credit-repair

Business Credit/Funding

Thu, 24 Aug 2023 14:08:45 GMT

What is business credit?

Business credit is your business's ability to borrow. Your business credit score influences your access to credit products such as credit cards and loans, giving credit agencies, lenders, vendors and suppliers an indicator of how you handle your debts and your likelihood of paying them on time

How does building business credit work?

The first step is to ensure your business is set up credibly so you meet credit issuer and lender standards, before you apply. Next you get real usable credit through vendors. These vendors will give you credit when you have no other EIN credit established and they report this credit to the business reporting agencies.

Within 60 days or less that credit is reported to Experian, Equifax, or Dun & Bradstreet. Once reported, your EIN will then have an established credit report and score.

Using that report and score you can then continue to apply for more tiers of credit where you can start getting access to revolving credit at most stores, credit that’s linked to your EIN and not your SSN and credit that doesn’t require a personal guarantee or personal credit check for approval.

You can continue to grow your credit to obtain fleet cards, even Visa and MasterCard cash credit. And by having business credit established you’ll have a much better chance of getting loans, credit lines, and getting these at better terms.

What Is Dun and Bradstreet?

Dun & Bradstreet is one of the world's leading suppliers of business information and research. Its global database contains commercial data on more than 240 million companies. Dun & Bradstreet also holds the largest volume of business-credit information in the world.

Why do you need a DUNS number?

DUNS numbers are used by lenders and potential business partners to help determine the reliability and financial stability of the company in question. It is similar to a social security number but must be requested directly from Dun & Bradstreet

How to Establish Business Credit

If your business is new, or if you haven't yet established business credit, obtaining tradelines is a great way to begin building your business credit report.

How to ensure creditors and suppliers can validate your business information:

Incorporate or form an LLC (Limited Liability Company) to ensure your company is seen as a separate business entity
Obtain a federal Employer Identification Number
Open business bank accounts in your legal business name
Set up a dedicated business phone line in your business name and make sure it's listed

Once you've completed the steps above, you can request business credit in your company name. Your business trades then are reported to Experian , Equifax , or Dun & Bradstreet . creating a robust business credit report that gives lenders and suppliers quality information about your company and boosts your ability to obtain loans, increase credit lines and earn more favorable credit terms.

How Long Does It Take To Get a Business Line of Credit?

The time it takes to secure a business line of credit depends on the lender you’re dealing with. Approval for a business line of credit can range from one day to several months. The application process varies by lender and is usually done online. Some lenders make a decision within the same day, whereas others take a week or two.

How Your Business Credit Score is Determined

Business credit scores range from 0 to 100, with 0 representing a high risk and 100 representing a low risk. Generally, business credit scores above 75 are considered excellent.

Scores are based on a number of factors contained in your business credit report. Your Experian credit score is calculated by a statistically derived algorithm, designed to determine risk based on multiple factors:

Credit: Number of trade experiences, balances outstanding, payment habits, credit utilization and trends over time
Public Records: Recency, frequency and dollar amounts associated with liens, judgments or bankruptcies
Demographic Information: Years on file, Standard Industrial Classification (SIC) code and business size

What does NAV do for business credit?

Business owners can, however, access information about their Experian and Equifax business credit reports with a Nav account . Nav provides business credit grades for each score as well as summary reports, your personal credit score from Experian, and free tools that may help you build business credit.

How long does it take NAV to report to Dun and Bradstreet?

It can take 4-6 weeks to process. You do not register your business directly with Equifax or Experian. Once you have confirmed that your business has a D-U-N-S number, you are ready to get accounts that will show up on your business credit reports. Payment history is the most important factor in business credit scores.

What is a good credit score for business?

80 or over: A business credit score above 80 is typically considered excellent. It could also help you access better deals on financial products like business loans, including lower interest rates.

Score range (Risk class)

80-100 Low
50-79 Medium
0-49 High

What are the requirements for a business line of credit?

