Vital Financial Updates Credit – Is it good or bad?

Obama Signs Bill Forgiving All Student Loan Debt

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Americans who are under the financial strain of repaying student loan debt are nowoff the hook for their education costs. President Obama signeda new federal bill this weekreleasing any student who has accrued outstanding debt because of the high interest rates and outrageous balances caused by college loans.

Any student, past or present, who has taken loans from the federal government within the last 10 years to pay for higher education, will no longer be required to pay back those loans. Said President Obama. This forgiveness also is to be extended toany student currently enrolled in college, who may need financial assistance for the next several years as they finish their degrees.

The idea of student loan forgiveness has been in the news for several years now, as students are forced year-after-year to leave school due to crippling costs of a higher education in the US. With most students not able to afford any facet of college without loans, the government has given out nearly $1 trillion dollars to those seeking a form of higher education. Although certain costs of school are generally offset by private loans, grants, and scholarships, almost every student currently in a 2 or 4-year program has some existing loans with the US government.

Education is the single most important thing in my mind when it comes to furthering this great nation. Said Obama. I can think of no better way to help the young people, this next generation of thinkers and doers, than by helping them to stand on their feet more firmly, and to give them some hope that they can and will receive their degrees, and they can work towards a future for themselves and their families, and not just a future of paying back debt.

How to actually save more money

I heard something on the radio this morning that got me fired up. It was a segment about tips on how to save more money. What came was a predictable list of brew your own coffee, buy generic products, and bring your lunch to work!

I cant stand these lists. I think theyre dangerous, because the average Americans dismal financial state has little to do with coffee, name brands, or lunch. The people writing these articles mean well. But theyre the equivalent of telling a drowning man how to dry his clothes — advice that seems helpful but misses the bigger problem.

Most workers reading this article earn enough money to be saving a lot of it. If you cant, its likely because the gap between reality and your ego is larger than it should be. And if you dig into that gap, I think youll find just three things:

o your house

o your car

o your education

If you want to actually save money, start there.

Your house

The average new American home now has more bathrooms than occupants. Nearly half have four or more bedrooms, up from 18% in 1983. While the median households inflation-adjusted income has been stagnant for decades, the median new homes square footage has increased 38% since the late 1980s:

In 1900, the average American family spent 23% of their income on housing, according to the Census Bureau. By 1950, that was up to 26%. Today the average household spends 35% of their income on housing. That nine percentage point gain means we spend an average of $6,000 per year more on housing today than we did in 1950.

A lot of people I know think housing is expensive. But it doesnt have to be. Whats expensive is when your expectations outgrow your income. You can live without two guest rooms, three spare bathrooms, and a two-car garage. You might need roommates. The average American could save a ton of money by realizing that their largest monthly expense is inflated expectations of what a decent house is.

Your car

The average amount borrowed for a car in 2013 was $27,000, according to Experian Automotive. For people with the lowest credit ratings — typically lower-income families — the average auto loan was higher, at $29,385. And thats just the loan amount. The average transaction at an auto dealership is now $32,160.

Experians director of auto credit explained why these numbers are so high: If you look at the most popular segments, they are full-size pickups and SUVs. Its hard to find one of those models new and fully loaded for under $30,000.

Heres your problem, America: You need a car to get to work. You picked one that can tow a boat and consumes two-thirds of a years income.

Add in the cost of gas and this is probably where the average American can find the most savings in their budget. You can buy an excellent new car that gets 35 miles per gallon for less than $17,000. These cars come entirely stripped of prestige, but this is where saving money requires closing the gap between your ego and reality.

Your education

This mainly applies to young people, but there are a lot of you.

I shake my head when I read stories about low income young people stuck with $200,000 of student loans. Whats frustrating is that the stories invariably blame the soaring cost of tuition on these debt burdens. But thats not really the problem. The problem is the student didnt do college the right way.

Unless you have generous parents or scholarships, almost no one should attend private college. Its totally unnecessary. Four years of public university isnt even necessary.

For most, theres an adequate and much cheaper way to go to college: two years at a community college, two years at an in-state public university.

Prices vary by state, but most people can go this route for less than $25,000 total and obtain a world-class education. It can save people tens, even hundreds, of thousands of dollars before theyre old enough to drink.

This route isnt as socially thrilling as going to a private school for four years. But youre 18 and broke. The first test of whether youre mature enough to attend college is whether you can grasp financial reality with both hands.

House, car, education. Take care of those three and you can drink all the coffee you want.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

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Easy Approval Home Mortgage and Refinance for Shoppers with Bad Credit …

Americas most trusted home mortgage and refinance lender is now offering quick and simple loan approval to loan shoppers with bad credit.

