Understanding Your Credit Score

credit scoreMany of us aspire to have good credit scores because it is one of the most important factors when determining your creditworthiness. Your credit score is what influences the likelihood of a lender approving you for various forms of borrowing money and it contributes to the determination of interest rates, terms and more. When you apply for something like a credit card, lenders want to weigh the risk they would take if they loan you money. This is where they look at your credit score and credit report to see the history of your past as well as your current financial picture; it helps them evaluate and summarize the credit risk.

However, how do you know if you have a credit score that is good enough to get you a great interest rate with favorable terms? Well, many lenders will look at your FICO score, which will range from 300 to 850. With this score range, you want to have the highest number possible to get the best deals on lending. To get a general idea of the numbers that constitute a good score from a bad score, review the following:

  • Excellent Credit = 750+
  • Good Credit = 700-749
  • Fair Credit = 650-699
  • Poor Credit = 600-649
  • Bad Credit = 300-599

While those scores are just general guidelines, every lender has their own classification of what a favorable credit score is. That means if you have a low credit score, you could still be approved for things like debt consolidation loans through Broadstar Financial Group.

What Affects Your Score?

There are many factors that affect your FICO score and it is broken down into five categories that are assigned a percentage. This percentage weighs the importance of each category and they include:

  • New Credit: 10%
  • Credit Mix: 10%
  • Length of Credit History: 15%
  • Accounts Owed: 30%
  • Payment History: 35%

As you can see, payment history and accounts owed make up the majority of your FICO score and individuals who once had good scores can quickly see that number drop when they face a change in financial circumstances. A rise in debt may occur from pay cuts, job loss, medical problems, divorce or having to rely on a low, fixed income because they may turn to credit cards to make up the difference. Of course, this has a domino effect because the payments can become overwhelming and unmanageable, which in turn, affects the FICO score.

How To Fix It

When an individual ends up with a low FICO score and a high amount of credit card debt, they may be able to find a solution through a debt consolidation loan by contacting Broadstar Financial Group. This option can help alleviate the stress that comes from multiple credit card payments and staggering interest rates. Often, those who opt for a debt consolidation loan will get a single-digit interest rate by combining all of their credit card debt into a loan that has one easy-to-manage monthly payment. With that in mind, it will provide the individual with numerous benefits because they can get immediate payment relief and with time, they can work on improving their credit score.

Black Friday Budgeting

sale shutterstock_41845789Did you know Americans are planning to spend over $630 billion this year on holiday shopping? According to the National Retail Federation, enticed by great deals, consumers will be hitting stores for all types of gifts, food, and holiday items for Christmas, Hanukah,  Kwanza, and other festivities. That can also mean big problems for millions of Americans:  It is too easy to swipe a credit card and rack up debt. Depending on how you manage your budget, Black Friday could be good or bad for you. :–Keeping in mind that your credit card may hold a high interest rate, check out some suggestions that will help you effectively budget your Black Friday shopping plans.

Set A Limit

We all know tis the season of gifting, however, don’t let your good intentions turn into bad financial decisions. Set a spending limit and stick to it. It is a bad idea to spread your finances too thin. Even though Black Friday deals can save you a ton of money, you can easily get carried away with too many purchases that will turn those savings into big financial burdens down the road. Once you have your overall budget set, allot individual amounts for each person on your gifting list.

Make A List

Start browsing the hundreds of Black Friday deals now and create a list of the items you want to purchase. This can help you stick to your budget and give you a well-thought game plan. Another great strategy is finding an alternative product for everything you have on your list because Black Friday deals only last as long as the inventory is in stock. Chances are that you may not be able to get your first picks on a few items, so if you have a backup, it can help you retain a budget-friendly alternative. Lastly, once you make the purchase, cross it off your list and calculate how much you’ve spent to remind yourself of the budget.

Consider Cash

Like mentioned above, swiping your credit card for purchases is all too easy and if you know that you tend to overspend, consider using cash. Carrying cash around can keep your spending under control because you only have a finite amount.. In order to avoid spending too much cash on one person without dipping into the designated amount for another, place the cash into separate envelopes with the names of each person on your list.

Don’t Forget About Cyber Monday

Hitting the stores for deals is not the only place where you can save on holiday gifts: In fact, Cyber Monday falls on November 30th and it’s a similar shopping event that takes place online. You can shop from the convenience of your home and find discounted goods as well as special deals on a variety of products.

