Test Your Credit Score Knowledge

Credit profile, score, assessment: if you’re thinking of taking out a home loan, these are important terms you’ll need to learn more about.

What is a credit score?

All credit active people have a profile. This is a summary of your history with every credit provider you’ve ever dealt with, and serves as a record of how well you’ve managed your accounts like loan repayments, overdue debts, how often you’ve asked for credit and the kinds of loans or credit you’ve applied for, and the frequency of your applications.

How it works?

Credit reporting providers summarise your profile into something called a credit score. The score is between 0 and 1200, where the higher the number, the more likely you are to be able to repay a loan. Lenders look at your credit profile and score to find out about your credit history and behavior, and assess if you are able to take on a new loan. This information reassures lenders that you’re good at paying money back to those you’ve borrowed from – i.e. you are a ‘low risk’ client.

A good score not only makes you more likely to get approval on your home loan application – but it also means you’ll qualify for a better interest rate. Of course, the other side of the coin is that if you have a poor score, you will be less likely to qualify for any new loans. This protects the lender and those with low scores from taking out additional loans and overextending themselves and getting into more debt. In short, you’ll need to have a good credit score rating for your home loan application to be approved.

It’s therefore a good idea to first find out what your credit score is before applying for a loan, and to give yourself time to improve it before approaching a lender.

How to check your score?

A great place to start your research is ASICs MoneySmart site. You can get a free credit score assessment from a number of online providers, which are listed on the MoneySmart site.

How to improve your score?

Improving your credit score starts with looking at your current financial situation and ways to improve it. Getting into a good credit position before you apply for a loan can help increase the likelihood of you getting approved.

You can improve your score by:

  • lowering your credit card limits
  • consolidating multiple personal loans and/or credit cards
  • limiting your credit enquiries
  • paying your rent and bills on time
  • paying your mortgage and other loans on time
  • paying your credit card off in full each month

To avoid any surprises, be prepared and know your credit score.


3 Things You Don’t Know About Your Credit Score

Yet, if you’re like many Americans, just knowing that you have a credit score may be just about all that you know. This is a bad situation, and you need to fix it, sooner than later.

“Why?” you ask. Well, your FICO score is, for better or worse, like your financial DNA. So, while you hopefully know that you have a credit score, you may not know just how important that score is to your life and livelihood. Unlike DNA, however, your score isn’t a number that just takes care of itself. No, you need to take care of it.

Here are just three reasons for making sure that you do.

Your credit score is somebody else’s business.

That’s right: big business. Your score is at the mercy of three privately owned mega corporations, whose business is rating you and your creditworthiness. In fact, it is these companies, or credit bureaus, that create your score in the first place. The “big three” of these national credit bureaus are Experian, Equifax, and TransUnion. This credit – or FICO – score that they assign you ranges anywhere from 300 on the low side to a perfect 850 on the high one.

Bad credit is expensive.

Your credit score can cost you hundreds of thousands of dollars in extra fees if it is less than excellent. You may have heard the saying, “Buy with cash, pay once; buy with credit, pay three times.” This refers to interest, or the cost of borrowing money. There are many other potential costs to bad credit, however. This can lead to hundreds and even thousands of dollars spent on higher premiums for your auto and home insurance.

Background checks aren’t all that potential employers pull.

Your credit score affects your ability to get a job. That’s right: your estimated ability to repay borrowed money (i.e., debt) also can be used to assess your fittingness for a specific kind of job. Although legislation has been introduced to limit the access of prospective employers to your credit score, these are just limitations, not universal exclusions.

Knowledge is power!

Hopefully, you’ve seen by now that your credit score is a big indicator of your financial health. Ignoring a low score won’t make it go away. However, proactively taking the proverbial credit bull by the horns and working at restoring or just raising your credit score is something that anyone can do. You just have to put your mind to it.

