Friday, February 15, 2013

How To Avoid Bad Credit

As people say all the time, "Prevention is better than cure." When you don't have a poor credit rating, the best strategy is stay out of trouble. In this article, we will discuss tips on how to avoid bad credit.

3 Tips to Avoid Bad Credit

1. Pay Credits on Time

As if this can't be repeated enough, making regular and timely payments is key to preventing yourself from having a bad credit score. Timely payments surprisingly account to up to 35 percent of your credit score.

If you want to cancel out your previous issues related to late payments and inability to pay, then paying on time is a must.

2. Pay

Worse than late payments is not paying at all. This is an a-ha! moment for most people. So you should make sure that all your credit accounts are managed and organized well. Do not miss payment due dates and don't skip any payment.

If you are unable to produce the money intended to clear off the debt, you can call your creditors to inform them in advance. They may offer you consideration and understand your reason.

3. Have a Positive Maintaining Balance in Your Bank Account

When creditors learn that you are bankrupt, they will have you fill in the consequences. Bankruptcy in general indicates that you don't have the funds to pay for your loans. So you cannot have any sweet escape this time.

If you file and declare your bankruptcy, banks and creditors will be alerted and keep this in their records and your credit report for eight to 10 years. Yup, it's really this long. This implies that even if you have survived through this painful no-money stage after a few years, applying for loans will be more difficult with poor history.

End Notes

Having credits is like passing an exam paper. You cannot submit your paper late to your teacher in class; moreover, you cannot NOT pass your paper forward. Also, you cannot pass the paper without having any answers to bank in for points. Your credit performance is very substantial as an issue in deciding for your chance of approval (or denial) in credit applications. Avoiding bad credit is a must. If you want, you can include it as part of your New Year's resolutions. :-)

Wednesday, February 13, 2013

How to Go Through Car Insurance Application Online

With the Internet, you can ditch long queues and the hassle of going to the physical car insurance company to get your vehicle insured. Now you can quote for prices and submit your application forms online. In this page, we are going to discuss the basic steps of online car insurance application.

1. Explore the car insurance company's website.

The first step is to pump all the juice you can get from the corporate website of the car insurance company. Compare the rates of as many companies as there are available. You can also request for quotations and compare them side by side online. If contents on their website are not enough, fill out a contact form to ask further questions.

2. Note your zip code.

Part of the driver's information that is vital in the application process is your zip code. Apparently, the zip code is one of the factors considered in the cost of the car insurance. Certain areas in the neighborhood are known to have higher crime rates. If you happen to live in one of these areas, your car insurance quote will tend to be more expensive.

3. Provide your car's information.

Companies require the following car specifics and information: the make, body style, model of the vehicle, and the manufacturing year of the automobile. This is for them to get a far more accurate quotation for the car insurance plan.

If your car to be insured is not brand new and has been used for six and more months, the car insurance company will also asked for the mileage used, the frequency of use and the purchase date as well.

4. Provide a short family background.

Some car insurance companies need to learn about personal household information such as the number of people living in your house and other insured belongings. This is because some insurance plans not only cover for the damage occurred to your automobile but also the medical expenses. 

For this, you can go with MedPay coverage for the medical procedures as a result of the accident. You can also get advice if there are offered services of the auto insurance company to help you pay out for rented vehicles in case your vehicle is badly damaged.

5. Check up on your driving history.

The last basic thing they will check on is your driving history. How many times have you been into a car accident? Did you have any insurance plan in the past? What's the running history of your traffic violations? Once they have completed investigation on your driving records, auto insurance companies can send you the quote instantly and you will just have to consult with one of their agents to get more information and finalize the deal.

End Notes

Applying for a car insurance plan online for quotations is a lot easier and almost hassle-free. In most countries now, without any car insurance, you won't be allowed to use your car legally. So the best move is to get the car insurance for the cheapest rates and best package with good benefits.

Monday, February 11, 2013

How Beginners in the Real Estate Business Can Be Successful

Admittedly, the topic "real estate" used to really bore me before. But after learning more of the opportunities in store for investors in the real estate business, this domain had started to get my attention.

