Credit scores are mostly the FICO scores, and they assess an individual’s creditworthiness and a lender’s risk in lending them money. A high score indicates their willingness to pay off the debt, and a bad score indicates the opposite. Also known as the credit level or credit quality scores, they have the ratings of poor, average, good, and best, according to the individual’s payment capabilities. Several factors are considered for assessing the financial position of the borrower before lending money, and bad credit points significantly reduce the chances of getting credit in the future. This checklist will help you understand the reasons for a low credit score: 1. Not paying the credit card bills If you continuously fail to pay up their credit card bills, you can generate a bad credit score. If you have several accounts that are yet to be paid, you may even generate a negative score. 2. Credit agreement failures Before entering into a credit agreement, it is advisable that you read the terms and conditions of making the payments. This is because failing to comply with the credit terms can generate a lower score and reduce the chances of getting credit in the future. In addition, making late payments also contributes significantly and gets poorly added in your credit history.

Applying for a 401(k) loan is the easiest way of gaining some extra emergency funds in serious situations. In most cases, the limit for borrowing money under the 401(k) loan scheme is about $50,000. But for the scheme, you will need proper documentation and specific reasons for breaking your retirement funds. 1. How to apply for 401(k) loan schemes? If your loan scheme offers a 401(k) loan and you are interested in it, then your plan administrator might provide you with information regarding the scheme. He would verify your reason for the loan and guide you through the necessary rules and regulation that you need for this scheme. If your application is approved, then you would have to sign a loan repayment agreement that would have details such as loan term, interest rate, principal amount, and other additional fees. If you are married and want to borrow an amount of more than $5,000, you would need a written approval of your spouse. After applying for a 401(k) loan, the amount of money that you could borrow would be about 50-60%of your total retirement funds. 2. How do 401(k) loans work? Most 401(k) plans would let you borrow money from your account but some schemes would not allow you to do so.

Checking accounts, also known as demand or transactional accounts, are terms used for deposit accounts held in any bank or other financial institutions. One can avail various checking accounts services such as withdrawal and deposits through electronic debits, checks, automated teller machines and various other forms. Checking accounts can be of different types as per their services. 1. Free checking accounts These accounts do not charge any monthly fees, however, they do charge against overdrafts of accounts. Different types of banking services including dealing with paper bank statements. 2. Joint checking accounts They allow multiple users and hence are suitable for married couples who can deposit their money in a single account to be used for managing household finances. 3. Online checking accounts These types of accounts are gaining popularity as they offer various banking services 24/7 for their users and do not charge monthly fees. 4. Money market and high-end checking accounts They offer a higher rate of interest in comparison to conventional checking accounts. The checking account services of these accounts often come with limiting the number of monthly transactions of an account holder and minimum account assets. 5. Business checking accounts These types of accounts specialize in managing large amounts of money and dealing with a huge number of financial transactions.

While many people are aware of the advantages of having a credit card, they tend to forget that these cards come with the risk of getting into debt. Once a person falls into debt, it might take them many years to pay it off. On the other hand, if used correctly, credit cards can be a tool to help people stay out of debt. A cardholder must consider keeping track of all financial exchanges and cash flow. They must limit their expenses to those things that they can pay for when the bill arrives. This step can help them to avoid credit card debt for a long time. Let’s discuss the various things that one should take note of regarding credit card debt. 1. Know when to use credit cards for emergencies Using a credit card for an emergency financial transaction can prove to be a wise decision, but only if the repayment time frame is for a short period. Credit cards usually charge high interest on pending dues. So, the sooner one repays the amount, the lesser will be the interest they need to pay. To avoid the risk of being burdened by debt, credit card owners must compare all available options, including short-term loans, before using a credit card.

A good maximum return on investment tip is to start with the basics of investment and setting a goal to further your plans. When investing money, you are either buying a portion of company funds or a commodity with a belief that the value of the fund will grow over a certain period. The rise in the general prices of the commodity coupled with low returns on several fixed government bonds has prompted many investors to take refuge in the stock market for earning higher returns. In the next section, you will learn about the various investment options you can put your money in to earn maximized returns from your invested dollars. 1. Investing in stock market The most beneficial thing for an investor to earn maximum returns on their investment is to put their money in the stock market. Owning a stock of a company is probably the safest deal to start with as you will invest in only a small portion of a particular stock. If the prices of the shares go up you will earn dividends based on the number of shares of the stock you own. Investing in stocks is also beneficial as you will be able to hold on to them and sell them later to earn profits.