To qualify for a business line of credit, you will typically need to have at least 6+ months in business, a 580 - 600+ FICO score, and a minimum of $120,000 in annual revenue. Collateral may also be required, but this requirement depends on the lender you're doing business with and your business's financial information. There are several loan options to choose from without involving credit if you have cashflow or collateral.

Auto Purchasing & Credit Related Info

Thu, 24 Aug 2023 13:45:00 GMT

What is the basic car buying rule?

Basically, the rule goes that you provide a down payment of 20% of the balance, sign a loan for a four-year period, and pay no more than 10% of your monthly income on car expenses. These expenses include any money you put towards your new vehicle, including gas, insurance, and loan payments.

What credit score is needed to buy a car?

Typically, you'll need a credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required to finance a car loan varies by lender.

If you have previous loan borrowing history, your score can be lower and still qualify for a higher loan amount. Your debt to income ratio will factor into the amount you’re eligible to borrow as well.

What is a down payment on a car?

A down payment on cars refers to the initial sum of money applied to a purchase being financed by the purchaser. When making a large purchase, many buyers will pay some of that cost upfront in the form of a down payment in order to reduce the amount of money to be financed.

Should I make a down payment on a car?

It is recommended by all auto experts to put a down payment of at least 20 percent for a new car, or 10 percent if you're buying used. It doesn't hurt to put down more to maximize interest savings, but only if you can afford to.

Do I have to put money down for an auto purchase?

No. Very simple. You are not required to put a down payment on a vehicle if you qualify for the full loan amount based on your current debt to income ratio and have a qualified credit score. It is recommended to put money down on finance unless you receive a 0% offer. Any lease, if you can put a $0 cap cost reduction, it is recommended to do just that. Taxes, registration and dealership fees all vary depending on the state you’re purchasing in.

If I have a low credit score/no credit and never financed an auto loan, can I get approved for an auto loan?

Yes. Everyone is eligible to receive a loan, but have to submit the application to each lender presenting the lowest risk in order to get an approval. Which means a safe loan amount price wise, with some collateral down (typically 10-15%) and proof of income (2 most recent paystubs/or 3 months of bank statement).

*Safe first auto loan amount is approximately $18-$20k* (ask NYT Corp for auto consulting assistance)

Does financing a car hurt your credit?

Buying a car using an auto loan will cause a small dip in your credit score, however paying the mainly loan payments on time over the full course of the loan will have a greater positive impact on your credit score.

Why did my credit score drop 100 points after paying off a car?

Lenders like to see a mix of both installment loans and revolving credit on your credit portfolio. So if you pay off a car loan and don't have any other installment loans, you might actually see that your credit score dropped because you now have only revolving debt.

How many points does your credit score go down for an auto loan?

1 to 5 points

Shopping around for a car loan can potentially impact your credit score. That's because every time you apply for a loan and have a hard credit check, your score can drop by roughly 1 to 5 points.

Multiple car loan applications will impact your credit score. However, all car loan applications and hard inquiries within 14 days are counted as just a single hard inquiry.

What is considered excellent credit when buying a car?

A good credit score to buy a car is often above 660, as you're then considered a "prime" borrower. There's no industry-wide, official minimum credit score in order to qualify for an auto loan. Generally, the higher your credit score, the better terms you're likely to get on the loan.

Can I get a 40k car with 600 or below credit score?

Yes. Your loan amount is determined by your debt to income ratio, credit score and prior borrowing history. If you have previous auto history, you will get better rates and have a higher likelihood of an approval. If you have never had an auto before, it would be based on your other established credit along with your debt to income ratio.

Auto Calculator

https://www.calculator.net/auto-loan-calculator.html

Home Mortgage Purchasing Info

Thu, 24 Aug 2023 13:22:30 GMT

Bad credit may seem like it stands between you and a new home purchase. Fortunately, there are ways to get a mortgage even with bad credit.

By taking the proper steps, you can get a mortgage loan with bad credit, and this transaction can even help you to improve your credit for the future. It's important to learn about the process and discover the facts about low credit scores and mortgage lending.

