Bad Credit Consumers Could Still Access Cheap Borrowing

Despite an increasing number of professionals aged in their 30s or 40s reported to be forced to take out a sub-prime loan, borrowers could still be able to access a competitively priced secured loan in the future it has been suggested.

According to research conducted by GMAC-RFC, about three-quarters of those with a sub-prime mortgage are aged between 35 and 54, reports the Times.

This figure was attributed to those in the age group suffering a damaged credit report due to missing credit card repayments or failing to reorganize finances after an event such a divorce.

As a result, potential borrowers were reported to be unable to access a cheap home loan and thus have to look to a bad credit loan which attracts a higher rate of interest.

However, a financial expert has indicated that consistently making repayments while on a bad credit loan can help consumers repair their credit rating and get access to cheaper borrowing in the future.

James Cotton from London & Country Mortgages told the publication: "If you can make the payments for the length of the sub-prime deal, the chances are that you could have repaired your credit record sufficiently to take out a prime deal next time."

Meanwhile, Savills Private Finance spokesperson Melanie Bien suggested that those with "one or two blips, such as missed credit card payments" should still be able to get a competitively-priced secured loan.

Earlier this year, James Jones, consumer affairs manager for Experian, advised consumers who are considering applying for a bad credit loan should first obtain a copy of their credit report.

He claimed that such a document can help borrowers identify where a change in circumstances, such as redundancy or illness, has affected their ability to pay off debts - which in turn could determine what rate of interest loan lenders decide to charge.

Saving - Is The Magic of Wealth Building

Saving As A Wealth Tool

Saving, everyone wants to save but why don't people save more? There are many reasons to why people do not save more, yet there is a simple solution, and people need to find the ways that they can save in order to build their wealth or improve their finances.

Saving money should be on every working person's mind. I am sure that not everyone wants to work all their lives and the earlier they start to save the better. I say this because saving is a good thing for everyone and when you start early, you can take better advantage of the compounding interest or dividends you earn on the money you have in savings. This is passive income. However, putting money away needs to be made simple and automatic. David Bach teaches you just how to make saving money automatic in his book The Automatic Millionaire.

The saving vehicles that can make anyone rich are your job, your credit, your retirement account like 401ks, IRAs, SEOGs, your home, etc. These are wealth-building tools you can use to save money and to generate passive income. There are others but they do not fall under the saving category. For instance, investing, Real Estate, owning your own home, and your own business. All of these should be part of your savings plan or program. Two great books will teach you more about these and they are The Automatic Millionaire by David Bach and TheMillionaireZone.com by Jennifer Openshaw. Oh, use your LifeNet for your success.

Wealth Building & Cash Flow

Saving money is a magical wealth-building tool that many people have been overlooking for centuries. Why is the question? The answer to this question is complex. For some people, it may not be just one particular problem. It could be many like a low-wage job, an undisciplined shopper, lack of financial knowledge, and people living above their means. This list can go on and on; however, the main problem is "Cash Flow." As Adam Bourque stated in his article, "Cash flow is a concept that is not taught in high school or even in most colleges and yet it's essential to understanding wealth accumulation and asset growth." Cash flow needs to be taught in schools both high school and in colleges as a mandatory finance class. Robert Kiyoski teaches this in his books, seminars, and board games. Keep in mind that cash flow can be either negative or positive. If you have more income coming in than going out then you have a positive cash flow. However, to build your wealth you will need to have income producing products and services like Real Estate (own home), investments, owning your own business. I hope that it will be a low cost start fee opportunity if you decide to start your own business.

One of the quickest ways to start your own home based business is to start a direct selling business. Simply find a unique product or service that you love and use every month then share the product and your experience with others. I suggest you take Jennifer's millionaire zone survey to find out where you stand as a budding entrepreneur. Also, use her 30 get started plan. Go to www. Themillionairezone.com.

Another, concept to use is to switch to money saving products and service products that you usually purchase at the super market and buy them from a direct selling company as an independent associate. The money you can make with one of these opportunities is amazing. You save on the product your purchase for your own consumption and you can earn residual income all in one shot.

