Credit, Credit Score, Money Management

A No-Cost Way to Prepare Your Credit for a Big Purchase

By: CFPB

Thinking about buying a house, car, or other big-ticket items, and know you’ll be using credit? Before making a big purchase, your first step should be to take a look at all of your finances. Check out these five steps to prepare your finances that won’t cost you a penny!

1. Take advantage of your free annual credit reports.

You can visit AnnualCreditReport.com to get a copy of your credit reports for free. The three nationwide credit reporting companies – Experian, TransUnion, and Equifax — each have to provide your free credit reports every 12 months – but only if you request them. You can check the three reports periodically throughout the year or all at once. If you decide to request one report every four months, you can monitor your credit reports more frequently throughout the year.

2. Review your credit reports for inaccurate information.

Take a close look at your credit reports to make sure all the information on your report is correct. According to an FTC study, one in five people have errors on their credit report. Not sure what to look for? Here’s a list of common credit report errors to help you through the process. 

3. Dispute credit report errors with the credit reporting company that sent you the report.

Incorrect information on your credit report may hurt your ability to get new lines of credit or may make the terms of credit more expensive. You can dispute inaccurate information with the credit reporting company. You can use these instructions and template letter as a guide.

4. Dispute credit report errors to the company that provided the information.

The company that provided or “furnished” the information to the credit reporting company is known as the “furnisher.” Furnishers could be your bank, your landlord, or your credit card company. You can dispute inaccurate information directly with the furnisher. Use this template to send a letter to the company that provided the information you’re disputing.

5. Make a plan.

Even if you don’t have errors on your credit report, reviewing your report can help you make a plan for how to improve your credit. For more help putting your plan together, download this guide to Rebuilding Your Credit.

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Uncategorized

Ways to Improve Your Financial Capability Now

By: America Saves

Are you ready for National Financial Capability Month? Here are three actions you can take now to make sure you are prepared for any financial disaster, big or small.

1. Have a Disaster Plan for Your Finances.

Sure, you keep bottled water, canned goods, flashlights, and batteries close at hand, but you should also have a disaster plan in place for your finances. The first step is building and maintaining an emergency fund. Saving is the best financial defense against disasters. A little bit at a time can go a long way. Then you can make sure the rest of your finances are in order.

The Federal Emergency Management Agency (FEMA) has an Emergency Financial First Aid Kit (EFFAK) that is great for identifying all your important financial information and then helping you keep track of it. The EFFAK also provides advice on managing finances, offers insights on dealing with credit scores, and describes what to expect should a disaster strike your community. All of this will help your family prepare today for both the big incidents and minor emergencies.

2. Check Your Financial Well-Being.

Just like you should go see a doctor once a year for a check-up, so too should you assess your financial wellness. Like your health, you should assess your savings annually to make sure you are saving for all the right things. Evaluate the status of your savings to see if you are saving adequately and create a savings plan. Start saving automatically by setting up automated regular transfers with your bank or credit union so your savings will increase each time you get paid. Automating your savings can take the guesswork out of reaching your savings goals.

The Consumer Financial Protection Bureau (CFPB) has a nifty tool that lets you take a ten question quiz that not only evaluates your financial well-being but also compares you to other Americans in your age group. Then it suggests ways to improve your score and where to find help.

3. Make Sure You’re Properly Insured.

Review your insurance coverage. Most homeowners and renters insurance policies do not cover flooding, so you may need to purchase a separate policy from the National Flood Insurance Program. An inch of water in your house can cause $25,000 of damage and 20% of flood claims come from areas outside of flood zones. Think because you’re a renter you don’t need insurance? If you don’t have renters insurance, and you lose your personal property to theft or disaster, you will have to replace everything out of pocket.

Let America Saves help you save money. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.

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Budgeting, Credit Counseling, Debt, Finance, Money Management, Taxes, Uncategorized

Tackling the Fear of Filing Taxes

Tackling the Fear of Filing Taxes

The holidays are over, a new year has begun, and now we are rolling into February: a month that brings Valentine’s Day to mind. Some people look forward to receiving candy hearts while others dread spending Valentine’s Day alone. However, getting snubbed by Cupid isn’t the only thing people dread in February. They also are very apprehensive about filing their taxes. How do you get started? How much money will you get back? How much will you owe? It’s enough to cause your stress level to skyrocket. Luckily, there are some things you can do to take the sting out of filing your taxes:

 

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  • File your taxes as soon as you can. The due date for filing this year is April 18th. It is usually April 15th but that falls on a federal holiday and a Friday, thus, the due date is moved to the next normal business day on Monday the 18th which gives you a few extra days to file. Now that January is over, you should have received most of your information, such as your W-2s, in the mail. If you absolutely cannot file by the due date, you may want to go to the IRS website to see if you can file for an extension.[/column]

