How to Stay Safe From a Credit Card Breach

As if you needed another reason to be concerned about your financial well-being. Financial experts throughout the United States are continuously warning consumers about the dangers of various financial reaches. And with good reason. Throughout the past several years, there have been serious security breaches at some of the nation’s largest – and most trusted – retail stores.

When it comes to securing your financial information, there are many elements that are outside of your control. However, this doesn’t mean that you have to fall victim to these crimes. We spoke with a top security firm to discuss ways you can protect yourself. With the number of elements that are outside of the realm of your control, there are many more that are within your control. Whether you’re looking actively protect your credit card information or are simply wanting more information about how you can safeguard this essential portion of your life, this article delves into the various steps you can take to help reduce your risk when it comes to technology breaches.

Tip #1 – Use a Prepaid Credit Card

According to our research partner, this is perhaps the most secure way to carry out digital transactions. These cards are in no way connected to your bank accounts, which make them the ideal solution to this ever-present problem. However, they do have some downsides to them. The most noteworthy of these is there is virtually zero fraud protection. Therefore, if a thief gets a hold of your card number, you will likely just be out of this money. However, you can prevent this from being truly detrimental by only loading a small amount of money on the card to cover specific purchases. It’s a good idea to use a different card every month to reduce the likelihood of this happening.

Tip #2 – Temporary Cards

The majority of major financial institutions, such as Bank of America and Wells Fargo, offer what’s known as a single-use credit card. Just as its name suggests, these cards are only good for a single purchase. While these are a viable option, they are a pain for some consumers as you must go and retrieve a new card for every purchase you wish to make. However, if you’re planning a large purchase, then they may be a great option for you.

Tip #3 – Stick With Cash

While this may seem outdated, the safest way to protect your financial information is to limit its spread across the retail industry. Instead of using your debit card or credit card, opt for using cash instead. According to leading industry experts, traditional cash purchases are – and will always – remain the safest way to spend your money.

What is A Good Credit Score for First Time Home Buyers?

Buying your very first home may come as a breeze if you are someone who happens to have very good credit. You may not get turned down just because your credit score doesn’t categorize as “good” credit, but you will definitely not get the best interest rate out there. Good credit scores will definitely come in handy when you get ready to buy your first home. They definitely will look for good credit, but may give you an exception but will make your interest rate a lot higher. So you may be asking, what credit score do I need to buy a house? Ideally, a first-time home buyer should work to get their credit score to 700 or more for the optimal interest rate.

Credit Score for First Time Home Buyers

A 700 credit score will get you in the home you want and not just end up settling for something that you do not too much care about. Buying a first home may come off as a bit unsettling for some, or some may be a bit anxious about buying your first home. The best thing that you can do is a lot of research prior to buying your home. Your credit score will also matter a lot more if you are trying to buy a mansion versus just a tiny 2 bedroom house. The best piece of advice to give yourself is to just be mindful of those things prior to finding a home. You want a good credit score, but you will also want to make sure that you find a home that is in your price range and nothing out of the ordinary that will require you to have a very high credit score.

Once you begin finding something that is within your price range, do a little research to see what you think may me the best credit score in order to get approved for a mortgage loan. The process may not be as hard as you may think.

Further Reading – Personal Finance & Security: How to Stay Safe From a Credit Card Breach

How to Find the Best Reverse Mortgage

In 2014, over 23,000 homeowners decided to revamp their financial life with a reverse mortgage. This number is surprising to many homeowners because the majority of big banks have stopped or severely reduced the number of reverse mortgages they approve. Because of this, many homeowners who secure a reverse mortgage are dealing with lenders that are lesser-known. While this may be a scary situation for many property owners, there are several tips to help streamline this process and ensure whether or not a reverse mortgage is best for you.

What is a Reverse Mortgage – A Brief Overview

Before delving into the steps in obtaining a reverse mortgage, it’s important to fully understand what this type of financial deal truly encompasses. A reverse mortgage is primarily used by Americans in retirement. While there are many sources of income a person in retirement may live off of, if you own a home a reverse mortgage helps add to your monthly income for greater comfort and financial security.

The term “reverse mortgage” directly references its process. Instead of payments going to a mortgage company, the payments are reversed and you (the homeowner) receive monthly payments based upon the equity that’s been built within your home.

