If you have a lot of debt, especially unsecured credit card debt, it may seem like a good idea to consolidate all of those little loans into one big loan – and indeed, doing so can save you time and money. Be careful, though, because different debt consolidation plans can either help or hurt your credit. Choose a plan that will get you out of debt as quickly and easily as possible while protecting your credit profile as much as possible:

Consolidating debt with a debt consolidation loan

Debt consolidation loans are the most popular way to consolidate and pay off debt. Rolling all of your loans into one larger, consolidated loan (preferably with better terms and interest rate) can actually save you money by reducing what you pay toward those debts.

Be careful, though, because it’s not always easy to find a debt consolidation loan with good terms, especially if your credit history has taken a hit because of recent financial difficulties, and/or because you’re carrying a lot of financial debt.

There are options if you have difficulty getting these loans through traditional lenders, such as peer-to-peer lenders like Prosper.com and LendingClub.com. You can also check with your credit union or bank, or search for an online lender that offers consolidation loans at reasonable terms. Make sure you do your homework before you sign up, though; there are lots of scammers out there, so make sure you double and triple check the organization’s reputation before you take the plunge.

How does this affect your credit?

Using a debt consolidation loan to combine and then pay off your debt can actually help your credit, since taking one out may let you pay off credit cards that are near their credit limits. Used wisely, this is a great way to manage your debt and maintain or even improve your credit rating.

Consolidating debt with a formal debt management plan

The so-called “debt management plan” or DMP is offered through credit counseling agencies; with this type of plan, you sign up as a client with the credit counseling agency, make one payment to that agency, and then the agency makes payments to each of your creditors, usually in exchange for reduced interest and lower payments. Again, make sure the agency you are dealing with is reputable.

How does this affect your credit?

Unfortunately, your credit will take a hit because you must close all of your credit accounts while you’re working with one of these programs. But it’s also true that FICO doesn’t care that your debt is getting paid off with the help of the counseling program, just that it is. What that means is that yes, your credit will probably take a short-term hit simply because you have to close all of your accounts while you’re with the programs; the effect is relatively short-term and will ultimately improve your credit if doing so lets you pay off your debt, though.

Consolidating debt by transferring to a lower rate credit card

You can consolidate credit card debt by transferring it from higher interest credit cards to a lower interest rate credit card; this can indeed help you pay off your debt sooner because your interest rate and monthly payment will be lower. However, be careful to be very disciplined. Don’t simply transfer the debt to the lower interest card, only to have interest rates jump after the introductory period so that you’re back in the same bind as you were before the transfer. Pay off the debt before the interest rates jump.

How does this affect your credit?

In general, your credit scores will drop when you open up a new credit card account and use the available balance on a credit card to consolidate debt. However, it’s a relatively short-term drop and probably worth it if you’re disciplined enough to pay off that debt before your interest rate takes a jump. It’s worth it to take a small hit if doing the transfer means that you can pay your debt off and save money at the same time. In the long run, you’ll actually improve your credit scores over time if you do so.

The author who contributed this article is Chase Sagum, Financial and Business blogger. Check out more of his content at www.lexingtonlaw.com.

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Buying a home for the first time will always be very scary. What if you don’t like the house? What if you chose the wrong location for your house? What if the additional monthly expense of buying a house makes it much more difficult for you to make both ends meet? These are just some of the concerns that make home buying difficult for first-time buyers.

Choosing the Location

Choosing the best location is, of course, one of the most important factors that you have to consider. For those with children, it’s best that you choose an area that has schools. Just see to it though that these schools have good rating.

Aside from schools, it will also be advantageous for you if you choose homes that are near parks and playgrounds. This’ll give your children a good place where they can have some fun and, at the same time, get a little bit of exercise.

For working parents, it will also be very advantageous for you if you purchase a home near your workplace. This will save you from a lot of time commuting to and from work, and this will also give you more time with your family.

Choose What You Can Afford

It’s a new house, so, yes, you would definitely want it to be your dream home. However, you should know that your budget will limit the way you want your home to be. You have monthly expenses to think of, savings to put in the bank, and a fund to set aside for emergency purposes. These expenses can limit your house options.

