Well then, how is my credit scored there fella?
So now that we know getting approved for any type of loan depends on your credit rating, how does that darn thing get calculated?
I actually wrote a detailed article about this some time ago, but the content is worth sharing again here.
Your FICO score is really a "how well I pay my bills score" that consists of the following calculations:
35% of your FICO score is based on your payment history. The key points here being frequency of payments (read: whether it was paid on time each month), and most recent occurrence of any non-payment. In other words, all late or completely missed payments will hurt your FICO credit score, but more recently missed payments will have a bigger effect on your score than some older ones.
30% of your personal FICO score is based on credit utilization. This is calculated based on the balance of all your credit accounts in relation to the maximum credit lines available to you. Revolving credit lines (read: credit cards) are the most significant part of this score.
Just these two factors comprise 65% of your credit score! That is why I call your FICO score a "how well I pay my bills score".
Now for the other 35% of your score.
15% of your FICO score covers your individual credit history. This is based on the number of years your credit has been established (basically the longer, the better). Having just one account 5 years old with consistent payments will look better than 3 accounts all paid off and closed within 6 months.
10% of your FICO score involves what types of credit you have, and the mix of revolving credit inquiries (read: credit applications). This does not include inquiries with no financial rating (Read: an inquiry from a potential employer).
As I mentioned earlier, there are three different FICO scores developed by the Fair Isaac Company, one from each of the three major credit bureaus. Experian uses the Experian/Fair Isaac Risk Model, Equifax uses Beacon, and Trans Union has something called Empirica. Consumers are likely to have a different score with each individual agency because each credit reporting bureau has its own set of reporting companies and there will be variations in the credit information that is sent in to them.
You should also know that your FICO score ranges from 300 to 850 and suggests an overall general credit profile. What does your general profile mean?
FICO score of 720 and above
This is a great FICO score, and it suggests that the risk of you defaulting on your credit is very low. If the lender finds any exceptions in your credit report, they will most likely be waived and set aside. If there are any weaknesses in the underwriting your credit (such as not a very long history), your high FICO credit score compensates for that particualr weakness.
FICO score 660 to 719
This is good FICO score, and suggests that your risk of default is still relatively low. This FICO credit score indicates that your credit history is acceptable and most people fall within this range.
FICO score 620 to 659
This FICO credit score represents a certain amount of risk to the lender. The credit underwriter will more than likely consider you, but will investigate a lot further to check on some details. For example, whether you are self-employed, have a high loan to value ratio, have any cash reserves, or are exceeding normal debt to income ratios.
FICO Scores below 640
Anything below 640 is considered sub-prime. Your risk of default is very high, and you will need to present strong compensating factors to the lender before the underwriter would consider approving a loan. Most mortgage lenders will not approve you for a house without at least a minimum 640 credit score.
FICO score between 619 to 585.
The underwriter will consider approving a loan but that depends on your specific credit issues. You are now in the same class as an applicant with no previous delinquency and lack of sufficient credit history. Mortgage lenders are much more likely to see mortgage delinquencies rise if they loan money to a consumer with a FICO score below 620.
FICO score between 584 to 500
You will have to explain your credit history in writing, and will need to pay off most of your debts to even be considered for approval. The loan underwriter may still consider you an acceptable risk but the high risk factors your credit score presents will have a really high interest rate attached to a much smaller credit line.
FICO score below 500
This is really bad credit. There may be some serious issues outside your control that caused this financial setback, however. There are also some individuals who simply do not care about what happens to their credit score. This does not mean that the world has ended, though. There is still hope and a way to fix your score.
Additional Notes About Your Credit Score:
Your credit report changes each month and your FICO score will change as well. Your FICO credit score does not change drastically from one month to the next month, unless there has been a late payment or a negative report hit your account. While late payments, collections, or bankruptcies can be very damaging to your score, it simply takes time to raise your FICO scores back up. It is a good habit to check your credit report every 6 to 12 months.
Your credit report must contain at least one reporting credit line over a six month period in order for a FICO score to be generated at all. Your credit report must have one credit line that has been updated in the last six months as well. This will ensure that there is enough information overall, and enough recent information, to accurately calculate your FICO score.