 

  • Look at all of your preparation options. It’s not a bad idea to research national organizations with locations near you that may offer free tax preparation for individuals with certain income limits. For example, United Way Worldwide has a program available during tax season called  Volunteer Income Tax Assistance (VITA) that is sponsored by the IRS. Volunteers (such as retired CPAs) help families with a household income of under $53,000 prepare taxes for free, while another program helps you prepare your own taxes if your income is below $60,000 per year.
  • Research credits and deductions. There are some that could save you money which you may not know existed. For example, if you are eligible for the Child and Dependent Care Credit you would be able to claim a credit for expenses that you paid for child care so that you could work or look for work.
  • Make a plan for your tax refund or payment by creating/using a budget. Planning can drastically decrease stress and eliminate the temptation of unnecessary spending. If you get a refund, budget your money so you can tithe and achieve the priority of paying down debt. If you do not get a refund and you owe money, it is even more crucial to create a budget plan to pay the IRS. You have payment options. The best option, of course, is to budget and pay before the due date. If you cannot pay by the due date, there are options for payment plans. You may be eligible for an online payment agreement with the IRS. If not, you can still pay in installments by filing for an installment agreement (Form 9465). It is important to note that you must file all tax returns before applying for any payment agreement with the IRS. Also, keep in mind that if you do not pay by the due date you will be subject to penalties and interest. For more information on this and other payment options, visit www.irs.gov or contact the IRS directly.

 

Learning helpful tips like these, researching your options, and making a plan will help reduce the fear of filing your taxes, thus, allowing you to focus more on positivity, tranquility and love, no matter what month of the year it is.

 

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Debt Counseling
Budgeting, Debt

Finances, Debt Counseling, and Marriage

Money and Marital Bliss

According to the Huffington Post, marriage is not just an emotional commitment but a financial one as well. When you enter into a marriage, you often share wealth as well as debt. Money problems are the top reasons cited for marital conflicts. When you seek debt counseling with your spouse, you are more likely to build financial intimacy.

Money tips for Marriage

  • Set Financial Goals
  • Seek Credit Counseling
  • Discuss Financial Habits
  • Talk about Money Decisions
  • Be honest
  • Talk at least once a month
  • Set benchmarks for your finances (Saving for retirement)
  • Set a budget

Setting a Debt Management Plan

After receiving debt counseling, you will know more about debt consolidation to handle credit card debt. If you have credit cards with high interest rates, you can often pay less in interest with debts under the umbrella of a debt management plan.

Couples can celebrate small financial victories such as sticking to a budget or saving money when grocery shopping for the week. After paying off credit card debt with a debt management plan, you can find low-cost ways to celebrate. Many couples take the money they used to spend for their monthly debt payment and use the money to fund a vacation, IRA or emergency fund.

Other financial questions to discuss with a credit counselor and your spouse include how to pay bills together, plan for the future and improve credit scores. A trained credit counselor doesn’t judge, but helps facilitate hard conversations about money.

 

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    Credit Counseling
    Credit Cards, Credit Counseling, Debt, National Debt

    Credit Counseling and Rising Debt

    Debt and Credit Counseling

    Household debt is reaching unsustainable levels, according to a report by NerdWallet. Another article in The New York Post states the average household debt in the U.S. is about $16,000. By arranging credit counseling or yourself and your family, it is possible to deal with staggering credit card debt. Most Americans pay a lot of money to cover interest charges over the years.

    Though, those statistics only take into account families carrying debt. Experts point out many Americans defaulted on their credit card debt in 2008 during the Great Recession. Instead of declaring bankruptcy, a positive solution is debt consolidation. A trained and certified credit counselor helps you avoid debt settlement scams and bankruptcy.

    Credit Card Debt and Your Roth IRA

    According to some reports, many Americans pay as much as 20 percent every month in interest. The best way to deal with staggering debt is to consolidate your payments through a debt settlement plan. Your creditors typically agree to lower the interest rate while you pay back the money you owe. The plan is simple because you only make one payment every month to satisfy all your credit card creditors. With an automated payment plan, the process becomes simple and stress-free.

    According to the report, American households pay more than $6,000 a year in interest. With an extra $6,000 each year, you can easily max out a Roth IRA or other retirement account as well as save for the future.

    Revolving Credit Card Debt

    According to an article in Mainstreet, paying down credit card debt is a top priority for Americans. But it could take up to 40 years for some families to pay down their credit cards, if they only pay their minimum payments every month. With the New Year on the horizon, make paying off debt a resolution.

    With credit counseling, you learn how to stop the revolving credit card debt trap. A debt consolidation plan stops the bad cycle because you stop using credit cards as you pay off a debt management plan.