Review the Payout Options

Just like any other payout system, not all reverse mortgage plans are the same. There is a wide variety of payout options which allow you to tap into your home equity. Perhaps one of the most popular options is provided by the Federal Housing Administration, which offers a total of five different payout plans. One of the most popular payout options is one where payments are sent out to the homeowner as long as they are alive and lives within the home as their primary residence. There are also plans based upon a fixed number of years. Another popular option is to use the equity within your home to create a line of credit, which allows you to fully control how much money is removed from the equity and when the funds should be delivered; however, this option does feature a maximum payout amount.

Read the Fine Print

While a reverse mortgage may be an ideal choice for some, for millions of others, it ends up being one of the worst financial mistakes of their life. Many reverse mortgage agreement require the homeowner to continue to pay for utilities, real estate taxes, flood insurance and homeowners insurance. Should the homeowner stop paying these expenses, the lender may actually stop sending out payments, or if a lump sum was delivered, action can be taken against the homeowner, which typically includes foreclosure on the home. With a reported 70 percent of borrowers requesting lump sums instead of monthly payments, many homeowners find themselves in a dire situation when the cash runs out and they’re unable to keep up their end of the deal, which is paying for regular monthly home fees and maintenance costs.

Credit Score for Low Mortgage Rates

When it comes to getting a mortgage, your income and the down payment  are both important factors. But they aren’t the most important factor. That would be your credit score. Not only does is a good credit score needed for approval to buy a car, boat, or home, but it also will play a major role in whether you get a low interest rate or not.

Credit Score for Low Mortgage Rates

Though it varies from lender to lender, you generally need a credit score of somewhere between 720 and 760 to get the lowest interest rate possible. This is usually the rate that the bank or mortgage broker advertises. Though many lenders will give mortgages to people with scores as low as 620 and even lower, the interest rate will be much higher.

While your credit score is the most important factor in getting a low mortgage rate, it isn’t the only one. If you are getting a loan through a government-backed program, such as a VA or FHA loan, you may not need a high score to get the best rate available. You also may be able to get a lower interest rate by paying points, which are upfront payments you can make to lower your interest rate.

Why Getting a Low Rate is Important

Because mortgages are such long-term loans, usually with 15- or 30-year terms, even small increases in the interest rate can mean you pay thousands or even tens of thousands more in financing costs over the life of the loan.

Improving Your Score

If your credit score isn’t high enough to get the lowest interest rate available on a mortgage, there are some things you can do to improve it. Pay off any past-due balances as soon as possible, and reduce the amount of debt you are carrying on your credit cards. Always stay vigilant regarding your financial security, and conduct regular security audits of your credit card accounts. One breach and your score could be impacted, even if you are not liable for the unauthorized charges. You also should also avoid from taking out any new loans or credit card accounts, especially in the months preceding your loan application.

Mortgage Rates and Credit Scores

The following are a few facts about the relationship between mortgage rates and credit scores.

Your Credit Score’s Impact on Your Mortgage Rate

Credit scores can seriously affect your mortgage rate. For example, in recent years 720 has been considered a “good credit score” for those looking to purchase a house. Therefore, if a person had a credit score within the 700 range, they would most certainly receive a much better mortgage rate.

A customer applying for a mortgage with a credit score within the 500-600 range would certainly receive a higher interest rate then someone with an almost perfect credit rating. A poor credit rating is considered more of a risk to most banks and financial institutions. Therefore, the customer may still receive the mortgage however the interest rate will certainly not be as competitive.

Therefore, credit scores not only affect mortgage rates but they can determine interest rates on certain credit cards as well as the terms of certain loans. Prior to applying for a mortgage, it may be wise to obtain a copy of a personal credit report.

Credit reports give the consumer an overall view of their credit standing as well as the overall credit score. Some services are available through the Internet that will actually provide a yearly copy of a credit report for free.

There are also credit services available that will keep track in any changes in personal credit score. Once a change is detected in overall credit score, the consumer would be notified immediately.

High credit scores can certainly secure low interest rates on home mortgages. In addition, decent credit scores can also be quite helpful when a consumer is considering re financing options. The bank or financial representative can explain these options prior to applying for a new mortgage.

A first time mortgage applicant with a high credit score would more than likely be offered an interest rate which may be hard to match. An mortgage interest rate of 2.8-3% would be considered a competitive interest rate available to only certain individuals.