Monday, June 30, 2008

4 Options to Get a Credit Card Even with Bad Credit

When you get turned down for a credit card because of bad credit, it's really not the end of the world. You still have many options, as you're about to find out.

Option #1: Your Credit Union/Bank

Most credit unions and banks now offer special credit cards for their customers. If you have a checking or savings account with a financial institution, check with them and see if they offer a credit card. If they do, apply for it. Chances are, you'll get accepted, albeit with a low credit limit, simply because you've proven yourself worthy based on your history with them. If, however, you've overdrawn your checking account, you may want to wait a few months and make sure you have a good history with them before applying.

Option #2: Local Stores

Generally speaking, getting a credit card from a place like JC Penney or Sears or Target is frowned upon because of the high interest rates these stores have for their credit cards, but for those with bad credit, they really don't have anything to lose by applying for a card with a store. In fact, it can be the start of re-establishing credit and getting a better card in the future. More than likely, if you apply for such a credit card, not only will you be accepted, but you'll probably get a decent credit limit. As long as you pay the balance in full, it'll be a good deal for you.

Option #3: Co-Signer

A lot of people with bad credit overlook one fact: if they get someone with decent/good credit to co-sign with them for the credit card, they'll most likely be accepted for even those credit cards that require good credit. Most people don't like asking someone to co-sign with them, as it can make them feel as if they're unworthy, but it is really a solid solution provided you're willing to make payments on-time every month on the credit card. If you have a spouse, getting a co-signer should be very easy.

Option #4: Secured Credit Card

Because of the fact that so many have bad credit, a lot of credit card companies now offer something called a secure credit card. A secured credit card is a credit card that is backed by the borrower's own savings account, so that if they spend too much, it comes out of their own money and not the company's money. While secured credit cards aren't for everyone, they're a great way of helping someone with bad credit to re-establish themselves.

Friday, June 27, 2008

With gas prices escalating it seems there ought to be a way to decrease the money we spend on gas. Not the science fiction method of converting your car to run on water instead of gas, or buying an expensive hybrid car that runs on electricity and gas. If you did that you'd have to own that car for the next bjillion years to come out ahead on the gas savings.

One method of saving on gas is to bunch your errands all into one trip. For example if you take your kid to school, also do your grocery shopping, pick up the dry cleaning, and return the books to the library on that same trip. Even better is to get a car pool going in the neighborhood where you only have to drive to school once a week. Picking up the other children that one time a week will use less gas than driving to and from five days a week.

When you're waiting in line at the drive up window at a fast food, bank, dry cleaning store. Turn off the engine if you'll be waiting more than a few minutes.

One way that will help you earn money on your gas purchases thereby decreasing the money you spend on gas is to get a gas card. Gas cards are credit cards that reward you for your gas purchases and other purchases. Every time you use the card you can get cash back, earn reward points for gas purchases. It's something to think about.

Thursday, June 26, 2008

Even With Bad Credit, You Can Get An Auto Loan

Getting an auto loan for people with bad credit isn't as hard as you might believe. An auto loan is a secured loan, which makes it a little easier. With a car loan, the lender will hold on to the title to the car until you have paid the loan in full, so they at least can repossess the car if you don't pay as agreed. Hopefully, that won't be the case, and you can use the auto loan to help rebuild a good credit history.

A lender will determine you can pay. They will check to make sure you're employed, and also that you can pay your current debts and the new loan out of your monthly salary. Expect to demonstrate at least three or four months of employment with your current employer, and some employment history before that. A lender will calculate what percentage of your income is already going to pay off debt - and as a guideline they will look to see if your debt is under 30% of your monthly paycheck. Every lender has their own in-house guidelines to follow. Remember that even though a lender has the car as security for an auto loan, they are not in the car sales business, and they would rather not repossess your car if at all possible.

If your situation is fairly stable, and you have regular employment, and are able to pay the debt you have now, then even if your credit is less than perfect, you will probably qualify for a car loan. Again, because a car loan is secured against an asset, the car, youmay qualify even if you have foreclosure, bankruptcy, or other serious credit events on your credit report.

