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All posts in Bad Credit

Recently we hosted a webinar on the topic of Building Wealth In Your 20’s & 30’s. In the third and final section of the webinar we covered building equity, tax savings and some very important closing thoughts.

For more resources and tips on how to build wealth, please contact us.

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Recently we hosted a webinar on the topic of Building Wealth In Your 20’s & 30’s. In the second section of the webinar we covered saving for retirement, the importance of life insurance and the different types of investments.

For more resources and tips on how to build wealth, please do not hesitate to contact us.

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Recently we hosted a webinar on the topic of Building Wealth In Your 20’s & 30’s. In the first section of the webinar we covered the importance of creating a budget for yourself and family, establishing personal finance goals and how to figure out, and improve on your credit.

For more resources and tips on how to build wealth, please do not hesitate to contact us. 

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Today we sat down and talked with Anastasia Tacewicz from GMH Mortgage Services on a couple different topics. One such topic had to do with different strategies one can implement to improve their current credit score or simply establish credit without much of a history. If you have done any sort of credit research, you know that there is a ton of different information out there regarding this topic. It almost seems like everyone has a different perspective on how to best handle your credit so it’s great to hear one from a mortgage professional.



Need more info about mortgages or about getting pre approved? Contact us at 617-297-8641

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Debt Buster Tip: Attacking your Credit Card

Never assume that you can’t improve the terms of your credit card payments. Many people are unaware of the power they possess inside of them! Our job is to tell you…you can do it… we have…we’ve suggested it to others…they have and they’ve seen results. Here are 2 tips to help you start chipping away at your credit card debt. 

Get Your Interest as Low as Possible

If you have a solid track record of paying on time and your card is not close to the limit, renegotiate the interest rates on your cards. Tell the companies that you’ve been a valued customer for X years and you have never missed a payment. You would like to see if they can give you a better interest rate on your card for being a valued member.

I promise you it works! It may not work overtime, but I’ve done it and other clients have done it and it works. The trick is not to bother them. Call once every 6-12 months to request a better interest rate.  Usually they decrease your interest rate by 1/2-1 percent. Although this amount does not sound like a lot…you are starting the process of saving more money.

Side tip: If you are given a decrease, calculate your payments based on the higher interest rates and pay that amount… you will be lowering your balance and climbing up the ladder toward financial freedom.

Pay off Debt from Highest Interest Rate to Lowest

There are different strategies to paying down debt. Some need small victories to motivate them to larger victories. This would be, for example, paying off the credit card with the smallest balance first. Once this card is paid off, you feel accomplished and energized to move on to the next. While I like this method, and use it depending on my mood, I think the best strategy is to pay the highest interest card first.   This is the mathematically correct way of doing things. You may end up spending thousands of more dollars in interest because while you paid off your $1000 card at 10% interest, you still have a $5,000 card with a 15% interest accruing over time. Interest is pretty much you giving away your hard earned money. Go with the mathematically correct way! Do not go with your emotions. Paying off small debts may feel nice but it’s a superficial feeling. Superficial feelings get people in trouble. Trust math. It has no emotions.

Financial Freedom requires determination and strategy. Pick which works best for your discipline level and for your wallet.

Our goal is to help our clients, improve their credit worthiness in preparation for a home purchase. For more information, please contact us and schedule your free no obligation consultation.

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Via our FREE Financial Literacy seminars and our partners, we educate members of the community on strategies to improving their credit score in preparation for the biggest purchase one can make…. buying a home!

One question we get asked a lot is whether they should pay off their collections. You have the option to pay off your collection or settle the debt for a lesser amount with the lender but there is one step before handing over your debit card. In order to truly impact your credit score, the creditor needs to REMOVE or DELETE the collection from your credit report. If you pay in full or settle, the negative activity still remains on your credit report. You need to request IN WRITING that your creditor delete the collection from your report. Do not issue a pay in full or settlement amount until you receive a response IN WRITING that they have agreed to or rejected your request. 

After 7 years, the collection item is no longer visible but if you are planning to purchase a home or a car within 6 years… it may be worth it to have those negative items removed from your record. 

I strongly recommend people monitor their credit report monthly. CreditKarma is FREE and sends you alerts when there are changes to your report. Although it does not utilize the FICO score which is utilized by the credit bureaus, it helps you MONITOR your financial report card so to speak. You want to know if you are on track or what items to address because they are setting you back.

 

For more strategies to help you get on track to purchase a home in 1-2 years, please contact us for a free no obligation consultation.

