What Is Your Credit Score?

Any potential lenders may use your credit score to assess how likely you will repay before deciding if they will lend you any credit. There are three leading credit reference bureaus, Equifax, Experian, and TransUnion that hold information for lenders to view about you and enable them to make their decision.

Each of the credit reference bureaus will score you differently; therefore, you will not have the same score from each of them. As a rule, the companies will look at your debt level, how consistently you have repaid it, and whether there are missing repayments. But each bureau may look at different data than the other, hence the differing scores.

Financial institutions can view a raft of information in your credit file. This can include:

Current debt level
Bills paid consistently on time
Any missed repayments and when they were missed
Repeated applications for credit in a short space of time
Length of credit history

The criteria that lenders look at varies between each lender, as types of credit vary, such as banks, mortgages, credit cards or auto loans, etc.

Lenders also look for affordability, so they will likely request your income and expenditures to check that you can afford to repay the credit.

Your credit score depicts what is in your credit report. Your credit score is viewed as a number, and scores can range from 300 to 850. There are many factors in your credit report that contribute to your score, and the higher your score, the better chance you have of being accepted for lines of credit. The lower your score means you may have difficulty getting credit or getting good terms on your loan, such as a lower interest rate.

What makes for a good credit score?

Pay your bills on time, every time.
Pay any credit card balance in full each month.
Utilizing less than 50%, or even 30%, of your available credit (e.g., if you have a credit card with a limit of $10,000 but you owe only $2,000, you are only using 20% of your limit)
Paying any debts off as soon as possible
Keep a credit card with a zero balance open, even if you owe a small amount on another. If you close the account, it lowers your overall credit limit. For example, if you have two credit cards with a total limit of $5,000 each ($10,000 total) and you owe $5,000, you are only using 50% of your total credit limit. If you close one account, that now leaves you with a total credit limit of $5,000, and now you are using 100% of your total limit.
A long and well-managed credit history
Utilizing different types of credit such as a credit card (revolving credit), installment loans, a mortgage, etc. to show you manage your finance well

What affects your score negatively?

Consistently missing bill payments when they’re due
Applying to a lot of different lenders in a short space of time, making you look desperate
A short credit history
Bankruptcy
Not having had any credit and therefore no credit history available for lenders to decide if you are likely to repay them.
Any mistakes on your report will work against you, so be sure to check your report regularly and contact the lender or CRA if any changes are suspicious.

Positive information can stay on your report for up to 10 years. Credit card accounts etc. (aka revolving credit) will be on your credit report for as long as the account is open, which, when well managed, improves your credit score.

Negative information, such as bankruptcy, may stay on your report for as long as ten years. Other types of negative information may be on your record for up to 7 years.

As a rule, your repayment history is what lenders and creditors will look at to see how well you manage your finances. They can see if you pay on time consistently or if you have missed any repayments and how often this occurs.

You are entitled to a free credit report once per year. If you applied to one of the three bureaus every four months throughout the year, that means you will get three reports a year. You will be able to view what is on record about you by all of them. You can get your annual credit report here at Annual Credit Report.com.

Keeping a close eye on your reports can help build an understanding of your score and check that it is accurate and up to date.

Advice To Help You Pay Bills During The Coronavirus.

With the Coronavirus outbreak rapidly progressing throughout the United States, and the world, it’s understandable that millions of people have severe concerns regarding their finances and their future. Many are looking for advice with help to pay their bills during the coronavirus pandemic so this article will benefit some people in their search for answers.

Try not to panic, firstly

During financial hardship, it’s very easy to become overwhelmed because of worry and anxiety. Ultimately this can hinder our efforts to be objective when it’s most needed. A clear plan is crucial at this time, to be able to see where you can cut back before looking into assistance programs that may be available.

If you have lost your job

The first thing you need to do is ascertain what you are eligible for if you have become unemployed. Find your state’s unemployment benefit office here. Most states have made the application process easier and waived the waiting period before receiving any benefits. Apply as soon as you can because, although the waiting period may be waived, there is also an extremely high demand for the service at the moment.

The federal relief package (CARES act) was announced at $2 trillion. It is aimed to make benefits more available to all workers, including part-time and self-employed workers. Beneficiaries will be given an extra $600 per week and an extra 13 weeks of eligibility. The maximum amount you will receive varies depending on which state you work in.

Review your budget

If you don’t already budget, now is a good time to start. There are tens of printable budget planners available online. These help tremendously when looking to see where your money goes, once you receive it.