When you're working to rebuild some good credit, getting an auto loan for can be just the ticket. You'll need a working vehicle to keep your job of course, and if you need a better car, getting a loan can help. You will have to make sure you pay the loan on time each month to re-establish a good credit history.

If you are stuck with a poor credit history, don't worry. Several lenders in the marketplace realize that many people with bad credit need cars. They may charge you a higher interest rate on the loan, and perhaps an application fee. You'll also need money down on the loan. One loan term to watch out for is a prepayment penalty, which means you'll pay a hefty fee if you pay off the car loan early - which could happen if you need to resell the car. Avoid prepayment penalties whenever possible.

It's also best to check with your bank and other lenders before turning to the car dealership for a loan. Most car dealers will not offer loans for individuals with bad credit, but the ones who do will likely offer very high rates and fees. Use them as a last resort.

Getting into a new car with an auto loan for people with bad credit is certainly possible. Just use caution when taking on new debt, and make sure you pay if off on time to rebuild your credit score.

Wednesday, June 25, 2008

Tips for Investing in Foreclosed Properties

Thanks to the explosion of the real estate market a few years ago and the amount of people who are now defaulting on their home loans, the real estate foreclosure market is booming. Unlike a decade ago when a foreclosure was almost certainly a broken down/condemned piece of real estate, now foreclosures are just as likely to be beautiful and well kept homes! This makes investing in foreclosed properties incredibly lucrative.

If you are interested in investing in foreclosed properties, here are a few tips to help you get started:

1. Do your research! Before you jump off the high dive, make sure you do your research on each and every property that you are thinking of investing in. If you can afford it, you should have each property professionally appraised before submitting an offer on the foreclosed property. Make sure that you aren't going to be investing in something that is going to be more of a "fixer upper" than you originally thought.

2. It is better to buy a foreclosed property at public auction. This is because sometimes homeowners who are facing foreclosure will take the money they make from selling it to you and, instead of using it to pay off their current home loan; they use it to purchase a new home. This means that, technically, the bank could still seize the house you just paid for and you have little chance of recouping your investment.

3. Investing in foreclosed property shouldn't be looked at as a full time job, especially if you are just entering into the field. It is best to start investing in foreclosed properties while you still have a full time job or some sort of steady income to ensure that you are still able to pay your bills while you work on your foreclosed property and wait for it to "flip."

Investing in foreclosed properties isn't for the faint of heart, but it can prove to be quite a profitable business! Make sure that you do your research and learn every thing you can about the field before you get started!

Monday, June 23, 2008

Venture Capital Conferences

Venture capital forums/conferences

Most regions of the US have a least one of these conferences annually. They are often sponsored by chambers of commerce, economic development agencies, technology associations, venture capital firms, or local venture capital clubs.

The forums are usually a combination of networking, speeches by experts in the field of raising capital, and presentations by a carefully selected group of companies seeking capital.

It is hoped by the conference organizers that a significant number of attendees to the event are venture capitalists or angel investors, or others who at least have access to investors.

Entrepreneurs are most interested in being included in the roster of companies making presentations. They need to keep several things in mind: there are usually hundreds of applicants to a well-publicized conference and only a half dozen or so companies selected to make presentations. The odds of being chosen are slim.

A public forum is not the best venue for some entrepreneurs who may not be comfortable with performing to an audience. Great care must be taken in organizing and practicing the presentation. If the audience loses interest in the first few minutes of the presentation, it is unlikely the entrepreneur will be able to get their attention. It is best to hammer home a few very important points rather than trying to present an entire business plan, or describe a complex technology in great detail. The most effective presentations tell the audience:

• What is truly great, unusual, groundbreaking about the business concept
• How this will result in investors being able to make money

These may sound like simple points, but in a large number of these presentations, the audience walks away not even understanding exactly what the company does.

The real benefit to these events for most entrepreneurs comes in the form of networking opportunities and social events, being able to introduce your company or your business idea to people who may have money to invest or know of people who do. Ideally, you may find someone who is so excited about your company’s prospects that he or she agrees to be your “champion,” recommending your company to potential investors and perhaps willing to help you in a mentoring capacity.

