credit card article rewrites

f you have a bad credit score, your chances of getting a loan, even a peer-to-peer one is quite low as compared to someone with a higher credit score. A lot of lending companies have raised the bar in credit scores to be able to qualify for a loan because of the increasing risk of borrowers with bad credit to them. In fact, statistics have shown that a third of those who apply for a peer to peer loan default in their payments within the first year. And for those lending companies, they would rather lose the income that would generate from loan interests instead of losing more money when they grant the loan to someone with a risky credit standing.
Having bad or very low credit ratings can be a hindrance especially if you plan to apply for a loan. Furthermore, applying for a loan even with bad credit can decrease your credit score even more. Therefore, you need to improve your credit score first before you go apply for that loan. And this can be done in several ways:

First, settle first outstanding loans by bringing them up-to-date. Some creditors may even allow a big discount on the loan. This will help them determine your ability to pay and how responsible you are in paying. You can also negotiate on payment terms, sometimes even getting a big discount if you pay the loan in full. Put all discussed conditions in writing for your reference.
After settling your accounts, you can check on the status of your credit report, if there are any improvements. There are sites that offer free credit reports as well as giving you some advice on how to handle and improve on your credit ratings. With this information, you can decide on what else to do to bring up your credit score and be qualified for a loan.
If your credit score reaches a level satisfactory for a peer-to-peer loan, then you may qualify for one once you apply. Even if you have a bad credit history, the effort that you put into improving your credit status can be seen by the increased credit score. This kind of attitude towards your credit can be a reassurance to lenders that you are responsible enough for the loans that you get.
If your credit ratings are in bad shape and you are in need of a loan, you unfortunately cannot get one, except from a peer. The best way to do it is to shape up your credit score so that it meets the levels that can qualify you for a loan.

Real estate has suffered greatly when the economy took a nose dive a few years back. Fortunately, it has been seen to be perking up a little at a time, with the sales of houses going up because of the low prices and mortgage interests. Because of the lowered rates, more people can now afford to buy a house or get a mortgage on it. But before you get yourself a mortgage, here are 10 facts to know on mortgages in 2010.

1. Strict requirements

Because of the bad and overdue loans that cropped up due to the economic crises, lenders are now stricter on the requirements for a mortgage and who to grant it to. They do not want to increase their risk of losing money again from bad loans. Until they can recover from their losses, they may not lower their requirements yet for 2010.

2. Down payment Prerequisite

Together with stricter requirements is the need for a bigger down payment for a mortgage loan, reaching up to 20% of the total mortgage price. A higher down payment means that you can get more competitive interest rates. However, those with support from the Federal Housing Administration may make a down payment of as low as 3.5%, although it depends on who is applying for the loan, the market, and the type of property being mortgaged. If an increase in the market values of real estate properties is seen to occur, then there may be a favorable change in the percentage of down payments needed.
3. Competitive credit ratings

If your credit scores are high, then you are also able to get a good deal in mortgage rates and down payments. A FICO credit score of 730 is seen to be the base level in order to get the lowest interest rates. To find out what your credit score is, you may request a copy of it in a lot of the websites dedicated to credit reports. Every year, each person is entitled to get a free copy of their credit report, based on the Fair and Accurate Credit Transactions Act. Through this, you may be able to review and check for any inaccuracies in your credit report that can significantly bring it down several notches. In fact, regular checking of one’s credit report is highly encouraged, especially if there are plans of getting a mortgage loan.
4. Federal Housing Agency (FHA)

The FHA is an agency that aims to help people with bad credit be given a mortgage loan, especially in times when the requirements are strict and they do not qualify for one using private mortgage companies. It gives them an option to consider while building up their credit ratings or saving for a bigger down payment. However, due to this leniency in granting mortgages, the loans granted by the FHA usually have other charges attached to it such as an insurance premium. Interest rates are also a bit higher in loans with the FHA.
5. FHA selectivity

Because of the lower down payments and more lenient requirements, the FHA has experienced an upsurge in mortgage applications. This has left the FHA in a critical financial bind, with its capital reserves below the appointed ratio. Because of this, the FHA has now added some selective measures on those applying for a mortgage, which can effectively screen the loan applicants. This includes a slight increase in the FICO score requirement, higher insurance premiums, and a higher down payment. These measures will enable them to help other people in their loans, without the fear of emptying out their reserves.

