Credit Report

Credit Report

Credit report is like a personal diary of a person. It�s like your financial condition, provide information about where you live, work, your pay, how you pay bills. If you pay bills on time of after due date. Your past information like if you have filed for bankruptcy, have been arrested or sued over last 10 years. All your information is complied by these companies called Consumer Reporting Agencies (CRA) or Credit Bureaus, and sold to businesses on request.

You should periodically review your credit report for omissions or inaccuracies from CRA. Most financial advisors usually advice their clients to review credit report from time to time. Specially when you thinking of buying a Home, you should make sure your credit reports are accurate and clean which is must to speed your credit-granting process.

Fair Credit Reporting Act known as (FCRA) allows businesses from every occupations evaluates your applications for insurance, employment, credit and other purposes, so complete and accurate information on report is very important. If you apply for any type of Credit or financing, your credit report are viewed from at least one of the three major Credit Bureaus. Many of the small or medium credit bureaus are their around country, and they are affiliated with any of the three Major Credit Bureaus i.e. Experian, Trans Union or Equifax. You should make sure your credit report when pulled from any of these agencies is clean credit report

Getting Your Clean Credit Report.

If there is a case where you have been denied insurance, credit or employment based on the information provided by credit reporting agency. TheFCRA rules say that you should take the agency�s name, address and telephone number who has given your credit report. When contacted to the credit report company, you should get the free report within 60 days of denial notice. You are also entitled to get one free copy of your report each year.

You can call each credit bureau listed for your copy since more than one may have your file, some might have different information. The three major National Credit Bureau are:

Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.

Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397 3742).

Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.

Correcting Errors for Clean Credit

You should always contact your CRA and information provider to protect all your rights under the laws and keep your credit clean. We have tried to list some positive points to keep your Credit Report clean.

To get clean Credit Report, ask your credit report agency to write information what you believe is accurate. Always include copies (original should not be given) of documents that support your information. You should always provide your complete name and address. Clear identification of each item should be stated in your report of your dispute, explain in detail why you need deletion or correction of dispute information providing facts. Remember to keep dispute letter copies for future reference.

With in 30 or unless day any consideration for dispute of all items in question must be investigated by them. Relevant data of yours about the dispute information should be provided after a notice is received by information provider from CRA. All the information should be reviewed, investigated properly provided by CRA and reported back to CRA for any differences. If information found is inaccurate then you must report to all CRA�s nation wide. This will help them to correct information about your file. And if some information you found is disputed and not verified , ask then to delete, this will help you receive a clear and clean credit report.

If you have clean credit but receive erroneous report from CRA, you should ask then to correct it. Also if your report shows an account belonging to some other person, you can request CRA to delete the said error from your file. Incomplete items must be completed by CRA. It should show current record for example In your report it should that you were failed to clear dues by over 30 days, but it failed to mention that you are no longer offender.

A free copy of your credit report with written results should be provided to you after all the reinvestigation is completed. Unless information provider has verified for any disputed or deleted item, they should not put it back in your file.

On your request a notice should be send of your corrected clean credit report to anyone who has asked for your credit report in past six months. If you are a Job applicant you can send your clean corrected credit report to who ever have received in past 2 years for employment purpose. You can ask CRA to include in your file your statement of dispute I in all future reports for any item which is still under dispute or investigation.

You can also provide in writing any disputed item in addition to writing of CRA credit report. Include copies (not originals) of documents to support your disputed cause, a provider can also provide an address for disputes. A notice of your dispute should be included if a provider reports any item to CRA. If disputed item is corrected and the information provider is satisfied, provider will not include disputed information again, thus you can have a clean credit report.

If your negative information is accurate, then it would take 7 years in general to remove negative information from your credit report.

Clean Credit

Exceptions for Clean Credit Report.

Your bankruptcy information usually appears in your credit report of at least 10 years.

Criminal conviction is reported in the credit report with no time limitation. Any lawsuit or unpaid judgment against you may be reported for 7 years or after certain period.

For a job applicant whose salary is more than $75,000 or more or has life insurance has no time limit.

How to add clean credit accounts to your file:

Most of the national banks, departmental stores, credit card accounts are included in your credit report file. Some creditors like travel, entertainment, gasoline card companies and credit unions do not report clean credit which will reflect in your file and this may not reflect clear credit report.

