Credit Resources & Information Thu, 15 Oct 2020 20:41:48 +0000 en-US hourly 1 32 32 Start a Business: 8 Steps to Turn Your Idea into a Working Business Thu, 15 Oct 2020 20:41:48 +0000 Have you ever had a business idea that was so groundbreaking, so profound, that you knew it could change your life and impact markets on a local or global scale? We’ve all had those “eureka” moments when it comes to thinking of business ideas. Maybe it was you and a friend coming up with some […]

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Have you ever had a business idea that was so groundbreaking, so profound, that you knew it could change your life and impact markets on a local or global scale? We’ve all had those “eureka” moments when it comes to thinking of business ideas. Maybe it was you and a friend coming up with some ideas of products you wish existed or maybe you were on your own. In this article will help guide you on how to start a business.

The big question is, “have you turned that million-dollar idea into a working business yet? Have you even started to look at what it would take?” If so, great. If not, why not? Turning thoughts into action is one of the hardest parts of starting any business. There is risk, uncertainty, financial pressures, a huge personal time & energy requirement, and more.

Let’s look at some winning foundational tactics to utilize if you’re serious about starting a business.

Step by Step Guide on How to Start a Business

There is a seemingly endless number of hurdles that discourage most people from doing what is necessary to start a business, even when they are young. But, these are not “dead ends” and are simply challenges to meet head-on and overcome.

The global economy isn’t currently making things any easier either for budding businesses. Many people have a lot of debt, have day jobs, have families, and have a lower threshold for risk due to these factors and market uncertainty. That doesn’t even consider the huge players like Amazon and Walmart which make getting into certain types of businesses seem impossible.

Beyond all the outside factors, the most common thing which prevents people from starting a business is the actual lack of starting itself.

When you look at only the big picture or the product, it can be a bit daunting or seem like an impossible task. By going about things in a piece by piece fashion you take away some of this burden. So, when you start writing up your “to-do list” to get the business going have it be detailed with small tasks that you can accomplish towards an end goal.

“Rome wasn’t built in a day” and the same goes for your business. No great business idea can be accomplished in a single working day and there is no copy and paste template to be found when learning how to start a business either.

Take these 10 steps for what they are. The order may not matter to you so don’t think of these as strict.

1. Your Business Idea

Coming up with a good business idea can mean paying attention to a need or missing product to solve a problem when you have one. It can be something for the tech sphere, a phone app, a sporting item, a teaching item; or anything else. If you don’t have a business idea yet look at your own life, have you ever been left feeling something was missing? Or maybe you already have a business idea that you’re working on.

The point is to get it written down.  When you start a business it’s important to write things down. When you write something down it becomes more real in your mind and this is an important step when it comes to developing your business idea. As you work through the idea, think about some key questions. “Do you have personal experience or knowledge about this area? Is the idea doable? Would people buy it? What do your friends think if the idea? What do your parents or other family members think of it?

Asking yourself these key questions and getting a few 2nd opinions on your idea can prove that your idea is something that can work. Or it can prove it was not such a great idea. Ask a friend or family member who you know will not sugar coat things for you. You want a serious answer, not a cushy one.

Business Name

When you start a business, there can be more to come up with a good business name than you may think. Because the name of the business will be what people see first it’s incredibly important. We see lots of two-word combinations used here in the United States (Ameritrade, Esurance, etc.). Your business name should illustrate a feeling of your business’s culture and perception.

If you’re planning an improved active dog collar company, avoid boring names like “Improved Dog Collars Inc.” Also don’t pull too closely from the competition. Your name should be unique but paint a picture. Something along the lines of “Rover Holder” or “Lasting Leash” can seem quirky but work. “Lasting Leash” paints a picture of the last leash you’ll ever need.  *Maybe this example seems foolish, but you get the idea*

2. When You Start a Business, Do Market Research

When you’ve gotten some good feedback and answered some of the key questions from step one, it’s time to start doing market research. The better your research the better you’ll be prepared to create a thorough business plan.

Now is the time to answer the hard questions: Can it be done? Is there a demand? Is there too much supply? Who will buy the product or service? What is the going rate? Are there companies selling something similar? How are they doing? Who is the target audience? If it is a physical product, where are they being made? For how much? How are they being delivered? What are people willing to spend?

You may find that there is a similar product or service already out there, but that should NOT discourage you. If there is another business or business making money at this that means it is a working idea. Yes, there is a competition but by there being competition you get the green light that the idea is a viable one.

There are also free tools available to conduct thorough market research:

  • USA Federal Government: There are various government agencies that provide economic information for free to the public such as income, locations, spending, demographics, credit, and more. Department of Labor Statistics for one.
  • (wholesale) and (single sale): a Chinese e-commerce retail space that is great for market research but also for finding products as well. If you’re ready for bulk orders, then Alibaba is the place to go. If you want to start small and do some one-off drop shipping, Aliexpress is the place to go.
  • Amazon: a physical product comparison can easily be done via an Amazon search. You can find how many people are selling a certain type of item, what it goes for, and even what people are saying about it in the reviews. A great tool for some thorough product-based market research. Search for any product and see all the competitors.

3. Business Plan

Some business owners will say a formal business plan isn’t necessary for success. That may be so for them, but most of us will have to rely on more than luck to get a business plan working. Having a game plan can make a huge difference at every step of the business building stage.

A business plan is important for looking at where you are now, where you need to get, and what needs to get done along the way. This is a MUST if you will be needing to look for investors and funding for your business. Coming to an investor with an idea is not good enough today. They need to see the nuts and bolts of what the idea is, how it will be implemented if it’s profitable, and what is in it for them if they invest.

You should have at least a general understanding of what your startup costs will be. If you’re planning a small local craft business for weekend trade shows you may not need investor capital at all, but many other business ideas will take money to get going.

What will the startup costs be? What about insurance? How long will it take until you are turning a profit? What could be major roadblocks? What are the projected profit margins? How far will a set amount of money take the project?

It can also be a mistake to look only at the dollar signs and decimal points. Create a larger picture of the business plan and cover these major points:

  • The What? Explain the service or product in detail and who is the desired clientele. Note the price, demographics, and the main competitors.
  • The Who? Who is in charge? Are you working alone or are their cofounders? What about managers? Illustrate who you are and your team if you have one, highlighting skill sets, expertise, and knowledge base.
  • The Red Tape? cover things that are out of your control like laws, taxes, banking, regulations, and more, which could be potential roadblocks.
  • The Why? Do your best to show what the risks and rewards are for undertaking this endeavor. What is the potential upside of the business? What are the potential financial risks? It may be impossible to predict market trends, but you can use numbers to paint a picture of what is likely to be the case.

These are some basic guidelines for writing up a business plan. You want to be as detailed as you can, especially when presenting this to any potential investors. They should be palatable to a few key people: lending banks, investors, business partners, and you.

4. Location

If your business will solely be on the web, then you don’t need to think too much of the location as even a home business can reach an international audience online. But there are some real considerations to consider a physical location. Every state has a different way of doing business as well. This means different taxes, credits/incentives, fees, minimum wage levels, and more. This doesn’t even take into account the wide-ranging scope of commercial real estate costs from the state to state, county to county, and town to town.

As a rule, the location should suit the business variety. Think of places like Silicon Valley which did their best to attract all manner of technology start-up companies with tax incentives during that time period. There is also the size of the city to consider.

