How to Build Good Credit

Good credit is essential for many of the major milestones in life. For instance, a relatively high credit rating is essential when you decide to buy your own home. Now, it’s quite common for potential employers to check your credit before offering you a position. While it is evident that building and maintaining a good credit rating is important, you must first know how to address credit concerns.

Earning good credit, first of all, takes time. When you’re just starting out, it will take a little while to really begin to get credit building opportunities. However, it’s never too early to learn how to handle your financial responsibilities so that when you do have those opportunities, they don’t become burdens instead.

Live Within Your Means

Once you begin to take on credit card accounts, it can be very tempting to keep using them until there is no limit left. However, this is not living within your means. When you use a credit card, you should be able to pay off that balance quickly. Paying only minimum payments for an extended amount of time is a sure sign of trouble to come, although as long as you maintain those minimums your credit score shouldn’t suffer too much. By paying off your balance quickly, however, you let other lenders know that you are committed to only buying what you can afford.

Not only does this concept apply with credit cards, but also with loans. It isn’t unusual to be able to qualify for a larger loan than you can comfortably afford to repay. Before you ever go to apply for a loan, sit down and take a serious look at your budget. What can you truly afford to pay each month toward a loan without being overextended? Do not under any circumstances accept a loan that requires a larger monthly payment than what you’ve budgeted.

Start Small

If you’re just starting out, it may be difficult to turn down all of those lovely pre-screened offers that make it into your mailbox. However, it really is best to begin with one credit card and stick with that one for a while. If you open several credit card accounts at once, you are in danger of borrowing too much too quickly and being saddled with debt before you truly have a handle on what it is. Also, each time an inquiry is made into your credit, there is a small plummet in your rating.

Keep Your Debt Down

Rather than getting carried away with that all that you can purchase with your new card, learn to keep your balance down to a minimum. Just because you have a $1000 limit doesn’t mean that you have to use it. Ideally, you would spend no more than 30% of your available credit. If that isn’t possible, shoot for the 50% mark.

Make Payments to Your Advantage

The ideal credit card situation is that you will only charge what you can afford to pay in full that particular billing cycle. Doing this raises your credit score tremendously. Also, making certain to pay your bill on time each month is crucial to building good credit. Once a debt has been sent to collections, it can be quite the ordeal to bring your credit score back to an optimal level.

Also, while it is the best situation that you pay off your full balance monthly, sometimes this just isn’t possible. When this happens, try to make a payment substantially higher than the minimum. Having a balance won’t necessarily harm your credit score as long as you stay well below your credit limit and make timely payments.

Building your credit is important to your financial future. Following the above tips will help you to do just that. Learn to handle credit opportunities well, and you’ll have great credit sooner than you think.

Credit Card Terminology Explained

It typically begins about the time you graduate from high school; credit card offers begin pouring in. Unfortunately, many folks who really have no clue how difficult a credit card can be to pay off look at these opportunities as free money. They choose a couple of offers because they can pick out their own card design or because this is the card that just happened to come today. This reckless selecting is a mistake because all cards are not created equal.

Understanding Credit Cards

You should have at least a working understanding of what credit cards are, how they should be used and how they should be repaid. This isn’t as easy as it seems because credit card services have their very own language that regular human beings often do not speak. The trick to knowing exactly what you’re getting into before you apply for a card is to learn basic credit card jargon. Then you’ll have no question about what your credit card terms mean.

Common Credit Card Terms

1. Annual percentage rate

The annual percentage rate, more commonly known as APR, is the amount of interest a credit card carries. The law requires that this figure be disclosed upfront. Obviously, the lowest possible annual percentage rates are desired.

2. Balance Transfer

Moving credit card debt from one card to another, normally to obtain a lower interest rate, is a balance transfer.

3. Cash advance fee

Many credit cards allow creditors to get cash advances. However, there is a fee that goes along with this transaction. The way these fees are calculated vary from card to card, but they are often far more pricey than a typical purchase’s APR.

4. Cardholder agreement

The Federal Reserve requires that consumers are given a copy of the cardholder agreement which plainly states the credit card’s terms and conditions.

5. Finance charge

Interest charges and other card fees total up to the finance charge.

6. Minimum payment

Most often, the minimum payment will be 2% of the balance owed on the card. It is the absolute lowest figure a cardholder can pay without being considered late on his payment.

7. Over-the-limit charge

Credit cards have a limited amount of space. For instance, a person may have a card with a $5000 limit. In the event that the cardholder goes over that limit, there is a fee applied to their overall balance.

8. Pre-approved

Credit card companies often screen people through a basic process which targets who they send pre-approved credit offers to. Often, these offers come as junk mail. These pre-approvals are not set in stone. If a person follows up on a pre-approved offer, the card company can turn down their application because of low credit.

9. Secured card

People who have little to no credit, or those whose credit has suffered in the past, may turn to these types of cards to bring their score back up. The card is ‘secured’ with the cardholders own money which is deposited in a savings account. In the event the cardholder cannot make payments, the money in savings may be utilized to pay off the card balance.

