Christian Credit Counselors, Debit & Your Credit Score, Money Management

Credit Reports – The Knowledge You need to Know

Improving Your Credit Score

The best way to improve your credit score is to improve your knowledge on credit reports.  There are three major credit bureaus that put together your credit report: Equifax, TransUnion, and Experian.  Although the information they gather is yours, you do not own it, these agencies own your information.  They have collected the information and they give you the right to view it.  You can view your credit report for free on www.anualcreditreport.com.  You can view one or all three, depending what you need it for.  Your credit score will be between 500 and 840, anything over 700 is a good score.

How your score is tabulated is unknown, but what makes up your credit score is no secret.  Some of the items that are calculated into your credit score are employment, department store credit card(s), credit card(s), installment loan(s), collection item(s), and inquiries.

Department Store Credit Card Accounts

For department store credit card accounts they look at highest credit allowed, balance, and date opened.  The rating scale on this account is R1 to R9 with R9 being the worst.  The R stands for revolving, and it tracks how well you pay.  A similar scale is used for installment loans, I1 to I9, where I9 means the account is in collection.  On this scale, I7 means they took back the collateral.  For example, on a car loan I7 means the car was repossessed.  All accounts, department store credit cards, credit cards, installment loans, etc., have a twenty four month window.  If you fall behind and make a late payment on any account, you must make twenty three on time payments to get the late payment to drop off.  Inquiries made on your account have a very small effect.  If you are shopping for a new car, the inquiries made by the dealerships have no significant effect on your score.  However, if you have fifteen inquiries in one month it will cause a big impact because it appears you are desperate for credit and this raises a big flag.

This information is sold to banks by the credit bureaus; this is how they make money.  With this information banks look at who is a credit risk, will pay over a long period of time, and earn them the most money.  For example, banks look at bankruptcy filers to offer them a credit card with high interest.  Also, the bank is attracted to those who recently purchased a home because most of them will make big purchases like furniture, home improvements, etc.

Managing Your Money

There are some simple rules that will help you better manage your money and increase your credit score.  Prioritize your bills, and pay your bills immediately.  As stated by the President and CEO of Christian Credit Counselors, Greg McTaggart, “the longer you have that credit card, the more they make off of you.”  Think of your purchases.  Do not just focus on the present, focus on what you will need 4 to 8 years from now.  Poor planning leads to impulse buying, pre-schedule bills, balance check book, and have cushion for savings and emergencies.  To avoid fraudulent activity on your credit report, do not give out your information generously.  Check your report annually and dispute any irregularities with the credit bureau.

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    Christian Credit Counselors, College Debt, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt

    Credit Card Debt and Five Habits You Need to Break

    Breaking Credit Card Debt

    Being in debt is no fun, but having fun costs money and that is what got you in debt in the first place. Credit card debt can creep up on you if you aren’t keeping track of your spending habits. Here are 5 things that are keeping you in debt that you might not even be aware of.

    Bargain Shopping

    We all love a great deal, and you may think that because something is on sale, that you are doing yourself a favor by making that purchase. But, before you buy, ask yourself if you really need this item. If you do, then if it is on sale you are saving money in the long-run. If you are buying it just because of the discount, then you are spending money that you shouldn’t be which of course isn’t helping you.

    Your Friends

    This becomes a problem if you are always going out to dinner/movies/bar etc. and spending money with your friends. Of course I am not saying don’t hang out with your friends, but find other ways to socialize that don’t cost money. Host a game night or go on a hike. I understand that this is unrealistic every time you get together, but try to incorporate free activities into your social circle when you can.

    Credit Card Rewards

    Many credit cards that are out there now offer various rewards on your purchases. While these rewards can really benefit you, be careful to make sure you can make your payments at the end of the month. Just because you are racking up airline miles by that outrageous charge on your card, doesn’t mean it is worth it if you can’t pay off your balance.

    Tax Refund

    If you are fortunate enough to get a tax refund this year, then lucky you! But just because you are getting a lump sum of money, doesn’t mean you need to go and spend frivolously. I know it may seem like you deserve to treat yourself, and that this is “extra” money, but be smart about it and use the refund to pay off some of your debt.

    Gift Buying

    Just because your friend spent an excessive amount on you for your birthday, doesn’t mean you need to do the same. If you are trying to stick to a budget, remember it is the thought that counts when it comes to gifts. If he/she is a true friend they will understand your financial situation and won’t resent you for not over indulging for their birthday.

    Can you think of any other things that are keeping you in debt?

