Connect with us

News

Real Debt Advice From People Who Paid Off Thousands

Published

on

Most Americans are paying off some kind of debt, whether you’ve got student loans, a car loan, a mortgage or high-interest credit card debt.

Sometimes, debt is part of a long-term financial plan (like if you hope to one day make money on the house you’re renovating). But other times, we find ourselves in debt because of unexpected circumstances, or simply because it’s tough to make ends meet.

Juggling all this debt is one reason why so many people are stressed about money. But there are steps that people can take to break the cycle, and those who have managed to put a big dent in their debt will tell you that it is usually worth a little sacrifice.

Below, CNBC Select spoke with four people who paid off a lot of debt to get their tips on how to stay motivated and find success.

Develop new skills to make extra money

Katia Chesnok was working a 9-to-5 job at a bank when her credit card debt was sent to collections. 

It was a wake-up call: She realized she couldn’t ignore her debt any longer, but she needed to find a way to earn more money fast.

Thanks to the advice of her colleague, Chesnok enrolled in a free marketing certificate course through Google’s Digital Garage. Within a month, she’d completed three certificates (absolutely free) and had the skills she needed to start a side hustle helping local businesses generate more online traffic and revenue.

“There’s a limit to how much we can save every month, but there’s no limit on how much we can earn,” says Chesnok. As her side hustle income grew, she was able to divert that new surplus of cash to pay off her debt.

She automated her payments every month, a trick she says is key for anyone juggling multiple jobs and bills.

“By automating my own payments, I was very consistent,” she says.

Chesnok was getting paid twice a month, on the 15th and the 30th. She called her card issuers to set up autopay near the beginning of the month so she knew the money would be there and she’d have no problem covering the bill. 

Have date night at home to save money

In 2016, Divya Sangam was credit invisible and thought she was safe from debt because she paid for everything in cash.

But she made an error while filling out her W4, and she and her partner were hit with a surprise tax bill that they couldn’t pay off right away. 

One of the couple’s favorite hobbies is going to the movies, especially to their local theaters in New Jersey that show movies in all three languages they speak — English, Hindi and Tami.

However, when they wound up in debt, the couple reconsidered how much they were spending on date nights. They opted to stay home and stream movies on Amazon Prime and Netflix instead.

After they paid off the debt, Sangam and her partner have decided to maintain their tighter budget: “Going to one movie a month seems like such an indulgence now,” she says. “Especially to our favorite AMC dine-in theater where you can relax on the recliner or have a burger and milkshake brought to your seat.”

With the extra savings from their new routine, the couple is padding their emergency fund and saving up for a down payment.

Still do what makes you happy

Entrepreneur Michelle Jackson has paid off over $60,000 of credit card and loan debt since 2012. When she started, the debt felt like “a mountain,” and she knew that if she was going to tackle it, she couldn’t make the journey miserable. 

“I knew that if I tried to eliminate everything that I enjoyed from my life in order to achieve this goal, I would fail,” Jackson says. “So, I decided to be honest about the things that I enjoyed as I began.”

Jackson continued ordering avocado toast, she tells CNBC Select. And if you’re wondering about coffee — she kept buying that, too. However, Jackson was more discerning about when she treated herself, and she kept her coffee drinks simple, saying no to add-ons like extra espresso shots and flavors.

Jackson even traveled frequently. “Those trips helped keep me sane and reenergized me each time I felt a little low,” she recalls.

But instead of charging travel costs on a credit card, she saved up to pay for her trips in cash. She stayed at upscale hostels, rather than expensive hotels, to enjoy a unique experience on a budget.

As for self-care, Jackson still took dance classes but found ways to lower the cost by doing work-exchange programs at the studio.

“Basically, I systematically worked through my wants and figured out ways to enjoy them at the same quality while spending less,” she says.

Don’t be afraid to learn new things

Credit repair coach Shanté Harris of Financial Common Cents paid off over $50,000 of credit card debt before becoming a certified credit consultant. Now, she has expert-level knowledge about the credit industry, including how to navigate debt collections and restore badly damaged credit scores.

Paying off her debt was challenging, but Harris possesses one important quality that she credits for getting her across the finish line: teachability. 

“I wasn’t born with an 800 credit score,” says Harris. “Everyone is where they are now because they learned something, whether it was a tragic situation or just learning from college or your friends.”

You don’t have to be an expert to get yourself out of debt; you just have to be adaptable and willing to learn.

How to get started

The first step to paying off your debt is knowing exactly how much you’ve got on your plate. Pull your credit report for free at AnnualCreditReport.com to see exactly what accounts you have in your name and what you owe on each. 

It’s also important to understand how your debt is affecting your credit score. A common assumption is that if you’re in debt, your score will be bad. But actually, you can still have a good score when you’re in debt. The key is to borrow strategically and make your payments on time.

Signing up for a credit monitoring service will help you track your score and know where you stand. As you pay off your debt (especially revolving credit card debt), you’ll likely see your score improve. 