In case you have been denied clean credit due to no credit file or insufficient credit files. If you have accounts with creditors whose record does not appear in your credit file, on all future reports you may request CRA to add this information. Many CRAs will require fee to add verifiable accounts. But you should understand about this creditors. If this creditors do not report to CRA on regular basis, then your credit report will not be an updatefile.

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Understanding Student Loans

Understanding Student Loans

Students who opt for higher studies often find that they lack the required capital to fund their anticipated study program stretching perhaps to several years. Fortunately, there are many institutions that a student can turn to for assistance for financing his education program. Except in the case of grants and scholarships, all other loans taken have to be re-paid; and unfortunately this fact does not strike the borrower forcefully enough at the time of obtaining loans. The obvious reason for same is since many repayments start only on graduation; and due to a feeling of satisfaction for the time being at finding the funds to cover more and more of the direct education costs and other education related expenses.

There is a cost attached to every loan that you take and it is very important that you educate yourself first on the types of loans available, which carry fixed as well as variable rates of interest during the lifetime of the loan. Even at fixed rates, the rates attached to different types of loans differ, as does the repayment periods, deferment options etc. It is also pertinent to visit websites of different lenders and do an in-depth study of the diverse packages on offer and / or negotiable, incorporating varying concessions on credit terms with regard to rate of interest, repayment period, deferment options etc; so that you can select the type and lender that best suits the circumstances on a case by case basis.

For purposes of college education, it is the Student Loans (except for limited Perkins Loans) that carry the most favorable all-round terms than any other general financial loans, and as such your search should mainly be confined to all types of student loans only.

1. Student Loans may be classified broadly under 2 categories:

(a) Federal Loans

Government sponsored loans executed via the Federal Family Education Loan Program (FFELP) and generally carry fixed, low interest rates; Perkins and Stafford Subsidized loans are need based while Stafford Unsubsidized and PLUS loans are not need based; but do not generally cover related costs of education such as tuition, books, computers, board and living expenses etc. Multiple options for re-payments and deferments may be available. Can be obtained through schools, banks and other student loans lending institutions

(b) Private Loans

Granted by private lenders and are obviously at higher interest rates than federal loans, but you do not have to show financial need for the amount of the loan and there is also no maximum limit, but have to show a good credit score. Deferment options may be obtainable (though at a price). Credit terms obtainable can be further improved by getting a good cosigner to support your loan application. A parent can apply on behalf of a student as a co-borrower to take advantage of his / her good credit score, but the responsibility for the loan lies with student as well as co-borrower parent.

2. Federal Loans comprise mainly of 3 types of loans:

(a) Perkins Loans

To qualify, have to establish �need� for exceptional financial aid, and be enrolled in school at least half time. Carries a Government subsidized fixed interest rate of 5%. Borrowing is limited to $ 4,000 for undergraduates and $ 6,000 for graduates.

(b) Stafford Loans

General conditions applicable for all types of Stafford Loans

To qualify, have to be already enrolled in a college at least half time or planning to be enrolled at least half time in a school participating in the FFELP Scheme, sometimes trade and business schools also may be considered; but those attending full time could obtain enhanced loans than those attending half time. Interest rate is currently fixed at 6.8%.

The applicant has to show the need for financial aid in respect of Stafford Subsidized Loans, (although it is not necessary to show need for financial aid to get a Stafford Unsubsidized Loan). No credit check is required; loans are low interest bearing at a standard fixed rate. Stafford Loans come in three types with prefix �Subsidized�, �Unsubsidized� and �Additional Unsubsidized�.

Essential differences between Subsidized & Unsubsidized Stafford Loans

The meaning of �subsidized� in the context of these loans is that the federal government guarantees the loan and also pays the interest component of the loan while the student remains at school as well as in the case of any and every occasion a deferment of payments is allowed to the student on request. In the case of unsubsidized loans the student undertakes to pay the interest as well and although deferments may be allowed, the consequent accrued interest also has to be paid by the student, thereby adding to the total cost of the loan.

Stafford Subsidized Loan

Log term, low interest, need based which has to be shown by filling a FAFSA form (Free Application for Federal Student Aid), but no credit check is required;, Loan guaranteed by federal government and interest too paid by government, postponement of payments possible in some cases and if allowed, accrued interest thereon too will be paid by the government.

