net 30 account reports your “tradeline” to Dun & Bradstreet, the DUNS system will automatically activate your file if it isn’t already. This is also true for Experian and Equifax.
Posted in Credit Tips
One of the best ways to improve your chances of getting a home loan is to improve your credit score. It is because better credit scores may give you access to better interest rates and more beneficial home loan products.
Here is a list of some quick tips to help you get the best possible credit score. While there is no guarantee that all of these options will immediately boost your credit score, they may help you establish habits that will strengthen your credit score.
Show you can pay your bills on time, every time
Lenders/credit providers will want to see that you can repay a home loan on time. So, here is a list of bills that you should pay on time, every time:
>> Your credit cards;
>> Your rent;
>> Your medical and utility bills; and
>> Any other service that may use a collection agency for the recovery of delinquent accounts.
If you miss a payment date by a few days, call the service provider immediately to make the payment, and don’t be afraid to ask the provider for a one-time forgiveness.
Check your Credit Rating
You should regularly check your credit report with a credit reporting agency (such as Veda Advantage and Dunn and Bradstreet), as it will:
>> Give you an idea if you have any defaults or negative repayments history recorded in your report;
>> Give you time to get the credit report corrected before a lender/credit adviser accesses your report; and
>> Enable you to verify your credit score with a credit reporting agency.
Note: You should be aware that due to the changes in the Privacy Act in March 2014, lenders/credit providers have the ability to access your credit reports and can see the past 24 months of your repayment history.
Maintain your Available Credit
Before applying for a home loan don’t open any other credit cards or lines of credit. It is because lenders/credit providers will see you as being a risk if you suddenly take out loans for cars, electronics, furniture, etc.
Also, refrain from closing your credit cards or other lines of credit. Instead, consider paying off your balances as a lower debt will improve your debt-to-credit ratio.
This is best illustrated by the following example:
Having a total debt of $4,000 with a $20,000 available credit will look better than having just $500 in debt with $800 available credit.
Establish a Savings History
If you are borrowing more than 80 percent of the purchase price of the property, you will be required to meet the “genuine savings” requirements of lenders/credit providers. Your savings will need to add up to around 5 percent of the purchase price of the property.
For example, on a purchase price of $700,000, you will need to have savings that add up to $35,000.
Note: Saving a larger deposit should help to reduce or avoid paying “Lenders Mortgage Insurance” (LMI) and you may even be offered a more competitive interest rate by the lender/credit provider.
Avoid applying with too many Lenders/Credit Providers
Avoid submitting your home loan applications to several different lenders/credit providers at once. It is because these loan applications will appear on your credit report. You should only submit your home loan application:
>> After you have compared lenders/credit providers; and
>> After you have decided to go with a particular lender/credit provider.
Your Employment Stability
If you have had the same job for several years, then this is a big tick. So, prior to applying for a home loan, Try to establish a stable employment history as it will enable you to make regular loan repayments.
If you have changed your job recently, do not worry. You may satisfy the requirements of lenders/credit providers, if:
>> You have been in a similar role; and
>> You have been in the same industry.
Disclose all Information
Lenders/ credit providers may think that you have other debts that have not been disclosed. So, always be upfront and disclose all information as non-disclosure of relevant information may result in your home loan application being declined.
Seek Expert and Professional Advice
All these tips should help you to improve your credit score. However, you should speak to a professionally qualified and expert finance broker who can help you to create a personalised credit improvement plan. Establishing this relationship with a finance broker will help you to determine which potential lender/credit provider best meets your needs.
All the Best!
Posted in Credit Tips
Some individuals are spending hours on the telephone daily, speaking to creditors and lawyers and even more lenders, all in an attempt to break clear of those bad credit score chains that bind us up while keeping us from enjoying life. Bad credit can weigh on the shoulders until it’s looked after, so let’s go ahead and take steps to mend that score completely. Look into government backed loans should you not hold the credit that is required to look the regular route by way of a bank or credit union. They can be a major aid in house owners that are searching for an additional chance when they had trouble by using a previous mortgage or loan. Have a copy of your credit score at regular intervals, and maintain a careful look for agencies to report your repair efforts. If you are clearing negative issues on your credit history, monitoring your report allows you to verify that agencies are correctly administering facts about your status and this additional negative reports will not be being made.
Make your visa or MasterCard balances low. Possessing a high credit limit on the card can appear like you’ve won the lottery, but using that entire limit will reduce your score. Keep balances with a 50% maximum. 30% is a lot more of a prime target. And you don’t need every dollar that has been extended to you, in this way you happen to be showing that you could handle your credit well. When attempting to repair your credit, will not be enticed by the scams that explain to you they will enable you to produce a new credit file. Developing a new credit file is actually fraud if you opt to follow through. Should you create a new credit file, because it is fraud, you are able to face legal repercussions. By maintaining a favorable credit ranking, you might be able to reduce interest levels. This helps decrease your monthly payments, and help you pay them off quicker. Asking for a much better deal through your debtors may help you get out of debt and to achieving an improved credit score.
Be suspicious of collection agencies that try and talk over you together with is not going to answer the questions you have. Agencies that happen to be scams will try to keep you off balance by continuously talking without providing you with any facts. Should they aren’t answering your concerns and are threatening you, let them know to get hold of you merely in writing. Find a very good quality help guide use and it will be possible to correct your credit all by yourself.
These are typically available all over the net along with the information that these particular provide plus a copy of your credit score, you will probably be capable of repair your credit. Now you know a thing or two on how to repair that bad credit score, it’s time for you to put the tips into action and begin living a poor-credit-free life. Make sure to invest some time and also to examine each of the angles. You must keep plugging away at it until it’s resolved, though not all word of advice you read relevant to credit will instantly do the job.
Posted in Credit Tips