To make it easy for you, you need to have your credit history checked and preapproved. Preapproval will give you a good idea of what you can and can’t afford, and checking your credit history will also show you if you have problems with it. If there are problems or discrepancies with your credit history, you need have the issues resolved as soon as possible so there won’t be any problems when you do get a housing loan. Knowing your credit history and getting preapproved, taking into consideration all your monthly expenses, will help you find a way for the housing loan to fit into your budget.

You can also make use of a mortgage calculator so you can find out just how much your monthly payment will be and how much it will make an impact on your monthly income and budget.

Of note; it’s tempting to purchase your dream house, but if this is going to be a nightmare on your finances, then settle for something that you can afford. You don’t want to commit to something that you can’t afford to pay. You’re only going to end up with more problems if you do so.

Choose a Good Company

Choosing a good lending company and good home builder is also key to buying your new house. For this reason, always take a look at the reputation of the companies before choosing one. Compare the services and offers of the different company, and always check and see if they are licensed and registered to offer their services. It will also do you a lot of good to check their testimonials and see how they work with their clients.

Jennifer Dalley is a freelance content provider who writes for home builders. Through this article, she hopes to help first-time buyers purchase their own homes.

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Before you append your signature on any paper so as to secure car loans, consider the following tips so as to avoid any regrets;

Term length of the car loan

Before engaging in any serious negotiations to secure car loans, know what you can happily pay on monthly installment. Never forget to calculate the repayment period. The time frame should not be compromised by the interest rate charged. Some dealers could stretch the term length to an extent that by the fourth year of the loan payment, you will realize that you are servicing a car loan for a car that no longer impresses you.

Interest rate on the car loan

Consider checking out for the best lender charging a reasonable interest rate. Remember even if you are bankrupt doesn’t necessarily mean that you have to accept loan from a non trusted creditor who offers a high interest rate. There are companies who are ready to work with you on securing a manageable  car loan and at the same time help you improve on your credit history once a gain. Convince the company that you are serious on getting out of the bad credit trap. The first thing you can try out is to visit your bank as there are likely to offer low rate to their customers.

Large deposit

When applying for a loan putt down a large down payment on the vehicle. This will be a good indicator that you are committed to paying off the balance. Moreover a large deposit will relieve you of a higher monthly installment. To further cut down the possibility of future regrets, have a fixed figure on your mind on how much you would want to spend on the car and stick to it. Do not be swayed into any deal that will ensures that you can hardly secure a meal and other basic needs afterwards.

Break down the details of the transaction of the car loan

To avoid the risk of any confusion, make sure that the car dealer breaks down the deal into under stable details for example the car price, the financing terms and the trade in value of the vehicle you want to buy. Understand each part before rushing to make a decision.

Check for mistakes on your credit report

Check for any small errors on your credit report. For example any account that had been closed down but is still being reflected on your credit report as open must be corrected. You can easily be considered a bad debtor or high risk borrower on these small grounds. It is therefore wise to get a copy of your credit report so as to correct these anomalies which might stand in you way.

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Whether you are just out of college trying to buy your first home or you are refinancing after your children have grown and moved out, you should have a copy of your credit score. Knowing your score puts you ahead of the creditors. Knowing that your report is free of errors and that anything negative has been disputed, gives you peace of mind.

When shopping for a credit report it can be overwhelming. Commercials will advertise free reports. However, once you log on to obtain your report there is a catch. Do not let the business of credit reports get you. You can get a free credit report. In fact, you are entitled to one.

Fair Credit Reporting Act

The Federal Trade Commission has a mandate known as the Free Credit Reporting Act. In this act you are entitled to a free credit report once a year from the big three credit companies: Equifax, Experian and TransUnion. The FCRA mentions that you should only request your credit report through annualcreditreport.com.

Common Requested Information

When filing for a free credit report one worry can be that you will have to give out personal information. With all the stories about identity theft this is a tough issue. Under the FCRA you will have to give your name, address, social security number and date of birth. You do not have to give a credit card number. If a site asks you for a credit card number, be aware that this is a red flag for a scam.

