Personal loans are loans that are applied for by and (hopefully) given to individuals. In other words, a person, rather than a business, corporation, or organization, wants to borrow money. Personal loans can be either secured or unsecured. Unsecured personal loans usually only require a person’s signature. The individual does not have to “secure” the loan with any type of collateral, such as a car, boat, or other personal property.

Sometimes, a financial organization may require a co-signer on an unsecured loan. In this way, if the original borrower cannot (or does not) repay the loan; the co-signer is responsible for the payments. The co-signer, however, does not have to put up any personal property either (unless that person wishes to do so).

Unsecured loans are usually fairly small. Some financial institutions will only lend up to a certain amount on an unsecured loan before they require that the loan become “secured“. While many lending agencies may offer unsecured loans, frequently, this type of loan is most often offered through a credit union or other similar organization. This does not mean that a bank, independent finance company, or other financial institution will not offer unsecured loans. One needs only to inquire at the place where he or she wishes to complete the loan application to find out if unsecured loans are offered.

An unsecured loan may very well be the first loan a young person applies for and receives. This is because the loan amount is usually fairly low, and the process itself is generally easier than that required for a secured loan. Unsecured bad credit loans will likely have a fairly low interest rate, and the monthly payment is usually very moderate. This makes an unsecured loan even more attractive, especially to a person who is just beginning to build his or her own personal financial history.

Obtaining an unsecured loan, making the payments on time, and paying the loan back within the specified time (if not a little early) are a very good way of starting a sound credit history. When and if the time comes that an individual is in need of another loan (whether unsecured or secured), creditors will have something to look at. If a lender likes what he (or she) sees, then there should be no problem when a person applies for a loan in a larger amount.

Once an unsecured loan has been repaid in full, a borrower may be able to make another unsecured loan, after a sufficient amount of time has passed. As long as each loan is paid off on time, with no late payments, the borrower can continue to obtain unsecured loans whenever it is necessary.

Personal loans are usually made with a repayment period of one to three years. The longer the repayment period, the less the monthly payments will be. A “first-timer” may wish to opt for more time in which to pay back the loan, as this will give the borrower a chance to practice and hone budgeting and payment responsibility skills.

IF a problem arises with repayment, an unsecured loan can usually be “extended”. This simply means that the remaining balance is re-financed, and the borrower is given more time to pay off the loan. If the borrower sees that this situation may be imminent, he or she should immediately contact the creditor and explain the circumstances. The lender is more apt to work with the individual if other arrangements are made before payments become delinquent.

Tags: bad credit loans, creditors, lender, loan, Loans, personal loans, secured personal loans, unsecured personal loans

With interest rates steady and fairly low, homeowners all over the country are wondering if it’s an ideal time to get a home equity loan. While there are some conditions that make a home equity loan’s timing more appropriate than others, there are some rules that should be considered no matter what the economy is doing.

Things To Consider Regardless Of The Economy

• Home equity loans are loans that should only be taken out for a “good reason”. Low interest rates are not an adequate reason alone for taking out a loan of this size. Substantial reasons for taking out a home equity loan include: a personal emergency, medical bills, college expenses, a sudden repair or debt consolidation.
• Another thing to consider is how much equity a homeowner has actually built up in their home. While equity takes time to build, the process is extremely slow overall.
• Those interested in taking out a home equity loan should be able to afford the loan’s monthly payments. If a homeowner is extremely strapped for cash it may not be feasible for them to take on another bill each month.
• One good reason for taking out a home equity loan is for a home project. Home projects are often great investments in your home. Thus, a home equity loan will help you add value to the overall property. It’s important to be certain your home project is indeed adding appropriate value in relation to what you’re spending. Thus, a realtor is the best resource to consult with before any additions or remodels are started.

The Status Of The Market Does Matter

While there are several things to consider no matter what the market looks like, the market’s status does indeed matter in the timing of a home equity loan. With interest rates moving on a daily basis, it is always good to watch the rate trends and lock in a low rate. Watching the market will help you determine when the timing is best for you to consider a home equity loan.