Wednesday, June 18, 2008

More on venture capital

Venture Capital Leasing

Some companies specialize in providing lease financing for equipment to high-tech start-up companies that wouldn’t ordinarily qualify. The financing can be provided at a higher fee to offset the risk and/or the finance company can have the option of purchasing stock at a preferential price if the company goes public.

Venture Capital Online services

Many intermediary-type firms have an Internet presence, which expedites the process of contacting them. Some perform a basic matching service, bringing companies and investors together. These services are not as prevalent as they were in 2000 and early 2001. As the environment for venture capital becomes more positive, more will pop up again. It is debatable whether established venture capital companies actually use these types of services to begin with. Most VCs have more deals and potential investment than they know what to do with.

Thursday, June 12, 2008

Venture Capital for Your Company

Venture capital funds are actually money management firms, sort of like mutual funds. Except instead of offering shares to the public, the partners of venture capital funds go out and raise money from large institutions such as pension funds. Most Venture Capital firms (VCs) are organized as limited partnerships. The partners in the firm may have some of their own money in the fund, but most of the money comes from outside sources, the limited partners. This is the major distinction between a venture capital fund and an angel investor: The venture capital fund invests money it has raised. An angel invests money he/she has earned.

In recent years, the average size of investments made by VCs has risen considerably. It is not unusual for $10 million or more to be invested in one company.

When venture capital funds raise the money from the limited partners, they do so on the basis of agreeing to invest in certain types of companies. Often the firm has a focus on one type of technology, such as networking systems. Many times, the fund will only allocate a limited percentage of its capital to early stage investments, which are inherently riskier, and devote most of it to companies that are already well on their way to success and just need capital to expand more quickly.

Entrepreneurs can save themselves a great deal of time by studying the types of investments the various venture funds have made in the past and only contacting those that are a close match with their entrepreneur’s company.

The good news is that there are many excellent directories, some online, of VC firms that describe the firms’ investment focus in great detail. Nearly all the major VC firms now have web sites that provide a wealth of information about how to contact them and about what investments they are particularly interested in making.

When preparing a business plan or executive summary to send to a venture capitalist, it is important to focus on the most important factors VCs uses to evaluate investments:

Quality of the Management Team
Size of the Company’s Market
Proprietary, uniqueness, or brand strength of the company’s product
Potential return on investment (ROI)
Company’s potential for growth

Which of these is the most important factor? Hands down, the Quality of the Management Team.

Wednesday, June 04, 2008

Does the term refinance loan scare you off. Here are a few tips that might make it a little less scarey.

Be realistic as what can be accomplished and what can't. Most mortgage lenders require that the appraised value of the home be at least 20% higher than the mortgage. That gives them a cushion in case values drop. The appraisal is based on what comparable homes in your neighborhood have sold for. That's different than what homes are listed for sale at.

Check your credit scores. Don't be unpleasantly surprised. If there are errors, such as a debt showing up that has been paid, get it cleared up before applying for a new mortgage. There is refinancing available for those with less than stellar credit but it's not at the low rates you might be expecting. You can check your credit scores online but you do have to sign up and provide some personal information. It's not instantaneous. Your identity has to be confirmed before you have access to your reports.

Don't wait until the last minute. Prepare the materials you think you'll need ahead of time. Most mortgage lenders want verification of income through tax returns, or paycheck stubs. They'll also want copies of bank and checking accounts, stocks, bonds, and other assets. If you're considering a major purchase put it off until you've refinanced your mortgage. Don't use your credit card or savings to finance that purchase.

Know what you want. There are so many alternatives from the standard 30 year mortgage. Mortgage rates and terms vary. Don't let yourself be talked into terms which may sound good in the short term such as an interest only loan, but may turn out to be trouble in the long term. Refinance at a level that's comfortable for you. You may think that taking out a loan that is as high as possible is the best course of action, but remember you'll have a bigger monthly payment.

Shop around and compare mortgage lenders before you get mortgage quotes. Check the fees they require, time it takes, application procedures, points, and interest rates. It's amazing the variance you can find.