Credit 101 Archives - The Fearless Factor

One of the harsh truths of secured loans is that your asset can be repossessed if you fail to make the payments. In the words of the FTC, âyour consumer rights may be limitedâ if you miss your monthly payments, and when that happens, both your financial situation and your bank balance will take a […]

Repossession Credit Scores: What You Need to Know is a post from Pocket Your Dollars.

January 12, 2021

Tagged All, Auto, bad credit, Credit, credit card

How to Save for Retirement in Your 20s, 30s, 40s, 50s and 60s

Credit 101

Retirement

1 week ago

You donât want to work the rest of your life. Hereâs how to save in your 20s, 30s, 40s and 50s, even if retirement seems light years away.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

January 12, 2021

Tagged 401(k), All, budget, Budgeting, Career

By: Jossy Wilson

Credit 101

1 week ago

I live in Florida, I had a car accident on 7/14/2010 and i ended up with a chiropractor unpaid bill; as soon I've received it I contacted them and told them to deal with my insurance and my Attorney; a portion was not paid and since then they have been sending a bill every month with accrued interest. I believe it is already outside the statute of limitation. I have just notice in the bill says I have made a payment of $9.14 on 1/6/2014 which is not true. What should I do to dispute it before they decide to take other actions?

January 12, 2021

Tagged Credit, Financial Wize, FinancialWize, Insurance

How Long Do Hard Inquiries Stay on Your Credit Report?

Credit 101

1 week ago

Your credit report offers valuable insight into your financial history and affects most of your financial future. Everything from whether you get approved for a mortgage to what your credit card interest rate will be balances on your credit score. Negative information on your credit report can be detrimental for years. Wonder how long hard inquiries stay on your credit report?… Read More

The post How Long Do Hard Inquiries Stay on Your Credit Report? appeared first on Credit.com.

January 12, 2021

Tagged All, closing, Credit, Credit 101, credit card

Self Review For 2021 (formerly Self Lender)

Credit 101

Loans

1 week ago

When you have bad credit, or even no credit at all, it can be difficult to build credit. This is true especially if you have no accounts that are reporting to the credit bureaus. Thatâs…

The post Self Review for 2021 (formerly Self Lender) appeared first on Crediful.

January 12, 2021

Tagged All, build credit, Credit, Financial Wize, FinancialWize

How To Freeze Your Credit After The Equifax Hack

Credit 101

Identity Theft

1 week ago

Here’s how you can freeze your credit to avoid fraudulent activity. This is especially important after a hack like the one experienced by Equifax recently.

The post How To Freeze Your Credit After The Equifax Hack appeared first on Bible Money Matters and was written by Peter Anderson. Copyright Â© Bible Money Matters – please visit biblemoneymatters.com for more great content.

January 12, 2021

Tagged Credit, Financial Wize, FinancialWize, How To, identity theft

Why Itâs Harder to Get Credit When Youâre Self-Employed

Credit 101

1 week ago

Around 6.1% of employed Americans worked for themselves in 2019, yet the ranks of the self-employed might increase among certain professions more than others. By 2026, the U.S. Bureau of Labor Statistics projects that self-employment will rise by nearly 8%. Some self-employed professionals experience high pay in addition to increased flexibility. Dentists, for example, are […]

The post Why Itâs Harder to Get Credit When Youâre Self-Employed appeared first on Good Financial CentsÂ®.

January 12, 2021

Tagged All, build credit, building, Buying, car loan

Does Refinancing Hurt Your Credit?

Credit 101

1 week ago

Before you make any big financial decision, it’s crucial to learn how it may affect your credit score. If youâre looking to refinance, itâs natural to wonder if it might hurt your credit. Typically, your credit health will not be…

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The post Does Refinancing Hurt Your Credit? appeared first on MintLife Blog.

January 12, 2021

Tagged All, Auto, car loan, closing, Credit

Before you make any big financial decision, it’s crucial to learn how it may affect your credit score. If youâre looking to refinance, itâs natural to wonder if it might hurt your credit.

Typically, your credit health will not be strongly affected by refinancing, but the answer isnât always black and white. Whether youâre still considering your options or already made your choice, weâve outlined what you need to know about refinancing below.

What Is Refinancing?

Refinancing is defined by taking on a new loan to pay off the balance of your existing loan balance. How you approach a refinancing decision depends on whether itâs for a home, car, student loan, or personal loan. Since refinancing is essentially replacing an existing debt obligation with another debt obligation under different terms, itâs not a decision to take lightly.

If youâre worried about how refinancing will affect your credit health, remember that there are multiple factors that play into whether or not it hurts your credit score, but the top three factors are:

1) Having a Solid Credit Score

You wonât be in a strong position to negotiate refinancing terms without decent credit.

2) Earning Sufficient Income

If you canât prove that you can keep up with loan payments after refinancing, it wonât be possible.

3) Proving Sufficient Equity

Youâll also need to provide assurance that the payments will still be made if your income canât cover the cost. Itâs recommended that you should have at least a 20 percent equity in a property when refinancing a home.

criteria-for-being-able-to-refinance-successfully

How Does Refinancing Hurt Your Credit?

Refinancing might seem like a good option, but exactly how does refinancing hurt your credit? In short, refinancing may temporarily lower your credit score. As a reminder, the main loan-related factors that affect credit scores are credit inquiries and changes to loan balances and terms.

