by Adam | Sep 8, 2015 | Credit Repair
If you’ve noticed that you and your partner don’t quite share the same spending habits, join the club. Finances are one of the top sources of contention among married couples. It probably didn’t take long for you to figure out who was the “spender” and who was the “saver” in the relationship, and it’s a good thing you have each other to balance one another out. However, when it comes to combining incomes, bank accounts, taking out loans together, etc. it’s very important that you and your partner have open communication and are on the same page about finances. If push comes to shove, your or your partner’s poor spending habits could damage your credit and substantially increase the risk of bankruptcy. Here are some important topics to discuss together to keep a healthy balance with your money and your relationship. 1. Be honest about your personal financial history As you discover each other’s flaws and realize that gasp! you’re not both perfect, be honest and also empathetic with your partner as you analyze your current financial situations. Your partner will likely want to know the good and the bad and work through it together. Finances definitely fall under the “for better or worse” category, so put it all out there and help make each other better. 2. Budget together Have a budgeting meeting at least monthly to make sure you’re both on the same page about how much is coming in and how much is going out. The cell phone bill or car payment should not be a surprise to either one of you. When you’re both responsible...
by Adam | Sep 1, 2015 | Credit Repair
As you continue to learn more about how your financial decisions affect your credit, you may often find yourself asking, “Why didn’t anyone tell me this before, when I was younger?” From car buying to credit cards, there are a lot of ins and outs to learn when it comes to managing your finances, and you may have had to learn some of those lessons the hard way. Teaching your children some of these important financial lessons before they’re faced with tough decisions can help save them a lot of grief and financial woes. Here are some important financial principles that even children should learn and implement to set the stage for a successful financial future. 1. Save, save, save! Children as young as toddlers can learn the value of saving their money. Giving them the opportunity to work and earn their own money for something they desire rather than buying it for them on the spot teaches them a valuable lesson about impulse control and patience. What may start as saving for a simple toy may translate to them saving for a car as an adult rather than relying completely on loans and credit. 2. Budget In addition to teaching your children to save for a specific purchase, teaching them to stay on top of every dollar they earn or spend is also very important. For some tips on where to start if you’re new to budgeting yourself, here’s a good article with some basics. Teach them to be aware of their spending habits and preferences so they can budget accordingly. If they learn these lessons when they’re young...
by Adam | Aug 27, 2015 | Credit Repair
It can be easy to get caught up in the spirit of buying and giving during the holiday season, only to cringe with regret and remorse when you see your credit card statement come January. From buying gifts, attending holiday parties, decorating, and even keeping your car and home ready for a winter storm, there are expenses that inevitably come with the holiday season. This year, don’t let the holidays break your bank account and ruin your credit. Rather than let all of these seasonal costs sneak up on you year after year, take some time to follow these simple steps that will help you stay in control of your finances without missing out on any part of the holiday festivities. 1. Start early Don’t wait for the stores to tell you the holidays are approaching. Start saving months in advance, even at the beginning of the year, so you aren’t caught off guard with holiday expenses. Ideally, you should create a segment of your monthly budget dedicated to holidays and gifts so that each month an amount is put away for the holidays. This can fund not only the end-of-the-year holidays, but any birthdays or other holidays that come up during the other months as well. 2. Look at the numbers first Before you even begin your shopping, look at your regular income and expenses for the upcoming months. Determine how much extra you can set aside for holidays. If it’s not as much as you’d like, review your budget to see if there’s somewhere else you can take money from, look into some side jobs, or work...
by Adam | Aug 18, 2015 | Credit Repair
You may have heard that too many “credit inquiries” can lower your score. This is both true and false – only some kinds of inquiries can lower your score, while others are harmless. Whether you’re applying for a loan or checking up on your own credit score, it’s important to know which kind of inquiry you’re initiating so you can avoid the more damaging ones unless absolutely necessary. What is a “credit inquiry”? Anytime someone requests your credit report or score, that is called a “credit inquiry.” Examples of common credit inquiries include: When you apply for a credit card When you apply for a mortgage When an employer conducts a background check When you apply to rent an apartment When a credit card company determines if you qualify for a card or special offer When you check your credit score or request your credit report The purpose of a credit score – and a credit report, for that matter – is to determine your credit worthiness. A higher score indicates that you have a good history of paying off loans on time without missing payments, and a lower score indicates that you’re more at-risk for defaulting on a loan. This information is useful for all kinds of people, organizations, and corporations. For example, a landlord may want to know if a potential renter has a good history of making monthly payments. Checking your credit is a fairly good indicator of this. There are two kinds of inquiries: hard and soft. “Hard” inquiries can lower your score A hard inquiry may actually knock your credit score down a few points, so they should only...