If it is a brick and mortar business, you should be looking at all these factors. It’s smart to compare places that have a few key similarities:

  • Low cost of living
  • High income for self-employed individuals
  • Affordable real estate
  • Low poverty rates
  • High median income
  • Good public infrastructure
  • And more

Don’t forget about yourself either. Is the location you’re considering a place you think you can succeed both professionally and personally? If a location has nothing to offer you as an individual it may not make a great fit even if it fits the business. So be sure to vet several locations.

5. Funding

Depending on the variety of businesses you are creating you may or may not need investment funding. People go about doing this all different ways. Some recruit friends and family for startup capital while others fund their businesses themselves or look for investors.

Turning to investors will require a few different things, like that business plan we were discussing earlier. When you can show an investor you’re serious, have done your homework, have a game plan, and the will to grind it out; you’ll greatly improve your chances of getting investor capital.

Starting a Business with No Money

Not everyone has a huge bank account, inheritance, stock holdings, or real estate to get their business started with. Turning to a bank or other investor is likely where you’ll find yourself when getting a business started.

Banks these days are far less willing to provide startup capital to a business that is not yet proven to be a success. This means your business with no track record will unlikely be a candidate for bank investment capital. But the bank does have a potential option through a personal loan that you then use for your business. The loan will be smaller than a traditional business loan and your credit rating will affect how much you can get and at what rate, but it is an option.

There are a few ways you can get startup capital on your own as well:

  • Government Grants: these can be tricky to qualify for but that doesn’t mean impossible. The federal government often provides grants to a certain demographic of people (for instance minority-owned businesses or women-owned businesses) or for businesses going into a certain market sector.
  • Angel Investors: these are firms or individual investors who focus solely on startup funding. It is more common to get Angel investor funding for physical products as opposed to services, but it is an option for both.
  • Crowdfunding ( and others): this could be a route if you can get other people to back it for you. This works well for businesses and stories that people can resonate with and feel passionate about. It is a way to potentially reach millions of people through.

6. Structure

There are lots of different business structures to consider and the nature of the business will also have an impact on what structure you go with. This will be important for taxes, insurance, financial reporting, accounting and more. Look at two key factors:

  • Which structure thoroughly protects me and the business?
  • Which structure has the greatest financial benefits?

The business structures which offer the greatest legal protection include limited liability companies (LLC) and corporation varieties (B, C, and S). These will protect the owner’s or owners’ financial assets from problems that arise with the business. Should something go wrong, these offer liability protection where if it were a sole proprietorship you could be required to pay a legal suit or business debt from personal assets (home, car, bank accounts, etc.).

There are also simpler structures like sole proprietorship (one person only), partnerships (more than one person), cooperatives, non-profit corporations, and more.  Every business will have different needs when it comes to banking, taxation, and overall structure. An accountant can help you determine what is the best structure for your business or through sites like

7. File & Register

You have your business idea, your plan, and your funding ready to go; and you know what structure you’ll be using. Now file with the IRS and get a proper Tax ID (EIN) number so you can open a business bank account. Open the account and file with any local or state governments that require it. An EIN number is very important when you start a business.

This could be as easy as going to the bank and opening the account (they handled the filing) or you may have to send some documentation to the Secretary of State’s office in your state. If you have patents or trademarks you will also want to file them now as well.

Different industries have different legal requirements for doing business as well. If you are a startup brewery, you’ll need licenses to brew and sell beer. Same goes for food, alcohol, firearms, transportation, energy, media, agriculture, chemicals, and more. You can apply for your tax ID (EIN) number directly through the IRS website here: Get Federal Tax ID (EIN). Some states require separate state Tax ID numbers as well.

This can be a daunting bit of work to do with all the required paperwork and if you’re new to it you should get some help.

8. Website & Social Media is important when you start a business

When your idea is ready, you have investment, accounts have been opened, and you are ready to start doing business; you’ll need a website and social media accounts.  Creating a website is a must in today’s modern world but so to is setting up social media accounts at places. Considering that almost 8 in 10 Americans use social media it’s an important avenue to take advantage of.

You have your business name already so do your best to get your website name and social media handles as close to it as you can. Many website URL’s may be taken so try to keep it close and the same goes for social media.

You can get a domain name ( from various websites like for a low yearly cost. This is just the name of the site though and it’s up to you to get the site built. Depending on your business model this could be a big undertaking or small. If you’ll be selling from the website directly there will be more web design requirements than if it’s strictly for information so be sure to bring in a web designer if things get complicated.

Verdict: Your Business is Possible

Coming up with a business idea and seeing it through isn’t for everyone. It can be exciting, unstable, fun, miserable, profitable, and not profitable. Don’t get caught up going for perfection, you can always tweak and refine details later. But using this basic list above you can start to see what it takes step-by-step to start a business.

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How Much Money Should You Save Each Month? Thu, 17 Sep 2020 16:11:09 +0000 Figuring out how much to save every month is an important tool when planning for your future. But how much money you should be saving each month isn’t always simple to figure out. There are rules such as the 50/30/20 income split but is that a good fit for you? One of the most important […]

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Figuring out how much to save every month is an important tool when planning for your future. But how much money you should be saving each month isn’t always simple to figure out. There are rules such as the 50/30/20 income split but is that a good fit for you?

One of the most important factors to long term financial security is your individual savings ratio. Determining the amount you should be saving every month is less clear. Should you save $100 per month? Half your monthly paycheck? If you have debt should you save or pay off the debt?

How Much To Save Each Month

It is popular to save 20% of your monthly income.

The 50/30/20 rule is broken down as follows:

  • 50% of your income should go to things like rent, utilities, food, etc.
  • 30% of your income should go to discretionary spending
  • 20% of your income should go into savings

This is a good rule to know how much to save each month is to follow if you’re able to. Not everyone will be comfortably able to save 20% of their monthly income so determining what is a safe percentage of your income to save each month is important.

If you have a high-income level it is smart to keep your costs low and save more of your monthly income. But if 20% seems like an impossible figure to save remember that saving anything each month is better than saving nothing.

20% is a good starting point. If you can save more, do so.

Why Should You Save Your Money?

Being prepared financially for whatever life may throw at you is one reason why you should decide how much to save. Another reason is to maintain your current lifestyle as you get older. Having no “nest egg” for your golden years can mean hardship and anxiety.

I have a grandmother who finally retired at the age of 89. She worked because she loved to, but she really worked at that age because she had to. Her and my grandfather did not do long term financial planning and therefore when he died, she was ill-prepared to pay the bills. So, she drove to Macy’s 5 days a week at 5 am to do floor re-pricing for 4 hours a shift. She always told me growing up to plan for the future, and she meant savings and retirement.

How Much Should To Save to Achieve That?

It really depends on your circumstance. Are you willing to live below the poverty line, or do you need first-class trip flights to Europe every year for vacation? Or are you like most folks and are ok falling somewhere in between these two? Your investment performance will also impact your savings. Determining what sort of standard of living you want to keep now while your saving and also after you retire is important to determine how much you need in retirement to live a certain way.

There is a rule known as the “4% Rule” which says you could theoretically take out 4% of your balance every year and live on it for the remainder of your life. If you can save 25X your annual expenses you can become financially secure.

But this rule has some drawbacks. Firstly, “risk-free” investments do not exist. Inflation or a stock market crash is always a threat to investments and savings. Depending on how much you save annually this can be a vastly different length of time. The more you save and the lower your expenses are the faster you’ll save enough to be financially independent.

