Whether you are just beginning to earn your own money and aren’t sure where to distribute it, or if you’ve been struggling with making the right decisions, this guide will help you to feel more confident with your financial decisions. Not only that, but you will feel braver and more optimistic about the future if you have savings to fall back on or even emergency funds for when you need it most. These are some basics of gaining control over your personal finances.
This might seem like an obvious point, but you’d be surprised how hard it can be to exercise some self-control with money. So many people are impulsive and might find themselves splurging on random items that they don’t need when they’re overwhelmed or stressed. Some great ways to reinforce better money habits are to learn how to reward yourself for tough days without spending high amounts of money. The modern world is full of advertisements and fast-food restaurants that it’s no wonder that you might find yourself spending more money than you need to. A great place to start is to set yourself easy goals, like going a week when you only buy yourself one of two rewards. Then, you could focus on making those rewards more affordable, like making coffee at home instead of heading to Starbucks.
Another great motivator to save towards is to assess your priorities and try to set up a savings plan. Whether you want to invest this or put it somewhere safe, you could speak with your bank supplier about what your options are. You might want to save for retirement or even a college education in the future. Spend some time thinking about what you want to save for, and let that encourage you to make smarter financial decisions.
Another great way to start saving is to put a small amount away each month or payday and keep it as emergency savings. This can help with injury recovery costs, medication, or even car breakdown. Whatever your future might hold for you, it’s better to be prepared because money worries will only weigh you down during already stressful times otherwise. It is reassuring to know that in an accident or emergency, you have yourself and your family or assets covered. Another way to ensure emergency savings is to search for a great insurance provider. Natural disasters, severe weather patterns, and the loss of a loved one can be protected in one place. Worrying about money isn’t something that anyone should be doing while dealing with an emergency.
Spend some time assessing your monthly expenses and decide how essential each of them is. For example, you might be paying for a subscription that you no longer use. Of course, bills and utilities should be the priority, but once you spend some time mapping out your monthly costs, you might find yourself more motivated to save or even find more efficient ways to fuel your lifestyle. Rent, utilities, food, and insurance all add up, and you might even find that you could be saving money by moving to a more economic flat or house.
One of the main reasons why so many people avoid working on their finances is because they might have outstanding debt or poor credit. This is why it’s even more important to work on your money management so that further debt is prevented. Working towards repaying loans or debts is also a great way to improve your credit rating. This means that banks are more likely to offer you more flexible repayment plans in the future for bigger purchases like mortgage schemes. It can be daunting when thinking about tackling your outstanding debts, which is why some personal loan companies offer services specifically for this. Seek friendly financial advice and tips on how you can consolidate your debts into one place and make it much more straightforward to eventually pay off. Rome wasn’t built in a day, so it’s important to remember that any small change contributes to a more financially stable, confident future.
We live in a world where everything is readily available whenever we could possibly want it. That is why more and more people are opting for a banking option that is easy to access and has apps that are easy to use. Do your research to compare which banks offer the best app if this is something that is important to you. It can be an effective motivator when it comes to avoiding impulsive purchases because you will be able to check the app and see how your savings are doing and decide whether you can afford it this month. Checking your accounts on the go is a modern thing that makes banking and financial management more accessible and convenient than ever before. Not to mention, the quality of payment methods and security that are now within reach of banking apps.
To summarise, this guide has hopefully provided you with some basic definitions to allow you to feel more comfortable thinking about personal finances. Finally getting round to managing your money and setting up savings can be intimidating, especially if you have a history of debt, poor credit, or even outstanding debt repayments. Loan companies are designed to help you and enable you to gain control over your finances for good. Hopefully, improving your knowledge of the world of money management will allow you to feel more confident and comfortable speaking with credit companies and banks about the future. Take some time to figure out what bank services are the most important to you, and think about whether you know where all of your monthly outgoings go to. Good luck!
The problem is, it can be quite hard for small businesses to get external funds since most traditional lenders are reluctant to invest in them. Because, unlike large companies, they don’t have the equity and resources to compete in the market. But thanks to the emergence of fintech or financial technology in the last decade. With fintech developments, small businesses have more opportunities to scale up and thrive by making financing from lenders more available to them.
Trustworthy lenders can help you with this matter. To further understand its impact, find out below how it expands the financing options of small business owners.
Most conventional lenders like banks and credit unions heavily rely on the old credit scoring system when making lending decisions. As a result, small businesses with a limited or no credit history find it too difficult to get loan approval. But fintech has made it possible to expand credit availability by developing new approaches in assessing creditworthiness.
