How Healthy Is Your Credit?

There’s only one way to discover the “health” of your credit. You need to examine your credit report. Your credit report is your “consumer identity” that potential lenders will use to judge your credit worthiness.

Use these tips to give your credit profile the “tune-up” it needs:

Tip #1- Check for Errors
Your credit report or profile is more than just a collection of who your creditors are and how much you owe them or have paid them.

The first thing you need to do is carefully check that your credit report is accurate. Nearly 70% of credit reports contain errors.

These errors may be as simple as an incorrect middle initial or address. Or it could be as serious as a creditor reporting that you were late with a payment when in fact you were not late at all.

This error might not seem like a big deal to you. However,to a future lender like a mortgage company it makes a big difference !

Carefully examine your credit report and if you find an error contact your creditor and the credit bureaus. Catchand correct these errors now before it hurts your chances of securing credit in the future.

Tip #2 – Correcting Errors
The two most common errors contained in credit reports are:

1) wrong account information
2) incorrect recording of late payments.

If you find an account reported that does not belong you, you need to contact the credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft.

Hopefully you’ll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when they report an account belonging to a family member or someone with a similar name on your credit report.

If your problem is an error in reporting a late payment you will need proof to back up your case before this error can be corrected or removed. The most common error occurs when a payment is reported as “late” when it was actually a current or “on time” payment.

In either case, the problem can and should be corrected. You will need to correct the error in writing. Keep a journal or log of all calls and correspondence.

The Fair Credit Reporting Act (FCRA) requires the credit bureaus and the agency reporting the information to the credit bureau to correct inaccurate information in your credit report. Therefore, it is important that you contact both the credit bureau and the creditor whose information is in dispute.

A sample letter is included here to help you in correcting your credit profile. Make sure that you clearly identify the information that you dispute, include copies of receipts or documents that support your position. Then request that the information be corrected or deleted from your file.

Send your letter by certified mail and request a return receipt from the recipient. Keep all correspondence that you mail out. Give the agencies involved 30 days to begin their investigation. You can call them but be aware that phoning them does not protect your consumer rights! You must notify them in writing to protect your rights.

They must notify you of the results of their investigation. Although the process will take time, it’s important to do it. This is your credit profile, your “consumer identity” that is at stake. Don’t expect an error to correct itself.

At your request, the credit bureaus must send notices of corrections to your credit profile to anyone who has requested your report in the last six months. If you applied for a job and were turned down because of inaccurate information in your credit report, you can have the corrected report mailed to anyone who received a copy in the past two years.

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Sample Dispute Letter
Date

Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received. (Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)

Originally Posted at http://www.ftc.gov/

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Tip #3 – Budget Planning
You can also use your credit report to help you plan and implement a personal budget. Your credit report will show you where you are spending your hard earned dollars. While the credit card balances may not be completely current, you’ll still see which of your cards has the highest balance outstanding.

If you have more than one major credit card you should compare the annual percentage rate (APR) you are paying on each account. If you are working on a budget to “pay
down” your credit cards, start by paying down the one with the highest APR or interest.

Once that credit account is paid off, move toward paying off the account with the second highest APR. Using this method you will be able to concentrate your efforts toward paying down your outstanding credit obligations.

You should also check with your credit card company to see what’s the best annual percentage rate (APR) they can offer you. If you are a good customer, you can often qualify for a lower rate than what you are currently being offered.

Caution: Ask if the new rate you are getting is a “promotional” rate or a “contract” rate. A promotional rate will expire at the end of the promotional term, for example 6 months. A contract rate does not have an “expiration” as long as you continue to meet the terms outlined by your creditor for that rate.

Tip #4 – Making a major purchase
If you are considering a major purchase such as a car or a home, checking your credit report gives you the chance to see what a potential lender sees and uses to judge your credit worthiness.

You want to make sure that your credit report is accurate before you apply for that sports car or new home. Errors or problems can be corrected before your lender can use
those against you and deny your credit request. You’ll also have a better idea of what type or rate of credit you should expect from a potential lender.

Tip #5 – Check your credit report regularly
Check your credit report regularly. Guard your “consumer identity” as you would anything else you treasure. Use your credit wisely, along with these tips, and you will enjoy the benefits that your good credit and your good name deserve now – and for years to come.

