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A bridge loan is basically a short term loan — one that is repaid in under a year. A bridge loan helps the borrower to get the cash quickly while waiting for a long-term loan or other financing to come through. The instant money allows the borrower to pay for outstanding financial obligations while still waiting for a deal or contract.

Taking a bridge loan means you will be paying a high rate of interest, and you must back it with collateral. These types of loans, like their name suggests, bridge the gap from when the individual receives more long-term loan and his direct financial obligations. Bridging finance may be utilized in a variety of financial scenarios.

The owner of a business may secure bridging finance in order to secure needed working capital while he completes equity financing deals which can often take several months.

People commonly use bridge loans when they are selling a home. There can be times when the real estate market in a given area is moving slowly, or there can be a home that is proving a hard sell. The owners of the home who are selling the house and want to move may take out a bridge loan so that they can pay their utility and food bills, as well as other financial obligations, while they await the sale of their home and the proceeds that they get from that. Or they may use the bridging finance as “chain breaking”, meaning they purchase an already-desired new house while they are still awaiting the sale of their current house.

Another use for bridge loans is to repair one’s credit. A person may borrow the money needed to pay off creditors so as to increase one’s credit score, making it more probable that one can then get a larger, more permanent loan or be able to be approved to rent a new apartment. People also use bridge loans when they are in between jobs but fully expect to be hired very soon or are just waiting to start. Along those same lines, these types of loans may be used to finance a relocation for work related purposes.

Often, you can receive a bridge finance in just 24 hours, since the need for extensive background checks and risk consideration are minimized by the high interest rate, short duration, and collateral backing required.

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Debt elimination involves three steps:

1. Stop acquiring new debt. 2. Establish an emergency fund. 3. Implement a debt snowball.

Here’s how to approach each step.

Stop acquiring new debt (This step can be accomplished in an afternoon.)

This may seem self-evident, but the reason your debt is out of control is that you keep adding to it. Stop using credit. Don’t finance anything. Cut up your credit cards.

That last one can be tough. Don’t make excuses. I don’t care that other personal finance sites say that you shouldn’t cut them up. Destroy them. Stop rationalizing that you need them.

* You don’t need credit cards for a just in case. * You don’t need credit cards for convenience. * You don’t need credit cards for cash-back bonuses.

You don’t need credit cards at all. If you’re in debt, credit cards are a trap. They only put you deeper in debt. Later, when your debts are gone and your finances are under control, maybe then you can get a credit card. (I don’t carry a personal credit card. I don’t miss having one.)

After you kill your cards, stop all recurring payments. If you have a gym membership, cancel it. If you automatically renew your Xbox Live account, cancel it. Cancel anything that automatically charges your credit card. Stop using credit.

Once you’ve destroyed the cards, call the credit card companies that you just killed. Do not cancel your credit cards (except for those with a zero balance). Instead, ask for a better deal. Find an offer online and use it as a bargaining wedge. Your bank may not agree to match competing offers, but it probably will. It never hurts to ask.

Establish an emergency fund (This step will probably take several months.)

For many, this is counter-intuitive. Why save before paying off debt? Because if you don’t save first, you’re not going to be able to cope with unexpected expenses. Do not tell yourself that you can keep a credit card for emergencies. Destroy your credit cards; save cash for emergencies.

How much should you save? Ideally, you’d save $1,000 to start. (College students may be able to get by with $500.) This money is for emergencies only. It is not for beer. It is not for shoes. It is not for a Playstation 3. It is to be used when your car dies, or when you break your arm in a touch football game.

Keep this money liquid, but not immediately accessible. Don’t tie your emergency fund to a debit card. Don’t sabotage your efforts by making it easy to spend the money on crap. Consider opening a savings account at an online bank like ING or e-trade. When an emergency arises, you can easily transfer the money to your regular checking account. It’ll be there when you need it, but you won’t be able to spend it spontaneously.

Implement a debt snowball (This step may require several years.)

After you’ve finally stopped using credit, and after you’ve saved an emergency fund, then attack your existing debt. Attack it hard. Throw everything you can at it.