Alternatives

Another option to a home equity loan is a home equity line of credit. This is a great option for those people who really don’t know how much money they want or need to borrow. It’s basically an account with an overall credit limit. Borrowers only pay interest on what they use out of it, which is one benefit to this type of account. Thus, many borrowers are not tempted to use more than they actually need and will end up repaying less than if they borrowed a lump sum of money.

Conclusion

The perfect timing for a home equity loan is analyzed on an individual basis. If your credit is in good shape, the interest rates are low and you have a “good” need for the money, it may be a good time for you to borrow. Remember, to get the best deals you should shop around for the best offers and watch the market trends to ensure you’re getting a good rate.

Tags: debt consolidation, home equity loans, loan, money

The news is rife with stories about how bad things are in the US economy, and the fact that many Americans have been living beyond their means. Usually, the articles take a stance that the latter is largely responsible for the former. Americans are frequently talked about as if they are the worst consumers, or maybe it’s just that, as the world’s official scapegoat, it often seems this way. When statistics about the US economy are then presented in comparison with those of other developed (or wealthy) nations, many would be surprised by the outcome.

Data from The International Monetary Fund is widely referenced for its market research and financial analyses by leading popular and scholarly texts due to its accuracy. According to its 2007 Financial Report, the 10 wealthiest nations in the world (in terms of GDP) were:

The actual nations that make up the highest GDP list are probably not surprising, and their combined GDP is equal to roughly half of the world’s total economy. Generally speaking, the countries that produce the most are going to be ones that spend the most. This is more or less the case for individuals as well. A nation’s external debt can include any number of factors, including loans, trade deficits, budget deficits, and the sum of its citizens’ outstanding consumer debt and other factors. This is similar to how an individual’s debt can include business loans, mortgages, credit card debt or student loans.

Surprisingly, there is not a wealth of literature written about the size of these large economies after their debts have been considered. Effectively, this could be referred to as an ad hoc net worth of the above nations’ economies. This is very interesting, as the nation is in essence the sum of its parts, meaning its citizens. Someone’s debt-to-income ratio is one of the main factors in someone’s credit, and their ability to buy a house or finance a car. Why does it not play a major role in a nation’s ability to conduct business and borrow money in such a way?

According to the CIA World Factbook, the top 10 debtor nations (meaning the countries with the most external debt) are as follows:

Seven of the top ten debtor nations are included in the world’s top ten economies. Not surprising. This is largely a result of widespread availability of affordable credit, and relatively large middle classes in these countries, and consequently a large ratio of home/property owners. Most popular rhetoric on the topic would claim that wealthy countries have grown accustomed to being wealthy and they are enthralled by consumerism – it could be argued that this high level of debt could be a result of a culture that is used to and willing to buy now, and pay later…even if it means with interest.

According to our data, Japan has the highest positive income (in gross terms) at US $2,892 Billion. Similarly, the US economy is $1,594 Billion. At the other side of the spectrum, Great Britain’s income to debt ratio is a US -$7,677 Billion, and that of France is -$1,890 Billion. But what do these statistics mean on an individual level? Well, if you were to boil down what each person in this country contributed to the nation’s income vs. debt ratio, the results would be startling. We would have to take into consideration the nation’s population to better understand this. And some may be surprised to see that the US does not fare quite as bad as imagined, comparatively:

So what are some of the reasons why these nations have such high outstanding debts, even to the point where it may dwarf its GDP in comparison? Typically, in what are considered to be established capitalist economies, interest rates are kept low on purpose in order to encourage entrepreneurship and to promote the growth of businesses and spending. The idea is that those who contribute to the growth of the economy would make up for those who do not, and those who do not contribute positively to the economy would at least spend money in it. Remember Reaganomics and the “Trickle-Down” mantra?