by Adam | Aug 5, 2015 | Uncategorized
Having poor credit can be financially paralyzing. But constantly checking your credit score or frequently pulling your credit report won’t necessarily fix your binding situation. To fully understand how often you should be checking your credit report, you should explore the answers to these commonly asked questions. What is a credit report? A credit report is a detailed report of your credit history. This document is prepared by a credit bureau and is used by lenders to determine your creditworthiness. Your creditworthiness is based on several factors including: Personal information Employment history Summary of credit history Account information Inquiries of your credit history Any accounts turned to a credit agency Why should you be aware of your credit report? Being aware of your credit report is necessary for several reasons, the most important being: Identity theft: With identity theft on the rise, you’ll be able to note any identity errors or reports of fraud on your report. Financial standing: If you aren’t aware you have poor credit, you’ll never begin to repair it. Errors: It’s not uncommon for reports to have errors that can damage your financial standing and credit worthiness. What is a credit score? When using credit, you are essentially borrowing money that you don’t have and promising to pay back the borrowed amount within a specific time period. Your credit score is a three-digit number that determines the likelihood of you actually paying back the money you owe. Your credit score is a number determined by the information provided in your credit report. Though credit bureaus have different evaluation methods, the most important factors a credit...
by Adam | Jul 27, 2015 | Credit Repair
Having poor credit is an unfortunate situation to be in, especially when there are discrepancies or disputed information on your report. While it is possible to try and resolve this issue and repair your credit alone, the process can be grueling and complicated. Thankfully, dependable and trustworthy companies are available to help. The top-three reputable credit repair agencies are compared side-by-side here, including a review of each company’s price, features and services. This allows us to bring you the most reliable information possible so you can choose the right company for you. #3 – MyCreditGroup Pros: With a score difference of just .05 from the leading company, Lexington Law, MyCreditGroup offers several similar factors, including: Month-to-month contract Identity theft protection Licensed Bonded Registered with the Attorney General They also provide users with all services including credit score analysis, couple’s discount, dedicated account manager, privacy protection, and payoff resolution – or help negotiating and paying off your debt – a service that neither of the top two companies offer. Cons: Unlike the two leading companies, MyCreditGroup doesn’t offer a refund policy, educational materials or online chat capabilities. MyCreditGroup is the most expensive group in the top three, charging $99 for First-Work Fee and $69 for Monthy-Fees. #2 – Sky Blue Credit Repair Pros: As the runner-up Credit Score Company, Sky Blue Credit Repair offers the same functional features as Lexington Law, including month-to-month contracts, identity theft protection, licenses, insurance, registry with the attorney general and they offer a refund policy. They also provide users with the same services as Lexington Law like: Email and phone support FAQs Online and Phone Registration...
by Adam | Jul 20, 2015 | Credit Repair
Having poor credit can put you in a paralyzing financial state. There is, however, a solution that many individuals don’t know about: do-it-yourself credit repair. Consider the following four steps to take in the first month of your credit repair efforts. 1. Make your point clear After obtaining a credit report from all three credit agencies, the first thing you need to do is write a letter to the credit reporting company. This letter should include all the information you think is inaccurate on your credit score. Your letter should include the following: Complete name Current address Each disputed item The facts and reasons behind your dispute A request for the information to be removed or corrected Your letter should also include a statement requesting a returned receipt for documentation. 2. Be patient Repairing poor credit is not a quick process. It takes considerable time and effort, but can be done. After submitting your letter to the credit reporting companies, they have 30 days to investigate and process the items you questioned. The credit reporting company must then forward all of the relevant data you provide to the original organization. After the original provider conducts their own investigation on the allegations, they send the results back to the credit reporting company. If, indeed, the disputed information is found inaccurate, the original organization must notify nationwide credit companies. 3. Ask for action After all investigations are complete and results have been decided, the credit reporting company will send you a copy of the results in writing as well as a copy of the report if anything was...