Some experts say to pay your highest interest debts first. There’s no question that this makes the most sense mathematically. But if money were all about math, you wouldn’t have debt in the first place. Money is as much about emotion and psychology as it is about math.

There are at least two approaches to debt elimination. Psychologically, using a debt snowball offers big payoffs, payoffs that can spur you to further debt reduction. Here’s the short version:

1. Order your debts from lowest balance to highest balance. 2. Designate a certain amount of money to pay toward debts each month. 3. Pay the minimum payment on all debts except for the one with the lowest balance. 4. Throw every other dime at the debt with the lowest balance. 5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.

I’m a huge fan of the debt snowball. It still takes time to pay off your debts, but you can see results almost immediately.

Supplementary solutions

You can do other things to improve your money situation while you’re working on these three steps.

First, focus on the fundamental personal finance equation: to pay off debt, or to save money, or to accumulate wealth, you must spend less than you earn.

Curb your spending. Re-learn frugal habits. (Frugality is something with which most college students are all too familiar.) You can find some great ideas on the internet. Also check Frugal for Life.

While you work on spending less, do what you can to increase your income. If possible, sell some of the stuff you bought when you got into debt. Get an extra job. (But don’t neglect your studies for the sake of earning more. Your studies are most important.)

Finally, go to your local public library and borrow Dave Ramsey’s The Total Money Makeover. Don’t be put off by the title - this is a fantastic guide to getting out of debt and developing good money habits. I rave about it often, but that’s because it has done so much to help my own personal finances. After you’ve finished, return it and borrow another book about money.

The most important thing is to start now. Don’t start tomorrow. Don’t start next week. Start tackling your debt now. Your older self will thank you.

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If you have a charge off it will cause your credit score to be lower. A charge off happens when an account is not paid on for 6 months.

An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.

In your credit repair letter tell them why the listing should be removed from your credit report. Common reasons are the: the account has been paid, information is wrong, or it’s not your account.

Our credit system is flawed and you are assumed guilty until you can prove otherwise. It is common for incorrect information to show on your credit history.

In response to incorrect information being reported congress passed the Fair Credit Reporting Act. This says that any listing that can not be verified must be removed from your credit report by the credit bureau.

It is also common for one charge off account to become many negative listings and ruin your credit score. Let me explain what happens to an account once it is charged off.

The delinquent debt is sold to a collection agency by the original lender. Then the collection agency tries to collect payment from you. If they can not then they will report a new negative listing on your credit report.

The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.

This process can go on and on, depending upon how large the debt is. Thus you can see how one account can turn into many negative listings on your credit report.

With a number of negative listings it will ruin your credit score. This will also make it hard to be approved for any new credit lines.

This is good to know before you pay an outstanding bill because payment does not mean that the listings will be removed. Instead I would recommend disputing the charge off before you take any step to repay the debt.

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One very important element in your overall credit worthiness package is your FICO score. But what exactly is that and how does it affect your debt management choices?

FICO is an acronym formed from the letters of its founder, the Fair Isaac Corporation. It is a number between 400 and 800 that ranks credit worthiness according to a proprietary algorithm invented by the company, with 400 being worst and 800 being best. Other companies now have their own variations.

A clear explanation of how the algorithms calculate your credit worth has never been disclosed to the general public. However through cause and effect some have been able to deduct some factors that can affect your scores. It has been noted that your number of credit cards or the number of credit checks run can have a minimum affect your rating. However, late payments, especially payments received extremely late, have a much greater impact on your scores. Also, your overall debt amount is an important factor that has great impact.

Any score below about 620 is considered marginal and below 580 is decidedly poor. 720 and above is very good to excellent. A range between 620 and 720 represents a kind of gray area, where items other than your FICO will play a more significant role in loan decisions.

Lenders of all types, credit card companies, mortgage companies and banks rely heavily on your FICO when determining whether to extend you credit or loan you money. Your scores also have an impact on what interest rate you will be offered.

Of course, many times all other things are not equal. Prevailing interest rates in general, the current demand for loans, the general economy and other factors have a heavy influence on the willingness of lenders to lend and at what rate.

The ever growing reliance on computers and modern technology in the finance world has changed the underwriting of loans dramatically. In addition, the Internet has greatly influenced the world of finance. These two variables have put a new face on the lending industry in recent years.

