Why Are Credit Scores Important?

In a world where the credit rating makes up 90% of your financial reputation, you’ll want to make sure that you maintain an excellent score or rating all the time.

Maintaining a good credit standing shouldn’t be all that difficult. All you really need is to keep up with your bills. Unfortunately, things don’t always work the way we plan them to and once in a while we’ll get into some trouble that can affect our credit score. When this happens, you’ll need to work on repairing that score before your reputation plummets and life becomes much more difficult.

What Is a Credit Score?

Think of your credit standing as your image because it is in so many ways. When financial companies look at you, they won’t see your face or the way you present yourself. What they’ll see are the figures that make up your credit score.

If those figures are good, you’ll find it easy to obtain loans with better interest rates and payment terms. If the figures don’t agree with the financial institution, you’ll probably receive a blank stare or even worse.

So, if you’re looking to go through life as smooth as possible, take care of your image (credit standing).

Excellent credit standing for good image

How Does a Credit Score Work?

First of all, credit scores are maintained by organizations with access to all your history, from loans to utilities.  Some well-known organizations are FICO and Vantage.

The scoring system is measured by a chart that goes from 300 to 850. If you’re repaying your loans so that you can take out new ones more frequently, you’ll get a score of over 700. If not, then your score drops. The worse you become at repaying loans, the lower your score gets. When it reaches the lower levels, you’ll find it difficult to get any type of loan at all.

How Do You Monitor Your Credit Standing?

One of the best ways to maintain a good credit rating is to monitor your report regularly. You’re usually entitled to one free report a year from organizations that monitor your ratings. After that, you’ll need to pay a certain fee for additional reports.

However, not all companies that claim they can monitor your ratings and provide you with free credit reports are trustworthy and reliable.  Some of them can be total scams.

A good example is a company called freescore360. Now, if you are wondering is free score 360 legit? Well, according to the BBB (Better Business Bureau) this company has a score of F, which is the lowest they give out. If you want to learn more about why the BBB provides their report freely on their website.

Conclusion

It’s important to monitor your credit standing, but it’s even more important to make sure that you’re doing all your can to pay your loans on time. If you’re doing this, there’s no reason why you should be given a low score, which means you won’t need to worry too much about monitoring your rating.

Would an Individual Voluntary Arrangement (IVA) Be Good for You?

So, you owe your creditors a certain sum of money and now you are having difficulties in catching up with the payments? With these financial troubles, your enterprise is in danger of bankruptcy and you have a lot to lose. Where do you turn to for aid?

How IVA can help with your debt

Individual Voluntary Arrangements (IVA)

In a nutshell, IVA is a legal agreement between the payer and the creditor for the former to pay his debts to the latter at an amount which he can afford on a monthly basis within a certain period of time agreed upon. This period lasts usually relatively longer such as in five years. During these years, creditors are prohibited from increasing the payment terms. Upon making the final payment, the rest of the debts is disregarded.

Sounds better than declaring insolvency, right? But can it do you more good than harm? Are you qualified to have an IVA set up for you?

Down here are some fundamentals and essentials about IVAs for you to take a look at before you decide to sign up for one.

The Benefits

Under IVA, you will only have to make practical and realistic monthly payments. The amount will have to be based on what you can actually afford. You have much greater chances of keeping your assets, such as your house and your car, for as long as you are able to maintain the mortgage payments and any other kinds of loan which you owe. Your creditors are not allowed to include these assets in the agreement.

In addition, your creditors cannot make any other legal move against you such as bringing the case to court. They are not even allowed to contact you regarding what you owe them.

IVA may have to stay on your credit file for the next six years but you will not have to endure as many financial and credit restrictions relative to having been bankrupt. Hence, on the face of it, IVA seems better than bankruptcy.

Sounds good so far, right? But are you suitable to enter into IVA? Let us find out next what the risks are.

The Disadvantages

While being allowed for realistic monthly payments is part of the advantages IVA can offer you, these will go on for five years. Depending on how you look at it and how undemanding or burdensome this might be for you, these payment terms under IVA can be considered a disadvantage as much as it can potentially be easy.

IVA is a deal or contract between you and your creditors and it is not built on trust which is not a legal criterion to set up for an IVA. You may be permitted to keep your assets but may also have to be obliged to release a considerable part of your equity. This may happen at the start of the agreement or toward its end.

Should you fail the IVA along the way by not adhering to the terms, it will still be bankruptcy which you will fall off to.

Weigh the factors and circumstances of your current situation and get professional IVA Help & Advice now and find out more about the arrangement. If you ever come to the decision of moving on in an IVA, choose your IVA provider wisely.