     

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      Debt Counseling
      Budgeting, Credit Counseling, Credit Score, Debt, Finance, Holiday Tips

      Debt Counseling and Holiday Credit Card Debt

      Debt Counseling and Christmas

      Most people love spending money on their family and friends, wrapping presents with shiny bows and watching their expressions as they open gifts. However, Christmas is a bittersweet holiday for people with excessive credit card debt. By seeking debt counseling before or after the holidays, you take control of your holiday credit card debt.

      According to an article in the Huffington Post, many shoppers experience the shopping hangover after major shopping days such as Black Friday. Even if you shop on major sale days, you don’t get ahead by using credit cards if you can’t pay them back. Revolving credit card debt is at the highest level it has been in several years, according to the Federal Reserve. Debt counseling gives you an edge so you start the New Year on the right path.

      Credit Card Debt Repayment

      If you can only afford to pay the suggested amount due or minimum due, you will benefit from debt consolidation. By receiving debt counseling, you find out how to budget to pay back all of your credit debt as well as monthly bills and expenses. With a debt repayment plan, you figure out how to get out of credit card debt for good.

      By consolidating debt you pay off credit card debt and satisfy your creditors. If you take a different approach such as using a balance transfer credit card, you could end up running up even more credit card debt. Debt counseling helps many consumers overcome the temptation to keep putting items on credit instead of setting the credit cards aside.

      Credit Counseling and your Finances

      If you just want a short-term fix, pay your minimum balance or transfer credit card balances to a new credit card. However, experts say most credit cards charge a 3 percent transfer fee. Also, paying the minimum amount doesn’t lower your interest rate. A credit counselor helps you actually lower the interest you pay on your credit card debt so you pay it all off in less time. A long-term fix is about examining your spending habits, learning how to boost a credit score and budgeting. Many consumers fall into traps. You can change your spending and savings habits with a few simple personal finance tricks.

      Although the holidays are all about giving, it is a good time to treat yourself to debt counseling. With a proper budget, you can buy loved ones holiday gifts and avoid lingering debt.

       

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        Christian Credit Counselors
        Christian Credit Counselors

        Credit Counseling – Five Steps to Crush Debt

        Crushing Credit Card Debt

        People who struggle with a crushing amount of credit card debt often feel motivated and positive after receiving Christian credit counseling. Trained and qualified credit counselors work with consumers overwhelmed by debt without passing judgment. According to a recent article by wisebread.com, there are 5 action steps you get a grip on personal finances. Christian credit counseling helps with all of the steps. Debt statistics by NerdWallet shows the average family in the U.S. owes more than $16,000 in credit card debt. Although some consumers feel helpless and frustrated by debt, having a realistic debt management plan helps you turn around the situation.

        Stop using Credit Cards

        One action step to take to crush debt is to stop adding to your existing debt. When you agree to a debt management plan, you agree to stop using the credit cards. A debt consolidation program often lowers your monthly expenses so you can save more. Most people find it easier to pay bills and live below their means when they money put aside in savings.

        Lowering Your Credit Card Interest Rate

        With Christian credit counseling, you receive the help you need to lower the interest rate on your credit cards. A credit counselor negotiates for lower interest rates. Experts say some credit card companies will not lower interest rates for consumers even when you ask nicely. However, the expert credit counselors know how to negotiate and help you meet your financial objectives.

        Agreeing To Down Debt

        Instead of agreeing to a payment plan with each credit card on your own, you will likely find more success by consolidating debt. It is a lot easier to make one debt payment each month, especially when you can enroll in an automatic repayment plan through a bank. In some cases, people who consolidate debt through a Christian credit counseling agency get out of debt 80 percent faster than those who take the DIY approach to debt repayment.

        Spending Less Money

        Although it is important to pay your utility bills, try to limit mindless spending. Also called discretionary spending, some of the items skip include clothing, entertainment, cable and vacations. Once you are debt free, you can resume the spending. Some people continue to treat themselves with free rewards such as a hot bath or walk.

        Earn More Money

        A final action step to take is to increase your income so you pay off your debt. The secret is to funnel any extra money you have into your debt management plan payment first. The second priority is savings.

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            Credit Counseling

            Credit Counseling – Paying Down Debt

            Debt Management Programs

            A lot of people who receive credit counseling wonder if they qualify for a debt management program to pay off debt. Debt management programs are so appealing because a trained and certified credit counselor negotiates a lower interest rate so you can make a monthly debt payment. Many consumers dream of living a debt-free life. Credit counseling makes it simple and easy. To qualify for an intensive plan to pay off debt quickly, it is important to look at where you are and where you want to go. According to a piece by the Great Fall Tribune, credit counseling gives consumers a chance to take control of their situation. However, not everyone qualifies for a more intensive plan to pay off debt.