Seattle, WA (PRWEB) July 13, 2014

Loan shoppers are now being approved through the easy to use online application provided by the nationwide lending network. Complete Home Loans connects loan shoppers with qualified lenders who have been pre-approved for customer satisfaction and high approval ratings.

https://completehomeloans.net/application-form/ 60 second application form

Once the application form has been submitted, Complete Home Loans matches the person’s financial information with a lender that can provide them with the loan they need.

Complete Home Loans encourages shoppers to get their credit score checked after they’ve applied for a home loan. Upon completing the online application the lending resource supplies loan shoppers with an easy to use credit score report through the top supplying resources in America. Home shoppers can take this information and improve their credit score which may have a drastic impact on their home finance rates (or approval).

About Complete Home Loans:

The Home purchase, equity, and refinancing loan company services customers across America no matter their credit history. They specialize in matching people with good, bad, or no credit to lenders who may be able to qualify them for a home loan. Their network of lenders is the largest in the United States and offers low interest financing to home owners or shoppers.

People who’ve been turned down in the past are able to use their easy online application form to instantly get approved for a loan (no matter their credit history).

For the original version on PRWeb visit: http://www.prweb.com/releases/bad-credit-mortgage-loan/loan-refinance/prweb12013586.htm

Majority of consumers enlightened about credit scores

With all the education thats been spread about credit scores, consumers are finally getting it.

A large majority of Americans know a great deal about credit scores, according to a national survey by the Consumer Federation of America and VantageScore Solutions, which produces the Vantage Score credit score.

Many know that missed payments, personal bankruptcy and high credit card balances are factors used to calculate credit scores. People know they have more than one generic credit score.

Generic credit scores are used by many types of lenders and businesses to determine general credit risk. They differ from custom credit scores, which are developed for individual lenders. VantageScore and the widely used FICO score are examples of generic credit scores.

“There are more generic scores out there than there were a year ago,” said Stephen Brobeck, executive director of the consumer federation. “Something that they really need to understand is that the lender scores are the most important, but even then, its not just the level of the score, but its how the lender treats that score.”

Despite the surveys encouraging findings, consumers still need to learn much more about credit scores.

“Most troubling is that only 42 percent know that a credit score measures the risk of not repaying a loan rather than factors such as knowledge of, or attitude to, consumer credit,” Brobeck said. “Consumers should be aware that they can take steps to reduce this risk and improve their scores, most importantly, by making all loan payments on time.”

The national telephone survey was undertaken in April, using a representative sample of 1,004 adults. The margin of error is plus or minus 3 percentage points.

If you want to test your knowledge of credit scores, take the free online credit score quiz at creditscorequiz.org.

One question on the quiz that might stump many consumers: When will multiple inquiries about a mortgage or auto loan lower your FICO or VantageScore credit score?

The answer is: never during a one- to two-week window. Inquiries during this period are treated as one inquiry by FICO and VantageScore credit scoring models, and usually by other scoring models. So time your credit inquiries for that safe period.

When Credit.com asked consumers in a separate survey last month what steps they planned to take to improve their credit, many said they would pay down their credit card debt.

“Thats a great thing, but closing accounts is the second most popular answer, and thats not likely to help,” said Gerri Detweiler, director of consumer education at Credit.com. “It might hurt your score.”

Thats because closing a credit card account can raise your utilization ratio, which compares the amount of credit youre using to the amount of credit available to you. This is especially critical if you carry high balances.

Experts say the ratio is more important than how much available credit you have. A low balance-to-limit ratio is good.

Whats more, if you close an older account, that could hurt your credit score because you benefit from having older accounts with a good history.

“The good news is a lot more people are seeing their scores,” Detweiler said. “Theyre much more involved in their credit, but there is room for improvement for some.”

A Guide to Your Credit History

A large number of Americans know little about credit scores, according
to a survey last year by the Consumer Federation of America
and VantageScore Solutions. While obsessing over your credit score isn’t
healthy nor recommended, understanding how credit scores work can help you
figure out how to improve your credit
health, score the best rates and potentially save thousands of dollars.
Read on for a basic primer of the credit scoring world.

What is a credit score?

A credit score is a three-digit number that uses information from
your credit report to assess your creditworthiness or how likely you are to
repay debts in a timely manner.

Why does my credit score matter?

Potential lenders often use your credit score to determine whether
or not to grant you credit and how much you should pay in interest. A low score
warns lenders that you might be an unreliable borrower, which can thwart you from
getting the credit you need. If lenders do decide to take a chance and grant
you credit, they may insure themselves by penalizing you with low credit
limits, high interest rates and/or extra fees. A high credit score can save you
tens
of thousands of dollars in interest over the life of your loans, so
putting some effort into maintaining a good credit history is worth the
investment.