by Adam | Jul 13, 2015 | Uncategorized
Negative items on your credit report can result in a lower credit score, higher interest rates, loan denials, and more. In some cases a bad credit report can even influence your ability to get housing or a job. If there is something on your credit report that isn’t correct, it is important to correct this as quickly as possible. Writing formal letters can be intimidating and confusion, but knowing how to correctly communicate with credit reporting agencies can be crucial to correcting your credit and improving your scores. Use the following sample letter as a guide when creating your own credit dispute letter. You may need to send a letter to each credit reporting agency. In this case, be sure to alter the information where appropriate. For more instructions, see our post: How to Write a Credit Dispute Letter to Repair Your Credit. Sample Letter [First Name, Last Name] [Street Address] [City, State, Zip Code] [Date] Complaint Department [Name of Credit Reporting Agency] [Company Address] To Whom It May Concern: I am writing to inform you that the following information in my credit report is incorrect: [Name of account], [account number] [Item description (e.g.: judgment, credit account, etc)] This information is inaccurate because [Give a detailed explanation of why the information is incorrect: (E.g.: I never opened this account/I made the payment on time/the information is incomplete/ etc.)]. This incorrect information has negatively impacted my ability to [acquire a loan/ get a fair interest rate/ find rental housing/ etc.]. As a credit reporting agency, you are legally required to report accurate information. Please immediately [remove this...
by Adam | Jul 8, 2015 | Credit Repair
Managing your credit can take some work, but it will pay off when you have lower interest rates and more lending options. Unfortunately, incorrect information can occasionally make its way into your credit report and damage your score. Left unresolved, you’ll continue to pay the consequences. If you notice something incorrect on your credit report, you should write a credit dispute letter, but sometimes that will need to be followed by a Method of Verification letter. Here’s what you should know: What is a Method of Verification? If you dispute something on your credit report and the credit reporting agency tells you that the disputed item has been verified, you have the right to request verification in the form of a “method of verification.” According to the Fair Credit Reporting Act (FCRA), the credit reporting agency is required to give you method of verification within 15 days of your request. This should be hard evidence that goes all the way back to the original creditor. Don’t settle for verification from a third-party database. Writing a Method of Verification Letter If a dispute comes back verified, but with no actual verification or documentation, it is time to send a letter and request it. Follow these steps when writing a Method of Verification Letter: Call the credit reporting agency using the phone number at the top of the verification report in question. Give them your credit report number and request the method of verification. Cite FCRA, Section 611. Request hard evidence that goes back to the original creditor and ask for the original creditor’s information. If the person you talk to...
by Adam | Jun 25, 2015 | Credit Repair
The Credit Repair Organization Act (CROA) was passed in 1996 as a way to protect consumers from shady tactics (and downright scams) in the credit repair industry. Designed to regulate the credit repair industry, as well as encourage consumers to be informed about their credit repair rights, the CROA places several restrictions and requirements on credit repair organizations (any group, company, or organization offering credit repair services for a fee). Restrictions & requirements placed on credit repair companies by the CROA According to the CROA, a credit repair organization cannot: Advise you to lie about your credit history (or lie on your behalf) Misrepresent their services Alter or create a new identity for you Charge you until services have been provided In addition to these restrictions, the CROA requires credit repair companies to provide a contract to consumers before agreeing to perform any services. The contract must contain details outlining the credit repair services to be performed, the time frame needed to carry out those services, and the payment amount. They must also allow for a 3-business day cancellation period, during which the consumer may cancel for any reason without incurring any fees. Are there still credit repair scams out there? Thankfully, the CROA is pretty effective at preventing credit repair scams, but as a consumer you still need to be diligent. For example, two credit repair organizations were sued by the FTC in 2005 for targeting Spanish-speaking consumers with promises of deleting accurate information from their credit reports. These kinds of deceptive claims are precisely what the CROA aims to combat. Unfortunately, there are still scam artists out there who often go...
by Adam | Jun 15, 2015 | Credit Repair
If you’ve already asked yourself these four questions before hiring a credit repair company, then your next question might be about cost. Obviously, if you hire an expert to conduct a service for you, you don’t expect them to do it for free – but how much can you reasonably expect to pay for a credit repair company to go to work improving your credit score? The answer is: it depends on the company. Let’s break down the pricing options for 3 of the top, and most respected, credit repair companies, but first: Don’t Forget You Have the Option of DIY Credit Repair – Free of Charge (not counting postage stamps) When it comes down to it, there’s always DIY Credit repair, which only costs some free time and postage (you’ll be mailing a lot of letters). If you like to take matters into your own hands, and you’re motivated enough to stick with it for months on end, then this may be the best option (it’s certainly the cheapest). Cost of Hiring a Credit Repair Company Maybe you’re not too excited about going the DIY route, and you want to know the cost of hiring a professional credit repair company. Most companies will charge you a monthly fee as well as an initial startup fee. You’ll need several months before you start to see positive results, but the amount of time required depends mostly on your individual credit situation. Here’s the basic pricing information for 3 of the top credit repair companies: SkyBlue Credit Repair Price: $59 setup fee, $59 monthly (or $99 for couples). CreditRepair.com Price: $89.95 a month, with no...