Accounts with Tax Advantages Make a Difference

Tax friendly retirement accounts like IRAs and 401(k)s improve your savings level and can more quickly aid in becoming financially secure down the road. Taking advantage of these sorts of savings and investment accounts can make a huge difference when you hit retirement age.

Also, consider a Roth IRA if you qualify. When you’re older and retire Roth IRAs are tax-free when you withdrawal money in retirement. This is a huge advantage as the money you’ll be withdrawing is tax-free at that point. Meaning if you take out $10,000, you get $10,000. Tax-free advantages like this are a huge plus for retirement.

Contributing to your 401(k) will also help you get to that 20% saving level especially if you have an employer match of 5%. You’ll only have to save 15% of your income to reach 20% as your employer is covering that last 5%. The funds are also deducted directly from your paycheck before taxes are taken out meaning you are saving money on your cash taxes as well.

Not everyone has a typical employer-backed 401(k). If you’re self-employed, it will be on you to set up your own retirement plan. That is where IRA’s come into play (traditional IRA, Roth IRA, SEP-IRA, etc.)

What if Saving that Much is too Much?

Not everyone will be able to comfortably save 20% of their income every month. There is nothing wrong with that! Day to day life has expenses so be sure you’re covering what you need to first and remember that saving something is always better than saving nothing.

Start where you can. Will 1% be a safe saving level? What about 5%? Or 10%? Determine what your monthly average costs are and if there is any money you can save (no matter the percentage of your income) then do it. You want to get to 20% where possible but sometimes we must start small.

Cut expenses where you can as well.  Smart personal finance means living within your means. If you think you can’t put any money away every month but buy Starbucks every day for $5.00, then you’re looking at this the wrong way. If you cut out the coffee shop at $5 a day, you’d have up to $150.00 saved each month (30 days @ $5.00/day). Start making coffee at home. This change on its own will be a great saving starting point.

What About my Debt? Should I Still be Saving?

By paying of your debt as quickly as you can you’ll also start saving more money. When you’re debt-free interest can not be accrued over time. This means that you will save even more as well.
Take a look at our article on Getting Out of Debt On Your Own for some smart guidance.

How can I get to 20% Saved Income?

There are lots of ways to plan out getting to 20% of your income saved. If you have a job where your employer will match 5% of your 401(k) investment, then you can simply save 15% of your income and they’ll add 5% which gets you to 20%. But there are other ways as not everyone has a traditional 401(k) to work with.

First, you need to know what your monthly income is and what your costs are every month. When you have that figure you can start to plan. Reduce costs wherever you can as well. (See our article on Retirement Saving 101 here)

Where Should you Save your Money?

Once you figure out how much to save, we recommend using one of the many online-only savings accounts. They pay a better interest rate in comparison to traditional banks and are easy to set up. Because online banks do not have any physical locations their operating costs are less and therefore the savings get passed onto you.

You can also be “saving” by putting money into a 401(k), IRA, or other investment accounts. Remember that these do carry some risk as they are based on the stock market. But, over the course of time if we look at the stock market figures it only goes up. Even considering things like the Great Depression where the market crashed and within a 20-year period was back to reaching new highs.

If a recession happens you can count on the fact that over time the market will recover. If you’re young you have more time to recoup any losses so your threshold for risk should be high. It’s smart to have investments leveled at 80% aggressive and 20% conservative when you’re young, if not even more aggressive.

Verdict: Start Saving Now!

Figuring out how much to save is always better than saving nothing. Planning for the future requires some thought and more important some action. How much money you should be saving every month is individual. Start where you comfortably can in terms of saving. Maybe that is only $20 a month for right now, but it is something that can build and grow over time. You just have to get started.

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A Real Solution For High Credit Card Debt Fri, 11 Sep 2020 17:53:26 +0000 This is a paid article Living day to day with huge amounts of debt can seem like carrying the weight of the world on your shoulders. It’s hard to breathe, hard to sleep, and hard to see the light at the end of the tunnel. Countless American families suffer from debt they can’t get out […]

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This is a paid article

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How would things change? What would improve? What could you do with that extra income every month that you can’t do now?

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Finding The Best Student Loans For Education Thu, 03 Sep 2020 15:07:11 +0000 Student loans can be a complicated burden but for many people getting a student loan is the only way they can pursue a higher education degree. Here we’ll look at education loans and the fastest way you can pay off your loans. The average cost of attending college is continuing to rise today. With average […]

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Student loans can be a complicated burden but for many people getting a student loan is the only way they can pursue a higher education degree. Here we’ll look at education loans and the fastest way you can pay off your loans.

The average cost of attending college is continuing to rise today. With average in-state tuitions reaching nearly $90,000 for four years and nearly $200,000 for four years of private schools; understanding student loans and who they are for is incredibly important. Knowing what you need in a loan and how it is intended to be paid back is as important today as ever before. Let’s look at the basics first.

What are Student Loans?

Student loans are specialized loans that are given specifically for the purposes of higher education. They are typically large enough to not only cover the cost of tuition but also the costs of room & board, taxes & fees, health insurance through the school, and other necessary expenses like school books. The best student loans offer everything ranging from undergraduate, graduate school, doctoral programs, and professional schools like medical school, law school, business school, etc.

Student loans are a bit different than traditional loans as they don’t require collateral the way other loans do. These are called “unsecured loans” and mean that your parents don’t have to use their home as collateral to send you to college and some don’t even look at credit scores for approval.

Private Student Loans vs. Federal Student Loans

Private student loans, not the best student loans to have, are usually provided by traditional banks and credit unions. They vary from federal in a few ways and one of those ways is that qualifying is based on your income and credit levels (or that of your parents). These loans often have higher limit amounts and can typically cover four years of school even at private schools.

Federal student loans are a bit different than privately provided loans. First of all, they are provided by the US Department of Education (an agency of the federal government). You can obtain one directly from the Dept. of Ed but also through partner banks and credit unions. Some universities themselves will provide these student loans to provide better loan opportunities to their attending students.

Most federal student loans are provided through a “Stafford Loan” through the program Direct Loan. There are 4 different options:

  • Direct unsubsidized loans
  • Direct subsidized loans for undergrads meeting certain financial need requirements
  • Direct consolidation loans (where graduates can consolidate their loans into a single loan)
  • Direct PLUS loans (for parents or guardians of undergrads, graduate students, or specialized students like law students)
  • Applicants are required to fill out the FAFSA (Free Application for Federal Student Aid) form. This is where the entire federal student loan process begins.

Who Needs Student Loans?

If you plan on attending college but do not have the available funds to pay out of pocket, you likely need to look into receiving the best student loans. So if you and your family don’t have the financial resources to pay for college, you likely need a student loan. It could be for the entire length of school or for a single academic year, it really depends on your individual needs.

Qualifying for the Best Student Loans

Federal loans through the FAFSA program don’t require any specified income or credit levels in order to qualify. They also do not require a cosigner or collateral to qualify. These are social programs created specifically for those who are unable to qualify for privately offered student loans.

Private student loans require much of the same prerequisites that traditional private loans do. Income and credit history is important and will need to be at the level to cover the loan payments as well as any other household finances (like a mortgage). You can qualify on your own or with the aid of a cosigner (most common) – having a cosigner will help you get the best student loans.