     

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      Christian Credit Counselors, Credit, Credit Cards, Credit Counseling, Debit & Your Credit Score, Finance

      Your Finances and Financial Spring Cleaning

      Financial Spring Cleaning

      With winter gone, and spring in full bloom spring cleaning is on probably on your mind. This is what you’ve been waiting for all winter, to clean your entire house from top to bottom. Wait, you don’t do annual spring cleaning? It’s okay, I don’t either, but the idea of going through your finances at least once a year seems a lot more beneficial then scrubbing the toilet.

      Know Your Financial Goals

      This may seem like a no brainer, but most people don’t have a defined plan concerning their financial future. Figure out exactly where you are now, and where you want to be in the next year, 5 years, 10 year, etc. Having a written document you are able to look at every so often will keep you on track toward securing your financial future.

      Get Rid of Unnecessary Documents

      While it is good that you are keeping a hold of valuable documents, some that have been in your pile for years may not be needed anymore. Visit bankrate.com to see what records you should have on hand and for how long.

      Review your Credit Report and Score

      The three credit agencies: Equifax, Experian, and TransUnion offer you one free credit report annually. This is something you should take full advantage of. For more information about credit reports and your score, check out our last blog!

      Analyze your Insurance Coverage

      To make sure you are getting the best plan at the best price, shop around and compare rates. Companies are competing for your business, so you may be able to get a better deal somewhere else. Visit sites such as insurance.com and insure.com to help you in your research.

      De-clutter your Home

      Go through your closet, old boxes, basement, attic, etc. and get rid of unnecessary items that are sitting there collecting dust. You can opt to make a little money by trying to sell some of your goods, or you can always donate/recycle them. Either way, after de-cluttering your home, you will be inclined to improve other areas of your life, such as your finances!

      Happy Financial Spring Cleaning!

       

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        Credit Cards, Debit & Your Credit Score, Goals, Investing, Money Management, Personal Goals, Saving

        Setting Good Financial Goals

        S.M.A.R.T Financial Goals

        If you are keeping up with the Newsletters, you know that last week we decided to open up the New Year by presenting you with the “S.M.A.R.T.” tactic; a great tool that you can use as a guide when setting your goals for 2011

        The aim is to set good financial goals.  You will want to write them down, consolidate and refine them, prioritize them, make them measurable, and keep them visible.  Set good goals and keep them in front of you—you’ll be surprised at how much more productive and focused you’ll feel as you start living with a clearer purpose.

        The second common denominator of all good financial plans is a spending plan (i.e., budget). You may not like it, but it’s an absolutely essential tool for everyone.  Without a spending plan, you cannot implement saving and investing strategies because you don’t know if you have any extra money to save or invest.

        Keep an eye out for next week’s newsletter about priorities!

        Financial GoalsTip

        Don’t procrastinate!  Just sit down and get started.  It does not have to be perfect, nor does it need to be complete.  You will find things along the way that will need to be added and/or changed; that is ok. The most important thing is that you make a set PLAN.

        “Failing to plan, is planning to fail.”

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          Credit Cards, Debit & Your Credit Score, Identity Theft

          Identity Theft Victims Must Do List

          A Must Do List for Identity Theft Victims

          If you’re a victim of identity theft, it’s essential to take certain steps as soon as possible, to start repairing the damage. At the same time, begin to keep a record of all conversations and copies of all correspondences. There are six things you should do right away:

          Fraud Alert

          Placing a fraud alert on your credit reports will prevent a thief from opening any additional accounts in your name. Although there are three credit reporting agencies, you only need to call one of them:

          Equifax 1-800-525-6285
          Experian 1-888-397-3742
          TransUnion 1-800-680-7289

          Review Your Credit Reports

          Request them from all three agencies and review them very carefully. Look for accounts you didn’t open, debt that isn’t yours, and inquiries from companies you haven’t contacted. Verify everything and begin the process of removing any fraudulent or inaccurate information.

          Close Tempered Accounts

          Call immediately and follow up with letters, including copies of your supporting documents. Also, send the letters by certified mail so you know they received it. Keep records of everything.

          Fraudulent Charges

          Dispute fraudulent charges on your credit card accounts or debit cards. Call the company to find out what their process is and where to send correspondence. Don’t send it to the billing address. Once it’s resolved, get it in writing.

          Federal Trade Commission

          File a complaint with the Federal Trade Commission. Go online at ftc.gov or call their hotline at 1-877-438-4338. The information will be used to help law enforcement officials track the criminals and stop them.

