A phenomenon that had had been declining is making a comeback. The seedy dangerous world of the loan shark is experiencing a new surge of popularity as progressively greater numbers of people are refused credit by the major and sub-prime lenders.

‘Loan sharks’ is the term used to describe money lenders who operate illegally. These lenders are not licensed by the financial services and so are completely unregulated. The Office of Fail Trading (OFT) issues guidelines to first and second line lenders. These guidelines must be adhered to or the lender will lose its licence. They concern a raft of items, however they specifically lay down a set of rules that are designed to protect the interests, livelihood and privacy of the borrower; for instance licensed lenders are prohibited from using unethical tactics to pursue debt arrears and are not permitted to charge unethical interest rates.

On the other hand the loan sharks operate with a completely free rein. Examples of this are interest rates and repayment terms. Loan sharks will often charge enormous rates of interest and offer loans on extremely bad terms for the borrower. Should the borrower fail to make scheduled repayments on the loan, the loan shark will often use extremely unethical tactics in order to get their money back. Often they will make further loans in order to enable the borrower to repay the first one. Gradually the borrower will become entrapped in a debt mountain with which they are unable to cope.

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Anyone who is finding it difficult to borrow money in a normal manner should seek debt advice from a reputable practitioner. To check whether a lender is licences is simply a matter of phoning the OFT.

There is no legal obligation to repay loans obtained from loan sharks, however resisting their demands can be very difficult. Often it is necessary to involve the local Trading Standards Office and even the police if things get very difficult. Anyone who has fallen into their clutches needs to seek help as soon as possible and before things get even more desperate.

If you are applying for a credit card, mortgage, car or personal loan, you should be familiar with the information included in your credit report. You are issued a number, known as a FICO score, which is calculated based on your previous payment history, number of debts with a balance, recent credit inquiries, and balance to available credit ratio.

I often hear remarks about ones Beacon Score for Credit Cards being low because of poor credit management. The Beacon Score (also called Fico Score) is one of the major factor in a credit analysis. Whenever you apply for a credit card, a mortgage, a personal loan or a line of credit, the financial institution will pull out a credit report and look at your score. If it’s not high enough, you could be declined base solely on this information.

Many consumers are aware that they can obtain a credit report, for a fee, from the three major credit reporting agencies. These include TransUnion, Experian and Equifax and they provide your credit report to loan officers, credit card companies, financial institutions and anyone whom you give permission to obtain a copy of your credit file. While many consumers know that credit reports can be obtained for a fee, many do not know that everyone is entitled to a free copy of their credit report from each of the 3 credit bureaus each year. Once every 12 months, you can visit and gain instant access to your free credit report online no fee needed.

When looking at a copy of your credit report, you will be able to view payment histories as submitted by each of your creditors, current and previous addresses along with any information included on public record. This may include civil judgments, bankruptcy or foreclosures, etc. If any of the information contained in your credit file is incorrect, you have the right to dispute that information directly with the credit bureau. At the time a dispute is submitted, the credit reporting agency will investigate and correct any errors that are made.

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Additionally, if you are turned down for credit at any time, the creditor must provide you with a written reason for the decline. At that time, you may request a free copy of your credit report from the agency that provided the information to the creditor. By sending a copy of the denial letter to the credit reporting agency, they are then required to provide you with a copy of their entire file relating to you and your credit history.

It is recommended that consumers check their credit file every 6 months to ensure that information is accurate and to prevent or detect identity theft. If you notice an invalid address or credit line that you never applied for, this is an indication of possible identity theft and should be dealt with immediately by calling the credit bureau and having a fraud alert placed on your file. An informed consumer is a happy one

After consumers complete the loan application and have chosen a loan type, the lender provides several documents to borrowers that disclose important aspects of the loan.

When it comes to borrowing money, it is common to focus on the interest rate. It makes sense, because the interest rate plays the largest role in determining how much the loan will actually cost, plus the interest rate is the easiest way for lenders to market their products.

While interest rates are certainly important, every loan has four common factors that will ultimately determine whether or not the loan is a good deal.

- Most loans come with some type of fee. This fee is usually used to pay for processing or originating the loan, and the fee isn’t always transparent. Sometimes the fees can be worked into the overall cost of the loan, or they may be completely separate. You will probably have to ask in order to find out what the fees are.

- Again, interest rates are used to advertise most loans, and obviously, the lower the rate, the better. One thing you do have to consider is whether the rate is fixed or adjustable, and if there are any special conditions that need to be met in order to qualify for the advertised rate.

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- A longer term on a loan means lower monthly payments, but this isn’t always a good thing. The longer the loan, the more interest you’ll pay. This is where interest rate can come into play again and lenders will offer a very attractive rate, but require the term of the loan to be quite long. This can actually make the loan more costly than a shorter term loan with a higher rate. Make sure you do the math before signing any papers.

