Nowadays, when considering the application of the client for the issuance of credit special attention is focused on the credit history of the potential borrower, information about which is requested by the bank in the credit bureau. The purpose of creation of the Bureau was to reduce the risks when loaning. Credit report – is a document reflecting the client’s reputation as a borrower. In this way, bank receives information about the customer`s existing loans and the quality of service loan repayments. This information has an impact on the adoption of decision by a credit institution on granting a loan.
How to get a credit report?
The borrower is entitled to receive a summary report on his active and repaid loans in accordance with the Law “On Credit Histories”. Besides the borrower access to the data of the Bureau also has a banking institution in the presence of the written consent of the client. In some cases, Bureau provides information on the credit history at the requirements of third parties (courts, police) in accordance with the law. Getting information once a year is free, subsequent requests are to be paid for.
At the moment, it is almost impossible to get a credit report online. In accordance with the law such information may be received in person or through an authorized representative or, assuring notarized request. In any case, the request performed by a computer is not made by a client in person. Such organization of the procedure reduces the risk of access to personal information of strangers, holding passport data of other persons.
You can get a credit history in three ways:
- A written request to the official website of the credit bureau. The borrower fills out an application form (from the website), notarize it and send a letter to the postal address of the Bureau. The answer must be sent by mail no later than 10 working days from the date of receipt of the request by addressee.
- Appeal to the official website of the Bureau of Credit Histories by a telegram. In the telegram must be specified passport and address data of the client whose signature is certified by the employee of post office. Credit report in this case also must be submitted no later than 10 working days.
- Appeal to the organization cooperating with the credit bureau. Contact numbers and addresses of such organizations can be found on the website of the Bureau.
Credit history – is a dossier containing information on the solvency liability of the borrower, the amount of his appeals to the banks, as well as approved and paid loans. To be interested in such dossiers must not only financial institutions but also the client. Every year on the Civil Code and the laws dedicated to banking, any natural person has the right once a year on a free of charge basis to receive a credit report or an extract from the CH. Moreover, a request for such a report is advisory but not binding. Yet all analysts advise not to ignore the recommendations and contact the Bureau of credit histories every year. And here’s why.
Preparing for a large loan. Why should you ask for a credit report before placing your car loan or a mortgage?
The primary objective of the credit report is considered to be a summary of the history of all requests, issuance and repayments of loans of the person. In the submission will be displayed dates and sums, including the number of days of arrears, penalties and the presence of active loans. There are situations when small banks forget to transmit information about the closed loan. Borrower is listed as debtor. And only for this reason, that is at the study of solvency, he can be denied in mortgage or car loan. If you notice deviations and “oversight” of financial institution you should in advance call back there and ask to fix your credit history. Active loans will be closed, and the chance to conclude a new credit agreement will increase.
And it also happens that the lender sends the wrong information in the credit bureau. Data on namesakes are confused and the wrong citizen becomes debtor. To request a credit report in this case – means to detect errors and to regain the reputation of a responsible, loyal borrower in time. For this you will have to visit the bank that filed incorrect information about their customers and to write a statement on the revision of history and correct inaccuracies there.
Thus, the answer to the question “Why do I need a credit report” is the protection of credit reputation and your own financial well-being. Therefore each borrower is recommended to contact the CRB annually.
- Gather information about the charity center or the car donation center where you consider to donate your car. All charity centers are different. Like everything else in life, some are good, while others are working in bad faith. It is unlikely that you will know about it until you have enough information about them. Here are some relatively simple ways to do this.
- Before you donate your car to a charity or non-profit center for car donation, you should check their tax documentation, simply go to the site irs.gov.
- Check the tax deduction. Another point that you want to learn- documentation of the tax deductions that you get when you donate your car. Most charity centers sell donated cars, because the procees of car transfer for destitute or its sale at a very low price create many difficulties. Furthermore, charity centers are dependent on revenues from sales of donated cars in the financing of their mission.
- If the charitable foundation will sell your car, you can get $ 500 or part of the sum that charity organization has gained from the sale of your car. To maximize the tax deduction, you need to learn how the organization is going to sell your car. Some charity funds sell donated cars to the same dealer. This is a fundamentally wrong idea, because the more competition there is, the more likely that the selling price will be higher.
- Other funds put all the cars up for auction. It is a good idea if car is in good condition. However, if the car needs repair or it is in bad condition, it cannot lead to the best possible sales price. The reason for this is that at first buyer pays for the right to participate in the auction and then pays the commission when buying a car. Most buyers take into account these commissions in advance by placing their bets at auction.
- Learn the process. In most cases, you can most profitably sell cars, referring to several dealers who are ready to buy the donated cars. And here’s why. If car is in good condition, it makes sense to put it up for auction in order to allow more customers to place their bets. If car is in satisfactory condition, selling it directly to the dealer engaged in second-hand cars can be the most profitable way, because it can offer a great price to avoid the commission of the auction. If car is in very poor condition, spare parts shop can offer the highest price, so that then resell work items and metal used in the construction of cars, on scrap metal.