The United Kingdom is an interesting economy in particular because its aggregate consumer debt alone ($2660 US Billion) is roughly equal to the nation’s total GDP. In this sense, the UK is just like your friend that spends exactly what they make, or even beyond their means to try and impress his/her friends. This is worse than living month to month – it’s like living a month to two months behind! And now, the UK is accumulating new debt at a faster rate than the economy. If the UK were a private citizen, it might be time for him/her to sell off what they can and move to Panama, or declare some type of bankruptcy.

So what are the causes of the high debt-to-income ratios in Europe? Expensive labor. Expensive exports. Expensive currency. Small population. High levels of taxation and large social welfare systems. On the international front, European nations are having a difficult time competing with an increasingly devalued dollar (and consequently the Chinese Yuan and The Japanese Yen), and domestically, these nations are taking care of their citizens to a point that would make any red-blooded Texas Republican cringe. And of course, the wealthy classes in these countries are so heavily taxed that money is being pumped back into the country’s extensive social programs that, perhaps counter-intuitively, can affect the economy negatively.

Conversely, in Japan, it is often pointed out that the nation has had a history of being a leader in technology and manufacturing – it is also a nation that is a net exporter, or a nation that exports more than it produces. Japan’s economy is rather large and it’s population very small. The country’s social welfare system is modestly sized, and the Yen has purposely been kept at a rate that has traditionally made Japanese exports more desirable compared to its US and European counterparts. There are also arguments that pertain to the differences in culture, and those that relate back to the fact that Japan’s position in the global economy is a relatively new phenomenon. Maybe the ‘buy now, pay later’ philosophy has not yet set in. If you were to attribute human characteristics to Japan, you’d have to conjure an image of a high-level executive who brings a sack lunch to work everyday, and drives to the office in his 1982 Toyota Pickup – because it’s paid off.

It is important to note that few economists would make any real case for some type of financial plan as a result of this data simply because most of them will never pay back any of their debt. But also, because there are not really any solutions - if the citizens of each country were taxed in a way to pay off their debt, there wouldn’t be much money (if any) left to spend domestically and put back into the economy. One of the benefits of being a wealthy nation, I guess! At the end of the day, if no one is coming to collect on these nations’ debts – what is the big deal, right? But, nations are not like people, and the rules of credit are not so applicable. The determinants of whether or not money will be lent between two countries are more likely to be a result of the two countries fraternal histories, or if they collaborate in military operations, etc.

It will be interesting to see if any of this will affect the international economy, especially with the doomsday talk about the world’s housing, stock and credit markets. In effect, most of this debt will probably be neglected, because you can’t send a country to medical collections, or into foreclosure. But what these European countries are in particular doing, is saying, “go ahead try to collect on me – I won’t pay you! And furthermore, when I decide it’s time for a new Audi, I’ll figure out a way to pay cash for it.” To take the analogy one step further, and if you are still one of the few people still in the real estate market, you would probably only be able to finance a home loan for Japan.

SOURCE

MSNBC

http://www.marketwatch.com

Tags: America, consolidation, countries, debt

The answer to that question depends on the circumstances. If it’s a true emergency-one that was totally unexpected, could not be anticipated in any way, and pretty much came “out of the blue”, then a payday loan (sometimes referred to as a “cash advance“) can be a good thing.

On the other hand, if the employees at the local cash advance office call your name out when you walk into the door, like they did to the regular patron on the ‘80s TV show set in a particular Boston bar, then it’s a lead-pipe cinch you’ve taken this (seemingly) easy route out way too many times. And, that is bad.

Print and TV advertisements make it seem like the easiest thing in the world: Walk in to the local branch, answer a few questions, write a check, get your money, and go happily on your way. When payday comes, just walk in and pay the amount of the check plus a “small” fee.

But, what happens if payday comes and there is no money to pay the cash advance loan? No problem, just extend it for another thirty or sixty days. You’ll just pay the amount of the check plus the fee, although it will be doubled to cover the extension time.

Yes, it sounds really easy, and convenient. And, it is. However, it is precisely this ease and convenience that serve to “trap” people in a vicious cycle.

