When you apply for a loan, mortgage or insurance, that institution will check your credit rating and credit score (FICO).  A numeric summary of the information in your credit report, a “FICO score” (ranging from 300 to 800) represents your potential credit risk based on the amount of money you owe, types of credit you have and how your bills are paid on time.  Lenders purchase your credit reports and review your application, basing their decision on your FICO score.  The lower your score, the more likely you’ll be approved with a less attractive interest rate or possibly be declined.  The higher your score, the more likely you’ll be approved with a better rate because lenders will interpret your FICO score as a lower credit risk.

Paying your bills also improves your changes of owning a home.  While lenders take your FICO score into consideration during the approval process, more and more mortgage lenders are also scrutinizing your bill paying history as well, and in some cases ranking your bill paying history higher than your FICO score.  Because of the recent subprime market collapse, mortgage lenders are more thorough than before and stricter in their approval process.  If you don’t yet own a home, keep paying your rent, car and other loan payments on time.

Everyday we’re bombarded with offers from credit card companies to transfer an existing balance to cards with a new, amazingly low interest rate.  But let the buyer beware and be sure to read the fine print.  Make one or two late payments and you’ll not only pay between $29 to $35 in late fees, but your attractive “introductory rate” of 1.9% or 2.9% or 4.9%, can jump to 20% or 25%.  But the credit card carnage doesn’t end there.  Late fees and high interest rates stain a clean credit history like blood on a white silk blouse, possibly hindering your chances for securing a new job or approval on a mortgage, with time and paying down your debt on time the only remedies.

Like mortgage lenders, auto insurers are linking late bill payments with auto insurance rates.  Auto insurers also claim to have found a correlation between poor credit and auto claims.  While you may be a good driver, without any accidents or claims, late payments will not only affect your credit score, it will also affect your auto insurance rates.

While you can live without the Internet and other services or products you lease or have on lay-away, getting them reinstated is not only a hassle, but also embarrassing when services are shut off.  Getting them reinstated is costly and can also be reflected in your credit score, another reason why paying bills on time is in your best interest.

One extreme example of what can happen when you don’t pay your bill is what new and used car dealers are installing under the dashboard.  This device will signal the driver when their payment is due and prevent the car from starting when your payment is overdue, leaving the driver no choice but to pay the bill to get the security code to start it.

Paying your bills on time takes self-discipline and determination.  But the long term consequences of not doing so can kill your credit score and hinder your chances for securing a low interest rate on a mortgage or your dream job.  Control your bills before they control you.

We’ve all had a laugh over comedian Jeff Foxworthy’s bit about his wife “saving money buying stuff.” If you find buying a big screen TV will save you $200, it’s hardly saving you money if you hadn’t planned to buy it in the first place. This is why many American families have instituted a 24-hour impulse rule. If the item is over a certain agreed upon amount and isn’t food, you have to wait 24 hours before buying it. More often than not, the item isn’t as enticing the next day. Another rule many families abide by is to not spend any money after midnight. This is especially helpful after a few hours at a club or casino. Having your credit card turn into a pumpkin at midnight is your financial godmother doing what’s best for you.

You should avoid using your credit card to buy items at flea markets or on websites with obscure foreign domain names. Give some strange guy at a flea market your credit card information and who knows what he will do. The trouble with flea market vendors is that many are just passing through town, don’t have permits and don’t leave information about where they can be reached if there’s a problem with your purchase. It’s better to pay with cash and be out the cash if something goes wrong than to be out the purchase amount plus the remaining credit on your card. The same is true with foreign websites. If you don’t know who you’re dealing with, don’t use your credit card.

And credit card companies aren’t any help either and the proof is in the fine print few of us take the time to read. If you’re nearing your credit limit, your credit score is likely to go down and your rate is likely to go up. And habitually paying off one card with another will show up on your credit report too. Don’t let reward points play any kind of role in the purchases you make with your credit card. If you want to take a vacation, skip charging a$5 coffee with latte each morning. Save the money you would have spent for a year and pay for your next vacation with cash instead.

