Archives for "Budget & Savings Tips"
Awesome Benefits of Credit Repair
What Do You Want From Life?
Do you own a home? Do you have the security of a savings account? Can you afford to set aside a percentage of your take-home pay for investment? Everything that you do in life is connected to your credit report. There is nothing that can have as significant an impact on your life, and ultimately on your financial freedom. It’s worth taking a close look.
The Interest Rate Connection
Most people that embark on a program of credit repair services have a single and valuable short term goal in mind. The most common goal is home ownership. In many cases consumers with credit issues simply can’t qualify for mortgage financing. These individuals would like to improve their credit scores enough to obtain mortgage approval. There are also a large number of people in credit repair programs that currently own homes but due to credit issues received expensive sub-prime financing. They would like to improve their credit scores enough to refinance into a better mortgage and reduce their payments.
Building Personal Wealth
Both of these goals are valid. Historically home ownership has been the foundation of almost all personal wealth. Home ownership is also likely to be the largest financial obligation that you will have in your life. And the quality of your credit will determine the size of the monthly payment associated with home ownership. The importance of this connection is enormous.
Home Ownership Costs and Benefits
Homeowners with sub-prime mortgage financing typically pay a premium of up to two percent on their mortgage rate. This interest premium on a typical $200,000 mortgage amounts to $333 per month, or $4,000 per year. In addition, sub prime borrowers are usually limited to some form of adjustable rate financing that often results in additional premium costs to them over time. There are many benefits to home ownership that may outweigh these extra costs. But there are also actions that you can take to eliminate the extra costs and the looming adjustable rate adjustments as soon as possible.
Credit Repair Works
Don’t underestimate the power of credit repair. You would do yourself a horrible disservice by ignoring the potential improvement in your credit report that can result from an informed review of the content of your credit and a systematic program of repair. Dealing with the credit bureaus can be challenging, but if you take some time you can learn how to do this yourself, or you can hire a reputable credit repair company.
Enormous Benefits
What is credit repair worth to you? The case above is pretty typical. An improvement in your credit score may very well save you in excess of $333 per month. What would this do for your life? If you were to deposit that $333 each month into a money-market account earning 5%, in ten years your account would have grown to $51,000. In twenty years this same account would have a balance of $136,000. Not a bad return on your credit repair efforts.
The Tip of the Iceberg
If instead of investing your monthly savings in a money-market account you were to apply that $333 each month to the principle balance on your new mortgage, assuming an interest rate of 6% you will pay off your mortgage in seventeen years instead of thirty. Would you enjoy being mortgage free? What if I were to tell you that your mortgage is just the tip of the iceberg? Do you want to know the real benefit of great credit? Consider every single thing that your credit will affect. Think about your auto loans, credit cards, personal loans, and equity lines. The math is staggering.
Take Action
It’s up to you. Make sure that your credit is every bit as good as it can possibly be. Don’t let anything stand in the way of taking action. You can undertake a program of credit repair on your own. Or you can check out a couple of good credit repair companies. Speak to them on the phone. Ask questions. They should have many years of experience in dealing with the credit bureaus and be experts in the field of credit scoring. There is so much to gain. Be proactive.
Copyright © 2007 Sky Blue Credit. All Content. All Rights Reserved.
Credit Repair and Financial Freedom
Your Credit
On the day that you decide to set foot on the path to financial freedom you should take a good hard look at your credit reports. The content of your credit will determine your credit scores. Every one of the building blocks of your financial plan is important. But if you ignore your credit every single large obligation in your life can end up costing far more than it should.
Credit Repair
As a credit repair professional I can tell you that there is a strong likelihood that your credit report contains errors that are having a negative impact on your credit scores. When you review your credit reports please take the time to look at every single item. The all important FICO credit scoring model places a significant amount of weight on information that you might not normally consider. Most people scan their credit report in search of obvious derogatory items like late payments or collections. Important information like the age of each account as indicated by the initial reporting date is often ignored. There are a number of important categories that can have a major impact on your score that you need to examine. A close look at all three of your reports will pay dividends.
Live Within Your Means
Over time life will force you to live within your means. It is a universal truth. If you live beyond your means today you will inevitably be living below your means tomorrow. Spending beyond your ability to repay is a temptation to which too many people succumb. The result may be familiar to you! If you find yourself wondering where the money for your car payment will be coming from, or if you find yourself examining the content of your checking account and realizing that you will have to cut back on your food budget, you have probably over committed yourself.
Start Your Budget Now
How much do your really have available to spend? This is not a complicated question. For most people the answer comes in the form of their weekly paycheck. If you want to put an end to financial stress you have to make a serious effort to live within a budget. Whatever it takes you have to make your expenses fit within the constraints of your income. If after a careful accounting you discover, as many people do, that your expenses exceed your income you must take immediate action to correct this situation. There are only a couple of options. If you have examined your credit repair options as a means of reducing the cost of your credit the only choice left is to look at ways to cut back. If you are serious about achieving financial freedom you need to make this a priority.
The Beauty of Simplicity
If you find that your expenses exceed your income you need to look at each expense item with an open mind. If you want to be free from money concerns you may have to make sacrifices. This is a matter of priority. If you have purchased an automobile with an oversized payment you should consider trading it in for a car that fits within your budget. Are you stuck with a mortgage that is sucking so much money out of your account each month that you have nothing left over? If you want peace of mind you should consider downsizing. There is no shame in this. If you don’t make these decisions voluntarily today you may find that your creditors are forcing you to make the decisions tomorrow. In the credit repair business we see people every day that have come to these valuable realizations the hard way.
