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Could your credit score be ruined by one typo? | Regional

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As we rapidly went from a healthy economy to worry about paying bills, more than ever, people need good credit. But three out of five Americans have inaccuracies on their credit reports that could make it harder to qualify for a loan or even a credit card.

Most people don’t know that they have a federal right to clean inaccuracies from their credit reports.

A single data entry mistake may cause you to pay higher interest rates and make it difficult to qualify for a home or car loan, or even get a credit card.

The Fair Credit Reporting Act gives you the right to investigate negative accounts on your credit report. If an account is not reported 100% accurately, you have the legal right to get it expunged.

Errors might include an inaccurate payment amount, which can affect your debt-to-income ratio. Or, your report might have negative accounts that aren’t even yours! Expunging these inaccurate negative accounts and moving credit scores from the 500s to the 700s enables people to qualify for homes, new cars, business loans and credit cards sooner. Persistence is essential.

Credit repair frees up your credit so you can get approved for things you want. The hardest thing is finding what’s inaccurate about a negative account. But there’s nearly always something.

What is a good credit score?

The lowest credit score you can have is 350; the highest is 850. If your credit score starts with a 3, 4, 5 or 6, you have negative credit. Credit doesn’t begin to get positive until you hit 680.

To have great credit, you need to be in the 700s. No one needs 800 or better. That’s more for bragging rights.

What affects your credit score?

Debt collections, repossessions, foreclosures, judgments, tax liens and bankruptcies can all cause your credit score to decline. But most people are shocked to learn that late payments should be feared the most. Late payments can’t be fixed and can drop anyone’s credit by as much as 125 points. That’s more than a bankruptcy! You’ve got to make 24 months in a row of on-time payments for a late payment to correct itself.

Credit scores increase according to how many positive accounts you have, after the inaccurate negative accounts are deleted. Ideally, you want at least five positive primary accounts in your name. You get points for paying on time and having a healthy mix of credit. In the credit world, history is also a huge part of your score. You’re more apt to get approved for a larger loan amount when financial institutions can see a track record of borrowing money and paying it back on time.

How does credit repair work?

If you’ve tried credit repair in the past, you may know that most companies dispute only two to three accounts per month. That pace can be discouraging. We prefer a more aggressive three-round burst strategy because we don’t believe in dragging out the process.

My team has learned that sending all the inaccurate negative accounts to the credit bureaus along with our legal documents is more efficient. We do this three times, with each round lasting 40 days. With this method, we will often see 50% of the inaccuracies on negative accounts deleted in the first round and raise credit scores by as much as 100 points. Once we get 90% of the inaccurate negative accounts deleted, we start using credit-building products, which can increase scores another 50 to 100 points.

Understand that removing inaccurate negative accounts from your credit report is not a form of debt consolidation. You still owe your legitimate debts.

How to spot the credit repair scammers

The credit repair industry is on fire. That has opened the floodgates for scammers who take the money and run. It’s illegal to ask for all the money up front before they do the work, so insist on affordable monthly installments. To find a reputable company, look at the provider’s education and industry experience. There are a lot of people doing credit repair without a professional background.

Also, check the reviews and confirm that they are registered with the Better Business Bureau. Look for a company that offers ongoing continuing education so you can learn how to manage your credit score moving forward.

What other strategies can improve your credit score?

• Have your own credit, separate from their spouse. A lending institution may look only at the one with the lower credit score, so you don’t want to rely on someone else for your own rating.

• Don’t max out your credit cards. Keep your balance below 30% of the approved amount.

• Keep a healthy mix of credit. That may include a revolving line such as a credit card, and an installment loan.

We all need credit to survive. I teach people how to make the credit system work for them instead of against them. We offer get a credit analysis at alexmillercreditreport.com.

Alex Miller is founder of Alex Miller Credit Repair, based in Houston, Texas.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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