There are some people out there who, when faced with an emergency that leaves them no alternative but to take out payday loans, will do so that one time, pay the loan off on time, and nothing will make them ever do it again. They will figure out a way to put a certain amount of money back from the next few paychecks to cover such an emergency, or they will sell something and put that money in an emergency account. But, they will never use a cash advance service again, ever.

Others, however, will find themselves literally using a cash advance office much like one would use a bank, “withdrawing” money for any reason, legitimate or otherwise. One day, however, they miss a payment, or find themselves unable to extend that original loan one more time, and they actually become worse off than before.

To make it worse, some (though not all) cash advances/payday loan businesses often persuade, or try to, a person to either extend the original loan or add to it. They’re going to do this because the fee is where they make their profit. And, the longer it can be stretched out, or the more fees that can be collected, the more money they will make.

Some places do try to “police” their customers, and encourage prompt repayment over extensions. Additionally, they do not use “teaser” or “get them in the door” tactics such as “first loan free” (no fee) or “make a payday loan, get a free…(whatever)”. These companies realize that most people have a legitimate need, and want to help alleviate the problem, not add to it.

Some states strictly regulate payday loan/cash advance businesses; others have only basic guidelines and regulations for their operation. Other states, however, do not consider payday loan/cash advance businesses as having any redeeming qualities at all, and, as such do not allow such businesses to operate.

Payday loans may be necessary, AT TIMES. But, as with anything else in life, the rule “all things in moderation” definitely applies here.

Tags: cash advance, emergency, payday loans

Very rarely is someone able to pay for a car without obtaining an auto loan. Most of the time, the buyer will need to borrow at least part of the money. Fortunately, for the most part, auto loans are fairly easy to get, and there are many different ways to obtain one.

Many car dealerships have a “working relationship” with certain banking institutions, and may even have an “on-site” representative to discuss your auto loan with you. Talk to the representative, if you wish, and find out what interest rate is being offered. It may be the best one you find; but, then again, you might be able to find a lower one.

Or, you may wish to deal with the bank where you have your checking and savings accounts. They may offer certain terms and interest rates to established customers.

If you are a member of a credit union, you may be pleasantly surprised to find that the auto loan terms offered by that establishment, especially for used cars, are by far the best. If you are not a member, you might wish to look for a credit union with “open membership” (that is, you do not have to be affiliated with or employed by a certain company or organization in order to be a member), and talk to them about an auto loan.

Some independent loan agencies also offer auto loans. Their terms and interest rates may be very different than other places; however, so make sure you pay close attention to what is being offered.

Don’t hesitate to make a lot of comparisons between different financial institutions. A car, especially a new one, is a major investment, and you want to get the best deal possible, both from the car dealer and the financial institution.

If you are buying a new car, you can most likely go ahead and reach a price agreement with the sales representative, then take that figure to the financial institution where you will be obtaining the loan. If you are purchasing a used car, however, you will probably need to go about it a little differently.

Your best bet will be to write down the make, model, color, condition, and odometer reading for the used car, as well as the asking price. Once you have obtained all this information, take the figures to the financial institution you will be or are considering using, and have them check the asking price against the actual value of the car.

The reason for this is because the financial institution will have car value information that you may not have access to, and can tell you immediately if the asking price is too much. Further, at that time, the financial institution will most likely tell you that they can (or will) only loan a particular amount of money for the type car you are interested in purchasing.

Some financial institution representatives, especially when making used-car auto loans, will actually call the dealership and tell the salesperson (or sales manager) that they will only loan a certain amount for the vehicle. If you are fortunate to have a “friend” like that (and believe me, someone that will do this for you is a friend), consider yourself blessed.

The salesperson cannot (or at least should not) try to change the price on you, and the representative and the financial institution will already have completed the majority of paperwork on the auto loan itself. This, in turn, will mean savings in both time and money for you.

Tags: auto loans, dealer, financing, loan, terms, used cars

Each year, high school students who are approaching graduation begin to think about continuing their education. For some, this may mean attending a major university, while others may decide to start out at a two-year (sometimes called a “community” college) institution, and then transfer to a four-year school. Others may choose to attend a technical college.

