Definition of An Unsecured Loan

An unsecured loan is a loan where there is no physical collateral. This means that there is nothing worthy for the bank to take if the loan isn’t paid off. This type of loan is differs from a secured loan because it is approved without the use of property as collateral for the loan. Usually these borrowers must have near-perfect credit ratings to qualify. (more…)

How to Get Your FICO Score Online

Understanding your credit score is not always a simple or easy task. The confusion is compounded by the fact that many people use the one term “credit score” to mean both the types of credit scores offered by the main reporting bureaus and your FICO score. However, when it comes to credit reporting, not all scores are created equally.

If you search for “free credit reports” you will likely come across many ways to access your scores from Experian, Equifax, or TransUnion (sometimes VantageScores), but none of these reporting agencies will be able to singularly give you your FICO score.

Finding Your FICO Score Online

Unlike the free reports you obtain from the major credit reporting bureaus, there is not really a way you can obtain a truly free FICO score. Probably the most used source for finding FICO scores online is myFICO, an online company with a trusted reputation, and is even recommended by USA.gov as the source for obtaining your FICO score. There are several different levels of subscriptions for myFICO, paying either per month or per year.

Users can, however, sign up for a free trial membership, good for just 10 days, and request their FICO scores under the Score Watch plan. This plan includes access to your FICO score, as well as alerts to when your credit report and FICO score change, or when you might be eligible for lower interest rates. If after those ten days the membership is not cancelled, users will be charged the regular monthly fee until you cancel the subscription. Some of the other features included in myFICO plans include the options to monitor your identity for identity theft and mobile alerts when your scores change.

There are other services available online from which you can request your FICO score, but all will come with a fee.

Equifax Credit Watch Gold with 3-in-1 Monitoring – This service is offered by Equifax, one of the three main credit reporting bureaus. When you sign up for a thirty day trial plan you get a “free” FICO credit score as well as a credit report summary. You will be charged a monthly service fee if you don’t cancel your subscription before the end of the thirty days.

Bankrate.com – This site doesn’t provide you with your FICO score, but does have a free FICO score estimator based on the information in your credit report.

Your bank – While it is not the typical practice, you can request a copy of your FICO score from your banking institution. This is most often done when the individual knows that the bank has already recently conducted the inquiry, and it will already be reflected on your overall credit history. Don’t ask your bank to make one on your behalf unless you are applying for a loan, otherwise your credit history could reflect a hard credit inquiry that negatively impacts your credit score.

Just be leery of the monthly subscription services because more often than not, they are simply not needed. Your money and time would be better spent elsewhere than a monthly FICO monitoring service.

A completely free annual service is available at the website Annualcreditreport.com that allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. AnnualCreditReport.com is the official site to help consumers to obtain their free credit report, but does not provide you with FICO monitoring services.

Mortgage Refinancing Penalties

(LoanSafe.org) — There can be a number of positive results for a borrower when refinancing a mortgage such as, a lower interest rate and lower monthly payments. However, refinancing a mortgage may also be a costly decision. When refinancing, you must always consider the potential penalties that are associated with it. (more…)

Should I lock in my mortgage rate today?

(LoanSafe.org) – You have been renting for years and have recently found the home of your dreams. The mortgage agreement has been signed, you have diligently researched current interest rates, and qualified for the mortgage. Just as you thought the hard part was over and no major decisions need to be made, you will need to decide whether or not you will want to lock in the today’s interest rate. (more…)

Where can I find general information about assistance for victims of hurricanes?

(Source: HUD) – HUD has general information about recovery assistance for victims of hurricanes on the following HUD website:  http://bit.ly/FHADisaster

If your home has been affected by a natural disaster (hurricane, flood, tornado, wildfire, etc.) it is important to identify the resources available to assist in your recovery. Most federal disaster recovery efforts are triggered by the designation of the area as a Presidentially-declared disaster area. To obtain the latest information on available programs, eligibility criteria, and declared disasters visit the national disaster recovery site, located at: http://bit.ly/DisasterAreas

To find more information about HUD and FHA disaster relief programs, please visit the HUD disaster resources site at http://bit.ly/FHADisasters

What to Do When a Tenant Will Not Vacate?

(LoanSafe.org) — If you are landlord, you might one day be asking yourself, “how do I evict my tenant?” It may sound cold hearted at first, but there are many reasons why you might have to eventually evict a tenant. Whether it be because they owe you a lot of money in rent, or because you need that extra room back for your new baby daughter’s room, there are certain processes to complete an eviction. Landlords should keep in mind, just because you tell them to leave doesn’t mean they will and you will need to make sure you complete the eviction legally.

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How Hurricane Sandy May Potentially Effect Your Refinance

This is a message I am sending to my clients at WJ Bradley, but this information will apply to most all blowers who may be in the process of any type of a loan or mortgage. The effects of Hurricane Sandy are creating difficulty in our funding process, which we need to communicate to our borrowers.