What's a Low Credit Score?

A credit score ranges from 300 to 800 for the 4 different credit reporting bureaus. When considering large lines of credit, like a home mortgage, any credit score lower than 580 is considered high-risk (i.e. “bad”). Many factors go into these low scores, including lack of established credit, missed payments, and the amount of available credit that you have already been given. A number of free credit report websites can offer details on your credit score and the credit history that has impacted it. If your credit score is lower than a 580, there are still options available for mortgages and home purchases.

FHA Loans for Buyers With Bad Credit

One of the best options for home buyers with bad credit is an FHA loan. These loans were established to encourage home purchases for first-time buyers, and they allow people with bad credit to obtain a loan. If your credit score is under 580, you are required to pay 10% down on a home in order to qualify for the loan. For example, if a home costs $150,000, you will need at least $15,000 to get approved for the FHA loans. If your credit score is above 580 but still too low to qualify with traditional lenders, you may be able to obtain an FHA loan with only a 3.5% down payment.

Along with getting approved for the loan, the FHA agreement comes with several benefits. To help make the home affordable, FHA loans often include lower interest rates, lower mortgage insurance fees, and reduced closing amounts.

WHAT KIND OF CREDIT DO YOU NEED FOR AN FHA LOAN?

Borrowers with a credit score of at least 580 can secure an FHA insured loan with just a 3.5% down payment, while borrowers with a lower credit score of 500-579 will be asked to pay 10% of the value of the loan as a down payment.

Under the terms of an FHA loan, borrowers are also required to pay two types of private mortgage insurance (PMI): an upfront payment of 1.75% of the value of the loan, plus up to 0.85% per annum.

How Do You Get Pre-Approved for an FHA Loan?

Just as it would if you were applying for a conventional loan, your lender will ask you for:

Personal information, such as driver’s license, state ID card, or social security number
Proof of income, in the form of pay stubs and W2 forms (past 2 years)
Bank and investment statements to show you can pay the 3.5% or 10% down payment
Other financial information testifying to your ability to make payments, such as bills and reports on additional income sources

When assessing your application for pre-approval, your lender will also pull a hard credit inquiry in order to check whether you meet the minimum credit requirements (of 520 for a 10% down payment or 600 for a 3.5% down payment). A hard inquiry can affect your score for up to 2 years. However, the credit bureaus typically consider all inquiries made within a 45-day period to be a single inquiry. Therefore, if you’re shopping around for FHA loans or you’re unsure whether you’ll be approved, it’s worth applying to all your preferred lenders within a short period of time so as not to cause unnecessary damage to your credit score.

Can You Be Denied a Loan After Pre-Approval?

Pre-approval is a conditional commitment from the lender to provide you a loan to a certain amount, but the lender is not legally obligated to provide the loan. However, if you haven’t yet found a home or if you’re having trouble getting a seller to agree to sell you a home, then it’s worth going through the pre-approval process as this gives you an advantage over buyers who haven’t been pre-approved.

Because of the unique specifications, it’s worth seeking out a top FHA lender that has experience with these loans.

Conventional 97 Loan Requirements

Whether you earn a lower income or are a first-time homebuyer without equity from a previous home, it can be challenging to come up with enough cash for a significant down payment. The good news is that there are programs that limit your down-payment requirement to just 3% without requiring you to get a government-backed loan. These so-called conventional 97 loan programs can help you get into the home you want more easily, but it's important to understand their requirements and also to consider some alternatives before you apply.

What Is a Conventional 97 Loan?

A conventional 97 loan is a type of mortgage loan that requires a down payment of just 3%. The "97" in the name refers to the loan-to-value ratio of 97% that you'll have when you close on the loan.

The standard minimum requirement for a down payment on a conventional loan is 5%, and while 3% doesn't seem much lower, it can make a huge difference.

For example, on a $250,000 loan, you'd need just $7,500 instead of $12,500.

