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What Exactly Is Bad Credit 💲 Geneva Lunch



Are you struggling with bad credit? If so, you’re not alone. In 2021, 11.1 percent of Americans have a “Poor” FICO score.

This impacts your ability to qualify for loans. The credit score agencies vary between states. Yet, 90 percent of U.S. credit decisions rely on FICO scores.

Keep reading to learn more about credit scores and how to work toward a better score.

The Consequences of a Bad Credit Score?

The Consequences of a Bad Credit Score

Lenders use The Fair Isaac Corporation (FICO) and other factors to assess a borrower’s risk. FICO considers a credit score between 300 and 579 as “very poor”.

Lenders may deny your application. Or, they may extend credit but charge extra fees or require a deposit.

Auto and home insurance premiums may be higher. Utility companies often charge deposits before connecting services. Personal loans and credit cards have set higher interest rates.

How to Calculate Your Credit Score

FICO evaluates five different areas and gives each category a different weight. The following explains the FICO credit score.

Payment History (35 percent)

They check for on-time credit payments, a history of bankruptcy, or collection actions. The company also counts the number of late or missed payments.

Total Money Owed (30 percent)

FICO compares the ratio of debt to the amount of available credit. Maxing out all your credit cards will lower your score.

Years of Credit History (15 percent)

In general, the longer you’ve used credit and consistently paid it off, the better your score. Short credit histories are okay if you’re making on-time payments.

Mix of Credit (10 percent)

It’s better to have several credit accounts. This includes credit cards, auto loans, mortgages, and loans, for example.

New Credit (10 percent)

If you recently opened a lot of new credit accounts, you’re seen as a risk. This lowers your FICO score.

Financial Goals

Financial Goals

It’s key to know that credit use and payment history are the biggest factors affecting your score. Strive to use less than 30 percent of your credit limits. The following are three approaches to raising your credit score.

Secured Credit Card

OpenSky® Secure Visa® Credit Card doesn’t require a credit check. Capital One® offers a Secured card after a deposit of $49, $99, or $200 based on your score. Make small purchases on the card and pay it off on time each month.

Credit-Builder Loans

Often credit unions or community banks offer credit-builder loans. First, you pay the total amount of the “loan”. Once paid, they give you the money and report your payments to the major credit agencies.

Be an Authorized User

Do you know someone with a good on-time payment history and low credit? Ask them to let you be an authorized user on their account.

This gives you a credit card to use. Keep a low balance and pay it off every month on time.

Talk to a Financial Advisor

Consider talking to a financial advisor. For example, this resource agency offers a 4-step process.

They provide a free analysis and consultation to discuss your financial goals. If you sign up with their service, they’ll complete a full audit of your credit reports.

Next, they add primary tradelines to your credit reports. This can include rent payments and revolving accounts.

They’ll also increase your credit limits. Last, they help you take steps to improve your score which may include getting a loan.

Looking to Raise Your Credit Score?

Looking to Raise Your Credit Score

Improving your bad credit score takes work. You must reduce expenses and save money. This site has articles to help meet these goals.

Bookmark our page today to keep up with the latest tips.

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Are Sallie Mae Student Loans Federal or Private?



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



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



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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