Category: Credits

Best Loans for Building Credit History

good credit historyIndividuals who have poor credit or little to no credit history typically struggle with low self-esteem as they may find it difficult to qualify for credit or a loan. Naturally, they often wonder how they can start to repair or build their credit. If you fall under one of those categories, you are not alone. A credit builder loan can help as it is tailored to specifically improve or build credit. Over time, it allows you to develop a good credit score, which can help you to qualify for a credit card or loan with better rates.

What are the Requirements for a Credit Builder Loan?

You generally don’t need good credit to qualify for installment loans to build credit history. However, you must prove that you have sufficient income to make payments back toward the loan. The amount that you ultimately receive on the loan is stored in a bank account as you pay it back. When you pay back the credit builder loan, your timely payments are reported to the three major credit bureaus, TransUnion, Equifax, and Experian. Your payments will help to improve your credit score and credit reputation over time, which can also improve your social reputation and self-esteem. The loans are commonly referred to as “fresh start loans” and are usually acquired through small financial institutions like community banks and credit unions.

China’s Social Credit System can serve as a guideline for improving a person’s social reputation and standing in comparison with an American consumer’s good credit history. The country has instituted a law that places restrictions on both people and businesses with low credit ratings and creditworthiness. This is essentially similar to restrictions that American consumers face when they have poor or no credit history as they are limited in terms of qualifying for credit and loans.

How to Secure a Credit Builder Loan

There are specific steps you can take toward securing a loan to build credit. They include the following:

• Find a credit builder loan: Search for loans that include payment levels that are comfortable for you to afford. It’s wise to avoid spreading your budget too thin with higher payments as you can end up having trouble paying back the loan. The best thing to do is opt for lower payments and terms lasting no longer than 24 months.

• Apply for a loan: If you are approved after applying for a loan, the money is placed into a savings account from which you have no access until after you have fully repaid the loan. Essentially, this is in place to protect the lender.

• Make timely payments: It’s important to make timely payments toward the loan. In return, the lender sends positive reports to the credit bureaus. Avoid making payments over 30 days late as that can have a negative impact on your credit score.

• Monitor your credit score: You can regularly monitor your credit score through personal finance websites or services.

• Collect loan proceeds, plus interest: At the end of the loan’s term, you will receive the funds and will see an improved credit score.

Finding Credit Builder Loans

It can be challenging to find credit builder loans. You can search online for institutions in your state that offer them and search for online lenders as well. Generally, credit unions usually have the best interest rates due to their membership requirements.

You can also find a loan through a Community Development Financial Institution, which helps individuals with lower incomes. Lending Circles is a program that is operated by a nonprofit that can also offer credit builder loans.

Avoiding the ATM Pitfalls: 7 Credit Card Tips for Traveling Abroad

card using tipsHere are some pointers on how to use your credit card wisely abroad and suggestions for using a travel card plus other savvy tips that should ensure you get the benefits of using your plastic on foreign soil without costing more than it should.

Before you go

It should be remembered that some credit cards are more attractive than others when it comes to overseas use and it would be a smart move to check out which of the cards in your wallet are international-friendly.

Using your credit card abroad will often incur a transaction fee and a withdrawal fee at the ATM, but you will find that some card companies either don’t charge any extra fees or offer much lower transaction charges than some of their rivals.

Shop around and check to see which is the best card to have with you abroad.

ATM agony

Drawing cash out of an ATM is quick and easy but it can be one of the most expensive ways of using your credit card, especially abroad.

The card company will likely charge you a cash advance fee and interest on the amount you take out and there may well be a foreign transaction fee on top of that too.

Try to plan your trip so that you don’t have to use an ATM unless your card provider is one that doesn’t apply punitive charges and interest.

Keep it local

Another potential sting in the tail is when the merchant offers to convert the transaction into your local currency rather than theirs.

This is invariably a bad idea as the conversion rate is not normally as good as the “mid-market rate” that card providers use when they make the conversion on your statement.

