Economic Domino Effect

Payday Loan Consolidation

Guest Speaker Angela Sanders

Earlier this month we posted an article about Payday Loans, and the possible pitfalls connected to this institution. This post was evidently compelling enough for a reader to ask to be a guest writer and post her own story. The following is from Angela Sanders, who writes a Blog of her own called A Financial Journal. We are always excited in bringing you the very best in information and calls to action on this blog. Here is Miss Angela…

Is it possible to consolidate your debts?

“The consumers take out payday loan to manage their emergency expenses at the middle of the month. When you apply for payday loan you are not required credit check so the interest on this loan is comparatively higher than other loan programs. Make sure that you pay off the owed amount on scheduled date to avoid the accruing interest on the principal balance.”

Pay Day Loans

Avoid Payday Loan Scams

Payday Loan Cycle

As the Thanksgiving and Christmas Season looms just over the horizon, having available money for holiday shopping swings into the forefront of our thoughts. As enticing as it may be, you should avoid payday loans except as an absolute last resort. Payday loans are also called “cash advance loans” and they are small, short-term loans that carry very high interest rates. Some companies have even begun to advertise them as “loans to help you repair your credit”, but this is very misleading. Some companies suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans back on time, you have to “roll-over” or extend the loan – often at huge expense and interest. Many people get into a “payday loan cycle”, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.

Short Sale vs Foreclosure

Surviving A Short Sale

There are several differences between a “short mortgage” sale and a mortgage foreclosure and the effects between the two are substantial for all involved including the borrower or mortgage holder, the bank and a potential real estate agent.

For the borrower, the benefits of a short sale include not having the “foreclosure” designate on a credit report, eliminating
the opportunity for the lender to take legal action against the borrower for the difference between the negotiated “accepted”
price and the actual cost of the property (with a no recapture allotment) and zero tax implications as long as the short sale
is completed and closed before the year-end 2012.  Even if the short sale text is reported to the credit bureaus (which, again,
any wording or verbiage can be negotiated), a borrower will not have to wait the industry standard 24 months for another mortgage.
The obvious benefit for the lender is they no longer have to absorb the operating cost nor the liability of the property until the property is either auctioned off or becomes an REO (Real Estate Owned) property.  The lender knows the realized settlement net because of the accepted offer.

Learn About Money

Make learning about money a priority

There’s a lot to learn about money, and there’s plenty of free information available. The Federal Reserve education web site,  offers personal financial education information and links to many useful resources.

Money education

Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Whether you attend information sessions at different venues, read about money in books, magazines, newspapers, or online, learning how to manage your money is an important part of life.

Here are some other possibilities:

• Nonprofit credit counseling service.
• Library.
• Community college.
• Bank or credit union.
• Nonprofit community development corporation.
• Nonprofit housing organization.
• Religious organization.
• Senior citizen center.
• Employee assistance program.
• Cooperative extension service.

Understanding Your Credit Score Part Two

Credit Utilization Ratio

The second largest factor in your credit scores is the amount you owe in relation to your high credit limits termed Credit Utilization Ratio, or CUR. This accounts for 30% of your score calculation. If you are carrying high credit card balances, you can actually hurt your credit scores almost as much as paying the account late every month. This aspect of your credit score has several different factors. The first factor is your relation of balances you owe on all of your accounts in relation to the high credit limits on those accounts. Once again, this takes into consideration balances on ALL of your accounts combined. Your credit score also takes into account balances in relation to high credit limits on your individual accounts also.

Recovering from bankruptcy

Every year more than 1.5 million Americans file for bankruptcy for a variety of reasons. While bankruptcy has many negative effects, it does offer people with devastated finances a fresh start. While most bankruptcies remain on your credit reports for 7-10 years, there are several things you can do to start re-establishing your credit after filing.

1. The first step in managing your credit is to clear your credit reports of errors. Check that your credit reports from TransUnion, Equifax and Experian have accurately recorded your pre-bankruptcy
   debts as “Included in BK.” Under the Fair Credit Reporting Act, you have the right to dispute inaccuracies.
2. After clearing out any errors in your credit reports it is best to keep a regular eye on your standing and use your credit conservatively. Keep your employment stable, be cautious with spending and pay all your bills on time.

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