FICO, which stands for Fair Isaac Corporation, is a term which describes your personal credit score. That score is used by lenders who will determine if you qualify for a loan and the interest rate you’ll
charged as well as the length of your loan. The higher your score, the more likely you’ll be approved for a consumer loan and receive favorable terms.

In these pressing economic times, not everyone has a good FICO credit score, which can be especially problematic if you need to apply for a consumer loan. Whether seeking a mortgage, a home equity loan/line of credit, car loan, credit card, or some other type of loan, you need to get the highest score possible.

Raise Your FICO Credit Score Step By Step

Fortunately, you can raise your score and see significant results within 2-3 months time. If you plan on applying for a loan some time over the next few months, the following steps can help you improve your FICO credit score:

Shrink those balances: You don’t have to pay off your credit cards, but running big balances is a red flag to creditors. Work on reducing your debt, a step which will gradually raise your credit score.

Don’t apply for too many loans: You may have unwittingly caused your credit score to drop by applying for too many loans in a short period of time. This can happen if you are planning to shop for a new car and are arranging your own financing. By applying to several different lending institutions for the sake of finding the best deal, you’ll be shooting up another warning flag to creditors. Find out the rate first, then apply.

Remedy credit problems: If you’ve been late making payments in the past, then your score will take a hit. Make payments on time and pay more than the minimum amount due each month. Get free copies of your credit reports and check them for errors; notify the credit reporting agencies if you find mistakes. They are required by law to fix mistakes within thirty days or that information must be automatically removed from your credit report.

Keep consumer accounts open: Odd as it may sound, closing a credit card or other consumer account will negatively impact your credit score. Simply tuck your unused credit cards away in a safe place and don’t use them again. You can gradually close them after you secure new credit, especially if you have no plans to borrow again in the near future.

More accounts means a reduced score: Opening more accounts will work against you. Only open up enough consumer accounts as needed.

Consider NOT moving your money around: Consumers have gotten into the habit of shifting outstanding balances from one account to another, but that move can actually reduce your credit score. Consolidating your balances to one account may cause your credit score to drop.

Building a good credit history is an achievable and laudable goal for any consumer. Take care of your credit score and your credit score will take care of  you in the form of favorable lending terms for your next consumer lending opportunity.

Tags: auto loan, car loan, consumer credit, consumer loan, credit card, credit score, FICO, home equity, line of credit, mortgage

Four dollars per gallon gasoline is making a mess of many home budgets as is higher food costs, mortgage payments, and other consumer goods. The average American is feeling the sting of diminished earnings, putting a real crimp on savings.

One of the last things you want to do when life is tough is to cut back on savings. That extra money can pay for future emergencies, help fund your retirement, and cover vacation, home improvement, and other anticipated expenses.

But, saving money when your disposable income has shrunk seems virtually impossible to do. Or is it? Can there be a way to set aside money even when the cost of living continues to rise? Let’s take a look at some common sense ways you can lower your bills and still have more money left over to save.

Food — Milk, bread, bananas, you name it has been going up in price, much fast than the inflation rate. Transporting food from warehouse to store has gotten costlier and those costs are being passed on to you. Wherever possible, clip coupons to save on your favorite foods while switching to generic or less known brands when you can. Shop the warehouse clubs and you could save 10-30% off of your food order.

Insurance — If you combine your homeowners insurance with your auto insurance, then you should receive a ten percent discount on your bill. Shop around too and take a good look at your 2001 model year car with high miles — it could be time to drop collision coverage.

Debt — Pull out your credit card statements and examine which ones have jacked up their interest rate recently. If you are carrying balances on high interest rate credit cards, then transfer those balances over to a lower rate card. Many card providers are still offering 0% interest on balance transfers with some waiving transfer fees too.

Cable and Phone — If you haven’t combined your phone and cable service yet, consider doing so at once. Get an internet connection, cable service, and local and long distance coverage for a flat monthly rate. You should be able to save 10-50% by combining your bills to one service provider.

Electric and Gas — If you have central heating and air, keep the indoor temperature at 78 degrees in the summer and 68 degrees in the winter. Supplement cooling and heating with ceiling fans, reversing oscillation for the proper season.

Dental and Health Care — If you are covered through your employer, then medical costs are a known quantity. Still, you can reduce your expenses by using “in network” doctors and labs, get your prescriptions filled at WalMart or a similar store offering cut rate medication services. If you need insurance on your own, shop through a cooperative to get the lowest rates.

Miscellaneous Expenses — Perhaps the greatest savings can come through the elimination or curtailing of various vices. Quit smoking, stop drinking, avoid gambling (including the lottery!), and take a hard look at your entertainment expenses. Take in a matinee instead of a night movie; eat out less each month.

Finally, with all of the money you save you can start setting aside some cash for savings. Maximize your employer’s 401(k) plan and set up automated savings through an online bank such as ING Direct to withdraw money on a regular basis from your checking account to a savings account.

The national economy will eventually improve, but you don’t have to let your personal economy take a hit while you wait for that to happen.

Tags: budget, cable, checking account, credit card, electric, food, gas, Money Management, personal finance, save money, savings, telephone, utilities

How many credit cards do you carry? 1, 5, 10, maybe more? Most consumers carry at least one credit card, especialy when you include department store cards, gas station cards, American Express, MasterCard, VISA, Diners, Discover and others. Consumer lending is big business, an area of marketing that lenders use to fuel their businesses.

You probably already know that not all credit cards are alike. Some offer low rates and decent rewards while others charge higher than industry rates and offer no incentives. Likely, most of the cards you have seen fall somewhere in between.

Maybe you have considered getting a new card recently. If so, let’s take a look at some of the popular credit card offers available today:

Low (or Zero) Percentage Rate Credit Cards — Lending rates remain low and there are still credit cards available with low rates, even 0% financing for balance transfers. Typically, these special rates are in place until the transfers are paid off; new purchases are usually charged at a higher rate.

Teaser Rate Credit Cards — To get you to use a new card, some lenders will offer you a special “teaser rate” that will run for several months, usually for as long as six months perhaps for a year. Purchases can be made at a very low rate (let’s say 3.9% for twelve months) and then rise to 15.9% or higher later on. These cards are popular with consumers who want to purchase an expensive item and pay it off over several months without incurring high interest charges.

Rebate Credit Cards — Make your credit card work for you! If this sounds like a marketing ploy, it isn’t: certain credit card providers will give you cash rebates on select purchases. For example,if you spend $2000 you could have $20 or $40 credited to your account — see each offer for specific details.

Award Credit Cards — Also known as rewards cards, an award card works like a rebate credit card: you get to choose prizes based on the number of points you have accumulated with your purchases. Usually, one point is awarded for every dollar spent and you can redeem those points online or through a prize catalog provided by the credit card company.

Pre-paid Credit Cards — For the consumer with bad credit or for students who at college, a pre-paid credit card allows holders to build up their credit while still having access to plastic. You don’t have to worry about carrying around a lot of money; if your car is lost or stolen you can replace it.

Many of the card deals mentioned are for MasterCard or VISA cards, but Discover and American Express have special offers which might be of interest to you too.

Tags: American Express, credit card, debit card, Diners, Discover, Master Card, VISA