            Credit Cards and High Interest Rates

            If the interest rate on your credit cards are 24 percent or higher, you are likely a good candidate for an intensive plan to pay off debt. Struggling consumers often deal with high interest rate credit cards that put them on a never-ending debt cycle. Credit counseling provides a positive solution to the financial dilemma.

            Earning Extra Money

            If you aren’t making a lot of money, consider getting a second job or better position so you can afford the agreed-upon monthly debt management program payments. With credit counseling, you learn how to set income and savings goals.

            Your Credit Score and Credit Counseling

            People with low credit scores inevitably benefit from good credit counseling. Whether you decide to consolidate debt or pay off your debt on your own, you will grow wealth more easily by knowing the secrets of a good credit score. Having a good score often means lower interest rates on car loans and mortgages and better job opportunities.

            Life Beyond Credit Cards

            When you enroll in a debt management program you agree not to open up any new credit cards. You can still benefit from the sage financial advice of credit counselors even if you don’t enroll in a program. However, most consumers do well when forced to live within their means by relying on debit cards and cash.

            Other benefits of credit counseling include advice on reducing spending, paying off debt and changing poor financial habits that led to excessive debt. At Christian Credit Counselors, we help consumers struggling with substantial debt. For more information on credit counseling and tips for paying off debt quickly, please contact us.

             

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              Debt Consolidation
              Debt Consolidation

              Debt Consolidation Instead of Dipping into Your Savings

              Saving Money for your Savings Account

              When it comes to credit card debt, some experts recommend dipping into your non-retirement savings to pay off your debt. However, people without adequate emergency savings rarely stop the cycle of credit card dependence.

              With a debt consolidation plan, you are more likely to get out of credit card debt for good. A trained credit counselor works to lower your interest rate, giving you a solid debt management plan with a target payoff date so there is light at the end of the tunnel.

              Tapping cash reserves is often risky because your credit card company could choose to close your account or lower your credit limit. If you are dealing with an unexpected financial emergency, it pays to have at least three to six months of living expenses set aside in a liquid account. Some consumers choose debt consolidation as a way to get rid of debt, but aren’t sure how to handle their savings goals and habits.

              Finances for the Future

              According to a Journal of Family and Economic issues study, people with household debt often feel depressed. By lowering debt and boosting savings, you improve your mood and outlook on life. Debt consolidation helps you get out of debt, which is especially important for people who are single, ages 51 to 64 and without a college degree, the study found.

              Saving More Money

              In addition to saving more money now by lowering your interest rate on credit cards, debt consolidation helps you lay a better financial foundation for the future. After you complete your debt management plan, you can shuffle the money used to pay off credit cards to beef up your emergency fund. It is also a good idea to set at least 10 percent of your income aside for retirement savings.

              With help from a Christian credit counseling agency, you repay your debt to meet obligations and set yourself free from negative guilt and remorse. Many people who complete a debt management plan feel motivated to advance in a career or save more for the future because of the fresh start and feeling of gratification and completion. In some cases, you pay off credit card debt 80 percent faster with debt consolidation compared to other financial strategies.

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                Debt Counseling
                Debt

                Debt Counseling for First-Time Credit Card Holders

                Credit Cards and Financial Predicaments

                If you are a first-time credit card holder, you likely viewed the card as a vehicle for getting you where you needed to go in life. Whether you used your credit card to pay for a new computer, clothes or vacation, the idea of maxing out a credit card scares many new card users. By receiving debt counseling you can prevent a financial predicament as well as solve the problem of runaway debt. A recent article by cnbc.com suggests using the card to build up a good and solid credit card history. By talking to a trained and certified credit counselor, you learn what makes up a good credit report as well as ways to budget and plan for financial emergencies.

                Mounting Debt

                Experts say one of the reasons young credit card holders face a mountain of debt is because they associate a lot of fun and pleasure with credit card use. It is fun to swipe a credit card as opposed to parting with cash. To overcome the challenge, seek debt counseling. Budgeting, saving and planning is often fun when you get creative about your goals. For example, reward yourself with a special reward for staying on budget or meeting savings targets. Plan a major reward for yourself after completing a debt management plan to pay off all your credit card debt.

                Lowering Credit Card Interest Rates

                Many first-time credit card holders feel duped into credit cards with high interest rates. Instead of feeling helpless, rely on a Christian credit counseling agency to negotiate lower interest rates with your creditors. High interest rates of 18 percent or higher are not uncommon, but you can realistically achieve a lower rate by consolidating your debt.

                Monitoring Your Credit Report

                With debt counseling, you also learn how to monitor your credit report. When you become aware of what makes up a good credit score and report, you take the action steps to improve your situation. A good credit score affects your ability to buy a home, take out a car loan as well as get a job in some cases. Misusing credit cards is a common predicament but a credit counselor provides non-judgmental guidance.

                 

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