Important Details

Variable vs. Fixed Student Loans

The best student loans are given in two varieties. A variable loan has interest rates that change with the interest rates of the market while fixed loans have a fixed interest rate for the entire length of the loan. Usually, variable rates are lower but fixed-rate loans can be lower over time if the market goes through a substantial rate increase at some point during the loan length of time. Federal loans are only fixed. Private student loans can be either-or.

Maximum Amounts

Federal and private will have varying maximum amounts. Federal loan maximum amounts are usually between $30,000 and $60,000 for undergrad and jump to about $140,000 for graduate student loans.

Private student loans are provided by private companies and have higher limits from $100,000 to $500,000. But some lenders will also be willing to provide a loan higher than that depending on what the cost of education will be for a particular person.

It’s very common for students to have a combination of federal and private student loan amounts to cover all of their costs and expenses when attending school. Having a combo of both can sometimes create the best student loan strategy you can have.


Private loans typically don’t have any origination or other variety of fees. Federal student loans on the other hand have origination fees that range from 1% to 4.3% of the total loan amount.


Private loan terms range from 5 years to 20 years on average. Federal student loans are longer and range from 10 – 30 years typically.


APR, or Annual Percentage Rate, for Federal student loans typically range from 5% to 8%. APR rates on private student loans can be lower or higher, ranging between 2.5% to 12%. So there are some other differences here from Federal to Student and you should look at the pros and cons of both.


Deferment is essentially a grace time period where you are not required to start paying back the loan. Federal education loans usually have a deferment of 6 months after graduation so you don’t need to start paying the loan off until 6 months post-grad (but interest will accumulate during this time period).

Private education loans have more variety when it comes to deferment options. Some will allow deferral until after you graduate while others may have a minimum monthly payment required. Be sure to look carefully at the options of any particular loan you’re considering.

Cosigner Release

Federal student loans don’t usually have a cosigner so there is no need for a “cosigner release” down the road.

Cosigners are very common for private loans as most people applying to go to school don’t work full time or have assets to use as collateral to the loan. Having a cosigner release provision is something to be looking for because this lets you continue using the loan while at the same time releasing your cosigner from any liability or requirements to pay down the road. The caveat is that in order for the lender to release your cosigner you need to have enough financial resources to carry the remainder of the loan and make payments on time for 2 – 4 years.

Forgiveness and Forbearance

Federal loans have loan forgiveness and forbearance options should you need them. Payments can be reduced to as low as 10% of your total monthly income. If you work for a government agency or certain nonprofit organizations and make 120 monthly payments while working full time, your loan may be completely forgiven meaning you don’t pay any more than you already have.

Private education loans on the other hand don’t have any sort of forgiveness as an option. Some may offer forbearance during hard economic times but every loan and every lender will have different stipulations for this sort of thing.

Student Loans Summary

Perusing higher education is part of the fabric of modern life, especially here in the United States. The market is vast and education loans can be rather complicated so it’s important to get some expert help where you can. When looking for loans, read the fine print and don’t jump into anything without knowing all of the facts. It’s tough to plan your life when you’re 17 or 18 years old and university is just one option for your future. So keep your doors open and be smart about where you put your time, effort, and money.

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How Can You Get Out of Debt by Yourself? Wed, 19 Aug 2020 13:22:48 +0000 It is possible to get out of debt without help from others! You can get out of $85,000 debt in a short number of years if you play it smart and act accordingly. It’s not the simplest thing to do but by following these guidelines you can start! We’re not talking about 5 or 10 […]

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It is possible to get out of debt without help from others! You can get out of $85,000 debt in a short number of years if you play it smart and act accordingly. It’s not the simplest thing to do but by following these guidelines you can start!

We’re not talking about 5 or 10 years from now either. We’re talking about right now.

You CAN and WILL get out of debt

I was able to pay off over 85K in student loans, credit card debt, and an auto loan over the course of a few short years. Here are the things that I did and none of them are earth shattering. They are all things you can start doing today.

I, like most people, had bad spending habits when I was younger. On top of my student loan I paid for many things using a credit card throughout my college years and post-graduation. I was living way beyond my means and that meant accruing a sizeable amount of debt. I went on trips with friends, bought every new iPhone when it came out, and went out to eat all the time. It was a lot of fun, but it was a lot of stupidity in terms of my financial well-being. As I approach 30 it was really starting to weigh on my mind.

What if I want to start a family? What if I fall ill and can’t work? What if? What if? Getting into the cycle of “what if” because of debt is incredibly stressful. Debt is a constant blight always there in the back of your mind. I wasn’t sleeping well, I was sometimes depressed because of it, and it took up a lot of my day to day thoughts. Needless to say, it was a bit overwhelming.

But I decided to start facing this challenge had on.

My goals were simple:

  • Get entirely out of debt
  • Become financially stable.
  • Plan for my financial future.
  • Take a deep breath and reduce my stress.

And that is exactly what happened.

I can now say that I am completely debt free, excluding my mortgage which is of course technically a loan. The way I got debt free isn’t rocket science either, there is no rabbit in the hat, it was straightforward.

Here are the basic steps:

  • Determine my debt and calculate debt ratio.
  • Change my bad behaviors permanently which created the debt in the first place.
  • Earn enough income to pay off the debt over time.

That is, it in a nutshell. When I was able to do all three of these things it was just a short matter of time until my debt would be eliminated. Let’s look at each piece more carefully.

Determine Your Debt Amount

Let’s face it, not thinking about your debt isn’t going to make it go away and with interest rates what they can be on credit cards it can continue to grow even if you’re not spending any  more money. So, the first thing to do is to determine your entire debt amount and how it is broken down.  Add together everything: student loan, credit card debt, auto loan, and any other miscellaneous debt you have.

Total it and that is the amount of debt you have.

Income to Debt Ratio

When you know your total debt amount you want to compare it to the amount of money you make every year. DTI (debt to income ratio) can be determined in a number of ways. But it’s pretty easy to use a simple formula to create a ratio.

  • Let’s say you earn $40,000 a year and your debt is $20,000. Your DTI or debt ratio is 0.5
  • Let’s say you earn $50,000 and your debt is $200,000. Your DIT or debt ratio is 4.0

Now you have a ratio as a starting point and give you an idea of how much debt you have and what will be required to eliminate it.

If your debt ratio is really high like the 2nd example above, do not despair. You can get out of it, but it will take some careful planning and serious commitment. It’s much easier to get into debt than to get out of it but it’s something you can and will do!

Change Bad Spending Behaviors Which Created Your Debt in the First Place

There are lots of reasons people get into debt but a very common one for younger people is spending money they don’t have. So, take the correct steps and stop that behavior. Start cooking at home instead of ordering out every meal. Make your coffee at home instead of buying it at Starbucks. Stop buying clothes you don’t really need. And so on. But it goes beyond spending habits also.

  • Stop spending money you don’t have on things you don’t need. Your iPhone X is just fine, do you really need the iPhone 11 pro? The answer is NO.
  • If you have $40K debt for undergrad, don’t take out $90 for a PHD.
  • If you lost your job and built debt because of the fallout, get hired and eliminate your debt and prepare for something like that in the future just in case.

This is sometimes harder than people want to admit. Chang your lifestyle and habits isn’t something that is easily done overnight. But it is one of the most important factors to eliminating debt. How can you get out of debt if you keep building more and more of it? You can’t.