Firstly, total up your income. This may be just a salary, but also include any enhancements or disability or unemployment aid that you receive.

Secondly, list every expenditure that you have, from a mortgage or rent payments, right through to subscriptions and memberships. There will be bills that are essential, such as rent, groceries, and utilities and some that are non-essential.

Are there any payments leaving your account for something that you no longer use? This may be a lapsed gym membership or a subscription to a magazine company. Now is the time to define necessity over luxury and ask yourself if you really need it. Cancel anything that you can live without.

Mortgage/rent

This is one of the biggest concerns of all- keeping the roof over your head. There may be different legislation depending on where you live, but see if there is an eviction moratorium where you are. Many states are rolling this out, so be sure to check. Essentially, this means that if you cannot pay your rent due to the coronavirus pandemic, then you cannot be ousted from your home.

Contact your landlord as soon as you can and explain your situation. Your landlord may be able to organize an arrangement between you, where you have a reduced rent with a view to repaying when you are financially more sound. Ensure you know your rights beforehand regarding local legislation and evictions.

The Federal Housing Administration (FHA) has also announced that it will suspend foreclosures on single-family homes, as long as they are FHA-insured. This ruling was announced on March 18th, 2020 and is valid for 60 days. If your home was already in the process of foreclosure, this too will be suspended.The Federal Housing Finance Agency have some further information here.

Fannie Mae and Freddie Mac have said to call your provider and explain that you cannot pay your mortgage due to the coronavirus. Whether that’s due to unemployment or caring for someone who is sick, they aren’t asking for evidence. They may be able to defer repayments for as long as six months.

Whatever your situation, do not just stop making your mortgage payments. Contact the company and they will advise you of your next steps.

Utilities eg. gas, electric, water and communications

The majority of states are demanding that energy suppliers (and water) freeze any likely cut-offs due to the Covid-19 pandemic. Check with your local offices to see how to go about this, such as how to call and explain your situation, and to see how long these freezes are in place.

Look into comparing prices between utility providers. It may be worth noting that your current supplier, whether it be gas and electric or home internet, could implement a payment plan with you before you change companies. Many of these large firms would rather keep you than lose you. Having said that, you may be able to get a much better deal elsewhere; you have nothing to lose by asking around.

Contact the Low Income Home Energy Assistance Program (LIHEAP) to see if you’re eligible. The website has a fact sheet that helps explain how you may qualify. They provide federally funded assistance in managing costs associated with:

Home energy bills
Energy crises
Weatherization and energy-related minor home repairs

For any concerns about your broadband and telephone connections, the Federal Communications Commission (FCC) have released a statement on their website. Their aim is to prevent anyone from losing their connections during the pandemic. On their website is also a regularly updated list of which companies have signed the pledge.

Medical help and insurance

If you have lost your job and your health insurance was tied to it, it is critical that you try to replace it. You may find that the premiums are not affordable if your salary has been slashed. Being in the middle of the Coronavirus outbreak is not the best time to lose insurance.

If you become ill, you don’t want to be left with a 5 or 6 figure bill. If your partner or spouse still has an insurance policy, ask if you can be put onto that.

If you are aware that you will struggle to pay any premiums, contact your provider as soon as possible.They may be able to help by extending the deadline of your payments or at least not terminate your coverage at this time. If the total household income has changed, you may qualify for more savings than you did previously.

Look at the Affordable Care Act. This page has answers and links for most questions. A handful of states are extending the deadlines to help the uninsured enrol.

If you now require insurance due to losing your job in the last 60 days, or even expect to in the next 60 days, you may qualify for a Special Enrolment Period. This also includes if you have lost coverage through a parent or guardian due to you no longer being dependent. These special circumstances also apply to you if you have not yet signed up this year, 2020, to allow you to reconsider doing so.

To see if you qualify for the Special Enrolment Period, Medicaid or CHIP, you can click here.

COBRA can give employees and their families the right to continue group health benefits for a limited period of time during particular circumstances. This could include voluntary or involuntary job loss, a reduction in your working hours and other life events.

If you require urgent treatment, your local hospital may have a financial department that could offer help or a solution.

Credit cards and loans

Contact the company that you have your line(s) of credit with and ask if they are willing to waive any fees and extend payment deadlines. Some are allowing you to skip a payment until next month in a bid to help, with others stating that they won’t inform the credit bureaus of late payments for two months. The three main credit bureaus are Experian, Equifax and TransUnion.