Your FICO credit score is meant to be a measure of your creditworthiness to a potential lender. In the mortgage industry, mortgage products and lending terms change constantly. If you manage your credit well, you will certainly qualify for a home purchase loan. In the case of credit cards, your account is reviewed periodically (usually every 6 months), and if you manage your credit well, you will most likely be given higher credit limits and offers to upgrade to a better rewards program.
Are your sales meetings productive? They probably aren't as productive as they could be. Too many sales meetings are nothing more than a series of individual updates designed to help the sales manager do their job.
Since sales managers are not involved each individual's day to day activities, it is often hard for them to keep up with every one and every thing that is happening. Ultimately, the salespeople in these meetings dread taking time out of their schedule to attend the same old boring meeting. Worse yet, they often leave such meetings less motivated than they were BEFORE they attended the meeting.
Below are my top 10 secrets to kick your sales meetings to the next level.
Also, be sure to recap for the team via email what the next steps are for anything decided upon in the meeting. The sooner you distribute this information and recap it, the more salespeople will view it as important.
The most amazing thing of all is that not one of the 10 things are out of reach for any sales manager. There is little reason for any sales meeting to ever be unproductive for you as a sales manager or for the sales team.
Examples of Sales Performance Goals
Although a typically accepted method of measuring success for your salespeople is in dollars or units sold, other sales performance goals may help your business achieve that ultimate financial reward target. Meeting a minimum number of clients per week or achieving a high retention rate may be just as important as counting sales dollars.
A typical approach in sales goal setting is the S.M.A.R.T. approach. A goal must be specific, meaning it's not so vague that it prevents your salespeople from focusing on that goal. It also must be measurable in order to easily determine if the goal has been achieved. A goal must be achievable, as in not so unattainable that it is impossible to reach. It must be relevant, meaning your salespeople should be able to relate their line of work directly to the goal. Finally, a goal must be time-constrained, where salespeople are given a target date for accomplishment in order to stay on track.
If your salespeople's success depends on getting in front of people as much as possible, a typical sales goal might be for each of them to make 100 phone calls every week. Although ultimate success depends on the ratio by which calls are converted to appointments and ultimately to sales, much of your business's long-term sales success can depend on how many potential clients your salespeople can get in front of or speak to on a regular basis.
In sales, potential success generally relates to getting a chance to talk to people face to face. You could make a goal for your salespeople of meeting 30 clients per week, for example, which amounts to an average of six per day in a five-day workweek, or five per day during a six-day workweek.
our business may be in a field where training is a requirement of maintaining a licensed or a condition of employment. Therefore, you could set a goal for your salespeople of setting aside so many hours per week for study, going to classes or attending sales seminars. Start with two hours per week and if that goal is achieved, increase t by one hour each time until you feel your salespeople have reached the level required by yourself of a professional association.
Your business's ultimate success depends on your salespeople's ability to close. Therefore, an important sales performance measure could be to make one sale every day. This goal should not focus on the amount of the sale; rather, it should simply stress making one sale, allowing each salesperson to become more confident.
Do not overlook the importance of keeping a client once a sale is made. Clients are good sources of referrals and may lead to repeat business. An example of such a goal could be to maintain a 95 percent retention ratio, meaning a client is only lost once in 20 times during the one or two years following a sale.
It’s obvious that we now live in a world of consumer credit and digital currency. With the explosion of crypto-currencies and all the new wireless payment methods, there are literally thousands of banks trying to extend people credit right now. The credit that you receive during your lifetime will range from a simple credit card, to a personal loan, student loan, mortgage, and auto loan. But specifically speaking about credit cards first, the number of people with credit card debt is rising faster every year (outstanding credit card debt topped $1 trillion at the end of 2016, according to a CNBC article). Many people can barely function without having a credit card in their wallet to swipe.
So what gives? Why have we become this way?
A lack of financial education and poor self discipline on the part of consumers is often the cause of severe credit situations like court judgements, bankruptcies, and loan defaults. Often, these financial "mistakes" make it difficult for consumers to get credit in the future as well. Before we go down this rabbit hole together, you may want to ask a simple question first; what exactly is credit anyway?