Breaking habits can be tough. But just like an alcoholic who starts going to AA meetings to get some help with their alcohol addiction, there are no group therapy meetings for overspending. It’s something you have to be diligent about. Start small. Like cooking at home every night, a week instead of Friday. Little steps like this make a huge difference over time. Think about it, ordering out can be $15-30 a night. Cooking at home for similar food can be $5-10 a night. That really adds up over time.

Start and keep at it.

Earn Enough Income to pay off Your Debt Over Time.

You have to have enough money to live your day to day life and also to pay down your debts. That means making enough to do both things. You can’t decide between groceries and a credit card payment every month, that is something is not sustainable.

The coin needs to be flipped. Instead of spending what you don’t have you need to be making more than you spend. So, it has to be completely flipped on its head. The faster, longer, and to greater level you can earn MORE than you spend, the faster you’ll be out of debt on your own for good.

Cutting Spending May Not Be Enough, Earning More Will Be

For people with a lot of debt, changing from eating out to cooking at home isn’t going to be enough of a change to get out from under a $100,000 student loan. Living at home with your parents may not be something you’d like to do again so that means you have to earn more. There are a number of ways to do it.

Get a part time or 2nd job. You can bar tend or work at a coffee shop or tutor on the side. Sometimes there are better job opportunities in different cities, and you may consider a move. Through adding a 2nd job, changing your career, and cutting spending you can add a good amount to your yearly income.
Playing the lottery isn’t really a game plan. So be practical. The biggest options will be changing your job for better pay or taking on a second job. If you’re debt isn’t incredibly high maybe changing your spending habits will do the trick. The point is take every step possible.

Some earning tips:

  • Sell things on eBay – old collectibles, video games, or other items can be sold on eBay. It’s a great way to clean up your apartment but also make a side income. Even a few thousand can make a big difference.
  • Work more – get a 2nd job or try to work overtime if you can. Adding another job isn’t going to be easy but it can be a good short-term solution to boosting your income.  You could start teaching English online to young students through places like Baby-sitting, dog walking, Uber and Lyft driving, are all ways to supplement your income.
  • Work better – work hard enough to get a promotion. If you can’t get a promotion look for a new better paying job. You may consider starting a small business on the side as well.

Use the Tools Available to You to Eliminate Debt

Debt Consolidation Loan

If your credit score is still intact, consolidating your debt with a debt consolidation loan could be a smart option. This variety of personal loan can be a great tool to pay off all of your credit card debt and then use the loan on a lower interest rate.

Pay the loan each month and over time you’ll be out of your current debt. Because you can get a fixed term loan over a few years there is no way to make minimum payments. You pay a fixed amount and know that if the loan term is 3 years everything will be paid off at the end of the 3 years.

That is great because it lowers your interest rates reducing what you will owe over time and provides a clear monthly goal and finish line at a set period of time. This can be a great option.

Consider Balance Transfers

Certain credit cards offer a no fee balance transfer option. This is a way you can immediately get out from a high APR interest rate credit card. You can simply move your debt from the high interest rate card over to the low interest rate card. This can save a decent amount of money over time.

This option doesn’t completely solve your debt problem, however. There can be balance transfer fees or if you still can’t make more than minimum payments, you’ll still have plenty of debt. Your credit also has to be high to get approved for a card with a lower interest rate and that means higher spending limits. So, if you haven’t truly addressed your spending habits this could be bad option that puts you into even greater debt.

Debt Management and Credit Counseling Services

There are services out there who will work with you to get your debt and finances in order. But be aware. Some of them are literally scams that will make your situation worse and despite the federal governments crack down on these predatory practices they are still out there.

  • Don’t go with an organization which has large up-front fees.
  • Be wary of big promises.

The (Nation Foundation for Credit Counseling) is a reputable non-profit credit counseling organization that works with Americans of all walks of life to get their credit debt under control. They will direct you to a local counsellor who will work with you directly. There may be a fee on a monthly basis or based on time, but it is usually very fair. is another option. Accredited Debt Relief partners with reputable debt relief companies, non-profits, and organizations who will negotiate on your behalf with your credit card companies. They will look to reduce interest rates, payment amounts, fees you owe, and more. You pay them directly on a monthly basis and they in turn pay your creditors under the new arrangement.

Get the Ball Rolling!

There is nothing more important that getting started on tackling your debt head on. No one can do it for you and winning Powerball is just pipe dream (plus if you play every week it can become costly over time).

Getting out of debt takes time and that means getting started. The longer you wait the worse it will become, just like any other problem. Things don’t get better on their own in this sort of a circumstance, so it’s up do you to take action.

In a nutshell here is what we’ve gone over:

  • Stop spending what you don’t have
  • Destroy your credit cards
  • Sell what you don’t use
  • Look for a better paying job or really go for that promotion
  • Downsize your apartment
  • Work part time
  • Use a debt consolidation loan
  • Transfer high credit card interest balances
  • Find out about credit counseling

You can do it. You just have to take the first step.

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Retirement Saving 101 : What, Where and When Mon, 10 Aug 2020 18:17:06 +0000 Saving for retirement is probably one of the last things on your mind right now. We all know that we should start but with so many other things on our plates it tends to get left on the back burner. Let’s take a look at the basics of retirement saving and how you can start […]

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Saving for retirement is probably one of the last things on your mind right now. We all know that we should start but with so many other things on our plates it tends to get left on the back burner. Let’s take a look at the basics of retirement saving and how you can start today.

Most of us have heard our parents or grandparents tell us about the importance of saving for retirement. “Just put a little away every month from your employer’s retirement program and you’ll be set later in life. It’s that simple.” But if you’re not working or more focused on other aspects of your current life, it can be hard to have the “long view” of something you’ll need 40 or 50 or even 60 years from now.

But they were right as parents and grandparents tend to be when it comes to this sort of thing you can only learn from life experience. When you get that first stable job or are ready to take the next step, putting in as little as $50 or $100 a month into your company’s 403(b) or 401(k) can be that piece that prepares you for later in life.

There are lots of different ways to invest and save towards retirement and here we’ll cover the basics.

Not Saving for Retirement Is a Bad Idea

The worst thing you can do for saving for retirement is nothing. The plan doesn’t’ have to be perfect or highly advanced, the plan just has to begin and the details can be worked out along the way. The younger you start the less money you’ll have to save to prepare for your retirement whenever that may be.

For example, A 21-year-old making $50,000 a year who puts away 10% of their paycheck into a retirement plan (and the typical 3% employer match) will have over $2 million by the time they hit retirement age at 65. This also doesn’t account for other investments, promotions or salary raises, or increasing your contribution percentage either. If they wait until there are 31 to start this retirement plan for the same time period, they’ll have less than $1 million. That isn’t bad but it’s less than half of what they could have if they started earlier.

Start Saving for Retirement Now! Start Today. Start This Minute

When the money you save starts earning interest, then that interest starts earning interest of its own, and that process continues; the snowball effect is powerful. This is known as compounding interest and it’s the main reason starting early will make a huge difference over the course of time. Your interest builds its own interest or your money makes you more money.

Types of Retirement Plans

401(k)s and 403(b)s

401(k)s and 403(b)s are retirement accounts you set up through your employer. The funds come from your pre-tax payroll deductions and the real difference is 403(b)s are only from employers who are non-profit organizations or educations institutions like high schools.