- Most people simply ignore the fine print, but this can be a costly mistake. Buried deep inside the terms and conditions you may find things like prepayment penalties, late fees, rate adjustments, refinancing restrictions, and much more. What could be an otherwise very attractive loan, may be so cluttered with potential fees and restrictions that you’re almost trapped into the loan. Take a few minutes to read and understand all of the fine print.

Most lenders use FICO (Fair Isaac Corporation, they developed the FICO, a measure of credit risk, that are the most used credit users in the world) credit scores to get an objective measure of your creditworthiness. By understanding the factors that affect your score, you’ll get an in depth understanding of how creditors view your credit application and how you can bump up your credit standing.

1. Payment history

The factor that has the biggest impact on your score is whether you have paid off the past credit accounts on time or not. It counts for approximately 35% of your score. It should be noted that the recent late payments or missed payments hurt your score more. It will be reflected on your report whether you are 30, 60, or 90 days or more late with a bill payment. A record of late or missed payments on several accounts will hamper your score more than late payments on a single account. So, pay off your bills on time, it will definitely have a positive impact on your overall score.

2. Amount owed

It counts for approximately 30% of your total FICO score. It shows how well you can manage your credit. However, it is not just the amount you owe already that influences your FICO score. Also taken into consideration is the amount of credit available to you. So, total up all the outstanding balances you have and compare it with the amount of credit that is available to you. If you are reaching or exceeding the available credit then it will negatively impact your score.

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3. Length of credit history

The third factor that makes up 15% of your total FICO score is the duration of your credit history. The longer your credit history, you will be considered more creditworthy by the creditors. Also taken into consideration is how long it has been since you used the credit accounts. For instance having an idle card for 15 years won’t bump your score. Also remember not to open multiple accounts at once to build a credit history.

4. Types of credit

Another vital factor that influences your score is the type of credit mix that you have. Your score will reflect your mix of retail accounts, credit cards, and installment loans like car loans and home loans. Consumers who have a healthy mix of credit have a higher FICO score.

5. Number of new credit applications

The fifth factor that influences your FICO score is the total number of recent credit applications that you fill out. For instance, if you have recently made multiple credit inquiries then it will negatively influence your score because it will suggest to the creditors that you are financially burdened and might be late on your payments.

There are other factors like employment, salary, duration of stay at current residence, and marital status that lenders look into. However, these factors do not affect your FICO score.

“If there’s anything I can do, just let me know.”

Admit it. You’ve said that at least once to someone going through a rough time–we all have. Matter of fact, it’s much more than a well-worn, well-meaning phrase that we instinctively say before hanging up the phone, anxious to our friendship duty. Do we ever question if we’re doing the routine rounds or do we feel a pull in our heart?

Let’s face it–how many of us, while in the midst of a crisis, can really get it together to tell exactly what we need? Unless of course it is an injection of a dose of money. So that brings us to the million dollar question–How do you deal with friends who need Financial help?

This could be a delicate situation that can perhaps degenerate itself into a difficult situation, as compared to your own financial status at that moment. If you’d like to help a friend who’s in a financial mess, just keep in the back of your mind that “Money really is power.” And it’s your responsibility to be sensitive to that.

Should you lend money to your friends? Shakespeare said, “Lend money to a friend and you lose both, money and friend.” My dad educated me a bit on this; his advice was that if at all you must help a friend financially, never lend more than you can afford to lose. That’s also my advice for people who are out to make a killing in the stock market–never invest more than you can afford to lose. And that’s what they call the “risk capital.” How much risk capital do you have after all your savings for the rainy day?

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If you’ve loaned people money before and you had a bad experience, tell the person who wants to borrow what happened. Explain that it’s not a matter of trusting that you’ll be paid back. It’s just that you’re not interested in a business arrangement that could cloud an otherwise solid relationship.

If however you do offer to lend money to a friend you could follow these steps: Make a written contract. Make it clear when it is to be paid back and of course make sure you feel happy with the situation.

These steps may sound brutal, but in the long run, they will prove beneficial to yourself, your money, your friend’s money and your the friendship. These are hard facts and unwritten rules of friendship. You can only pretend to ignore them; but, if you want to keep your money AND keep your friend, these rules are the unwritten gospels of truth.

At times you may be able to get out of a situation by offering advice. Ask yourself if you’re sincere and genuine in giving advice to your friend on how he or she could come out of their financial mess. Put yourself in your friend’s shoes. It’s well known that a lot of people get into financial difficulties due to sheer lack of finance management. And some of the direct results of this are insecurity, fear, anger and depression. These feelings of anxiety and confusion can also cause one to make poor money management decisions. These poor decisions can lead to heavy debt loads, and start a vicious cycle of fear, anxiety, and panic that never seem to end.