Using a credit card is easy and old habits die hard. But you’ll save more money in the long run when you avoid using your credit card in these situations.

While evidence of deceptive or illegal financial practices, unexplained affluence or compulsive/addictive behavior raises security concerns among those who hire within the military, delinquent debt is the most common.  But the cause of the debt is more important than the amount of debt as it reveals a person’s trustworthiness, reliability and judgment.  Nearly 50% of people who seek credit counseling do so because of reckless spending and such behavior is likely to continue.

What employers want to see is how the individual is currently responding to their debt.  If someone has chosen to ignore their financial responsibilities, then it stands to reason that the same individual may ignore their responsibility to safeguard classified information.  Changing addresses without notifying creditors, failure to take reasonable measures to pay or reduce debts, knowingly issuing bad checks and increased credit card use immediately before filing for bankruptcy are all examples of irresponsible behavior.

However, if an applicant’s debt occurred due to situations beyond their control and he or she is handling the debt reasonably through bankruptcy or debt consolidation, the significance of the problem is substantially reduced.  Bankruptcy and credit counseling are looked upon as positives because the applicant is making an effort to take control of his or her debt.

Employers take the amount of debt into consideration as well, attempting to determine if a person’s total debt appears excessive.  Employers use the same rule of thumb as credit counselors.  If an applicant’s minimum monthly consumer credit payments, (not including their mortgage) are more than 20 percent of their monthly take-home pay, they have a financial problem.  For unmarried military personnel living in barracks and eating in mess halls with a similar financial situation, this does not apply.

With all the background checks and investigating that’s going on, it would seem your credit would have to be flawless for you to get hired.  That’s why military job searchers need to prepare and get their stories straight.  Before you apply for any position you should buy a copy of your credit report from each the three credit services.  The last thing you want is to be blindsided when an interviewer asks about an inaccurate item you don’t know about.  Better to catch any mistakes on your credit report before a job interview.  Look for any mistakes on your credit report and contact the creditor that made the error well in advance of any job interviews.

If an interviewer asks about poor credit, you should keep your answer short, sweet and sincere.  Acknowledge your past mistakes and how you’ve learned from them, assuring the employer that you’ve changed.  Under the Fair Credit Reporting Act, an employer must give you a copy of the credit report and explain your rights if you are turned down for the job due to poor credit.

Poor credit can work against your military career.  How you respond to your debt reveals your character and can be the difference in whether or not an employer will overlook your delinquent debt or hire someone else.

The average household pays 8 to 15 bills every month. Americans have busy lifestyles and it’s easy to lose a bill, forget to pay or inadvertently pay late. So converting your paper bill paying system to paperless not only frees your desk or kitchen counters of clutter, it also prevents late payments and having to pay late fees. Another benefit of paying your bills online is selecting your bill payment dates and keeping a log of your payments. You can also easily make multiple payments, especially helpful when you’re trying to pay down the balance on a credit card or mortgage. And there’s also the time savings. You don’t have to physically write a check, place the check and statement into an envelope, put on a stamp and walk it to the nearest mailbox. You also eliminate the need for postage stamps and the inconvenient trip to the store or post office when you run out.

Many consumers use online bill payment systems through their bank, with the majority of banks offering online bill pay for free. While most utilities, mortgage companies and credit card companies accept online bill payments, there are still a few companies and/or entities not yet accepting payments online. In these cases many banks will debit the amount from your account, cut a check and mail a paper copy.

While there are many benefits to paying your bills online, there are also some precautions you should take. First, make sure that your computer is armed with anti-virus software and firewall protection that is up-to-date. Second, despite the option to automatically save your password and credit card information, you should avoid doing so as even the most novice computer hacker can crack the site and access your credit card number. Many consumers are opting to use a temporary credit card number to make purchases or payments online. Many credit card companies like CitiBank, Discover and MBNA offer temporary credit card numbers that are linked to the customer’s permanent account number and expire after one purchase. Temporary credit card numbers are available on the card issuer’s website or by downloading software from the website that creates a temporary number.