Individual Retirement Accounts (IRAs) are retirement accounts not provided by an employer. These are ideal for people who want to save for retirement whose employer doesn’t offer 401(k)s (50% of the US workforce) and is also ideal for self-employed individuals. If you have a 401(k) or 403(b) from your employer however, you can still set up an IRA and increase your retirement savings. The types include SEP IRA (for self-employed individuals), Traditional IRA, and a Roth IRA (using after-tax income).

Each has it’s own setup parameters and benefits but all are great for your retirement and the best option on the table for folks not able to get an employer program or who are not traditionally employed.

Social Security

This is a government-run retirement program for people who pay taxes. You pay your taxes and some of that goes into social security. Either through your personal self employed business taxes or through your company’s payroll taxes taken from your checks. When you retire the government sends you a monthly check based on the taxes you paid over the years. It’s not a bad system despite the endless political debate constantly raging about it, but it won’t be enough to provide a truly comfortable retirement for most people. Who knows how it will work in 40 years either or even still exist. The point is you shouldn’t put all your eggs in the government basket when it comes to anything, especially when it comes to your retirement.

Investing in Stocks

When you’re under the age of 40 you still have quite a way to go until you retire, what better way to spend that time then saving for retirement. Therefore your financial risk is still less when it comes to investing. Even if the economy tanks and the market collapses, there is still plenty of time for it to come back up and stronger. If you look at a graph of the past 100 years on the stock exchange, that curve is ever rising. Sure there are some dips like the great depression and the financial crisis of 2008, but the market recovers and goes higher than it was before. So, even in a financial crisis, you have a lot of time for it to come back with a vengeance.

Investing in high-risk stocks at a young age offers higher profit margin potential. When you get closer to retirement age then you want to move your investment into a less risky investment like bonds. But while you still can safely, push the envelope and go for it.

Don’t Pick Stocks Piecemeal

Playing one stock at a time is time-consuming, incredibly difficult, and carries large amounts of risk, especially when you start to save for retirement. So too is hiring a financial advisor to run your portfolio on a stock by stock basis. Individual investors almost never beat the overall market when it comes to gains and unless you are playing around with millions or billions there are smarter ways to invest in stocks.

There are many smarter options when it comes to investing in stocks. Start by investing in Electronically Traded Funds (ETFs) or other low-cost index funds. How these work is they look at the market as a whole, or segments of the market like the S&P 500 and NASDAQ. This is how you can diversify your portfolio and allows you the option of investing in a wide range of stocks which will help saving for retirement. This way if one area goes down your diversified portfolio will not be entirely in that one specific sector.

Financial investment firms typically offer about 7 different index funds to choose from or target-date funds which self adjust as you get older to reduce your risk. They also have lower fees than other types of funds and that means you keep more of what you earn. There are also AMAIAs (automatically managed investment accounts) which are operated by computer programs and are another smart option with even lower fees.

After You Start Saving For Retirement, Don’t Touch Your Savings

When your retirement plans are up and running and you’re invested into a diverse set of ETFs, your best bet is to leave it be. Take a look or contact your financial advisor two or three times a year (if you have one) to see what’s going on with your assets. Beyond that, let your investments marinate. If you’re watching the market every single day and it tends to go down, this can cause a lot of mental stress. So it’s smarter to “set it and forget it” when saving for retiremtn.

Don’t Cash Out Before You Retire

If you’re facing some financial burdens it can seem appealing to take some money out of your retirement accounts. But there are major problems with doing so. If you’re under the age of 59.5 years you’ll face up to a 10% penalty for 401(k)s and traditional IRAs. Plus your money will no longer be earning interest and that means the compounding interest dies with it. So at all costs do not touch your retirement nest egg until you actually retire. Your life after retirement will thank you.

Start Now

As we said in the beginning the most important thing you can do for saving for retirement is to start saving. Get set up with your employers 401(k) or 403(b) or open an IRA. Then work your way to the stock investment aspect. The point is to get started one foot in front of the other. Just as you’re likely trying to build your credit, you should be trying to build your retirement plan the same way. Little by little over time and eventually you’ll get where you want to be. No one wants to live paycheck to paycheck, especially when they’re retired and are no longer working. Get started today and you’ll thank your young self for incredible foresight when it comes time for you to retire!

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Invest With Low Capital: The Best Ways Mon, 10 Aug 2020 16:23:20 +0000 For a lot of us “investing” is something done by Wall Street bankers and big business players in dark suits behind closed doors, not normal people like us. But that is not and has never been the case! Investments don’t require millions to make money and even by investing small amounts you can make profitable […]

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For a lot of us “investing” is something done by Wall Street bankers and big business players in dark suits behind closed doors, not normal people like us. But that is not and has never been the case! Investments don’t require millions to make money and even by investing small amounts you can make profitable gains to aid you and your family on your financial journey. In this article, we talk about how to invest with low capital.

It starts with smart financial decisions and good spending and saving habits. Some great tips are to eat out less, make your daily coffee at home, and put some money aside every single month. By doing this even for a little while you can save enough money to start to invest and let that money work for you to make and save more.

Investing today doesn’t require hiring an investment firm or stock portfolio manager. With technology and just about everything available at your fingertips through a smartphone app; investing is no different. There are incredibly powerful relatively new ways to invest on your own with limited money to begin with.

Let’s take a look at the best ways to invest with low capital.

1. Saving to Invest with Low Capital

You can’t invest without having some available funds to do so and that means starting to save up. Because you don’t need huge amounts of money to invest this may be possible for you far quicker than you believe.

When you start to invest with low capital, start your saving practice small. Put $10-$20 away every single week. It seems small but over the course of a year, that means $520 – $1,040 saved. You can do this a number of ways as well. Put your cash in a safe, envelope in your sock drawer, a rainy day fund jar, or even at the bank. There are free online bank accounts and savings accounts that offer small interest that you can open with as little as $25. This are all good options but if you feel having the cash around may lead you to lose or spend it, put it in the bank.

Savings account at online banks like Chime offer a 1.00% APY for all of their online savings accounts. You can also open the account with any amount of deposit your comfortable with there are no minimums. But there are also other online banks offering similar terms.

Saving enough to invest in this manner won’t even take a long time. It can be as simple as cooking at home on the weekends instead of going out for dinner for even a short period of time. So think about your long term goals versus your short term pleasure. There will be ample time to eat at restaurants when your investments are working for you! This is the #1 way to start  to invest with low capital

2. Invest in Stocks with Low Investment Funds

It used to be that, in order to invest with low capital, you needed quite a bit of capital to successfully invest in the stock market. But that is no longer the case. The internet and increased connectivity globally mean even small investments can be placed into the stock market. It’s a smart idea to start investing in stocks with $100-$500 or less to learn the ins and outs and without putting huge sums at risk of loss.

Nowadays there are loads of options where you can literally start investing in stocks for as low as $1 with no fees or commissions when you get started. This is a major change from traditional stockbrokers taking large commissions and ultimately sucking up much of your stock investment profits. That meant it was very hard for the average family to invest into stocks because the risk was too high and the profits weren’t entirely their own.

Because of the way these low-cost stock trading brokers operate, the entire industry has shifted with even the biggest players now offering low to no cost stock trades and low to no commissions. Places like Fidelity investments now offer $0 commissions having their hands been forced to follow suit considering the movement of the marketplace towards that direction – a great thing to have since commissions and fees can eat into your profits when you invest with low capital.

