Credits Myths Debunked: Gospel or Porkies

Life is littered with myths, urban legends, fairytales and good old-fashioned gossip; the majority of which are unsubstantiated and have been perpetuated – and indeed, further fabricated – from person to person as the rumour mill gathers momentum. But then as we all know, hearsay makes the world go round, and for the most part is relatively harmless. That is, unless it stands as an obstacle to someone seeking help, especially of the financial kind.

There are individuals out there who perhaps need monetary advice and help when they get into a pickle, who won’t approach those companies who are dedicated to helping their financial cause, because they’re under the impression that certain omnipresent myths surrounding subject matters are gospel, as opposed to porkies. Pies that is, as in lies for the uninitiated. Successful cash loan firms such as Cash1Loans for example, exist to help those who have fallen on hard times pick themselves up, dust themselves down and start out on the road to fiscal recovery. Yet if would-be clients believe the bunkum they hear on the grapevine, who’s to say they ever reach out for assistance.

Thankfully we’ve set about separating the fact from the fiction beneath, by picking apart just a few of the most overheard myths which continue to do the rounds; in this particular instance focusing on personal credit and some familiar rent-a-quote statements you’ve probably been privy to on previous occasions.

My credit score is negatively impacted every time a third party checks my credit, right?

Wrong, give or take. If you’ve heard it once, you’ve heard it a million times before. The greater the frequency of you applying for credit, the bigger the hit your credit score will take as a direct result. Which isn’t exactly true you’ll be pleased to learn. Should you make tentative enquiries about a mortgage or car loan within a relatively short passage of time, then your credit score will remain largely unscathed. And that’s because the credit scoring system readily acknowledges that it might have to shoulder a few checks within an inclusive period, and pre-empting this (providing said enquiries are executed within a specified time frame) they usually tend to count as the single enquiry. Meanwhile checking your own credit score is a financially painless exercise too, as is when an existing creditor instigates a soft inquiry on their customer/you. Which they might trigger to determine their own risk at various junctures during an agreement.

Just as long as they receive their money, if I default on my repayments from time to time, it’s no big deal, is it?

You could look at it that way, but the chances are that if you do you risk losing more than you’ve ever gained. Although there might be times when it’s virtually impossible to meet pre-agreed payment deadlines, you should always try to, no matter what. Although if you can’t it may be worth have a word with the likes of Cash1Loans who’ll give you the SP on alternative, short-term funding means and much more besides. Essentially though this is no myth. If you consistently make late payments then your credit score will be compromised as you go forward as for your part you’re flouting the rules you signed up to in the first place. And no lender (current or future) will take kindly to this and moreover, continue to accept this. So be warned, than on agreeing to a lender’s terms and conditions, it’s your responsibility to adhere to your part of the deal until the end.

I’ve got credit cards coming out of my ears, so my credit score is impregnable, right?

Er, no. As while on paper this sounds like it should ring true, possessing a stash of credit cards does not necessarily equate to a bullet-proof credit rating. As you might be that someone is scraping minimum payments together, balancing one off against the other or simply that they’re clinging onto said cards due to not being in a financial position to actually pay them off here and now. If anything the opposite applies, in as much the more cards, the greater the perceived debt outstanding on them. Ergo the prospect of a more substantial debt could easily prohibit the debtor to acquire any new funding streams or extend the agreement they have in place. Picture it this way, if you’ve saddled with lots of credit cards and then require another loan, few loans company would even entertain the idea because the very first thing they’d do is question your ability to make these new repayments on top of existing debt.

I’ve heard that just so long as I keep paying minimum payments my credit rating will be fine

Then we’d question your sources if we were you then, as continually making minimum payments over a protracted period of time alerts potential new lenders that this may be masking a bigger problem behind the scenes. That being serious cash flow issues. Lenders want to observe histories of any outstanding debts being paid off, the quicker the better, so as to prove they have the ways and means. Always have and always will.

I guess nobody will give me any credit as I suffered with significant debt problems in the past?

Not entirely true. The further back in your personal history this event occurred the better, as after so many years your credit slate is wiped clean so to speak. Which effectively means that you maybe in a position to start over again, carefully rebuilding a credit rating. Unless of course you were declared bankrupt, which might hamper your plans for a lot longer.

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4 Ways to Pay Off Your Mortgage Early

Two-thirds of American homeowners had to take out a mortgage to finance their home purchase. If you’re serious about joining the list of debt-free homeowners, then you need to start thinking of ways you can pay off your mortgage early. We all know that mortgage payments can be stressful, especially when you have other major expenses to handle.

Check Writing

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So, how exactly can you pay off your mortgage early?

Opt for Biweekly Mortgage Payments

This concept is pretty simple. Instead of making monthly mortgage payments, you start paying every two weeks. That will result in 26 half mortgage payments, which is 13 full-monthly mortgage payments each year. That may seem insignificant, but that extra mortgage payment can knock 8 years off your 30-year loan depending on the interest rate charged for the loan.