Rich Success – How to Turbo-Charge Your Profits

Money is one of the biggest concerns for most people. Learn to master money and that success can transfer over to every other part of your life if you let it. As you already know mastering money is not easy but it can be made simple with some little-known techniques.

The techniques I am going to reveal here have been responsible for literally millions of dollars being created and even billions of dollars, as mentors such as Jim Rogers have taught me.

Jim Rogers is one of the greatest commodities traders in history. By my estimates he has made well over $1 billion trading commodities. Learning some valuable lessons from Jim allowed me to turbo-charge my profits.

FOLLOW THE MONEY: You can earn large amounts of profits by first letting the wealthy use their money to search for opportunities and then jumping on board. Find out where the big money is investing and get in. This is sometimes referred to as following the trend.

You can literally make tens of thousands of dollars doing this. The trend is your friend is a phrased used often by me and other successful traders.

KNOW WHEN TO GO: You must be careful to recognize when the trend has ended. Amateur traders often get in when it is too late because the trend has ended. Another challenge is they get in a trade and stay too long.

Unless the market is already trending down there really is no way to know if it is too late however you can limit your exposure to risk. Use a tool called a STOP LOSS. This does exactly what it implies, it stops your loss.

This tool should be used on every trade every time. This tool also keeps you from staying too long in a trade. It is easy to use. At the time you place your trade also place your stop loss meaning where you want to exit a trade if it does not continue to go in your favor.

BONUS TIP: As you make profits cancel your old stop loss and enter a new one so that it locks in a certain amount of profits. As you continue to make money keep moving your stop loss to lock in more and more profits.

USE LEVERAGE: You must learn how to effectively use your money. Most people use their money on a 1:1 basis. A few people know how to use their money on a 1:2 basis. The great traders use their money on a 1:10 or even a 1:20 basis. This means that for every $1 they invest they control $20.

For example, if you invest $1,000 do so to control $20,000. This is leverage at work. Your risk has not been enhanced because as previously discussed you will use a STOP LOSS.

Now let us take a look at a market to apply these techniques. Since 2001 Gold has been in an uptrend. Will it end soon? Who knows for sure but the analysts tell us that it will not end anytime before the end of the decade.

If you had invested $1000 in Gold in 2001 you would have $40,000 at the time of this writing. In six years you would have earned 40 times your investment!

This is just one market. There are many, many other markets where these techniques can be applied.

Crude oil, of which gasoline is made from, is also in an uptrend. If you had invested $2,000 in crude oil at the end of 2003 as of this writing you would have $30,000. In four years you would have earned 15 times your investment.

The good news is if you invest correctly there is still plenty of money to be made.

Learn how I made profits of $52,000 using just 40 hours of my time by visiting http://www.WealthCodeBreaker.com

Wealth Management Seminars

When selecting a wealth management seminar, you should look for smaller size classes containing 25 people or less. Topics should include estate planning, financial planning, retirement plans for small businesses and the self-employed, savings and investing for retirement, understanding your 401(k) and employer fiduciary responsibility. Investing in times of trouble and economic market outlook are among other topics that should be covered.

One strategy recently discussed in a wealth management seminar I attended was using the equity in your primary residence as an investment vehicle and asset protection play, however, it is a risky proposition.

Here are the details, you take out a low interest mortgage on your home, you then you invest the proceeds in investments that are protected from creditors. This achieves a few things, first, this keeps creditors from viewing the house as an easy target for legal judgments personally as the home has very little equity due to the mortgage.

And secondly, let's assume you were able to acquire a mortgage at 6% interest. If your investments return 9%, you are ahead 3%. But don't make the mistake of taking out an adjustable rate mortgage because you may find yourself losing equity and investment dollars at the same time.