Your score also matters even if you’re not planning on applying for credit in
the near future. If youre looking to rent an apartment, your potential
landlord may ask to see your score to decide whether to approve your
application and determine how much you’ll pay for your security deposit and
other fees. It can even impact your home and auto insurance rates and influence the terms of your new cellphone contract.

Why don’t I receive the same credit score everywhere?

One of the biggest credit
misconceptions out there is that you only have one score. In
reality, you have many scores, which is why you won’t always receive the same
score from different lenders and score providers.

Credit scores can vary for many reasons. First, the three main
credit bureaus (Equifax, Experian and TransUnion) may have differing information
about you. If one credit bureau is missing one of your accounts, it doesn’t
have your full credit history and may report a different score than another
credit bureau that has more complete information. Secondly, each credit bureau
can use dozens of scoring models to calculate your score. If one model puts more weight on your payment history, while another cares more about your age of accounts, your scores can differ even though theyre based on the same information.Lastly, credit
scores change constantly. Lenders are continuously sending new information to
the bureaus, so your score may fluctuate regularly.

What factors are used to calculate a credit score?

While each scoring model may emphasize different aspects of your
credit, most models care about the following factors:

  • Credit card utilization rate. This is
    how much of your total available credit card limits you’re using.
    Generally, the lower your credit card utilization rate, the higher your
    score. Try to keep your rate between 1 and 20 percent – lenders like to see that you’re using credit but
    aren’t dependent on it.
  • Percent of on-time payments. This
    shouldn’t be a surprise – if you
    pay your bills on time, it shows you’re a responsible borrower. Your
    payment history is heavily weighted, so just one or two late payments can
    significantly lower your score.
  • Number of derogatory marks. A
    derogatory mark is a negative record such as a bankruptcy, foreclosure,
    account in collections, tax lien or civil judgment. Since these marks
    indicate that you’ve mismanaged credit in the past, they can severely hurt
    your score.
  • Average age of open credit lines. The amount
    of time your accounts have been open, averaged across all your accounts,
    helps creditors assess your creditworthiness.
  • Total number of accounts. Your
    number of accounts includes your credit cards, auto loans, mortgages and
    other loans. In general, lenders like to see a good number of accounts on
    your report because it shows that other lenders have deemed you worthy of
    credit.
  • Number of hard credit inquiries. A hard
    inquiry occurs when a financial institution checks your credit report to
    make a lending decision. Since a lot of hard inquiries may make it look
    like you’re desperate or aren’t getting approved for credit, it’s best to
    minimize how often you apply for more credit.

This may seem like a lot to take in, but on a positive note, there
are many factors that aren’t used to calculate your score, including
your ethnicity, gender, religion, marital status, age, salary, occupation,
employment history, where you live and more. Lenders just want see that you’re
a responsible borrower – they don’t need to assess your life story.

What’s a good credit score?

This is tricky to answer, as scoring models may use different
ranges of numbers and the term “good” is subjective. In general, a FICO score
of 720 or higher may be high enough to score you the best interest rates on
conventional loans. However,
if you’re just looking for a decent credit card, a 650 may suffice. It all
depends on what you’re looking for.

How can I improve my credit health?

Now that you know what lenders care about and what factors are
looked at when calculating your score, you should have a good idea of what you
need to do. Keep your balances low to maintain a healthy utilization rate,
apply for credit sparingly to minimize hard inquiries, never miss a payment and
be wary about closing
your oldest account. In addition, pull your credit reports from
AnnualCreditReport.com each year, scrutinize them for
errors and dispute any inaccuracies you find. Your credit score is important
and should be based on the most accurate information possible.

The Bottom Line: Now that you know all about credit scores, put that knowledge to
good use! Your credit score is one of the most important numbers that will ever
be attached to your name. Take care of it, and it’ll take care of you.

Weekly Wrap: Bitcoin Rival Could Shake Up Commerce; Rethinking Credit Scores

Ripple Effect: Futurist Dick Samson champions the Ripple protocol, an open-source payment and currency exchange system that he says could transform commerce and banking by making dollars, yen, euros, bitcoins and even loyalty points virtually interchangeable. Banks can use Ripple to offer speedier, cheaper currency exchanges, develop digital safety deposit boxes and create a range of cutting-edge payment products, Samson writes. American Banker readers were more skeptical in their assessments of the system. I certainly understand how virtual currencies work and are easily applied to certain exchanges, writes one commenter, but what I dont understand is … who or what backs up the virtual currency in the event of economic turmoil or loss of public confidence. Another reader argues that currencies on Ripple are not so easily interchangeable. People who receive a dollar on Ripple are actually getting an IOU, guaranteed by the organization as a Ripple gateway, to repay [the dollar] on demand, writes the commenter.