6. Buying of assets

The Federal Reserve has plans to buy securities from credit companies to be able to retain a low mortgage interest rate. However, if this support from the FHA would discontinue, it may bring up those interest rates once again.
7. On jumbo mortgages

The interest rates on loans on the more expensive properties are hitting low levels, making it more attractive to those who would like to invest in these jumbo mortgages. However, because of the higher amounts of these jumbo mortgages, the requirements for these loans are quite stringent. They usually go to those who have the ability to produce a higher down payment, with excellent credit ratings.

8. Increasing rates for federal funds

One of the avenues that the government used to boost the flailing economy is to slash the rates for federal funds to even as low as 0%. And because of the still bad economic conditions, these rates may still be at the low numbers for an extended period of time. In case these rates do increase, its effect on fixed mortgage rates is just minimal, and with the adjustable mortgage rates and home equities the most affected.
9. Economic recovery

Once a significant recovery is seen in the economy of the US, this can bring up the mortgage rates, due to the higher credit demand. Furthermore, this would encourage more people to invest, using the assets they have frozen in safer investments to more risky investments, but with higher returns. A better US economy means higher mortgage interest rates.

10. The future of major finance companies Fannie Mae and Freddie Mac

The finance companies Fannie Mae and Freddie Mac have played a significant role in the economy by buying housing loans from banking institutions that have the need to liquidate their assets. Unfortunately, they are also the ones majorly hit during the economic crisis that the government found the need to help them out by taking over the loans that they have. Now that the economy is recovering, plans for these two companies are being made, although still unclear if they will remain or converted to other services. One thing is clear though, it would definitely have a major impact on the mortgage rates once these changes push through.

Everyone dreams of a life without debts. Who would want to live every day of their lives paying debts? And the sad part of it is that even with making the minimum payments, they all go towards the high interest rates, without making even a small dent on the principal debt. You end up drowning in debts, high interest rates, and outstanding loans. If you see yourself like this, then it is time that you do something about it before debts take over your life.
1. Have full knowledge and acceptance of your present condition

You know that you have debts but you have no idea how much it really is. But to be able to get out of debt, you need to know the actual amount. This first step is the first hurdle to overcome. Once you have computed how much you really owe, and accepted this amount, then you can start. Do not use your credit cards anymore. Using it will just increase your debts. The decision to stop takes a lot of control but once the credit card addiction is overcome, then the next steps would be a lot easier to accomplish.
2. Make an outline of what you plan to do about the debt

A debt will not go away on its own. But you cannot just put all of your income towards debt payment because you still have your basic needs to support. There are actually two ways to approach debt payment. You can either first pay off the debt with the highest interest rate or first pay off the biggest debt amount.

On which approach to use to greatly reduce your debt depends on the type of debt you have and how you want to deal with it. It also needs a bit of common sense to know which one to choose. Paying off a high interest debt is definitely better than paying off a debt balance but with no interest.
It also helps to write down what you plan to do such as how much you plan to devote for debt payments, how much your savings will be, and how can you achieve your financial goals. This is to ensure that you can visualize what you want to do and you can follow it concretely.

3. Put aside a certain amount for savings

Why do you need to have savings when you want to get out of debt? Can’t the savings wait until all debts are settled? The general tendency of a person in debt is to direct all income towards debt payment. However, when an emergency occurs, they end up looking for credit once again, adding another debt to their list. With a bit of savings set aside, these emergencies can be taken care of, without missing any payment or getting a new loan.
So how do you do it? After making your minimum payments, put aside half of the extra money to pay the principal debt and the other half for savings. And to make sure that there is extra money to put away, look for other avenues to earn money such as getting additional work, selling things you don’t need in a garage sale, renting out an extra room and even asking for a raise from your boss. In this way, there is always something that goes towards reducing your debt as well as for savings.

4. Don’t settle for paying only the minimum amount.

Paying only the minimum required amount on debts will just cover the interests on your debts, and a very minimal portion of that debt. At this rate, you will still be paying for your debts even after your retirement. If you can afford to do so, then try to put in more than the minimum amount prescribed so that it can make a bigger dent on the debt balance. Then find ways to augment your income so you can pay a bigger monthly payment on your loans.

