Credit Score

Tips On Saving

In these uncertain times, saving money is as important as earning. Saving money is a great and effective way to see your wealth grow day by day. It is also named as “achieving financial freedom” and the key to do this task is to spend less money than you actually make. It seems like a very hard task to follow but there are many easy ways to save. First of all you need to grow a financial habit.

Read along for tips on saving:

• Pay your mortgages on time- You can save extra money by paying the mortgages every month with a set amount. An extra monthly payment every month can make a huge difference. You can set a goal, save and pre-pay your mortgage.
• Debt consolidation- It is the way to pay back other loans by taking a loan. In most of the cases, debt consolidation involves a safe loan against any asset mainly a house. Debt consolidation is very important to those people who are willing to pay the credit card debt.
• Saving money from salary- You can put aside some money from your paycheck as soon as you get it and can save the amount. You can also put the amount in a paying account to get higher interests. These amounts will help you to grow your savings.
• Use your credit card limitedly- Stop using your credit card or use the credit cards occasionally or in emergency. Make a habit to pay using debit card or cash. In this way, you can avoid debt problems as well as can save money. Don’t open new credit accounts.
• Use credit cards with 0% credit offers- You can save up to $ 1000 by using transfer credit cards with 0% balance. The cards offer you the liberty to spend more as well as help you to save money. But you need to be careful about the fees of balance transfer.
• Improve your credit score- Try to get a good credit score by paying off the credits as soon as possible. If your credits score increases, you can save up to thousand dollars in interest from a home loan to a car loan. You can also get benefit in the school loans. You can start from today by knowing your present credit card score and concentrate on to improve the score.
• Stay away from Private Mortgage Insurance (PMI) - If you are paying 20% of your monthly income, then you are only paying the private mortgage insurance. Contact with your mortgage company to remove the PMI and start saving.

Effective tips on saving also include investing regularly in a retirement savings accounts, cutting down unwanted expenses, getting rid of things you don’t need or avoiding impulsive buying sprees. How much you save is not important at first. The important thing is to get into the saving mode. Once it becomes a habit you will find it easier to grow your wealth portfolio.

Credit Score

Credit Scores Not Always On The Number

By Eileen Ambrose, Tribune Newspapers

Everyone’s got your number — a credit score, that is — and as a savvy consumer, you might want to find out exactly what they’ve got.

This three-digit number tries to predict whether you are a credit risk and can dictate the terms you get on credit cards, mortgage loans and insurance premiums. Once secret, scores are now widely pitched by companies, often for a price.

But the score you buy might not be anywhere close to the one your lender or creditor uses. Even a small difference could keep you from getting the terms you expected.

“They show you a score but don’t tell you it’s not the one that’s used by the lender, or not even used by a majority of lenders,” said Evan Hendricks, author of “Credit Scores & Credit Reports.” “That ain’t right.”

Scores and credit reports wield increasing influence on our financial lives. That’s why Congress has been looking into how they are created and used.

There’s also been a push on Capitol Hill to make credit scores more accessible. A provision in the House financial reform bill would allow consumers to buy the scores used by creditors. And next year, federal regulations take effect that could make free scores available to consumers applying for credit.

Credit scores remained a mystery until about a decade ago, when legislative pressure forced mortgage companies and credit bureaus to share scores with consumers.

Now they flood the marketplace. Fees run about $15 for a score and credit report, or $15 to $40 a month for a service that provides scores, reports and other features.

FICO is the oldest and most widely used score by creditors and lenders.

The three major credit bureaus, Experian, Equifax and TransUnion, created the VantageScore four years ago. Consumer advocates say it’s not broadly used by creditors, though TransUnion spokesman Steven Katz said many of the top financial institutions and credit card issuers use it.

There also are knockoffs, or so-called FAKO scores, that are purely educational and sold only to consumers.

Creditors select the score they want to use. It could be one that’s tailored for a specific product, such as autos or credit cards and not sold to the public. Or they can supplement a score with their own model.

Mortgage brokers find the scores a consumer buys can be 30 to 100 points higher than the FICO they use, said Liz Pulliam Weston, author of “Your Credit Score.” That can mean “not only don’t you have a good score, but you’re subprime,” she said.

Some creditors adjust every 20 points, Hendricks said. If you buy a score that says you’re a 740, but the lender is looking at one that pegs you at 720, the interest rate could be a quarter-point higher than you expected, Hendricks said.

If you’re just curious, try one of the free credit scores through Quizzle.com, CreditKarma.com and Credit.com.

But if you plan to refinance or make a big purchase using credit, buy your score at least three months in advance so you have time to improve it. (To boost a score, pay bills on time, avoid new lines of credit and reduce credit card balances.)

Buy the FICO score because it’s likely closest to the one your lender will use, credit experts say. Go to myFICO.com to get scores based on a TransUnion or Equifax report for $15.95 each. (Consumers no longer can buy a FICO score based on an Experian report, though lenders can get this.)

Get both FICOs in case the results vary significantly, a sign that one report holds more negative information than the other, Hendricks said.

“We focus so much on the credit score, we forget the score is driven by the report,” said John Ulzheimer, president of consumer education for Credit.com.