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Many people face financial crises at some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or simple overspending, it can seem overwhelming, but often can be overcome. The fact of the matter is that your financial situation doesn't have to go from bad to worse.

If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Lendingtips has complied the articles below to help w/ the rebuilding process.

Recent credit tips:
FREE Credit Report and Credit Score.

The Credit Score and you:

What is your credit score?  Lets get one thing straight “YOUR CREDIT SCORE IS VERY, VERY, VERY IMPORTANT".  Your credit score matters when applying for any type of loan.  Credit scoring is a system creditors use to help determine whether to give you credit or not.  One of your most expensive purchases in your life is usually the home.  Home loans are based largely on your ability to repay the loan in a timely and accurate manner.  Credit scores help the lender determine this amount.

What affects my credit?  Typically paying your bills on time, the number of account you have, the type of accounts you have (revolving, mortgage, vehicle etc), late payments, collections, age of accounts, credit limits, your income, the history of accounts all effect your score either in a positive or negative way.  Credit scores range between 450-850.

To order your free annual report from one or all-national consumer reporting companies, visit:
Click here:  www.annualcreditreport.com
Or Call:       877-322-8228

You can also mail the form to:
Annual Credit Report Request Service
P. O. Box 105281
Atlanta, GA 30348-5281
For the form click here: http://www.ftc.gov/bcp/conline/include/requestformfinal.pdf

The three major reporting agencies are:

Equifax: 800-685-1111; www.equifax.com
Experian: 888-EXPERIAN (888-397-3742); www.experian.com
TransUnion: 800-916-8800; www.transunion.com

These agencies each have different scores for the same person, because they all will base your credit history and calculate them their own individual way, but they should all be within a small range of points difference.  Depending upon the state you live in can determine which credit agency receives the most or recent data on your credit report. 

Now you have found your credit score and you want some help fixing your credit.  What can you do?  First thing is first, don’t panic!  Credit reports can’t usually be fixed over night, but they can be fixed.  You have to have patience and discipline here, because if you have a poor credit score 500, 501, 502, 503, 504, 505, 507, 508, 509, 510, 511, 512, 513, 514, 515, 516, 517, 518, 519, 520, 521, 522, 523, 524, 525, 526, 527, 528, 529, 530, 531, 532, 533, 534, 535, 536, 537, 538, 539, 540, 541, 542, 543, 544, 545, 546, 547, 548, 549, 550 than you have some work to do.

You are not alone; there are many Americans that have credit problems and have fixed them to their liking and the lenders liking too! 

There are more and more people that have a credit score of 551, 552, 553, 554, 555, 556, 557, 558, 559, 560, 561, 562, 563, 564, 565, 566, 567, 568, 569, 570, 571, 572, 573, 574, 575, 576, 577, 578, 579, 580, 581, 582, 583, 584, 585, 586, 587, 588, 589, 590, 591, 592, 593, 594, 595, 596, 597, 598, 599, 600, 601, 602, 603, 604, 605, 606, 607, 608, 609, 610, 611, 612, 613, 614, 615, 616, 617, 618, 619.  With credit scores in this range I want to point out a simple loan calculation (hence showing you why you need to pay bills on time). 

If you are in the credit range of 550-619 or “sub-prime” credit your interest rate on a 30 year mortgage might be about 8.5% (not bad), but when you consider it against the same person with a credit score in the range of 681-720 getting a rate of 6.5% on the same loan of $200,000 the payment for principle and interest is $1537.83, $1264.14, respectively.  The difference over the term of the loan is $98,528.40.  I hope this makes some sense here, so stay on top of paying your loans on time and accurately.  Don’t overload yourself in debt.  Just because you can afford it doesn’t mean you should take it. 

There are many things you can do right away, make sure your bills are paid on time.   Catch up on any late payments and pay as much as you can, but don’t over do it.

Be careful when applying to multiple loan companies, because typically each credit inquiry will incur a 3-point deduction on your credit score.  Each credit inquiry is a credit report pull, usually when you apply for a mortgage, car loan, cell phone, credit card and so on. 

There are many mortgage loan types out there.  Each lender treats every application with an open eye on their credit history.  Each lender has their own guidelines to determine what type of loan program you will fit into.  Just because they fit you into their own program doesn’t mean that you have to accept their terms, you can apply with a different lender if you want to. 

Most lenders work with conforming loans that have a credit score above 680.  The range of credit below 680 and above 620 like: 621, 622, 623, 624, 625, 626, 627, 628, 629, 630, 631, 632, 633, 634, 635, 636, 637, 638, 649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 660, 661, 662, 663, 664, 665, 666, 667, 668, 669, 670, 671, 672, 673, 674, 675, 676, 677, 678, 679, could be considered for “non-conforming” loan programs.   

The difference between conforming and non-conforming is typically interest rates.  You will usually get the loan amount you are looking for with those credit scores, but with lower credit scores the higher the rates the lender will charge you.  This is why it is so important to keep a good handle on your credit report and pay all debt on time and in full. 

Lastly report any fraud:
Don’t be a victim so report any suspicious or real fraud by reporting your complaint to 1-877-FTC-HELP or ftc.gov.

The tips on this website should be considered food for thought only. Lendingtips.com is a clearinghouse of ideas, not a professional adviser. Before any important decision, please consult the appropriate professionals (lawyer, accountant, real estate agency, broker etc.).

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