3 Ways to Save Money Instantly Online

In today’s world, shopping in “brick and mortar” stores seems so backward, dated, and boring. Millions of people each year sit in their jammies while drinking wine and shop for clothes, household goods, gifts, and just about anything else you can imagine.

One of the great benefits to shopping online is the various coupon, rebate and dollar-back programs available. If you click through a link, or use a coupon code, your savings can be substantial. In addition, you get all the myriad benefits of shopping online – no children to drag through stores, no gas costs to get there and back, and no hassle of dealing with crowds.

So, once you’re convinced to shop online, where can you find the savings? There are several ways to save money online. Let’s start with coupons.

Coupons

This is a fairly standard. Go to one of the coupon sites (many will be provided below) and look for the store you want to shop with, or search by category, depending on your needs. Be sure to click “apply” when you enter the coupon during checkout.

Although in the early days of online shopping, coupon codes were plentiful and generous (frequently you could find $10 off a $10 purchase with free shipping), good coupons these days are hard to find. Some stores (like Lands’ End) rarely offer coupons while others (L.L. Bean) often offer free shipping on any size order. When you order, or even if you don’t order, be sure to sign up with the website either by registering or signing up for coupons. These direct-email coupons are often some of the best you’ll ever find.

Here are some excellent coupon sites to get you started:

MyBargainBuddy.com — Here, a mom compiles good deals and coupon codes for you. Some of the best deals need no coupon at all, but if there’s a good deal and a coupon to go with it, all the better.

FatWallet.com — Lots of codes here along with active message boards where other deals can be found.

MyCoupons.com — The most beneficial part of this site are the message boards, which are alive with the sound of people saving money. Check out the posts that have stickies on them at the start of each forum – there are often some good links to printable coupons here for favorites like Toys R Us and Chuck e Cheese.

One note: If you are looking for a code for a certain store, don’t assume that if it’s not available at one website, it doesn’t exist. There are different codes at different sites. Visit several coupon sites before giving up hope that a code does in fact exist for that store.

Rebates

Here’s how the big daddy of online rebate programs works. Go to Ebates.com and sign up for an account. There’s a sign up bonus of $5, so you already have a free $5 coming to you. Then, when you go shopping, check Ebates before heading directly to an online store. Even if you have a coupon from another site, click through the store link on the Ebates page for more savings.

Let’s say you choose a new jacket from Kohls and you have a $10 off a $75 purchase. Great. Keeping the coupon code in hand, you head to Ebates and find Kohls among the list of stores. This store offers 2% back, so you click through the Kohls link on the Ebates page, and make your purchase. Not only do you benefit from the coupon code you applied, but also got an extra 2% back on your purchase. Not a bad deal. Ebates will send money to your Paypal account or send you a check.

Points

Not everyone knows about the various point programs available, but since you can earn points without doing any shopping, the points programs are worth knowing.

Visit MyPoints.com and sign up for an account. My Points will send emails (sometimes daily, sometimes several in one day). You click a link in the mail and automatically get 5 points. Sign up for an offer or make a purchase through that link and earn even more points, from hundreds to thousands of points per offer.

My Points is most useful, however, when you’re shopping online. It’s like Ebates in that you click through a link on the My Points site, and you get points for your purchase. Most stores offer a certain number of points (2 to 4 on average) per dollar spent. Once you have at least 1,000 points, you can redeem the points for gift certificates for restaurants, gas, travel and clothing.

You can’t use Ebates and My Points in the same purchase, so if a store is linked through both Ebates and My Points, you have to decide which is the better deal for you. Whenever possible, try to combine a coupon code with the My Points or Ebates deal.

7 Tips To Increase Your Credit Score

Having a high credit score can mean the difference of thousands of dollars of saved interest expense compared to others with a lower score. For example, if you improve credit score results from the credit bureaus, just a few points that increase your credit score can make huge difference in the interest rate you will pay for a home purchase. It pays to increase your credit score!

The most commonly used credit scores available to lenders are FICO scores, which is a scoring method created by Fair, Isaac & Co…FICO!