Expanding Access to Homeownership: Regulators should adjust credit score requirements in order to improve homeownership opportunities for minorities and millennials, according to Pastors Mark Whitlock and Sam Rodriguez. Pristine credit standards are often artificially defined, the authors write, pointing out that foreclosures unfairly damage the scores of many financially responsible African-American and Latino families who lost their homes only as the result of plummeting home prices in their neighborhoods. They also argue that credit scores paint an inaccurate picture of borrower risk because they do not include on-time rental and utility payments. Borrowers who lack an artificially pristine credit score should not be barred from securing a 30-year, fixed-rate qualified mortgage, the authors write. One solution could be to offer such loans to otherwise qualified borrowers who agree to commit to a mandatory financial education and credit counseling program. One commenter chimed in to say that all members of the middle class, regardless of race, are being adversely affected by inflated credit score standards. As a banker of 35 years, I am insulted by the restrictions placed on my underwriting skills and experience by these artificial standards which in many situations allow for no discretion, writes Craig G.

Also on the blog: JV Rizzi warns investors to curb their appetites for covenant-lite loans, which impose minimal financial restrictions on the borrower. Peter Wallison of the American Enterprise Institute argues that the Financial Stability Oversight Council has taken an arbitrary approach to designating firms as systemically important financial institutions. The Greenlining Institutes Orson Aguilar outlines a few steps the Small Business Administration can take to help minority business owners’ access capital and win corporate contracts.

Banks can defend themselves against disparate impact lawsuits by adopting a centralized credit policy, according to Eric Lindeen of Zoot Enterprises. Paul H. Kupiec, a former director at the Federal Deposit Insurance Corp.s Center for Financial Research, argues against Federal Reserve Board Governor Daniel Tarullos proposal to measure banks capital levels with stress tests instead of Basel III capital requirements. And Dave Martin describes how a week in the Magic Kingdom left him marveling at Disneys talent for product rollout.  

Wendy Evans: Saving money on your family holiday cash

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Wendy Evans of parenting charity Nottingham Family Lives looks at how best to manage your finances abroad when on your summer holidays

MORE than half (53.5 per cent ) of respondents to a recent Family Lives survey said that their finances were in a worse state than previous years.

The needs of the family are changing, and families continue to tell us that their single biggest worry is making ends meet. This often causes conflict and stress.

Managing the family coffers is important, but so is taking a break. If youve booked a holiday abroad, make sure you spend wisely

Barwa Bank unit FFC wins ‘Best Business Finance Company’ award for 3rd cons…

First Finance Company (FFC), a member of Barwa Bank Group, was recognised as Best Business Finance Company at the 2014 Banker Middle East Industry Awards held on June 3 in Dubai.

This was the third consecutive year that CPI Financial bestowed the award to FFC for its comprehensive range of Shariah-compliant financial solutions and exceptional customer service.

FFC chief executive officer Eslah Assem said the company continues to perform at the very highest level within the industry and constantly works to refine product proposition to ensure flexible, fast, and tailored financial services to customers.

These awards prove our leading position in the industry by delivering customers new and innovative products and services that are both highly-attractive and consistent with their ethical beliefs, Assem said.

FFC deputy CEO Yousif al-Subaie thanked the companys professional team for showing exceptional commitment to provide outstanding service excellence, consistent with the highest international standards and in accordance with Islamic Shariah principles.

Since its inception, FFC has focused on delivering a comprehensive and innovative range of market-leading consumer finance services, including auto and home finance that offer great value and outstanding features.

To support Qatars booming economy, FFC also offers a range of Shariah-complaint financing for small and medium-sized enterprises (SMEs) that provide flexible down payment, instalments for up to 48 months, fast and simple performance, and flexible payment scheme.

To empower entrepreneurs, FFCs SME product also provides financing to startups that have been operational for more than six months or less than a year.

Westpac customer marketing chief: Social is a great way to start conversations

Social media is a great place to start conversations with customers on a new purchase journey, and also plays a vital role in recognising and responding to their needs, Westpac’s customer marketing chief claims.

Speaking at the Retail Financial Services event in Sydney, head of customer relationship marketing and digital, Australian Financial Services, Karen Ganschow, highlighted the importance of social and mobile engagement in the banking group’s modern marketing strategy.

