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Archive for March, 2010

Home Purchasing Your Credit And Unpaid Bills Oh My!

Many people find themselves in the situation where they have a good job maybe even a decent down payment but their credit is shall we say less than stellar. The problem with getting a decent rate on a mortgage is that your credit rating is going to determine whether financial institutions are going to fall all over themselves to get your business or in a financial sense look at you like you’re something unpleasant and offer you a mortgage with a ghastly amount of interest attached.

However you can avoid some of this unpleasantness by improving your credit score. Credit scores are something like rocket science. Everybody knows about them but few people know exactly how they work and how one can manipulate them to one’s own advantage.

The first thing is to pull your credit report from the three agencies that make it available. Why all three? Because different agencies can have different discrepancies that are keeping your score low. If you challenge them and get them erased it can go a long way to make your overall score head skyward.

If you pull your credit report once every year you will have a good idea of where you are and how far you have to go. Don’t pull credit too often; frequent credit reports are a real scoreplummeter. If anything looks strange or wrong to you give the credit agency a call. It can’t hurt and it may help you get your credit back on track.

The most obvious part about improving your credit is paying your unpaid bills. You know how a lot of diets boil down to “eat less and exercise”? It’s the same with credit. Your score can improve simply because you don’t have an old phone or credit card bill sticking out like an inflamed pore from your credit history.

Try the snowball method. Pay the minimum amount on all bills. Now take your smallest bill. Add all the extra money you can to pay it off sooner. Once you pay that bill add all of the money you were paying on it to the next smallest bill. By the time you discharge the debts on your smaller outstanding bills you’ll be amazed at how much the debt on your large ones melts when you have the money you were paying on the small ones to take care of them. Plus you can pay off smaller bills before larger ones and the psychological rush you get when a slip of paper marked “Paid in Full” arrives in your mailbox.

Of course the snowball or any other strategy doesn’t work when you whip out your credit card after taking all of .002387 seconds to think about impulse purchases. Do you have a house that seems smaller than it really is due to all the useless stuff? Get rid of the useless stuff and stop buying more. Most people have several vices that they can limit or stop until debt is paid.

While you’re doing this calling creditors about any outstanding debts might be a good idea. Most creditors are going to want to help you pay them back it makes no sense for them not to accept *some* money instead of you walking away from the debt.

Mortgage lenders may require that you settle old debts before they give you a loan in which case the faster you can pay these the faster you can qualify for a mortgage. If this is not the case be careful. There are times when paying off an old debt can actually drop your credit score due to the weird way FICO is constructed. Fortunately today FICO can now tell the difference between a “new” bad debt and an old debt that was paid off. However credit is still a shaky thing and it pays to get the details of the statute of limitations in your area.

In conclusion: Pay your debts don’t make new ones and research the implications of fiddling with your credit. Hello new mortgage!

About the writer:  

About the writer:  Jerry Clifford has received the prestigious 100 Club award for his success as a real estate agent in the Minneapolis real estate area. He is certified as an ePRO and prides himself on attention to detail. If you need help in your search for Plymouth Minnesota real estate visit JerryClifford.com.

Benefit Of Insurance With ELSS

Posted by Arnav On March 24 2009

The going has been tough for equityoriented schemes from the last one year. All these schemes are giving negative returns and it is very difficult to convince investors to make further investments in this area. EquityLinked Savings Schemes ELSS which are taxsaving schemes with a diversified nature are also facing a similar situation. In order to increase the effectiveness and appeal of the schemes among investors there has been a move towards offering additional facilities such as insurance. Several fund houses have started coupling insurance policy with their funds and hence this needs to be considered in terms of the actual benefits and the manner in which this will work for investors.

Nature of insurance

The first thing that an investor has to understand is that the insurance that is being offered is just an additional facility for him/her. This facility should not be considered as a means to complete the basic insurance requirement of the individual. This is because the amount of insurance available is far less and also the nature of the insurance might also not meet the requirement of the investor.

There are generally three main types of insurance that are actually offered along with the ELSS schemes. The first is the life insurance that is available in case of death of the individual whereby the dependants will get a specified amount from the insurance company. The second type of insurance is accident insurance where there is a payout for the investor and the dependants only when there is a death due to an accident and not in the normal course of events. The difference in both these types of insurance is that the latter might not be eligible for the investor to claim under several circumstances and due to this reason this is likely to be used sparingly.

The third type of insurance is a critical illness cover where several chronic illnesses like cancer would be covered for treatment for the individual. This insurance is also useful for those who do not have such a cover and might suffer from the specified illness.