These scores are provided to lenders by the three major credit bureaus: Equifax, Experian and TransUnion. Before we get into some tips how to improve credit scores, it pays to review the major areas that determine your FICO score.

1. Payment history on credit and retail store cards, loans and mortgages.
2. Amount that you owe. Credit agencies look at how many accounts have balances and the proportion of that balance to the credit line.
3. How long is your credit history? The longer the better.
4. New credit accounts. Applying for a bunch of credit cards all at once can hurt your score.
5. Different credit types, such as mortgages, retail loans, credit cards and installment loans.
6. How many late payments do you have?

Now, with the playing field laid out, let’s work to boost your credit score! Some methods that boost your credit score take time, months or years, and others areas to improve credit score can be made with a phone call right now! That said, here are the 7 tips to raise your credit score!

7 tips to improve credit scores

1. Pay your bills on time. Your payment history is a major factor (35% of your FICO score) in determining your credit score. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.

2. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.

3. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score. To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit. Don’t use the extra credit though! That defeats the whole purpose and puts you further in debt!

4. Don’t apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.

5. Don’t ever close an open credit card account. If you pay off a credit card down to a zero balance, leave it open. Remember that a positive factor for your credit score is how much available credit you have at your disposal when compared to your credit balance, in addition to the length of your credit history.

6. Apply for loans within a two-week period. Every time you request a loan and the lender pulls your credit report, it can hurt your score. It is part of the FICO formula that reasons “this person is trying to apply for credit and loans and possibly be trying to live way beyond their means!” If you keep the loan process within a two-week period, all of the credit report lookups are bundled together as one single request!

7. Check for errors on your credit report. Examine your credit report for errors and contact the credit reporting agencies to fix any errors on your credit report.

If you take action and follow these tips, you will be able to give your credit score and immediate boost and gradually increase it even more as time passes. The major keys are to pay your bills on time and reduce your debt amounts when compared to your credit limit. This has a twofold benefit of improving your credit score and reducing your debt.

A Debt Consolidation Loan Help Get Your Finances Back On Track

Recent studies have shown that an average individual in a developed country spends almost forty per cent of his or her monthly salary before earning it. Today’s society runs on credit and with loans being easily available for the fulfillment of each and every desire, be it owning a new car or going on a holiday, we can easily be labeled a credit dependent society. However, a major downside to this credit trend that we are living with is that more and more people are finding it difficult to manage their numerous loans and landing themselves into bad credit situations. While some people actually end up in bad credit situations because of over spending and mismanagement, the majority of people who are finding it difficult to pay back their loans on time are those who have been faced with sudden job losses, illnesses, transfers or accidents. If you are also on the verge of getting into a bad credit situation or are already knee deep in loans that you are finding hard to pay back, then you should avail the help of a debt consolidation service as soon as possible.

Many financial institutions offer debt consolidation services to people who want to make their debts more manageable. A debt consolidation firm can be of great help to people who cannot pay back their numerous debts on time and are being forced to pay back even higher amounts as a result of increasing APRs and late fees. A debt consolidation service will pay off all your outstanding debts and consolidate the amount into a single loan which you will be required to pay back. So a debt consolidation loan will be the sum of all your debts put together. However, taking a debt consolidation loan is a better option than paying many separate loans with different terms of payments and different rates of interest. This is because companies offering debt consolidation loans will provide you with better rates of interest (much cheaper than what you were paying earlier) and more flexible terms of repayment. Apart from having to pay lesser amounts, a debt consolidation loan is easier to manage than your previous outstanding balances since you only have to make a single payment per month at a constant rate of interest.

Based upon your needs and requirements, you can avail different types of debt consolidation loans. The cheapest and the most easy to get debt consolidation loan is the home equity loan where you get the loan after putting your house as collateral. This is also known as a secured debt consolidation loan. The major disadvantage associated with such loans is that you might end up losing your house if you default on paying back the loan. You can also get an unsecured debt consolidation loan where you do not provide any collateral, but these loans carry a much higher rate of interest than secured loans and also have stricter repayment terms. Many credit card companies also offer balance transfer cards where you can transfer all your outstanding balances to a single credit card which has a very low APR for the first few months.

