There may be many things that our one vote will not impact in this year’s election.  Our vote may not make a huge difference in the nation’s economic challenges.  But we can elect to change some things in our own financial world.

We can become informed.  Just like people researched and learned about the proposals, referendums and candidates in their own state and city, as well as learning about the presidential contenders, we can take the same initiative for learning about personal finance.  

Start with tracking household spending.  Know where your money is going; you may be surprised.

Make a budget.  And then leave it out where you’ll see it again and actually use it.  Schedule it into your planner: “Budget Review”, 30 minutes.  At least once a month, right next to “Balance Checkbook”.Review your monthly expenses to see if any can be cut or reduced.  Are you still paying for long distance on the landline when you always use the cell phone for long distance calls?  Do you need the extra tiers of cable service or will basic cable be okay?

Decide to put some money into savings.  Do it consistently, even if it is just $10 a month.  

Have an insurance checkup.  Are you with the same company that you had 10 years ago?  And with the same coverage?  Ask your agent for a review to see if you can get more benefit for less cost.  If not, shop around to be sure you have the best policy and rate for your family’s needs.

Learn about your credit and what you can do to make it better.  Whether we like it or not, our credit score has become a major factor in most of the financial situations in our lives.  Do you have good credit?  If so, do you know why?  What are you doing to keep it that way? 

Just by reading this, you’re further ahead than so many people who don’t have a clue about their credit, don’t have a plan for their future and aren’t doing anything to change it.  Good for you!

For more information, you can contact us for your professional Credit Report Review and an in-depth Credit Analysis to improve your Personal Financial Fitness.  Because YOU get to decide.  Be proactive and vote for your financial future.

1) Pay all your bills on time.  This is the number one part, 35%, of your credit score.  Typically, late payments are only reported on your credit report when the payment is 30 days or more past due.  One late payment can drop a credit score anywhere from 5 to 50+ points.

If you are going to be late with a payment, contact the company and let them know.  Ask for an extension or a courtesy adjustment to your account.  When they agree, be sure to get it in writing for future reference if needed.

If you have already been 30 days late on a payment, contact the company and ask for a one-time adjustment to your records.  As a long-time customer in good standing, many companies are willing to work with you to keep your business.  Again, whenever something is in your favor, get it in writing.

2) Pay down credit card balances and DO NOT close the accounts.  Many people believe that paying off credit cards and closing them will help their credit scores.   The second largest part of your credit score, accounting for 30% of it, is your balance-to-available-credit.  When your credit card balances are over half of the credit limit, credit scores usually go down.  Maxed out accounts have a severely negative impact on scores. 

If you close your credit card accounts, you reduce your overall amount of available credit.  And you can affect two other parts of your score, too; your length of credit history and your mix of different types of credit used.  Additionally, many lenders require at least one open account in good standing as part of their loan qualification. 

Strategy - Pay credit cards down to under 50% of the credit limit.  Keep them open even after they are paid off.  It is okay to have zero balance.  Use them at least twice a year for a small purchase that gets paid off the next month; this will keep them active and included in your scores.

3) Monitor your own credit reports.  You can do it for free and it won’t count against your scores.  This is the most cost-effective way to be sure your credit report is free from errors and to check for evidence of identity theft.   As many as 80% of credit reports have errors on them, usually hurting credit scores.    Having your credit report in good standing now will help your credit rating grow in the future.

Strategy: Practice Identity Theft Prevention to protect your good name and good credit. 

4) Use your budget.  If you have not yet made a personal, household budget, start NOW.   It is challenging to figure out how to keep more of your hard earned money if you do not know where it is going.  Be sure to include the “small” purchases such as stopping at the store for milk and carrying out two bags of groceries.  Or picking up that fast food and morning coffee every day.  You might also decide to cut out the premium cable and just do basic, or reduce the number of monthly subsciptions you have, freeing up more money.  Ask your phone company and insurance agent to do a rate check to be sure you are on the best, most cost effective plan for your family’s needs.

Strategy: Consider cleaning out your closets and garage by selling items that you no longer use or need.  A neighborhood yard sale or free, online classified ads at sites such as Craig’s List can result in several hundred dollars to add to your pocket or to your savings account. 

The small steps you take now can add up to big savings in your financial future.  Contact us today for your Complete Credit Analysis with personalized credit building strategies.

All the while, a large clock of sorts was racking up numbers on the screen in front of us, directly above the small clock counting down to the movie’s start time.  Turns out this huge, fast-running clock was a number: the United States’ unfunded liablilities.  And it was more than 50 TRILLION dollars.  And it never slowed down.