Locate your principal amount, interest and tax and insurance fees you pay every month and divide the total by half. That will be your biweekly payment. Find out from your mortgage lender if they accept biweekly mortgage payments. The good news is, popular mortgage options like FHA home loans allow bi-weekly payment arrangements, according to OnQ Financial.

Make Extra Principal Payments

Do the best you can to pay extra towards your monthly principal payment. Every time you do this, you get to save yourself a significant amount of interest charges as well as getting closer to paying off your mortgage several years ahead of the loan term. The most important thing is ensuring that you can do it comfortably without jeopardizing your financial stability.

For instance, if you’re paying $1046 a month, consider adding some extra cash to make it $1100 and dedicate that extra amount as a loan principal payment. Even if you pay just an extra $50 or $100 a month, your principal amount will add up much faster than you would think. Make sure to also check with your mortgage lender before you make additional payments.

Refinance Into a Shorter-Term Mortgage Loan

Have a 30-year mortgage? You could consider refinancing it into a 15-year mortgage. This will blast you through your mortgage loan much faster, and will probably get you a more affordable interest rate, because shorter-term loans come with lower interest rates. An article on how to refinance a home loan notes that those who refinance their mortgage pay a lot less in interest.

To see what savings you’ll make, simply pull up an online mortgage calculator and play around with different numbers to see how much you would have to pay each month for a 15-year mortgage refinance. If it’s affordable, go ahead and do it. If it’s above what you can afford, you can consider a 20-year loan instead.  

Put That Extra Cash Into Your Mortgage

If you have an extra source of income, then it’s obvious you should be setting aside that extra cash into paying your mortgage. Many taxpayers get tax refunds at the end each year. If you direct all or part of that cash as an extra mortgage payment, you can make serious progress in getting your mortgage paid off early. Dedicate any windfall: a bonus, holiday or graduation gift or raise you receive towards paying down your loan.

 

Five dollar bill

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Note that the highest interest loan should always take priority, But if you don’t have an adequate emergency fund, and your mortgage is the only debt you have, then you should be adding any extra money you get to your mortgage payment as additional principal. A Marketwatch article offers some insights into whether to pay off your mortgage or invest that money.

Conclusion

The more cash you put into paying your mortgage early, the less money you’ll end up paying down the line in interest. This will eventually add up to lower mortgage loan payment, making it easier for you to pay off your mortgage early.

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How Much Does a Dental Implant Cost?

“How much does a dental implant cost?” is not a question I ever wanted to know the answer for.  However, last fall we found out first hand just how expensive a dental implant is. Mr. Money had a tooth that had become painful and he made a trip to our general dentist for an exam. She checked him out, decided he needed a root canal, and sent him to the endodontist.  The endodontist drilled through his tooth to discover it was too far abscessed and that it wasn’t able to receive a root canal but would need to be pulled instead.  The endodontist charged us about $200 for his discovery.

Mr. Money was then sent to Dentist Number Three, who was the tooth pulling dentist. He extracted the tooth, sent him home, and told him to come back in a few months for preparation for a dental implant.  This dentist charged us about $200 for the extraction.  Mr. Money asked about leaving the tooth spot empty and not receiving a dental implant but both Dentist Number One and Dentist Number Three said it would be better to receive a dental implant as teeth often move in the absence of other teeth.  Mr. Money went back to Dentist Number Three a few months later, and he started working on his dental implant.  He screwed a post into his jaw bone and sent him on his way.  This procedure cost us about $1720. Unfortunately, at this point we didn’t have dental insurance since as Mr. Money was unemployed.

About a month later, Mr. Money returned to our regular dentist for her to fit the crown part of the dental implant on.  I am estimating that cost about $300.  As of right now, Mr. Money has a fully functioning dental crown and we are now in debt to Dentist Number Three for about $1200 still, after making payments for the last few months.  We are thankful that the dentist is working with us on a payment plan!  I am estimating we will have him paid off in roughly a year. I think medical debt is probably the least fun debt you can accrue.

Honestly, I’m not worrying myself sick to get this paid off because it will get done when it will get done.  Right now, we’re paying $100 a month to the dentist, which is the best that we can do. I don’t like debt but at this point in our financial journey it is what it is.  It will eventually get paid off, and hopefully we won’t accrue any more debt any time soon.  We’re doing our best to make this happen, and we are both trying our hardest to brighten our financial future.  I’m hopeful that next year this time things look so much better!

The moral of this story is- take care of your teeth.  Brush, floss, and visit your dentist regularly to hopefully prevent anything terrible from happening.  I don’t think Mr. Money could have done much differently to prevent his tooth from becoming abscessed, but routine maintenance is always a good thing to do!  An ounce of prevention is worth a pound of cure.

How do you feel about debt?  Are you currently working to get out of it?

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