5. Negotiate for better payment terms.

When your payment track record has been quite regular and prompt, you can request for discounts and lowered rates for your loan. A lot of creditors are willing to negotiate payment terms since they would rather have the loan paid instead of writing it off as a loss. Depending on the debt type, different options are available. You may be allowed to exchange a few hours of work to be able to remove a large chunk out of their student loan. Mortgages too can be modified to reflect the missed payments rescheduled after the end of the term. Or, having a quick sale of the house instead of going into foreclosure proceedings can also help. Some suggest scouting for other credit companies who offer competitive rates and citing this as an example to bring down your own interest rates.
6. Ask for the help of a good credit counselor.

If handling this debt is not your cup of tea, you may want to delegate this task to someone else, like a credit counselor. With a credit counselor, you can negotiate on the terms of your account, payment terms that you can easily manage.
With a credit counselor, you are able to organize your priorities and budget them accordingly. They can help you plan your payments and even recommend a good program on debt management.

However, be cautious on which credit counselor to choose since there are a lot of credit counselors in the market who are just after the commission that they get from it, without any concern on what happens to their clients. Check with the Better Business Bureau on the status of the said credit counselor. You may also ask the bank on a list of accredited credit counselors.
If you think that your debt is something that you can barely handle, get a credit counselor instead of waiting until it is too late and need a bankruptcy lawyer instead.

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Rewrite 14
Owning a credit card means that you have to make monthly payments for the purchases you make, as well as annual fees, and other fees that add on to the expense of your credit card. So if you do not use your credit card anymore, then to lessen the hassle of juggling monthly fees, you may think that you might as well close it. Unfortunately, doing this can hurt your credit ratings and bring it down several points.

The credit score is computed based on several factors, including your credit history and credit utilization. Your credit history is based on the number of years you have your credit card. The longer you have it, the higher your credit score will be. Furthermore, credit utilization is the ratio between the total debt balance and the total available credit. If you close your credit card, the total available credit goes down. The total debt balance remains the same but its ratio with the total available credit goes up, which will consequently lower your credit score.

Keeping your credit cards active can contribute greatly to having an excellent credit standing. Keeping a credit card active is to continue using it to purchase small affordable things monthly that you pay in full and promptly each month. This creates an excellent credit history for you and you can also avoid other charges that come with a credit card. However, if you are required to pay fees on the credit card, even if it is not in use, then you may be better off just closing it instead of paying those fees, which is just like giving away your hard earned money.

To get competitive rates for your credit card, you need to negotiate with the lenders for it. You can either get a lower rate or get freebies instead. Keep the watch out for promotions that may come your way since they can give you better deals on your credit cards. If you are in good credit standing with them, then they will most likely listen to what you have to say since they do not want to lose you as their client.

Avoid applying for new credit cards. A lot of people apply for a new credit card thinking to increase total credit balance as well as to help pay other high interest loans, which will bring up their credit standings. However, this has the opposite effect, especially if changes are made to the payment terms, interests and fees of the credit card. If you truly need to get one, choose a credit card that charges low interest rates and does not have an annual fee. But if it’s just for a rewards program, or to fulfill your current cravings, then you might be better off abstaining from it.

Instead of closing your credit cards, unless of course you have too many to start with, you have to concentrate instead on giving your credit ratings a boost. Be prompt and mindful of your monthly payments so that you will not end up with additional fees. Little by little, you will notice significant changes in your credit scores. And this will open more doors of opportunities for you with regards to your finances, and achieve financial independence.
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Rewrite 15
The decline in the economy has most credit companies scrambling to increase their fees and interest rates on their credit cards, leaving the consumer with the problem of catching up with them. Because of this, a lot of debts have escalated because of wrong moves on these very expensive plastic cards. To avoid becoming a statistic, here are common credit card mistakes that have cost consumers a lot financially and sometimes, even emotionally.
Having too many credit cards
A lot of people think that having more is better. However in this case, having too much credit cards can be detrimental to your credit ratings. Having just one credit card is found to be best since you can easily control your purchases and monitor monthly payments. But consumers tend to juggle a lot more credit cards, sometimes about ten at a time that they cannot control what they spend. Furthermore, they couldn’t keep track of their monthly payments, leading to more fees and charges.