Stafford Unsubsidized Loans

Log term, low interest, not need based, no credit check, interest is paid by the student; postponement of payments is possible in some cases, but accrued interest thereon is payable by the student. More suitable for those who don�t qualify for other loans or those who still need additional funding for their education.

Stafford Additional Unsubsidized Loan

Federal guidelines classify certain students as �Independent Students�. Another branch of Unsubsidized Stafford Loans known as Additional Unsubsidized Stafford Loans are generally reserved for borrowers from this Independent Students category.

To change your status from eligibility for a subsidized loan from an initial eligibility for only an unsubsidized loan.

Although a student may initially not qualify for a subsidized loan because of his lesser need in virtue of his part time work or other income, if he now quits his work / employment, he can fill a fresh application form showing his changed financial status and the new need for additional financial aid which may qualify him for a subsidized loan on the second occasion.

If this succeeds, it would make a very big difference to your total cost ultimately payable as an unsubsidized loan ends up very much costlier than a subsidized loan to repay, for obvious reasons.

Students may defer interest payments until graduation or up to when school attendance ends. When repayments start, a student may find himself owing anything between $ 20,000 - $ 100,000 or even more. Loan Repayment re-scheduling is not always negotiable and Stafford Loans are not dischargeable through bankruptcy.

(c) PLUS Loans (Parent Loan Undergraduate Students).

Parents do not have to show financial need to apply. The only federal loan where a credit check is required (although not a full scale check), however, parents should have not have had any adverse credit experience / records of default or bankruptcy; interest rate is currently fixed at 8.5%. This type of loan is disbursed to parents of undergrad dependent children who are enrolled in school at least halftime. (independent children are not eligible). Can borrow up to total cost of entire education of a dependant child undergraduate less: any grants, scholarships received. Repayments start after 60 � 90 days from the full disbursement of the loan; or after the student graduates.

3. Private Loans

These are also known as Alternative Education Loans and are offered by private lenders. There are no federal forms to be filled and these loans are not need based. Eligibility will depend on a good credit score. The rate of interest is (obviously) higher than in the case of federal loans and variable. Maximum amount that can be borrowed as well as a reduction in the interest rate are dependent on how good your credit score is. If your credit score is not good enough for the lender, to service your maximum requirements, getting a cosigner of high credit standing to support your application may achieve those extra benefits for you. These loans are generally taken as a supplement to federal loans to bridge the gap between the borrower�s actual requirement of financial aid and the limited amount that can be borrowed under federal loans programs; or when they need more flexible repayment options.
4. Conclusion:

We have given above concise and yet sufficient details in order to get an all round basic idea of all types of student loans available for the funding of educational programs. We have not tried to overload this article with comprehensive details and facts pertaining to these loans since we have already posted 2 separate and more comprehensive articles on Federal Loans and Private Loans under the captions of Federal Student Loans and Private Student Loans respectively. We recommend the said two articles for those desirous of obtaining more details on eligibility, features, repayments etc., and a deeper understanding of the advantages / disadvantages and other implications pertaining to all classes of Student Loans.

By Gus Taperman

Is Refinancing the Way to Go

Lots of people have started engaging themselves in some activity or the other, making their lives simpler and better, post the development of information technology, particularly after they started getting themselves into debt traps.

They try to look for ways of lessening their troubles; even if that means changing things around - the risk factor of falling into another set of problems runs high.

The theory of refinancing is one such example. A few people feel that refinancing would be the best solution for all their debt-related problems, and opt for it without understanding anything about it. They don't realize that it is just a better choice. Moreover, the truth is that if the concept is incorrectly implemented, then one may go through a lot of changes.

The Concept

Basically, refinancing is a procedure of requesting for a secured loan so that the person can settle the already present higher loan amount, as they are no longer in a position to pay the interest amount. The primary reason for people opting for refinancing is that they want to reduce their interest charges, if not eliminate them completely.

The most popularly known types of refinancing are ones involving home mortgages, as these are difficult to pay off. In such cases, the debts keep accumulating due to the increased interest charges, as you are unable to pay them off.

If you have problems with your debts and wish to either decrease or eliminate the interest charges, refinancing would be apt for you. However, you should know the downside to this, so that you don't find yourself in another mesh of trouble.

If you are considering refinancing your home to lower your monthly repayments it's important to do plenty of research to see if it is really worthwhile for your own situation. These are the main points to consider when making this decision:

Whether you are going to remain in your home or plan to sell up and move on

Is the interest rate lower than 8%?