Credit cards can be very useful financial tools when utilized appropriately. However, they can also be quite a bit of trouble if abused. The best way to choose cards with exceptional terms and conditions is to have a general understanding of credit card related terminology before applying.

Top 4 Cash Back Credit Cards

Some financial advisors caution against utilizing credit cards for purchases. They argue that they will explode your debt and hurt you financially. This does not need to be the case. Some credit cards actually offer users some cash back every month. Cash back credit cards can provide a certain percentage on all purchases. They can also provide a bonus on special categories. Here are some of the leading credit cards that offer cash back.

Chase Freedom

The Chase Freedom card provides users with a 1 percent refund on all purchases each month. In addition to this great benefit, the card also provides 5 percent cash back on a rotating bonus category each quarter. Some common bonus categories are retail stores, gas stations, restaurants, and travel. Users have to sign up to get the bonus each quarter, and they can get the bonus on the first $1500 spent.

Citi Double Cash

This relatively new offering from Citi pays off an effective rate of 2 percent on all purchases. The first percent is earned when a purchase is made. Users will then earn a second cash-back bonus of 1 percent when they pay off the card. This gives an effective rate of 2 percent cash back when users pay off their balance each month.

Fidelity American Express

This card offers cash back with a twist. All purchases earn 2 percent cash back. There are no special bonus categories or payoff bonuses with this card. Users earn a straight 2 percent each time they swipe the card for a purchase. Once users accumulate $50 in their account, they can then deposit the funds into a Fidelity investment account. Because stocks and bonds can appreciate over time, this bonus can really lead to a much better overall return than the 2 percent stated rate.

Discover It

The It card from Discover is fairly similar to the Chase Freedom listed above. Users get 1 percent cash back on every purchase they make. They can also earn 5 percent cash back on rotating categories that do not necessarily coincide with those offered by the Chase Freedom. This last fact can help users maximize their earnings if they happen to hold both cards and maintain the proper strategy when spending.

Cash back credit cards can actually help users build up a nest egg rather than taking money from it. The key is to get the cards that maximize savings while also paying off the balance each month to avoid interest charges that would more than offset the benefits the cards offer.

The Foundation of Good Financial Choices

For anyone who is interested in making good financial choices, the journey begins with being able to differentiate between wants and needs. In his autobiography, Benjamin Franklin addressed this very problem by starting a log book of all his everyday expenses, and this can be a very valuable tool for people living in these modern times.

Keeping Track of Things

After all, if someone can’t even reliably say what they are spending, it is not likely that they can formulate any realistic financial plan other than going out and making more money. While we would all prefer to do this, it is not always possible. By religiously writing down every single expenditure of any sort over a period of a month, a clear picture rapidly emerges—and it is seldom a very happy one. When it is all down in black and white, or perhaps black and red, most people are astounded to discover how much they are actually spending. In particular, they are shocked to discover how much those nickel and dime expenditures add up to some real money over the period of a month.

The Want Versus Need Dichotomy

This is where it becomes necessary to decide what is a “want” and what is a “need”. By paring away at all of the incremental wants that have burrowed their way into the need category, significant progress can be made in freeing up capital that can then be put to wiser uses. Once all of these small leaks have been plugged in the financial ship, it is then time to look at all of the big ticket purchases in life. While these tend to be actual needs, such as transportation or shelter, that does not mean that there is not an element of want in the equation as well.

Gassed Up and Ready to Go

For example, a new car may offer improved gas mileage over an older model, but it will cost more in terms of license fees, insurance, and the actual price of the vehicle. Most people can drive a long way on $30,000 worth of gas in their old car. The same goes for housing. Proximity to work, good schools, and nearby shopping are often very important factors in choosing where to live, but it is often possible to obtain all of these criteria in a dwelling that is a little more modest than a brand new custom home.

You Don’t Have to Live Under a Rock

This should not imply that financial wisdom is incompatible with enjoying life, but the key point is that wisely-invested money can be made to work for you, and thus provide a more secure and comfortable lifestyle in both the short and long terms, whereas unfettered expenditures are simply…. gone. Every penny you do not throw away can be used to make the important things more affordable to you.

But You Do Need to Save

By cutting down on minor extravagances, it may be possible to double up on mortgage payments, for example, and thus pay off the house much sooner. This often puts six-figure sums into your pocket by defeating the need to pay many extra years of interest on your loan. Speaking of pockets, it is important to establish a reserve of cash that can get you through an emergency or allow you to jump upon some lucrative but fleeting cash-only deal.

Winning Is Easy

In short, making good financial choices really gets down to asking yourself a simple question every time you reach for your wallet or dig into your purse: Do I really need this, and if so, why? Once you develop that habit, you will find that all of the other financial decisions get easier, since you have more money available to make them with.

“Pay As You Go” Cell Phones

Pay as you go service is the alternative to contract cell phone service and other plans. Rather than making a multi-year or even annual commitment, consumers purchase cell service as they need it. Some providers allow customization of the monthly set-up such as adding unlimited international features for limited periods.