She also stressed the need to personalise and standardise customer experiences across whatever channels a consumer chooses to communicate and engage with a brand in.

Ganschow shared an example of how Westpac has generated qualified customer leads through
Facebook by opening up conversations between prospective customers and home finance experts on first-time lending. Customers looking to take conversations further are then sent a direct message offering them their own personal finance expert within the bank.

“This is slightly less confronting than walking into a branch, and has been working well in helping generate real business leads,” she told attendees. “It also helps us understand what’s on our customers’ minds.”

Westpac is also supporting customers of its Westpac, Bank SA and St George brands through social. “Social can be scary as a brand, especially when bank bashing is a national past time, to put yourself out there. Yes, you will get people saying nasty things about you and your brand. But we’ve also learnt a lot about our customers through these channels,” Ganschow commented.

“In digital [channels], you can see through a consumer’s behaviour what really works, what they care about, and what doesn’t work… we use search keywords for example, to know what’s hot for customers and pull that through our whole customer journey.”

In one case, social helped Westpac see the confusion customers were experiencing around fixed and comparison rates it advertised for new home loans, Ganschow said. Westpac responded to these comments by providing an external explainer website to help customers understand comparison rates.

“The joy with social media… was that we got to see that confusion and were able to respond to that,” she said. “We received 800 comments, and the last 600 were positive, having established that precedence.”

Related: Customer-led big data programs add millions to Westpacs bottom line

Ganschow also highlighted the vital role mobile is playing in customer engagement today, pointing out that more than half of all banking is now being done on mobile devices. Westpac is meeting this need by designing all digital services and forms with a mobile-first mentality, she said.

2013 was the last year of the desktop and laptop; everything weve seen since then says the majority of online bank sessions are now coming through mobile,” Ganschow said.

“If your assets are not mobile-first, friendly and mobile-aware, you won’t be giving customers a great experience.”

At the same time, she called on brands to ensure that whatever message or experience they and endeavouring give to customers is consistent and relevant across whatever channel consumers choose to engage in, digital, call centre or otherwise.

“Customers won’t stay tidy – they move between screens and devices,” she said. “They also don’t go one-way; a customer may start online, then come into the brand and go back online to complete a purchase. And it’s not necessarily one action after another; they can be simultaneous.

“The challenge for marketers bringing this together is that it’s getting more complex. The only channel we have turned off is fax marketing. We still need and want TV, outdoor, direct mail, branches, employee activation, social media and a mobile app.

“We have to learn how to orchestrate and synchronise the marketing team as we launch new products. And the real frontier is not just harmonising our efforts, but ensuring there’s no loss of data, insight and engagement for customers.”

The Retail Financial Services event was hosted by Asia-Pacific Banking and Finance.

Photo credit: Courtesy of AB+F magazine.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

How To Buy A Car With Bad Credit

If you dont have the greatest credit score, getting a loan for a big-ticket item like an automobile can be difficult. But with reliable transportation being a basic necessity for many Americans, there are some potentially painful steps on the path back to good credit.

Shop around for a lender

See what interest rate you can get from various dealers and credit unions, and choose accordingly. Also consider swallowing your pride and accepting some help from a family member, either to co-sign the loan or to lend some of the money to you at a better interest rate. Where the money comes from can easily represent a difference of thousands of dollars in the total price of your car.

Boost your credit

Identify reasons your credit score is low and see if there are any that you can resolve before you try to get a car loan, even if it means cutting back elsewhere to catch up on a few bills. Some low scores may even just be an error on the part of the reporting companies. Anything you can do to raise your score will help you get a better interest rate.

Choose a cheap car

Its always tempting to get something fancy or to avoid something thats small or junky-looking. But thats a luxury that you may have to sacrifice if you dont have good credit. You dont want to get something so cruddy that youll be dumping your paycheck into repairs, but $5,000 should buy you a fuel-efficient and decently reliable economy car like an eight-year-old Ford Focus or Hyundai Accent. Spend a little bit more for a Kia Optima or Nissan Versa if you really need a roomy interior.

Note that there are sometimes better low-credit financing deals on new cars instead of used, to the point at which a new car is actually going to be no more expensive than a used one, but the same advice applies. You may qualify to buy an expensive car, but settle for something cheap until your credit score improves. The Nissan Versa and Hyundai Accent are among the best new cars for a very tight budget.

Brady Holt, a Washington DC newspaper reporter, has had a lifelong interest in cars in the automotive world, and hell share his thoughts at every available opportunity. Brady has written for Examiner.com since 2008, publishing hundreds of car reviews, automotive news pieces and other features. His work can be found on Examiner.com.

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