Through machine learning technologies, lenders have a pool of data to support their decision-making. Factors like financial situation, spending habits, and professional background are analysed by the machine to come up with the applicant’s behavioural profile. This gives small business owners more chances to prove their creditworthiness towards the lender.
Small businesses are often viewed by banks and credit unions as risky borrowers. It’s one of the main reasons why they usually require multiple in-person interactions before approving their loan. Plus most of them used manual and paper-based loan approval that normally takes several weeks and even months.
On most occasions, such a lengthy process results in a low approval percentage for small business loan applications. Fortunately, fintech provides easy-to-use online applications, allowing small business owners to apply for loans at their convenience and get faster approval. With rapid loan underwriting, small businesses can navigate and understand their financing options much better.
Drawn-out application processes and high fees have held back many small businesses from securing short-term loans. Such limitations are impacting the cash flow of thousands of companies. But the need of small business owners to access fast credit is largely recognised by fintech.
With fintech’s advanced loan origination software, online lenders that offer quick cash loans, bad credit payday loans, emergency loans, etc. don't only improve their credit assessments but the process of their loan disbursal as well. They can already provide loans to small business owners using direct money transfers and enforce repayment terms through an online platform.
The fintech industry has undoubtedly provided multiple ways for small business owners to grow and expand. With better automation, speed, precision, and the possibility of lower interest rates, it brings various lending solutions to small businesses and even startups. Below are some alternative forms of financing they have created.
P2P lending is a painless way to get financing with quick disbursals and easy repayment methods. Through automated algorithm-based pricing and underwriting, P2P lending platforms screen all types of borrowers more accurately and match them with the most suitable lender. So even with shorter credit histories and lower scores, small businesses can secure financing.
With accrued late payments, the working capital of small businesses might take a hit. But fintech has made a way to invoice financing technologies to help increase the liquidity of companies suffering from late-payment problems. With a web-based portal, small business owners can get advances from an invoice finance company. They can upload their invoices in real-time and have the amount deposited in their bank account.
Small businesses can also get an advanced lump sum of money based on their future credit card sales. They can repay the advance by taking a fixed percentage of those sales until the whole amount is paid back in full. With fintech streamlining the process of credit assessments and setting up dynamic repayment schedules, small businesses can keep their margins and profits still intact.
With fintech innovation, multiple crowdfunding platforms allow entrepreneurs to fund their small businesses through a variety of people who want to get involved with their business campaigns. Depending on the type of crowdfunding, small businesses may have to repay the fund or compensate in the form of equity. But besides raising funds, the best part about crowdfunding platforms is giving entrepreneurs opportunities to reach out to potential customers.
Fintech development doesn’t solely make outside financing more accessible to small businesses. It can also help you manage all your financial needs and transactions more efficiently from online lending to accounting and invoicing. You can have an edge over your competitors by leveraging fintech innovation in your daily business transactions and operations.
Unfortunately, car accidents are more common than they should be, especially when you consider that they are one of the leading causes of death around the world. Even when car accidents are bad enough at the moment of occurrence, they also have a lasting impact on survivors.
Many people fail to understand how big of an impact a car accident can have on your financial health. While it doesn’t directly impact your credit score, it can create conditions that may make it significantly more difficult to maintain it. Here are some of these conditions:
Increase in Car Insurance Premiums
Car accident claims can increase your insurance premiums, even when you’re only partially at-fault. This is because if you’ve caused an accident, your insurance company will tag you as a high-risk client.
The reason behind this increase in your premiums is that insurance companies need to evaluate the risk that an insurance policy holder has of getting into an accident. The goal of any insurance business is to ensure that the premiums they collect will always be higher than their insurance payouts. This is why they deem it necessary to make certain adjustments on the premiums of high-risk clients.
Even the smallest increase in your insurance premiums can add up to a hefty amount. This increase in premiums will be much higher if the accident was so severe that you need a new car. While this may not affect your credit score, this increase in expenses will affect your ability to pay for other bills.
Hefty Fines and Medical Bills
Another effect of car accidents is that they cost a lot of money to recover from. Depending on the extent of your injuries, your medical bills could vary, and in more severe cases you may even end up with a recurring medical expense.
While it’s true that you can sue for damages, lawsuits can take years to resolve, and you may have already suffered financially. This is why it’s important to hire seasoned car accident lawyers to get your lawsuit resolved as quickly as possible, especially since you need to get fair and full compensation as soon as possible.
