There is approximately $33 billion in unclaimed property across the nation; this can include payroll or dividend checks that were never cashed, unredeemed money orders, insurance refunds or payments, customer overpayments, trust distributions and more.

There is no fee to access and search these sites.  Be sure to look in all the states that you ever lived in and do a name search for deceased relatives, too.  Legal heirs can prove their right to collect on their relatives’ behalf.  If you find a match for your name, complete the claim form and send it to the proper office along with your documentation, following the instructions provided on the site.

WHAT DOES THIS HAVE TO DO WITH CREDIT?
Having some extra money may give you the opportunity to pay down or pay off some credit card debt.  Because the second largest part of your FICO score is the Amounts Owed, having credit card balances less than 25% of the credit limit is a good way to get better credit scores. 

At the very least, try to get the balances on all your accounts under 50%, or half, of the credit limit.  And when the account is paid off, DON”T CLOSE IT.  It’s okay to have credit cards with zero balance.  They are effective tools to build your credit rating and can have a positive impact on four different parts of your scores.

If you plan to pay off some outstanding collection accounts, we suggest that you request Debt Validation before paying anything to be sure that the company trying to collect the debt actually has the right to collect it.  The Credit Info Center has detailed information on how and why to do this before paying an alleged debt. 

Our clients receive step-by-step strategies to pay off items in a way that can help their credit as part of their individual consulting service or in their Credit Analysis.  You can contact us today for more information.

Universal Default is a term for a practice used by the financial services industry.  This practice consists of a lender changing the terms of a loan from the original terms to default terms when that lender finds out that their customer has defaulted with another lender, even if that customer was not in default with the first lender.  Traditionally, the default terms and interest rates, sometimes up to 30%, apply to customers who have missed payments on their loan or account. 

This practice began in the mid-1990s with the increased deregulation of the credit card industry.  Now about half of all banks that issue credit cards include Universal Default terms in the fine print.  However, since the practice started, most credit card companies have not regularly enforced these terms.  Remember, these are not typical times and things are changing.

In 2007, Citibank became the first bank to voluntarily eliminate its universal default provisions with some other card issuers following suit.  However, the move did not give Citi the competitive edge it had hoped for and in the summer of 2008 the New York Times ran an article about the possibility of Citibank re-instating it. 

WHAT IT LOOKS LIKE
The Universal Default Language may not be easy to identify in all the small print of the credit card terms and is not usually given the “Universal Default” title.  It may appear as some version of this:
We may change the rates, fees and terms of your account at any time for any reason.  These reasons may be based on information in your credit report, such as your failure to make payments to another creditor when due, amounts owed or the number of credit inquiries….

WHAT TRIGGERS IT
SAME ACCOUNT: Late payments, bouncing a check sent in for your payment, or going over your credit limit can all trigger default terms on your credit card account as standard operating procedure in the financial industry.

WHAT TO DO
1) Make all payments for ALL your bills on time to reduce the risk of qualifying for the Universal Default.
2) Keep credit balances under half of the credit limit.  This has the added bonus of helping your scores.
3) Monitor your credit report regularly.  Make sure there are no errors which could trigger the Universal Default.
4) If your interest rates go up, call the credit card company to find out why and request that your previous rate be re-instated.  NOTE: This may not work as financial institutions are looking for revenue from all angles.
5) Pay off the higher interest rate accounts as soon as possible to help your budget.
6) Don’t close the accounts when they are paid off.  Order your Personal Credit Building Plan from us as part of your Credit Analysis to learn how to use your credit accounts as effective credit building tools.

To give yourself every financial option you can, building your credit rating and getting better credit scores should be part of your Personal Financial Fitness plan.  Just like paying the bills on time and following your budget, having a Credit Building Plan in place, and using it, should be part of your routine. 

WHAT TO DO
1) Pay all bills on time.  Don’t be late on anything.  This is the number one factor in credit scores.  If you do miss a payment’s due date, contact the lender immediately to find out if it has been reported to the credit bureaus.  Typically, payments that are less than 30 days late are not reported. 