Now I know that real estate is one of the most promising places to invest money in, although securing a good real estate investment that brings profits sure requires deep understanding and knowledge. In this article, we will go through tips on how to find one that will bring profits.

Real Estate Investment for Dummies

1. Write Your Goals

Whenever you are and whatever you do, especially if you're the new kid on the block, you have to set goals to have something to work for. In the real estate business, you should not stay contented with your emotion as the drivers of your success. Rather, you should have pre-defined goals with timeline, roadmap and descriptions in an outline.

This goal list will make up to a plan that will also have to cover the risks and the mitigation tactics to recover from losses (in case) in the future.

2. Build a TEAM

Individual efforts may not count much if you are targeting close goals to the destination you aspire to land. The key is to build a team of people with different expertise in real estate such as the real estate agents and brokers, bankers, private lenders, affiliates, property managers, lawyers, accountants, property inspectors, contractors and real estate appraisers. This team will further add on to your knowledge about the legal protection, tax structure, substantial investment types, property management, and development of your resources.

3. Know the Trends in Real Estate

It is not enough to talk to brokers and real estate marketers and then decide which to choose and start on your real estate investment. You should be very critical in actually selecting the areas, neighborhood, structure and everything about the assets you will be investing in. Knowing the trends in the real estate market entails diligence and respective understanding on the market value of typical estates in different locations, expenses and cash flows for your intended business.

4. Hone your marketing skills.

Investing in the real estate business does not work in two steps: Buy and Sell. It hugely relies on how you market for the selling or renting out of the resource. Excelling in both the marketing and sales fields are important to capture customers and even leads. If you don't see yourself as a good marketer, maybe you can attend trainings and seminars before deciding to hire agents to work for you.

End Notes

Investing in the right real estate is marked with a learning curve. It does not work only by luck.You have to learn the techniques firsthand to fulfill your requirements. Failing at the start is quite an enriching experience and it might be beneficial for you to learn from mistakes. You can start by reading more resources about real estate (both historical, current and projections), to get on your toes for the perfect deal.

Friday, February 8, 2013

Top 5 Common Credit Card Mistakes

Applying for a credit card commonly requires easy steps: submission of an accomplished application form, ID and another document such as the certificate of employment or copy of the income tax return for the past two years.

However, maintaining credit card usage and handling debt are not as easy as they sound. Rather, they are nerve-wracking as much as they are comforting. Why comforting? Of course, you get both the luxury and privilege of borrowing money from a trusted institution and pay it later to continue your lifestyle.

In this article, we will talk about the common credit card mistakes that you should avoid and actions you can do to rectify them:

1. Not understanding the implications of late payments

If there are outstanding credits due in your balance, don't intend to play with fire and pay them right away. Late payments will incur you bad credit score and negative credit rating in your records. You will also need to pay some late payment charges.

If you admit that you're a bit forgetful in paying for the bill, you can sign up for an automatic payment facility that gets money from your account and automatically pays for your credit card balance.

2. Not knowing the date when credit card payment is due

You may be confused on the dates shown in your credit card bill. If you're unsure, check with the credit card company on the details of the bill. Ask for help when necessary and don't just make your own assumptions.

In general, the due date is not the deadline for sending your payment; it is when the merchant expects the receipt of the money. If you don't deliver payment on that deadline, you will experience the consequences of a late payment. A good practice is to make payments in advance. It's not hard to mark your calendars with reminders, right? :-)

3. Collecting many credit cards that results to difficulty in tracking credit card details

Some people just want to be collectors of credit cards to stuck in their wallets. These credit cards look good when piled up? I don't know. What I do know is that there are more problems in terms of tracking down the credit card details monthly such as the interest rates, balances and payment due dates.

It's okay if you have five and more credit cards as long as you can still handle them all efficiently. But if you can't, just stick with one or two that you can manage.

4. Compromising on credit cards with higher interest rates for loyalty points

It is common for credit card companies to offer promotions such as the loyalty program where you have to buy stuff to earn points and points can be converted to vouchers or gift certificates to make a purchase. Another one of the most used tactics is the collection of miles for a flight. This is also a point system where you have to earn miles that can be converted to the number of kilometers you can travel across the globe with their partner airline company.