Costs of Repairing or Replacing Damaged Vehicle
Repairing a car can be expensive, and replacing a car even more so. Even if you have an emergency fund, having to deal with such a hefty expense so suddenly can significantly affect your financial health. If your car was totalled, you may even have to pay for the remaining balance if it still wasn’t fully paid off. This can eat away at your budget and may even deplete your savings, which will affect your ability to manage your credit lines.
Thankfully, there are many ways to help protect against such a sudden financial burden. Besides having an emergency fund, you may want to consider getting a loan to help you get through your expenses, especially if there’s a significant gap between the period of the accident and the settlement.
If you already have a good credit score, you’ll have access to all these options that will prove valuable options for mitigating the financial impact of your accident.
When you're applying for a mortgage, auto loan, personal loan, or any other loan, you want to get the best outcome. However, your loan application may not go well all the time. It's because lenders consider a range of factors to ensure that they are extending the loan responsibly.
If you don't know what your lender is looking for, it can be more difficult for you to get approval. It would be best to acquaint yourself with the different factors that may significantly affect a lender's decision on your loan.
Before handing in your loan application, you may read through the following factors to help you get the most favourable response from your lender.
Lenders look at different factors when making loan decisions. While some of them are lenient when loaning the money, others can be remarkably strict. It's also worth noting that every lender is different and may place a greater weight on different factors. Many lenders look for trustworthy borrowers to minimise the risks of lending money.
Nevertheless, below are the factors that lenders usually consider when deciding on your loan.
Knowing them by heart can make the difference in qualifying for a loan and getting it at a good interest rate.
Typically, lenders will examine your credit report to know how you've managed your credit with other lenders in the past. Different relevant information that lenders are likely to see on your credit file, but your payment history will probably have a large bearing on your loan application.
Typically, lenders will examine your credit report to know how you've managed your credit with other lenders in the past.
If you didn't incur missed or late payments in your past credit accounts, they may consider you creditworthy. But your payment history, along with other details in your credit report, is basically encapsulated in a single number known as credit scores. Such scores may range between 350-850, and the higher they are, the better off your loan application will be.
It is important to remember that lenders prefer loaning money to borrowers who they have confidence will repay the loan as agreed. With that, they will certainly use your debt-to-income ratio (DTI) to determine how much you're earning and currently owing.
Although each lender has different requirements when it comes to your DTI ratio, they usually prefer a percentage that is not higher than 36%. If your monthly gross income is $5,000, your total monthly debts should not exceed $1,080. The lender's goal is to make sure you have enough income to make payments on new debt.
The amount you want to borrow and how you plan to use it can also affect a lender's decision on your loan application. Basically, it's one of the bases that lenders use to determine how much interest they will charge. If you borrow a larger amount, you are also likely to pay more interest on your loan. But a 20% down payment may help you get less interest.
Depending on the type of loan you'll borrow, lenders may also require you to put up collateral. But they usually do that when you're applying for a substantial amount. Lenders would want you to secure your loan so that they have a sort of protection if you miss payments. The loan purpose may also have some bearing on your application, depending on your lender.
The amount you want to borrow and how you plan to use it can also affect a lender's decision on your loan application.
The length of time you'll be paying the loan plays an important role in the lender's decision. Note that they will usually feel more comfortable lending you the loan for a shorter time. It's probably because you're less likely to default on the loan if you have to pay it sooner. But of course, it would mean a higher monthly payment on your part.
Lenders often take into account your liquid assets when you apply for loans like a mortgage, auto loan, or home equity loan. If they see that you have funds or assets that you can easily turn into cash, lenders may give you lower rates or better terms. It gives them reassurance that you have a financial cushion to fall back on quickly to make repayments even if you lose your job.
Besides the factors mentioned above, it's worth noting that the type of lender you choose can also make a big difference on your loan application. If you want to increase your chances of approval, you may have to go to a lender that best suits your needs and qualifications.
It would help to get yourself acquainted with the following types of lenders and see where you most fit in.
Traditional lenders typically refer to banks and credit unions. For such a long time, they were only the sources for loans and lines of credit. Among all the available commercial lending options, traditional lenders may offer the best terms. But the problem is, they are harder to qualify for since they have stricter application requirements.
[ymal]
On the other hand, alternative lenders have been around for only a decade. They are also known as online lenders, and they are not subjected to the same level of regulation as banks and credit unions. They often have more lenient qualifications and much faster turnaround times than traditional ones. However, these lenders may charge higher interest rates.
