Tips For How to Improve Your Credit Score

Posted on by

With changes to bank policies and fees, many Americans have seen changes in their credit scores.  If you’re asking “how to improve my credit score?”  you are not alone.  Many people saw a downturn in their score.  Here is a really basic tip on how to improve your credit score.

When you’re applying for credit today, getting a store credit card is the kind of card that’s easy to get, but that  you  may not use all the time.  Once you apply, you may forget about even having that card, if you don’t shop at that store frequently.  Yet that open store card account appears on your credit report while it’s still an open account.  When you have lots of these types of unused accounts at various stores, you may damage your credit since it looks like you have too  much available, and could get overextended.  Lenders don’t like to see a lot of available credit you never use. 

It’s also true that having many credit card accounts you don’t use can lead to a risk of forgetting bills, and forgetting to make payments on those accounts.  Having these kinds of lingering debts can also hurt your credit score. You never want to have a bill go unpaid or be late in any way, if you’re trying to raise your credit score to a higher level.  It’s a good policy to only keep open those accounts which you know you will use, and make sure you pay those on time.  Close other accounts that you do not use, or do not intend to use.  When you have a manageable number of accounts, that means you can more easily keep track of what you need to pay each month, not to mention keeping your payments affordable.  You can improve your credit score by closing some of these accounts, and paying the remaining accounts on time.

If you do have one of these accounts that has become delinquent, even if you close the account the history will still appear on your credit report.  That’s why it’s so important to make every payment on time.  You may also see a slight drop in your credit score when you close an account, because your existing balances are a bigger percentage of the remaining accounts you have open.  Don’t worry about this too much, but just keep paying down balances and your score will come into line too.

As an example, if you start out with a total of $4000 in credit, with a balance owed of $1000, but you close two cards and reduce your available by half, owing $1000 on a card limit of $2000 looks worse than owing $1000 on a card limit of $4000.  Just  keep paying down your balances, make your payments on time, and soon your balances will get below $500 and your credit will improve.

Help – Get Me Out Of Debt!

Posted on by

With so many people now struggling under large debt burdens, along with job insecurity, you can almost hear people pleading: Get me out of debt! Many of us probably wish today we hadn’t accumulated so much debt, and had started paying it down all those times in the past when we swore we were going to pay off balances.

Getting out of debt is simple, but not easy. It takes some patience, and most of all a plan. We aren’t used to financial planning, now, are we? As long as there was cash available on the credit card, we bought stuff! Well that “plan” isn’t going to work any more. Many people have been using credit lines as a substitute for additional income, as incomes for most Americans haven’t gone up since the 1980′s. Now we have to learn to live within our means, meaning, spending less than we make each month.

This brings us to step one. The best thing you can do for your financial future and to get out of debt is to create a budget. Everyone groans when they hear the word “budget”, but it can be something very simple to use as a guideline, before you make it more detailed and specific. All you need to do is write down what you need to spend money on for the month, including necessities like utilities, food, shelter and clothing. In addition, add things you owe, such as mortgages or rent, car loans, credit card bills and the like. Assign every dollar of income to one of your needs or debts. When your next paycheck comes, ONLY spend that money for the items on your budget.

An easy way to help you make your payments is what’s known as the “envelope system”. You create an envelope for each expense, like groceries, gas, lunches, and so on. You then put cash from your pay into each envelope according to the budget, and then only pend that much. If you run out of money, you have to borrow from another envelope, which gives you less for that category, so you have to be careful.

A problem can arise if you don’t make enough money to pay your necessities plus your debts. In this case, you will have to find a way to renegotiate lower payments on your debt, reduce your expenses, such as fast food dinners or grocery store bills, or increase your income. You can get a part time job, start an online business to bring in more money, or sell some household items you don’t need any more. Make sure all of the extra money goes to paying down your debt.

If you follow these basic steps, your neighbors won’t hear you yelling any more, Get me out of debt! In fact, they might even start asking your advice about how they can do it too.

Can You Give Up Using Credit?

Posted on by

If you are having financial trouble, and think you need credit help to deal with creditors, repair your credit score and raise your credit score to be able to get more credit, maybe it’s time to think about things differently. For example, many people trying to improve their credit are desperately trying to get more credit.  But clearly, there is a problem, because you can’t be in credit trouble if you know how to handle credit.  The way out of this hole is not to get more credit but to re-think your relationship with credit generally. Maybe instead of getting more credit, or repairing credit just to get more, you need to think about just using less credit, or even no credit at all.

