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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    Budgeting, Money Management

    Money Saving – Top Ten Tips

    Setting a Spending Plan

    At the beginning of each year, many Americans include “get out of debt” on their list of New Year’s resolutions and then seem to live under the illusion that they will be able to wish this into reality since a spending plan is never created or written down. The most important part of taking control of your finances is starting somewhere and starting now.

    The only way you will get out of debt is if you stop unneeded spending and start allocating the money you are saving toward your debts.

    Money Saving Tips

      1. Stop eating out –  Even if you only eat out once a week, if you spend $25 each time you eat out, you’d be saving $100 per month—so there you go, that’s already $100 you are saving.
      2. Stop spending at Starbucks –  Let’s low ball this and say you spend $3 each weekday on coffee, meaning you spend $60 per month. Now you’re at $160 saved.
      3. Use coupons wherever you go – Coupons.com has a plethora of coupons that you can print out. No one wants to be dubbed coupon-crazed, but one or two dollars here and there will definitely add up. Just make sure you aren’t buying something just because you have a coupon for it (and you don’t need it).
      4. Cut out luxuries – If you’re serious about getting out of debt, you can find alternatives to these luxuries.
        • Ladies— getting your hair done; either go natural or do it yourself. Color out of a box will save you at the very least $50. This also goes for getting your nails done.
        • This one is for guys and girls—cancel your gym membership and go hiking instead. You’ll save $20-$30 per month and you’ll get some fresh air in the meantime.
        • If you can think of some other luxuries you can live without, like massages or having a monthly cleaner for your house, you’ll notice that you’ll save at least $100 on those alone.
        • Now for something a little harder to cope with for some—cable. Cancel cable and watch shows for free online at hulu.com. Most shows are available online and you can watch them at anytime. This will save you at least $30 per month.
      5. Downsize your living space. You won’t have to stay in this situation forever, but this could be an easy way to save a few hundred dollars a month.
      6. Downsize your car. Sell your car and buy a less expensive car if you would be able to make a significant amount on the sale. If your family has two cars, try downsizing to one and sell the other. It may not be very convenient, but if you are serious about getting out of debt as soon as possible, these are some options that could help you right now
      7. Sell some of your items on Amazon or eBay.
      8. Work overtime or ask for a raise (only if you deserve it). This also means it’s important to make yourself an asset at your company–do your job.
      9. Take side-jobs if you can. Learn a new skill or use a skill you already have to make some extra cash outside of your current job.
      10. Rent out an extra room in your house if you have one. Advertise this availability amongst your friends and family and post it at church. You’ll need to choose a renter wisely since they will be living under your roof.

    Have more tips to add? Share them in the comments below!

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      Budgeting, Christian Credit Counselors, Credit, Money Management

      Financial Literacy: Money Lessons

      Financial Literacy Month

      We are back! I hope you had a Happy Easter with family and friends. And even though April is coming to an end, it is still Financial Literacy Month. Gregory Karp of the Chicago Tribune has put together a money quiz to help contribute to your understanding of money topics. Here is a chance to test your knowledge and hopefully learn a thing or two that will ultimately help you with your finances.

        • Do your credit scores rise when you get a higher paying job?

      Simply put, no. Your income in not shown on your credit report, so that isn’t a factor when determining your credit score. Using credit, and using it well, is what really matters.

        • Is a household budget meant to restrict your spending?

      Restrict is the wrong word. Budgeting allows you to tell your money what to do instead of wondering where it disappeared to. If you keep track of your spending and budget wisely you can set aside money to spend on fun things. Indulging once in a while will keep you on track so you don’t feel so restricted.

        • Should I pay off highest interest-rate debt first?

      Mathematically, using extra money to pay off high-rate debt, such as credit cards, makes sense. But if you have many different debts, you might get a psychological boost by wiping out smaller debts first.

        • What is the only official site for getting your credit report?

      You can request a free credit report annually from the three main credit bureaus: Equifax, Experian, and TransUnion. For the most part, they have the same information, so you could request one every four months to keep track of your score throughout the year.

        • If a thief steals your credit card and charges $1,000, you’re responsible for how much?

      Federal law says you’re responsible for $50, but most major credit-card issuers absolve you of all liability if it’s a clear case of a stolen card or number.

        • What is likely to provide the highest returns over time: stocks, bonds or CDs?

      Most financial advisers suggest a mix of stocks and relatively safer bonds, with the mix getting more bond-heavy as you approach the time you’ll need the money. Stocks have provided the highest returns over long periods, especially if you’re talking about decades.

        • Which is more expensive for a family of four: food or financing a new car?

      Food costs more, unless you’re talking about an especially pricey car. The American family of four spends about $8,700 on food in a year, or $725 per month, according to the most recent government Consumer Expenditure Survey. That’s far more than most monthly car payments. People will research for months to get a good deal on a car, but many won’t look at a sales flier or clip a few coupons.