There are various financing options everywhere. However, they are not all created equal. If you want to get the best terms possible, you must take the time to shop around different lenders and work on what they're looking for.
Debt doesn't have to be a fact of life, although many people look at it that way. They assume that it's normal to owe money and may not even pay attention to how much they are paying in interest or how long the payments will take them at their present rate, which could be decades. Others might be struggling to keep up with their bills and wonder if they will ever be in a better financial situation. Wherever you are on this continuum, it is possible to pay off debt fast using the steps below.
Your first step is to take a serious look at your finances and figure out how much is coming in, how much is going out, and how much you owe. For now, just make a list of your total debts, excluding your mortgage since it may be more beneficial to pay this one off over time. Now, review your spending and look for places where you could cut back. Dig deeper than simply cutting back on your entertainment budget or buying cheaper groceries.
For example, could you be paying less for car insurance? What about moving to a cheaper apartment or getting roommates? If you have looked at ways to cut back and not found many, you might need to consider taking on another part-time job or looking for a higher-paying one. Another option is gig work, which can mean anything from dog walking to computer programming and more and is easy to fit around your regular schedule.
The next step is to look at ways to reduce your debt in addition to paying it off. For example, interest on your credit cards is probably very high. Rather than continuing to pay off a little each month, a better option might be to take out a personal loan from a private lender. You can check your estimated interest rate, and it is likely it will be lower than the credit card rate. You can then use the loan to pay off the credit card in full and then turn to paying off the loan at a lower rate.
[ymal]
Next, you should decide whether you would prefer to pay off your smallest debts first or those with the highest interest rates first. The latter is the more financially sound approach because you will end up paying less in the long run. However, some people find that the former method is more motivating. The main idea is for you to stick to your plan, so choose the one that is the most appealing to you.
Make a list of the debts in the order that you will focus on them. Whichever one you begin with, put the majority of your money set aside for these payments toward that. On everything else, simply make the minimum payment. When that first one is paid off, add what you were paying on it to the minimum payment on the second item on the list. As you proceed through the list, the payments you make on the main debt will grow larger.
Annie Button offers her advice on debt management and how investment stacks up against simple repayment.
It is an interesting question that many people will have to face at some point in their lives: if you have some extra money, is it best to use it to invest in something that will hopefully give a profitable return, or pay off previous debts that you have accumulated?
As with virtually all matters of money, this is very much a question that can be answered only by looking at your personal circumstances. Your current budget and your plans for the future have a serious effect on the best moves to make with your money.
Investing can provide you with a greater amount of money than when you started, which could conceivably make it easier to pay off debts in the future. But at the same time, large debts mean expensive interest payments, and these can actually hinder your ability to save extra money and continue investing.
Here we take a look at your options when it comes to using extra money in the wisest way: should you invest, or should you pay off debts?
Debt is a real problem. In the UK, households have an average of over £60,000 in debt as of October 2020. And yet, this is an inevitable part of living. Without taking on debt, the majority of the country would not be able to buy a property or make major purchases such as cars.
Sometimes, unforeseen events force individuals to take on debt - such as in the case of needing emergency repairs to a property. Credit card debt is also very common, with many preferring to make purchases and defer payment to later.
However, it is important not to lump all debt together. Some debts - such as mortgages or student loans - come at a relatively low rate of interest compared with others such as personal loans or credit cards.
Without taking on debt, the majority of the country would not be able to buy a property or make major purchases such as cars.
Credit report providers Experian state that “prioritising the debt with the highest interest rate will save you more money and allow you to redirect funds to other financial goals faster”, and this is a good place to start.
In general, it is always best to pay off any high-interest debt as soon as possible. This is simply because any investment that you might make needs to achieve a better return than the rate of interest that you are paying on your debt. This is clearly harder with high-interest debt.
It can be very tempting to look at the extra money that you have available - whether it comes from savings, disposable income, or a financial windfall - and see the opportunity to turn it into more.
This is especially true coming out of 2020, where many people have seen their financial situations change drastically. But is 2021 the right time to invest?
Of course, everyone is facing uncertainty due to the COVID-19 pandemic and while this can be worrying it can actually make things interesting from an investment point of view. Typically the market responds poorly to uncertainty and challenges.
We are in a situation where the pandemic has caused shares in many previously profitable and successful businesses to fall dramatically. With vaccines now available, and a more positive outlook on the horizon, it may not be long before the stock market begins to stabilize. As such now could be an ideal time to invest.
