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Category: Good Credit Tips

Co-Signing a Loan – Should you do it if someone asks?

Everything You Need to Know about Co-signing a Loan

Co-signing a loan may be a requirement by the lender when giving loan. This is the act agreeing to pay the debt if the borrower fails. Individuals with good credit score are often asked by their friend or a family member to co-sign. Although, you are willing to help; you must also be aware of its multifarious aspects. This article will focus on both the faces of co- signing the loan and help you make an informed decision.

What a co-signer is liable of:

When cosign a loan, he or she is pledged to pay the debt in-case the borrower defaults. Moreover, the cosigner is liable to pay the extra amount including late fees and collection money. The creditor has the right to collect the debt from the cosigner without even approaching the borrower (depending on the law of the state). Plus, they can sue or even seize salary.

So, make sure you can afford the amount and are willing to accept the responsibility.

Why would someone consider co-signing a loan?

You might want to co-sign a loan for your son and buy him his first car. You might also want to cosign someone’s education loan! The fact that, credit rejection is common; especially for people with low credit score; you can help them by cosigning a loan. This will help increase their credit score and credit history, as well as get them the transportation or education they need.

Things to Consider:

  • Make sure that you can afford the debt amount
  • Defaulting may get you sued or lose credit rating
  • It may keep you from getting other loans
  • Before cosigning, ask your creditor to quote the effective amount you will owe
  • You could negotiate and limit your obligations to just the principal and not include the additional charges
  • You must take the copies of all essential papers after cosigning
  • Know your co-signer rights

Risks of Co-signing a Loan:

Co-signing a loan comes with a lot of risk, like increasing the DTI (debt-to-income) ratio. As a cosigner is an integral part of the loan; he/she must address the loan closing documents. The loan is reflected in the credit report and the monthly payment goes to the DTI ratio. Moreover, as the amount you owe is 30 percentage of the FICO score, hence lowers the credit score. More, is the debt amount, lower will be the credit score. Keep the DTI ratio below 36 percentage.

By co-signing, you are accepting the responsibility and are tied to it until the balance is paid off. There is no escaping once done. However, in certain cases like with student loan, you can avail release from being cosigner.

The bottom line is, if the needs of the borrower outweighs you personal preference, you should choose to cosign the agreement. However, it is advisable to judge you friends trustworthiness wisely. It might not be noble, but this may save you later.

What is a credit bureau? Experian, TransUnion, Equifax

What is a credit bureau? There are 3:  Experian, TransUnion, & Equifax

When you opt to buy something on credit or take a loan, the lenders don’t just decide to give you the facility right away. They try to collect information on your credit behavior, both past and present, track record, and various other data to ensure that you have the potential to fulfill the liabilities you obligate yourself with. This is where the Credit Bureau comes into the picture.

Ok, so what is a credit Bureau?

A credit bureau is a company that collects and maintains credit information of individuals and supplies it to the interested organizations and bodies such as lenders, creditors, etc. As a consumer, you can also have your own credit report from the bureau. The credit information is basically a summary of your credit behavior and includes the following details:

  • How much of credit you have
  • How much of the credit is left
  • How much credit are you using
  • How often do you make your payments

Credit information also contains rental repayment reports if you own a property. Other details mentionable in a credit report are liens, judgments, and other details that expresses your current financial position.

There are 3 major national credit bureaus in the United States:

  • Experian – This global information service group operates in almost 40 countries and employs a total of 17k people. The agency was founded in 1996, the headquarter of which is in Dublin, Republic of Ireland.
  • Equifax – Another consumer credit reporting agency and one among the three largest credit bureaus, Equifax records and maintains information of over 400 million credit holders in the world. Based in Atlanta, Georgia, the company employees 7000 plus employees and operates in 14 countries. Equifiax is also one of the oldest credit report gathering agency that has its operations ongoing since 1899.
  • TransUnion – The third largest credit bureau in the United States, TransUnion is an American credit information management agency. The company has information of approximately 500 million customers worldwide and over 45,000 business houses. It works closely with Callcredit, a UK based credit reference agency.

