Whether it be business or personal, dealing with money, credit, loans, all of that type of stuff really can get complicated and it can be hard to discern for yourself what the best practices may be. Raleigh is a very big city in terms of not only the population but the amount of business done there. Even if you aren’t interested in business at all, you need to have a good understanding of how to manage your own finances just to make your life that much easier, nobody likes to have to deal with financial issues. Get more detailed information about our credit resources here. 

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Raleigh Mortgages

The official legal definition of a mortgage is “the pledging of a property to a creditor as security for the payment of a debt.” To put it in English, a mortgage is a loan and your property is your collateral to ensure that you pay off that loan in full. For the huge majority of people, the biggest loan you will ever take out is a mortgage loan for a home. When you get a regular loan, there’s no certain collateral required before you can borrow. The lender will simply look at your credit history, income, and factors like that to determine if lending to you is worth the risk. With a mortgage, you have to have that collateral as the home itself. If you aren’t able to pay back the loan, and this also means any fees and interest included, then the lender can take your home to help them recoup any money they lost.

 

Probably the most important take-away is how your credit score is going to affect mortgage rates and vice versa. If you don’t have the cash on hand, as most people don’t, you really want to avoid buying a house or getting a loan for one unless your credit score is already at a good point. Low credit scores mean you’re less likely to even qualify at all, and you’re only going to get the highest rates that they offer. So it is still possible, but for your own financial sake, it is far from ideal. Having a high credit score means you won’t have any issue being approved for mortgages and loans, and you’ll be able to get the lowest possible interest rates. Something as small as one extra percent on your interest rate can add up massively by the end of your loan, it could come out to thousands of dollars extra that you may just not have on hand. Never take on a mortgage unless you are 100% ready to handle it responsibly and know you can make your payments.

Bankruptcy

Bankruptcy is a legal process that involves either a business or person that doesn’t have the means to repay their outstanding debts. Most often a debtor, being you who owes money, will file a petition, all of your assets will then be evaluated and some of your assets may then be used to pay parts of outstanding debts. While this does free you from your debts, some things like student loan payments are going to stick with you regardless so don’t forget to check the details. It also doesn’t just get you out of your other debts scott free, it’s going to be visible on your credit report for up to 10 years and is going to make it very hard for you to borrow money in the future. Do NOT make this decision lightly, your credit score is almost certainly going to see some serious drops, expect on average to lose well over 100 points. If you already have a decent credit score you’re going to see the most damage done, this is just because you have more to lose, and filing for bankruptcy is a last resort.

 

Quantity and the amount of debt you’re trying to rid yourself of is a huge factor in how many points you’re going to lose overall if you’re trying to shed multiple accounts with hefty debts you’re going to see some heavy impact. At the end of the day what’s going to weigh on your credit is how recently you filed and the details of the bankruptcy itself. The sooner you can work on growing your credit score afterward, the better. You don’t need to wait at all and there is no magical trick to getting your score to climb back up, but responsible credit use is your best bet.

Personal Loans Raleigh, NC

Approved Raleigh Personal LoanTaking out a personal loan is a double-edged sword. In the short-term, it may cause your score to lower slightly. This is just because of how the score is factored, you’re taking on new debt and increasing your overall debt load. But on the other hand, if you’re able to pay off your loan in a timely manner it’s going to be great for your overall score. As we always stress, do your research first and find the best possible loan in Raleigh. If you already have a good record of paying off loans and debts the negative effects right off the bat may be mitigated. Just like with all things credit, start making those payments on time and don’t stop until the debt is gone, and your credit will benefit. Responsible credit history is the biggest part of your credit score, taking on, and paying off a personal loan is just going to bolster your history of these good payments. Keeping that credit score as high as you can mean lenders will always want to do business with you and will be more than happy to offer you the best interest rates, they can trust with a proven history that you’re very likely to pay them back.

Raleigh Business Loans

More often than not, a small business loan is going to be guaranteed by an individual. That means that you either as the owner or partner in a company will agree that the debts will be a pain. In these cases, the lender can go to collect payments from you personally if your business ends up not being able to pay as agreed. This, in essence, means you’re co-signing on the loan, so the debt can and will be reported on your personal credit report if it comes to that. Just as you would personally, be careful not to take on too much debt. A missed payment here and there can add up to defaulting on a loan and before you know it your personal credit could be in ruins to the point you can barely get a loan. Learn more about small business loans here. 

Credit Cards

Good Credit credit cardObtaining and using credit cards responsibly is the best way to quickly and sustainably build up your credit score. A lot of the overall score just comes from incurring a little bit of debt on your card every month, but paying it off on-time and in full. This is reported to the credit bureaus and reinforces a history of good lending and repayment practices on your behalf. To a potential creditor, this is a quick summary of how much they can trust you to pay them back. Remember the whole reason for credit scores and all is because of the fact that lenders have to make money to stay in business and lending to people that constantly don’t repay you is going to put you out of business quickly. We can’t stress enough not taking on debt you don’t need and not opening up credit cards you aren’t going to use, have your credit in mind before you do anything! Learn more about credit cards here. 

Building Credit

We’ve gone over a lot of stuff here, and it may make it all seem more complex than it really is. At the end of the day, you want to be as responsible as you can with all of your financial activities regardless of what it is. Keep debts low and those that you do have, pay on them regularly and really put some importance into getting them paid off. On top of weighing down your credit history, nobody likes to have debt weighing over their head. So just be a responsible credit user, and you should never really have to worry about your history. It is not easy work holding yourself accountable at all times, but it’s so worth it. When you’re able to get those big emergency loans when you need them at the absolute lowest interest rates, you’ll be thanking yourself for all of that hard work. Nothing feels worse than needing a line of credit and either being declined or discovering at the interest rates you can get it’s just not worth it. Learn more about building good credit here. 

Our Frequently Asked Questions page is also a great resource, please feel free to give it a read! We’ve spent a lot of time coming up with comprehensive answers to the questions that we feel we see most often, so chances are good we’ve already answered a question you may have in there.