Click on the link below to receive free information on how you can take charge of your financial future. After all: your credit is big business… isn’t about time to make it your business? This changed economy means that our financial well-being is ever more in our own hands!


How Divorce Affects Credit

Divorce is hard emotionally, legally, and financially. Sometimes, people don't think about what joint accounts can do to harm their credit reports until they finally get around to looking at their credit scores. Don't let mixed assets affect your credit report after you file for divorce. Here are some ways to prepare for separating your credit and steps to regain your financial independence.

Remember that divorce is only acknowledged by the court. A divorce will not automatically separate you and your spouse financially. All jointly held financial accounts and debts will have to be reconciled jointly or transferred from one party to the other.

Separating Credit

1. Contact any lenders about outstanding debt. A collections agency may try to contact you long after outstanding debt has been removed from your credit score. If you have any debt leftover from your marriage, find a way to pay it down, or have the lender remove you from the contract. You may need to get your spouse to agree to the arrangement and he or she may have to prove to a creditor that the debt can be managed singularly.

2. Always pay debt down during a divorce process. In some cases, a spouse may try to use credit cards in an effort to hurt the other party with high balances and debt. Pay any jointly held accounts to prevent a bill from affecting your credit score. Close the accounts or have yourself removed from the account to prevent further abuse.

3. Close accounts that cannot be reconciled. This will ensure that no new debt is added to your accounts if you have trouble removing yourself from them or paying them off.

4. There is no need to separate your credit reports. All credit reports are issued to individuals regardless of marriage status. Making sure that all jointly held accounts are reconciled is the most important credit-affecting factor to consider after divorce.

5. Your ex-spouse is not allowed to receive your credit report after the divorce is finalized. There are a number of ways a report could accidentally be sent to an ex. If he or she has identifying information for you, it is possible that your credit report could be accessed despite the reporting bureaus' identity protection precautions. You may have grounds for a lawsuit if your ex-spouse obtains your credit report illegally.

6. Have your ex-spouse removed from your report. Even though your report is completely separate and having a spouse's name on it will not affect your score, having your ex removed as your listed spouse can clarify your situation to anyone who accesses the report.

The bottom line is to reconcile any accounts that you and your ex-spouse held jointly. While divorce will never impact a credit score directly, the status of joint accounts can affect both parties' credit reports negatively.

Rebuilding Credit

If your former partner caused damage to your credit prior to or during divorce proceedings, you may need to take steps to rebuild your credit. If you haven't held an account individually in several years, you might also have a lower credit score than you will want to have as an independent individual. Take these steps to rebuild your individual credit score.

1. Change your name. You will need to establish your credit as an individual. While changing your name doesn't erase existing debt, it will help you build your individual credit apart from your ex-spouse.

2. Gain financial independence. The sooner you take steps to regain financial independence by getting a job, paying bills, and other financial necessities, the sooner your credit score will improve. Child support and alimony will both supplement income in a usable way, but you should never rely on these two sources of income completely.

3. Take steps to handle bills you can't pay. Contact a credit counselor or repair agency to help you work through financial struggle after a divorce. There are a number of different ways to handle debt after a divorce, and a credit counselor can help you determine the best course of action for your situation. Leaving bills you can't afford unattended will only worsen your credit score over time.

4. Successfully use a credit card. Even if you don't use it for extravagant expenses, use a credit card occasionally and pay off the bill every month. Using credit cards responsibly is one of the best ways to rebuild credit. The cards should be in your name as an individual, not a jointly held card from your marriage. Sometimes, jointly held accounts that were not responsibly paid off may prevent you from obtaining a credit card. In this case do the following.

A. Make sure the card is closed. As long as a jointly held card is open, it has the ability to affect your credit score.

B. Apply for a secured credit card. If you cannot get a regular credit card, a secured card will be available with a cash or collateral deposit. You'll only be allowed to use the card for as much of a deposit as you put down at first, but it is a successful method for building credit. It also has the benefit of being a more secure method of payment than a debit card.