Despite the many conveniences online bill payment systems provide, it’s still up to you to pay attention to how long it takes to process each bill. Some payments can take up to five days to process. So you’ll still need to plan ahead to avoid paying late fees. Too many late payments and your good credit standing could be affected. In the long run, online bill pay saves you time and money. But it’s up to you to monitor your payments.

Military men and women with computers are also taking advantage of Facebook, a social networking service that enables users to create their own personal profiles, add other users as friends and exchange messages and automatic notifications when they update their profiles.  With a single post to Facebook, folks serving in Afghanistan and other remote parts of the world are much more efficient at staying in touch and keeping loved ones updated.

Twitter is another social networking service that makes military life easier.  Accessible on a home computer or Internet capable cell phone, users can “tweet” by sending and reading text-based posts up to 140 characters.  But ultimately seeing is believing.  For those serving overseas, there’s no substitute for Skype, a service allowing users to communicate with their family and friends by voice, video and instant messaging over the Internet.  Calls to other Skype users are free, making expensive long distance phone bills ancient history.

In addition to social networking, there are many other ways computers make military life easier.  One of these is online banking.  With online or Internet banking, customers make financial transactions on a secure website operated by their retail or virtual bank or credit union.  The majority of these websites have online bill pay, allowing you to pay your mortgage, utilities, daycare and other routine monthly expenses without having to write a check and the service is usually free.  You can also view your monthly statements, images of paid checks and transfer funds between accounts 24 hours a day, seven days a week.

With a computer you can book airline flights, hotels and other vacation reservations from home.  Traditionally, families wanting to go to Disney World booked their vacation through a travel agent.  But with computers and the Internet, travel information is readily accessible online, with the option to receive special rates and offers by Email.  Because of computers and Internet capable cell phones, you can print airline boarding passes at home and perform a pre-check-in to your hotel a few days in advance of arriving.

Computers connect us with the rest of the world.  Whether you want to stay in touch with family and friends, see the latest music video, or pay your bills, computers make accomplishing everyday tasks faster and easier.

What is a debt consolidation military loan?

A debt consolidation loan is a loan that allows you to roll all of your debts into one low monthly payment.  Banks and financial institutions offer debt consolidation loans at lower rates than the rates that are charged by credit card companies.

What are the benefits of debt consolidation loans?

Click to apply for a debt consolidation military loan

With debt consolidation, you can pay off all of your debts (credit cards, payday loans, medical bills) through an affordable monthly payment plan.  Because you don’t have to deal with creditors anymore, it reduces your stress.  Collection calls and harassing letters from creditors and collection agencies are eliminated.  Your monthly payment is lower than your pre-consolidation payments because you have secured a lower interest rate.  Low debt consolidation loans are also longer term than regular loans.  Budgeting is easier because you have replaced several bills with one manageable payment.  Paying off your debts with a debt consolidation loan improves your credit score.

How can I choose the right debt consolidation military loan?

It helps to shop around.  Before choosing a low debt consolidation loan, investigate a number of financial institutions as loan interest rates vary.  Find the company that requires you to pay the least monthly installment and check the company’s profile and service backgrounds.  Ask for a breakdown of the costs you’ll have to pay and be sure that your monthly loan payment is lower than your current bill payments before you sign any paperwork.

What about my credit score?

In order to qualify for a debt consolidation loan, you need evidence of income and a good credit score.  Lenders want to see that you can make payments on the consolidation loan to repay the monthly balance and your other living expenses.  Ironically, you won’t get approved for a loan if the total amount that you owe is too low.  Newsflash!  Despite their claim that they want to help you save money, lenders are in this to make money off of you.  If you can’t prove you can pay them back or the amount of money they might make from you isn’t worth their time and effort, then they won’t approve you for a loan.

What should I do before I apply for a debt consolidation loan? 

