Tips & Tools : good credit

Credit and Forget It

RE.com Tips & Tools — Thu, 25 Jun 2009 13:03:00 GMT

By Aldo Singer, 123Movers.com

The process of moving into your new home or apartment actually begins years before that event has taken placed. You can’t rent an apartment or find yourself a home if you don’t have good credit. Establishing good credit is one of the cornerstones to a happier life because if you can afford a nice home, chances are you’ve got good credit. Getting to the good credit point of your life starts off slow but there are ways to know that you’re going in to the right direction.

When you’re starting, probably while you’re in college its best to get any credit card you can. I say that because it’s going to be hard to get any kind of credit card when you do not have any credit to go on. Some credit cards you may be able to get are a secured credit card or a prepaid credit card. These cards will help you build on your credit report slowly.

You should also have a savings and checking account in place so the creditors can keep an eye on your funds. There is no point in giving someone a credit card if they don’t have money to spend.

If you’re still having trouble getting a credit card and you’ve been constantly turned down, you should look into being added on to someone else’s credit card account. This can help you build credit as well but it also makes you liable for the other person and vice versa. If the other person on the card or the ‘account holder’ is making charges that neither of you are going to be able to pay, your both going to be held responsible for those charges. You can’t run away from those charges.

When you receive your bill with those large charges you must make a payment to keep building on your credit.

Two of the most important factors of building good credit are paying your bills on time and how much of your actual credit that you’re using. Even if you can’t pay your bill in full (which is the #1 way to build fast credit) you should pay the minimum payment at least. It shows your making an effort.

It is recommended that you use at least 1/3 of your credit availability. Spending $50 a month isn’t going to make your credit score jump very high within a short period of time.

Before you realize it, it’ll be time to move out of your parent’s house and into your new home you should have a solid credit score if you’ve followed the aforementioned tips.

One more thing, probably the most solid tip to live by as much as you can is to never spend more than you make. If you do you’ll find yourself in loads of debt, the exact opposite record of building credit.

How to save money on homeowner's insurance

RE.com Tips & Tools — Tue, 16 Jan 2007 20:07:00 GMT

Insurance experts cite these 12 ways to cut your premiums.

All homeowner’s insurance policies are not created equal, nor do they all cost the same amount. Annual premiums for similar policies can vary by hundreds of dollars, according to the Federal Citizen Information Center.

Here are 12 ways to save on homeowner’s insurance compiled by the Insurance Information Institute and endorsed by consumer groups including the Consumer Federation of America and the National Consumers League:

1. Shop around. Ask your friends about their homeowner’s insurance carriers, check consumer guides and online insurance quote services. Another good resource is your state insurance department. States often disclose typical rates and the number of consumer complaints received about specific insurance companies. Ask plenty of questions of homeowner’s insurance carriers to get a feeling for the type of service they give and what they would do to lower your costs.

2. Raise your deductible. You could cut your homeowner’s insurance premiums by as much as 25 percent by raising your deductible from $500 to $1,000. Some policies have separate deductibles for different kinds of damages.

3. Don’t confuse what you paid for your house with rebuilding costs. That price includes the land your house sits on. If you include the land value in the amount you insure, your homeowner’s insurance premium will be higher.

4. Buy your home and auto policies from the same insurer. You may be able to save five to 15 percent on both policies. But compare with other insurers to be sure.

5. Make your home more disaster-resistant. Your homeowner’s insurance representative can tell you what steps you can take to make your home more resistant to windstorms and other natural disasters. For example, steps like adding storm shutters, reinforcing your roof or buying stronger roofing materials can save you money on your homeowner’s insurance premiums.

6. Improve your home security. You can usually get discounts of at least five percent for a smoke detector, burglar alarm or dead-bolt locks. Depending on the insurer, you could cut your homeowner’s insurance premiums by 15 to 20 percent by installing high-end sprinkler systems as well as fire and burglar alarms.

7. Ask about other discounts. Some companies discount homeowner’s insurance premiums for retired people because they tend to be home more often. Some employers and professional associations offer group homeowner’s insurance with lower rates, and some insurance companies offer discounts for members of certain professional groups.

8. Maintain a good credit record. Insurers often use credit information to price homeowner’s insurance policies.

9. Stay with the same insurer. Some insurers will reduce their homeowner’s insurance premiums by five percent if you stay with them three to five years, and by 10 percent if you keep the policy for six years or more.

10. Review the limits in your homeowner’s insurance policy and the value of your possessions at least once a year. You may be able to cancel extra insurance for items whose full value is not covered under your regular policy, such as expensive jewelry or valuable art work.

11. Look for private insurance if you are in a government plan. You may be able to buy homeowner’s insurance at a lower price in the private market.

12. When you’re buying a home, consider the cost of homeowner’s insurance. Your premiums may be lower if your house is close to a fire hydrant or if, for example, your neighborhood is served by a professional rather than a volunteer fire department. You may also qualify for lower premiums if your electrical, heating and plumbing systems are less than 10 years old. You can check the Comprehensive Loss Underwriting Exchange (CLUE) report of the home to see the homeowner’s insurance claim history of the property.

The full list of ways to save on homeowner’s insurance, and links to state insurance departments, is available at www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm. For other tips on homeowner’s insurance, you also can visit the Insurance Information Institute’s Web site at www.insurance.info, or www.iii.org.

Improving Your Credit Score

RE.com Tips & Tools — Thu, 11 Jan 2007 19:31:00 GMT

To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt

Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change, but improvement generally depends on how that factor relates to other factors considered by the model.

Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application. Nevertheless, scoring models generally evaluate the following types of information in your credit report:

Have you paid your bills on time? Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy.
What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that may hurt your score.
How long is your credit history? Generally, scoring models consider the length of your credit track record. An insufficient credit history may have an effect on your score, but that can be offset by other factors, such as timely payments and low balances.
Have you applied for new credit recently? Many scoring models consider whether you have applied for credit recently by looking at inquiries on your credit report when you apply for credit. If you have applied for too many new accounts recently, that may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make prescreened credit offers are not counted.
How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may negatively affect your credit score.

Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home.

To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It’s likely to take some time to improve your score significantly.

This information is adapted from "Bound for Good Credit" published by the Federal Trade Commission.