Despite all these changes, or possibly because of them, your FICO is a key factor considered by lenders. Though it is not the only thing considered, it carries a lot of weight in deciding whether or not you will be approved for a loan.

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Companies throughout the world all operate under the same principle which is to make money, but more than that, to turn a profit. Making all the money in the world doesn’t do you any good if you’re still spending more than what you make, and this is the same in personal financing. You’re very much like your own little company. You have expenses and revenue, and these need to be properly balanced to keep you out of the red.

When companies are first getting off the ground, it usually takes some time before they begin to turn a profit. An initial loan or funding is used to get the company off the ground, get the concept launched and the word out there about the service or product. The rate at which this initial funding is spent is often referred to as the burn rate. The faster the funding is burned through, the quicker the company must increase revenue to counter it, or the company will not long survive.

The trouble with personal financing is that increasing your revenue is not quite as easy as it can be for a company. Unless you take on an extra job or get a higher paying one, your revenue is going to be static. For this reason your burn rate must be minimal. Using up your resources too fast will leave you unable to manage, where upon you’ll reach the equivalent of a company going out of business, bankruptcy.

This wasn’t so much an issue in years past, where credit was harder to come by. With no credit, it was all but impossible to spend more than you were earning. But in this era of cheap credit, that’s no longer the case. You can easily live above your means for a long stretch of time, as many people have, eventually hitting the end of the line where even the credit gives out and you hit rock bottom.

The other thing that separates you from a company is that you have something that must be planned for long term, which is you retirement. So not only do you need to not spend more than you earn, but you should be spending less than you earn. As long as a company is at least breaking even, they’re not in terrible shape. Their stockholders may not be happy, but ultimately they’re no worse off. They don’t have that end goal that must be met like you, and the time is always running out on meeting that goal.

Since time is of the essence, you must be setting aside a certain amount per year, which could be called your profit margin. Based on your income and how much you want saved away for your retirement, you could be looking at a desired profit margin of anywhere from 5-10%, which will be used to fund investments.

If your current profit margin simply isn’t cutting it, then you need to cut your expenses. Again, you don’t have the luxury of increasing revenue, so this is the one option open to you to reach your margin. This is again all about balance. You need to cut expenses in a way that won’t be detrimental to your living, by cutting things you can do without. For example, you can start by reviewing your current credit card balance. What extras have you been buying that could be cut out? The opposite of poor retirement planning is over planning. Do you really want to live like a hermit for 20 years just so you have a few comfortable years at the end of your life? Make a plan that’s comfortable and that you can stick to. If that means working a few extra years or something along those lines, then so be it.

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Knowing your credit score is an important thing, but that knowledge is absolutely useless unless you understand what the score means. If you don’t have knowledge of how to increase credit score, you will never be able to compete in a financial world that requires credit. All of the financial and credit-related decisions that you make combine to create your credit score.

Once you’ve viewed your FICO report score, you will realize how you are affected by certain things like use of a secured bank card or a portable mortgage. These things greatly impact generic scoring models. Whenever you affect your FICO score negatively or positively, you will see the impact last for a long time.

Credit Cards Influence Your FICO Score

Credit cards can really affect your FICO score. Using your credit cards frivolously will result in horrible credit scores with all three companies. Credit cards hugely influence the FICO Experian score as well as on the other credit bureau scores.

You need to pay attention to your credit cards every month. Most people only have small payments, but you still need to pay attention to them.

With that in mind, consumers have a chance to positive impact their FICO free score with their credit card use. When consumers come in and ask “how to raise my credit score”, the majority of credit repair clinics will tell them that getting a small credit card and paying the balance each month is a great way of fixing credit score problems.

On the other hand, credit cards are responsible for many people’s financial problems. It is amazing the volume of people who complain “credit cards killed my FICO score”. Your score decreases every time you either miss a payment or make payment late.

Your credit score can significantly drop because of one or two missed payments in the past. Also, the credit amount on the credit cards is also significant.

If you obtain too many charged cards (more than three), lenders will see you as a bad candidate for credit. Instead, it is better to have only two cards and use them cautiously.

