Although I’m not a spendthrift, I feel as if I never have enough money in my bank account. Because I’m setting aside cash in order to buy a new home, I’m always searching for ways to decrease my monthly expenses. Fortunately, through my research, I’ve found some great, simple tips that provide substantial savings over time. For instance, I turn off my HVAC unit whenever I’m traveling. I also conserve gasoline by running all of my errands for the week on the same day. On this blog, I hope you will discover some easy, painless ways to lower your regular monthly bills. Enjoy!
If you're planning for the future at all, you probably realize that you'll have to have a good credit history if you ever want to buy a house or a car. Just because you need a little financial boost now shouldn't mean you need to wreck your chances of getting approved for a mortgage in the future. Use these three tips to make sure your personal loan actually helps you build a positive credit history.
1. Try to find a lender who won't do a hard pull on your credit during application
A "hard pull" or "hard credit check" is a credit inquiry that shows you've applied for credit and is available for future lenders to see on your credit report. This is an important feature of credit reporting because it means lenders can tell if you seem desperate for money (reputable lenders prefer financially stable customers). Some lending companies do hard credit pulls during the application process, which can be especially problematic if you have bad credit and don't get approved for the first one you apply to.
Each hard pull puts a little ding on your credit score, which is small enough that one isn't a problem; but if you have more than two or three dings together, it can start to affect your credit score considerably. For this reason, the best type of loan to get when you're trying to build credit is one that uses a "soft credit check" (one that doesn't show up on your report) for the application process. You don't have to worry so much about getting a hard credit check after you've been approved, since just one doesn't affect your credit score by much.
2. Stick to loans with payments you can easily afford
One of the things that lending companies like to see is a credit history that shows you regularly pay more than the minimum payment. Not only does this show that you're responsible and enterprising, but it also means that if they lend you money, they're likely to eventually get the principal back. So rather than shopping for a loan payment you can barely afford, try to get one that's more easily affordable so that you can budget a little more money than the minimum payment each month.
3. Make sure your loan provider reports to credit bureaus monthly
If you take out a private loan, you shouldn't assume that your provider reports to all three credit bureaus. Most large lenders do, but some companies choose to only send info to one credit bureau or don't bother doing it at all. You may think that this goes both ways, but it really only hurts you if you pay off your loan dependably. If you can't pay your loan off and it goes to collections, you'll still end up with a negative item on your credit report because you can be sure the collections agency will report it. So be certain your loan provider reports to all three credit bureaus before you get a loan; if they don't, it can only hurt your credit history.
These three issues are all important ones to consider if you need a personal loan but don't want to wreck your credit score doing so. Of course, the easiest way to wreck a credit score is to get a loan and then not make the payments; in that scenario, none of these tips will help you, so make sure you take a good look at how much free money you have each month and whether you can really afford that loan payment. Contact a financial institution like Union State Bank for more information.
Share19 July 2016