Before you apply, check your credit report so that you can identify the credit problems that you want to eliminate with a low debt consolidation loan.  Calculate the total amount you owe so you can decide how much you need to borrow to pay off your debt.  Decide which bills you want to pay off.  In some cases borrowers have more debt than the consolidation loan amount available.  Finally, plan a budget so that you can continue to pay for your living expenses as well as pay down your consolidated debt.

Are there any disadvantages to a debt consolidation loan?

While your monthly payment is low, you pay much more in total interest because the loan is longer term.  Moreover, a debt consolidation loan doesn’t provide any tax benefits.  This is because the interest on a personal loan is not tax deductible.

Should I consolidate my debt?

The answer is different for everyone and depends on your current financial situation. Contact a financial professional or trusted friend who can help you crunch the numbers so you can decide whether or not debt consolidation can help you save money.

Get a high paying job

The best and fastest way to pay off student loans is working.  If you’re lucky enough to work a high paying job, so much the better.  By living under your means, making more money than you spend, you can make double payments and reduce your loan balance in no time.

Live Like a Student

If you can live the way you did while you attended college – staying away from shopping malls, reading books in the library, eating cheap meals (Yes, that includes Ramen noodles), you’ll have that much more money to use to pay down your debt.

Be a Paid Designated Driver

Raymer McGuire, a deep in debt Boston college student, tapped into his entrepreneurial side and charged drunken students to drive them safely home in their own cars.  Less than a year after starting this business, McGuire sold 41% of it for $85,000.

Party! Party! Party! 

With the kids that is.  If you’re not afraid of losing some of your dignity, or a few kicks in the groin from five-year-olds, then entertaining kids at home parties is one way to pay down a student loan.  Some clowns and magicians at home parties earn $50 for two hour’s work while popular balloon-animal clowns can make $0-$300 a day.

Clean Houses

Distribute flyers offering your services as a once-a-week house cleaner.  Use a couple of free hours on a Saturday to thoroughly clean someone’s house.  Depending on the area, you can earn anywhere from $10 to $25 an hour.  With regular customers and word of mouth referrals, you’ll pay down your debt sooner than you think.

Sell Garbage

The saying that “one man’s trash is another man’s treasure” is true.  Take a drive through rich neighborhoods on garbage day.  Pick up usable “garbage” to sell online, through the classifieds, to your friends or at a garage sale.  Quite often you’ll find items that are in excellent condition that you can sell at rock bottom prices since you paid nothing up front.

Stick to Your Knitting

If you can crochet, knit or sew, then upload photos of your talent online to sell your items for some extra cash.  A variety of websites exist that allow you to set up your own craft store online.  It may not be enough to live on, but it will be a way to pay down your debt while doing something you enjoy.

Teaching/Tutoring

No matter what your area of expertise, someone out there wants to learn more about what you know.  Earn enough to pay off your student loans by sharing your knowledge through tutoring or teaching.  If you were an English major, you can tutor high school students on their English essays.  You can teach immigrants how to speak English.  If you are a fantastic test taker, you can train people about standardized test preparation.

Student Loan Forgiveness

With loan forgiveness, some or all of your loans are erased after you work or volunteer under a particular organization’s specific terms.  Keep good records of your student loan payment history as most loan forgiveness programs won’t consider you if you haven’t made a payment in over 180 days.  Here is a list of loan forgiveness programs:

Participate in Market Research Surveys

Get paid to voice your opinion.  Can it get any better than that?  Contact a local market research company; provide them with your name and contact information and report to their place of business when called upon.  Many of these surveys are done after business hours – evenings and weekends and pay quite well.  One survey the writer of this article participated in paid $75 for 3 hours of listening to the first 5 seconds of a song, and asked her to rate whether or not it was played too often or not often enough on local radio stations.

Paying off hefty student loans may seem like an impossible task.  But remember, you didn’t spend the entire balance in one day.  Paying them down takes time.  With perseverance and using some of these ideas, you’ll eventually reach your goal.