5. Keep all card balances low. Ideally, your credit card balance should never rise above 35%. If you need to put a larger expenditure on the card, pay it off multiple times a month rather than waiting until the due date. Doing so will ensure that credit bureaus are not receiving inaccurate information about your accounts during the month.


Don't Be A Bad Credit Rating Victim

A bad or blemished credit report can stop you in your tracks. For unsecured loans you will find it almost impossible to be even considered for a loan under $ 3,000.

So how do you get a bad credit rating or a blemished credit report? It is surprisingly easy and the way to avoid a bad credit file is just as easy. Following the following tips will see you maintain a good clean credit rating and be seen as a favorable borrower by lenders.

1. Don't shop around for credit. Every time you fill in an application form online or at a financial institution for any type of loan you are giving the lender permission to check your credit file. When the lender checks your credit file they are obligated to list on your file that you are applying for a loan. This will stay on your credit report regardless of whether you obtain the loan or not. To avoid this happening do your research 1st by reading all the information the lender provides, making phone calls to the potential lender or use a broker who will do this for you. So rule of thumb is if the form you are about to fill in does not say that it will not effect your credit file do not fill it in.So why does this effect your ability to get a loan? The more inquiries you have on file the more it says to potential lenders that you are not being successful in obtaining finance and flags you as a risk. To ensure you get the right advice you need to speak to a broker or lending expert. If you do want to do it yourself do not make more than 2 or 3 inquiries in a 3 month period.

2. Avoid obtaining small loans on a regular basis from a Payday Lender. Payday lenders are there as a lender of very last resort. If you use these lenders on a regular basis when you wish to borrow a larger amount of money the lender will be suspicious of your ability to manage your finances. Some lenders will ask you to justify your position. It is not a show-stopper but you do need to be aware of how it may be perceived by a lender. If you are unsure speak to your broker or a loans adviser.

3. Not paying your bills or credit card could be classified as an unpaid default and be marked on on your credit file.It is extremely important to understand that if you cannot make minimum payments on your credit card or you are suffering financial hardship with your bills or other loans you speak to the company or lender and come to some arrangement for payment.You need to make a payment arrangement for your bills before you receive a default notice in the mail. However if you do receive a default notice it is your last chance to ensure you do not have a default marked on your credit file. Failure at the point of default notice to do this will surely mean a mark on your credit file. The most common reason why people ignore the constant reminders for payment is they are embarrassed. However, companies are keen to assist you and ensure that your obligations are met. You need to call and make a payment arrangement and keep to that arrangement to avoid unpaid defaults being listed on your credit file.

4. If you have unpaid defaults on your credit file you are still obligated to pay them. By paying your defaults they will be marked a paid defaults on your credit file and can improve your ability to borrow as a lender can see you did meet your obligation.

5. Avoid where-ever possible declaring bankruptcy. Bankruptcy is an option of last resort and can debilitate your ability to obtain credit even more than if you have defaults on your file. If you are suffering financial hardship you need to speak to a professional or your lending institution. If you are struggling to pay loan debts there are many ways a broker or a lending adviser can assist. Often for loans it is a case of consolidation at a lower interest rate that is more affordable. The most important thing is you make bankruptcy your absolute last resort. Once you are declared bankrupt there is very limited options for obtaining personal finance, almost no chance of obtaining a credit card and if you wish to borrow for a car or a house your interest rate will be significantly higher than the standard rate.

The best thing you can do is if you are unsure of your credit rating is obtain a Veda credit report. Once you have got a copy of your Veda credit report speak to your broker or loans adviser and send them a copy of your report if you have defaults or bankruptcies marked on it. They will advise you the best way to go with your lending needs.

Remember do not be embarrassed about your situation. Everybody wants to assist you in keeping a good clean credit file. Following the above guidelines will assist you but if you have a question just pick up the phone and ask.