Loans and My FICO Score

All of the many kinds of loans will affect your credit score at each of the three credit bureaus. In order to raise your FICO score at each of the credit reporting agencies, it is crucial that you consistently make timely payments on your loans. Student loans and mortgages are usually reliable loan types that show strength of credit to other creditors. Your credit bureau will create a positive impression for future creditors if you are able to pay and manage these two types of loan.

The other side of that has to do with the size of these loans. Mortgage loans, in particular, are large loans. If you do happen to fall behind on one of these or you happen to go through voluntary repossession, then your credit score will take a major hit. My FICO score is strong because of a long standing mortgage loan, but I’d shudder to think of how low it would go if I were to default on that loan. In addition, consumers would be smart to keep track of personal loans like they do a credit card. These loans are much more unstable and if you lose track of them, your FICO credit score will struggle.

My FICO Score Can Be Altered By Credit Inquires

Unknown to many people is the fact that each and every time they apply for a credit card or for a loan of any kind, it will appear on their credit report. No matter whether they are approved or denied, consumers’ FICO score can be affected simply by filling out the paperwork. It’s not worth the free t-shirt being offered if you apply for a new credit card that isn’t actually necessary. Applying for numerous loans indicates instability and causes your FICO score to drop as a result.

Being turned down for a credit card or loan is even more detrimental to your credit score. When you are rejected for a credit card, it hurts your score a little bit more than an inquiry does. If you are turned down several times, your rating will drop 20 points or more.

My FICO Score and Credit Balances

Using all or most of your available credit will have a negative outcome. Using more than half of the available balance typically causes your score to drop. In the case of high limit cards, these balances are more extensive and likewise have a more substantial impact on your score. Many people ignore card balances though they have a large impact on FICO scores.

You can establish a good payment history by carrying a small balance on your credit card. You are considered a credit risk if you begin using all of your available credit. These are the real intentions of my FICO score. When it comes down to it, these are the real intentions of my FICO score. It quantifies the level of risk for lenders so they can make sound business decisions.

The Serious Stuff

While missing payments and having high balances will impact your credit score some, nothing will hit it harder than serious things like tax delinquencies, bankruptcy score filings, repossession of your property, or a serious loan default. If you are forced to go through bankruptcy, then you can expect that the next time you use a FICO calculator, your score will be in a very low place.

Bankruptcy causes a lower FICO score, usually 500-600, and makes it difficult to get a loan. Credit repair companies can help you understand your options if your credit has been impacted by one of these serious circumstances.

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Your credit report score is a number contained within your credit report. The final judgment on your credit report score depends on the amount of debt and your history in repaying loans. The amount of credit you have available to you will also be taken into consideration when your credit report score is determined.

Financial lenders believe there is a direct correlation between your credit report score and your chance of defaulting on your credit responsibilities. So the higher your free credit report score, the lower the risk of defaulting. High credit report scores get the best loan terms; low credit report scores the worst.

Your free credit report score is based on over 80 factors and is computed based on the contents of your credit report at a given point in time. Credit report scores are not fixed, but change with new information.

If you make all or most of your payments in a timely manner, your credit report score will rise. Lenders look at your credit report score as a way to determine your credit worthiness. If your credit report score is low, you will likely have trouble in obtaining new credit.

Your credit report score is also based on the past 2 years of payment history on any credit card or installment accounts. Making one late payment on any account can lower your score significantly. By making timely payments each month, you can increase your credit report score over time.

In many cases, the top priority for the creditor will be to recover as much of the receivable as possible. Many people are surprised how accommodating they can be in terms of arranging a payment process: in many cases the creditor will eliminate the interest, or even lower the bill itself it return for immediate payment. If you can’t pay right away, propose a payment plan to the creditor that you can stick to - creditors will be accommodating to most payment proposals as, again, their primary interest will be in recovering the debt.

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Ever since the Discover Credit Card first started offering cash back on purchases credit card issuers have been beating each other’s brains out to get your business. Credit card rewards now come in all shapes and sizes, and some credit cards can get you to those rewards faster than others. Whether it’s air fare, theater tickets or anything else you’re after, there is probably a reward credit card available that can help you get it free.