[ymal]
No matter your financial situation, it is a great idea to take financial advice before making any move relating to investments or debt. As mentioned above, this really can come down to the specifics of your situation and a financial adviser can help with this. In fact, it can be advisable to look at specialists offering wealth management services.
“Wealth management is important,” says Jonathan Baggot of Numeric Accounting; “it is all about aiming to sustain and grow long-term wealth. The financial market is complex, so wealth management specialists have the knowledge needed to explain plans and schemes clearly and concisely while offering impartial and unbiased financial planning advice”.
Paying off debt is important - but making smart investments as early as possible is best if you wish to reach your financial goals. Everyone’s individual financial situation is different, so following the advice of professionals is a great way to make smart decisions.
This is likely because of the common misconception that any form of debt is bad. While it's true that debts have negative effects, they are also good for several reasons.
Financially responsible consumers take out personal loans to purchase their dream home, finance their car or fund their education. Debts have positive outcomes if you know how to manage them responsibly. But it should be noted that debts, such as personal loans, are not for everyone. They can be a smart move, but only depending on your situation.
Nevertheless, knowing how you can benefit from a personal loan is an excellent place to start to decide if a loan is right for you. Here, we discuss the potential advantages of getting one.
One of the notable benefits of personal loans is their flexibility. Unlike other types of loans, there are no restrictions on how you will utilise a personal loan. You can use the fund for almost anything. However, it's worth noting that not all purposes are financially healthy for you.
If you want to make use of personal loans to your advantage, here are some of the sensible options:
It's always good to have a fund set aside for emergencies. But that is not always the case for everyone. Many people don't have the cash to cover unforeseen expenses like a sudden car repair or medical bill, based on a report. If you find yourself in the same predicament, you can use online installment loans from a direct lender to take care of financial emergencies immediately.
Unlike other types of loans, there are no restrictions on how you will utilise a personal loan.
There are also instances when you have to fund a major purchase, such as buying a necessary household appliance or installing a new furnace. Paying for such a large purchase on a higher interest credit card can be too expensive. Taking out a personal loan can be your cheapest option without having to put up any collateral unless you have spare cash.
If you're having a hard time paying off existing debts with high-interest rates, you can consolidate them through a personal loan. With a low-interest personal loan, you can save money and reduce financial stress. Because instead of paying different loans with different due dates, you will only be paying one debt every month.
Interest rates on personal loans are usually reasonable. In fact, their rates are typically much lower than credit card rates. If you have a good credit score, you can get as low as single digit interest rates on a personal loan.
Remember that the interest you pay on loan is the cost you pay for borrowing. Thus, the lower the interest rate is, the more money you can save. What's good about personal loans is you have various options to pick on since many lenders offer them. By shopping around different lenders, you can easily find the best rate for you.
Taking on debts can be stressful. You have to make adjustments in your budget to ensure that you can make monthly repayments on time. Else, you can incur penalties and more interest on your debts. But you can minimise this emotional toll with a personal loan because it has a fixed interest rate and predetermined term.
It means that you know exactly how much interest you'll pay and when you will be done paying off your debts. With a set rate and payment schedule, you can easily manage personal loans in your budget and stay in control of your finances.
[ymal]
Like any other loans, personal loans may be able to help you boost your credit score if you use them responsibly. Consolidating your debts in a single personal loan is the most obvious way it can help you improve your credit score. But then again, only if you make your payments on time and pay the full amount required.
Another thing is that replacing your credit card debt with a personal loan can also boost your credit score. Note that lenders may consider you a higher risk if your credit utilisation is too high. But since a personal loan is an installment loan, it is not factored in your credit utilisation ratio.
There is no particular rule that allows you to deduct personal loans automatically on your tax bill. However, there are possible cases where you gain tax benefits under a personal loan. If you use the loan to invest in a business, you can claim the interest paid as an expense, which you can deduct from your taxable income.
You can also claim a tax credit if you take out a personal loan to purchase a home because the mortgage interest is deductible, provided that it is your primary residence. The same applies when you use the loan to fund a college education.
Personal loans come with certain benefits. However, it is always important to remember that it depends on how you utilise the loan. To ensure that you're making a sound decision. It would be best to consider your purpose in taking out the loan. Doing so can help you maximise the advantages of personal loans.
The Fair Debt Collection Practices Act protects consumers from unfair debt collection practices. This law applies to third-party debt collectors for personal debts. It doesn’t involve creditors who are legally attempting to recover debts owed to them.