Based on the information on your credit report provided by any of the three aforementioned credit bureaus, the lender assesses whether they can offer you the credit or not. Whether your credit scores pose a risk and put you in a bad standing or has a high score that easily help you in obtaining the loan. This will also help them in deciding what interest rates they can offer you.

Summary:  What is a credit bureau?

There are agencies that can help you in getting out of a bad credit report. They will help in reestablishing your reputation as a credit holder and will solve all your credit issues. Search on the Internet to find such providers and take their help to get back on your feet.

Credit Repair Services – How Do They Work?

Credit Repair Services – How Do They Work?

Do you look at your credit report and think about nothing but credit repair services? Have you had one or more financial misfortunes over the past several years and now have a less than ideal credit score? If yes, then it’s high time to get your credit repair process started. Credit scores have been one of the biggest victims of the financial crisis and the recession. Anyone with poor credit scores will definitely know what a low credit score can cost you.

Credit repair services can improve your credit enough to lower the rate of interest, which can result in saving you thousands of dollars on a loan. When making an essential purchase, such as buying a car, it’s vital to make sure your credit rating is as its best in order to get the best rate and terms possible. Bad credit can land you up in problems and have a considerable negative impact on interest rates or loan approval.

How credit repair services work?

The credit card repair services have been around for a couple decades with better known rules surrounding credit repair and know how to handle those rules to either raise your credit score or give you your money back. The legitimate credit repair agencies will state what quickly repairable issues to look for, how to approach your credit issues and then will submit the appropriate challenge, dispute, or intervention letters to credit bureaus on your behalf, so that your credit rating can get upgraded. They will identify the mistakes, correct the appropriate information, get rid of negative reporting and monitor the creditors to ensure that your credit report is as accurate as possible and corrected accordingly.

Necessity of credit repair services:

  • Better car insurance policies: The policies that most car insurance company offer are usually based on the clients’ credit reports. For example, you will end up with a reasonably priced car insurance policy if your report suggests that you are late with paying other accounts. Thus, credit repair services can clean up your credit rating and help you get considerable savings over the duration of your policy.
  • Better car loan or mortgage facilities: A low credit score can put a negative impact on getting different car loans. You may not get the desired loan amount or land up paying greater interest on your loans for the lifetime. A bad credit score can lower your credit limit, thus making the loan even more pricey for you. But a report with good credit score will increase your chances to get your own desired vehicle.

A higher credit score can help you with: lower interest rates on your credit card, get approved for low interest loans and lower insurance rates on your car. So, it’s important to keep your credit score in good condition. The higher your credit score is, the lower your interest rates are. There are a handful of benefits that come along with a credit score repair. So, open that door, hold out your hand and grab hold of those opportunities with a credit repair.

How to Improve Your Credit Rating – 5 Easy Steps

How to Improve Your Credit Rating – Follow Just 5 Easy Steps

Credit scores are like report cards for grown-ups. This is a three-digit grade which signifies a person’s creditworthiness towards banks, insurance companies, landlords, lenders and even to some car loaners. These are mostly used by loan companies to help them determine whether or not you are a good risk and if you are likely to repay any loan taken out. Whether you are buying a car, renting an apartment or taking a loan, you need to make sure that your credit score is at its best. One has to build a great credit history to pass for a good credit. Unfortunately, there is no magic trick that can pump up your score by a certain number of points. Building a good credit takes time and good habits. However, there are few things that can do raise the score of your credit. These are:

Step 1: Check your credit report

Check your credit report to see exactly which place needs improvement. Do your debt utilizations too high or did you missed payments? Tackle your dues first, request a free copy of your credit report and check the errors. Check the reports for errors and fraudulent accounts as well. If something is incorrect, dispute with credit bureau. This could helps increase your credit report a bump higher.

Step 2: Pay Off Debt

Reducing the overall debt is an effective way to jack up your credit score. Reducing the amount that you owe is going to be a far more satisfying achievement than improving your credit score. Stop use of your credit cards, ask for funds from friends or relatives and clear your debts. Check your recent credit card statement to make a list of your debt and interest rated on that. Secondly, you must give prime focus to credit utilization, as it will help you measure the amount of debt. Create a plan, evaluate your expenses and reduce your debt to improve your credit utilization portion.

