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Four Tips to Improve Your Finances

Four Tips to Improve Your Finances

Most people would want to enhance their finances and live a luxurious life so they seek steps on how they can boost their finances, cut down their expenses and increase their bank balance. One of the best ways to increase your bank balance and income is to have financial investments. In terms of improving your finances, here are a few tips.

First, pay all your credit bills and pay back your debts. Once an outstanding debt is disclosed on your credit report, this will definitely have a negative impact on your credit score. That’s why it is recommended to always pay your debts on time and you can even decrease your credit card limits and expenses so that your debts will also decrease.

Second, pay your outstanding credit bill as soon as possible. Contrary to belief, delayed credit payment of a bill is actually recorded in your credit report every month, together with the number of days that you missed your due date. To avoid this, make sure to always pay your bills on time because this will work against the negative effects of delayed payments and helps your credit score to increase.

Third, you should not only aim to get a high credit score but also to maintain it once you achieve it. Again, make on-time payments so that you will have a good credit score, and in order to maintain it, make sure to pay in full as well. Moreover, if you pay your bills at once, this will also enhance your score much further.

Fourth, do not throw away your old accounts because this will be reflected in your credit score as well. The longer the duration of your credit background, the higher your score will be. In addition, be more cautious in opening new accounts as this can decrease your credit score, especially if they are too much.

Low Interest Rates are Not Good for the Future

Low Interest Rates are Not Good for the Future

If you are baffled with just how exactly interest rates relate with bonds and loans then you should not fret, MBAs are just as on the dark as you are in the matter.

The MBA are baffled right now with the issues in installment loan, and most especially the role of interest rates in the lives of the people and the economy. Interest rates have fallen so low during the recession that many individuals had failed to see how largely the country has fallen into debt.

It is a rule of thumb that lower interest rates mean cheaper loans. However, this requires knowledge from consumers about the operation of financial markets in order that they could comprehend the hazards of increasing national debt to the future of the economy of the country.

For example, when the government has more expenses compared to its revenues, it has to borrow money to balance out the loss. In order to do this, it would sell its bonds in to other financial intermediaries. When someone buys the bonds, the money earned would be now part of the U.S. Treasury and is used to pay for the debt of the government.

When economy is bullish like the recent situation in the US today, the savings would be higher compared to the investment opportunities in the financial market. The only positive news about the borrowing cost of the nation is that since the recession in 2008, there is a deficit of over $ 5 trillion and almost all of it will be soon be part of the Treasury bond of private individuals and banks in the United States and all around the world.

During the period of election, this problem will be left with economists, however it will remain as a hidden information from the public.

Increase Credit Score by Borrowing Money

Increase Credit Score by Borrowing Money

The majority of borrowers usually think that they can increase their credit score by paying off their debt or getting rid of their loans and credit cards. While paying off your debt is a good practice, the latter is not.

Without a doubt, paying off your debt improves your credit score. Lenders want to make sure that your debt-to-income ratio is low and they do not prefer maxed-out credit cards.

Lenders decide whether or not to give you a loan by considering your ability to fully pay the principal plus interest on time. To do this, they check your credit report since it reflects how you have previously managed loans.

Although you have a debt, you must handle it responsibly so that you can have a good credit report and a high credit score. First, you must be aware of the two types of loans. The first type is an installment loan and the second type is a revolving loan.

An installment loan is a loan that is given to you for only once and you pay it back a later time. After paying off the loan, you cannot avail of it again. For instance, auto and mortgage loan are installment loans.

On the other hand, a revolving loan is a loan that can be availed for a number of times, for instance, a credit card. You can borrow money up to a certain credit limit, pay it off, and borrow once again. For instance, your credit card is a revolving loan.

The second thing to be aware of is that lenders prefer that you have both types of loans in your credit report because it shows your responsibility in borrowing money and your ability to handle debt.

Therefore, in order to keep a high credit score, you must borrow money and pay them back responsibly, particularly, on time and in full.

More Mortgages Because of Low Interest Rates

More Mortgages Because of Low Interest Rates

There are an increasing number of people getting new mortgages because of the current low interest rates in the market. Moreover, this is a result of the desire of homeowners to lessen their payments and shorten the term of their loans.

The Mortgage Bankers Association expects almost $20 billion increase in new mortgages for the current year, with the majority of them refinancings.

According to Mike Fratantoni, the vice president of research of MBA, there has been an appearance of situations that could cause rates to drop and refinancings to increase, particularly because of Europe’s market crisis.

The MBA forecasted that interest rates will be lower this year because of the decreasing debt situation in some places of Europe and slow global economic growth.

Based on a Thursday report from Freddie Mac, the government-owned mortgage buyer, there was a slight increase in interest rates this week, particularly, the average rate for a 30-year loan was 3.71 percent, which is an increase from the 3.67 percent in the previous week.

According to Derrick Wynkoop, the president of Walden Savings Bank, there has been a 60 percent increase in closed loans in the first five months of 2012 compared to the same time one year earlier. Moreover, almost 55 percent are refinancings and 45 percent are new purchases.

Robert Michaud, senior vice president of Mid-Hudson Valley Federal Credit Union, said that they have encountered an extremely high demand for refinancings.

There is also an increase in single-family home sales, but still less than those in the early part of the decade. According to Wynkoop, savings for deposits and closing costs have been eroded because of unemployment and underemployment. Moreover, potential buyers have been hesitating because of strict standards to become eligible for a loan.

Michaud said that there have been more denials compared to the past and the majority of these denials are because of collateral, income qualifications or credit.

How to Rent an Apartment with Poor Credit

How to Rent an Apartment with Poor Credit

Besides difficulty making purchases, having a poor credit can also mean that you will have difficulty renting an apartment. On the positive note, there are still ways that you can have a nice apartment and the following are some tips on how to do so with poor credit.

First, get a copy of your credit rating and examine it. If there are any problems in your credit, then try solving them. For instance, pay off previous debts to improve your credit score.

Second, consider getting a cosigner, someone you know, a family member or a friend with good credit score, who will be held responsible for your liabilities in case you don’t pay. This can help convince the landlord that your rent will be paid. Although cosigning is avoided as much as possible, there are a lot of landlords who are more comfortable renting to people with poor credit, as long as there is a cosigner with good credit.

Third, pay a huge amount as deposit. Paying more than the average deposit can make the landlord feel more confident about renting to you. Besides earning back their losses, landlords will feel that you are sincere and will be more difficult for you to leave.

Fourth, find an apartment that does not require a credit check. Unlike bigger corporate apartments, there are small-time landlords that do not perform credit checks because of the additional expenses and hassle for them. Even though it will be harder for you to find an apartment that don’t perform credit checks, there are still good apartments among rental properties.

Fifth, don’t only think of the apartment you’re getting right now but also having a long-term plan of improving your credit. By doing so, it will not only allow you to get apartments easier, you will also be able to get auto loans and mortgages. One of the benefits of improving your credit is there are landlords who require smaller deposits from those with good credit.

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