Monday, October 28, 2013
Buying a car is a big ticket item. You need to make sure you get the best vehicle possible for your needs and within your budget. This can be difficult when in the presence of a very convincing and very determined car salesman, who may have his commission payment as his best interest. It is absolutely vital that you do your homework and that you do it thoroughly. Research, research, research!
Check out all the features that each car offers against the price. Sometimes buying a more expensive car with more features will actually give you the best value for money. What will you use the car for? Are you looking for a small city runabout that is easy to park and has excellent fuel economy? Or do you want to the car to serve a dual purpose, like being able to go on and off road so you can takethe family for camping holidays? Is comfort important to you? What about space and a roomy boot?
Be really clear on what your needs are and then set about finding cars that fit the bill. That way you won’t end up driving home a convertible sports car when you really needed the room of Land Rover’s luxury SUV. That may be an extreme example, but the truth is you can be pushed into an impulse purchase that does not meet your needs, especially at the hands of a professional salesperson.
By all means visit car dealerships to find out everything you can about various makes and models, but be sure you know exactly which car you want before you buy. Think about size; how many passengers you will have? If you don’t have many a small car will be much cheaper to run. Fuel economy should play an important role in your decision. Safety too will be a big consideration; check for things like the number of airbags, reversing cameras and sensors.
Accessories can greatly increase driving pleasure, but be clear on what accessories you really need. Don’t be swayed by a whole host of features that you will not use. Check out accessory packages carefully; find out what is included and decide whether you really need it all. Unwanted accessories can bump up the price considerably and while they sound good when being recited to you in an impressive list, you may never use them.
If you are financing your purchase this is a very important consideration. Check out payment plans thoroughly. Find the most competitive interest rate you can. Watch for loan fees and other fine print obligations. Pay attention! You will usually get better interest rates at a bank or building society.
Many car dealers will try to sell you insurance with your car. Remember, for them it is all about commission payments, so be prepared. Do your research beforehand and know the best priced insurance you can get independently. And if they can’t match it or better it, say no.
Monday, October 7, 2013
Like it or not, a credit score is the language of lending approval for the consumer and for small businesses. It provides a standardized way that lenders can quickly evaluate and filter out loan applicants for all types of credit products ranging from revolving lines of credit to mortgages, and its not going away any time soon. In fact, credit scores are now expanding in their use beyond just financial tools as well. Here's an introduction to get you familiar with the concept.
For decades, credit scores have followed the FICO model, a mathematical model developed by the Fair Isaac Corporation. The formula gives different points to different types of loans based on a variety of factors, including how they have been handled by the consumer, the rate of successful payment, the age of the loan, the amount of credit still available from existing lenders, and other negative factors such as foreclosure or bankruptcy if present. All of these elements add up to a total which represent a person’s raw credit score. Lenders then decide which point level is desired, which is acceptable, and which “don’t make the cut” and should be rejected.
Credit scores have long been used to evaluate borrowers in a way that provides a solid defense against accusations of discrimination. Instead of having to prove the bank did it’s research to objectively provide loans, lenders can simply sit back and put the burden on the consumer for not keeping his score high enough.
However, credit scores are now being found elsewhere as well. Because a the score is a symbol of a person’s ability to manage his finances, which requires discipline and often leads to financial success, people are beginning to put weight on scores as a way to evaluate someone's character, especially when deciding if a person should be trusted with responsibility. Areas where credit scores are being seen as a gauge include:
- Rentals and leases – Landlords and property management companies frequently believe there’s a direct correlation between a credit score and how reliable a tenant will be in paying rent timely. As a result, scores are often being used for tenancy approvals.
- Security clearances – Those who can’t manage their finances well can be seen as a potential risk for blackmailing and temptation to disclose data or products for easy money.
- Hiring – Companies have long known application forms and interviews don’t tell very much about a job candidate. However, credit scores can often signal a disciplined, reliable person versus a poor candidate that shouldn’t be hired.
The best ways to improve a personal credit score are usually controllable. They involve making debt payments in a timely manner or, even better, paying off debt completely. Multiple accounts should also be streamlined to the oldest, largest accounts, with a preference for collateralized debt versus open-ended revolving lines of credit (i.e. credit cards). This shows long-term stability and successful debt management, which scores better. Consumers should also regularly vet their credit history to find and remove any mistakes which can negatively score downward.
A credit score doesn't have to be a thing feared, but it does take work to maintain and monitor. A consumer who understands this fact gains an upper hand on the scoring system, understanding how to use it.