There are also fractional investing options available today. The way this works is you don’t invest in a full share but a partial share of stock. This makes it easier to diversify and save money at the same time. The point is that you can get started with very little investment capital.

3. Use Your Employer’s Retirement Plan like a 401(k) to invest with low capital

Just because you’re on a tight budget doesn’t mean you can’t start saving and investing. Most employers offer a 401(k) or other retirement plans that can be started with very low monthly investment amounts. This is something everyone should do. Planning for the future is something that many of us don’t do properly or don’t do at all and that can mean major financial hardships later in life.

Start investing just 1% of your salary into your 40(k) or other retirement plans, especially if you are going to invest with low capital. It is usually an amount that even folks on a budget can handle and it is also tax-deductible which means it’s actually cheaper than it seems as well. Over time you can start to increase that salary % to invest year by year, 1 percentage point at a time. It’s very smart to time that increases with your annual pay raise so you feel that burden far less.

When you get to retirement age you’ll be confident in the nest egg you’ve been saving over the years and can safely retire. We’ve all heard stories of people who did not plan for the future and were forced to work low paying jobs until they were in their 80’s. This is something you can avoid even on a very tight budget.

4. Utilize Low-Initial-Investment Mutual Funds

Another way to invest with low capital is to use a mutual fund. A mutual fund is investment security where you invest in a portfolio of bonds and stocks in a single shot. This is ideal for folks new to investing because you don’t have to do research on individual stocks and buy and sell individual shares. It is all managed by the mutual fund so you invest, and they handle the rest.

There is a slight barrier to entry though as typical mutual fund companies have minimum initial investments of $500 or more. If you’re on a tight budget this figure can seem too high at the moment. But there are still options. Some mutual fund providers will waive your minimum initial investment amount if you agree to automatic monthly investments. So this means you can get started with as low as $50 to $100 a month.

Many electronically traded funds (ETF) utilize automatic investing features so it’s another option to look into for a low initial cost. You can also usually set up automatic deposits into your mutual fund int he same manner that you can into your 401(k). Making it seamless and smooth.

5. Other Low-Cost Investment Options

There are also other ways to invest with low capital. Some of these will have smaller profit returns but they’ll also carry little or no risk. Making them very safe, albeit small, investment options.

  • Treasury Securities aka. Savings Bonds – these are always a safe long term investment with guaranteed payouts.
  • Utilize real estate crowd-funding where you own a fractional share of commercial properties without the trouble of being the landlord.

In Conclusion

As you can see from the shortlist above there is a multitude of low-cost ways to invest with low capital. There are investment options available to you on a tight budget. The point is to get started. Investing is a marathon and the faster you save enough to get started the better off you’ll be on your long term financial journey.

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Your Credit Scores Impact On Your Mortgage Rate Wed, 05 Aug 2020 15:23:05 +0000 Credit scores have a large impact on how lenders view you when you apply for any loan, especially a large loan like a mortgage. The rule of thumb is that the higher your credit score the lower your interest rate will be. So having a high credit score is crucial to getting a mortgage rate […]

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Credit scores have a large impact on how lenders view you when you apply for any loan, especially a large loan like a mortgage. The rule of thumb is that the higher your credit score the lower your interest rate will be. So having a high credit score is crucial to getting a mortgage rate your comfortable with. Something seemingly as small as a single point or a half point on your interest rate can mean a huge difference in cost over time. Consider that on a 30-year mortgage if you’re paying about $60 less per month because of a half-point on the intrest rate, you’d save about $21,600 over the course of time. No small amount!

Before talking to a realtor you should know what your credit scores are from the 3 main federal credit bureaus as a lender may look at one or all of them. You can check your score in loads of places online for free and other sites that offer a paid service. No matter how you check your score it will give you an idea of it your credit is suitable to apply for a mortgage. If it’s lower than you expected you can also take measures to increase your scores before applying.

Ideal Credit Scores for Buying a Home

Most lenders will look at your FICO credit score which ranges from 300 (poor) to 850 (excellent) to determine the risk of providing you a mortgage loan. The higher your score is the more comfortable the lender will be to approve you for the loan. Scores are rated as follows:

  • 800 – 850 : Excellent
  • 740 – 799: Very good
  • 670 – 739: Good
  • 580 – 669: Fair
  • 300 – 579: Poor

Each lender will have its own method to determining interest rates based on the size of the loan and your credit score, even just a few points up or down on your credit score can make a big difference. Consider if your score is 739 (good) instead of 740 (very good). This could have a substantial impact on the rate you receive.

You can use free online loan calculators at places like which looks at the type of loan, your credit score, the loan amount, the loan terms of length, the down payment percentage, the property value, and the home location. It’s recommended to use these free tools prior to applying for a loan. But also you can see how a few differences in your credit score or down payment can make a huge difference in the loan cost over time.

If My Credit Score is Low Can I Still Get a Mortgage?

The short answer is yes you can. But the hard truth is that you’ll pay higher interest rates and that means higher monthly payments and more costly over time. Lenders will also look at other varieties more carefully then such as how much debt you have if you’ve had any major credit problems and other areas of your finances.

Financial requirements like credit scores also vary from lender to lender, so a loan could look a lot different from 2 different lenders even with all other things the same. It’s a smart idea to get multiple offers from lenders to compare how they hold up to one another.

Let’s take a look at some of the different credit score minimum for various mortgage loan varieties:

Conventional: you can have a score as low as 630 and still get approval but may need to have things like a higher income or other financial factors that will get you approved despite a low credit score.

VA Loans: These are loans backed by the United States Department of Veterans Affairs (VA), and are only available to active or retired military as well as their families. The US government doesn’t have a minimum credit score requirement but many VA lenders will still want you to have a score of at least 620 – 630.

FHA Loans: These are loans provided by the Federal Housing Administration (FHA) for individuals with low or poor credit. These loans also offer lower required down payments. you’re eligible to qualify for an FHA loan with a lower score of between 500 and 579 provided you can pay a 10% down payment. If your score exceeds 580 then your required downpayment will be at least 3.5%

USDA Loans: The Department of Agriculture also has a loan program (USDA loans) for low to medium-income individuals looking to buy a home in traditionally rural areas (hence the backing by the department of agriculture). You’ll need a score of at least 640 to qualify. You can still qualify with a lower credit score but the lenders will then most likely look at other aspects of your financial history to receive approval.

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Experian Boost Review Wed, 05 Aug 2020 15:08:57 +0000 Having a good credit score can have major impacts on the way in which you live your life. The problem is that typically improving your score from bad to good and beyond to excellent can take a long time. But through Experian, improving your credit score doesn’t have to be overly complicated or long-winded. With […]

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Having a good credit score can have major impacts on the way in which you live your life. The problem is that typically improving your score from bad to good and beyond to excellent can take a long time. But through Experian, improving your credit score doesn’t have to be overly complicated or long-winded. With free services like Experian Boost you’re able to improve your score all for simply showing bills you already pay. Here we’ll look at the ins and outs of Experian and if it is the right fit to guide you on your credit-building journey.

“So, What is Experian Boost?”

While many credit score companies pull information from the three major federal credit bureaus (Experian, TransUnion, and Equifax), you can see from the name Experian actually is one of the credit bureaus. This means cutting out the middle man. What credit bureaus do is pull information from public records on an individual from lenders like banks, credit card providers, and mortgage lenders as well as collection companies.

