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Credit needed for real estate mortgage financing differs from credit needed for consumer loans. If you need help getting a home mortgage, these credit tips will help you.

Contrary to what many credit advisors say, paying off credit cards each month is not always the best action to take. When making credit card payments, don’t pay the balance in full each month — let a little roll over. Carry a balance on your credit card every other month –as little as a dollar. Paying balances in full does not increase your credit score; paying balances in full may in fact lower your credit score. Accounts with zero balances do not compute significantly in your total score. For instance, a credit card with a perfect payment history and no balance will not raise your credit score as much as a credit card with a low balance. Any balance keeps the card active so it computes in your credit score.

You most likely have been advised to cut up your credit cards and close your accounts. Following this advice degrades many credit scores.

Canceling Credit Cards

Canceling credit cards can lower your credit score. Keep your longest-term credit card account open to show long-term credit history. If this account has prior late notations, negotiate with the creditor to drop negative reporting on your credit history file. Slowly close out newer accounts after they are paid off. Keep your best accounts open — those paid on time or reporting “pays as agreed” and with the longest history.

Credit card companies may raise your rate if you cancel a card before it is paid off; it is best to keep accounts with outstanding balances open until you pay them off.

Perfect Balance of Credit

1. Mortgage over one year old with all payments on time

2. Visa Card or Master Card with less than 10% of available credit as balance due

3. Discover or American Express Card with less than 10% of available credit as balance due

4. Auto loan either paid off or paid down with low payments compared to monthly income.

Debt-to-Income Ratio

Credit scores do not reflect income — credit bureaus do not have income reported to them. However, real estate lenders look at the consumer debt-to-income ratio — the amount of monthly debts in relation to the amount of earnings. Consumer debt is more highly regarded/scores higher if total debt is under 20% of net income, or total monthly payments on all debts is less than 35% of monthly gross income.

Qualifying Ratios

Lenders want the total debt ratio (the percentage of total monthly payments, including the new mortgage, to income) to be less than 33% for a typical conventional mortgage. This means the new mortgage payment, credit card payments, and all other monthly debt payments should not equal more than about one-third of the monthly income.

Lenders want the mortgage debt ratio (the percentage of the new mortgage payment to income) to be less than 28%.

Non-prime loans have lower standards; some lenders allow debt-to-income ratios as high as 55%. Borrowers with less than perfect credit qualify more easily for a non-prime loan compared to an “A-paper” loan.

Once you total your monthly expenses and determine your debt ratio, you can estimate how much you can afford for a house payment. For example, if your income is around $3,000 per month, you can afford a home with payments around $1,000 per month (including taxes and insurance) with a conventional loan, if your other debt does not total more than 5% of your income.

For investors, these equations change. Lenders expect 10%-25% down on investment property and allow about 75% of the rental income to offset the debt ratio.

Understanding your credit helps you manage your credit so you can obtain real estate financing, either for the house of your dreams or for your financial future.

(c) Copyright 2005 Jeanette J. Fisher. All rights reserved.

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Instant payday loans are cash advances with no frills attached. You get the loan in a couple of hours, without being put to rigorous credit checks and documentation hassles. You pay back when you get your next pay check. Sounds easy, so let us get an instant payday loan. But this raises fundamental question: Can we really live on loans? After all, a payday loan has to be paid back at a later date.

It is well known, we cannot afford to go on a loan shopping spree, taking one after another. So let us find out the situations which justify picking up instant payday loans.

Emergency, Of Course

Everything in this world is useful, provided it is used prudently. So it is in case of loans. A medical emergency, sudden sickness, an immediate repair, etc are a few critical situations that have given birth to the idea of payday loans. The instant cash advances bale you out of crisis that may turn adverse due to dearth of cash.

Instant payday loan can be availed simply by either calling a payday loan lender or applying online. As no papers are required to be faxed, the loan is sent directly to your checking account. Since no fax-no credit check is required, instant payday loan is also sometimes referred to as faxless online payday loan.

Pay Up Pending Utility Bill

Utility bills often create chaos at the end of a month. With the utility bill due date round the corner and your salary check far behind, you are trapped in a tight situation. But help is just a phone call away. Get an instant payday loan, pay your bills before due date and avoid surcharge. If the instant payday loan is paid back in time, an instant cash advance will cost less than a bounced check fee. Banks usually charge $20-$30 for a bounced check, whereas an average instant cash loan will cost you about $18 for every $100 borrowed.

However, abuse of payday loans should be avoided. Remember, instant payday loans fill a temporary cash shortage. These cash advances should be borrowed for the shortest period and should be paid pack at the earliest. A one time payday loan fee of $15-$30 may not be taxing. But over a period of time, the high interest adds up. In certain cases, the worth of loan fee rises much more that that of the initial loan.

A few important pointers to keep in mind when you go loan shopping are:

If you apply for a payday loan online, make sure they are registered with Better Business Bureau.

If you need more than $1500 loan, take some financial advice before going for a payday loan.

Check the lenders market reputation

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The vending machine business is a multi-billion dollar industry where the opportunity for fraud abounds. Fraudulent businesses, run by smooth talking con artists, sell vending machine business opportunities with claims of highly exaggerated income potential to the unsuspecting and uninitiated entrepreneur. Not only do the entrepreneurs fail to realize the promised income but they also risk losing substantial portions of their investments in the process.

Not all vending opportunities are fraudulent and not all involved in the promotion of vending businesses are operating a scam. However, for those who are, the Federal Trade Commission (FTC) has been actively involved in investigating complaints against deceptive and dishonest vending business promoters. The FTC has charged some companies with misrepresenting the earnings potential; misrepresenting the ease and speed to which machines can be delivered, maintained, located and repaired; providing phony references and failing to provide key pre-investment information required by the FTC’s Trade Regulation on Franchise and Business Opportunity Ventures.

If you’re thinking about investing in a vending machine business opportunity, check the reputation of the business by requesting a list of previous investors as well as their addresses and phone numbers. If possible, visit a few of the investors on the list at the locations provided by the vending promoter. Do not just depend on acquiring this information by telephone as the person you talk to could very well be in cahoots with the promoter. You can also check on the reputation of the seller/promoter by contacting the offices of the Attorney General and the Better Business Bureau where the business is located and where you live to see if there are any unresolved complaints on file. Keep in mind, however, that the absence of unresolved complaints could simply mean that the promoter may be operating under a new business name and even under a new personal name.

If the seller makes earnings claims, ensure that written substantiation be provided. If the seller/promoter recommends a locator, ask for a copy of the market survey in your area. If you are contemplating buying an existing vending route, talk with the owner of the route and make it a point to accompany him or her on the route so that you can check the condition of the machines and observe first hand the amount of revenue generated. Also, talk with the people at the establishment where the machines are located or will be located to determine how many people will use the machine and what they might like to see in the machines as well as any complaints or concerns they might have about the machines already there or machines that will be placed there.

Finally, before signing any agreement or paying any upfront money, consult an attorney, an accountant or a trusted financial advisor for another opinion as to the efficacy of the business proposition. If the promoter/seller requires a deposit, an attorney can review the contract and establish an escrow account where your money can be maintained by a neutral third party. If the seller/promoter has problems with the arrangement, then it might be best to walk away rather than risk losing your hard earned cash.

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