Credit Worthy?

Happy New Year! It’s January 1^st, 2011 and you know what that means: “New Year’s resolutions”. Lots of people focus their resolutions around losing weight, getting healthy or getting more active in something they disregarded last year. Why not consider your financial health?

The economy is slowly bouncing back, and during this transition, it’s getting tougher and tougher to obtain credit to buy houses or other big ticket items. You may have been one of the thousands of people who received a letter from your credit card company in 2010 stating they were “lowering your credit limit” or “increasing your interest rate”. Just because you received one of those letters, doesn’t necessarily mean that your credit is bad.

Want to know if you’re in good shape or not? There are a couple things you can do.

  1.   Get your annual credit reports (for free) 

        2.      Get your credit score (for free)

You are eligible for one free credit report from each of the three major agencies:  TransUnion ®, Experian ® and Equifax ®. There are many websites that enable you to do obtain them. My preference is: https://www.annualcreditreport.com/cra/index.jsp . The site allows you to obtain all three reports at one time all from the same site. All reports are FREE. Keep in mind, you can only get each report free once per year. When you get your credit report, look it over with a fine tooth comb and identify any/all inaccuracies or discrepancies. If you’re lucky, there won’t be any, but there’s a chance (during this age of identity theft) that there are lines of credit on your report that you didn’t open or there may be a discrepancy about “late time” payments. If you find any, you must contact that creditor in writing to dispute the inaccuracy. This is how you clean up your credit. Also, most credit agencies will offer to provide your credit score for an “excellent price”, I suggest you pass up that offer and get your score the free way.

You are able to obtain your credit score for free whenever you choose. All you have to do is go to your place of banking (i.e. credit union or bank) and meet with a loan agent. Tell them you want to know your current credit score. Now keep in mind, they are “running your credit”, and it’s not good to have your credit ran often. Only get your credit score once per year (around the same time you obtain your credit reports). If you have your credit ran several times during a short time, it will cause your credit score to go down.

Now to the good stuff; How do you know if your credit score is good or bad? Well, I’m glad you asked. When you receive your credit score it will either be your “FICO” score or “Vantage” score. Here are the ranges and ratings. Compare your score to these charts to identify where you stand.

FICO Score	Credit Rating
760 – 850 700 – 759 660 – 699 620 – 659 580 – 619 Below 579	Excellent Very Good Good Below Average Poor Very Poor

               

Vantage Score	Credit Rating
901-990 801-900 701-800 601-700 501-600	A B C D F

Here’s what the credit scores are based on:

Vantage Score	FICO Score
– Payment History – Utilization – Balances – Depth of Credit – Recent Credit – Utilization	– Payment History – Length of Credit History – Amounts Owed – Type of Credit – New Credit

Once you have your credit report and credit score, you will have a better idea of where your credit stands. It’s important to know your circumstances because if there are some legitimate issues, you want to know about them so you can address them. Take charge of your credit situation and reap the benefits of having excellent credit. If you have questions regarding your personal credit situation, please seek expert advice. I hope you found the above information useful. Have a great 2011!

(The information in this article is intended for informational purposes only. It is published with the understanding that the author is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, please seek the services of a professional person.)

Empty Printer Cartridges Pay Cash

Ever wonder what to do with those empty ink cartridges that build up near your computer printer? Turn in them into money. Office Max has a program which enables you to gain $3 per empty cartridge turned in. The payment is paid out as a store credit that can be used towards the purchase of any items from Office Max.

Office Max Ink Program

What’s interesting is that most people don’t even know programs such as this exist. As a result, many people end up throwing the cartridges away or letting them build up in a dusty corner. Know of any other payment recycling programs? If so, please add comments to this entry with those programs.

Stating the Obvious and the Unclear

It’s obvious that if you don’t pay it off each month, every time you use your credit card, you’re going to spend more money for that item than the price you were charged. The additional amount you pay is interest. What’s not so clear is that…using cash wisely will actually save you money. I know you’re what you’re thinking, “you just said the same thing flip flopped”. Yes that is true, but let me ask you this: how many people actually look at it that way?

Not many.




Using a credit card is like throwing money out the window!

So, let’s ask the obvious question. Why do people use credit cards? Well that’s easy…because they don’t have the cash on hand. Here’s something not so obvious. If you don’t have the cash on hand and you’re tempted to use your credit card, have you ever thought…do I really need this? I mean really need it? Not “do I want it” or “is there a strong temptation”, the question is do I need it? Most of the time, the answer is NO!

So what’s my point? Establish a cash-based budget that is very disciplined and specific. In your plan specify how much will go towards required monthly expenses (bills, mortgage, groceries, gasoline for vehicles) and how much will go to discretionary spending (clothes, entertainment, snacks). For anything outside of that budget, or if you end up in a situation where you feel you must use your card. Think really hard about if you can live without it. (Please re-read that last sentence- it’s a doozy). If you can live without it, then DON’T buy it.

Spend Spends tip: The more purchases you pass up, the more money you save. In the end, you’ll end up with less junk and more cash.