Using up the maximum credit card balance
Because you don’t have to dole out cash, it is easier to make purchases, and definitely easier to spend as much as you could using your credit card. And this can be detrimental to your credit ratings especially since it increases the credit utilization factor of your credit score.

Using a credit card for cash advances
Cash advances from your credit card should only be used for emergency purposes because of its high interest charges that start from the time the cash is dispensed.
Making late payments or no payments at all
A major factor of a credit score is a person’s ability to settle monthly payments on or before its due date. Every time tardiness occurs in payment, it brings down a credit score significantly. Frequent tardiness in payments may be a sign of losing control in spending, which can lead to more serious problems.

Going on debt settlement
Debt settlement is one of the avenues that a person takes when his finances are in dire straits and they already have nothing to lose because of the condition of their credit scores. However, if there is no significant damage yet on your credit score, steer clear of debt settlement and find other ways to handle your out-of-control finances.

Other credit card errors

Even the little things such as applying for a new credit card just to avail of reward points or to transfer your existing credit card balances to can somehow affect your credit standing, however minor it can be. If your credit score is already on the brink of being within dangerously low limits, then it would be best to look for other avenues to keep it afloat.
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Rewrite 16
One thing that credit card holders cannot control with regards to their credit cards is its ever-increasing interest rates. Even if you are in good credit standing, you are not exempt from these increasing interest rates, especially as the CARD Act is being implemented. This CARD Act aims to control the interest rates dictated by credit card companies, making it impossible for them to raise it just on a whim.

Increasing credit card interest charges

Legally speaking, a credit card company can bring about changes in the terms of your credit card account, including higher interest rates and lower credit limits, as long as you are notified of these changes electronically or through mail. However, when payments have not been made after the due date, they may increase the rates on these late payments, even without prior advice from them to you.


No exemption from interest rate increases

When a credit card company increases their interest rates, everyone is affected, more so those with outstanding late payments. They sometimes offer options that can result in a 50% decrease in interest, just as long as a balance transfer is made from other credit cards, which often comes with other hidden charges. At first glance, this may be a good offer to consider. However, if the rates of your other cards are lower that what they offer, why will you still transfer your balance? If you pay your credit card purchases in full every month, then there is no need for you to follow through on this option since you do not pay for interest charges on your purchases anyway.

Browse through your mail
Credit card companies often send notifications of interest rate increases via mail. However, since it usually looks quite similar to junk mail, people tend to ignore it. So when the credit card bills come, and they see the increase in interest rates, they cannot complain that they don’t know about it because they weren’t notified about it. It will also be too late for them to opt out from the increase.

Opting out of interest rate increases

You have the right to opt out of an increase in interest rates by credit card companies, wherein you must advise them within a specified period of time of your intent to do so. Opting out of these increases means that you either pay the full balance off to enjoy the same rate you have or you can settle your balance based on your present interest rate, but will not be able to use the card anymore, which will end on its expiration date.
What’s next?
Opting out is usually applicable to those people with a large debt balance with their credit cards since an increase in interest rate means higher monthly payments. But if you do not incur any debt on your cards, then it would be a bit useless to opt out. You can just close this card or keep it, especially if it does not have any annual fees, just in case you may need it for future transactions.

Haggle and negotiate for a better deal

Before, having an excellent credit history can get you better deals with regards to your interest rates. Credit card companies are often willing to bring down interest rates especially if they earn a lot from your purchases and cannot afford to lose you. Nowadays, it may only hold true for some companies because of the sudden decline in the economy which contributed much on their losses. Other companies stand firm with regards to the increase in their interest rates because they need the cash flow to augment their losses.
Apply for a new credit card

If negotiating and haggling won’t work, even with your excellent credit history, then your final option may be to apply for a new credit card. Sometimes, this may be your best option since credit card companies welcome clients with a good credit history, offering them competitive interest rates, which are definitely lower than what your present card can give.