The largest risk you face cashing out all of the equity in your home is what happens if you lose money in all or most of your investments? What if your investment return doesn't cover the payment on the mortgage and with your creditors decide to take your investments rather than your house? While the cash out mortgage programs are a good deal, you should consider talking to an attorney about the state laws protecting your home and a certified financial planner about ways to boost investments to cover the mortgage payments.

Do You Know Your VantageScore?

For over fifty years your credit score has been calculated using the Fair Isaac and Co's system and so it is generally described as your FICO score. Now there is a new system known as VantageScore. This is just over one year old having been launched in March 2006. So why was a new system needed, and how does it differ from FICO? What are the advantages of VantageScore, and more importantly, what are its disadvantages? And finally, how can you find out your VantageScore?

It is a well known fact that the three credit bureaus, Experian, Trans Union and Equifax will report a different credit score for an individual based on the records that each company holds. VantageScore was created with the intention of providing greater consistency between the three bureaus so that these discrepancies would be removed.

The two systems differ both in the way that the credit score is calculated and in the way the result is presented. Both systems use the same five factors in their computation, but whilst FICO places most emphasis on payment history and amount owing, making up 65% of the score, these factors only count for 47% of the VantageScore. For the results FICO uses a figure between 500 and 850 with anything over 720 being regarded as prime. VantageScore ranges fro 501 to 990 with an additional classification of letters A-F for each group of one hundred. So A is 901-990 which is regarded as super prime, with C 701-800 being prime and at the other extreme. F 501-600 treated as high risk.

One criticism of FICO is that while a score of 720 and above gives a clear green light to a potential lender, there is no generally accepted grading of the lower figures. This problem is solved with the VantageScore by use of the letters A to F which enable you to tell at a glance into which category a borrower falls. However there are critics of this system too who point out that within each category there will be a wide variation. For instance a score of 698 is only three points short of prime, when 603 is just two points clear of high risk, yet both fall into category D.

The main reason why FICO credit scores vary between the three bureaus is the variation in the data that each receives. While the promoters of VantageScore say that their system will produce more consistent results, they admit that ultimately this depends on the quality of the data.

Your current FICO credit score can be obtained from each of the three credit bureaus, but to date only Experian will supply you with your VantageScore and it will cost you $5.95.

Children Facing Foreclosure & Homelessness Beg Your Understanding

Kim & Joe M. of Orlando, FL, fell victim to the shrinking house market. Both worked in financial services, Kim an administrative assistant at Wells Fargo and Joe a loan officer with a bank.

For five years, they stayed busy and saved money.

In July 20005, Kim lost her job…downsized. Wells Fargo didn't need her any longer. Not as many mortgage applications. Kim's job search lasted three weeks before she found a replacement for 75% of what she had previously earned.

In September, Joe suffered an auto accident, putting him out of work for six months and without an income as the insurance companies battled it out.

Kayle, 6, and Kyle, 8, knew something was wrong. Mom and Dad were preoccupied. Money was tight.

Kim and Joe and their two children quickly fell victim to bad luck and a slumping housing market. They fell behind in their mortgage payments on the same house in which they had lived for eight years. No irresponsible overspending here. No new BMWs; no Rolexes; no expensive vacations; no extravegence at all.

Joe got hurt…he couldn't work. Kim lost her job…she couldn't recover lost wages. Kyle and Kayle watched on…helpless.

According to the American Banker's Association, most people have less than 3 month's worth of cash in reserve.

Despite eight years of perfect payment history, Kim and Joe's mortgage company refuses to work with them. They've received a Notice of Default.

The foreclosure of your home can lead to the bank seizing your property, your cars, your stocks, your kid's college savings! Even the IRS can get involved with wage garnishment or levying your bank account. Kyle and Kayle watch on…helpless.

The National Association of Mortgage Banker's (NAMB) records show that more mortgages go into foreclosure 3-5 years after issue than at any other time. Credit is trashed and families are scarred.

Children, the most innocent victims of unfortunate tragedy, watch on…helpless.

Kim & Joe's horror will haunt them for life. More than 40% of borrowers took an adjustable mortgage in the past five years . Many of them have children.