The movie was good.  It is a documentary, no glitz or special effects.  Just cold, hard facts.  And hot, buttered popcorn with cold, bubbly soda didn’t make those facts any easier to absorb.  The Peter G. Peterson Foundation, the Concord Coalition with its Fiscal Wake Up Tour, and many others have done a fantastic job of giving American citizens an understandable and real view of the seriousness of our nation’s debt.

Is it a symptom of the increasing personal debt in the U.S.?   Or the reason?  Are we as consumers simply following the lead of our government and using credit and borrowed time to finance our current lifestyle, whether we can afford it or not?  Either way, you leave the theater knowing that it cannot continue on a personal or national level.

The movie opened in ten cities across the country on August 22nd; you can view the complete theatre listing to find the one near you.  

From a credit consultant standpoint, this movie drives home the point of getting out of debt.  Pay off those credit cards and store accounts.  Pay off your vehicles and keep them in good condition.  Start saving money and putting it to work for you.  Prepare and follow a personal, household budget.  Get credit-wise by learning how to use your credit accounts to build your credit rating and increase your credit score.  All of these things will lead to financial freedom, less stress and a better quality of life. 

From a concerned citizen’s standpoint, I believe we should all be contacting our state and federal congressional representatives and tell them our concerns about the federal deficit, the continuing unbalanced federal budget and the enormous burden we are creating for generations to come.

When you are ready for a thorough assessment of your credit report with real strategies for improving your credit rating, contact us.

1) CHANGE YOUR MIND

-Decide that you want to be debt free and have no credit card debt.  This includes major credit cards, retail store accounts and gasoline cards.  Be realistic and realize that this will take time and probably will not be easy.  Remind yourself of your long-range financial goals to keep motivated and on track.

-Credit cards are not money, they are convenience loans.  There is no federal limit to the interest rate that credit card companies can charge and many states do not have usury laws, meaning there is no state cap on the interest rate. Eight of the top ten credit card issuers have their charter in states with no usury laws.

-Credit cards are not free, they cost you money.  Many credit cards charge an annual fee; others require a minimum, monthly payment of less than 5% of the account balance.  This can lead to a longer period of time before the account is paid off and subsequently, more interest charges over that time.

2) CHANGE YOUR HABITS

-Do not carry your credit cards.  There will not be an emergency that requires you to have every single credit card with you in your wallet.  This also decreases your chances of being the victim of fraudulent credit card use or identity theft.

-Do not use a credit card for something you do not have the cash for at that moment.  A $500 impulse purchase can cost $625 or more when it finally gets paid off several months later.

-Pay all bills on time, every time.  Especially credit card accounts.  Many companies have included the “Universal Default Policy” in the fine print of their credit card agreement.   This allows them to increase a customer’s interest rate if there are late payments on ANY of the customer’s accounts that are reported to the credit bureaus.  Not just the credit card with their company, ANY other company that reports a late payment can trigger the much higher Universal Default interest rate.

3) MAKE A PLAN

-Stop using the credit cards you have so that you stop accumulating more debt.  If you do not have a budget, make one and stick to it.  Give yourself a certain amount of cash each week and hold yourself accountable to only spending that amount.  Remember your long-term goals are more important to your financial fitness plan than short-term impulses are.

-Contact your credit card companies and request a lower interest rate.  Some online research at sites such as bankrate.com will show what offers the major credit card companies are giving to new customers.  As an established, loyal customer, you can use this information to ask for at least that same rate on your existing accounts.

-Pay off your highest interest rate accounts first.  Pay more than the monthly minimum, even if it is only $5 more.  Do not close credit card accounts when they are paid off.  A major factor in FICO credit scores is the utilization ratio, which is account-balance-to-credit-limit.  Closing accounts decreases the available credit, which makes for a higher ratio and lower scores. 

4) FOLLOW YOUR PLAN

-Continue to use your budget and keep your spending under control.   Once you have eliminated credit card debt, establish your “Smart Fund”.  Start with a goal of at least $1000 in a savings account that can be used for emergencies or unexpected items such as a new car battery or plumbing repair.  Using the Smart Fund instead of a credit card saves money and keeps the credit card debt from returning.  Replenish your Smart Fund as soon as possible.

- Shred the “convenience checks” that credit card companies send to you.  Do not open any new credit card accounts; consumers with long established, good credit do not need more than 3 – 6 open, revolving accounts.

Becoming credit wise and learning how to use credit cards as credit building tools can lead to a better financial future, more money in your pocket and peace of mind.  Contact us today to get your personal Credit Building Plan.