Step 3: Fix your collection accounts

Collection stays for a long time on the credit bureau, and even you forgot about their first position! This is the very aspect that can have a harsh effect on your credit score. So, check it, fix it and get rid as soon as possible. Get in touch with credit bureau and the party to resolve the issues and have a fair report. This will eventually increase your credit score and prove you to be liable for any loan.

Step 4: Build good credit by following guideline

Moneylenders or bankers check the credit score to find out your financial faithfulness Therefore, maintain good credit habit to improve your score and prove credible.

  • Make your payments on time.
  • Keep your old account open.
  • Lower your balance on credit card.
  • Set-up payment reminders.
  • Use your card regularly
  • Annually check your credit reports.
  • Avoid applying for new credit cards

Step 5: Get a secured credit card

Get a secured credit card to quickly build a payment history. These cards are backed by cash depositing that is parallel to the limit of credit. You could easily get the approval, as money already their in your account. Double-check to ensure that the card is truly a credit card. Although, unsecured card carries more positive weight than a secured one. You could easily upgrade the secured card into an unsecured one after few months. This would sincerely give a boost to your credit score.

Summary:  How to improve your credit rating

Follow the steps listed above, and build a credit score which you were missing. These 5 tips will give this impression to financial institution, and therefore increase your chance of borrowing. But, you have to keep patience, as it cannot be achieved overnight.

Why Do I Have a Bad Credit? And, How do I fix it.

Why Do I Have a Bad Credit?

You work hard to make sure that your credit score remain high, right! Unfortunately, all your hard work could be hurt by seemingly small things that could give a big impact on your credit history. From parking ticket to auto loans, irresponsibility could take down your credit score. Credit score is a tricky thing and some harmful action or behaviors can terribly impact your credit. Having a blemished credit history is likely to mean you are turned down when you apply for car loans or borrowing money, giving rise to think that your credit is blacklisted or bad credit rating. By understanding the biggest mistake determine or reduce problems that might affect your credit. Here are some of them:

Making late payments

Your credit history accounts 35% of your credit score. Late payments records hamper your ability to finance major purchases such as a car as much as a personal credit history full of mistakes. So, if you fail to make debt repayments on time, it will show a red flag to credit agencies.

Closing card account

Closing credit accounts is a bad idea to boost credit scores. A closed credit account will fall of your credit report sooner than later. The positive history associated with a account is removed from the credit report, if the account is closed. Credit history counts for 15% of FICO score. So, the one with younger credit are more risky then consumers with older history.

Over utilization of your available credit card limit

If you wish to establish a bad credit, charge your credit upto their limit and keep them there. Apparently not, because high balance on your credit cards takes your credit score down. The credit score is based on ratio of total, debt to total available credit. Your credit balance goes up, your credit score goes down. So, try your best reduce the percentage and pay them down as much as possible.

Error in credit report

Mistake on your credit report, which lenders check is an important part of credit score process. If there is some error in credit report related to debt or dues that does not apply on you then report the reference agency immediately. If you spot some case of fraud in your name without your acknowledgement then report to get investigated and removed.

Filling bankruptcy

Last but not the least, Bankruptcy is an undisputed champion in destroying an excellent credit rating. This undeniable one of the worst thing, which can cause a lose of 200points in credit score. It may take 10 years to fall from your report, but the impact will lessen over the time. Filling bankruptcy is like pushing a financial reset button. This is an important decision and needs precise concern and information. Take helpful suggestion before filling one.

If you see anything on the list you know you’re guilty of? Start taking necessary steps to properly address the problem as soon as possible. Be consistent in paying down bills and debt on-time and create a clean bill of credit.

Understanding a Vehicle Purchase Contract

Understanding a Vehicle Purchase Contract

When reading through any type of contract, whether it’s a legally binding contract or not, it is important that you grasp the concepts that are being presented through the use of the contract. In order to properly understand a contract, there are certain terms that you will need to be familiar with in order to ensure that you understand what you are agreeing to. There are many basic terms that are used in contracts that are legally binding, and these terms are perhaps the most important part of the contract, which means that the line that one of the following terms is included in should always be given special attention. This article will cover the basic terms that are used often in contracts that you will encounter.

Acceptance – Acceptance is the agreement to any terms listed in the contract. Until acceptance has been given, any terms in the contract can be taken back.

