Credit Repair Help

It wasn’t so long ago when getting a home mortgage loan was a piece of cake. It didn’t seem to matter if you had a good credit score or a bad credit score; all it took was the desire to buy a home and the willingness to sign a home mortgage agreement. However it is no doubt because of these irresponsible practices on the part of the home mortgage lenders that we are experiencing such disastrous effects in today’s housing market and the economy overall. This of course has led to many people asking just what is the minimum credit score for a home mortgage loan these days?

The short and simple answer to this question is that as a general rule, if your credit score is below a minimum of 640, then you are going to have a bit of trouble getting approved for a home loan. That being said, it won’t be entirely impossible, and there of course things you can do to improve your credit. Which, in all honesty, I would recommend anyone do before applying for a home mortgage loan in order to get the best interest rate.

The first thing you should do is pay off any outstanding debts than you can afford to pay off. It’s surprising how many people have credit card debts that they can afford to pay off but would rather not because they would prefer to stay liquid. This is a mistake. Not only are you costing yourself more money in the long run, but it’s also terrible for your credit. However, rather than paying off the entire credit card, your target goal should be to simply pay it down to less than 20 - 30 percent of it’s maximum balance and demonstrate that you can handle a moderate debt and make consistent payments towards it.

He long and short of it for anyone asking just what is the minimum credit score for a home mortgage is these days, the answer comes down to several variables. You want to have credit above 640, however the higher it is, the better the terms you will get on your loan will be.

Many of us (include yours truly) have used personal credit cards to finance the start up or growth of our business. It’s easy, fast, and available. The interest rates may be lower than business credit cards. And, you may have exhausted your business loans or lines of credit. But there are a few dangers in using your personal credit cards to finance your business, instead of using business credit cards or loans.

• You can’t deduct the interest. If you mix personal & business expenses on your credit card, you can’t deduct the interest because some of the debt is due to personal expenses. If you are carrying a fair amount of debt, this could add up to hundreds of dollars each month.
• You will miss deductions. If you are randomly using personal credit cards for business expenses, you will inevitably forget to enter all those receipts into your bookkeeping system. Which means that you will miss a tax deductions that you deserve to take.
• You will be on “the hook” for what is really the business’ debts. If your business needs debt financing, the business (and its assets) should be responsible for paying off that debt, not your personal assets. If you are using personal credit cards then you are obviously personally liable for the loan, even if something happens to the business (you shut it down, for example).
• You can’t accurately track the real expenses of the business. When you are analyzing the profits & loss statements of your business and creating your cash flow projections for upcoming months, you need accurate information about your historical expenses. If you have expenses “hiding” inside your personal credit card statements, you will not be able to analyze whether your business is actually making a good profit, or if your business has cash flow problems.

What can you do if you are using personal credit cards?

You may not be able to switch to using business debt immediately, either because your business can’t get its own credit cards or loans, or because you are not ready to form a separate entity. If so, consider using only one personal credit card for business expenses, and use it ONLY for business expenses. This practice will ease your tracking & bookkeeping, and may make it possible for you to take all the deductions you deserve.

The Wealth Spa(TM) Minute: Have you used personal credit cards for business expenses? Did you input them into your bookkeeping system? Pick just one of your personal cards to use for business (and only for business) expenses.

Everyone is trying to get out of debt these days. Now the key to getting rid of debt is first of all to stop making new debt. If you find that you have an addiction to plastic, then get a debit card. If you are continually adding more debt there is no way of becoming debt free. If you are going to have some form of debt, then make it a mortgage. At least that way your will have something worth what you paid.

The first thing you need to do is cut up all credit cards. Credit cards only cause more debt. If you stop using them, then you’re not accumulating more debt. If you have some cards with a lower interest rate than others see about transferring a debt from a higher interest card. If this is not possible, call the credit card companies and request a lower rate. Normally this can be done every six months as long as you are making your payments on time. Since you will be paying off your credit cards (and hopefully at a lower rate) you will be able to see your debt going down.

Next you are going to need to list all of your debts. If you have a small debt, allocate the funds to pay off that debt first. This does not mean to not make a payment on another account. Use money that you would normally have spent eating out or just used to buy something you were not going to use anyhow. Once this debt is paid off do the same thing to pay off your next smallest debt. As you pay off your credit cards you will have the amounts you once used for those payments to add to paying off your debts. Credit cards are not the only debts that should be listed here. you should list all loans here as well. If you are paying on furniture, or electronics list them here as well.

The point of getting out of debt is to pay off all debt without accruing more. Do not trade in something that is almost paid off to start paying on something else. If you car is paid for and in good condition, keep your car and use what would have been your car payment to either pay off other debt or put it in a savings account specifically for your next car. You would be surprised just how quickly that money will add up and how soon you will be able to purchase (with cash) another car. Getting out of debt does mean sacrificing a little but the more you sacrifice up front the sooner you will have the money to purchase free and clear what you other wise would have bought with credit. You will not only feel better to be out of debt but how good does it feel to be able to pull out cash and pay for it on the spot?

Before you think of bankruptcy, let’s take a look at debt settlement negotiation as a solution to your problems. Negotiation with the creditors is one step closer to solving your financial problem because if you can get them to lower the interest and allow you to repay the payment in a longer time, you will stand a better chance to repay all the debt and free yourself from the financial burden. You should always be open for doing that, as it will free you up for daily tensions, which can kill you and have a very bad effect on your health.

Of course, when you are negotiating with the creditors, you need to be polite and always watch your manners, as it is easy to get emotional or angry when you are negotiating. They are the ones who determine whether to help you or not in settling the debt. There is no use getting angry, as you need to remember that it is not their fault you get into such a situation. You should always take care that you should be cool and try and get a good deal out for yourself. Always make it a point that you are not getting into any issue of any kind while you are negotiating.

Try to ask for lowering the interest rate as well as longer time for repayment so you can lower the repayment rate every month. This will increase your ability in repaying all your debt within the time frame. Explain to them how this will be useful for you and how this will benefit both you and the lenders. Let them see the benefits and you will stand a better chance of winning this negotiation. It is best to keep calm throughout the negotiation. You can save some money if you are trying to reach a settlement and that can get you a good discount.

If they rejected your request, you might have to find other ways to solve your problems before you jump into the bankruptcy bandwagon. Too many people have chosen to declare bankruptcy and living a life so painful. This is perhaps a lesson for you so that you will not get into such a trouble in the future. Take a step at a time when solving the problem as rushing will not help in any way. But you should always approach the situation with a open mind.