Tell your credit card company

Having chosen the card or cards that you are going to use abroad it makes good sense to tell them of your travel plans in advance.

If your card starts being used abroad and you haven’t told them beforehand they might assume that the transactions are fraudulent, which could mean they decline a purchase or block the card altogether.

Save the hassle by notifying the card provider so that they won’t flag foreign purchases as suspicious.

A bit of peace of mind

It is worth pointing out that there are definite benefits to using a credit card abroad too, and one of those plus points is the fact that you should get payment protection.

If you buy something that is faulty and it is not feasible to get a refund from the retailer your card company should offer payment protection and cover any potential loss you might otherwise have suffered if you paid for something in cash.

Find a secure connection

If you are using a banking app or accessing your account over the internet while abroad make sure that you find a secure connection rather than rely on somewhere more vulnerable like an Internet cafe.

You don’t want to find that your personal details have been compromised.

Lost or stolen

If your credit card is lost or stolen don’t waste any time telling your credit card company.

Any delay could give someone the chance to wreak havoc with your card if it’s fallen into the wrong hands.

Even though it might be a pain to interrupt your holiday to call your bank it could save a lot more hassle later on.

Avoid the classic credit card pitfalls and if you choose your card provider wisely it should make using it abroad a breeze.

Why you should Fintechs instead of Private Banks for your credit requirements

banking servicePrivate Banks have always been the leaders as far as offering credit products are concerned. This has however, changed in recent times, thanks to the emergence of Fintech companies. Popular surveys have indicated that Fintechs command a larger market share in the lending space, and this has occurred due to a lot of reasons. While we look at these reasons, we’ll go on to determine why Fintechs are a better option than traditional lenders for instant personal loans.

Turnaround time for loans from Fintechs vs turnaround times of banks

The equation is quite simple and straightforward actually. While traditional lenders take at least 7-8 business days to complete the processing and subsequent disbursal of your loan amount, Fintech companies boast ridiculously low turnaround times of 24-48 hours.

Eligibility Parameters – Fintechs vs Traditional Lenders

Traditional lenders generally have stringent eligibility parameters as far as the credit score, income and other parameters are concerned. For starters, applicants need to have a minimum credit score of 750 to qualify for a personal loan with a traditional lender. However, most Fintechs allow individuals with low credit scores to apply for loan, with the more popular ones such as Fintechs requiring scores of as low as 575 to become eligible. As far as the income parameter is concerned, top private banks require applicants to have minimum monthly income levels of at least Rs. 30,000 to qualify, while on the other hand, Fintechs allow for income levels starting at Rs. 20,000 per month.

Processing of application – Fintechs vs Traditional lenders

Fintechs are literally the reason why instant personal loans have evolved. Unlike traditional banks that haven’t shifted completely to paperless and digital processing, Fintechs have made the transition to a digital and paperless application, thereby saving a lot of time and resources. Moreover, applicants can get instant approval when the apply for a loan based on their credit assessment – which is performed by a credit assessment algorithm – allowing them to choose a different lender if they face rejection.

How to Buy Rewards Points Instead of Waiting to Earn Them

card reward pointsNot many people know but it’s true that you can buy rewards points without having to wait to earn them. This has been a somewhat hidden option all this time. You can actually top up your account by buying points for a redemption. And the best thing is that the cost of doing so is not as unreasonable as you might think it will be.
People can buy points by their Membership Rewards Linked Cards, and at $25 for 1000 points, they’re not as expensive as one might think they’d be. These points are still cheaper than buying from an airline. So in this article, we’ll discuss how you can buy rewards points and why you might want to do that.

Why Buying Rewards Points Makes Sense

The main reason to buy rewards points is to top up your account for a particular redemption. Membership Rewards points happen to a flexible currency. This means you can check how many points you have and how you wish to use them. If you’re short, then you can buy as many points as you want to use them for whatever purpose you intend to use them for.