Tracfone Model

Tracfone was an early success in the pay as you go cell phone service sector. Tracfone’s pay as you go option uses payment cards that consumers pay to load with telephone minutes. In this way, the consumer sets the amount of usage by the amounts of minutes purchases. One simply pays as one needs to go on using the phone. Tracfone offers incentives to encourage larger purchases of telephone time. They can charge more for usage when roaming away from a home area, and this can be as little as visiting a neighboring town.

Advantages of Pay as You Go

Pay as you go offers the most flexible approach for consumer budgets of any cell phone service. The consumer has total control over the amount that he or she will spend. The consumer may have to sacrifice value in the process as the price incentives point towards large and larger purchases. The greater values are in annual term purchases that sometimes multiply minutes and remove roaming charges

Disadvantages of Pay as you Go

The primary use of a cell phone may be to communicate when needed. The pay as you go model can leave the consumer temporarily out of a cell phone because he or she exhausts the prepaid minutes. This is not a restriction on transmission speeds or data transfer; it is a loss of basic cell service until one can fix the situation. This possibility means that the consumer flexibility comes at a risk that an occasion may arise in which basic voice communication will not work.

Best Cell Phone Plans

Comparison shopping is an ideal way to assess competing cell phone plans. While nearly all providers offer unlimited data plans, most of the throttle their subscribers by reducing speeds after a level of usage. Among those that do not throttle are MetroPCS, Sprint, and T-Mobile. Unlimited talk and text are more common than true unlimited data usage.

Charges and Fees

It is sometimes hard to compare prices for cell phone service providers. They make comparisons difficult by setting price points that depend on things present in one plan but not present in another. For example, prepaid rates for a top service might be as low as $40 per month. The same services could cost $80 per month from a top carrier. The difference might be a deep discount on a top of the line phone. One must consider whether the great phone is worth an extra $40 per month. The complications also involve the idea that the deep discount phone is in a two-year commitment.

Devices Make a Difference Too

Plan features are part of the service but so too are the devices. Carriers bundle devices with plans to make their offers more appealing. Sometimes it involves a trade-off. For example, a plan might have limited data usage from throttling but offer the best new phone. For some consumers bundling devices and combining features makes for difficult choices.

Get Your Real Estate Broker’s License in 5 Steps

Real estate agents and brokers perform similar tasks: helping clients rent, buy, and sell real estate. Brokers, or managing brokers however, are licensed to manage their own real estate business. Real estate brokers can work as independent real estate agents or employ a team of agents, whereas sales agents are required to work for a broker. A broker works with buyers to determine their needs, locate suitable properties, prepare clients, and represent them during negotiations. When representing a home seller, a broker lists the property, advertises the home, arranges viewings, and represents the seller.

All states require real estate brokers be licensed, but the requirements vary by state. To become a broker, you must first obtain a real estate agent license. In some states, a minimum of two years of work experience as a sales agent is also required. Here are the steps you need to follow to become a licensed real estate broker.

1. Complete Education Requirements
All states require real estate brokers and agents have at least a high school diploma or the equivalent. Most brokers take accredited pre-licensing courses, but many states waive this requirement for candidates who have taken real estate-related college classes. Because the real estate market is very complex, many employers seek agents who have taken related courses or obtained a degree in finance, law, economics, and/or business administration.
Optional courses can also assist in becoming a broker. Along with business courses, many real estate associations offer professional development classes for pre-licensed, new, and experienced agents and brokers.

2. Meet General License Requirements
Every state and the District of Columbia requires agents and brokers be licensed. While the licensing requirements vary by state, most require candidates be 18, pass an exam, and complete specific real estate courses. These licenses usually cannot be transferred among states, but some states accept licenses from other states in a reciprocity agreement. Some states have additional requirements like passing a background check. You will need to be licensed as a real estate sales agent before you can obtain a broker’s license.

3. Gain Experience as a Real Estate Sales Agent
Obtaining a real estate broker’s license usually requires anywhere from 1 to 3 years of experience as a real estate sales agent working in a brokerage. Most states, such as California, require two years of full-time sales experience within the last 5 years to obtain a real estate broker license. Texas has the most strict experience requirement in the United States: applicants must have at least 4 years of active experience as a licensed real estate sales agent immediately preceding the application to become a broker. Most states require sales agents train by completing pre-licensing courses from an approved school before becoming licensed.

4. Complete Mandatory Broker’s Courses
After obtaining enough experience as a sales agent, additional broker courses can be completed that cover additional topics like real estate finance and law. A state-approved broker training course that takes a few weeks to complete is necessary to obtain a broker’s license. The mandatory coursework varies by state, but it usually involves around 180 classroom hours covering contract law, agency law, real estate finance, real estate principles, and real estate brokerage. Some states require up to 630 additional classroom hours in related courses. Previous coursework for becoming a sales agent can meet this requirement.

5. Obtain a Broker’s License
After the course is complete, candidates can take the broker licensing exam followed by a background check. Licensing exams are usually performed by approved testing companies. In most states, additional coursework is required if the candidate fails the exam three times. The broker license exam also comes with application and background check fees.

After obtaining your real estate broker’s license, you can choose to start your own business and hire sales agents, work as an independent real estate agent, or continue working with a brokerage as an associate broker under a principle broker.