The ABC’s of a Bad Credit Auto Loan: 3 Tips for Getting Loan Approval

Purchasing a new car is an exciting process. You select a car of your favorite color, make and model. But if your credit score does not make the cut, it can create a problem for you. It is will make you realize that a bad credit score is like a ghost that can come to haunt you every now and then. A few late payments, a maxed out credit card and a habit of purchasing in excess than your repayment capacity are a few reasons that can damage your credit score. However, don’t lose heart. Even though you might have suffered from a bad credit score, there are still numerous ways to obtain an approval for a bad credit auto loan.

Do not worry if you want a bad credit auto loan. The following ABC tips will help you in getting loan approval:

  1. Always be Prepared

Prior to applying for an auto loan, ascertain your credit score from your credit reports. Analyzing your credit reports can give you great insight in anticipating any discrepancy or error that may become a problem later. The main factors that are accessed during the process include your current income and your employment stability. Your income will be an indicator of your ability to repay the loan and the duration of your employment will strengthen your credibility in the eyes of the lender. By being prepared, you will be one step ahead in the process of obtaining your bad credit auto loan.

  1. Bring a Strong Co-Signer

A strong co-signer with a flawless credit score can enhance your chances of getting a bad credit auto loan. Once you get a co-signer for your loan, the other person is equally responsible for it. In case, you are unable to repay the loan, the co-signer will be liable to pay the debt. Thus, the presence of a strong co-signer will further create a positive credit image and increase your chances of getting loan approval.

  1. Compare Auto Loan Offers

When starting to look for a bad credit auto loan, it is always a good idea to shop around your neighborhood. Do not take the first deal that is offered to you as it is a wise decision to look for more options. When looking at different lenders, make a note of the ones that offer you the best interest rates. Many a times, bad credit loans include high interest rates. Therefore, it is a good idea to reconsider all your auto loan offers before making a decision.

If you have a bad or damaged credit score, it does not mean that you cannot get loan approval. Remember the ABC tips for obtaining a bad credit loan because they will assist you in getting a faster auto loan approval.


Get Instantaneous Approval Credit Cards Online

You can find quite a bit of individuals who’re talking about immediate approval credit cards today. This can be since you can find a variety of companies who are claiming that they are able to provide the top ones on the web. Lots of men and women think that this indicates that they are able to immediately download a copy of a card and start utilizing it right away. Unfortunately, this is just not how it works. Whilst your application might be permitted virtually immediately, which actually means that it’s going to be approved inside of just a couple of minutes, you can’t print it out and start shopping immediately.

Though it only takes a couple of minutes to be accredited for instantaneous approval credit cards, it is going to take a handful of days prior to your card will arrive in the postal mail. So, the only real benefit here is that you will know if you’re accepted for this card inside a fairly short time. If you were to have applied for a credit card via mail, you would have waited numerous days or weeks for the bank to even run your application. This really is just one of the benefits. Another advantage is that you just can compare the price of different credit card businesses.

Of course, you will find limits to whom is eligible for these instant approval credit cards. These are in fact meant for people who have excellent credit. Nevertheless, you’ll find some methods in which you’ll be able to get around this. For instance, there may be times when the organization that you have applied to won’t be capable to access your credit history records for some reason. Sometimes the competition within the credit rating market is so high that some organizations are willing to take a risk just to obtain customers. So, even if your credit ratings record is just not all that wonderful, you may perhaps nevertheless be capable to obtain immediate approval credit cards. For these reasons, you ought to nonetheless try applying for one of these credit cards.

You will find plenty of these credit cards that you can apply for on the internet. All you need to do is go onto the World wide web and search for them. You’ll come across plenty of them to choose between. So, you seriously really should take your time to comparison shop. Visit the different web sites and look at the diverse offers that they have. This really is how you may be capable to come across the perfect deal on your next credit card.


