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Archive for the ‘long-term goals’ Category

Whether you’re looking to purchase a new home, take out a new line of credit or simply assessing your current financial position, having a good credit score is a must. Here’s how to improve your credit score so that you can meet your short and long term goals. Of course, you’ll first need to obtain a credit report so that you can evaluate your score and spot potential issues.

1. Pay Bills On Time – Late payments are the most common pieces of negative information that are posted on credit reports. There are certain loans like mortgage loans that have a more drastic impact, but it’s a good idea to pay all minimum balances on time. Ultimately, you want to avoid having your account sent to collections, not to mention, paying late fees is never fun.
2. Keep Credit Card Balances Low – It’s always great to see that your credit card limit has been raised, but you don’t want to reach your maximum limit. Having large balances on credit cards will hurt your credit score, so it’s best to keep your balances within a moderate amount, approximately $350 for every $1000.
3. Have Old Bankruptcies Removed – If you had a bankruptcy over ten years ago, make sure it has been removed. It’s not uncommon for bankruptcies to linger on your credit report, but after ten years, they should be wiped clean.
4. Spot Potential Errors – Errors are commonplace, even on credit reports, which is why it’s essential that you maintain yours. You receive three free credit reports each year from major bureaus, and you should take advantage of these by printing off the reports and looking for false information.
5. Reach Out to Creditors – Although creditors don’t seem to be our friends, working with them is the right attitude to have. If you don’t pay your bill, they don’t get paid, and the cycle continues. If you are faced with a challenging financial time, reach out to the creditors and try to negotiate a compromise.
6. Avoid Applying for Too Much Credit – Taking out too many new credit cards will hurt your score. If you can pay for something without taking out a new line of credit, you’re better off paying for the purchase upfront. However, if you’re shopping around and inquire for several loans for the same purpose, this will not have a negative effect on your credit score.
7. Separate Your Credit Accounts After a Divorce – Since you don’t want to take the fall for your ex-spouses poor decisions, be sure to close all joint accounts, pay them off or have your name removed. Then start building your own credit by taking out a new credit card.
8. Don’t Close Unused Accounts – Having a positive account is beneficial to your credit score, so be sure to leave a few cards open, even if you’re not actively using them. Place them in a safe place and maintain your good standing.

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Getting behind on payments can happen to anyone, but not getting help to get caught up can mean a significant risk of losing your home. And for those who become behind or facing the prospect of foreclosure, there may be government help for late mortgage payments. Keep in mind that the government is not going to simply give you money to get your loan caught up.

However, today’s government regulations do offer some protection for homeowners, and many lenders are at least making an effort work with borrowers to get their loans back on track.

First steps you can take

The government suggests individuals to take their first step by calling their mortgage lender and determining if the lender can help them directly. Oftentimes, lenders are willing to adjust interest rates or to help individuals to get caught up by making home loan modifications. For example, the lender may agree to tack on the missing payments at the end of the loan or may agree to allow you to repay the missing payments over a period of time.

Making Home Affordable

Another option that may work if the lender is not immediately willing to work with you is the Making Home Affordable Modification Program , called HAMP. This is a form of government help for late mortgage payments. You may qualify under certain circumstances, if you meet the right requirements, such as the following.

• You are living in the home you are behind on mortgage payments (it must be your primary residence).
• You owe less than $729,750 on your mortgage and began it prior to January 1, 2009.
• Your payment on the loan is more than 31 percent of your gross income at this point.
• You cannot afford to make your mortgage payment due to some type of financial hardship, such as a job loss or because of medical bills.

In these situations, the lender may agree to work with you under this government help for late mortgage payments. You will need to apply for this type of help through the federal government’s website for the program. You may or may not receive help. It is important to consider your long-term goals here. In some situations, if you do not have the financial means of being caught up, you may lose your home due to the inability to pay your loan.