In order to take advantage of a credit card that offers rewards there are several things that you should keep in mind:

* Do you maintain a balance on your credit cards? If you aren’t in the habit of paying the complete balance due on your cards every month, then you seriously need to consider whether a reward card is the right thing for you. It doesn’t take much of an outstanding balance at all for interest to outstrip any rewards that you might gain through credit card rewards. Look instead for a low interest credit card.

* Check the points. Know how much you need for a card reward before you commit on the card. For example the number of points needed for a round trip coach ticket varies across different credit cards. Make sure that you get the best deal that you can find.

* Check to see if points expire. While airlines have begun to offer their customers points that never expire, some credit cards still give you points that are use-it or lose-it. It may take you a long time to qualify for some of the higher point valued awards, so look for a card that offers points that don’t expire.

* Know which purchases give you the biggest reward for the buck. Some purchases will net you more points than others, and some purchases might not net you any points at all. Many airline rewards cards offer point bonuses for purchases of air travel. Some American Express cards offer double points for purchases of gas and groceries. Make sure you understand the credit card agreement and pick one that will maximize your receipt of points given your spending habits.

* Pay household bills with your credit card. This one is huge for me. I pay for gasoline, groceries, electricity, heating oil, cable TV and water all with my credit card. If you get used to paying as many bills as possible with your credit card (and then transferring the money from your checking account to your credit card) bill payment gets easier, the credit card balance won’t get away from you, and you’ll earn points faster than ever.

* Get the best sign-up bonus. Most rewards cards offer a sign-up bonus of points. As you ‘re shopping for a rewards card find one that offers a good bonus for just applying and being accepted. Often the bonus alone can get you half-way to a high-point award. Once you achieve the award you want you can shop for another rewards card, sign up, close your old account and reap the benefits of another sing-up bonus!

My family grocery bills approach $200 per week (I have a big family!), and it all gets put onto a rewards card. If you’re smart and willing to work at it you can use the tips above to accelerate your rewards. Using the tips outlined above I’ve been able to get round trip airfare in as little as two months time. With free airfare I’ve been able to take trips I otherwise wouldn’t have taken - and for me that’s worth more than the money! Try it - it can work for you too.

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There are many terms that are often used to describe real estate with environmentally friendly architecture. “Green,” “eco-friendly,” and “sustainable” buildings reduce energy and water use and may improve the quality of life for those who live or work inside it. Architects design green buildings using various design techniques, including natural ventilation, geothermal cooling systems, low-flow toilets, solar chimneys, and reclaimed wood.

The green building industry (a field that most hadn’t heard of only a decade ago) was worth about $12 billion in 2007, according to the U.S. Green Building Council. Although sustainable construction is one of the fastest-growing areas of commercial building, a small number of new buildings are green. Buildings that do meet these standards can save money on energy costs, which is a benefit that may become more attractive as energy costs continue to rise.

What Is a Green Building?

Leadership in Energy and Environmental Design (LEED) is the designation given by the U.S. Green Building Council based on how well architects and designers can reduce a building’s environmental impact and energy use. LEED projects may receive one of four levels of certification. The certifications include Certified, Silver, Gold, and Platinum, depending on how many credits the buildings receive.

There are many ways that architects and organizations can make buildings green without having to involve costly projects. Using recycled materials, for example, is a way to generate several points. Changing the way a building faces, so that windows and open spaces can better use natural light, doesn’t have to cost any extra money. It also can reduce energy bills and increase the number of points the building receives. Having natural ventilation shafts for circulation and roof overhangs to shade windows also are simple design methods to reduce the need for air conditioning.

Using Green to Put Green in Your Wallet

There are many benefits from using green designs. Benefits range from lower energy costs to improved indoor environmental quality, which can lead to greater employee comfort and productivity. These benefits make going green more attractive, despite any initial costs for the projects.

Green properties can also have a boon for real estate investors, as the green buildings can bring higher rents and building values. According to McGraw-Hill’s SmartMarket Report in 2006, buildings renovated to meet green standards often increase value by 7.5 percent and occupancy rates by 3 percent. Green buildings may cost between 2 and 3 percent more to build, but they use between 25 and 30 percent less energy than “conventional” buildings.