How to Choose the Right Travel Credit Card

Travelling is one of the passions shared by most people on this planet. People travel for the purpose of business and to explore new destinations. Traveling provides people with an opportunity to explore new cultures, cuisines and experience new languages. Given that traveling is an integral part of the lives of most people these days, many credit card issuers offer cards that come with a variety of travel benefits.

If you are someone who travels on a frequent basis, you will benefit from applying for a travel credit card as it will provide you with access to exclusive offers, promotions and deals that will make traveling a more rewarding experience for you.

It is a fact that there are too many travel cards available these days and so it becomes a daunting task to choose the right credit card for traveling. Here are a few tips that will help you in making the right choice:

1. A good sign up bonus – most cards come with different types of sign up bonus and in the case of travel credit cards, the cardholders are offered with free air miles or a free air ticket when they use their card for the first time after receiving it. You should make sure that the card you opt for will offer you with a huge sign up bonus preferably in form of air miles so that you can redeem the same for your travel bookings.

2. More air miles for your money – earning air miles is one of the main reasons behind applying for a travel credit card and so the card that you opt for should apply you with more air miles for your credit card expenses. For example, every time you spend a dollar on the card, you should be able to earn at least 1 air mile. If the credit card cannot offer you with sufficient air miles for your expenses, it will not be very beneficial to you.

3. Airport lounge access – the travel credit card should also offer you with complimentary access to Airport Lounges so that you can travel with luxury and comfort. Since most of the top credit cards for traveling offer complimentary lounge access to the customers, it will not be very difficult for you to apply for such a card.

4. Travel Insurance – another feature that you should look for when applying for a new travel credit card is free travel insurance. If you are provided with travel insurance coverage, you can travel in peace as you will be assured that the insurance policy will provide you with the required support in case something bad happens when you are on a trip.

5. Low annual fee – even if the card offers you with a wide range of features, it will be futile to opt for the card if it comes with a high annual fee. The annual fee charged for the travel card should be low so that you will not end up spending a lot of money to avail the benefits offered with the card.

6. Wide acceptability – it goes without saying that the travel card has to be widely accepted so that you will not have any problem using it when you are on a vacation or a business trip. The acceptability of the card should not be limited to only a handful of merchants.


7 Tips to Avoid Credit Card Fraud

Your credit card offers you access to a world of possibilities. It can not only help you in making payments, but it can also help you to improve your credit score. If you make the payments on time and use your card wisely, you can improve your credit score by leaps and bounds. However, if the card is misused due to negligence or fraud, your credit history and score can be severely affected. Hence, it is important that you avoid being a victim of credit card fraud.

Here are 7 tips that will help you to avoid credit card fraud:

1. Do not disclose your credit card info – You should never disclose your card number, security code, expiry date and other details of your card to anyone. These details can be used to make fraudulent transactions and so you need to make sure that no one has access to them. Even if you get calls from people claiming to work for your bank, do not disclose your card info to them.

2. Keep your card safe – It is very important that you keep your cards safe and away from the reach of other people. Place your cards in a bag or wallet close to your body so that it cannot be easily snatched away. If you use a purse, make sure that it is properly zipped so that the cards do not fall off from your purse. Also, instead of carrying all your debit and credit cards with you all the time only carry those that you need.

3. Be cautious when using your card online – When you use your card to shop online, be careful and make sure that you only use it on websites that are legitimate and offer SSL encryption security for online payments. If the site does not provide adequate security, your card information can be stolen and the same can be used for identity theft or for making fraudulent transactions with your card.

4. Keep a track of your account – Opt for mobile and email alerts to keep a track of your credit card account all the time. In case of any unauthorized usage of your card you can report it to the bank immediately. You can also access your account online through electronic banking and make sure that you are aware of all the transactions made with your card.

5. Keep your PIN safe – When you swipe your card at merchant outlets to make payments, you will need to provide a 4 or 6 digit Personal Identification Number (PIN) to authorize the transaction. Make sure that you do not share your PIN with anyone or write it on any piece of paper as it can be stolen and misused.