It may seem impossible to live without credit.  With the price of cars and houses alone, how would it ever be possible to pay cash for such large amounts? Well there are ways to get both of those things and live within your means.  This doesn’t necessarily mean paying cash, but it also may mean buying what you can afford, or renting a house instead of buying.

Today for example, it’s very unlikely that in the majority of areas of the country, home values are not going to go up much beyond the rate of inflation for the next few years. Considering that most people stay in a home for three to five years before selling, why buy a home now unless you want to stay there much longer?  The costs and fees and interest in getting a home mortgage will wind up leaving you without much appreciation in value by the time you sell. Renting a home might make more sense that buying in this kind of market.

As for cars, we really think of cars as extensions of our personalities.  But some people are coming to their sense and realizing that this is just a tool to get to work and the store and school.  When you consider it’s just meant to be useful, and that other things in your life have more importance, you may not be so concerned about pending a year’s salary on a vehicle.  Buying something that does the job means you can put the extra $30,000 you saved into retirement account or college fund.  Which means more – retiring in style or driving in style right now?  That’s a choice you will have to make.

Trying to live without credit is hard at first. but once you realize you need to budget, and keep cash aside for emergencies, you begin to build up a little cushion.  You start to think twice about the things you thought you needed, and see how frequently you indulge in impulse purchases.  Sometimes it’s hard to believe you would have just snapped up that aisle-ender item without thinking.  This is where the money goes when we wonder, “where did all the money go?”

When you give up using credit, there is some adjustment period, but when you hear everyone complain about their holiday bills, the high interest rates, and what amounts to near slavery to the credit card companies, you will feel a satisfaction and relief that is worth more than credit can buy.

Foreclosure Tactics of Banks – Don’t Be Intimidated

Posted on by

I try to publish accurate, helpful advice here on this blog.  If you have a question or a problem or don't agree, then post a comment or contact us with the Contact Us page. I'm not trying to scam anyone or do anything that would make you lose even more money than you already have. 

And specifically, with personal experience, it's not always going to match what your experience is, so it is helpful to get others' comments and ideas about their own situations.  Today for example, plenty of people are going through foreclosure. I also lost my home right after filing for bankruptcy. I posted already about my bankruptcy, which I should not have filed.  Then I lost my job, and my efforts to keep my home were fruitless. The banks refused to work with me (this was 4 years ago before they faced so many delinquencies).  I tried to get them to agree to a short sale, but they refused – the second lien holder absolutely refused, despite the fact that they would get nothing when the house got foreclosed.  It was spite and nothing more – PNC Bank was not going to help me get out of this with a short sale instead of a full blown foreclosure. They got nothing in the deal.

My home was in a nice area, with two mortgages that totalled more than 100% of the value – and the banks knew it when they lent it to me. I also knew they were over inflating the price when they told me what it was "worth" so they could lend me 80% of that number. But I wanted to money.  But once I lost my job, there was no way to cover the high payments.

So what would I have done differently? The bank kept pushing my sheriff's sale date back. This hurt me because it was another year before the home got sold – and that meant another year before I could qualify for another mortgage.  They kept changing the date so they could keep adding the carrying costs onto the sale that added up when they changed the date!  It wasn't until I threatened legal action that they sold my house (can you imagine – I had to threaten to sue so that they WOULD sell my house!?)  The banks play any number of games to get more money into their own pockets. Consumers just don't know the ropes, can't afford high-priced lawyers to help them, and the banks know it.

So while it took a year to sell from the original sale date, I didn't know they'd push the date back repeatedly, and I moved – and incurred rent right away.  I could have lived in the home for free all that time – and today with what I know, that's what I'd do if it ever happened again.  For anyone trying to deal with a bank in a foreclosure, stand up and fight – you still have rights even though you owe them money. Bankruptcy can help, because it will stop a sale, and possible help you work out a payment plan if you have regular income.  Try to get your loan modified, and if the bank won't talk to you, call your Congressional representative your state representatives, anyone you can.  Be a squeaky wheel, and don't get taken advantage of in this process.