Finances

The good thing about bad credit is that you can fix it. If you start now, over time, your bad credit can turn into good credit, and you could qualify for the loans you want at the rates you want. The most important aspect of rebuilding your credit after it has been damaged is showing lenders and creditors that you are serious about repaying your debt and that you can be a reliable borrower over a significant period of time.

Negative account histories remain on your credit report for up to 7 to 10 years, depending on the type of action. Bankruptcy can stay on your report for up to 10 years, and collections drop off after 7 years.

Advice varies widely as to the best methods to rebuild your credit. Some points most experts agree on include:

Over the course of the past two months, readers have brought to my attention that there is a steep learning curve for investment terminology. That’s why the focus of this month’s Beginning Investor column will be investment terminology. The world of finance can be complex. This article doesn’t intend to provide an all-encompassing set of definitions, but rather, as a general guide to help you understand the most frequently used financial terms. There’s no way we could cover everything - and I’m sure that we wont - but this should clarify some things for those new to investing. This month, we’ll be looking at stock-related words in particular.

Stock

Let’s start with the absolute basics. The most common type of investment is in the form of stock. Stock is an equity security - that is, when you buy stock, you are purchasing a piece of that company. You are part owner, and therefore entitled to help select the people who run the company from day to day. Money is made from stocks either by dividends, or capital gains.

Annual Report / 10-K

Finding the best mortgage lender online is simply a matter of doing some smart shopping. Begin by gathering your financial information, and then request quotes from several lenders. Compare the rates and fees for each quote to find the best mortgage lender.

Online Mortgage Lenders

Online mortgage lenders bring you all the services of a mortgage broker with the convenience of the internet. With online lenders though, you can quickly compare rates without feeling committed to a loan. Most mortgage loan information can be found on a lender’s website, but you can also contact a representative through email or the phone.

Start Prepared

Start prepared by gathering all your financial information in one spot for easy access. Bank statements and previous tax records will usually be all you need. Also, determine how much you would like to borrow and use as a down payment.

Gather Quotes

Online mortgage lenders provide almost instant mortgage loan quotes by asking you basic questions about your income, the loan amount, and your credit rating. These types of quotes will allow you to quickly compare rates and come up with a handful of potential mortgage lenders.

If you find yourself looking for a loan, you’ll likely be getting a secured personal loan. A secured personal loan can be used for a variety of reasons, from paying off student fees to buying a new car? but they all have a few things in common. Any secured personal loan that you get will require you to put down a security deposit in the form of property (which is known as collateral), which helps to assure the lender that they’ll be getting their money back. Collateral is also a good incentive for paying back your loan, after all, you do not want the lender to have to sell your property because you didn’t pay them what you owed.

Examples of a secured personal loan

Any loan that you take out for yourself that has some sort of property attached to it is a secured personal loan. You could be borrowing money from a bank and using gold jewelry as collateral for the loan, or you could be purchasing a new house with a mortgage through a finance company? either way, if you don’t pay back what you owe then you’re going to lose the property in question. Automotive financing, title loans, and pawn shops also fall into this category, though pawn shops are a bit more of an extreme example of the secured personal loan.

Is identity theft really that serious? Thousands of people every year are victims of this terrible crime. Thieves use your personal information to commit fraud or other crimes in your name and can cause significant credit damage. Identifying information taken without your permission, such as your Social Security number (SSN), credit card number, or your drivers’ license, can be used to "steal your identity."

The effects of identity theft are much greater than most people suspect. Victims can spend years trying to re-establish their credit and their good names. The cost of this process, both financially and emotionally, is often quite high. But there are options (see below).

Identity theft is a serious crime. The Federal Trade Commission reports identity theft as its number one source of complaints by consumers. The average victim pays more than $1,000 repairing the damage and loses an average of $6,767. A recent study by CBS News claims that a thief steals someone’s identity "every 79 seconds."2 An estimated 750,000 people are victimized each year.

A 2nd mortgage loan after a bankruptcy is possible in as little as two years. Refinancing your mortgage can help you make needed home improvements or pay off high interest debt. Refinancing with adverse credit history requires savvy shopping on your part to ensure that you get a reasonable 2nd mortgage loan.

Building Good Credit

After a bankruptcy, take the next two years to rebuild your credit history. By making regular payments and building up cash reserves through a savings account or saving bonds, you will put yourself in a better position to refinance your home.

Sub Prime Brokers

Your credit report will list your bankruptcy for seven to ten years, so you will need to go through a sub prime mortgage broker. A sub prime mortgage broker offers loans at slightly higher rates to high risk lenders.

Sub prime brokers vary in the amount of fees and points they will charge. With adverse credit, you should expect to pay a couple of points higher than a traditional loan. The best way to ensure you are getting a competitive rate is to shop around.

Searching For Rates

ID theft is a major consumer concern, though there is apparently much confusion about proactive protection initiatives and apparently safe and unsafe spending behaviour. For example, many consumers remain reluctant about shopping online, but they may still give out personal details over the phone in a cold call, or they may have redundant or dormant accounts and financial products which are susceptible to fraud.

If reducing fraud vulnerability wasn’t sufficiently difficult already, consumers are now being offered anti-ID theft services and ID protection insurance by banks, insurance companies and credit reference agencies. There is considerable debate around such policies however, as they do not offer full financial compensation. In The Observer last week, Richard Brown, Chief Executive of consumer finance site moneynet ( http://www.moneynet.co.uk ) stated that:

"Few, if any, of them appear to offer insurance protection against actual financial loss in the event that a credit company, for example, refuses to cover the loss ? and this is what consumers really need. While ID protection services may have a degree of value, they shouldn’t be used as a reason to take an otherwise uncompetitive product."

Bankruptcy laws give debtors a way to resolve debt by dividing their assets among their various creditors and in some cases will allow debtors to be freed of outstanding debts that cannot be paid, even after the division of assets. For individuals who find themselves unable to pay their debts, bankruptcy can be a viable option. As a debtor, you are entitled to file for bankruptcy. There have been recent changes to bankruptcy laws that may affect your ability to discharge your debts without credit counseling, but individuals who have found themselves unable to pay their debts can still file bankruptcy and be freed of outstanding debts.

Chapter 7 bankruptcy is normally used by individuals wanting to rid themselves of all accumulated debt, and is the most frequently used method of filing bankruptcy. Businesses who wish to completely liquidate assets and close permanently can also file Chapter 7 bankruptcy. Under Chapter 7, individuals are allowed to keep certain property such as their home and perhaps their vehicle, but may still lose some property in the proceedings. During the course of the bankruptcy proceedings, the debtor’s assets are controlled by a trustee and will be divided among the various creditors as the trustee sees fit. After the bankruptcy has been discharged, control of any remaining property is placed back in the hands of the debtor and all outstanding debts will have been removed.

The perfect company - it’s the holy grail of the investment world. The company that will make its initial investment hundreds of times over. It’s what everyone shoots for. To have bought Microsoft when it first went public… It’s how fortunes are made. What does make “the perfect company”?

The search for the perfect company is not the pursuit of day-traders or market insiders. They’re looking for quick and dirty returns. High speed, high risk, high stress. No, the perfect company is more along the lines of what an individual investor - like you or I - would look for. I don’t want to have to have my hand on my mouse until the closing bell just to make sure I don’t lose my shirt. I want to buy a position in a company and know that regardless of what happens today or tomorrow, eight months from now, my portfolio will be worth more than today. I’m not talking about a laissez-faire approach to investing - far from it. What I’m talking about does take a time investment as well, in research, understanding the ins and outs of a company, but one that will be paid off in spades.