6. Shred your statements and other documents – Shred your credit card statements and all other documents that have your card information on them. Your account information can be accessed online and all other details will be available on your card. Even if you forget your password, user ID or PIN you can get them reset by contacting the customer support team of your bank. Hence, it is important that you shred all possible documents that include information about your card.

7. Inform the bank if your card is lost or stolen – In case your card is lost or stolen, call the card issuing bank immediately and inform them about the same. The customer support representative of your bank will then guide to you to get the card blocked so any unauthorized usage of your card can be avoided. The representative will also inform you about the steps you need to follow to get a new card.

Apart from the above, you should also ensure that the supplementary cardholders use their cards wisely and are aware of the procedures they need to follow to safeguard your account against fraud.


No Collaterals Needed For Bad Credit Unsecured Loans

Financial turn-downs are a common occurrence, and these might even challenge the existing living conditions. In these conditions, there is very little or no security in which a collateral against a financial loan can be arranged. The borrower has to show his or her cautiousness, especially when he/she applies for secured loans. If such an individual is reeling under poor credit history, then the chances of approval are minimised further.

The primary reason for it is that poor credit history is considered a high-risk category by several brokers. However, it does not mean that one doesn’t have the easy loans route, but it is only that you need to apply under appropriate loan category that addresses your special financial condition. The bad credit unsecured finances is a specialised category, wherein the broker offers the credit lending taking into account the bad credit history and the amount of collateral that is more likely to show up.

What Follows before Applying for Unsecured Loans?

A bad credit situation is generic in nature, and can happen to anyone, and brokers obviously need to comprehend this situation. More importantly, the broker wants to know your credit situation and the current source of earnings. In case you have placed home as the security, nothing like it. This equity is quickly used against the unsecured loan, and the broker is always interested in it.

The potential borrower has to realise that unsecured loans are offered on a higher rate of interest in comparison to the secured ones, and just in case, there is a bad credit history attached to it, the possibility of interest rates making the surge increases to a new high.

Why Interest Rates are Higher than the Usual?

Here are the common reasons why interest rates surge when you go for the finances through an unsecured route:

a) It reduces the risk of the lender;

b) It places the lender in a comfortable position, where he/she can lend easily;

c) It ensures a healthy dialogue as well as relationship between the borrower, the lender and the broker;

d) It helps the borrower to repay the loan within the terms and conditions defined by the lender.

Taking into the account the practical aspects, the borrower should explicitly show his/her readiness to shoulder the burden of high-interest rates for instant cash access. The overall advantage still rests with the borrower, as he/she does not have to place any asset as collateral that could otherwise be claimed by the lender in the event of non-repayment or delayed repayment of the loan.


Stay Out of Debt by Discarding the Credit Card

It is probably the greatest money cow the banks have ever seen. The credit card is a trap to woo people into spending what they don’t have. That becomes a debt for which many won’t be able to repay on time. The interest charged in that case is exorbitant and far more than a personal loan would cost. This is currently a moral issue in Australia where the Opposition is promising to hold a Royal Commission into banking practices.

What people need to do is wake up to the risk they take when using a credit card. First of all, do you really need to spend that money. Because of the easy access to it prices of goods have risen exponentially. This involves also what the financial institutions are able to charge for lending you finance.

As prices soar so the cost of living rises and while wages are falling the difference is now so great between what people owe and what they can afford to pay that many are forced into bankruptcy. This makes the banks happy because under those circumstance they can seize property, sell it far below cost, and keep the proceeds.

Credit is no different to putting money into poker machines or throwing it into the street. It is a dumb act to try to make it work for you. While it is used mostly by those who are already struggling the situation quickly spirals out of control.

The bottom line is use a debit card to avoid carrying cash. Don’t spend money on things you can’t afford and don’t really need. Cut up the credit card and keep your finances in better shape. If you haven’t got the money then don’t spend it.