Each of these venues has at least two things in common. They all offer a college or technical degree, and they all require that the student pay tuition. Student loans are often the only way in which some students have to pay for a college or technical education. Thankfully, there are many options for obtaining a student loan.

The Federal Government offers many different types of student loans. There are several to choose from, with different terms and repayment options. Some students, however, often consider private student loans. These are loans that are made through financial institutions, such as banks, credit unions, independent loan agencies, or similar organizations, or even through individual companies or corporations.

Private student loans can often give a student more choices than other types of student loans. The amount that can be borrowed for a college education may be more, and one may be able to spread out the payments over a longer period of time. (Many Federal loans and student loans that are not considered private often require that the loan be fully repaid within a specific number of years-usually six.)

Interest rates on private student loans will usually be comparable. There is a slight chance they may be slightly higher; however, once a repayment history has been established, it may be possible to negotiate a lower interest rate for the rest of the loan. This is an advantage, as adjustment of loan terms is something that is not always an option in other types of student loans.

Banks and credit unions which do offer student loans often begin advertising the fact around college enrollment time. When such a financial institution does begin to make it known that private student loans can be applied for at the branches or offices, that is a good time for anyone who needs a student loan to inquire about their services.

Some places may offer a reduction in interest rates or repayment terms if a loan is applied for before a certain date; others may offer free banking services (such as checking accounts, savings accounts, and other amenities) as an incentive for taking out a college loan.

Independent loan companies may offer incentives of their own. They can certainly be another source of information on the different types and terms of private student loans.

As mentioned earlier, some businesses or organizations often offer private student loans. What makes these loans different from others is that repayment may not be in “monetary” form; rather, the loan will be paid back by the student’s working for the company.

This can actually have a very positive impact. The student is guaranteed a job (at least for the duration of the “repayment period”) after graduation. Further, the student may be able to work at that company while attending school. Either way, both the organization and the student profit from these private student loan terms.

Student loans are available to those who wish to achieve a college or technical degree. Private student loans offer students a chance to accomplish this goal.

Tags: accounts, banking, checking, college, degree, federal, interest rate, private, repayment, savings, student loans

Some consumers were already “feeling the pinch” before the current economic situation (high gas prices, businesses failing, increases in home foreclosures, etc.) ever occurred. Many people were already facing problems that came from having “less than perfect” credit, and the number is, unfortunately, growing.

For this reason, there has been an influx of businesses that offer “bad credit loans”. A credit check is not required in order to obtain money; rather, a “payday”, “title”, or other similar loan can be obtained.

At first glance, these types of loans for people with bad credit would seem to be “the light at the end of the tunnel”. However, a lot of people do not realize that these loans typically have an extremely high interest rate, and terms and limitations that would make a CPA feel as though he had not opened the first college textbook if he were to have to try explaining them.

Those who do have bad credit need to realize that quicker isn’t always better, and just because there is a business offering bad credit loans on practically every corner in those states that allow them to operate does not mean this is the best option. There are financial institutions that are more reputable, and operate within higher ethical standards, than those mentioned above.

These institutions are willing to extend loans for people with bad credit. Granted, the interest rate may be higher for those with lower credit scores than it is for people who have better credit ratings. But, these places will try their best to approve a loan if other criteria can be met.

Some institutions are lending money to those with bad credit, with the stipulation that the borrower(s) attend money management classes. The business itself may offer the classes, or may be in partnership or alliance with those who offer these classes. They may even consider participation in these classes as a reason to adjust the interest rate upon successful completion and a number of on-time payments.

Other reliable loan companies may not necessarily provide a “new” loan, but may allow for an adjustment of terms, refinancing, or the extension of an existing loan. This will allow the borrower to make lower payments, albeit over a longer period of time, but with the opportunity to improve one’s current “not so good” credit rating.

