5 Financial tips for the first week of November 2012

By: on 2013-01-09
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Check out the 5 financial tips for the first week of November 2012.

Tip no 1 - Check out your credit score before approaching your lender for approving your loan request.

Traditional mortgage lenders maintain strict lending criteria. Normally, they reject the loan applications of the people with bad credit. They accept the loan applications of people who have at least 720 credit score. So, if your credit is less than 720, then it will be futile to submit your loan application.

A few lenders may agree to lend money even when your credit score is less than 720. However, they'll charge a rate which is higher than the normal market rates. You'll have to pay a very high amount to the lender every month. This may drain your funds eventually.

Tip no 2 - Do all you can to avoid default. Defaulting on a financial obligation can harm your finances in the short and long run.

Send money to your creditors before the last bill payment date. Do it every month. This will help to avoid loan defaults. If you get delinquent on a loan, then it'll be reported to your credit report. This will create a negative impact on your payment history, which in turn will drop your credit score. If your credit score drops, then lenders won't happily agree to give you a loan. Moreover, employers may not like to give you a job.

Try to avoid defaulting on a loan. You can talk to your bank and arrange an automatic bill payment system. This will ensure timely payments on your loans.

Tip no 3 - Maintain good credit score so as to get your loan approved soon.

If you wish to obtain a loan quickly, then take steps to have a good credit score. You can forget about obtaining a conventional mortgage loan without a credit score of minimum 720. You can expect to get low interest rate on the loan if your credit score is between 720 and 850. Likewise, the minimum credit score you need to have to qualify for FHA mortgage loan is 620. If your credit score is less than 600, then it'll be very difficult to secure FHA approved mortgage loan.

If you wish to take out a conventional mortgage loan and your credit score is in 600s, then take positive steps to improve your score. Otherwise, it'll be difficult to get your loan approved.

Tip no 4 - Be regular on social networking websites and build up a following to boost your small business growth.

Social networking websites such Twitter, Myspace, Facebook, etc. have become a very good platform to promote your business. Use these websites to establish an online presence of your business. Create a business profile in the social networking websites. Post the latest information on your business every other day. You can even post advertisements in order to attract new clients.
You can work with a social networking analyst to promote your small business. He'll tweet the latest happenings and help to increase your client numbers. Remember, the more clients you get, the better for your business.

Tip no 5 - Close your accounts after reading your credit report carefully.

A lot of people close their accounts when they're facing credit problems. This is not right. One should look at his/her credit report before closing accounts. An individual can know if the account is old or new from his credit report. If the account is new, then the individual can close his account. However, if the account is very old, then it is better to not close it. Once the account is closed, his payment history will get shortened. This in turn will affect his credit score negatively.

Last Updated on: Wed, 9 Jan 2013

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