The laws in your state may also protect you beyond this act. In addition to certain practices for collecting being annoying, many are also illegal. As a result, it’s helpful to know about these five unlawful debt collection practices and how to spot them.
One of the biggest complaints consumers have is being asked to pay debts they do not owe. By law, if you don’t owe the debt in question, you have a legal right to request, in writing, that you want verification of the debt. You can also request that the debt collector cease all contact with you. Doing this in writing is wise as it ensures that you have proof that you made the request.
In many cases, when collectors try to claim a debt that you don’t owe, you may be a victim of identity theft. Always check your credit report to see if there are any mistakes or unusual activity.
By law, a collector must provide you with written notice of the debt they are trying to collect from you within five days of the first contact. They must include the amount of that debt, the original creditor to whom the debt is owed, and a statement of your right to dispute the debt. If you do not receive this notification, you can file a complaint with the Federal Trade Commission. If you do receive written notice, it should include all the details of the debt.
Collectors are prohibited from harassing you when they call or contact you by any other means. This is the law. At the same time, the FDCPA doesn’t specify a set number of calls debt collectors can make within any given time frame. Instead, the court can determine what is appropriate and what is considered harassment.
[ymal]
You can take note of the days and times you receive calls and record messages as evidence. Collectors also cannot legally contact you before 8 AM or after 9 PM unless you’ve expressly allowed them to do so.
According to the law, debt collectors are not allowed to threaten legal action or wage garnishment even if you do owe a debt. Likewise, they aren’t allowed to threaten you with jail time or a poor credit rating unless they have the authority to do so. Such threats violate the FDCPA. Collectors must first sue in court and actually win their cases before they can take any legal action against you.
You can look up a list of debt collectors in the United States and read up on the actions they can legally take.
Debt collectors are prohibited from using false statements or representations to force you into cooperating with them. This rule holds true even if you owe a debt. If they claim an affiliation with a government or state, tell you that you will face prison time, lose property, or have your wages garnished, or even imply that you committed a crime, it violates the FDCPA.
If you have been harassed by debt collectors who are violating the law, you need the assistance of a skilled attorney.
In that case, bankruptcy serves as a last resort that will allow you to make a fresh start.
While filing for bankruptcy is a solution for many people in bad financial situations, you must be able to qualify for either a Chapter 7 or Chapter 13 bankruptcy. This guide will help you determine which option is best for your situation and what to do with your fresh financial start.
A Chapter 7 bankruptcy is often the most desirable form of debt relief because it involves discharging or dismissing all of your unsecured debts. Typically, any assets you own will be seized by the court and liquidated to relieve some of your creditors. Anything else will be discharged.
In recent years, federal laws have been updated to ensure only those in severe financial distress can qualify for a Chapter 7 bankruptcy, so a means test has been initiated.
In order to pass the means test, your monthly income cannot equal or exceed the average income for families in your state. If you fail the means test, the court will assume you have enough money left over each month to pay your debts off, and that will disqualify you from declaring bankruptcy.
If you believe you will fail a means test, professional bankruptcy lawyers recommend their clients file for Chapter 13 bankruptcy. This is different from Chapter 7 because your debts are not discharged. Instead, you and your attorney will have to draw up a payment plan that consolidates your debts under the court's supervision.
There are a few requirements you'll have to meet in order for the court to allow a Chapter 13 filing. First, you'll have to show that you have a regular source of income that will enable you to meet the obligations of a repayment plan. Additionally, the plan must be structured to ensure your debts will be fully repaid in three to five years.
[ymal]
The court also restricts the amount you can seek in debt relief. You can owe no more than $394,725 in unsecured debt and no more than $1,184,200 in secured debt. You are also not allowed to have filed for Chapter 7 over the last four years or a Chapter 13 within the past two years.
Even though your debts have been discharged, you may still have some work to do in rebuilding a good financial profile. This will likely include attending a court-ordered credit counseling course. You should also make a habit of checking your credit reports with the three main credit bureaus to make sure your debts have been discharged.
Any remaining debts should be paid off as quickly as possible but be sure to make all the minimally required payments on time. Just one late payment can destroy your credit rating and sabotage any progress you have made so far.
Even though a Chapter 7 stays on your credit report for 10 years and a Chapter 13 stays on your credit report for seven years, you can start rebuilding your credit score immediately. In addition to paying debts on time, getting a secured credit card can help you establish good credit sooner.
You can also help your credit score by maintaining lower balances on any credit cards you still have. All of these methods can be combined to show lenders that you're a low risk client, while also boosting your credit score over time.