by Adam | Jun 8, 2015 | Credit Repair
It’s much easier to do the small things to help prevent identity theft than it is to clean up the damage of having your identity stolen. However, even the most diligent among us can still fall prey to identity fraud. If you discover that your identity may have been stolen, do these 5 things immediately: 1. Freeze your credit cards or accounts where the fraud occurred Contact the credit card company or institution where you’re experiencing fraudulent charges and have them freeze the account. This will effectively stop the bleeding and prevent any more damage from occurring. In order to begin safely using an account again, you may need to re-set PINs, request new cards, etc., but for now just focus on alerting your bank/creditor of the possible fraud. 2. Place a 90-day fraud alert on your credit reports A fraud alert means that the credit reporting agencies will take additional precautions when verifying your identity. You only need to request an alert at one of the credit reporting agencies (they will contact the other 2 for you): Experian Equifax TransUnion 3. File an Identity Theft Affidavit with the FTC The Federal Trade Commission (FTC) is tasked with fighting and preventing identity theft. They rely on people to report suspected identity theft, which you can do online or by calling 877-438-4338. 4. Contact police and file a report Identity theft is a crime, and so you need to report it to the authorities. The main reason for doing this is to create a police report, which you will need when working with creditors and the credit reporting agencies to resolve all fraudulent...
by Adam | Jun 1, 2015 | Credit Repair
“An ounce of prevention is worth a pound of cure.” – Benjamin Franklin Although Benjamin Franklin probably wasn’t thinking about your credit score when he penned this famous line, it certainly applies to identity theft. In fact, there’s a new victim of identity theft in the U.S. every 2 seconds. While not all cases of identity theft are preventable, most are. All it takes is a few precautionary measures to drastically improve your chances of never having to deal with the enormous fallout of identity theft. Here are 7 easy tips for preventing identity theft. 1. Get a paper shredder Seriously. You can find a decent paper shredder for under $30, and it’s the most effective way of making sure your sensitive documents, papers, receipts, etc. aren’t waiting to be snatched up by dumpster-diving fraudsters. 2. Install an effective firewall on your computer For would-be identity thieves who are a tad more tech-savvy than their dumpster-diving cohorts, a firewall is one of the best lines of defense against hackers trying to steal sensitive information from your home computer or laptop. 3. Be aware of who’s watching over your shoulder Simply be aware of who is around you when you’re typing in a PIN or accessing a bank account on your mobile phone. Much of the time, identity theft is a crime of opportunity – so don’t give those around you the opportunity to steal your identity. 4. Keep and organize paper records It’s important to keep and organize paper records (think bank statements, receipts, invoices, etc.) to track all your accounts, spending, contracts, terms and conditions, and more. Basically, it helps you notice...
by Adam | May 22, 2015 | Credit Repair
If you’ve ever had a bad credit score, you know that it often involves a cruel cycle of debt, missed payments and collections. It can be hard to break out of this cycle, mostly because that requires perseverance – nothing is going to get better overnight. You’re in it for the long haul. So how do you go about breaking out the bad credit cycle? Here are 4 steps that will give you a pretty good chance of building good credit, and making sure things stay that way. Step 1: Set up automated bill payments It can be hard to remember when bills are due, and even one missed payment can erase months of progress repairing your credit. The easiest, and most stress-free method of avoiding late payments is to set up automated bill pay whenever possible. Virtually every credit card company allows this, and it’s also an option for other bills such as utility payments and cell phone bills. Once you set up your automatic bill pay, you no longer have to worry about making a payment on time (although you still need to make sure there’s enough cash in your bank account). Step 2: Pay off your entire credit card balance each month Pay off your credit card balance (down to zero) each and every month to avoid falling back into a cycle of debt. Not only does this ensure you don’t build up credit card debt that take years to pay down, it also makes it so you pay zero dollars in interest. Win-win. Step 3: Don’t use your credit card unless you have the cash to...
