I guess it would be referring to balance transfers, refinancing and debt consolidation. I've heard of quite a few people who have taken out large personal loans to pay off credit card debt as they could not get another credit card with a big enough limit to balance transfer.
If you look at the very wealthy they've all gone broke at leasr 2 or 3 times before they found their Eldorado. (self made millionaires and billionaires that is - not the inherited wealth)
Just wondering, isn't banks normally check your credit rating to determine if they should lend you money? Please correct me if I'm wrong, if I run away from paying any bills, I'm risking that my credit rating be downgraded by the company. I once worked on a billing system for a utility company before, the system has a credit rating module. That's why I'm very careful with all my bills, even library fine, I just have to make sure I clear them in case it affects my credit rating. Again, please correct me if I'm wrong
They check your credit file to determine if you are credit worthy. So if you don't have defaults, have applied for credit but not excessively (their definition of excessive) or have a mortgage it will show that you can pay your debts and they will use a point based system to rank you. If you are over the hurdle requirement you will be given the loan/credit. You can get your credit file at Veda or DNB for free; you can see what records they have of your borrowings/defaults etc. There is no credit rating, each company applies their ratings individually. Individuals don't have credit ratings, just credit file. Late bills don't get logged into the credit file I think, only when you default and they need to chase you up with a debt collector. Stuff like Credit Cards, Line of Credit, Car Loans, Mortgage, those Harvey Norman 24 month interest free deals, Phone Plans etc are all logged onto credit file.
Yep. When i used to run credit checks on people, defaults were commonly lodged by telephone, mobile and credit card companies for unpaid/outstanding amounts. Sometimes the amounts were very small. In many cases customers were unaware they had such defaults on their credit file, as they thought accounts had been closed but hadn't been or they had moved house and bills were not redirected etc. Companies also don't usually notify their customers that defaults are going to be or have been lodged against them. You then have to go through the process of paying any outstanding amount and attempt to have the default removed, which can be a hassle. One or 2 minor defaults were usually okay were i worked, however if there was a long string of defaults then clients were rightly refused credit. It pays to be vigilant.
Actually the words "Credit Card" is wrong and deceptive terminology for what actually a "Debt Card"! When you own a "Credit" card you don't actually have any credits... what you have is pre-approved LOAN/DEBT agreement.
I can't see anywhere you can get them for free. They all say you have to pay for it. How did you get it for free?
The only thing we have to know about credit now is that it is toxic, toxic at the top and toxic down here where we live. This entire generation and the one before it too are so addicted to debt they cannot imagine life without it in some form. They have been convinced by the experience of housing and business that they NEED a credit rating or they will never get a home of their own, never be able to succeed in business. For the briefest of periods this has been true, but look at the end result of this attitude. Most small businesses, even those that have been established for decades live on an overdraft with zero savings. They were lured into it for tax benefits. Millions, probably, home-owners have re-mortgaged their homes to buy cars and holidays, extensions and second homes. They were lured into by increasingly cheaper interest rates, the desire to look as good as their neighbors and friends, the promise of free riches. This attitude is 100% reversed from that of their parents and grandparents who avoided debt and deeply distrusted debt. They had grown up in the depression and war years, what we are facing directly ahead of us, and they knew from experience that if you held debt you would lose your farm, your car, your stock portfolio. This current debt will not be forgiven either and the holders of it will go bankrupt or lose everything attached to the debt. That is unless they can pay it off before the economy collapses. We have been foolish with debt the way a child is foolish with fire and our fingers are about to be severely burned.
So I glad I used my foresight and did'nt get sucked into the real estate game that's been played out in this country...... The banks and RE industry and the previous govs have ALOT to answer for and will have even more to very soon in the new year.....Pay down your debts asap......Merry Xmas!
I am glad we used our foresight and did invest in Real Estate so that we built a passive income stream that now sustains us. Credit is neither good or bad, it just gives you choices. You can either use it to buy doodads or you can use it to purchase assets such as investment property that puts money in your pocket day in day out. In the 1990's securitized lending allowed us to purchase commercial real estate at home loan rates thanks to competition. Today our bankers are very unhappy because we have all these home loan variable mortgages and we refuse to refinance them. As long as we meet our repayments we are home and hosed. The other thing we did in the 1990's is we accepted as much credit card limits the bank would give us. We have about $250,000 available but don't use it. Kind Regards non recourse
I dont think anyone here is debating that RE in the 90's was a good investment. we all know that. Now is a different story.