Buying points to top up your account when you know there’s an airline seat that can be redeemed is another reason to buy rewards points. This way you can secure the seat earlier instead of waiting until you have earned the remaining points from your day to day spends. If let’s say you’re another 1000 points short, then it could take a very long time to earn that many points, and the airline seat that you’re after won’t obviously wait for you for that long.

Important Details When Buying Rewards Points

The process of buying rewards points can easily be conducted over the phone number given at the back of your frequent flyer credit card or charge card. With American Express, you have to buy points in chunks of 1000. There is no limit on the number of points that can be bought. For more details about buying points, you can visit Points Bank.

Whenever you buy Membership Rewards points you’ll have to transfer them or redeem them over to a partner program at the time of purchase. So it’s better if you buy these points with a specific purpose in your mind. Points can be purchased on request immediately, and the transfer of points is also initiated at the same time.

Another advantage of buying points is that if there is any bonus promotion running at the time when you buy points, then the points will be offered to you at the bonus promotion that is being given at that time. However, you won’t be able to earn more points on the purchase of your points.

Buying rewards points is actually very easy. All you have to do is just make an account with Points Bank and state how much points you would like to purchase and for what purpose. These orders usually take 72 hours before your purchased points can be seen in your account.

Loan Options Available if You Have Less Than Perfect Credit

loan approvalMost people will encounter a time in their lives where they fall short on cash and need to borrow to cover their expenses. If you have a savings established you simply have to make a quick withdrawal. However, if you have no savings set up for emergencies and your credit is less than perfect you may think that you have no options. Luckily there are lenders willing to loan money to people who have a lower credit score, as well as other options available.

Short Term Loans

When you think of short-term loans, you may think that the only one you will qualify for is a very high-interest payday loan. Thankfully, there are payday loan alternatives. There are online lenders who offer low-monthly installment loans to people with less than perfect credit. And, unlike a payday loan, you have several different repayment options.

Title Loans

If you own your vehicle, there are lenders who are willing to use your car as collateral against a loan. Depending on the Blue Book value, this type of loan can give you access to more money than a short-term loan.

401K

If your company has a 401k plan and you are a contributor, you can borrow up to 50 percent of the vested amount. Since you are borrowing the money from you, the chances for a quick approval are very good. The best part about this type of loan is that while you will pay interest, you pay it back to you.

Pension

While you should never touch a retirement fund. If an emergency arises and you need the cash to prevent losing your home or your vehicle, and the company you work for allows it can give you access to a lot of cash in a lump sum. If you are less than 59.5-years old there is an additional fee of 10 percent plus the 20 percent withheld for the IRS.

Borrowing from Family

If you don’t have a savings account, a 401K or a pension that you can withdraw from, you can see if a family member is willing to give you a loan. If someone in your family does front you a loan, remember to treat it the same as you would any other lender. Come to an agreement before accepting the loan and then stick to it. It’s very easy to put a family member on the back burner and pay other bills first. Make every effort to repay per the terms agreed on and if you should have a rough month contact them and advise them when the next payment will be. This way you’ll stay on good terms should you need their help in the future.

Take on a Part-Time Job

If you find that you are having trouble making ends meet often, you may need to find a way to bring in more money each month. If you have a talent, you can sell items or services to fill in the gap until you reduce your overhead. If not, you may need to consider taking on a second job for a while to get you on your feet.

Hard times can happen to anyone. Maybe you lost your overtime or you have extra expenses like school or medical bills. Whatever the reason, there are many ways to dig out from under and get on an even platform. If your monthly expenses are very high, look at your bills and see where you can make cuts, even for the short-term. For instance, if you have a large cable bill, go to basic service. Also, if you eat out often, reduce it to once a month as a treat, brown bag your lunch for work and use coupons when going food shopping. By pulling in your belt, you will have the money you need to cover your expenses and work towards improving your credit score.