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Sollen Technologies enhances Lender OnLine loan finder/pricing tool

National Mortgage Professional
Nov 09, 2006

Practicing good credit behavior improves credit and prevents financial hardshipsSherene Costanzocredit behavior, credit score, credit reporting Practicing good credit behavior is extremely important for consumers who strive for excellent credit and a healthy financial situation. Here are a few tips for you and your clients to consider that will improve their financial situation or keep them on track and prevent financial messes: Make sure to create and live by a reasonable budget Whether your financial situation is good or bad, following a budget is the key to a healthy financial situation. No matter what your income, everyone must live within his means. Following a budget is a necessary tool to help prevent a disaster or snowball effect of growing debt. It is important to keep track of every dollar you spend so that there is plenty of money to pay bills that come due and cut out any unnecessary spending. Always check your credit reports Check your credit reports at least once a year, if not more. Errors do occur and can affect your credit score drastically if not corrected. If you don't check your credit frequently, you may not realize that there is a problem with your score until you try to make a major purchase. By this point, it may be too late to correct the problem before you make your purchase. This can cost you thousands of dollars in interest in the long run. To protect your credit, you also need to check for any fraudulent activity. Although it is fraudulent activity, it can take several months or years to correct. So be sure to frequently check your reports for accuracy. Pay your credit card bills before or on the due date Paying credit card bills after the due dates can cost you a lot of money. Not only do they hit you with $39 late fees, but they can hike up your interest rates as well. Worse off, if you are past 30 days late, the creditor will usually report to all three of the credit bureaus, which will drop your credit score. It doesn't stop there - your other creditors may now increase your interest rates as well. One late payment can rack up a lot of unnecessary debt. Accidents or unforeseen circumstances can happen, of course; in such cases, call your creditor and ask them to change your due date, defer a payment or to remove the one-time late report and all associated fees as a courtesy. Pay more than the minimum payments due if possible When you pay just the minimum payment due on a credit card, you will never be able to pay off the debt. In order to see your debts decrease, you will have to pay more than the minimum payment due each month. This will also save you a whole lot of money in interest. Of course, you should be sure to have enough money each month to make the minimum payment on all of your credit cards before sending extra money to any of the credit cards. This way, you will be sure not to miss any of the minimum payments due. Prioritize your bills Always pay your living expenses first so that you can survive. Bills should be prioritized as follows: 1. Home mortgage or rent 2. Utilities 3. Groceries 4. Medical care (immediate care only, not medical collections) 5. Car payment 6. Secured debts or loans (equity lines) 7. Unsecured debts or loans (credit cards) and 8. Collections accounts, school loans and medical bills Stay away from department store credit cards Department store credit cards just create more bills. Even though they may offer a savings if you apply, it is not worth it in the long haul. Department store cards usually come with high interest rates and just create more bills and more due dates. Save yourself the hassle and just use one or two major credit cards with the lowest interest rate you can get. If you do have more credit card accounts open, leave them open, just don't use them. The old cards with available credit lines create credit history and usually keep your credit score higher. Be careful of tricky credit card offers with low rates on balance transfers Many of these balance transfers charge you a fee. They also usually expire within six months to a year. You must pay the balance in full before expiration or they will back-charge you all of the interest. You also cannot be late, or your special interest rate will increase drastically. Also, many times those special rates do not apply to purchases. You will be charged high interest on your purchases and your monthly payments pay off the lower rate balance transfer first. It is best not to make purchases on these types of credit cards. If used properly, these special offers can save you money; however, they can be misleading and cost you a lot of money if you don't read and understand the fine print. If your client is already in a financial mess and has poor credit, you may refer them to a credit restoration company to help them toward their goal of improving their credit rating. Working with a reputable credit restoration company can save a consumer thousands of dollars in the future, as well as help you close their loan. Don't turn away your clients with poor credit - help them improve their credit and close extra loans! Sherene Costanzo is vice president of Credit Consultants Inc. She may be reached at (888) 522-7007 or e-mail [email protected]
Published
Nov 09, 2006
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