Experian is able to provide a credit report history that shows all of your current debt, payments, or other items of information like bankruptcies. In turn from that report, they are then able to determine your FICO credit score. A number ranging from 300 (poor) to 850 (excellent). There are some positive results when using Experian Boost. We’ll see them here.

Boost Your Credit Score Just for Signing Up

One of the greatest features about using Experian is that by simply signing up for your account you get a boost to your FICO credit score. When using Experian Boost you can increase your score by simply connecting the system to your bank to illustrate all the bills you’re already paying. Things like electric, gas, car, phone, and most recently – Netflix! This is a free service to use and has raised the score of over 60% of users who take advantage of Experian Boost.

How Does It Work?

It’s free to use and anyone who wants can sign up. Create an account or log in and get over to the “Boost” page (you can’t miss it as they direct you there). You’ll be asked to connect a bank account (or multiple accounts) that you use to pay your monthly bills. If you’re concerned about granting third party access to your account, don’t be. Experian illustrates that they only access “read-only” data from your bank, nothing is touched or moved. After your account is connected the service scans all your transactions to things like on-time utility payments, phone bills, etc. Experian also looks only at positive payment history (it will not report any negative information which could theoretically lower your score). Note: Experian will need a minimum of 3 months of payment history within a 6 month period for the Boost to take effect.

Benefits of Using Experian Boost

There are a lot of benefits to a free or paid membership with Experian.

  • New credit scores go into effect immediately.
  • FICO credit score tracking
  • 256-Bit SSL security encryption
  • Free service
  • Working directly with one of the three federal credit bureaus
  • Loads of service options for the paid account
  • The free 7-day premium trial period for all features.
  • and more

Downsides of Using Experian Boost

There really isn’t much negative about using Experian Boost, both for the free or paid accounts. That being said the only downside is there is not guarantee it will boost your credit score. If you pay your utilities and phone bills using a credit card, for example, this will not boost your score. Also, Experian’s FICO score uses FICO Score 8. Some lenders may use a different credit model to determine your eligibility for a loan.

Experian Boost: Costs & Fees

Signing up for an Experian account is free and you get your credit report and history. Using the Experian Boost service is also free and you can use it to boost your credit score. You also get a free 7 day trial to the “premium” Experian account which offers a wide range of different benefits. After the free trial period, you can keep the account premium for as low as $5 a month. There are different plans with different services so be sure to see what you need as the monthly cost could go up to $39.95 a month if you add every single service.

Keep in mind that Experian Boost uses the FICO Score 8 model and works with FICO 9, VantageScore 3, and 4. Remember that some lenders may use other credit models or reports to determine the eligibility to approve a loan or credit card for an individual. Something to keep in mind. Furthermore, there is no 100% guarantee that your score will automatically go up. But the vast majority of people do see a jump in their credit score through Experian Boost, with both the free and paid service.

Verdict: Experian Boost

We recommend using Experian Boost for a few reasons. The free account gives you access directly to your Experian credit report and FICO score. Next, using the Experian Boost feature you can boost your credit score rather easily. The overall value of using Experian is very high and with their other services, it can be a great all-inclusive solution for you on your credit journey.

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Different Types of Banks Based on Your Need Wed, 05 Aug 2020 15:04:16 +0000 Technology has completely changed the way in which we bank in recent years. Today there are more options than ever before when it comes to where you keep your money so knowing the different types of banks and how they can fit your lifestyle is important. If this is your first foray into opening a […]

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Technology has completely changed the way in which we bank in recent years. Today there are more options than ever before when it comes to where you keep your money so knowing the different types of banks and how they can fit your lifestyle is important. If this is your first foray into opening a bank account or you’re looking to change banks it can seem a bit overwhelming considering the multitude of bank varieties and brands out there today. Below is an article that will discuss the different types of banks.

Different Types of Banks

There are three major types of banks that offer personal banking: traditional banks, online banks, and credit unions. There are some major differences between these types of bank and with online-only banks entering the foray in recent years it can be a bit confusing.

Traditional Banks

These are the banks that we’re all familiar with. Large well known financial institutions who provide products such as savings and checking accounts, investment accounts, credit cards, loans, etc. These are banks like Bank of America, Chase, Citibank, PNC, Wells Fargo, etc. They are large institutions with many national branches and ATM’s.

There are some benefits to these types of banks such as easy in-person customer service, straight forward and multi-function websites, as well as 24/7 customer support on the phone. But there are a few downsides as well. Because of the size of these huge financial institutions, the customer service can be lacking, and also there are typically far more fees associated with opening and maintaining an account (like monthly minimums).

Credit Unions

Credit Unions are different types of banks in a few ways and are not banks in the same way. They are member-owned and are not for profit. So when a Credit Union is doing well it’s members benefit. But the opposite is also true.

  • Member Dividends: if a credit union is doing well they provide payouts back to their members as they are non-profits and can’t turn a profit so that money goes back to the members. This can be a nice bonus.
  • Lower Fee’s and Rates: because they are smaller and non-profit credit unions have lower fees and rates than traditional banks. They pay higher rates on savings accounts and have lower rates.
  • A Vote: members have voting privileges when it comes to making decisions about how and when money is used by the credit union. Board members have to be voted into office but they can also be voted out if members are unhappy with what they’ve been doing. Most members will not pay attention to this sort of thing but it is an option.
  • Customer Support: because they are smaller they can provide a more personalized customer service experience than large national or international banks.

But it’s not perfect. There are some downsides to using a credit union. Because these types of banks are much smaller they will have far fewer locations (usually around a specific geographic location) and may have fewer ATMs as well if not partnered with a larger bank. If you are out of town and your credit union is regional you will be out of luck to get into a branch. Also, because they are smaller and have tinier budgets, the technology provided by credit unions is usually far more outdated than larger banks. This could mean a minimally functional website, an app that doesn’t do much (or no app at all for that matter), so the user experience can be a bit less satisfying in technological terms.

Online Banks (No Physical Branches)

These are the newest form of financial institutions in today’s banking marketplace. These types of banks are intriguing for a few reasons we’ll cover here. But you should know that these banks do not have any branches at all and only conduct business online or over the phone. If this is unappealing to you an online bank would be something you should avoid.

Benefits of an Online Bank

  • Zero or Low fees: the best online banks offer free checking accounts with no monthly fees, no foreign transaction fees, no ATM fees, and no overdraft fees.
  • High payout rates: this is a bigger advantage to an online bank and that is they pay out better interest rates on things like savings accounts. They are able to do this because without having to invest in branch locations and employee salaries they are able to offer their clients better interest payout rates.

The downsides fro these types of banks include no in-person customer support at all but you can still call on the phone for help if you need it. Making physical deposits can be a bit more difficult if they are not partnered with another bank’s ATM network, so it’s not perfect.

Choosing a Bank Based on Your Needs

Knowing there are 3 main types of banks, you should be looking to choose one which fits your needs and lifestyle. Do you travel? Do you like to go to the bank or prefer to do things through the website or app? Is ATM access important to you? Are you interested in a credit card, mortgage, car loan, or personal loan?

You can also do all of your banking through more than one financial institution if you prefer. To save money you can open a checking account from a credit union or online bank but when it comes time to a mortgage going with a larger bank may be a better bet as they have more assets and can provide a lower interest rate.

You can always talk to a banker and see if these types of banks will work for your situation. Take into consideration a few of the factors above and you’ll be able to make the best choice for your personal banking needs.

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