There are a few types of conventional 97 loan programs that are available through Fannie Mae and Freddie Mac, including HomeReady loans, 97% LTV Standard loans, and Home Possible loans.

Conventional 97 Loan Requirements

If you're thinking about buying a home, but you don't have a lot of cash for a down payment, a conventional 97 loan may be right for you. But depending on the program you choose, the requirements can differ. Here's what you should know about each of the main programs available.

Credit Score

With all three loan programs, you need to have a credit score of 620 or higher. This is standard for most conventional loans. That said, a higher credit score can help you achieve a lower interest rate on your new loan.

First-Time Homebuyer Status

Both the Fannie Mae HomeReady and Freddie Mac Home Possible loan programs are available to all types of mortgage borrowers. If you want a 97% LTV Standard loan, though, you must be a first-time homebuyer.

Income

The HomeReady and Home Possible loan programs are both designed specifically for low- to moderate-income borrowers. More specifically, your household income must be at or below 80% of the area median income, called AMI for short, based on where you live.

You can look up the AMI for your area by using Fannie Mae's AMI lookup tool .

The 97% LTV Standard loan program does not have a maximum income limit, so anyone who meets the other criteria for the program may be approved.

Other Requirements

All three conventional 97 loan programs require that you complete a homebuyer education course, which you can find through Fannie Mae or Freddie Mac.

Also, Fannie Mae's HomeReady and 97% LTV Standard loan programs are available only for one-unit principal residences, including eligible condos, co-ops, planned-unit developments, and manufactured homes through the MH Advantage program.

With Freddie Mac, you can get a Home Possible loan for one- to four-unit properties, condos, planned-unit developments, and certain manufactured homes.

Alternatives to Conventional 97 Loans

If you're looking for a home loan with a low down-payment requirement, it's important to consider all your options. Here are some alternatives to compare:

FHA Loans

A Federal Housing Administration (FHA) loan requires a minimum down payment of 3.5% and a credit score of 580 or higher.5 However, if you can put 10% down, you can qualify with a credit score as low as 500.6 There's no maximum income requirement, so anyone can qualify if they meet all other criteria.

One thing to note is that FHA loans come with a mortgage insurance premium that you may not be able to get rid of, as you can with private mortgage insurance (PMI).

VA Loans

If you're an eligible member of the military community, you don't have to put any money down on a U.S. Department of Veterans Affairs (VA) loan. And this option is not reserved only for low- to moderate-income earners.

Keep in mind, though, that while the VA doesn't list a minimum credit score requirement, most lenders will have one. The typical minimum is 640, but some lenders may be willing to accept a score as low as 580. Also note that there's an upfront funding fee that can range from 1.4% to 3.6%, depending on your down-payment amount and whether it's your first VA loan.

USDA Loans

The U.S. Department of Agriculture (USDA) loan program is primarily for low- to moderate-income homebuyers. Visit the USDA website to find out what the income limits are. You can also review the agency's eligibility map to find out if the property you're purchasing qualifies for a USDA loan.

USDA loans have a guarantee fee that consists of a 1% upfront fee and a 0.35% annual fee, which doesn't go away like PMI.

First-Time Homebuyer Financial Assistance 101

Buying your first home can feel overwhelming. Finding the perfect home, putting together a down payment, and getting approved for a mortgage - it’s a lot of work and the financial burden adds up quickly. The good news is that first time buyers have special programs designed just for them. We’ll explain everything you need to know about how to qualify for them.

What Financial Assistance is Available for A First-Time Homebuyer?

"A first-time homebuyer can qualify to receive cash that recipients can use to help purchase their first home. The funds can be used towards a down payment, to help pay closing costs, or even to reduce the overall cost of a mortgage.

This financial aid for first-time homebuyers comes in several different forms, but they’re distinct from other types of homebuyer assistance programs in that they don’t need to be repaid. There are no financial strings attached to worry about down the road, making these a great option for those who qualify for them."

How Can You Qualify for First-Time Homebuyer Programs?