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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            Credit Cards, Debit & Your Credit Score, Money Management

            Repairing your Credit – Five Trouble-free Guidelines

            Repairing Your Credit

            Repairing your credit is something we all have to do from time to time. It may appear like a hard task to do, but the fact is that it can be fairly easy when you follow these five simple guidelines to repairing your credit and getting back on track for a future with easy credit options.

            Pay your bills on time.

            A full 35 percent of your credit score is made up of your payment history, meaning it matters more than anything else. Hence, it is incredibly important that you pay back your bills on time and do not let them get late, or go to collections. One late bill can send your credit score spiraling down. This is why it is so important that if you are repairing your credit, to pay your bills. Even if it means minimum payments, you should pay your bills as soon as you can without letting them be late.

            Pay and Transfer

            Pay off your high interest credit cards and transfer balances to your low interest credit cards. Interest can sink you when you are trying to pay your credit cards, so transfer your high interest balances to low interest cards to save money. As well, if you have more than three credit cards, close out the high interest cards to get yourself down to two or three credit cards, no more.

            Credit Report

            Get a copy of your credit report. Understanding your credit report is key to fixing your credit. It will show you what to fix and what to not worry about. On top of that, it will help you see if you have any problems with errors on your credit report, something that affects 75 percent of all credit reports. Repairing a credit report error can drastically fix your credit, so make sure you get your credit report.

            Don’t spend.

            The smaller amount you spend on credit, the less you have to pay back and the easier it will be to start cutting down on your debt. You should try and limit all your everyday expenditured and create a budget so you can observe yourself and see accurately how much you need to allocate each month to pay off your debts in a year or so.

            Financial Accountability

            Talk to someone about your debt. A credit counseling company will take all your debts and put them into one loan that is easier for you to pay back. A credit counseling company will help you learn more about your credit and how to fix it. You won’t be so worried because you will have these companies on your side, helping you fix your credit. Just be careful of debt consolidation and debt counseling companies that are not legit and only want your money. Do your homework.

            These five tips can help you repair your credit and get yourself out of a debt spiral. Use these tips and before you know it, your credit will be back up above 650, and you will be living a much easier life again.

            Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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              Debit & Your Credit Score, Loans

              Unsecured Loans – Your Cheapest Options

              Dealing with Bad Credit

              The interest rates offered to you can be a result of bad credit scores or no credit at all. There are a lot of websites which offer an instant credit report for a small fee. Another reason to check your credit score is it may not be as bad as you think it is. Often credit ratings are simply misunderstood by individuals.

              An unsecured bad credit loan can work as a perfect solution to your financial need. You can use the loan amount for any purpose ranging from buying your dream car, going out for a long awaited holiday, combining debts to decrease the debt load, or for any personal reason. It solely depends on you and what do you with the loan money.

              Dealing with Lenders

              Usually, in the lack of guarantee, lenders demand high interest rates and heavy monthly installments. The lender undergoes a great risk of losing all their money if you fail to repay the amount. Therefore, they offer you a short repayment time so that they can get back all the money as soon as possible. However, the lack of security does not invite long legal paper formalities unlike secured credit; therefore, it becomes easier to get unsecured credit quickly.

              You should not forget to understand that this article can cover information related to cheap unsecured loans but can still leave some stones unturned.

              Consolidating your Debt

              To get the lowest rates, you want to have a loan of as little as likely to consolidate your debts. Therefore, start by totaling up your high interest debt. That figure is what you want to apply for. Besides your credit amount, also consider what terms you want. Many personal credits are for five years, but you can extend them for smaller monthly payments.

              If a home equity credit or refinancing is not a choice, you may think about transferring your high interest balances to a low rate credit card. This will lower monthly payments and make is probable to shrink debts. Another alternative involves consolidating debts through a credit counseling or debt management agency. These agencies negotiate lower interest rates and consolidate debts without collateral or credit checks.

              Credit Providers and Creditors

              The remaining task has to be carried out by the credit provider and their trained representatives. It is they who would deal with a number of creditors, a duty most debtors would love to be relieved of after the regular haggling with the creditors. These trained representatives are behind the negotiations that take place on the debts. A better speaker can help to reduce the repayable amount, thus saving a part of the unsecured debt consolidation credit for other reasons. It is to be pointed at this stage that an unsecured debt consolidation credit is a personal credit and can be used for any reason other than debt settlement. Therefore, the credit proceeds can be used for purchasing the car, financing holidays and also for undertaking home improvements.

              Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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