10 Steps To Save Your Retirement

Many of the brightest and hardest-working marketing and advertising people in the country are obsessed with getting you to spend money and, if necessary, to go into debt to do so. Absolutely all the media that reach you every day are designed to get you to spend money. In order to save money in this environment, you will need determination to withstand the constant pressures to spend now.

What is it that separates those who are successful from those who are not?

Successful individuals have a strong personal vision of what they want and why they want it. That vision gives them the strength to stick to their strategies even when doing so is uncomfortable. It gives them the determination to persist when they are discouraged. This is the same characteristic of women entrepreneurs and is the reason their new, small businesses are successful.

The 401k Plan

Today, the 401(k) plan has become the main investment vehicle for working women to save for retirement. But many don’t take full advantage of their plan, and this could leave them with a lot less at retirement. Here are some steps we believe you can take to improve and eliminate any retirement worries about whether or not your retirement will be pleasurable or public charity; or whether you will have all the free time to spend with your family or friends.

1. Increase your contributions to the maximum that you can manage. Many women contribute just enough to take advantage of their employer’s matching contributions, and then they stop. By adding more to your account, beyond the matching contributions, you’ll end up with more in retirement.

2. Invest at the start of each year instead of taking a little bit out of each paycheck. Nothing in the law says you have to invest in a 401(k) plan a little at a time, from each paycheck. By investing early, you’ll put your money to work sooner for your benefit.

3. A few years ago it was reported that more than 30 percent of the money in 401(k) plans was invested in money-market funds or similar accounts. For investors nearing retirement, that may be appropriate. But most workers in their 40’s and 50’s need growth in their retirement investments. Put more of your investment fund in equities and less in money-market funds.

4. Research indicates that over long periods of time, small-company stocks outperform large-company stocks. Since 1926, In the equity part of your portfolio, shift some of your money into funds that invest in small companies. Don’t put your entire equity portfolio in small-company stocks. But consider investing at least 25 percent of your U.S. equity investments in that fund.

5. Numerous studies have shown that value stocks outperform growth stocks. According to data going back to 1964, large U.S. value companies had a compound rate of return of 15.1 percent vs. only 11.4 percent for large U.S. growth companies. Among small U.S. companies, the difference was even more striking: a compound return of 17.4 percent for the value stocks vs. 12.1 percent for the growth stocks. Don’t put your entire equity portfolio into value stocks. But if there’s a value fund available to you, consider investing at least 25 percent of your U.S. equity investments in that fund.

6.Rebalance your portfolio once a year. Your asset allocation plan calls for a certain percentage to be invested in each of several kinds of assets. Rebalancing restores your asset balance and allows for the possibility that last year’s losers may be this year’s gainers. Diluting your diversification actually increases risk in your portfolio over time, which is a result that’s just the opposite of what most investors want.

7.Without compromising proper asset allocation– use the funds in your plan that have the lowest operating expenses. Choose funds with low turnover in their portfolios.

8. Don’t borrow or make early withdrawals from your 401(k) unless that is the only way to respond to a life-threatening emergency. Furthermore, if you take an early withdrawal before you are 59.5 years old, your withdrawals will be subject to a 10 percent tax penalty (in addition to regular taxes) unless you are disabled. Just don’t do it.

9. If you leave your job, you’ll get a chance to roll over your 401(k) into an IRA. Take that chance. In an IRA, you have the same tax deferral as a 401(k), and you’ll have the flexibility to invest in virtually everything you can get in a 401(k), plus much more.

10. Here’s the most important thing you can do to maximize your 401(k): Keep your contributions automatically payroll deducted, and make them no matter what. It’s simple, but it’s not easy. Half of the households in the United States have net worth of $25,000 or less. In a typical year, about two-thirds of U.S. households do not save money.

Remember, to be successful, first, imagine your early retirement; the Caribbean condo, the yacht, the new Lexus. Luxury and pleasure as far as your eyes can see. Create a strong vision, and then don’t let go. The power of a clear, strong vision applies to more than just your retirement savings. Let your vision shape your life, instead of the other way around, and all of the time in the world can be yours. You won’t be spending your Golden Years working at the Golden Arches.