Being approved for "credit" simply means that you are getting an advanced form of payment to use for your own purposes during the course of normal life. You are then bound to this "credit grantor" by a contract tht says you will repay your debt in the future as agreed by the contract. If you vreabk this contract, then there are sever financial penalties. As previously mentioned, credit exists in lots of different forms, including loans, mortgages, and/or credit cards.
Before you can get approved for credit from a financial institution or lending agency, they will first check your credit history to determine your credit worthiness. Your credit worthiness is determined by how you have handled your financial obligations in the past. If you had a default on a loan prior to this application, or currently have bad credit history, you will find it difficult (though not entirely impossible) to get credit when you apply for it.
There is good news though. Even with a bad credit history, it IS possible for you to improve your credit history over time, or even build a new "good credit" history by repairing your credit. Credit repair is the process by which consumers with unfavorable credit histories attempt to re-establish their credit-worthiness going forward. This process of credit repair will help re-establish your credit-worthiness in the eyes of future lenders. Credit repair is a big business. It currently targets the 68 million Americans with a credit score lower than 601, in an attempt to sell them services. In case you were wondering, there are lots of credit repair companies that promise to repair your credit score for a fee each month, but if you can follow our simple guide, it’s possible for you to repair your credit on your own.
Repairing your credit will make it much easier for you to get low interest credit card transfers, auto, or home loans. With a poor credit rating, none of these things are impossible, but they will certainly be much more expensive. In fact, with a really poor credit score you may not even be able to get approved for a loan (or you could be subjected to some really high interest rates). In other words, it’s very important that you repair your credit now if you have a poor credit history.
When your debt is out of control and you don't want to consider bankruptcy, what do you do about it? How do start to transition from financial child to intelligent behaving adult? Here are some steps that you can take to prevent yourself from getting into more debt, and help yourself eliminate some of the debt that you are currently dealing with.
#1 - Put Your Credit Card Away; Literally!
If you have a difficult time saying no to purchases, or you get that credit card out of your wallet as fast as anything, take your card out of your wallet and put it in a safe place at home where it is not with you. Make the decision that you will leave it there and will only take it out when you absolutely must have it. This one small step will help force yourself to be more cautious in your spending.
#2 - Cancel Those Retail Credit Cards
Retails credit cards typically have the highest interest rates on the market. It is also difficult to stop spending when you feel like you have several payment options. Get rid of these retail cards and keep only one main credit card, which is hopefully the one you have already taken from your wallet and placed in a safe place at home!
#3 - Pay Back Your Debts as Quickly as Possible
If you have a balance on a credit card (or 2 or 6), be sure to pay at least the minimum monthly amount each month on all your debts. Do your best to pay back your debt as quickly as you can by using the snowball method (see article here). By paying off your debt as fast as possible, you will eliminate some of the high interest charges that continue to build as time progresses.
#4 - Consider a Second Job
If you can work even one extra hour or day per week, you will pay back your debts sooner. At the very least, extra work may give you extra wiggle room so that you do not get yourself further into debt over time. Yes, a second job will take up some of your free time, but it will be worth the sacrifice when you have nothing but good debts left in your life.
#5 - Creatively Find as Many Ways to Save as Possible
Look for every way possible to save money. Whether that is by clipping coupons or shopping only during sales, make it work to stretch your dollar. Find other ways to save in other areas, such as your electricity bill. There should be a bazillion different ideas all over my blog to help save some money.
Keep doing the hard work for as long as it takes! Take a bagged lunch to work instead of buying fast food every day. Make coffee at home before you leave for work instead of stopping at the drive-thru on the way there. Stop spending on any unnecessary purchases.
Learning to be frugal takes a little bit of preparation, but it gets easier as time goes on. It might seem like a tough chore at first, but the benefits are wonderful. You will become a more creative person and you will be able to save your hard-earned money for retirement. What better benefits could there possibly be than that?
It wasn't so long back that I wrote a fairly controversial statement. To be exact, I said, "just for the record, I believe the government's account of inflation about as far as I can throw a piano. Anyone that has been to the grocery store over the past 12 months will tell you that inflation is here in a big way already."
I would like to say it feels good to be correct, but I would be lying about how I feel. What I really feel is saddened. Saddened that most Americans will continue to do the same thing over and over again, never even worrying about how more and more of their money gets taken away from them by the government each year.
