Tell my audience about yourself. What made you want to start your website beatingbroke.com?
I discovered blogging in late 2005, and started a tech/personal blog. About the same time, my wife and I found ourselves in some pretty dire financial situations, and I read Total Money Makeover by Dave Ramsey. As I learned more and more about personal finance, and started reading a few personal finance blogs, I started my own. After writing that blog for a year or so, I hit a major block and ended up selling it. About a year after that, I got the itch to write about personal finance again, and Beating Broke was born. The objective for the first site, and Beating Broke has always been to share the information and thought processes behind personal finance.
Please name some quick and easy ways for a person to improve their credit even if they’ve recently been through a divorce or some type of financial calamity?
Learn more. That might sound a little silly, but it’s the best advice I can give someone. Knowing how credit works, and the different ways that you can improve it is the best way of being able to look at your finances, see the mistakes you’ve made and make improvements. Some financial events remain on your credit report for some time. Bankruptcy, for instance can remain on your credit report for 7 years. For something like divorce, the best advice I can give is to get your name off of anything that your ex and you were joint on, and then begin establishing your own credit by opening new accounts (that are necessary) in your own name. I’ve written a Credit Score Guide that’s available on Beating Broke here: Beating Broke Guide to Your Credit Score
When a person walks into a car dealership what are some credit questions you recommend that consumer ask the salesman or finance manager?
You should have your credit all figured out before you walk into the dealership. Go to your financial institution ahead of time and have them pre-approve you for an auto loan so that you know how much you can spend, and what the rate and payment will be. If you’ve got that wrapped up, you can walk into a dealership and ask them what the discount is for cash. You can also ask them what rate and payment you can get through their financing, as they sometimes have national lending accounts that can offer deeper discounts than your local institutions.
How long does the credit restoration process take?
It depends on what you’re restoring from. A bankruptcy will take at least 7 years to fully recover from. Just having delinquent accounts, or missed payments can be quicker. The recovery begins almost immediately when you start taking steps to improve your credit. In all cases, being responsible with your credit gets it going in the right direction. Make your payments on time, control your spending so you don’t stretch beyond your limits, and begin saving for the future.
If a person can’t purchase a vehicle in cash, what’s the ideal down payment you recommend they have? Does a larger down payment mean a shorter loan and APR?
By default, most lenders will give the borrower the longest term available for a car loan. The auto will depreciate by 10-20% as soon as you drive it off the lot, so it’s always a good idea to come up with as much down payment as possible. 10% as a minimum. If you have more to put down, it can open up some negotiation avenues with your lender. You can shorten the loan, and possibly drop the APR some, but, for the most part, the APR will be dependent on your credit score. Going to your institution and getting pre-approved for the car loan can help you negotiate with the dealer, as well as let you know what the payment and terms will be so that you can make sure that they fit into your budget.
There is nothing more important, when it comes to car insurance, than shopping around. You’ll likely have some local agencies that have the ability to give you quotes for several insurance companies, and there are several places online where you can price shop too. If you’re going to have a loan on the car, make sure you know what the lender is going to require for insurance. Any lender is going to require full coverage (Comprehensive and Collision), but some will require a certain level of both and may require certain deductibles. Make sure that you ask your agent if there are ways that you can reduce your insurance costs. They may have discounts for bundling other insurances together, safe driving discounts, and discounts for paying for a certain amount of time in advance.
Besides beatingbroke.com what are some of websites/blogs you would recommend our visitors visit while trying to improve their credit?
I think any website that provides good information on personal finance will help you improve your credit. As you learn to handle your personal finances, your credit score will naturally improve along with your finances. A couple that I would recommend, though, are Consumerism Commentary, Narrow Bridge, PT Money, Sustainable Life Blog, Get Rich Slowly, and Wisebread.
This is our twentieth interview in our “1000 Interview Challenge” If your interested in an interview, please contact me.
This interview was conducted by Shane McC. Shane currently is attending RISD studying computer programming. He enjoys traveling and plays hockey. He played for the Boston Junior Bruins of the EJHL during the 01-02 season. You can follow him on Google+