Keep these budget suggestions in mind when you are shopping during Black Friday and Cyber Monday so you can maintain control over your budget. For more ways to take control of your budget and to stabilize your financial security, contact Broadstar Financial Group today.

Dealing with the Financial Impact of High Medical Bills

stressed couple Did you know that one in four American families experience some level of difficulty in paying medical bills? According to data from the National Health Interview Survey, some of these families have problems paying medical bills in general, while others have long-term payments that are hurting them financially; others still are unable to pay their healthcare bills at all. If you are struggling with heavy medical debt, there are ways to find relief that are easier than you think.

Debt Consolidation

Medical debt is just like any other debt you have accumulated – it is money owed, whether to a lender, creditor or doctor’s office. The best long-term strategy is to gradually pay down this debt; however, medical debt can often be difficult to manage, since it’s often simpler for the organizations in question to just send it off to collections rather than working with you. Perhaps you’ve already tried to dodge collections by paying the bill with a credit card, but now you’re having trouble affording all of that interest. You’ll need a way to pay off the lump sum now so that your debt doesn’t ruin your credit. In order to avoid this and get financial help, you’ll need a debt consolidation loan.

A debt consolidation loan doesn’t make your medical bills disappear, but it can immediately improve your cash flow and provide you with some much-needed financial relief. In layman’s terms, these loans can be used to pay off all of your bills at once, leaving you with only one bill that offers a much lower interest rate. This provides you with more financial flexibility, as all of your medical debt will now be in one easy-to-manage account.

Debt consolidation loans also keep you from forgetting due dates and make it easier to manage the money at your disposal. For instance, having bills due the 3rd, 12th, 21st and 27th of each month makes it more likely that you will overlook one of them or potentially spend the money in your account without leaving enough for that automatic payment that you scheduled. With only one bill to remember, this scenario becomes much less likely.

In addition, these loans can be tailored to your specific financial needs. For example, even if you haven’t resorted to using your credit cards on medical debts, you may still owe a significant amount on them. You can bundle these cards into the loan so that you get all of the advantages of lower interest rates. This is especially useful for credit cards, since many of them have prohibitively high interest rates once you’ve passed the introductory period. This extra money can be used to better manage your finances, pay for regular life expenses, and start putting aside some savings. Once you get into the habit of being smart with your money, it can keep you from falling into the same debt trap again, and those savings can be put towards unforeseen medical expenses in the future.

Whether you are on the brink of having your medical debt sent into collections or you’ve maxed out your high-interest credit cards to cover medical bills, contact Broadstar Financial Group for a debt consolidation loan. With it, you may be able to overcome the financial burden of medical debt!

3 Tips to Manage Debt

money-256312_1280Did you know 8 out of 10 Americans have debt? According to a recent study published by Pew Trusts, the most common type of debt stems from mortgages but that’s not the only thing people can struggle to pay back. There are credit cards, student loans, car loans and so many other things that can all add up to a decent size. With that said, how well do you manage your debt? Read on to learn three simple ways to make managing debt easier to get on the path of eliminating debt completely.

  1. Know How Much You Owe

Time for a reality check! Make a list of all your debts and write down how much you owe and to who you owe it to. From there, make sure you note the monthly payment amount and each due date. Once you’ve gotten everything in front of you, you can clearly see how much you need to pay. Seeing everything in plain sight will give you the motivation to buckle down and get smarter with your money. Transfer your list to a calendar and place it on your refrigerator to serve as a constant reminder of when everything is due. On top of that, add reminders into your phone so you reduce the chance of missing a payment.

  1. Cut Back On Spending

In order to live debt-free, you’ll need to cut back on daily spending because you will want to put as much money as you can towards your debt. Think about the things you need and not the things you want. For instance, if you order take-out once a week, consider cutting that back to once a month. If you buy a cup of coffee each morning before work, consider making it yourself. These little conveniences will add up to a great amount of money that can be applied to debt you owe.

  1. Consider Consolidation

Like mentioned earlier, you may have many different forms of debts and juggling all of the payment due dates can be stressful. Instead, you could benefit from a debt consolidation loan that could lower your interest rate on many accounts by lumping them together into one single loan. For instance, you could apply for a debt consolidation loan from Broadstar Financial Group that would take your existing debt and put them into one easy-to-manage loan.

When it comes to eliminating debt, you need to be proactive with the way you manage your money. By trying the suggestions above, you could be on the path to financial freedom!