Conditions – Conditions of a contract are the basic terms of a contract that will be agreed to. When conditions are given, the individual signing the contract will read the conditions and either accept them or deny them.

Exemption Clauses– Exemption Clauses are terms of a contract that protect the party from liability in the terms of specified outcomes that may happen. Exemption Clauses are often included in a contract in order to ensure that the individual signing the contract cannot place blame for any negative outcome on the party writing the clauses.

Express Terms – Express Terms are the terms and conditions that are specifically stated in the contract.

Jurisdiction – Jurisdiction usually states the state or country in which the legal laws will be placed on the terms of the contract.

Liability – Liability is defined as the legal obligation of a party to cover any damages or blame that happens during the period in which the contract is effective.

Subject to Contract – Usually, this term will be used by any parties who are involved in the writing and signing of a contract. This term means that the discussion that is currently being held does not concern the overall acceptance of a contract.

Void – A contract becomes void when the individual or party who has accepted the terms of the contract can no longer abide by the terms listed in the contract.

Warranty – Warranties are defined as promises that are laid out in a contract, but are not on the same level as conditions. When a warranty is given, the party creating the contract is liable for damages to the individual or item listed in the contract.

What is a Good Credit Score?

What is a Good Credit Score?

You may not fully understand your credit score. When trying to get a loan, you may think, “What is a Good Credit Score?” You want to know what type of score you need to qualify for loans. You want to make sure that you are on the right track or that you know when there is a problem. If you do not know what a good credit score is, though, you cannot do this. Thankfully, it is not that hard to understand. While there are several sources for a credit score, it is all easy to understand and is quite similar.

There are several sources for a credit score, as mentioned above. One source is not the same as another source. A lender will look at these scores to determine where you stand. An important part of these scores is that their range differs, too, so the lenders are not looking for a single specific number. They all start from the low hundreds and go up to the high hundreds, but the exact starting point and ending point changes. Since it changes, what makes a good score or the line drawn for a good score is not the same for all of them.

What makes a good score is not the same for all lenders, either. Looking at a single score, the line drawn will change from lender to lender. Some have higher standards or expectations while others are more lenient when looking at credit scores. A 700 may be the minimum score required for one lender, but 600 or 650 may be the minimum for others. Since there are so many differences between lenders, you should not aim for a single number. You should attempt to make your score as good as possible so that you can gain from a high credit score. By aiming for as high of a credit score as possible, you can try to qualify for all lenders.

When thinking, “What is a Good Credit Score?” there is not a lot to consider. A good credit score is a high score. As long as the number is as high up there as possible, you will have a good score. The line drawn and the minimum and maximum scores change, but there is one constant: You should aim high. If you already have a good score, try to improve it and keep up the good work. If not, work on improving it so that your score can actually benefit you.

Does a Car Loan Help My Credit?

Does a Car Loan Help My Credit?

You would have probably heard about how a car loan can actually help you in increasing your credit history. But, you must be wondering, ‘Does a car loan help my credit?’ Well, we will try to provide an answer for this question below. Yes, if you are trying to improve the credit health of yours, after facing a bankruptcy, or are just trying to get started as a borrower, taking car loans, and repayment of these loans can help in building up your credit score. Well, we give some details regarding the car credit, and how these are helpful:

Does a Car Loan Help My Credit? – Reasons

    • Auto loans are paid back in instalments. When the lenders and the credit bureaus check the credit history of a person, they like to see a good mix of revolving credit and instalment loans. The revolving loans include the home equity loans, and the credit cards. And, the instalment loans include the auto loans, mortgages, and the student loans. Auto loans is one of the easiest kind of loans, and you will be eligible for a good credit history.
    • Refinancing of auto loans is easy. If you are a borrower without credit history, you will have to pay the premium for the car loan. And, the interest rate could be high, too. But, after you make the payments on time, for about one or two years, you would be able to refinance the car loan at a lower rate of interest.
    • Flexible car loan repayments: Early payment of loans might invite penalties, but other than that, the car loan payments are quite flexible. And, if the monthly instalment for the car is low, you can also plan to make double payments, or extra payments, whenever you feel that you have the liquidity. When you are able to make the payments faster, it can reduce your interest burden, and can also help in boosting the credit score.

