Tell my audience about yourselves. What made you want to start your website themoneyprinciple.co.uk?
I started The Money Principle in 2011, when we were a year in our debt repayment; it wasn’t supposed to be (and it isn’t) a debt diary. I had already realized that for someone educated I know very little about money – mainly because I wasn’t sufficiently interested. My blog is a reflection of this renewed interest in ‘all things money’ and contains the learning, thinking and experimenting I/we did over the last couple of years. And the learning paid off – we don’t have consumer debt any longer.
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?
Improving credit is to a degree a mystery to me, mainly because it is to a large degree a matter of balance. If you haven’t borrowed you are a risk; if you have borrowed too much you are a risk; and, naturally, if you have borrowed and failed to pay back lenders won’t touch you with a barge pole. Lesson: borrow a bit and always pay your debts back on time. People can also do things like register to vote (which one should do anyway, I am very ‘old school’ on this one).
But the best way to improve your credit is not to damage it to begin with. Though, even if you have a spotless credit history you can be refused credit if lenders think that your borrowing to earnings ratio is not good. In such cases there are two choices: reduce your borrowing or increase your income.
When a person walks into a car dealership what are some credit questions you recommend that consumer ask the salesman or finance manager?
I am not sure that I am the best person to answer this one: I usually get it wrong. I don’t ask credit questions for three reasons:
First, with cars I get too hung up on image and I don’t mean ‘posh’ one; last time I did this I ended up with a two sitter Smart. The day after I bought it I realized that I can’t take my son and his friend to the cinema – not enough space. My husband asks whether one can get a washing machine in the boot. Again, misleading.
Second, I did buy my last three cars for cash. Were I to need credit I would have asked for 0% credit and would have made sure to read the ‘small’ script very carefully so that you remember when this expires – interest after that can be crippling.
Third, with cars we have moved away from ownership to use. We find that there are very good deals on leasing and choose smaller, economical cars. At the moment we drive a brand new Skoda CityGo – drives like a dream and does ‘what it says on the tin’; which is about seventy miles to the gallon.
How long does the credit restoration process take?
Depends. But it can take between several month and couple of years.
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?
On this one, I am rather old school again: get together as large down payment as you can. Cars are a liability (albeit a necessary one) and borrowing money to buy liabilities is not smart.
In you’re a first time car buyer and you’ve never shopped for insurance before, what are some tips to get the lowest payment possible? What are some questions you should ask your insurance agent?
Being young is not good when it comes to car insurance. Apart from this two other factors play: length of driving experience and driving history. If I were a young, first time car buyer I would go for something that will allow me to get only third person insurance – it is not good for the ego (old banger of a car) but my bank account won’t go in the red for a year ahead. My aim would be to build driving history and, well get a bit older, I suppose. I am not sure that comparison would help much – all insurance is likely to be very expensive.
Besides themoneyprinciple.co.uk what are some of websites/blogs you would recommend our visitors visit while trying to improve their credit?
To be deemed ‘credit worthy’ you have to be financially responsible. Read the good finance management blogs; too numerous to list but with a little effort one can find them (it is also a matter of what one enjoys reading). My main recommendation would be: don’t stop with websites and blogs – read wider to improve your financial education; responsible financial behavior will hopefully follow.
This is our nineteenth 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+