Interest Rate

When it comes to car loans, many consumers only look at their monthly payment, rather than how much they’re paying for the car.  While you may have a low monthly payment, you need to consider how long you will be making payments.  If the loan term is long enough, any payment level can be reached and you’ll end up paying more in interest.  You, the buyer, are in the driver’s seat and can negotiate the interest rate.  If the dealer won’t lower the rate, then walk away.  Make sure the details are accurately spelled out in the contract, that the agreed upon interest rate doesn’t change during the loan’s term, that there is no “subject to financing” or “subject to approval” statements and ask about prepayment penalties before you sign.  Also make sure that the contract you are signing is a final contract.  In some cases the dealer collects the down payment, tells you how much your monthly payment will be and sends you home in the car.  Hours later the dealer calls, explaining that the financing didn’t go through, they need the car back and you to sign a new contract.  This is a spot delivery.  The dealer’s new contract requires a larger down payment and a higher monthly payment, giving new meaning to the “subject to approval” statement.  This is why it’s ideal to shop for a loan at banks or credit unions before you even step foot on the dealer’s lot.

Insurance

Another way dealers try to drive up the costs of financing is through insurance.  Many dealers offer life and disability insurance as a means of protecting your investment should something happen to you.  While the dealer may imply that this is required, it is not.  Also be on the lookout for this insurance on the paperwork, as it is often added without your knowledge.  Banks and credit unions offer this type of insurance at a much better rate and sometimes include it for free when you’re financing your car with them.

Extended Warranty

Many car experts believe that the warranties that come with new cars are comprehensive enough that an extended warranty is unnecessary.  But dealers almost always offer extended warranties on a new car.  If you believe you still need an extended warranty, it pays to do some research.  By exploring online sources, banks and credit unions, you can compare and get a better price, sometimes for half of what the dealer charges.

Added Protection

Dealers try to add more to the bottom line by offering rust protection, undercoating, fabric protection and paint protection.  Rust protection and undercoating are both applied at the car factory.  Don’t pay to have it done again.  Using polymer sealant car wax is the best way to protect your car’s paint and no matter who applies it, you or the dealer, it has to be reapplied every six months.  You’ll save a lot more money if it’s you.  The same is true of fabric protection.  Buy a can of fabric protector at your local car parts store and do it yourself.

Car Alarm and Window Etching

Most reputable auto shops will install an alarm system that’s just as good as the dealer’s and often for $500 less.  While window etching the Vehicle Identification Number (VIN) on all the car’s windows will deter many car thieves, dealers charge hundreds of dollars when you can do it yourself for between $20 to $30 dollars.  But if you still want the dealer to add these features, you can better negotiate a fair price knowing their true costs.

Armed with these facts and the knowledge of how to get the best deal, you’ll be able to get a great military car loan at a good rate.  To get started with the loan process, apply here.

Car Loans

Knowing your credit score before you buy a car allows you to confidently shop for a car with a low interest rate.  A good credit score empowers you to secure a low interest car loan with a rate that’s lower than the average new car loan.

Renting

A high credit score means you pay your bills on time and a low credit score means you are a risk.  With a good credit score, landlords see that you are low-risk when it comes to paying your rent on time, making you preferable to other potential renters.  Pulling the FICO scores yourself, rather than having a realtor or landlord pull them, saves you time and money as well.

Car Insurance

Insurance companies associate a good credit score with responsible driving and less of a risk of using auto insurance.  Historically, people with bad credit have filed more claims and these people are penalized with higher insurance premiums.  For this reason, drivers with good credit scores get preferred rates on car insurance.

Cell Phones

Cell phone providers require a credit check because, like landlords, they equate lower credit scores with a higher risk of not being able to pay the monthly bill.  With poor credit, cell providers offer a pay-as-you-go plan instead of a contract.  But with a good credit score, your monthly rate decreases dramatically, you avoid paying a security deposit and you can take advantage of hundred-dollar discounts on the latest phones that come with signing a contract.