2) Keep credit card balances under 50% of the credit limit.  Having your account balances over half of the available credit usually causes credit scores to go down.  This includes your gasoline cards and retail store accounts, too.

3) Keep revolving accounts open and active.  Don’t close your credit cards when they are paid off.  They help several parts of your credit scores and they do this best when they have zero or very little balance and are used a few times a year to keep them reported as active accounts.  Use your planner to schedule a fill up with that fuel card you rarely use or that Sears account you’ve had for years.  Pay the entire bill as soon as it arrives; you’ll save money on interest fees and help your credit scores grow.

4) Keep your credit cards at home in a safe, locked place.  Don’t carry all of them with you all the time.  You rarely need to use them all in one day anyway and it may help to reduce the temptation to overspend.  Additionally, having fewer items in your wallet means less opportunities for identity thieves in the event your wallet is lost or stolen.

5) Limit the number of times you apply for credit.  The scoring formula takes into account how often you are “shopping” for credit; too many inquiries can trigger a drop in scores.  Rate shopping for mortgages or auto loans should be done within a two-week period to minimize the effect on credit scores.

6) Monitor your credit regularly.  Checking for errors at least three times per year is a great way to be sure your credit report is accurate and contains only YOUR information.  The rise in identity theft and the continued rate of credit reporting errors means you must take an active role in maintaining your good credit rating.  You can do this for free with your Annual Credit Reports.  Dispute any errors with all three credit bureaus, even if you only found the error on one report.  Keep copies of everything.

7) Bookmark our website and subscribe to the link on the right to stay updated on credit building information.  You can also get personal credit consulting services designed to optimize all five parts of your credit score based on the accounts you currently have.  Contact us today for more info.

For consumers with established credit, having 1 to 4 open revolving accounts is recommended for better credit scores.  The FICO score considers people with no credit cards, OR more than eight cards, a higher credit risk.

WHAT TO DO
Once they are paid off, keep your revolving accounts active as credit building tools by using them at least twice a year for a small purchase of something you need and then pay the bill in full when it arrives the next month.  If you have more than four credit cards, DO NOT randomly close them all without analyzing their impact on your overall credit rating by their longevity, credit limit and last activity.

You can check your own FICO scores and it won’t count against you.  You can also get your Credit Report Analysis with strategies for each of the five parts of your credit rating, including detailed credit cards analysis, by contacting us today. 

BACKGROUND INFORMATION
The second largest factor in credit scores is the utilization ratio, your balance-to-credit-limit amounts.  Theoretically, having zero balance should really help that ratio. 

In reality, the credit card company has to process your payment once they receive it.  Then, the next time they transmit updated customer account information to the credit bureaus, your payment and zero balance will be included.  BUT, if the credit card company only sends customer info to the bureaus once a month and it happens the week before your payment is due, the zero balance may never show.                              

Your account will still report “current” or “in good standing”, which helps your credit score under Payment History.   The downside is that, on your credit report, it could look like that credit card is carrying a balance. 

If you regularly use a significant amount of the credit limit each month, it could be reflected with a high utilization ratio.  When credit card balances are OVER 50% of the credit limit, credit scores usually go down.

WHY IT MATTERS
When you apply for a loan or credit account, the potential lender checks your credit report and score.  If their lending guidelines require a certain credit score, and your score is 20-50 points lower than it should be due to the credit card showing a balance, creating a high utilization ratio on paper, you may be turned down for the loan or account.

WHAT TO DO
If you are planning a major purchase in the near future and heavily use your credit cards throughout the month - paying them off completely when the bill is due – you might want to consider changing your habit for a few months.  By limiting the credit card usage for two months before your loan application, you give the reporting process time to accurately reflect your true credit card account balances.  We have seen scores increase by more than 50 points just by having the utilization ratio under 30%.  So pay cash or distribute the card usage among a few different accounts for the month or two prior to your major lending purchase.

For more specific information on your accounts and how you can use them to optimize your credit score, contact us today for your Credit Analysis.

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.