Those "teaser" rates of 5% or less are set to explode their mortgage payments by 25-33% or higher when they adjust. In 2006, over $300 Billion dollars worth of mortgages will adjust with $1 trillion more in 2007, according to Freddie Mac, the secondary mortgage lender.
Homeowners are upside down…they have no equity. Some mortgage lenders, who shouldn't be in the real estate business, appear to want to take homes from Kyle and Kayle.

They appear not to want to work out payment plans to help families victimized by bad luck and a slumping housing market.

Adding insult to tragic injury, Kyle & Kayle learned about "deficiency judgment". The bank sold their home…the home where Kyle was born…the sale didn't cover the amount Kim & Joe owed.

The proceeds of the sale did not cover the total owed the bank, including legal fees, administrative fees, fee this, fee that.

If the bank cannot recoup their deficiency from you, Kyle & Kayle, and if your state will not allow a deficiency judgment, the lender will write the deficiency off on their taxes.

However, kids, the pain doesn't stop there. Now the IRS may enter the picture. This "deficiency" amount not collected by the lender is considered money you owe.

They will add it to your annual income and expect you to pay taxes on the total amount. This is business, Kyle & Kayle. Nothing personal. You'll get over it, Kids.

If your parents cannot pay, the IRS can come after everything you own, including your mom's & dad's paychecks.

Kim & Joe sought professional help as suggested. Kim & Joe's lender chose not to help them save their home. Tragedy strikes not just once but repeatedly, oblivious to children.

It's business. Real people with real children (scarred for life) lose their homes, get hit with a deficiency judgment & meet the Gestapo (the IRS).

It's not just the irresponsible overspenders carelessly losing homes to foreclosure. Some are real people with real children.

Great Reasons For Home Loan Refinancing

Why would you want to refinance your home? The best explanation I can give you is to lower your interest rates. In this article I plan on showing you some other great reasons for home refinancing.

A refinance home loan is a new loan that is taken to pay off an existing loan. You can also apply for a lower interest rate or to take cash out of your homes equity. Right now interest rates are lower than ever because of fast paced and changing economy. So now would be the best time to try refinancing. Even a quarter of a percent on your interest rate over a year can make a huge difference in the amount of money you save.

The biggest questions home owners ask is why should I refinance my home?

1. Lower Interest Rate

In today's day and age home owners are always looking for new moneys to invest. Buy refinancing your mortgage at a lower interest rate you can save thousands of dollars a year that can be used to reinvest in other places.

2. Cash Out

Some home owners like to refinance their homes so they can take the equity out and use it for other projects whether it is a vacation, home repairs or retirement investments.

3. Home Improvements

In almost every case a personal loan will be more expensive to take. That's why so many people refinance their homes in order to keep the maintenance up in their home. Without this things can be very difficult. Home repairs can be very expensive and it can be stressful trying to find the money for the repairs that's why this is a win win situation.

4. Just Want A Change

Many people are not happy with their existing loan program. There could be a number of reasons why you're not happy with your existing situation so maybe a refinance would be all it takes to make you more satisfied.

There are several benefits to refinancing your home including better credit standings so that you can refinance and obtain a better loan. Or you can get a line of credit backed by your home loan. This allows you to have cash available to you anytime you need it. Or your lender can consolidate all your bills to make your monthly payments come way down.

Dale Mazurek

Debt and Financial Freedom Don't Mix

One of my least favorite subjects in the financial freedom arena is debt reduction. People use all kinds of reasons to justify their debt and it becomes a very emotional struggle to eliminate it. I am pleased that I have adopted the "Not So Easy" approach to financial freedom. That way I don't have to come up with any psychological approaches to achieving financial independence. Why pretend that something is easy - when it's not….

My article "Debt Reduction: The Weed-Out Course on the Road to Financial Freedom" generated quite a bit of discussion a few months back. In the article, I challenged Dave Ramsey's psychological approach to debt reduction and took some heat for it. An article last week, reminded me on that article and also why debt crushes dreams. Here are few paragraphs.