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Start Building Credit While You Are Young

Breaking-Down-Your-Credit-Score-mortgage-infographic

At The Mandrell Company, we are firm believers in educating our clients so they make wise financial decisions. These decisions go beyond purchasing a home but truly building a foundation on how to grow wealth. We found this infographic (source: MGIC Connects) and wanted to share this statistic that over 74% of college students do not know their credit score. Again, this is something that is not taught in school but we should all review our credit report at least Bi-Annually. Credit Karma is a free service, and although it does not provide your FICO score, it can be a great tool to monitor your credit so you have an idea of where you stand. 

Credit impacts your purchasing power and unknown to many, it can also affect your hiring status for a new job. You may be wondering why… well… some careers that require you to work with money or others’ finances want to ensure you are also financially responsible. Their goal is to limit their liability so it makes sense to hire a candidate with a strong history of being financially responsible.

Are you a Greater Boston college student interested in building credit and truly paving the way for when you enter the real world? The world of “adulting” with rental applications, car loan application and mortgages, can be stressful but we would love to point you in the right direction to increase your chance of success.

Please contact me to schedule FREE seminars on your campus. 

I look forward to speaking with you!

Denisha

Denisha@MandrellCo.com  |   617-982-3337

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Building Credit For Home Ownership

Due to the consistent rise in Hyde Park home values and subsequent rental costs, many people are starting to look more seriously at home ownership before they are priced out of their community. Understanding how credit plays a role in your ability to purchase a home is critical. If you do not have credit, then understanding how to build credit with a credit card can really be life changing. It’s an easy way to change your financial future.

You ideally want a card that reports to all 3 credit bureaus and you want to PAY IN FULL each month. If you are unable to do so, do not carry a balance greater than 10% of your card’s limit. The best way to accomplish this is live within your means: DO NOT BUY MORE THAN YOU CAN AFFORD. IF YOU CANNOT PAY OFF THE DEBT IN FULL, YOU CANNOT AFFORD THE PURCHASE! Paying off the card automatically each month is easy, with automated payment options and flexibility in selecting your due date, you should be able to pay in full each month or carry a minimal balance. You are not jumping through silly hoops trying to ‘hack’ the FICO system simply charge what you can pay for and go about your life.

Example: I charge my groceries to my credit card and when I get home, I pay off the bill. This allows my behavior to be reported to the credit bureaus (they hold the key to your financial future if you operate in the realm of credit). You want all 3 bureaus looking at your good credit habits (experian, transunion and equifax). By showing them your good habits, you will increase your credit score in a hurry.

There are 5 factors that go into a FICO score. The biggest 2 are payment history (35%) and amounts owed (30%). As you can see, it’s more important to pay on time than it is to owe a lot of money. Never take out debt to raise your credit score. That’s not a wise choice. That’s like spending money in hopes you can save money by getting a lower interest rate. Does. Not. Make. Sense. Go for the 35% and pay off your card each month. Being in good standing with your debt is the largest factor in your credit score.

At The Mandrell Company, we try to teach strong financial habits to increase home ownership in communities across Greater Boston. We specialize in teaching clients how to build wealth through real estate, and to get started, you need a good track record of strong financial decisions. To attend one of our free seminars, please register at Urban Money Matters or contact us directly at contact@mandrellco.com.

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When it comes to buying a home, having bad credit is not the end of the world. Whether you have suffered from a bankruptcy, foreclosure or some type of financial hardship that resulted in late or missed payments, there are lenders who specialize in financing for those with less-than-perfect credit. You will likely have to produce a larger down payment and/or pay higher interest rates than someone who has good credit, but the important thing to know is that buying a home is an option for you.

Even if you have bad credit, it’s important to check your credit report from each of the three major credit reporting agencies – TransUnion, Equifax and Experian – before applying for a loan.  If anything is inaccurate, file a dispute with the reporting agency and request a correction.  You can request a free copy of your credit report every 12 months.

In addition to correcting any inaccuracies on your credit report, it’s important that you know what can help or hurt your chances of obtaining a loan.  You can start improving your credit by avoiding the temptation to apply for new credit right before submitting a mortgage application. Multiple inquiries will cause your FICO score to drop, and lenders will rely on this information when deciding whether or not to issue your loan and how to calculate your interest rates. 

If you have any questions or want more information about how to obtain or improve your credit score, please give me a call at 617-297-8641, and I would be happy to work with you. 

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