  • The bond market remains closed.
  • Fannie Mae and Freddie Mac have communicated a closure to last the next 2-3 days, and Morgan Stanley, UBS, Bank of New York
  • Banks that support our warehouse lines and our ability to fund — are either closed or functioning on limited staff based on their own disaster recovery/business resumption plans.
  • In addition, Fedex and UPS deliveries, nation-wide, have been delayed or stopped outright due to the effects of the storm, which is causing delays in our receiving final docs and loan collateral to support fundings.

While we continue to fund loans, our capability to do so has been strained due to these factors.

Fundings for today and tomorrow will be managed as follows:

We are working aggressively with our warehouse lenders to ensure we minimize the storm’s impact; however there will be a number of refinance transactions that get pushed into next month.  While we’re certain that this will cause difficulties with your clients and closing agents, the Company will roll lock expirations and will protect customer / originator / branch pricing from the impacts of the increased G-Fee as a result of the delays over these next few days.

As for locks – The Company was proactive with its hedging and will continue to accept lock requests even with the market closed.*  However, to the extent the markets remain closed for longer than expected or if lock volume exceeds expectations, we may be forced to suspend locks until the market re-opens. We’ll keep you informed as we progress through today and tomorrow.

We understand the stress this causes, and we are thankful that these delays represent the extent of our difficulties. We extend our best wishes and prayers for those directly affected by this disaster.

If you have any questions regarding this, please don’t hesitate to ask.

Stand by for the jobs report coming out late this week to see how interest rates will be impacted. I believe that interest rates will hit all time lows again late this week and early next. If you haven’t locked in your interest rate, now might just be the time!

Erik Sandstrom
Office: 858-217-5756
Mobile: 619-379-8999
erik.sandstrom@wjbradley.com
www.LoansReduced.com

What Do You Need to Get a PayDay Loan?

(LoanSafe.org) — Have bad credit? Don’t have a credit card? These are often two major problems for people who need quick cash in emergency situations. In an emergency situation like an unexpected hospital bill, you will need cash fast. For a lot of people, these emergency situations can happen before we get our paychecks. In these situations many people tend to pursue payday loans. (more…)

How often can I check credit scores without a penalty?

Are you concerned about your credit rating and unsure if checking it repeatedly will affect your score? You’re not alone. Many people have possibly heard the same things that you have – that repeated credit checks will lower your credit scores. This is true, but do not become a worry wart over your credit and cause yourself unneeded stress. You should only check your credit report at least once a year to correct errors and detect unauthorized activity.  But if you must keep an eye on your credit for personal reasons or you are looking to make a big purchase soon, then you should pay close attention to your credit.

What you need to understand is that there are two distinct differences in the types of credit checks that will determine if this is true or not – hard vs. soft credit report checks. (more…)

How to Monitor My FICO Score

Your FICO score, named after Fair, Isaac and Company (the business that is known for developing the most popular credit scoring equations), is a summary of your credit history. This summary includes reports from the three major reporting bureaus: Equifax, TransUnion, and Experian. Your FICO score indicates to potential lenders how much of a risk you pose, and includes things such as available credit, late payment reports, and any outstanding and unresolved balances.

Scores can range from 300 to 850 points. The higher your score is, the less risk you pose in the eyes of creditors. On average, if your score is lower than 620 you will be paying a premium in interest rates, if you can secure loans at all. The lowest interest rates are usually reserved for individuals who score higher than 760 points.

The 5 Categories of Your FICO Score

In order to monitor your FICO score it is important to understand the 5 basic categories that contribute to the overall credit history summary.

Payment History = 35%

Late payments on those credit cards and loans can have the biggest impact on your FICO score (not including bankruptcy or things such as liens). Your score in this category will also be impacted by how often and how recently you are late on your payments.

Outstanding Balances = 30%

If you are maxed out on your credit cards and have a long history of not being able to pay off your cards in full, you are going to be lowering your outstanding balances score. These types of activities demonstrate that you are financially strained and a high loan risk.

Length of Credit History = 15%

Potential lenders want to see a long, solid history of repayment and positive credit in this category. The length of time you’ve have credit accounts in good standing will influence the points you receive. This is why you might hear people say that it is a good idea to have credit cards even if you don’t use them as it establishes your credit history.

New Credit = 10%

If you have just applied for and opened several new credit accounts, you will be considered a much higher risk, especially if your overall credit history is relatively short.

Types of Credit = 10%

This portion of your score is a summary of the different types of accounts you have – credit cards, auto loans, mortgage loans, etc.

Options for Monitoring My FICO Score

Now that you understand a bit more about what makes up your overall FICO score you can proactively do two things: check your actual FICO score and work to improve your credit rating. There are several agencies that offer reports on your FICO score. Two popular services include myFICO and CreditCheck Total. The services from myFICO (typically an inexpensive subscription) includes two free score reports each year with your current FICO score. You can also use myFICO to request notification any time there is a change to your report (note that myFICO only files reports based on the Equifax report). Services such as CreditCheck Total can be more expensive than myFICO, but they can also be more comprehensive as they draw from all three credit reporting bureaus.