"What has happened in the past six years is extraordinary. The debt that has been accumulated will be with most of the borrowers for the rest of their lives. They have become debt slaves to the banks and tax slaves to our government. There are those in our society that will remain in perpetual debt. A debt that is almost impossible to pay off. Their debt game is how our society is being controlled and destroyed. Our children are bombarded on TV with ads or situations where the credit card is the preferred mode of payment. Upon entering college students are deluged with credit card offers. By the time they graduate they have $20,000 in card debt and $30,000 in studying loan debt. This debt in many cases stays with these graduates for life. The banks want you in debt from cradle to grave. They do not want consumers who regularly pay off their debt. They can't make any money off them.

These conditions make the bank the boss. This perpetual debt makes the consumer subservient, not just because his credit rating may be used against him, but it shades his political perspective as well. The debt is a privilege meted out by the all powerful bank whether it is your home or your credit card or your vehicles. You should bow down to MasterCard, Visa and America Express, because they are doing you a priceless favor."

http://news.goldseek.com/InternationalForecaster/1174499046.php

"Perpetual debt makes the consumer subservient" that statement alone is enough to inspire me to stay out of debt. I don't need Ramsey's or anyone else's gimmicks. Getting your debt under control is one of many "mind-shifts" necessary for anyone seriously considering walking the path to financial freedom.

Debt Management Primer

Credit is essential these days. A person needs credit to be able to do almost everything, from buying a car to getting a utility turned on. Bad credit can be quite costly. That is why debt management is so important. Debt management is the way you acquire and handle your debt so that you can afford it.

The key to debt management is understanding your finances. You have to have a budget and you have to know what you can and can not afford. That may seem simple, but credit is actually designed to help you get what you can not afford and that is why many people end up with credit problems.

The whole idea of credit is to offer you a loan so you can buy something you would otherwise not be able to afford. You are borrowing money. The simplest way to avoid debt is to not borrow at all, but then you would not be building your credit, which, as mentioned is very important. You have to learn how to borrow responsibly.

You have to be smart about credit and debt. Part of good debt management is setting limits for yourself. Do not let your debt get out of control. You can use credit cards or get loans as long as you can afford them. Most people get some type of loan during their life. A good example is an auto loan. Most people can not afford to pay upfront for a car, so they get a loan.

For someone who is careful about their debt, they will make sure they can afford the loan. They will figure it into their expenses and if they can not afford it they will pass it up and try a different option. Someone who is not managing their debt would simply take the loan and figure out how they could afford it later. This is what leads to debt problems.

Debt management involves going through your finances. You have to list all of your expenses and you income. Your expenses should never be more than your income. If this is the case then you need to learn how to manage your debt. You may have to cut expenses, if at all possible to get them lower than your debt.

Once you understand your debt you can then manage it. Lets say your expenses per month are $1000 and your income is $1500. You would have $500 extra each month. You have some options of what you can do with that money. You could put it into a savings account where it will build interest.

You could pay extra on some of outstanding debt to help pay it off sooner or you could take on more debt. The chose is yours, but always keep in mind that you should never spend more than you make or you will fall victim to bad credit and debt.

By conducting good debt management you will find yourself enjoying a good credit rating. This will open many doors for you and allow you more financial freedom.

Breaking Your Credit Score Down Into Its Components - Part 1

To best understand how the score is computed you need to understand that the FICO score is made up of 5 main factors that are all weighted differently. This means that some factors like payment delinquency is weighted more heavily than say, inquiries for new credit. While this makes common sense, by understanding how the computer scores different factors you will have a better shot at making the changes that will have the maximum impact to your score.

Factor 1: Payment History - 35% of Score

It is easy to understand why your payment history is weighted so heavily as it is this information that tells a prospective creditor what your history has been paying your other creditors. This information gives prospective lenders insight as to how you will likely treat their account based on your previous payment history.