Many sites will say that they are issuing a free credit report when you sign up for a free trial service. However, they will ask for your credit card number at the time you sign up. If you opt for this service make sure that you read the fine print and cancel the trial before the deadline or you may get charged.

Another Option for a Free Report

Under the FCRA if you are denied a loan or application of some kind, you are entitled to ask for a copy of your report within 60 days of said action. You should receive an Adverse Action Notice which will state that you were denied credit, the reasons why and that you are entitled to a free credit report.

If you were approved for a loan, but your credit score affected the rate at which your loan was given in a negative way, as compared to other consumers, you will receive a Risk-Based Pricing Notice. If you do receive this you will find information about your score and what factors contributed to the negative risk that is associated with you as a client. Additionally, you will receive information on how to obtain a free credit report.

Some companies will send out a Credit Disclosure Notice, which will give you information about your credit score and how it was used in the approval process of your credit application.

Knowing Credit Score Factors

Your credit may change every day. Some of the items that affect your credit score are:

• How often you move
• How often you r payments are on time or late
• How often creditors or banks pull your credit report
• Whether you have disputed items

With these factors in mind it is important to know your score when you are looking for a loan or applying for a job. CreditKarma.com is a website that provides your score free. This site bases the score off of your TransUnion credit report. They will not charge for this service and you can keep an eye on your score.

What About the FICO Score?

There is one other score that may be looked at when you apply for credit or a mortgage, which is the FICO score. This score was once the do all to end all score. This is no longer the case. The FICO score is actually one of many scores that a company may or may not look at. It appears as if companies are now looking at your VantageScore, your credit report and other factors they determine in house.

When struggling with credit issues, know that you are entitled to a free credit report.

The author who contributed this article is Chase Sagum, Financial and Business blogger. Check out more of his content at www.lexingtonlaw.com.

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There are many questions that you are assuredly going to be confronted with when applying for a credit card. These questions are important to answer, and answer honestly because of the credit card companies need for accurate information. The information that you provide will help them to determine what credit card is right for you and what financial offerings they can provide you through their institution. Lying about this information is not only problematic but also fraudulent. Whether you are applying for credit through a large institution, such as would be the case if you were applying for a Lloyds TSB or Barclays credit card for example, or are just looking for more data for a future application, the following is some of the common information that you will most likely be asked during this process.

Income

Though personal, a credit card will assuredly be asking you what your income level is. They will want to know what your annual take home is and may want to know what the monthly is as well. This information is important to a credit card company for many different reasons. First, it will help to determine how much financing and credit they can provide you with. They do not want you to be at risk of being unable to pay so knowing how much disposable income you have can allow them to provide you with an appropriate amount of financing. They will also want to know what income bracket you fall within to better help determine the type of credit card that is right for you. An individual with a high level of income may be eligible for a bonus or rewards card, while those with less monthly income or annual revenue may not. This serves as a protection to both the credit account holder and the lending institution.

History

Before issuing a line of credit to an individual, the financial history of that individual will be assessed. This is done by doing a credit report. The individual applying will have to provide information on application that agrees to this assessment. If not, they may not be able to move forward in the application process. A bank or credit card company wants to know that their risks are worth it. If an individual does not have an established credit history or has one that is highly flawed, this can reduce the chances of them issuing a card. If the individual has a stellar report, they may be more inclined to accept the application and even to increase the amount of credit that is issued. Either way, it will be unlikely when applying for a credit card that you will be able to move forward without answering questions regarding your credit history.

Employment

Another way in which a bank or financial institution will seek information on an application for a credit card is to ask for your employment history. This is important because it shows whether an applicant has a consistent source of annual income as well as how stable their career is. This section may or may not be included on the main application, but you should be prepared to answer it just in case.

Laura was getting ready to apply for a Lloyds TSB credit card. To prepare, she wanted to gather all the information that she may have needed before beginning the process.  Then she created the above list to help others.

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