Since FICO scores are used in over 90% of lending decisions, signing up for the FICO® Basic, Advanced or Premier service will help you get a good snapshot at what lenders see. It’s also comprehensive, for when you want to apply for a big-ticket. All plans offer access to 28 versions of your FICO score, including scores for credit cards, mortgages and auto loans. Plus you’ll receive $1 million identity theft insurance and 24/7 access to U.S.-based identity theft experts who can help restore your identity if your information is compromised.

FICO® Basic, Advanced and Premier

FICO® Basic, Advanced and Premier

Information about FICO® Basic, Advanced and Premier plans have been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.

  • Cost

    $19.95 to $39.95 per month

  • Credit bureaus monitored

    Experian for Basic plan or Experian, Equifax and TransUnion for Advanced and Premier plans

  • Credit scoring model used

  • Dark web scan

    Yes, for Advanced and Premier plans

  • Identity insurance

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

TML introduces mortgages for credit impaired borrowers

Published

on

TML introduces mortgages for credit impaired borrowers

The Mortgage Lender (TML) is launching a range of residential mortgages to cater for borrowers who have suffered some form of credit issue through a change in circumstance.

 

The Lumi-branded range is available up to 75 per cent loan to value (LTV), across four categories to support customers with defaults, county court judgements (CCJs) and mortgage arrears.

The products are available for employed, self-employed and complex income applicants.

Rates start at 4.98 per cent for a two-year fix and 5.29 per cent for a five-year fix at 70 per cent loan to value and are open for loans between £25,001 and £1m.

It also offers criteria for unsecured arrears, bankruptcy and pay day loans outside that of TML’s standard range.

The lender said it was taking a pragmatic approach to the real-world experience many clients are facing and it was providing “a stepping-stone for homemovers or those remortgaging and, in some cases, credit repair”.

TML sales and product director Steve Griffiths said: “Now more than ever lenders need to have criteria that caters for a wide range of customer circumstances and recognise that the last 12 months has been financially difficult for many people.

Doug Hall director of distributor 3mc added: “We are seeing increasing numbers of customers whose financial situation has been impacted by the coronavirus pandemic who need products that are appropriate for their circumstances now.

“Through sharing our knowledge and challenges with lenders, like TML, the specialist lending sector is proving it can meet those needs in a responsible way.

“The launch of Lumi is great news for brokers and customers. It shows lenders are listening and able to respond to the market, improving customer choice and competition.”

 



Source link

Continue Reading

News

Landmark Point Predictive Fraud Study Details Record Year for Auto Loan Fraud in 2020

Published

on

SAN DIEGO–(BUSINESS WIRE)–Apr 15, 2021–

Point Predictive Inc., the San Diego-based artificial intelligence and data science company that helps lenders predict the trustworthiness of loan application information, published research detailing increased levels of attempted loan fraud in 2020, which the company believes could continue through 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210415005688/en/

US Auto Loan Fraud Reaches $7.3 Billion in 2020 (Graphic: Business Wire)

The company’s Auto Fraud Report is the auto finance industry’s most comprehensive annual assessment of application fraud risk. The 2020 edition includes unique insights about income and employment misrepresentation, identity fraud, and collateral fraud for US auto lenders, as well as the impacts of the pandemic on this important sector of the economy.

“2020 was a pivotal year for fraud risk, with auto loan fraud reaching $7.3 billion of originations,” said Frank McKenna, Chief Fraud Strategist for Point Predictive. “The pandemic heightened fear and anxiety and likely made consumers more vulnerable to scams and frauds. The ensuing economic turmoil caused an immediate and dramatic rise in unemployment, increasing some people’s willingness to engage in loan fraud. Furthermore, a flood of stimulus money and generous lender forbearance programs simultaneously increased the level of fraud while delaying lenders’ ability to recognize it.”

Many lenders have praised Point Predictive’s research due to the breadth, detail, and scope of the analysis. This year’s analysis drew from the Point Predictive anti-fraud Consortium dataset, a secure and private data science collaboration among dozens of US lenders. The Consortium now includes over 94 million loan applications containing 85 individual fields of data on each application. Every month, activity from 45,000 dealerships contributes to a view of vehicle financing that spans nearly all 157,000 US auto dealers. This data set tracks over $2.7 billion in known early payment default and the company’s machine learning techniques have generated more than 10 billion risk attributes, offering unparalleled insight into mostly hidden risk trends and the ability to predict more fraud than ever before.

“Consortium data is deeper and more predictive of risk than any credit bureau or public records source,” said McKenna. He continued, “This vast and deeply-specific data on each loan application gave us incredible clarity into fraud risk that lenders are exposed to. And one thing is for sure: the risk of fraud to auto lenders rose dramatically as the pandemic unfolded.”

One of the most significant trends addressed by the analysis was the marked uptick in income and employment misrepresentation. As the lockdowns began, Consortium members were suddenly impacted by a 100% year-over-year increase of falsified income and employment claims on auto loan applications, a level of risk which continued throughout the year. Detected among the trend was the use of over 300 new, but bogus employers each month, used by applicants to fraudulently convince lenders of steady sources of income.

Completing a complex risk picture for fraud managers, the report notes that scams like synthetic identity creation, credit washing, and even lawful impacts of credit repair efforts complicate efforts by lenders to guard against fraud in order to more quickly serve trustworthy borrowers.