Those loan companies who do make loans in which one’s car title is the security, or a personal check is “held” until the next payday, or similar loans can have their place. If a true emergency arises, such as a major car breakdown, a severe medical emergency, or other similar situation that occurred with no forewarning whatsoever, then one may have no choice but to avail him or herself of such a service.

However, if this is the case, the borrower should take care not to allow him or herself to be swept up in the heady rush of just being able to walk in, lay down a check or a car title, and walk out with cash. The borrower should remember that this is a legitimate emergency situation that will not likely happen again, at least for a very long time, and that this is the only time that this type of service will be used.

Most of the time, however, there are other options. Bad credit loans are available from places that have been in business for many years, and will likely be in business for many more years, and the people who run these places are willing to work with those who have poor credit but need financial assistance.

Tags: bad credit, cash, credit, financial assistance, foreclosures, gas prices, interest rate, Loans, money, money management, payday

Millions of Americans find themselves spending more than they earn each month. Thus, to “get by” they pull out their credit cards and personal equity loans to pay for necessities. After putting six months of grocery bills and gas expenditures on a high interest rate credit card, the average American then looks at their debt with panic. After all, one trip to the grocery can take up to a year to pay off when using a high interest credit card and only making minimum payments each month. Because millions are overextended, maxed out and having trouble paying their monthly bills debt consolidation or debt relief is often a popular option sought out.

Pros Of Debt Consolidation

Debt consolidation is one of the most popular means of dealing with debt in America. With debt consolidation, a consumer who is overextended can easily get back on track. The process entails taking out a loan and using it to pay off all other debt. The main point of the operation is to get a loan with a lower interest rate and use it pay off the high rate credit cards and loans. Debt consolidation often results in a lower payment and a shorter pay-off schedule. Thus, the consumer will pay less each month and get rid of their debt much faster than if they paid each individual debt.

In addition, there is only one payment to keep up with and consumers often find it easier to navigate their finances with a solitary bill due each month. Debt consolidation and debt relief can be an excellent way to get rid of debt. It can help consumers become debt-free quickly, as most consolidation loans have terms of five years or less. Considering the average credit card will take a consumer fifteen to twenty years to pay off (with minimum payments), debt consolidation or debt relief is quite appealing.

Cons Of Debt Consolidation

While there are many benefits to considering debt consolidation, it can be a damaging choice for consumers to make. Realistically, going into debt is a cycle. Just like abuse it is often repeated and relived by people over and over again. Often consumers will acquire a large amount of debt, consolidate it under a loan to get lower payments and then go out and charge their paid off credit cards to the limit once again. It can be a vicious cycle!

In the end, the consumer is stuck with a consolidation loan payment and once again maxed out credit cards they just paid off with the consolidation loan. It can leave them in a worse place than they first began. Thus, many consolidation companies require borrowers to cancel all credit card accounts before they’ll approve a consolidation loan.

Overall Outlook On Debt Relief

Debt relief and debt consolidation can be a very responsible action to look into. However, consumers who choose to consolidate their debt (gaining lower interest rates and lower monthly payments) should also choose to cancel all credit cards and possible loan accounts. If a consumer’s not responsible enough to stay debt-free while paying off their consolidation or personal loan; otherwise, the entire process will fail.

Tags: America, cards, consolidation, credit, debt, loan, relief

As the economy worsens and more and more people are getting foreclosed on, I’ve noticed several more places advertising payday loans and cash advances cropping up. There aren’t many statistics or figures out there to tell us how many people are getting payday loans or if the number is growing. The most current figures are from 2005, when the industry issued more than 28 billion dollars in loans, but financial experts are sure that these numbers may double or more as the housing crisis worsens.

If you’re not familiar with payday loans, the idea is fairly simple. If you need a short term loan of just a few hundred dollars payday loans sometimes called cash advances may be the only option you have. These payday loan companies don’t check the borrower’s credit and they don’t deny loans to anyone, as long as they can show some type of income or government subsidy. The loans typically need to be repaid in just one or two weeks.