It makes sense not to overspend at this time if unnecessary, you will have to pay the debt back at some point, remember.

For students with loans, President Donald Trump announced that there will be a two month break on repayments at this time. If you have a federally-held student loan, then you won’t have to pay interest on that currently either.

If you are concerned about missing payments on a vehicle, there is help available. As with all of the financial issues on here, contact the provider first. There may be a way to extend your lease or to defer payments for a certain amount of time, such as 90 or 120 days, depending on the dealer. Some dealers are suspending repossessions of vehicles in such circumstances.

Grocery shopping

If you are struggling, don’t be too proud to ask for help. Consider shopping at a budget store and only buy essentials. Use social media to see if there are any local food banks within your community, or any charities that can assist you.

Organizations such as Feeding America and the Salvation Army have food banks across the USA. Simply enter your zip code to find where is the nearest one to you.

There are companies from which you can buy low cost food too.

Some of the rules around government meal programs have now been relaxed amid the Coronavirus pandemic. For a more comprehensive list of what’s available, visit Food Assistance.

Plan your meals in advance. By doing so, you only buy what you need. If you can, batch cook meals and freeze them. This very often works out considerably cheaper.

Shop for reduced price or on sale items. Try the store’s own brand rather than the higher end named brand. Search for money-off coupons, there are many you can print at home to take to the store with you.

If you’re home at the moment and have some time on your hands, why not have a go at growing some of your own vegetables and salad ingredients?

Relief is available, but you will likely have to ask for it. Whatever you do, ensure you contact the relevant organizations or companies first, rather than missing repayments; honesty is always appreciated.

You are not on your own at this time. You may struggle to contact the company by phone due to reduced staffing. If this is the case, use live chat or send emails. The process is ultimately going to be slower than usual, but have patience.

Eight tips for how to save on a wedding gift

According to the 2018 Wedding Guest Study by The Knot, an online marketplace, guests spent an average of $289 on a wedding gift

Add to this the cost of a new outfit, transport and possibly an overnight stay, it can be an expensive time.

Here is a handy guide to help keep some of those costs down:

Set a realistic budget- This is a crucial first step. Whether a combined budget for everything- gift, clothing, transport and refreshments or just the gift itself, it is good practice to have a set limit or it can spiral out of control.
Buy off registry- Take a look at the registry if there is one, you may be surprised at what is on there. Many people choose to pass over on the smaller, ‘less important’ items but they are on the list for good reason- they are wanted! Some of the utensils or crockery etc could make a great hamper.
Buy discount gift cards/ experiences- There are plenty of websites offering discounted cards and experiences. They are great options to look into. Swagbucks allows you to take surveys, watch videos and do shopping online in exchange for free gift cards. Giftcardgranny offers discounts or cash back on your favourite gift card brands. Sites such as Groupon and Living Social are also sites worth visiting- you could purchase a couple’s spa day with massages or experience for whilst they are on honeymoon. There are cinema and dining deals for a romantic night out together post-honeymoon.
Stockpile credit and travel rewards- If you travel a lot for pleasure or business, many hotels and airlines offer loyalty schemes/ programs. You can earn points and miles and some of the programs allow you to spend these across other programs. These could be used to upgrade the happy couple’s flights. Some credit cards also offer great rewards.
Provide a professional service- Do you own a car that is the envy of everyone? Are you a budding photographer? Is baking your forte? Maybe you’re spectacular with hairstyling and makeup? Any of these ‘services’ could be provided by you, as your gift. The bride and groom would be saving a lot of money and so would you, win-win situation!
Contribute to a cash registry- These can include honeymoon fund contributions or towards a large purchase such as a sofa, garden fund or even towards a deposit for a new home.
Go in on a group gift- If there is a more expensive gift that is on a registry, could you and other friends or family members all put in together to purchase it? Bigger gifts are sometimes there with an expectation for people to pull together for it.
Make something- A romantic night in? Pack a box set, a cosy blanket, some candles and snacks. Or it could be a jar of passata, pasta, herbs, candles and napkins for a meal. A honeymoon hamper- beach towels, sunglasses, sunscreen, fun beach games and a good book or two. If you’re very close to the couple and part of every step, maybe a scrapbook with pictures, fabric samples, wedding invites, order of service, photos and some personal messages from those closest to cherish memories of the lead up to it.

Blog