- Find out which of the methods of welfare center is going to sell your car. This will help you determine whether they will provide you the greatest amount of the tax deduction for your donation.
1. In the first place – with the highest reduced rate
This would seem obvious, but many people try to extinguish the first small loans to pay at least a part of it. In this case, you overpay the interest of service, so that the total sum obtained is bigger. For example, you have one loan at 13% per annum, the second – at 10%. For the same loan amount, focus on payments of 13 per cent loan, paying the minimum payments on the other.
You will have to pay the interest any way, but in such a way you will make them smaller.
Tip: Calculate loans: extinguish those that are profitable, but not those you want to.
2. If the calculations of several loans are approximately equal
Reverse method: if you have several loans with equal charges, extinguish the least one. This so-called “snowball method”: repayment of a loan motivates you to put out next, and you reduce their number. For most people it’s easier, and they subconsciously incline to this method. Please note that if you are threatened with confiscation, or in one of the loans calculation is clearly greater, this method is excluded, extinguish a larger loan, as described above!
Tip: If you have equal debts try to close a particular loan
3. Restructuring and Refinancing
If you took a large sum for business development or purchase of apartment, and have paid at least one-third, you can ask about the restructuring. It is profitable in that case, if now bank gives for the same purpose loans at lower interest rates. They can make advance, and you’ll get not only the reduction in total debt, but also the extension of the new loan. That is, you can take advantage of the restructuring to reduce the monthly payment, increasing the total term of the loan. Restructuring makes sense when interest rates are substantially different, as when formalizing everything you have to pay the commission and some other payments, so carefully calculated profits.
By the way, not all banks agree to refinance their own loans, so that you can try to sell the loan to another bank.
Tip: If you cannot pay – restructure: restructuring will gather all into one payment and reduce the monthly sum.
4. Repayment of the loan from another account
If you want to repay the loan with other bank credit card on which you have no debt, and there is a certain amount of money, which you can use, make sure that it is profitable. Even if you can use the amount at 0%, there are always commissions related to transactions, so that you will lose some money, but at the same time increase the amount of credits that you have to put out at a time. If you choose this method, to calculate the amount of the debt, divide the number of months during which the acts interest-free loan, and make sure that you have enough funds to pay off.
Tip: Keep out of penalties: use other loans, if the situation requires.
To whom can you donate?
The list of organizations is long, but they share a common principle – non-profit organizations. These can be:
- a community trust fund established exclusively for charitable, religious, educational, scientific or literary purposes, or for the prevention of cruelty to children or animals;
- churches, synagogues and other religious organizations;
- war veterans organization;
- non-profit volunteer fire company;
- volunteer organizations;
- cemeteries, crypts, etc.
What can you donate?
You can give to charity, followed by a deduction from the tax, almost everything, most importantly, that these things were in good or very good condition, ie, a broken vacuum cleaner won`t be accepted.
You can donate:
- clothes and other personal items;
- furniture, appliances and other household items;
- real estate: houses, land;
- cars, boats, motorcycles;
- jewelry, precious metals and stones;
- shares, securities;
- to organize some very necessary activities requiring investments;
- collections, pieces of art, etc.
Those who do not want to search for such organizations can simply bring to the store «Good Will» or similar stores their belongings.
How to determine the value of donated goods?
The law has a fairly detailed description of how to determine the value of things, check out the information here irs.gov.pdf. The whole essence of the definition of the cost comes down to the fact that it can not be higher than the market prices of similar goods.
For example, the clothes will be worth many times less than it was originally bought. By the way, the maximum allotted clothing, which are allowed to deduct from the tax – it’s $ 500. For a larger amount it has to be some kind of a special case.
To evaluate the real estate, and other unique products you usually need to involve experts.
For all categories of products there is teir maximum (always have reservations and special cases), which can be deducted from taxes.
The concept of the balance came from Italy. As an accounting term, it stuck in the XIX century. The balance is translated from Italian as the rest of the calculation, the price paid. In accounting, it means the difference between the amount of pay-in account, that is, flow rate, and expense account – credit. At the beginning of the XX century its meaning has expanded and moved beyond accounting.
Types of balance
Credit balance – in this case credit is bigger than flow rate. This indicator makes it possible to see the status of a source of income that is used for the execution of business affairs of the enterprise. The credit balance is shown in the balance sheet liabilities.
Debit balance – debit is bigger than credit. It shows the state of the balance relating to the conduct of operations. In this case for the basis is taken a specific period of time.
The score on performed operation closes when the difference between credit and debit is zero.
Usually, in practice, not the whole history of the movement of funds is taken into account, but the selected time period (month, quarter, year). This period is called reporting.