How long will it take you to break even
How long it will take for your savings to compensate for the cost of your refinancing
When considering a possible refinance don't just look at the stated annual percentage rate (APR), but also take into account such factors as the terms of the mortgage and the amount of time it will take to pay off the loan principal and interest. Although a short loan period usually means lower interest rates it can also involve higher monthly repayments, but does have as its advantage greatly reduced interest costs over time.

You also need to consider whether it's best to choose a fixed rate mortgage, which keeps the same interest rate over the entire period of the loan, or an adjustable rate mortgage (ARM), which while offering a lower introductory rate than a fixed rate mortgage is liable to increase in the future if interest rates rise. The bottom line is that if you do plan to stay in your home for an appreciable length of time it makes sense to go for a fixed rate, but if you are planning to sell up and move on before the rate goes up, then you could save money by electing to go for an ARM.

It's worthwhile considering at this point that the very low interest rates of recent years are likely to give way to higher ones over a period of time.

If you decide to refinance bear in mind that a lower rate of interest is often accompanied by having to pay fees to the lender on closing the deal. These are known as 'origination fees',' 'discount fees' or 'points', where one point is equivalent to one percent of the total value of the loan. Loans with higher rates of interest do not carry such fees so it is important to weigh the pros and cons of either option.

Remember too that the costs of refinancing may be lower if you stay with your existing lender simply because this will speed up your application as they already hold your important financial information, and that this may certainly simplify the process! This is just one consideration however when coming to a decision as to whether to refinance or change your company ' the important thing is to take your time in reaching the right decision for your particular situation, taking care to shop around, compare figures and asking lots of questions!

You might wish to employ the services of a financial advisor but whatever you do make sure that you read the contract very thoroughly before you sign anything and don't let anyone rush you into reaching a hasty decision. Good luck with your aim to reduce your monthly payments and do use your savings wisely, perhaps diverting them to a retirement plan or for your children's education.

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Home Ownership

Home Ownership

There was a time when owning your own home was as much an investment as a way to put down roots. But if you wanted to make a quick profit it was the done thing to sell up and move on, to re-invest in a new property often in a different location. Now however, times have changed due to a probable slump in the housing market, say some. It is predicted that national home prices will decline in 2007, making this historically the first serious housing slump since the Great Depression.

(Of course there have been several notable examples of long deep slumps in housing prices such as in Texas following the fall in oil shares in the mid 80s, New England in the late 80s and early 90s and in Southern California following the fall in Soviet Communism and subsequent slump in defense spending).

Weighed against the obvious security gained from making roots and settling down in your own home is the probable fact that it can work out more expensive to buy your property, than to rent. This is when you factor in not only such additions as closing costs, after-tax costs of mortgage interest, commissions and local taxes, but indeed the regular high maintenance costs involved with owning your own home, such as outgoings on home repairs and improvements and home insurances.

Nevertheless, there are of course financial advantages in buying. First of all, your mortgage is tax deductible, whereas renting definitely is not, as the government allows you to deduct mortgage interest and property taxes. Moreover there is a distinct advantage for those who might otherwise neglect to make important savings, in that the monthly mortgage repayment over a period of perhaps 15 or 30 years incorporates a portion that not only reduces your debt but also increases over time. You will certainly make considerable financial gains in buying your property, the only drawback being that you could experience severe losses in the case of the predicted housing slump.

Despite this however, much security and happiness is derived from owning your home. The fact is that it is your own and you do have the freedom to make those improvements and extensions, something which is not possible if you rent someone else´s property. Plus on the financial side there are, indeed, tax incentives on mortgage interest and property taxes which, again, are not available to renters. It is definitely worthwhile to own your own home, in terms of it being the place for you and your family to put down roots. Making those monthly mortgage payments means that you are contributing to your future savings, which is great for those who perhaps lack the incentive to otherwise save!

In conclusion, enjoy the security and freedom of owning your property, but don´t t rely on it as a long-term investment, that will yield huge dividends. Concentrate on creating a comfortable home for your needs, but don´t regard investment in home improvement as a means to finance your retirement. Instead, it may be a better idea to invest some money in classes about financial assets as stocks and shares in thriving companies, globally, are the most likely to succeed and gains accrued in this way may be the best way forward for providing a comfortable retirement.

By Gus Taperman More...