There is no single financial aid for first-time homebuyers. As stated on the U.S. Department of Housing and Urban Development (HUD)’s website , “The federal government does not give housing grants directly to individuals. The funds are given to states and certain municipalities, who in turn, distribute the funds to residents.

Different first-time homebuyer options have different eligibility requirements. As the name suggests, they’re typically available only to first-time homebuyers—that is, individuals who have never owned a home before, either on their own or with a spouse.

However, there are some programs that are open to individuals buying a second home, especially if it’s been a few years since you bought your first home. So, it’s worth checking program requirements even if you’re already a homeowner.

The general purpose is to give financial assistance to those who otherwise wouldn’t be able to purchase a home. Thus, some of the qualifications are based on an applicant’s financial situation .

According to Bankrate, there are several overall qualifications that one would need to meet, to qualify as a first-time homebuyer, and these qualifications can vary based on your lender. Things like credit score and income restrictions may rule out some applicants, while most lenders are looking for applicants with a low debt-to-income ratio.

Many first-time homebuyer programs have additional eligibility requirements around income, home location, and credit score. These requirements are intended to ensure that the assistance is having as significant an impact as possible and contributing to socioeconomic diversity in the housing market.

Thus, if you are a veteran, buying a home in a rural or economically depressed area, or earn significantly less than the median income for the area in which you’re buying, you may qualify for especially generous first-time homebuyer programs.

Types of First-Time Homebuyer Programs

First-time homebuyer programs can take many different forms. We’ll explore some of the most common types of assistance that first-time homebuyers can receive.

Low-down and 100% financing programs

Alternative down-payment programs make it possible for first-time homebuyers to purchase a home without the stress of putting 20% down. Given that it takes the average American 51 months (4.25 years) to save up for a 20% down payment on a home, a lower down payment or a loan without one can have a big impact.

Many low-down-payment loans such as an FHA loan, allow homebuyers with fair credit or better to put down as little as 3% on a new house. There are multiple low-down-payment programs available through the federal Fannie Mae and Freddie Mac lending programs , including HomeReady , Home Possible , and Conventional 97 .

Loans that don't require a deposit enable homebuyers to purchase a home without paying anything upfront. Even closing costs can be financed in most cases. Popular 100% financing options include USDA mortgages , which support home purchases in rural areas, and VA mortgages , which support home purchases by US military veterans.

Mortgage rate discount programs

Some first-time homebuyer options are designed to reduce the overall cost of a mortgage rather than minimize upfront costs. Programs like these can cut the interest rate on a 30-year mortgage by up to 2% APR, which will save buyers a significant amount of money in the long run.

Importantly, a reduced mortgage rate of 2% can also increase a homebuyer’s maximum purchase price by 22%. That makes it much easier for first-time homebuyers to get the home of their dreams rather than settle for something less.

These programs are typically reserved for low-income buyers. Buyers may also be able to reduce their mortgage interest rates by boosting their credit score .

Down payment assistance programs

Down payment assistance programs involve loans that you can take out to finance the down payment on a home, making it easier to overcome the hurdle that a down payment presents to buying your first home. These loans typically do need to be repaid, however, one advantage of down payment assistance programs is that often, they offer very low interest rates , and some may even come with no interest.

In some cases, down payment assistance loans can be forgiven after a certain amount of time. For example, New York City offers a forgivable loan for up to 50% of a down payment , if the applicant meets certain criteria. Such a loan would be forgiven, as long as the homebuyer lived in the home for at least 10 years (or 15 years, depending on the loan amount).

Closing cost assistance

Closing cost assistance programs can pay up to 100% of the closing costs for your mortgage. That includes all the costs associated with mortgage fees, transfer taxes, and title fees.

That same loan offered by the City of New York also offers up to 100% coverage of an applicant’s closing costs . These aren’t as large as some down payment programs, but they’re often easier to qualify for and can reduce the amount of money you need upfront by thousands of dollars.