You can ride on these promotions and use your credit card for points. But note that these cards may be the ones which have additional interest rates in the transactions. The tendency is to pay up more. In the end, you are only fooled to spend and spend extra using the credit card. It could be better if you withdraw cash from the ATM and use cash, or use a debit card to swipe for your purchases.

5. Not reading the terms and conditions

You may be signing up already for the agreement that you will be put to a death sentence without you knowing! Never sign up the terms and conditions of the credit card application without reading and understanding them in full context.

End Notes

Applying and using your credit card does not make you financially free or financially independent. On the contrary, it requires you to be more careful on your expenses. You have to be sure to clear off your debts and remember always to pay in a timely fashion.

Wednesday, February 6, 2013

Advantages And Disadvantages of Borrowing Credit

Indeed, when we are dire in need of a lifeline and we don't know where to get money to pay our due expenses, borrowing credit is the best way to solve our problem. However, as everything has a positive and a darker side, borrowing credit is no exemption.

Benefits of Borrowing Credit (a. k. a. Getting Money That is Not Your Own)

1. Spend Whenever and Wherever

You don't have the physical money in your wallet, in your bag or even in your bank account. But you have the purchasing power to buy anything you desire. This can be anything--TV, gadgets, refrigerator, an entire new wardrobe, a car, a house! You can even loan money to start your dream business.

2. Safety Not Carrying Cash

The advantages of using a credit card is overrated. For one, it's safe (you don't need to bother about robbers who will steal your cash or handbag). You can terminate the credit card at once with just a call reporting the incident to the bank or credit card institution. You will only carry one small and thin plastic card!

3. More Income

More income will come to your hands if you know how to circulate and make more money by investing in some profitable business. With a workable strategy, you can earn more than your active income supplied by your day job. For instance, you can borrow credit and build a small store near your house. Sell snacks to your neighbors and generate enough money to pay your debt and get more in return.

Cons of Borrowing Credit

1. Supporting Your Expenditure

Credit as a supporter of your expenses can be a good thing. But this is also a double-edged sword. Some people (and I hope it's not you) cannot resist the temptation to maximize their credit limit and NOT pay the borrowed amount afterwards.

Worse is when the credit limit is reached in one credit card, they start to use another credit card and spend as much as they want--without thinking about the consequences: lowered credit ratings and punctured credit report.

2. Interests Incurred in the Balance

When you are not paying the due amount of credits for a specified and agreed term period, you will be charged with interests. And further, these interests will grow while you are not clearing the debts out. More costs are added to your expenditure that you should not be paying for.

3. Change in Interest Rates

Be sure to read the credit card terms and agreement before signing on the dot. There are some credit card companies which impose the right to change your credit card limit and respective interest rates at their own discretion. When such thing happens, they will send you a notification mail to your address. Change in interest rates is not a good sign as it will be shown in your credit report that you are a risky borrower. Oftentimes, this is marked when there are lots of late payment and defaulted repayment.

Key Takeaway

Ultimately, the best advice you can take away is to use your credit card only when REALLY necessary. Else, credit cards would be contributor of major trouble than good support. If you enjoy this article, visit my other blog to read for more posts related to credit and other financial advice.

Monday, February 4, 2013

What is the Best Stock Market Capitalization to Include in Your Portfolio?

Companies can make their stocks go out listed for public trading. This is when they enter the stock market. But how do they determine the value of their stocks? This is through limits and identification of the capitalization.

In this article, we will focus the discussion on the different stock market capitalization. Which one among them are best to include in your stocks portfolio?

Definition of Stock Market Capitalization

Market Capitalization, or "market caps," is the total value of the company's shares. This value indicates an estimate of the company's worth in the market. To go for standard computation, you can determine the market capitalization of a company by multiplying the number of its issued outstanding shares and the company's net asset value. So gotta consult your accounting department here to check your books.

If you are not decided to list your company for the stock market, it is also ideal to know about your market capitalization. This is because business investors and financial analysts often assess your company's stock value not on your total sales and assets but on your stock market capitalization.

