Achieving your financial and other life goals, like owning a house, acquiring a car, expanding your business, or even furthering your studies in college, are highly dependent on having a good credit score. Lenders use your credit score to predict your creditworthiness and how responsible you are with using your credit cards. They also use the score to determine the terms of lending you a loan or offering you other credit products, if they decide to do so. Some of the things that influence your credit score include your credit history, your amount of debt relative to your credit limit, and your credit mix, among other factors.

The following are some things that you can do within a short period of time to help improve your credit:

1.      Pay off any overdue payment

Since your payment history contributes to a significant portion of your credit score—35%—it is critical to pay any account that is past its due date. The more days that pass after your payment’s due date, the more damage is being done to your credit rating. You should talk with your lender or credit card issuer to sort out any overdue accounts before they are shared with the credit bureaus. Your card provider may even be willing to re-age your accounts if you approach them, so that your credit report would show timely payments throughout.

2.      Seek professional assistance

Your debt burden may be too overwhelming to the extent that you cannot handle it. In this case, you need to look for professional help, for example from a credit counseling agency or from a financial analyst, to help you see how you can cut your expenses and repay some loans. Additionally, you can engage a professional in improving your credit, to work with you on improving your score by using tradelines.

3.      Stop further credit card purchases

Consider avoiding any more credit card purchases, as they make your credit utilization go up. Credit utilization is the ratio of the amount you owe on a card to its credit limit. For example, if your card has a limit of $3000, and the outstanding balance is $2000, the credit utilization is 0.67. For the same limit, but with a balance of $1000, the credit utilization is 0.33. High credit utilization hurts your credit score. Avoid further purchases with your card to stop raising the credit utilization, and instead, pay with cash or even minimize your cash purchases to only what is necessary, and use the rest of your money to pay off your card balance.

4.      Check your credit report

Get a free copy of your credit report from the major credit bureaus and go through it to check for any errors. If you spot an anomaly, like late payments reported by mistake, get in touch with your lender and the credit bureau to rectify it. Though the effect may not be instantaneous, the corrections will be visible on subsequent reports, and you will have started to correct the wrongs. If need be, pay a fee for the report, since the benefit of correcting any error that could be hurting your score or using the report to strategize how to improve your score far outweighs the cost.

5.      Put any new credit card application on hold

Hard inquiries on your credit score, necessitated by the application of a new credit card, will hurt your score, so avoid applying for a new card when working on boosting your score.

The bottom line

You have many redemptive measures you can do right now to help your credit, like paying overdue debts and reducing the usage of your credit card, so make wise decisions to help improve your score.

Most individuals will come across a time in their life when obtaining life insurance is a good choice, such as getting married or having a child. There are always uncertainties as it pertains to the future, and insuring against those uncertainties is one of the best gifts that can be passed on to a loved one. While most people are aware of the need for life insurance, many have no idea where to start and what kind to go with.

Life insurance comes in many different forms: whole, variable, term, permanent, just to name a few. The variations are endless, and the additional riders which can be added to a policy can make a person’s head spin. The important thing to remember when it comes to life insurance, is that the purpose is usually to replace lost income (or duties) in the event of a death. By keeping that in mind, it becomes easier to wade through some of the noise when it comes to life insurance offerings.

Term Life Insurance Defined

Term life insurance is perhaps one of the easiest products to understand because it operates similar to other insurances which people are accustomed to. There is a period of time which a policy is in force (the term), and a person pays a fee (the premium) every year that they wish to maintain coverage. A typical term policy will be written for a specific time period, such as 5, 10 or 20, and the premium payment will stay the same the entire time.

Term Life Insurance Cost

The cost of a term policy is typically related to the age, gender and health of the applicant, as well as the length of time for which the policy will be written. Healthy young people are less likely to pass away, so their policy amounts will be lower. In comparison to other life insurance products, term life insurance almost always provides the most insurance coverage per dollar.

Term vs. Other Life Insurance Types

As stated before, life insurance is designed to replace lost income or duties of a particular person in the event of their death. Term life insurance works exactly in this way. For example, a married couple where each person makes $50,000 a year may take out a $500,000 policy on each person to help cushion the financial blow to the household should one person pass away. The insurance payout could then be invested and drawn upon to help replace the deceased’s income.

Since insurance premiums for term life insurance are some of the lowest around, the additional savings can then be invested for long-term retirement or other goals, while still maintaining adequate insurance coverage.

Other insurance products such as whole life and variable life policies cost a substantial amount more than term. These types of policies use some of the excess premiums and invest them on the policy owner’s behalf. That means down the road they will have funds available through the policy, but the returns are often sub-par compared to a typical investment portfolio.

The cost of these other types of insurance products can often be 5-10x that of term, and many times offer less coverage in the event of a death. While there certainly are scenarios when these products make sense for individuals, it is very important to speak with a financial planner before signing up for one. The commissions on these other types of life insurance products are tremendous, so sales agents are very eager to get their clients into them.

Do you currently own a condo? Insuring your condo can be quite confusing at times.

We all know that house insurance is made to cover the entire property, and if you rent, renters insurance covers various things within your unit like furniture, jewelry, and other valuables. But with a condo, what do you really need when you’re in the market for condo insurance? Here are some questions you should ask in order to fully understand what is your responsibility to replace and what is not.

What is Not Your Property?

Unfortunately, there is no set standard from what you own and what you don’t own in your condo property. All complexes can have a different policy, so it’s important to read yours and understand it. Typically, the exterior is not yours, which includes the shingling, the outside of your exterior walls, and the yard (and any communal perk like a swimming pool, tennis courts, etc.). Since you don’t own these things, then you really don’t have to insure them. They should be insured through your association.

What’s Commonly Yours to Insure

As a rule of thumb, most associations believe that the property that is within your four walls are yours to insure, which actually includes the drywall as well. So, if you accidentally set fire to your kitchen, the repair cost is coming out of your pocket, not out of your association’s.

Insuring the interior of your condo can be done through an outside insurance agency, or it can most likely be done through your association as well. Just be sure to understand exactly what’s covered within the policy though. Here are two policies that are very similar, but have their distinct differences.

• Bare Walls In – this policy covers all real property from the exterior framework inward, but does not include fixtures such as lights, countertops, or faucets. These extras will need to be covered by a separate policy.
• All-in – this policy covers fixtures, installation, and even additions within the interior walls. If you have this coverage, you most likely won’t need much else.

How Much Coverage Do You Need?

Once again, there isn’t one standard answer for everyone. What you should do is take an assessment of the interior value of your home, including the valuable non-fixed contents as well. So, you have the current value, but you should also research how much it would cost to replace these items as well? More than likely, the replacement cost is higher than the appraised value of all your items. If I were choosing an insurance policy, I would most likely go with the one that would pay me the replacement cost, since that’s what it’s actually going to take to make my home seem like home again.

Another factor in your insurance could be the amount of money you have sitting in the bank. After all, if you have $10,000 in the bank, then perhaps it’s not as important for you to get the best coverage for the inner contents of your condo. The less value you insure, the less you’re going to pay each month for the coverage.