The calculation of the balance of money in the account is not possible without understanding of the following definitions:
- Opening balance. It shows the rest of finance on a specific account of the beginning of the reporting period. This is calculated by taking into account the previous operations;
- outgoing balance shows the balance of the account on the date of completion of the period. To calculate the amount you need to add up the initial balance and all transactions for a specific period;
- the balance of the period – this figure indicates the result of all the previous operations, which were carried out in a certain period.
To determine credit turnover it is necessary to calculate the result on the accounts of by selecting the desired period.
At the present time, as well as a few centuries ago, the balance – is the difference of final accounts according to the account of debit and credit.
But besides the specific accounting transactions this term is widely used in foreign trade.
Foreign borrowers have little use of “cash” loans so popular among Russians – for all the payments they use the credit cards and with their use generally occur most questions from those of our citizens who work, study or went abroad forever. Moreover, the specificity of credit cards (and credits in general) in Europe or the States is very different from the loan “plastic”, to which the Russians have become accustomed.
For example, to such a question as refinancing we come only in respect of mortgage loans, and Russian banks do not give the possibility to change the conditions on most of the current credit agreements. Abroad, the credit organizations approach the issue of debts very differently, believing that even the other bank of the debtor can be converted into a grateful client, offering it the opportunity to consolidate debts (combination of multiple loans into one, and often at a lower interest rate). To “transfer” debt from one bank to another in Europe can be even by a credit card – this procedure is called a balance transfer.
How does this happen?
In order to “transfer” your debt balance to another bank, you will have to open a new credit card and using it repay your old debt. This service has been popular among Europeans, not only because it makes it possible to change the current conditions of use of credit card to more profitable, but also for another reason. The fact that European banks are seeking to survive as credit card issuers, vying with each other offer “newcomer” customers an introductory promotional interest rate – a period of one to six months, when on the money used is charged a minimum percentage, and in some banks this fee may even be 0 %. For the fact of the transition, banks typically do not charge a fee, and in order to use the service you will need only your e-mail address and a valid social security number.
Why do you need it?
In Europe credit cards are a fairly extensive business segment for banks. This “plastic” – is the main source of their income, so the desire to attract as many cardholders as possible is understandable. For these same borrowers, such a procedure becomes a great opportunity to get a respite for payment by credit card. Even if we consider that the interest rates on credit cards in the European average is 16% per annum (how can we not recall the “domestic” 25-27%), with such sums that the average European should give banks on the cards, it is a significant burden on the budget. Therefore, balance transfer is an excellent way for a certain period to return (now to a new) bank funds at a reduced interest rate, which ultimately translates into a decent save.
The world never stays still. It is constantly changing and developing. In the twenty-first century, it feels particularly dynamic: rapid growth of technology and globalization became an integral part of our lives. Each of us daily faces various aspects of technological progress and information exchange.
Separately it’s worth noting the financial sector as a standing on the front-line of technological progress. In the developed and developing world, it has long become synonymous with a dynamic and changing world and a symbol of global links between the countries and corporations. World’s leading research centers have already drawn attention to this relatively new segment of alternative finance market and are quite optimistic about its prospects.
How peer to peer loans are developed?
Р2P-lending is a mechanism of borrowing between the individuals through the special online-platforms. Its basic idea is that people can lend money to each other without the involvement of the financial institutions: banks, credit unions or microfinance organizations. The world’s levels of Р2P-lending already amount to tens of billions of dollars, and they grow every year.
How do p2p loans work?
Р2P stands for “peer-to-peer” or “person-to-person”. Future creditors and borrowers are registered on рeer2peer-platforms – Internet resources or programs, installed on smartphones, and conclude loan agreements right there. Unlike in banks, people arrange with each other about the debt stock, interests and maturities.
How to invest in p2p loans?
It works like this: investors and borrowers are registered in the system, after which the former get access to the requests placed by the latter. Investor can view them at any convenient time in search of advantageous offer, taking into account the interest rate, terms and rating of borrower. The latter depends on the data that the platform requests for each applicant in the credit reference bureau. The loan agreement is concluded with р2р-platform, which takes a commission for its services. As a rule, this is a % of loan amount. Both one and several persons can be the creditor on one loan.
How peer2peer loans are developed nowadays?
Such system is actively developing in the world. In this, one can borrow not only dollars or pounds, but also cryptocurrency. For example, some platforms of P2P credit allow one to borrow bitcoins.
How peer 2 peer loans key configurations of companies on Р2Р market act:
- online platform, requiring the mandatory registration of participants and allowing one to automate the search and selection of borrowers and creditors, reducing the level of cost. Most often all participants follow how p2p loans analog of credit rating is calculated, determining the interest rate and other conditions;
- classic intermediary, who provides the legal support of the direct lending transactions, focusing on the deposit as a way to minimize the risk. Intermediary is also responsible for the means test, expert real estate valuation and meeting of investor and borrower in real time at minimal cost.