When it comes to derogatory credit information (often referred to as "dings") the assignment of weight (how much your score will decline) is based on three factors:

• Recency

• Frequency

• Severity

Recency refers to how recent (from the time of credit report being pulled) the "ding" was reported. For example, if you had a 30-day late on a credit card only one month ago, this would score more heavily (more negatively) than a 30-day late that was reported last year. As far as regular payment "dings" (30, 60 & 90 day lates) the time scale is 24 months. This means that the more recent the "ding" to the date that the report was pulled, the more it hurts your score. The closer the "ding" to the 24 month (back) date, the less it will impact your score negatively. And when the standard 30, 60, or 90-day late becomes over 2yrs old it is NO LONGER PART OF THE SCORE! While you can still READ the information on the report (for up to 7 years) the "ding" is no longer being calculated as part of your score. This is important, because for most people, if you start doing the right things with your credit and pay your bills on time, you can go from bad credit to good credit, even great credit within 2 years.

Frequency refers to how often you have payment "dings". If you have one 30-day late in the last 24 months, this will hurt your score less than if you had 2 or more late payments in the last 24 months. So the fewer the late payments within a 2 year period, the better!

Severity refers to the type of derogatory information or "ding". A 30-day late is worse than past-due. A 60-day late is worse than a 30-day late and a 90-day late is worse than a 60-day late. Nothing is worse than a 90-day late because credit card companies have determined that most 90-day late accounts end up having to be "charged off" and end up in collections. In fact the true definition of the original FICO score was "What is the likelihood that a borrower will have a 90-day late in the next 24 months?" Try to avoid 90-day lates at all costs as this type of "ding" is weighted the most heavy and negatively affects your score more than the others. However, as with 30-day and 60-day lates, after the "ding" is over 24 months old, it is no longer part of the active score.

Factor 2: Balance of Available Credit - 30% of Score

The second largest factor affecting your credit score, next to your delinquent payment history is related to your balances relative to your credit limits. It is important that you understand how this works. Let's say you have a VISA card with a $10,000 limit. If your balance on that credit card is $6,000, although you are not maxed-out...you will suffer a "ding" to your credit. Fair Isaac will not release the details of exactly how much it hurts your score, but it is generally accepted that like the rest of credit scoring, it is based on a sliding scale.

The closer to maxed-out the worse the "ding" to your score. Again, although Fair Isaac has not released the details, many industry experts believe that the optimal ratio of balance to available credit is 30%. It is also generally assumed that the "ding" becomes more severe as you cross the 50% line and head towards the max. This ratio is applied per card not against your total credit limit across all cards. For example, if you had 4 credit cards each with $10,000 limits, the system will look at the balance ratio on each card and then assign a point value. The reason that this is important is that many people might have several credit cards that have no balance and that they rarely, if ever use. Then they have one or two cards that they use all the time. Let's say that out of the 4 cards I mentioned previously, Jane only carries a balance on one the cards and leaves the other three with no balance. If card one had a balance of 8,000, although that only represents 20% of her total available credit ($40,000) it actually represents an 80% ratio for that specific card, and that is how the system is looking at that. So Jane would be better off (from a credit score perspective) to spread $2,000 onto each card thereby reducing her ratio to only 20% per card. The reason is that there is NO positive points awarded for carrying no balance, only negative points for the 80% ratio on the one card that Jane uses.

So she was "dinged" for the one card she uses, but received no compensating positive points for the three cards that she carried no balance. An important distinction to make is that credit scoring decisions may be counter to financial decisions. For example, if Jane only used card #1 because it had a very low interest rate compared to her three other cards, this would be a good financial decision. However, as we have just learned this will cost her in FICO points. So you need to make your decision based on what your goal is. If you have excellent credit and have points to spare (i.e. 750) then you may choose to use Jane's strategy and save money on interest charges. If on the other hand you are trying to improve your credit while you apply for a loan or a new credit card, you would want to spread the money to all the cards to avoid the "ding" from the 80% ratio on card #1.