Sounds great, doesn’t it? Everyone has unexpected and urgent expenses crop up from time to time. However, there is a downside to these cash advances. They often have high hidden fees. More importantly, the interest rates on payday loans can easily range from between 400-1200%. Some estimates have shown that the average person who takes out a payday loan will end up paying $793 over the course of two weeks for a loan of just $325.

There are many horror stories out there from people who have gotten a cash advance and gotten in over their heads. It is much rarer to hear a story from someone who took out a pay day loan and had a good experience. There are several reasons for this. Payday loans used to be more or less unregulated by the government. There were many large scale unscrupulous cash advance lenders out there that took advantage of this. There are many decent payday loan companies out there, the trick is to ask around and compare rates to find one.

And, as much as some companies have helped earn the bad reputation payday loan companies have, a small part of the blame can be placed on those who take out the cash advance in the first place. Many lenders do not take the time to make an informed decision about their payday loans. They may not read through their entire contract before signing it. Then they feel cheated or scammed when hot with fees and interest they weren’t clear about. The single largest mistakes people make when it comes to payday loans is taking out a lot of them. The system is not made to benefit those who rely on cash advances frequently.

Payday loans are not meant to be long term loans or something you use regularly. If you have a short term, infrequent cash flow problem payday loans can be an ideal way to solve that problem. To keep from getting burned, it’s important to do your research before deciding on a payday loan company, to read everything and be clear about everything before you sign any paperwork and to pay off the loan in the time allocated. Most people who get in over their heads do so because they are continually rolling their loans over. This may buy you more time to pay them back, but really it will cost you so much in fees and interest and all you’re doing is digging a hole you probably won’t be able to climb back out of.

Tags: advance, cash, lenders, Loans, payday

Say you miss a payment, bounce a check, or overdraft your direct pay. Happens to the best of us even under the best of circumstances. A few hours or a few days late isn’t the end of the world. Even a 30 day or 60 day late payment is considered short term and, if the planets are aligned, may never be reported to a credit bureau. A quick call to your creditor and you’ll be spared any dings on your score.

If you’ve gone 90 days or more on a late payment, watch out. You’ve surfed into choppy waters where creditors are unlikely to come to your rescue. Prepare for credit damage up to seven years. It doesn’t matter if the late payment was a $9.99 balance for the latest iTunes download or a $1000 house payment.

Creditors will also look at how much you owe compared with your available balances. It’s not always best to pay off your credit cards because keeping a balance between 30-50 percent makes for healthy scores.

Creditors also consider how long you have been using your credit. Longer is better. And if you recently applied for more credit. Hold off on that Macy’s card if you’re considering a big purchase in the next few months. And finally, they want to know what your credit soup looks like. Like a good gumbo, variety makes it hardy.

Just starting out or trying to rebuild your credit? You’ll need to have at least one account that’s been active for a minimum of six months and one that has been updated in the past six.

Overdue Library Books & Parking Tickets Can Ding Your Credit

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If you just found that library copy of Gone With the Wind under your daughter’s bed where the dog dragged it six months ago, chances are that unpaid library fine has dinged your credit report. So will that late child support payment, utility bill, and parking ticket. Unfortunately, paying them on time doesn’t get you extra credit points on your credit score.

Are you the perfect tenant? You may win points with your landlord, but unless he reports your responsible payment habits to a credit bureau, your timely rent payment will not improve into your score. The good news is that this works vice versa, when you find yourself a day late and a dollar short knocking at the landlord’s door.

Fallen upon hard times? Loss of a job or unexpected medical bills aren’t factored into your payment history. You can cry to your creditor first, but your mother (or an emergency savings plan) is more likely to nurse you back to financial health.

How about those pesky credit card offers that clog your mail slot every week? Nope, they don’t ding your credit report unless you apply for the card because then lenders actually have to check your report.

Your credit can even affect what you pay for car insurance. The San Antonio Business Journal reported that people with poor credit scores make twice as many car insurance claims than those with the best scores.

Race, sex, age or where you live do not affect your credit score. Neither does your salary history, your job title, or who employed you. But it will reveal if you’ve been involved in civil suits, arrests, and of course, bankruptcy. Your credit report will show who’s been checking up on you, such as banks, mortgage companies, or potential employer.