Set your priorities first. Is the well-being of you, and your family has to be your priority during times of financial stress? Did you notice how “well-being of you” came first in the last sentence, and not “your family?” The reason for that is simple–if you take care of you first, then you are indeed taking care of your family. In financially stressful times, if you, as the head of the family, can’t cope, can you expect your children to cope? Now, or in the future?

Credit cards can be an excellent tool to help you manage your finances. But sometimes we make poor choices, or sometimes the events in life take us beyond our expectations and we are left to foot the bill. Perhaps you have had a few months of extra, unexpected expenses that you are now paying for. What can you do?

Gather together all of your credit card bills and add up the amount that you owe. Factor in the extra expenses you haven’t heard on your credit cards since you receive those bills. Add to that about ten or twenty per cent, which is the “whoops, I forgot about that” factor. Then, with that figure, start shopping around for a loan.

Get the loan and pay off your credit card bills. If you think that you may still use your credit cards, you may want to hide them away so that you reduce the temptation to use them. Now, instead of having several credit card bills at a high interest rate due by the end of the month, you now have one bill that is due once a month at a lower rate. This is called consolidation. At first glance it may not seem obvious why you’d want to do this but there are two reasons:

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The first reason is that you will save a lot of money on interest rates. In fact the interest rates might be as much as half of regular credit card interest rates. The second reason is that you will get one bill with a fixed amount due every month rather than several bills with several amounts due throughout the month. This will help you budget.

Credit cards can be an excellent tool to help you manage your finances and buy the things you want or need. But when things go on a ride and your bills get out of hand, which happens to even the best of us, choosing a personal loan as a way to consolidate those bills will help you reduce your interest rates and set up a fixed amount of payment. Reduced interest rates will ultimately increase the amount of money you keep and a fixed amount due every month will help you plan your budget.

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Most of the insurance agents offer packages that include home insurance as well as car insurance. With a little extra payment, even dental insurance can be included in the package. Consumers who keep up with free insurance quotes are usually the ones who know of these side-deals.

I was involved in a discussion some time back and we were discussing this and all of us thought it was ridiculous that they don’t teach a personal finance class in high school, at least not when I was in school.

Is it any wonder that when kids go off to college they rack up so much debt? According to some statistics I read that the average undergraduate has credit card debt! My friend Shane has recently done a three post job on getting out of debt and each one worth reading.

The logic behind teaching children and teenagers about personal finance is pretty obvious. Just think of all of the finance clichés that you’ve heard: start investing as early as you can, the most important factor in investing is time, don’t get into credit card debt, etc. – all things that are best to learn sooner rather than later.

And because many basic aspects of personal finance currently aren’t taught in school and are left to be learned at home, this current system seems to nurture the fact that wealthy people tend to stay wealthy and poor people tend to stay poor. I don’t think it takes a giant leap of faith to see the possible correlation.

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A simple personal finance class with discussions on retirement, the negative impact debt can have on a person, automobile financing, and saving for the future instead of buying for the now should be implemented in every single high school across the country.

The best long term solution is educating people so that they want to save by making financial capability a compulsory part of the school curriculum and embarking on a public awareness campaign to show the potential hazards of not saving.

Did I really need to learn Chemistry if I had no interest in any fields that would need it? I would think that learning how to control one’s money would be of more help to most people. Thoughts?

Did you have finance classes in high school? If you did, did they help? I would love to hear about your experiences!

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A perfect life insurance policy is the one that comes with perks of rental insurance as well as equity loans. As a result, home mortgage is one problem you may never have to face, and debt loans never pile up to create a financial threat.

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Whenever you hear discussion of credit card debt, the various best ways to manage it and clear it etc., one thing is mostly ignored. Credit card debt can be extremely stressful and it can have a very negative impact on your life.

It’s always hanging over you, getting you down, making it difficult to live your life the way you would like to. This article takes a look at how to recognize debt stress, and what you can do about it.

The Symptoms of Debt Stress: There are numerous symptoms that can be caused by stress. Some of the most common ones are: feeling depressed and irritable headaches, not being able to sleep, forgetfulness, lack of concentration. If you have some of these symptoms but you’re unsure whether they are related to stress a visit to your Doctor may be in order.

Who Gets Debt Stress? Just about everybody that has debts gets stressed about them. Debt results in millions of days off work every year and it’s statistically one of the leading causes of suicide. When you read about someone who has committed suicide it’s very common to find their name is followed by “who owed in debts”.

Students and graduates are among the most vulnerable, as debt is growing here faster than in any other sector of society. It’s very easy for anybody to rely on their credit card, a little here and a little there and before you know it you owe thousands.