Good Neighbor Next Door Program

The HUD’s Good Neighbor Next Door Program offers homes to first-time buyers at half their market value. That’s an incredible deal that ends up reducing your down payment, closing costs, and mortgage interest costs.

The Good Neighbor Next Door Program is only available to teachers and individuals in law enforcement or emergency services . You must purchase a home in the same community where you work and it must be in a designated revitalization area.

First-time homebuyer tax credits

The federal government first offered a tax credit to first-time homebuyers in 2008, in the midst of the Great Recession . Congress is considering relaunching a similar tax credit, the First-Time Homebuyer Act of 2021 , which would give first-time homebuyers a 10% refund on their home’s purchase price, up to a maximum of $15,000.

This tax credit has not yet been passed and signed into law. However, in its current form, the tax credit would apply retroactively to anyone who bought their first home starting in 2021.

Deferred mortgages

If you have a deferred mortgage, you don’t need to make repayments until you sell or refinance your home. If you sell your home for more than you paid for it, you can pay off the deferred mortgage immediately. Important to note that the money does need to be repaid.

Deferred mortgages vary in size and typically won’t cover the whole cost of a home. You’ll still need to make consistent repayments on any conventional mortgage you take out to cover the rest of your home’s cost.

Where to Find First-Time Homebuyer Programs

There are a lot of first-time homebuyer programs available, but, unfortunately, there’s no central database to find out which ones you might qualify for. However, you can divide up your search for homebuyer programs into a few categories.

There are numerous federal programs available. These are typically offered through individual mortgage lenders, so you don’t apply through the government directly. The agencies offering first-time homebuyer assistance include HUD, VA, USDA, and FHA, along with Fannie Mae and Freddie Mac.

Many states have their own first-time homebuyer programs, too. Check with your state’s housing department for more details on what programs are available and how to qualify for them.

Finally, many individual lenders offer first-time homebuyer programs of their own . For example, major banks may offer down payment assistance loans or low-down-payment options.

Take the First Step Towards Your First Home

First-time home buyer programs offer an opportunity to make buying your first home more accessible These programs or loans can come in the form of reduced down payments or 100% financing, coverage of closing costs, and discounted mortgage interest rates. While most have restrictions on who can qualify, there are many options on the market, so be sure to check the fine print, so you can find one that’s right for you.

Find first-time home buyer programs and lenders in your state

Northeast

First-time home buyer programs

Participating lenders

CHFA lenders

MaineHousing lenders

MassHousing lenders

New Hampshire Housing lenders

NJHMFA lenders

SONYMA lenders

PHFA lenders

Rhode Island Housing lenders

VHFA lenders

Midwest

First-time home buyer programs

Participating lenders

IHDA lenders

IHCDA lenders

Iowa Finance Authority lenders

Ohio Housing Finance Agency lenders

South Dakota Housing lenders

WHEDA lenders

South

First-time home buyer programs

Participating lenders

AHFA lenders

ADFA lenders

Delaware State Housing Authority lenders

DCHFA lenders

FHFC lenders

Georgia Dream lenders

Kentucky Housing lenders

Louisiana Housing Corporation lenders

Maryland DHCD lenders

Mississippi Home Corporation lenders

West Virginia Housing lenders

West

First-time home buyer programs

Participating lenders

AHFC lenders

Arizona Department of Housing lenders

CalHFA lenders

CHFA lenders

HHFDC lenders

Idaho Housing and Finance lenders

Montana Housing lenders

Nevada Housing Division lenders

MFA New Mexico lenders

OHCS lenders

Utah Housing Corp lenders

WSHFC lender s

Wyoming CDA lenders

Home Mortgage Calculator Website

https://www.mortgagecalculator.org/

MORTGAGE TERMS

Applying for a mortgage involves a lot of confusing numbers, but it's actually the words around those numbers that you should be focused on. Learning and understanding common mortgage terms can make the application process a lot easier.

Along with browsing professional reviews, you can compare lenders and understand options by breaking down specific terms and definitions. Use the following list to help build your knowledge and apply for a loan with confidence.