Capitalization Limits

Now that you are aware of how the capitalization value is derived, the next step is to define the category of your caps.

Each stock market index provides its own limitations to categorize whether your company's stock market capitalization fall on large, mid or small cap. But generally, market capitalization work in the percentile system (in dollar values) to make them standard across different regions in the world.

Large Caps, Mid Caps and Small Caps

When there's economic hiatus and political turmoil, the stock market does not get away with being affected. Volatility is much considered in the stock market.

Guess which among the large, middle and small caps is least volatile. If you think it's the small caps, you guessed it right!

Small Caps Stocks

Since the range of small cap companies' market value only spans from $1B and below, they have very high risks for investment. But they also have the most potential for growth, because it's like a "baby." Small cap companies are usually those which are newly established or those which have just suffered from a company loss.

Mostly, stock market investors who would include small caps in their portfolio are adventurous and high risk-takers. They are people who have a large appetite for large profits and are not afraid to lose money at the same time.

Large Caps Stocks

When the country is in economic crisis, it is best to buy stocks which are of large capitalization. These are the companies which have market value of more than $10B. Yes, every unit of stock is really expensive. But think of earning profits from large caps stocks in a long term view. They can be good already for your retirement plan.

Mid Caps Stocks

Half way in between small and large, we have the mid caps stocks which encompass company market value between $1B and $10B. Most investors own stocks that are in this market segment. Companies that have mid caps stocks have less probability of getting sunk; they also have medium probability of soaring high. This is just a safe place and best for those who want to monitor the stock market trends regularly.

The Verdict

Depending on your investment capability and financial goals, you may invest in either one or all these market capitalization. I also suggest to strike a balance of three three stock market caps to maximize the chance of being profitable and minimize risks.

Friday, February 1, 2013

Why is Your Credit Score Dropping?

Sadly, your credit standing may step down one level without known reason. This can be acceptable if the credit score is having only small dips. There would not be a big difference as compared to the one previously checked. However, when the sudden drops are like earth-shattering with a magnitude of six, you have the right to worry. The BIG question is, "why is your credit score dropping?"

Is there something wrong with the computation and verification of your credit score? In this article, we will try to give you clarity on this.

Common Reasons Why credit Scores Drop

1. Poor Payment History Connected

Your good credit points might be lost because of your payment history which contributes to 35% of your credit score. Credit bureaus consider the last 12 months of your payment history in calculating for your credit score.

If you have incurred any missed payment toward a loan, credit agencies will make your score drop. Another is when you send your payment late for your credit call bills and when you had a large expenditure that ate up your credit limit. This latter one may sound unfair but it's true. Credit agencies eye on your purchases just before you pay up for all of them.

2. Opening of a New Financial Account

The second cause of a lowered credit score is the act of applying for a new financial account. This one is worth 10% of your credit score. So closing your bank account which had bank credit history and opening up a new one will not make your name as fresh and good as you wish it will be.

This also holds true when you have discontinued your use of a credit card or when you maintain an account with no or minimal balance.

3. Outstanding Credits

Even if you are paying your debts consistently to creditors, your credit score is still punished by the outstanding credits you own. In the credit scoring system, the outstanding credits make up 55%. That's a considerably big percentage share right there.

To balance it off, you can have a shorter time for credit as length or duration of the credit accounts for 15% of the calculation. Moreover, you have to have lesser amount of money being credit. This accounts for the remaining 10% of the whole.

End Notes

Before you get an 'O' on your mouth for being caught surprised with learning about a low credit score, find out if these three reasons are applicable to your case. If any of them is encountered, you can continue trusting the credit score system for its calculation. You can also ask the credit bureau to show you recorded proof of faults you've made that brought to the low credit score.

Once the reasons are identified, you can either keep silent about it and then move on improving your credit score in the future. Else, don't be shy or afraid to escalate the issues or errors up to their attention. Miscalculation of your credit score (and anyone else's) should not be ignored. Find ways to dispute the errors and have the correct scoring be reflected on your profile. Whatever the case is, you must aim for a credit-worthy score.