Following this guide can help you start a new life for yourself, but, if you don't learn financial responsibility, you'll end up right back where you started. Even if a bankruptcy judge doesn't order it, taking a personal finance course can give you a more thorough understanding of the concepts related to financial responsibility. When you complete the course, you'll know how to build and maintain good credit, which is one of the keys to obtaining a better financial flexibility.
The lower your credit score, the higher the chance potential lenders see you as a high-risk borrower.
If you’ve found yourself in this exact predicament, you might be wondering if there’s anything you can do to solve the problem. Credit repair companies might be able to help, but it’s worth putting time and effort into choosing the right one. Here are some factors to consider.
Some credit repair companies can be in a hurry for you to sign on the dotted line – even before you know what you’re getting into. What you will notice with some of the best credit repair companies is that they put time and effort into ensuring you understand what they can do for you. They explain how they look for errors, review negative items, and negotiate with creditors on your behalf.
It can also be worth learning more about debt and credit scores by checking out the Federal Trade Commission website. You can then gain an understanding of the documents to expect from your chosen company, such as a Notice of Cancellation and a copy of the Consumer Credit File Rights.
Some credit repair companies will offer the full package, such as credit-counseling, loans, creditor engagement, and credit bureau communication. However, some will just offer a few of the many services you may require to improve your credit score.
Before you decide on the company you’d like to work with, explore their website to determine what they can do for you. There’s also no harm in asking them questions about their offerings and whether they can assist with particular problems, like getting a mortgage with a bad credit score.
[ymal]
Many things can impact a brand or business’s reputation. However, at the top of that list is customer reviews. Do your homework online to establish what people’s experiences have been with that particular credit repair company.
Take note of what is being said on social media, Google, and even in news articles. These factors can help ensure you choose one of the best credit repair companies for your needs.
In most cases, consumers feel more comfortable working with businesses that offer guarantees. They can often provide the illusion of safety and security, not to mention the peace of mind that you’ll get the results you desire.
Regarding credit scores, guarantees of improvement can have the opposite effect. It’s rarely possible to predict how credit bureaus or creditors react to requests for information and changes.
If you’re viewing a credit company that guarantees a credit repair in as little as x number of days, look elsewhere. As stressed as you might be about your financial situation, you can’t always expect the miracles that some credit repair companies try to offer.
Just as you would do your due diligence before choosing a bank, lending company, or any business, it pays to do the same with a credit repair company. Compare services, reviews, and professionalism levels before you make your final decision.
Tradelines or AU tradelines are credit accounts that appear on your credit report. Credit agencies use the information within those tradelines, such as their payment history, balance, activity, and creditor’s name, to form your credit score.
Your credit score is a figure that measures how credit-worthy you are. If you have made payments on time, have been responsible with credit, and kept your balances low, then you may have a high credit score. Banks and lenders may then be more likely to look favorably at you for lending. However, if you have too many tradelines open or haven’t made the best decisions regarding your credit, your credit score may be low.
To combat a low credit score or build a positive payment history, you may decide to purchase tradelines. These can improve a low credit score and allow you to build up a payment history. As common as this practice is, it’s easy to make some of the following mistakes.
You may have heard that tradelines can improve your credit score. If you don’t know a lot more than that, it can be easy to purchase too many tradelines, the wrong ones, or be led into making tradeline purchases that aren’t in your best interests.
When you add an authorised user tradeline to your account, you may think your credit score will immediately increase. You may then put plans in place to secure a mortgage or take out a loan. Tradelines are not instant. Instead, when you purchase an authorised tradeline, it can take up to 30 days to see an improvement, as long as you’ve selected one that can improve your credit score.
Many people don’t understand their credit score. Sometimes, it’s only when you go to take out a loan that you come to realise it’s not as high as you expected it to be. If your credit score is surprisingly low, a tradeline is not a way to repair it. Instead, it’s a way to add information to your credit report to potentially increase your score. If you have a low credit score and you’re unsure why, you have the right to question it. You may be able to correct anything that appears to be wrong and subsequently lift your score.
[ymal]
If a credit bureau has put a fraud alert or credit freeze on your account, any tradelines you purchase will not be posted to your credit report. Before you go down the tradelines route, contact the associated credit bureau to have those alerts removed.
Each tradeline is going to have a different effect on each person’s credit report. Its power will depend on what your credit report already outlines. The goal is to choose a tradeline that has better features than what you already have. For example, if your accounts’ average age is eight years, a five-year-old tradeline is not going to benefit you as much as one that has an average age of 10 years.