“As a lender, you have to keep your guard up at all times. No assumptions can be made about any loan application until every single one clears a satisfactory fraud review,” said Steve Christensen, Executive Vice President of Elite Acceptance Corp. “The analysis and outlook from Point Predictive is essential reading in order to be prepared. For Elite Acceptance, the crucial trends to get ahead of are the dealer implications, such as a sale price inflation of over 10% on the top 10 models,” said Christensen. He concluded, “I credit Point Predictive for exposing the truth behind what is presented to lenders by dealers and borrowers.”

Additionally, the analysis of auto loan fraud in 2020 covers other concerning trends, including clusters of fraud in certain states and metropolitan statistical areas (MSAs), new tactics used by self-employed borrowers, patterns of suspicious and ambiguous naming conventions for fake employers, synthetic identity centers, Social Security number manipulation tactics, vehicles subjected to inflated pricing, and the systematic disputing of multiple negative tradelines on a credit report in order to make the borrower appear to be more creditworthy. Power booking is also on the rise, wherein dealers inflate sale prices and falsify down payments to increase the chances of loan approval.

The Auto Fraud Report concludes with recommendations from Point Predictive’s fraud experts for staying ahead of fraud in 2021. Tim Grace, Chairman and CEO of Point Predictive, encourages lenders to bolster fraud defenses and staff. “In times of crisis, there is often a need to reduce costs to stay profitable amidst decreasing volumes. But this is a mistake. The rate of fraud and risk will increase over the next 18 months, making fraud prevention and staffing one of the most important investments you can make in maintaining the health of your portfolio. Resist the urge to cut costs where it matters most.”

Auto, mortgage, and student lenders who are interested in receiving a copy of Point Predictive’s 2020 Annual Auto Fraud Report should contact [email protected].

About Point Predictive Inc.

Point Predictive enables lenders to fund more loans simply with a unique combination of Artificial and Natural Intelligence™ (Ai+Ni™) to power machine learning technology solutions. Point Predictive helps automotive, mortgage, retail and personal loan finance companies to identify the consumer applications with truthful and reliable information without the intense interrogation and verification of data caused by lower tech solutions currently in use. Highly regarded as the most trusted fraud and misrepresentation analytic solution providers, Point Predictive has transformed that trust to enable lenders to fund more loans to more consumers simply. Point Predictive uses big data powerfully orchestrated from millions of examples of true and falsified loan applications, billions of derived proprietary data elements, and scientifically selected third-party data sources to build powerful machine learning models with the added natural intelligence of human experience.

Located in San Diego, California, more information about Point Predictive can be found at www.PointPredictive.com.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210415005688/en/

CONTACT: Dennis Behrman

VP of Marketing & Growth, Point Predictive

858-227-6644

[email protected]

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: TECHNOLOGY FINANCE AUTOMOTIVE GENERAL AUTOMOTIVE SECURITY BANKING PROFESSIONAL SERVICES SOFTWARE DATA MANAGEMENT

SOURCE: Point Predictive Inc.

Copyright Business Wire 2021.

PUB: 04/15/2021 10:57 AM/DISC: 04/15/2021 10:57 AM

http://www.businesswire.com/news/home/20210415005688/en



Source link

Continue Reading

News

TML announce launch of new residential Lumi products

Published

on

Steve Griffiths TML





A new, Lumi-branded, residential product has been launched by The Mortgage Lender, following a rise in demand from borrowers who have been financially impacted by the pandemic.

TML say that the range is available up to 75% loan to value, across four Lumi categories and caters for customers with defaults, CCJs, and mortgage arrears. It also offers enhanced credit criteria for unsecured arrears, bankruptcy and payday loans when compared to TML’s core range.

Lumi products are available for employed, self-employed and complex income applicants. The minimum loan is £25,001 and the maximum loan is £1m with rates starting at 4.98% for a two-year fix and 5.29% for a five-year fix at 70% loan to value.

Steve Griffiths, The Mortgage Lender sales and product director, said: “Now more than ever lenders need to have criteria that caters for a wide range of customer circumstances and recognise that the last 12 months has been financially difficult for many people.

“Our Lumi range, which is available through specialist distributors, takes a pragmatic approach to the real-world experience many of our broker partners are presented with when they are sourcing a mortgage for their clients.

“It offers fair rates combined with a flexible approach to underwriting that provides a stepping-stone for home-movers or those remortgaging and, in some cases, credit repair.”

Doug Hall, 3mc director, adds: “We are seeing increasing numbers of customers whose financial situation has been impacted by the Coronavirus pandemic who need products that are appropriate for their circumstances now.

“Through sharing our knowledge and challenges with lenders, like TML, the specialist lending sector is proving it can meet those needs in a responsible way. The launch of Lumi is great news for brokers and customers. It shows lenders are listening and able to respond to the market, improving customer choice and competition.”

(function(d, s, id){ var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) {return;} js = d.createElement(s); js.id = id; js.src = "https://connect.facebook.net/en_US/sdk.js"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk'));

Source link

Continue Reading

Trending