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Rewrite 17
Going on a diet means taking control of your weight and your life. The same applies to your finances. Spending is like eating; you do it to enjoy the moment; when it gets out of hand, you suffer the consequences afterwards. To go back to your original state, you have to go on a diet on both spending and eating. To diet is not to starve yourself, then bingeing at a weak moment. It is more of taking charge of yourself, making wise decisions on what you eat and what you spend. Sooner or later, these healthy practices become healthy habits for both your body and your finances.
If you find yourself with bad credit ratings, a debt diet may be right for you. A debt diet consists of several steps that can give you control over your finances and boost up your credit ratings.

Know the exact amount of your debt and its effect on your finances.

Make a list of all your credit cards, loans, and other debts that you have. Check on what your present credit score is and review your credit report for errors and inaccuracies. You may get a copy of your credit report from sites such as myFICO, CreditKarma, Quizzle, and AnnualCreditReport.com. Some give out credit reports for free, and some at a discounted price.
After making a list, organize your debts according to priority. Basic necessities should be at the top of the list, then taxes, then all other debts that need to be paid.
Monitor what spend and divert extra funds for debt payment.

Every time you spend, list it down. Check your list on items that you can give up, even temporarily, just to be able to save a little bit more to pay debts and other more necessary items.

Make the most out of your credit cards.

Do not settle with making minimum monthly payments. Add a little extra on each payment to speed up the settlement of your debts.

Negotiate with your credit card company on lowering your interest rates. If they won’t do it, then look for one that can.

Use the right kind of card based on what you need. Be on the lookout for cards with 0% interests and offer balance transfers which can help greatly in reducing your debt, especially if you can settle your balance within the time given for those low rates. Look for low interest credit cards, especially if you do not pay in full. However, if you do, then the best card for you is one that gives grand rewards for each purchase.
Be meticulous with details on your credit card account before you settle and apply for a new one. Always check the fine print for rules that credit card companies don’t usually mention until asked.

Analyze and strategize on the best and most efficient way of handling your monthly payments. You may opt to settle based on interest rate or size of debt balance.
Stop making unnecessary purchases. You know perfectly what they are.

Plan your purchases for each month.

A purchase or expense plan per month can help you monitor where your money goes. Through this, you can determine where to cut corners when other sudden expenses crop up and where else you can get extra cash to add to debt payments.
Increase your income.

If after all those listings and planning, you find yourself still at a loss on where to get extra cash from your current work, you can try other money-making avenues. You can start a small business, do freelance work, or get another job. You can also gather all your stuff that you barely used during the year and sell it via eBay or at a garage sale.

Increase credit ratings by paying off debts.

When your debt balance decreases, your credit score increases. Putting a bigger percentage of your salary towards debt payment, while avoiding making any unnecessary purchases, can lessen the waiting time until these debts are fully paid.
Know and understand your spending habits.

There are many reasons why people love to spend and tend to lose control over it. Understanding the reason why you do it can help a great deal in controlling your impulsive spending behavior. Through this, you can increase your savings, and eventually learn to invest to boost your income as well.

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Rewrite 18
Everyone knows that a credit report plays an important role in the world of finances. It is with this report that people are either granted or denied a chance to make their dreams real. A credit report is basically a summary of the financial activities of a person. And if you are concerned about your credit status, then you would be constantly requesting for a copy of your credit report.
To request for a copy of your credit report requires pertinent information as well as the cash to pay for it. There are some sites that propose to give out the credit report of a person for free, although the catch is that once they sign up to get their credit report, they also unknowingly sign up to use the site’s credit monitoring services, which are quite expensive.
The FTC is looking into these sites that have these types of practices. Credit monitoring services is experiencing a boost in sales because of the awareness of consumers on their credit reports and how to keep it within limits. However, they seem to be missing the point of why are consumers required to pay for a report that they themselves have created whenever they need to know the status of their finances.

Those who collect the financial information of people are paid to do so by lending companies for them to know a person’s financial status. Therefore, why is it that the consumers also need to pay for a peek of their credit reports? Those who collect the data receive compensation to get it anyway. Why do they need to be paid twice for something that isn’t even theirs? Isn’t it just right that the consumer be given free access to their reports, whenever they want to?

A person’s credit score reflects the person’s financial activities. Every little detail that pertains to finances is enumerated in the credit report. Then isn’t it just proper that the consumer be free to check on the status of their credit report.