    These were some of the reasons for taking up a car loan. Hope these answers were satisfactory, and helped you in finding the answers for ‘Does a car loan help my credit?’ Taking a car loan is definitely a good and easy way for boosting the credit history. It is not only easy, but is also quite flexible and affordable. You can drive your way to a good credit history, by purchasing a car with car loans.

How to Build Good Car Credit

How to Build Good Car Credit?

While most of us have a credit card with us, it is usually not easy to get hold of the first credit card. There are lots of things, which are checked by the credit card company, before they issue an unsecured credit card. Also, if you wish to purchase anything in life, you need to also have a good credit. Having a good credit history can make you eligible for all kinds of loans, like housing loans, car loans, and other kinds of loans. So, how does one build a good credit history? How to build good car credit? These are some of the questions, for which you will find answers over here.

Want to Know How to Build Good Car Credit?

There are some ways by which you can build a good car credit. And, that is by not paying the full money in cash. Well, if you are planning to purchase a car, you can use the option of dealer financing for purchasing the vehicle. Once you take the dealer financing, you can prepay the complete loan, after just one monthly instalment. Are you wondering how this will help you? Well, you will be paying minimal interest, and you would be establishing a good credit history, by making the payment on time. In fact, some people end up getting better deals on their cars, because the dealers give a lower price when they help you in financing the loans. So, you would actually be making a good profit.

Yes, this is one of the best ways for improving the car credit. And, with the help of this credit history, you would be able to get a credit card issues on your name too. But, once you have the credit card, you should use it in a responsible manner. Sometimes, the credit score is calculated on the basis of the time period, for which the accounts are open. So, it is always useful to have the credit card account kept open. This will help you in achieving the high credit score. And, of course, you should pay the bills on time, and in full. But, remember that you should not go overboard with all these credit cards.

Hope you got your answer for “how to build good car credit”. You can use these options, and improve the car credit, which will be useful for you in purchasing new cars, and also in other things.

What is a Credit Report?

What is a Credit Report?

Like most people, you might ask yourself, “What is a Credit Report?” If you are trying to purchase a vehicle, you probably heard about a credit report at some point. At most dealerships, your credit report comes into play when making such large purchases. Since it is such a large part of your life, you should know what it is all about and what you can do to improve it. Knowing this will help you to take control of your finances.

A credit report is a report of your credit history and credit activity. It will tell people about activity related to your credit, such as things that have gone unpaid. If it is connected to your credit, it is on your credit report. This is important for lenders since they deal directly with money. They will look at a credit report to determine your trustworthiness. If your credit does not look good to them, they may not want to lend you any money. For vehicles, this means that you cannot receive any financing. With traditional lenders, there is no way around this when you have bad credit.

There is less chance of approval for vehicles, homes, and other major expenses if you have poor credit. The major lenders will not want to give you money if they feel you cannot pay it back. To change this situation, you will have to begin building your credit. Since there are three bureaus, you must look at each of them. One good idea is to go to a location that does not base your approval on  your credit but still gives you access to major purchases. This will help you to get what you want, such as a vehicle, without you having to worry about your credit report. With regular payments, and if the company reports to the credit bureaus, you can also see your credit improve.

Next time you find yourself wondering, “What is a Credit Report?” just remember your credit. Anything connected to your credit history is part of your credit. The better your credit history, the better your credit report and score will be. A good credit score will help you to finance many of the larger expenses that you need.

If you do have bad credit, read this to get ideas on how to rebuild your credit.

Used Cars & Trucks in Utah: Makes and Models

Resources:

Used Cars & Trucks in Utah
Can I get a Car Loan with Bad Credit?
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Acura
Audi
Buick
Cadillac
Chevrolet
Chrysler
Dodge
Ford
GMC
Honda
Hyundai
Infiniti
Jeep
Kia
Land Rover
Lexus
Lincoln
Mazda
Mercury
Nissan
Pontiac
Saab
Saturn
Subaru
Suzuki
Toyota
Volkswagen


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No information contained herein can be relied upon as legal, tax or any other type of professional advice. It is for general informational purposes only and does not apply to your particular set of circumstances.
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