by Adam | May 15, 2015 | Credit Repair
Last week I wrote about where to start if you’re new to budgeting. Now we’re going to set pen to paper and nail down some concrete strategies for crafting a family budget that actually works for you. We already outlined how to track expenses and separate wants from needs. Armed with this information, you are now fully capable of creating a budget that puts you on the right financial track. But first, you have a few more things to take care of. 1. Decide on a financial goal A budget without a goal is like a TV show without a relate-able central character; there’s little motivation to stick with it through the end. You need a powerful financial goal to make your budget work. For many families, their main goal is to get out of debt. This can be a very powerful goal, especially since it allows you to set deadlines and hold yourself accountable for meeting those deadlines. Other examples of financial goals are: Saving enough money for a down payment on a home Saving for retirement Having enough room in your budget for annual vacations Growing a college fund for your children All these are excellent financial goals, but no matter what you choose it needs to be tailored to you and your family. The right goal will give you the motivation to carry on when the going gets tough. 2. Choose a budgeting platform There are literally hundreds of software programs designed to help you craft a family budget, many of them free of charge. You want to choose a budgeting platform that is easily accessible, that you can quickly check...
by Adam | May 8, 2015 | Credit Repair
Drafting a budget and sticking to it is the single best thing you can do for your personal finances. So why is it so hard for so many people? One reason people drag their feet when it comes to budgeting is that they think it’s difficult. It’s complicated, you tell yourself, and it will just make me feel bad about yourself, so why bother? Well, I’m here to tell you that budgeting is easy. It’s one of the easiest things to get your head around, but you have to stop thinking of it as a chore to be avoided. It’s actually the one thing that will set you free from financial bondage, and it’s amazingly simple to do. So let’s get started with the basics – Budgeting 101. Where to start: 5 Steps to Begin Your Budget Budgeting can be summed up in a single sentence: tracking money that comes out and tracking money that comes in. That’s really all you’re doing. You take a look at the money your family earns, and you take a look at the money your family spends, and you adjust the spending column so that you don’t end up spending more than you earn. Which brings us to step one of easy budgeting: 1. Track total income This is probably the easiest, and so we’ve put it first on our list. For most people, all you have to do is look at monthly salary or wages. If you have fluctuating income (maybe you do freelance or seasonal work), then you might have to do a little estimating. In that case, look at what you’ve made...
by Adam | May 1, 2015 | Credit Repair
Credit reports are long and complicated. It can feel like a pain to get a hold of them (although requesting your free annual report is a cinch). So why is it so important to stay on top of the details in your credit report? Why do you have to know what’s contained in those pages? Here are 5 of the biggest reasons why you should check your credit report regularly (at least once per year, preferably more). 1. Find errors in your report As many as 40 million Americans have errors in their credit reports. You won’t know if they are there unless you check your credit report. Also, don’t fret too much if you find an error; there are steps you can take to repair your credit, all by yourself. And if you don’t have the time or energy for DIY credit repair, there are reputable credit repair companies out there ready to help. (Ask yourself these 4 questions before hiring a credit repair company.) 2. Uncover identity theft Sometimes an error isn’t an error at all; it’s identity theft. You might not know that someone has stolen your identity until a collection agency is hounding you for a loan you never took out. If you’re regularly checking your credit report, then you can at least discover identity theft before it becomes a huge problem. 3. Make sure your credit is in good shape before you apply for a loan If you’re planning on taking out a major loan (such as a home mortgage), it’s important to be proactive and check out your credit report before you head over to the mortgage lender’s office....
by Adam | Apr 24, 2015 | Credit Repair
Unfortunately for many of us, repairing credit often involves dealing with collection agencies. Debt collectors get a bad reputation because of the questionable tactics some of them use to collect the debt, sometimes crossing over into harassment. Of course, not all debt collection companies use unethical practices, and there are laws in place to protect consumers from such tactics. In fact, the FDCPA (Fair Debt Collection Practices Act) sets several protections for consumers and makes some guidelines that can benefit your credit repair efforts as long as you know your rights and aren’t afraid to lay claim to those rights. One way you can take advantage of the FDCPA is by sending collection agencies a “Debt Validation” letter. Why Seek Debt Validation? According to the FDCPA, a collection agency must verify your debt or else it is considered invalid and they can’t report it to the credit reporting agencies. If they can’t verify the debt, they can’t attempt to collect the debt and they can’t attempt to contact you about the debt, either. If a debt collector doesn’t verify your debt, and reports the debt to a credit reporting agency anyway, then you can take them to small claims court and receive $1,000 from them as well as additional damages. How is a “Debt Collector” different from the original creditor? The difference between a debt collector and an original creditor is important, because only a debt collector is subject to the FDCPA. According to the law, a creditor is only the original entity that issued you the loan directly. A debt collector is defined as an entity that the creditor has hired to collect the debt, or an...