Here is the article proving I was correct.
Corporate America’s new dilemma: raising prices to cover higher transport costs
ReutersFebruary 26, 2018
FILE PHOTO: Freight trucks are driven on the Fisher freeway in Detroit, Michigan, U.S., March 27, 2009. REUTERS/Rebecca Cook/File Photo
MoreBy Eric M. Johnson and Chris Prentice
SEATTLE/BOCA RATON, Fla. (Reuters) - The drive for cost cuts and higher margins at U.S. trucking and railroad operators is pinching their biggest customers, forcing the likes of General Mills Inc (GIS.N) and Hormel Foods Corp (HRL.N) to spend more on deliveries and consider raising their own prices as a way to pass along the costs.
Interviews with executives at 10 companies across the food, consumer goods and commodities sectors reveal that many are grappling with how to defend their profit margins as transportation costs climb at nearly double the inflation rate.
Two executives told Reuters their companies do plan to raise prices, though they would not divulge by how much. A third said it was discussing prospective price increases with retailers.
The prospect of higher prices on chicken, cereal and snacks costs comes as inflation emerged as a more distinct threat in recent weeks. The U.S. Labor Department reported earlier this month that underlying consumer prices in January posted their biggest gain in more than a year.
As U.S. economic growth has revved up, railroads and truck fleets have not expanded capacity to keep pace - a decision applauded by Wall Street. Shares of CSX Corp (CSX.O), Norfolk Southern (NSC.N), and Union Pacific Corp (UNP.N) have risen an average 22 percent over the past year as they cut headcount, locomotives and rail cars, and lengthened trains to lower expenses and raise margins.
Quickening economic growth, a shortage of drivers and reduced capacity, and higher fuel prices have driven up transportation costs, prompting some companies to threaten to raise prices on goods ranging from chicken to cereal.
For a graphic, click http://tmsnrt.rs/2oth2Zx
Cream of Wheat maker B&G Foods Inc (BGS.N), Cheerios maker General Mills and Tyson Foods Inc (TSN.N), owner of Hillshire Farms brand and Jimmy Dean sausage, said they will pass along higher freight costs to their customers.
Tyson Chief Executive Officer Tom Hayes told Reuters in an interview that its price increases "should be in place for the second half” of its fiscal year, and that it has begun negotiating price increases with retailers and food service operators. The company declined to specify how much its freight costs increased in recent months, but a spokesman said they are up between 10 to 15 percent for the total industry.
General Mills informed convenience store and food service customers of the price increases directly, a spokeswoman told Reuters in an emailed statement, declining to provide specifics. Chief Executive Officer Jeff Harmening cited logistic costs and wage inflation as factors.
"It feels to me like an environment that should be beneficial for some pricing,” he said in a presentation at last week’s Consumer Analyst Group of New York conference.
Hormel Foods, the maker of Skippy peanut butter and SPAM, has been talking with retailers about raising prices, according to Chief Executive Jim Snee.
“We don’t believe we’re going to recoup all of our freight cost increases for the balance of the year,” Snee told Reuters in an interview, noting operating margin sank to 13.2 percent, from 15.6 percent due to higher costs - including freight - in the most recent quarter.
Confectionary and snack company Mondelez International Inc (MDLZ.O) halted operations over a weekend late last month at its Toledo, Ohio wheat flour mill - the second-largest flour mill in the United States - because the plant could not get enough rail cars to carry flour to bakeries, a spokeswoman said.
She declined to comment on whether Mondelez would raise prices to cover any higher costs.
A new government regulation for drivers and truck availability are pushing up freight costs at JM Smucker Co (SJM.N). “We anticipate inflationary pressures likely to cause upward price movements in a variety of categories,” Chief Financial Officer Mark Belgya said last week at an analyst conference.
To be sure, transportation costs are just a sliver of the price consumers pay at the grocery store. The U.S. Department of Agriculture estimates transportation represents just 3.3 cents of every dollar consumers spend.
But an increase in truck rates over the next 12 months implies a 15-to-18 basis point gross margin headwind for U.S. food companies on average, according to Bernstein analyst Alexia Howard.