        • How large should your emergency fund be?

      Three to six months of bare-bones living expenses, most money experts advise. But with the current state of the economy, six months should be the minimum.

       

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        Money Management

        April is Financial Literacy Month

        Financial Literacy

        In a proclamation on March 31st, President Obama explained how important it is to be financially literate and to have access to trustworthy financial services and products.

        “The financial crisis was fueled by a lack of responsibility from Wall Street to Washington,” Obama said. “It devastated ordinary Americans, many of whom were caught by hidden fees and penalties or saddled with loans they could not afford. Preventing a recurrence will require both better behavior and oversight on Wall Street and more informed decision making on Main Street and in homes across our country.”

        Financial Protection Laws

        It is our duty as Americans to be financially responsible and contribute to the financial education of the men, women and children around us. It is important that they know the importance and the freedom that comes with being debt free.

        President Obama is in the process of enacting more consumer financial protections into law, continuing what he started with the Credit Card Accountability, Responsibility, and Disclosure Act and the Dodd‑Frank Wall Street Reform and Consumer Protection Act signed into law last year.

        For the remainder of the month of April, our posts will be about some basic financial education topics that we have found to be helpful. Feel free to respond in the comments below with suggestions or topics you would like to learn more about.

         

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          Holiday Tips, Money Management, Saving

          Budgeting for a Festive St. Patrick’s Day

          Happy St. Patrick’s Day!

          Another holiday means more temptation to go out and spend money to celebrate. Whether you are Irish or not, people like to take the opportunity today to wear green, eat some corned beef, and wash it down with an Irish brew. There are many other ways to celebrate today as well. Here are some budgeting ideas for you to save some green this St. Patrick’s Day.

          1. Check out a local parade and get into the Irish spirit. This is great for the whole family and will most likely be free of charge.
          2. If you want to decorate a little bit around the house, don’t go to expensive craft stores. Opt to go to the Dollar Store to find great St. Patty’s decorations, and save some green.
          3. If you wish to celebrate by eating some traditional Irish food, instead of going out to a restaurant, find an easy recipe online and try to make it yourself. Visit Allrecipes.com or foodnetwork.com and filter the search to meet your needs. If you are planning on making tonight a date night, cook the meal together and have fun with it!
          4. Rent a movie inspired by the Irish. 411mania.com offers a list of the top 10 movies to watch on St. Patrick’s Day. Make an Irish coffee and bundle up on the couch for a relaxing evening.
          5. If you do not want to celebrate St. Patrick’s Day, that is okay! Today is the start of the NCAA’s March Madness. So kick back and watch some basketball. You can still enjoy an Irish brew if you like, I won’t tell.

          I hope you all have a Happy St. Patrick’s Day! Most importantly, even if you are feeling the luck of the Irish, be safe.

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            Budgeting, Money Management, Saving

            Save Money at the Gas Pump

            Rising Gas Prices

            We have all noticed in the past week how much gas prices have gone up. It hasn’t been this high since 2008, and frankly, we are not liking it. With the everyday stress of trying to save money and pay off bills, while staying out of debt, an increase in gas prices isn’t good for our wallets. Unfortunately, we cannot change the prices, but we can alleviate some of the burden by a few simple adjustments to our lifestyle.

            Driving Alternatives

            If you are fortunate enough to live in the city, you can get anywhere by foot, taxi, bus, subway, etc. Take advantage of these options when you need to get somewhere. Even in more rural areas, public transportation is still available. If you don’t want to resort to these, then try carpooling. You won’t only save on gas and money, but you’ll get a chance to catch up with friends/colleagues/family.

            Don’t make unnecessary trips

            Instead of going to the grocery store after work every day, simply go once a week and stock up. You can also make dinner at home instead of going out to eat. You won’t only save on gas, but you will save on money from the added expense of fancy dining.

            Opt for a car that is good on gas mileage

            If you are in the market for a new car, consider buying a hybrid or one that has good MPG (miles per gallon). There are SUV’s out there now that offer decent MPG if you need the extra room that a sedan or compact car can’t offer.

            Do your research

            It is so easy to go online or download an app that will provide you with the cheapest gas prices in your area. Instead of going to the same gas station all the time, shop around for the best deal out there. A few cents here and there might not sound worth it, but over time those pennies will accumulate and you will be glad you put in the extra effort.

            Ride your bike whenever possible

            This is not only a great alternative to driving your own car or using public transportation, but you will be doing something good for the environment. You will also get some exercise and maybe even reduce some stress! Who knew going green could be so easy?