If you just need a free copy of your credit report, you can always use the completely free annual service at the website Annualcreditreport.com that allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. AnnualCreditReport.com is the official site to help consumers to obtain their free credit report, but does not provide you with FICO monitoring services.

What do banks use to check credit scores?

If you are looking to secure a loan such as a mortgage from your bank or even begin a new checking account you can be certain that your credit scores will be checked and thoroughly reviewed. Your credit score will indicate to the bank the amount of risk you bring to their company. Think of your credit profile as your character reference in regards to how you manage your money and debts.

Credit Reports

There are three main credit reporting bureaus your bank might use when checking your credit history. These include Equifax, TransUnion, and Experian. The Patriot Act requires that all banks verify the identities of individuals who apply to become new customers. Known as the customer identification program (CIP), banks must check your name, address, birthdate, and other information pertaining to your identity. This verification process is considered a soft credit check if anything at all and will not negatively affect your credit score.

ChexSystems

One of the more common ways that banks assess your credit history is through ChexSystems, an verification system used for keeping track of consumers who don’t appropriately use their deposit accounts. The information gathered by ChexSystems typically covers a time period of five years and is used to help banks protect themselves against high risk customers. If your banking institution uses ChexSystem, they can determine if you have overdrawn any account in the past five years, have indications of fraud associated with any of your accounts, or have attempted to manipulate a savings account.

Not all banking institutions use the same reporting agencies, and not all count as hard credit checks – those checks that can negatively affect your credit score.

Protecting Your Banking Options

There are several steps you can take to ensure that when a bank runs a credit check on you that the report is as positive as possible.

•    If you are looking to establish a new relationship with a new bank, begin by first checking your own credit history. Not only can you request, for free each year, your credit report from one of the three main reporting bureaus, but you can also request a free report from ChexSystems. This is an important step because this is the report that many banks are likely to use when opening new accounts.

•    If you find any discrepancies in the report, contact ChexSystems as well as the institutions that have false or misleading claims against you.

•    If there are outstanding claims against any prior accounts, once you reconcile these the banks have to register them as “paid” on your report.

Do apartment credit checks lower your credit score?

Question: I have been searching for apartments and each one is asking for a separate application with a credit check as well. Thus far, I have applied for three and am worried about how this may affect my credit. Will these credit checks lower my credit score?

Answer: The answer to that question depends on your landlord. Two types of credit checks exist – hard and soft – and the choice your potential landlord makes will determine if your application for that new apartment lowers the score on your credit report.

Hard Credit Checks for Rental Agreements

If you’re completing an application for that new apartment and the rental management company requests your permission to run a credit check as part of the process, it is important to know whether or not it will be a hard credit check. These types of credit checks indicate to reporting bureaus that you are possibly going to be in debt, in this case for a lease agreement. This makes you an increased financial risk, and it can lower your credit score.

When hard credit checks are run, they typically only lower your overall credit rating by five points or less. The good news is that these hard credit checks only remain your credit report for two years, and only usually affect your credit rating for twelve months.

Soft Credit Checks for Rental Agreements

Some landlords only perform soft credit checks as part of the screening process for your lease agreement. These credit checks can be seen on your credit report, but they do not negatively impact your credit rating. The inquiry will only show who pulled your credit history and the date that it was pulled.

Protecting Credit Ratings while Renting

If you are concerned about your credit score as you search and apply for that new apartment, there are several steps you can take to help protect your credit history and still get you that new place to call home.

  • Check your credit history before applying for the apartment. If you see that your credit history is relatively positive, it increases the chances that you will be able to secure a lease agreement. Those five points you might lose as the result of a hard credit check should not be detrimental to your future – they will only last for twelve months, which is about the time-frame of a rental agreement.
  • If you find negative reports on your credit history, do whatever you can to rectify the situations before making any more applications for borrowing purposes.
  • Inquire with potential landlords as to what type of credit check they will be running as part of the application process. Some landlords will agree to use your own credit report, as long as it is current and complete. When you make an inquiry on your own to see your credit report it is only considered a soft credit check and it will not lower your credit score.

How to Get a Personal Loan

A personal loan from a lending institution typically consists of two forms; a secured and unsecured personal loan. A secured personal loan generally requires collateral from the borrower and allows lower fees and more favorable interest rates. While an unsecured loan is granted without collateral and will come with a higher interest rate than a secured loan. (more…)

How to Get a Bad Credit Car Loan

One main factor that any lender will look at when applying for an automobile loan is the borrower’s credit rating, especially when the applicant has less than perfect credit. Most people believe that having a poor credit rating will prohibit them from obtaining financing for a vehicle, and a lot of times the only chance at qualifying for a loan will be at a local “buy here pay here” auto lot. (more…)