How Credit Card Companies Take Advantage of Customers

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Be on the look out for several goblins of credit card scare. They make high interest APR’s appear from thin air and nickel and dime you into a debtor’s grave with extra fees.

The Goblin of Identity Theft Protection is eager to chip away at your monthly income through excessive fees. You don’t need it. Credit card companies already protect you.

There’s the Over-The-Limit Goblin. This one is will eat into your bank account with unannounced late and overdraft fees.

The Goblin of Non-disclosure is his close cousin. This guy likes to hedge around so you can’t find out what your interest rate will be. He also likes to jacks up interest rates when he catches you just hours late with your payment.

And finally, the Home Invaders Goblin; he comes in the form of a telemarketer. He calls your home five times a day, finally leaving an urgent personal message instructing you to please call him immediately regarding your account. Panic strikes as you imagine you’re the next fraud victim. You dial only to find out that he’s the goblin of identity theft protection.

The False Security of the Debit Card

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Debit cards are good tools to help you keep better track of your spending, but if you spend more than what’s in your account, you can rack up overdraft fees of an average of $30 per purchase.

When you use a debit card for hotels and rental cars, the company blocks off a couple hundred dollars, tying up your available funds and putting you at greater risk for overdraft. Use a credit card in these situations will ensure that the exact amount of your expenses are rung up at the time the purchase is made.

Credit cards can also offer more protection if your card or numbers are stolen because the credit card company is carrying your debt and will work harder to resolve the account and stop the theft. If a thief steals your debit card, he can quickly drain your account and you’ll have a much longer fight to get your money back. If you don’t catch debit card fraud in two days, you may not be able to get larger amounts of cash back. Wait up to 60 days and your chances of recovering your losses are about as good as finding the Loch Ness Monster.

Exploiting The Innocents of Credit

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The most targeted credit card customers are young adults because they are inexperienced in using credit. Eighteen year-olds often receive up to eight credit card offers in the six months following their birthday. Companies may try to lure teens with credit card offers for things like free frisbees and Jamba Juice. Offers may promise no-interest APR, but fine print tells a different story. Some lenders may change the APR at any time for any reason without notifying the customer. It’s important that teens learn responsible credit card use so they don’t end up swimming in debt.

Pollster, Zogby International, reported that almost a quarter of all college students they surveyed finished college with more than $5,000 in credit card debt. And The U.S. Senate Committee on Banking, Housing and Urban Affairs stated in 2002 that the fastest-growing group of bankruptcy filers are 25 or younger. The answer isn’t “no credit cards,” but better education. Credit bureaus, legal offices, and other financial institutions all over the country are responding by offering financial literacy classes in high school to try to save teens from bad credit or bankruptcy damage.

Tempting the Small Business Owner into Expensive Debt

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If you’re starting or supporting a small business, you know that it’s harder than ever to find cash. Stocks and housing values are down, severely hampering a your choices to draw from dividends or equity. You might be tempted to turn to credit card. Note that this might start a pattern where the profit from the business goes to pay off credit card debt, says Panda Morgan of the Greater Sacramento Small Business Development Center. Take the time to write a business plan and apply for a business loan, which will hold an interest rate in the single digits. Credit card companies have been known to charge 15-19 percent, so shop around for the best rates if you choose to go this route.

At the end of the day, credit reports and credit scores can be as stone-hearted as a jail warden on the night shift; but you can keep him happy by paying on time, not getting in over your head, studying the fine print, and reviewing your credit report for errors at least once a year.

Information for this article was gathered from a variety of sources including: Phoenix Business Journal, Birmingham Business Journal, Pittsburgh Business Times, The Tigard Times, Fair Isaac Corporation, Lawyers Title Agency of Washington, S. Michael Windsow, Helen Hecker of Articlesbase.com, Liz Pullliam Weston,Personal Finance Columnist, and The Today Show

Tags: check, credit cards, report, score