Glug glug keep telling yourself how smart you are, no borrowings, no assets living from pay cheque to pay cheque a wage slave in perpetuity.:lol: Kind Regards non recourse
When we bought in the 1990's we were told then that we were foolish and we were taking on too much debt. Better to play it safe, believe all the "experts" who own nothing but are happy to charge you a fee for advice that ain't worth a nob of goat S!!t. The answer is put all your eggs in one basket and watch that basket grow....You want to be poor, diversify in lots pf paper equities and let the financial planners churn your share portfolio, better yet have him put it in a managed fund where you get two sets of fees and your financial planner can advise you to stay vested in the market. Your his super plan drip drip your equity is bled dry. Kind Regards non recourse
I apologize for the long cut and paste but I felt this piece was very informative. Note: The US residential market portrayed here peaked in 2005 and commercial lagged by 2 years. From 2 years ago now. That was the prospects for US commercial 2 years ago, now lets F-Forward in time 8 months Now the picture 8 months later, just 6 months ago. A total disaster for leveraged players and outright owners alike? The game isn't over yet and the economy in the US shows no sign of improving. Now a glimpse from the past, the great credit boom and bust of the Depression. Why Australia has not followed suit is a question for endless debate. The fact remains though that our fundamentals, our consumer debt, our dependance on other nations, the coupling of financial markets, etc, is similar in most all regards to the nations that have already begun to implode. It has always been my opinion that the people who set up this game never intended for any group within their system to escape with their wealth intact. Everything is interrelated and everything ties back to credit and the shadow banking system. By that I mean the big money center banks, not the banks we deal with.
Without a doubt you rolled the dice well and landed on your feet mate. No question. You made intelligent choices on risk vs reward at what many would argue to be the most perfect place and perfect market in this country's history and rode the wave enough to make many of us green with envy. If I could go back in time to the early 90s and roll the dice the same as you, I'd definitely give it a crack but at that stage I had different priorities in life (like needed a roof over my head!) and nothing of the financial & economic nouse I have today. I would love to walk in your footsteps if I could be assured that property assets would be as profitable as it was for your run, but given the state of the current market I can't be sure of that and moreso, I can't get access to the levels of debt you got your hands on to roll the dice anyway. I would so dearly love to flip my boss the bird and be independently wealthy, but we're in a transitional market environment at the moment with a LOT of serious doubt creeping i over how things will look going ahead. I really want to leap, but I can't see what direction is safe - other than staying debt free, cashing up a bit, saving in metals with the rest and adopt a 'wait and see' attitude to it all. The idea of income producing assets is music to my ears, but I am not so sure that for the property illiterate like myself, jumping into this current market would be a wise choice. So right now, I'm stuffed on what to do other than sit tight and wait for my opportunity to materialise... I'm sure many of us 'late bloomers' would be in the same boat, eager but not really knowing the best way to jump.
Auspm..... Unfortuneautely in the new year there are probably going to be ALOT of First Home Buyers that have heard the new ECB bailout news and been told 'Don't worry everythings fine'...... Go get a your 25-30 year mortgage...... What they don't know is it's all goin down within a few years after just being extended, again! Just remember you and the rest of us here have MUCH more informed information and we need to use it to keep ourselves ahead of the rest, while telling friends and family at the same time to be safe with their money.....It's taken me months to get my family to realise things are'nt as 'fine' as they thought they were.. It's also hard for them to believe or see what the global 'credit crisis' has got us all in but when the SHTF it aint goin to be pretty...... So keep stacking and sit tight.
That has to be the worst advice ever. Nobody should put all their money into one thing, be it property or precious metals. Diversification is key to protecting yourself from the rules being changed and the playing field turned against you. You seem to have something against paper equities or the share market but shorting the ASX 200 or the S&P 500 are entirely valid hedging/diversification strategies. Much like you wouldn't buy properties all in one area or bank with only one bank.
