Take Control Of Your Finances – With Our Help!

There’s good debt and there’s bad debt. You only want to take on good debt – which is investment debt that creates something of value, for example: student loans, home mortgages and business loans. These debts are tax deductible and they help you produce more wealth in the long run.

Bad debt is used to buy things that will lose value – like using a credit card to pay for things like clothing or other disposable or durable goods. Every month that you don’t pay the credit card bill in full, the credit card company adds interest to your debt and you end up spending a lot more for your purchase than you originally intended.

Rule of thumb: If you’re going to buy something that doesn’t go up in value, and you can’t afford to pay cash for it, then you can’t afford it, and you shouldn’t buy it.

More Americans’ credit score dip to new lows: 1 in 4 Americans have credit scores below 599, marking them as poor risks to lenders, making it impossible for them to get credit cards, auto loans and mortgages under new tighter lending standards.

Because they relied so heavily on credit for their spending in the past several years, their new restricted access to credit will make our economic recovery even that more difficult.

How do you avoid this? Do what credit score perfectionists do:

1. Make payments on time (and make a long history of this, starting now)
2. Don’t max out your credit lines (leave room for emergency purchases)
3. Hold onto old credit accounts (don’t just close out old credit cards you don’t use – they help build your credit history)
4. Shop around for the best interest rate when taking out an auto loan or mortgage (multiple soft credit inquiries by institutions that must pre-approve you have little to no impact on your credit score), however
5. Don’t go opening up multiple new credit accounts all at once (don’t just open new credit card accounts to “stock up” your credit history – only open accounts when it makes sense to do so)

Only 13% of people have credit scores of 800 or higher. What do these people have in common? They have:

• 4 to 6 credit card accounts
• No late payments in 7 years
• At least 1 installment (auto or mortgage) loan with excellent payment history
• An average of 10 years credit history per account (and some accounts with 20 years of good history)
• Few credit inquiries (less than 3 in 6 months)
• No bankruptcies, foreclosure, charge-offs or collections
• Debt of less than 35% of their credit limits on each account

Follow this strategy and you should begin to build great credit or repair bad credit on your own. It takes time but it is worth it, plus you’ll form good credit habits in the process, which will benefit you for the rest of your life!

AnnualCreditReport.com: Featuring the top 3 credit reporting bureaus, Experian, Equifax and TransUnion, visiting AnnualCreditReport.com is a yearly MUST for everyone. It is the only website where you can get all 3 credit reports for free with no strings attached.

Why should you check your credit?

1. You need to know this information! We should all be aware of our credit rating, how good our chances are of opening a credit card or getting approved for a loan, and our overall financial standing. This better prepares us for major decisions in our lives. And if we need to improve our credit, this gives us a heads up to start making changes in order to improve our financial picture.

2. Errors. The people running the credit bureaus are not perfect and they can make mistakes. You don’t want to find out at the last minute before you purchase a car or home that you are being turned down for a loan because of a mistake on your credit report. Errors can be removed by contacting the credit bureaus individually, but you can’t remove errors if you’re not aware of them! Also, it is a must to check all 3 reports because one report may have an error that the other two do not.

3. Identity theft. (Listed as #3 but this is really #1! We save the best for last.) Someone may have stolen your identity and may be in the process of ruining your credit, driving you deep into debt or bankruptcy. Checking your credit report every year allows you to check up on the information that allows you to use credit or be denied for credit. Finding out about errors and fraud lets you take care of a problem before it gets out of hand. Once someone ruins your credit, you can spend the rest of your life paying for it.

If you have been a victim of identity theft, or you are worried about the potential of it happening to you, since it is the fastest growing crime today, you can purchase credit monitoring from the credit bureaus for a small fee each year that gives you regular updates throughout the year of all activity regarding your credit. You can find out when someone tries to open a credit card under your name or any other attempts to ruin your credit.

Many companies offer credit monitoring, and some offer free credit reports along with a free trial of their credit monitoring service.

Checking your own credit won’t lower your score. Here are some of your options:

Equifax.com – One of the 3 major credit reporting bureaus, Equifax offers you the opportunity to monitor all 3 major bureau credit reports. 3-in-1 Monitoring makes it easy for you to monitor all 3 of your nationwide credit reports by alerting you within 24 hours of key changes, all for $14.95 a month. They also offer Score Watch: Monitoring your credit score can lead to big savings and more purchasing power. A higher credit score typically means lower interest rates which will reduce your monthly payments – and that could mean saving thousands of dollars over the life of a loan, all for $12.95 a month.

TrustedID.com – The top name in identity theft protection. Protect yourself in less than 2 minutes: 30-day risk-free trial. After 30 days, plans range from $8.25 to $19.99 a month.

TrueCredit.com – Run by TransUnion, one of the 3 major credit reporting bureaus, TrueCredit offers 3-bureau credit monitoring that updates all 3 of your credit reports and scores every 30 days for $14.95 a month, plus up to $25,000 in indentity theft insurance at no additional cost. You can also get a free 30-day trial of TransUnion credit monitoring, which costs $11.95 a month thereafter.

LifeLock.com – LifeLock’s industry-leading protection works to help stop identity theft before it happens. They search the web for the illegal selling of your personal information, verify change of address requests, help replace the contents of a lost or stolen wallet, and take proactive steps to help put you in greater control of who has access to your credit. As a LifeLock member, if you become a victim of identity theft because of a failure in their service, they’ll help fix it at their expense, up to $1,000,000. (Restrictions apply.) Just $9.00 a month. Sign up for a whole year and save $9.00!

One of the best ways to keep on top of your finances is to set up automatic payments or online bill pay. If you have a credit card and you’re still paying each bill with a check, you may fall in the trap of forgetting a payment or not paying the amount you really should.

If you haven’t set up automatic payments for all your bills just yet, there is no better time than now. You can set the payment to automatically pay the full balance on your statement or another amount. Of course I recommend paying the full balance all the time every time, but if you can’t afford to, you can also pay an amount that is either equal to or more than the minimum. Always pay the bill in full, and if you cannot, then at least pay more than the minimum. (If this is a problem for you, you may need to read about lesson #1).

If you are afraid that setting up automatic payments will make you forget how much you owe, and then subsequently leave you with less in your bank account than you need to make that automatic payment, you should take this one step further and keep a calendar (either on your wall, in a planner, on your phone or on your computer) and keep track of the day of the month the automatic payment typically gets deducted from your bank account.

Also set yourself up with your credit card account’s email reminders for when a payment is due, or how much you owe, so each month you can prepare for the day the amount is deducted from your checking account balance. This way you can ensure there is always enough money in your bank account for payment day!

A bank/direct deposit alternative to the millions of people who are tired of paying overdraft fees or do not have a bank account.

ONLY to be used by the people who:

• Can’t get credit
• Need a credit card
• Are committed to begin financial responsibility

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