An example can be found in Exelon Corporation, one of the largest electric utility companies in the United States. This company in downtown Chicago was recently certified at the Platinum level. Exelon has reduced its electricity consumption by more than 43 percent and its water consumption by 30 percent.

Green Investment Opportunities

There are three main ways to have green investment opportunities. Two ways are indirect, and are through pooled investment vehicles, mutual funds, and REITs. The third method is through direct investment through buying a company’s stock. There are currently few pooled funds that focus only on green real estate. Most funds only have a portion of assets invested in green properties. Individual stocks may have more opportunities for investors, but then investors also have commensurate risk and have the challenge of having to weed good stocks from the bad.

One significant challenge for individual and institutional investors as that LEED and the Energy Star program only certify individual properties and not the companies investing in those properties. That action begs the question of whether social and environmental issues should be evaluated at the property level.

Additionally, the methods for assessing social and environmental characteristics of real estate investments are not widely defined or accepted. This mean that a store like Wal-Mart or Home Depot may be attacked for eliminating local merchants, but can also be defending as being a benefit for low-income consumers who want quality products at a price they can afford.

The REIT Way

Real estate investment trusts (REITs) are investment funds that own a portfolio of property investments just how mutual funds aggregate securities. REITs with offerings of new or renovated green buildings may be the easiest way for individual investors to invest in green real estate. With one REIT purchase, the investor can access the portfolio of properties in the EIT. This spreads risk across many properties, and much more efficiently than if an investor with a small amount of assets were to do the same thing.

Mutual Funds

There are some mutual funds that are composed of green real estate stocks. They may also have stocks for companies that manufacture products used to construct green building. These mutual funds, like REITs, spread the risk of investment across a broad portfolio of securities. Mutual funds and REITs have professional managers for their holdings, which means individual investors don’t have to take that responsibility.

Individual Stocks

Those who are looking for green investments, and are willing to buy individual stocks, may have a broader range to choose from. Investors can choose from various companies that have various involvements in green real estate. Individual stocks have more risk and volatility than pooled investments like mutual funds or REITs.

The Bottom Line

Green properties, although they may initially be more expensive, will likely become more popular as the trend of energy conservation grows and energy itself becomes more expensive. This growing market for “going green” like flexible reward cards and the acceptance of green buildings means that this area will be rich for profitable investment opportunities.

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Getting into serious levels of credit card debt and then trying to get out of it is quite comparable to gaining weight and then trying to lose it. Reaching a level of excess debt or weight is a disturbingly fast and easy process; it’s getting back to safe and healthy levels of debt and weight that requires that you follow a strict plan over a long period of time.

Most people who gain a lot of excess weight never originally planned on doing so. Such things just happen as a result of an extended period of unhealthy lifestyle choices that stretches over several years. Similarly, credit card debt does not suddenly appear. Instead, it tends to grow over time until it becomes an uncontrollable problem.

Unfortunately, unlike a weight problem, the effects of credit card debt cannot be dealt with by undergoing some kind of surgery. The damage it causes is long lasting. Even though you have to put forth a notable amount personal effort in order to get rid of your credit card debt, there is help available to you.

The first thing you can do, and it seems so obvious, is to stop using the credit cards. Many people get themselves into a vicious circle where they need the room on the credit card to buy gas and food but they cannot afford to pay anything but the minimum monthly payment. Then the credit card company seems like saviors when they raise your limit but all they are doing is keeping you trapped in the cycle. So the first step in the quest to pay off credit card debt is to stop using the cards.

Pay for everything in cash, and only cash. The following suggestions will help you when you find that you have run out of cash but still need to pay for monthly bills and other important things.

Hard Work and Sacrifice

The hard work and sacrifice involved in getting rid of credit card debt requires that, above all, you earn more money. That could mean getting a second job or taking on extra hours at the job you already have. Even though working two jobs is never the most pleasant experience, you would be doing it with a definite goal in mind. Knowing that it will end when you have paid off your credit card debt should help you to stick it out despite the difficult involved.

A well established plan that outlines how you will use your extra earnings to get rid of your debt will help you persist until you are successful.

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