Credit Inquiries

Whenever you refinance, lenders run a hard credit inquiry to verify your credit score. Hard credit inquiries typically lower your credit scores by a few points. Try to avoid incurring several new inquiries by using smart rate shopping tactics. It also helps to get all your applications in during a 14â45 day window.

Keep in mind that credit inquiries made during a 14â45 day period could count as one inquiry when your scores are calculated, depending on the type of loan and its scoring model. Regardless, your credit wonât be permanently damaged because the impact of a hard inquiry on your credit decreases over time anyway.

Changes to Loan Balances and Terms

How much your credit score is impacted by changes to loan balances and terms depends on whether your refinanced loan is reported to the credit bureaus. Lenders may report it as the same loan with changes or as an entirely new loan with a new open date.

If your loan from refinancing is reported as a new loan, your credit score could be more prominently affected. This is because a new or recent open date usually means that it is a new credit obligation, therefore influencing the score more than if the terms of the existing loan are simply changed.

How Do Common Types of Refinancing Affect Your Credit?

Refinancing could help you pay off your loans quicker, which could actually improve your credit. However, there are multiple factors to keep in mind when refinancing different types of loans.

main-types-of-refinancing-that-can-affect-your-credit

Refinancing a Mortgage

Refinancing a mortgage has the biggest potential impact on your credit health, and it can definitely affect your FICO score. How can you prevent refinancing from hurting your credit too much? Try concentrating your credit inquiries when you shop mortgage rates to a 14â45 day window â this will help prevent multiple hard inquiries. Also, you can work with your lenders to avoid having them all run your credit, which could risk lowering your credit score.

If youâre unsure about when to refinance your mortgage, do your research to capitalize on the best timing. For example, refinancing your mortgage while rates are low could be a viable option for you â but it depends on your situation. Keep in mind that losing your record of paying an old mortgage on time could be harmful to your credit score. A cash-out refinance could be detrimental, too.

Refinancing an Auto Loan

As you figure out if refinancing your auto loan is worth it, be sure to do your due diligence. When refinancing an auto loan, youâre taking out a second loan to pay off your existing car debt. In some cases, refinancing a car loan could be a wise move that could reduce your interest rate or monthly payments. For example, if youâre dealing with an upside-down auto loan, you might consider refinancing.

However, there are many factors to consider before making an auto loan refinancing decision. If the loan with a lower monthly payment has a longer term agreement, will you be comfortable with that? After all, the longer it takes to pay off your car, the more likely it is to depreciate in value.

Refinancing Student Loans

When it comes to student loan refinancing, a lower interest rate could lead to major savings. Whether youâve built up your own strong credit history or benefit from a cosigner, refinancing can be rewarding.

Usually, you can refinance both your federal and private student loans. Generally speaking, refinancing your student loans shouldnât be detrimental in the grand scheme of your financial future. However, be aware that refinancing from a federal loan to a private loan will have an impact on the repayment options available to you. Since federal loans can offer significantly better repayment options than private loans, keep that in mind before making your decision.

Pros	Cons
If the cost of borrowing is low, securing a lower interest rate is possible	Credit scores can drop due to credit checks from lenders
If your credit score greatly improved, you can refinance to get a better rate	Credit history can be negatively affected by closing a previous loan to refinance
Refinancing a loan can help you lower expenses in both the short term and long term	Refinancing can involve fees, so be sure to do a cost-benefit analysis

How to Prevent Refinancing from Hurting Your Credit

By planning ahead, you can put yourself in a position to not let refinancing negatively affect your credit and overall financial health.

Try to prepare by reading your credit reports closely, making sure there are no errors that could keep your credit application from being approved at the best possible rate. Stay one step ahead of any errors so you still have time to dispute them. As long as you take preventative measures in the refinancing process to save yourself time and money, you shouldnât find yourself struggling with the refinancing.

If refinancing makes sense for your situation, you shouldnât be concerned about it hurting your credit. It might not be the most ideal situation, but itâs extremely common and typically relatively easy for your credit score to bounce back.

If you notice that your new loan from refinancing causes alarming changes when you check your credit score, be sure to reach out to your creditor or consider filing a dispute. As long as youâre prioritizing your overall financial health through smart decision making and budgeting, refinancing shouldnât adversely hurt your credit in the long run.

The post Does Refinancing Hurt Your Credit? appeared first on MintLife Blog.

Source: mint.intuit.com

Late Payments, Credit Scores and Credit Reports

Credit 101

1 week ago

A missed credit card or loan payment can have a seriously detrimental effect on your credit report. The golden rule of using a credit card is to make your payments on time every time, building a respectable payment history, avoiding debt, and keeping your creditor happy. But what happens when you fall behind with your […]

Late Payments, Credit Scores and Credit Reports is a post from Pocket Your Dollars.

January 11, 2021

Tagged All, budget, building, Buying, Credit

9 Financial Strategies for Padding Your Bank Account in Case 2021 Goes Sideways

Credit 101

1 week ago

Sure, weâre glad 2020 is over. But here are nine financial strategies for padding your bank account â just in case 2021 goes sideways, too.

January 11, 2021

Tagged All, budget, Buy, Buying, Car Insurance