Utility Security Deposits

When you establish utility service in your name or transfer service to another residence, a good credit score means you won’t have to pay a $100 to $200 security deposit. These deposits are a major inconvenience if you have to relocate.

Better Credit Cards and Loans

If you have shaky credit, you avoid making new credit card or loan applications because you’re scared of being turned down.  While not a guarantee, you’re more likely to be approved with an excellent credit score.  Good credit scores also mean you can negotiate a lower interest rate for a loan or a credit card by simply referencing your score and explaining that you’ve received offers from other companies based on your credit score.  Banks are willing to lend more money to borrowers with higher credit scores because they have a history of paying back their debt on time.

Mortgage

Good credit scores go a long way towards making sure you get the best rates available for a mortgage.  Lenders offer borrowers with high FICO scores (760 to 850) lower interest rates and more loan choices.  Lenders place borrowers with scores of 620 or lower in the “subprime” category, and quote significantly higher interest rates on fewer varieties of loans. A 500-520 FICO score is usually the minimum range that will qualify for a mortgage.

While paying down debt is easier said than done, the benefits associated with good credit scores make doing so well worth the effort.

Many unsuspecting people can easily fall victim to this privacy crime, which can involve Social Security Number (SSN) theft, credit card or debit card theft, credit/debit card number theft, bank Personal Identification Number (PIN) theft, and more.

So how does it happen? Identity thieves can steal personal identification from your mailbox; through “dumpster-diving” (through going the garbage or recycle bin for credit card statements, etc.); through “shoulder surfing” (watching for your PIN while you use the ATM or your credit card number while you make a purchase); and via the Internet.

Thankfully, while there’s no 100%-guaranteed safety net against identity theft and crimes, there are a number of simple steps you can take to protect your identity from thieves and reduce your risk of becoming a victim.

Protect your Social Security Number

Safeguarding your SSN is one way to protect yourself from identity thieves. Don’t carry your card with you. Don’t write the number down on your checks. Never give out your SSN to people or companies with whom you’re not familiar until you confirm their identities and verify their need to know your number.

Protect your PIN

Identity thieves can steal your PIN in a number of different ways. Here’s how to protect yourself:

-don’t carry your PIN with you; memorize it

-don’t write it down

-don’t share your PIN with anyone

-keep it out of others’ views when making a purchase or banking

-change your PIN every year

Protect your cards

Keep a close eye on your credit and debit cards. Take only the ones you’ll need when you’re out; keep the rest in a secure place at home. Report any lost or stolen cards immediately.

Get a shredder—and use it

Dumpster- and recycle bin-diving might be considered nasty, but it’s one surefire way for identity thieves to find “treasure”—e.g., credit card statements that people haven’t bothered to shred or rip up.

Invest in a shredder so you can easily destroy all private records and statements before throwing them out or recycling them. Even without a shredder, you can still rip or cut up your statements.

Monitor your mailbox

Mail theft is more common than you might think. While you might be more inclined to wait expectantly for a check, a letter, a magazine, or a package to arrive, you might be less likely to be keeping track of bills, invoices, bank statements, and credit card solicitations, which all contain personal and financial identifying information.

Empty your mailbox frequently or consider acquiring a lock or P.O. box. You may also want to look into receiving your bills and statements via email. When you’re out of town, have someone pick up your mail for you.

Check your accounts

Be sure to check your bank account and credit card balances on a regular basis; report any suspicious or fraudulent activity as soon as possible. If you bank online, you can check your accounts frequently. If you wait for monthly statements, write down the date of when to expect these in the mail; if a statement doesn’t arrive on time, call your bank.

Avoid the paper trail

Keep all receipts, etc. (from the ATM, credit card purchases, etc.) with you until you don’t need them anymore; at that point, destroy them.

Be smart online

Internet identity theft is growing, so be cautious when online. Update your virus protection software to prevent your computer from being hacked. Avoid downloading files from sources you don’t trust. Be careful about giving out any personal information online—always confirm identities and ensure the use of secure encryption software for online transactions.