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              Budgeting, Holiday Tips, Money Management, Saving

              Loving on a Budget for Valentine’s Day

              You and Your Valentine’s Budget

              The day is quickly approaching. If you have been procrastinating on getting your sweetheart a gift, totally forgot, or feel like you don’t have the money to spoil your loved one, you still have some time before the big day. Remember, it’s the thought that counts, so as long as you put a little bit of time and effort into it, you should have your loved one feeling like the luckiest person in the world.

              A Picture is Worth a Thousand Words

              With the ease of taking your photos on your computer and saving them to a memory card, you have no excuse to say you don’t have time for this. Pick some funny/romantic/memorable photos of the times you have shared together, save to your memory card, and head to the nearest photo kiosk at Walmart, Target or CVS. You can upload your photos to create a personalized card or a photo book. Most places can do this in an hour or less, and you will have a one-of-a-kind gift to give.

              Chocolate….need I say more?

              Who doesn’t love chocolate? Unless you are allergic–then I understand, but if you’re not, then…well…I’ve got nothing. Chocolate releases endorphins that make you happy, and who doesn’t want to make their partner happy? There are so many different chocolates out there to choose from, try to go for something a little unique. If it’s a little pricey, maybe opt for the smaller package, or just get a few pieces for your loved one to try. It isn’t everyday they get to indulge on fine chocolates, so it will be sweetly memorable.

              See’s Candies, Ghiradelli and Godiva,

              “Love” Coupon Book

              Pamper your loved one. A great idea is to create a personalized coupon book. You can have coupons such as: good for one half-hour massage, breakfast in bed, movie night or dinner of your choice, a big smooch, etc. Tailor the coupons to what you know your partner will actually enjoy. This is probably one of my favorite ideas out there, because not only are you showing how much you care, but it allows you to spend more quality time with your loved one, not just on Valentine’s Day.

              Here are some pre-made coupons that you can print out: Free Love Coupons

              Romantic Dinner

              You don’t have to go out to a fancy restaurant to have a romantic evening. Cook your partner their favorite meal, and have a nice quiet evening at home. You can set the mood with candles and music, and avoid the hustle and bustle of finding parking. You can also buy their favorite wine, make dessert, and serve your special someone as if they were in a fancy restaurant. They say the way to a man’s heart is through his stomach, so ladies; this might be the perfect way to celebrate this year.

              The Food Network Valentine’s Day: Cooking for Two

              There are many way to show someone you love them without breaking the bank. Just remember that as long as it is special and coming from your heart, your valentine will appreciate the time and effort you put into it. I hope everyone has a safe and happy Valentine’s Day! Go out there and spread the love!

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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, 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.

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                    Holiday Tips, Money Management, Saving

                    Saving Money During the Holidays

                    Holiday Money Saving Tips

                    The holiday season is officially here! While money is tight for many of us this year, there are some ways to save a little bit of money.

                    Reuse wrapping paper and gift bags

                    Even though it’s too late now to go back and save the wrapping paper and gift bags from earlier in the year (although you can start saving this Christmas/Hannakuh for next year!), recycle the wrappings from any gifts you get between now and the holiday from work parties or friendly gift exchanges. Sometimes even the bag from the store in which you purchased the item can be fancied up with a little tissue paper and ribbon!

                    Get creative with your wrapping paper

                    When I was little, my mom would wrap presents in the comics from the newspaper. If you don’t get the newspaper, you can always use magazine pages, decorated paper bags, or by decorating computer paper or butcher paper if you have access to some.

                    Give homemade gifts

                    This is especially appropriate for co-workers and/or a boss. I don’t know anyone who wouldn’t enjoy getting some homemade baked goodies! Parents and grandparents also love homemade crafts from their children, especially if there is a picture of the child involved (such as a frame ornament made out of popsicle sticks) or the child’s handprint. For tons of great ideas for things that children can create, visit Amazing Moms.

                    Christmas Postcards

                    Postcards require less postage to mail, and spread holiday cheer just as well!

                    Use a Smartphone App

                    Check out apps such as ShopSavvy or Coupon Online Codes, both free. ShopSavvy allows you to scan the barcode of a particular item and then tell you where else it is being sold (including online) and how much it costs, saving you a considerable amount of driving all over town to compare prices. Coupon Online Codes allows you to search hundreds of retailers for coupon codes to use towards your online purchase.

                    Give up Starbucks

                    If you cut out your coffee, lunches, and dinners out for a month, the extra money can be put towards gifts at the end of the month. You can do it – it’s only a month!

                    Split the Cost of Gifts

                    For example, go in with your siblings to purchase something for your parents. Chances are that you can get a decent gift for less of a contribution than you would have shelled out on your own.

                    Set a Dollar limit

                    Talk with your family members/co-workers/friends ahead of time and agree on a set amount that you will spend on each other. This way, everyone knows what to expect and no one has to worry about “outspending” anyone else.

                     

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