The average adult now owes many thousands in debts, tens of thousands even and as that’s the average, then it stands to reason that many people must owe much more. This being the case then always remember that you’re not alone, other people are suffering in the same way and there may well be many worse off than you.

How Do You Deal With It? The perception of stress caused by debt is often of embarrassment or shame. People with lots of debts don’t want to talk about it, even with their family or close friends, for fear of upsetting people or looking like a failure.

It’s essential that you talk about your problems, storing it up inside will result in even more stress. If you talk to no one else you should at least talk to your partner. They are in the best position to understand and possibly help you. When you’re ready to confront your debt stress probably the best route is to find two people outside of your partner, one who can advise you and one who can act as a counselor.

Finding someone outside your partner who can advise you and act as a counselor. That means a professional who knows what they’re doing in regard to financial matters and possibly a psychologist or psychiatrist or some other kind of counselor. Don’t let stigmas deter you, this is about your health which is much more important.

The next thing to do is to consider how you created the debt to begin with. Dig out your old credit card statements. What did you spend the money on? By far the best way to defeat your debt stress is to pay back your debts.

Even if it will take a while to clear the debt you know that your debt is gradually going down and as it does your debt stress will follow.

Does it sometimes seem as though you cannot afford to do things because your financial obligations are holding you back? If you find that you are asking yourself these sorts of questions, perhaps you should take a look at your financial situation and assess whether you are practicing good personal finance management or not. Good personal finance management spends within their income, plan for the future and solve financial problems as they arise. Poor personal finance management pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.

Planning your personal finances doesn’t always come naturally, and even if you’re just beginning to take your financial matters seriously, then you likely need a few personal finance tips.

Evaluate your current financial situation. One of the most important goals for most people is financial independence. Collect accurate information about your personal financial situation. Calculate your net worth which includes the real estate, saving and retirement accounts, and all other assets. This will help you decide how much money you can set aside for meeting future needs and goals.

A basic personal finance tip is to make a budget. A personal finance budget is information made up of your income and expenses and the more accurate this information is, the more likely you are be able to meet your goals and realize your dreams. A personal finance budget should be made for at most one year at a time and include a list of your monthly expenses.

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All expenses must be included. To be sure of that go through all your paid bills, check register and receipts to find expenditures that recurs every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.

Get an electronic bill pay. This is a very convenient way to pay your bills. You pay them electronically, by direct withdrawal from your bank account. The transaction is processed immediately. You can even link your bill pay service to your personal finance budget, so that your expenditures are automatically entered in the appropriate category. Personal financial management can be really easy.

Make an investment and finance plan. Now that the fundamental state of your personal financial security has been established, the time has come for the more prosperous part of your personal financial life. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.

You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you don’t have to worry about debt taking control of you.

Does your spouse or partner complain that you’re spending too much money? When your credit card bill arrives, are you surprised to you find that you charged more during the month than you thought? Does your closet contain lots of shoes or clothes that you almost never wear? Do you own every gadget known to man (or woman)? Do you come home from the mall with items you had no intention of buying? Do you spend money on things that you didn’t realize you needed until you saw them on display in the store?

If you answered yes to any of these questions, you probably suffer from impulse spending. When people are unable to save money for the things that are really important to them, like a house, a new car, a vacation, or retirement, impulse spending is often the culprit. If you don’t have specific financial goals, it’s more difficult to resist spending money on items that don’t really have any meaning to you.

Once you’re already saving regularly towards your most important financial goals, you may want to have a fund to use specifically for occasionally spending money on unplanned items. Then you can indulge in occasional impulse spending without jeopardizing your financial future.

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Impulse spending, or recreational shopping, can put a strain on both your finances and your relationships. To overcome the urge to spend money, learn to recognize your needs from your wants. We’re constantly bombarded with messages from advertisers who appeal to our psychological needs to tempt us into spending money on things we want but may not need. Allow a cooling-off period before spending money on anything you haven’t planned for in advance.

One method of controlling your spending that works well is to carry an index card in your wallet. When you see something you want to buy, write it on the card. Force yourself to wait two weeks (or any other period of time you set for yourself, but at least a week) before spending the money on this item. During this cooling off period, if you see something else you want, add it to the card. However, you can never have more than three items on the card at any one time, so to add a fourth item, you have to remove one of the other items from the list. If you’re an impulse spender, you’ll find that you’re frequently crossing items off to make room for the newest “must have” thing.

Another good rule to adopt is to pay cash whenever possible. When you go shopping, leave your credit cards at home. Most impulse spenders use credit cards more often than not. When you use credit cards, the reality of the amount of money you’re spending and how you’re going to come up with that money, is suppressed. When you pay with cash, it feels like you’re spending “real” money.

Learn to recognize wants from needs, and practice controlling your impulses to spend your money on things you don’t really need, and you’ll be able to change your spending habits and end up far ahead financially.