Amount of insurance

The amount of the insurance that is being provided is also important and an investor should understand that higher the amount of insurance the better it is for him/her. In several cases the insurance cover is so low that this does not have much value for the investor. Bringing the nature and the amount of the insurance together will ensure that the individual investor is able to understand the real benefit of the insurance and the manner in which this can actually be useful for him/her.

Cost of insurance

The other part that is also important for an investor is the cost of the insurance. There is a cost that is involved due to the payment of the premium for the insurance that is taken for all the investors in the scheme. There has to be some payment of premium and the manner in which this will be paid is important for the investor.

There are some fund houses that actually charge the cost of the insurance to the expenses of the schemes making investors pay the cost out of their own pocket. The investors might not know it as this is not charged separately but will be adjusted in the net asset value of the scheme automatically so they pay it indirectly.

There is also another option that is often followed by the mutual fund asset management company and this is to pay the cost of the insurance themselves. Here the cost is not passed on to investors. This is a case where there is an additional benefit available for the investors because they are actually not paying for the insurance cover unlike the other case where they are indirectly paying the cost for the insurance being provided. This factor also has to be kept in mind while the entire insurance offer is being evaluated. However one important point is that the investment should not be bought just for the insurance but the insurance should be considered as an additional benefit.

About the writer:  Rupeetalk is the one stop solution for all personal finance products. We provide detailed analysis on all personal finance products in India.

Fundamentals Of Paying Your Debts

Okay you feel your debt is out of control and it is too late to say “I wish I had taken action sooner.” What do you do? First of all you don’t panic and you keep things as simple as possible. Secondly look to see just how bad it really is. Third decide which of 4 actions to take with your debts:

1. Ignore them.
2. Pay them.
3. Negotiate Them
4. Declare Bankruptcy.

This article will concentrate on the second action above Paying Your Debt. This action in turn also can be simplified using 3 options:

1. increase your income;
2. decrease your expenses;
3. some combination thereof.

KISS

It is that simple…not easy but simple. And if you keep things simple you can better think your way out of trouble. Adding complexities confusions anxieties and other non simple complications does not help. It is time for ACTION. So decide and GET THE JOB DONE.

To Increase Your Income

By increasing your income even by a little bit you can apply the extra money towards debt which in turn creates more working money to apply to still more debt. Consider some of the following options:

1. Sell something
2. Offer your services in lieu of cash i.e. offer to mow the lawn or fix up a place for a lower rent.
3. Get a temporary second job. If you already have one get another… this is WAR.
4. Ask for a raise
5. Get another loan… I add this very cautiously and almost include it below under Things NOT To Do. A new loans often seen as a way out of debt problem. Creditors love this scenario. And sometimes it is actually true. But I heavily caution against a new loan. Simply put you cannot “normally” borrow your way out of debt. All “borrowing” does is prolong the agony.

To Decrease Your Expenses

Here are some additional ideas:

1. What do you do when all of a sudden the month is just beginning and you have nothing left? Read Debt Priority Hierarchy of Debt. Its cold and its hard. But it’s fact.
2. Call your creditors and ask for lower interest or to skip a payment to catch up. Surprisingly this often works if you give a good enough reason for a creditor to do so.
3. Look over your last 6 months of check registers to find out where your money is going. Isolate those items that you can change in your life and make a plan of action to change lifestyles to save money.
4. Review 5 Proven Steps To Budget Motivation

Things NOT To Do

“When the going gets tough the tough get going” is an axiom that applies also to debt. But when the going gets tough it is not time to jump from the frying pan into the fire.

Here are some cautions and DO NOT’S

1. Some slick promoters would like you to believe the government can bail you out with a grant and are willing to sell you the information to find out how to do it. First of all the material is free and secondly it is not designed for this purpose.
2. Do not run out and grab the first debt counselor that happens by. The Truth About Traditional Debt Counseling explores the question who are the good guys and the bad guys in this potentially lucrative industry?

Readers will probably be interested to know Mike the author of this article also offers a free debt elimination minicourse via email. You can enroll at Debt Free In 7.5 Years.

About the writer:nbsp;nbsp;Mike has been an Internet Guide/Writer in the field of Credit/Debt Management for over 10 years. His site was awarded Best Of Net by Forbes Publication from 2000 to 2005 with site visitation doubling to over 500000 average views per month in the last year.
He has also offered debt elimination seminars to businesses and community colleges for the last 9 years and has written for several publications and has been interviewed on the radio a number of times.http://learncreditmanagement.com/ ” />http://learncreditmanagement.com/