When the time comes to request a loan or a mortgage, it helps to understand as much about your credit report as possible. You can then learn about ways to improve it, repair it, and use it to your advantage.
Matthew Glickman, VP of Customer Product Strategy, Financial Services at Snowflake, examines the benefits that the data cloud can bring to financial services.
In the wake of COVID-19, financial services have had to adapt almost overnight to the economic challenges presented by the pandemic. With cities across the world going into lockdown, consumers expect banking to deliver digital-first experiences that match their usual expectations. Digital innovation is very much at the heart of this transition. To navigate and thrive in the current climate, capitalising on the data cloud will enable fintechs to respond nimbly to customer demands and remain competitive.
According to an Accenture survey, over half of respondents in the retail banking industry believe cloud technologies have the biggest impact on improving operational efficiency, and 40% believe that it can also generate business value for the industry. The data cloud can provide the foundation on which companies can build a technology stack that delivers business agility and growth. Here are three ways financial services companies can benefit from harnessing the data cloud.
The cloud offers companies the opportunity to house all their various types of data in one secure place, enabling them to personalise services for customers. By using the data cloud, companies have a consolidated governed location for all types of data (for example, clickstream, transactional, and third-party) that can ingest data from new sources such as IoT devices. This enables organisations to gain a 360-degree view of customer behaviours and preferences from multiple inputs.
The cloud offers companies the opportunity to house all their various types of data in one secure place, enabling them to personalise services for customers.
A full customer view is fundamental for a successful personalisation strategy as it enables organisations to pinpoint high-value customers and ensure they have a good experience at every touchpoint. Without real-time visibility into customer interactions, providing the best possible customer experience just isn’t possible.
Over time, digital banking platforms will evolve to incorporate ML predictive models to drive even more personalised banking behaviours. This will only be achievable for organisations who successfully tap into the data cloud, as the success of ML models will require support from ever increasing volumes and access to datasets, both within and external to an organisation. The more an organisation can tap into customer personalisation, the better equipped they will be at customer retention and remaining competitive.
To ensure fintechs can continue providing the best possible customer experiences, and adapt to any demands posed by the pandemic, having an acute awareness of all data available will be key for these insights. Adopting a cloud data platform that offers the direct and secure sharing of data without the complexity, cost, and risk associated with legacy data warehouses is one such solution. With simpler, enhanced data sharing, companies can quickly and easily add new data products, and get near real-time insights across the business ecosystem on how this is operating. Offering a standalone data product to data consumers can lead to substantial revenue. For example, financial companies that collect tick-by-tick stock market data can use a cloud data platform to create a data project that they can sell to hedge funds.
A cloud data platform can also reduce the manual effort and copying that is necessary with traditional data sharing tools. Instead of physically transferring data to external consumers, companies can provide read-only access to a segment of their information to any number of data consumers via SQL. By breaking through barriers between disparate data systems, companies will find new sources of revenue and opportunity.
The rise of digital-first banks, the increased availability of online services and the ongoing surge in mobile banking all represent the modern evolution of how customers now interact with their finances. To meet the demands of today’s customer, financial organisations will see big benefits in collaborating with other finservs through real-time access to data. For instance, if a customer is using a third party fintech to track their finances, a financial institution must share data with that fintech organisation so their customers can access their accounts.
[ymal]
Last year, 65% of banks and 76% of credit unions said partnerships with fintech companies will be an important part of their business strategies in 2020. These numbers represent an increase from 49% and 60%, respectively, in 2019, showing a clear trend towards a more open banking landscape. Financial institutions that do not take steps to improve the accessibility of its data risk frustrating their customers or losing them to a more agile and collaborative financial institution.
Data collaboration can also help improve instances where investment banks may otherwise have been forced to hold excess capital. This is because aligning on risk exposures and liquidity is executed through nightly correspondances instead of what could be real-time data sharing through the cloud.
With fully governed, secure data sharing, companies can also easily determine who sees what and ensure all business units and business partners access a single and secure copy of their data. Not only does this enhance efficiency, but centralising data into a single source of truth, rather than in separate locations, will boost data security.
Data is the lifeblood of the financial services industry. By migrating to and capitalising on the data cloud, companies can build a future-proofed technology stack that delivers business agility, enhanced customer experiences and data sharing capabilities that ensure business continuity during this volatile economic period. Prioritising these digital-first experiences for customers will ensure financial organisations have the competitive edge that these times demand.