Inner Wealth and Outer Wealth
You should not look at these budgetary decisions as an austerity plan. The inner peace that comes from living within your means is far more satisfying than the pleasure of buying unaffordable possessions. If you can fully grasp this concept and put it into practice an amazing thing will happen in your life. You will discover that you have more money than you need each month. And having discovered the joy of living within your means you will naturally discover the next step towards financial freedom which is savings and prudent investment. The value that you place on inner peace will inevitably lead you to real wealth. The first steps towards financial freedom may seem hard, but the moment that you commit yourself to the path you will feel a burden lift from your shoulders. You are on your way.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Credit Repair: The Cost of Errors
Credit Report Errors Mean Consumers Lose
In 1998 the Federation of State Public Interest Research Groups (PIRGs) published a now famous report called, Mistakes Do Happen: Credit Report Errors Mean Consumers Lose. This report detailed the results of the PIRGs sixth study on the accuracy of credit reports. The results, in their words, were troubling, and revealed that an alarming number of credit reports contain serious errors. Here are some of the highpoints (or low points) of their study findings.
Serious Errors can Have High Costs
Seventy percent of all of the credit reports investigated contained errors. The errors uncovered by the study were broken down into categories based on the severity of the errors. The worst of the errors occurred in twenty nine percent of the credit reports and were likely to result in the outright denial of credit. This type of error included accounts that are incorrectly marked as delinquent, accounts that do not belong to the consumer, and derogatory public records such as judgments that belong to someone else.
Not a Small Issue
The types of errors noted above are obviously very serious. It should be emphasized that twenty nine percent is a horrendously large number. This number alone indicates that you have more than a one in four chance of having errors on your report that will cause you to be denied credit. An additional result of this misreporting may include your placement into a sub-prime credit category and result in you receiving a higher cost loan than you would otherwise have received. Translated into dollars there is the potential for a life changing impact on your financial wellbeing.
Little Things Count
Forty one percent of the credit reports reviewed contained personal identifying information that was out of date or belonged to someone else. These erroneous items included incorrect Social Security numbers – often belonging to total strangers, wrong birthdates, addresses that had never been lived at, and employers that the consumers had never worked for. Here again it is essential to consider, not only the massive numbers of errors that are indicated by the study results, but the implications of these results. These statistics show a massive potential for every credit report to contain potentially costly errors.
Missing Accounts Can Hurt
Twenty percent of the credit reports reviewed were missing major account information such as auto loans, mortgages, and other consumer accounts that could have demonstrated the credit worthiness of the consumer. Credit repair services like ours discover these omissions on a daily basis. In many cases a credit report is as damaged by the absence of these major accounts as it would be by the presence of erroneous derogatory accounts.
Closed Versus Open Accounts
Twenty six percent of the credit reports contained accounts that had been closed by the consumer but remained listed as open accounts. Keeping in mind the significance that the FICO scoring method places on the number and status of current accounts it is clear that even this seemingly harmless omission by the credit bureaus can potentially cause expensive and intolerable damage to ones credit. In the majority of these cases it was concluded that this error could make it appear that the consumer is currently over extended and cause the denial of a credit application.
Credit Bureaus Are Not Government Agencies
The information noted above is an indication of the severity of the reporting problems that occur. We have been helping our clients with credit repair since 1989. I often find myself correcting customers’ impression that the credit bureaus are in some way connected to the government. This belief is understandable. The credit bureaus have a major impact on your financial life. But although the bureaus seem like an omniscient Big Brother, they actually have no connection to the government at all. In fact, they are under constant scrutiny and have been fined many millions of dollars for their failure to cooperate with consumers’ efforts to fix reporting errors.
Your Rights
Significant legislation has been enacted to protect you from the impact of the credit bureaus inaccuracies. The right that you have to receive copies of your three credit reports for free on an annual basis is not a friendly public service by the credit bureaus. The bureaus have been required to provide this service as one of the protective measures included on the Fair and Accurate Credit Transactions Act of 2003. Your credit report can have a major impact on your financial life. Give your credit the attention that it deserves and review your reports regularly.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Credit Repair & Your Budget
There are some powerful credit repair strategies that can have a fast and significant impact on your credit scores. But in the long run if you want to maintain your credit you will need to make a big lifestyle decision.
It’s Your Life
The financial benefits of good credit are significant. Perfect credit, of course, doesn’t mean that you won’t have to get up and go to work every day. But it will mean that you won’t have to work as hard to cover your monthly bills. Poor credit can easily mean that you will pay twice as much for every dollar that you borrow as you would if your credit were perfect. When you stop to add up the numbers including your mortgage, your auto payments, and all of your credit cards, you will realize that poor credit can easily cost hundreds of extra dollars each month. The effort that you make to improve your credit is the best single thing that you can do to improve the quality of your life.
Achieving Perfect Credit
You can achieve perfect credit. The goal is within everyone’s reach. But there is effort involved and in the final analysis it requires a sincere look at your own life. There are many powerful credit repair strategies that can have a quick and significant impact on your credit scores, but today I would like to offer some creative and effective tips on budgeting, which in the long run may be the most important ingredient in maintaining your great credit.
Your Budget
I’m guessing that a discussion about credit repair and your budget is not on the top of your list of fun things to do. But bear with me. These methods are extremely effective, personally rewarding, and might even turn out to be fun. I can’t begin to tell you how many people I have spoken with about their money and their credit over the years. These ideas have translated into major financial benefits for many people. You should consider the possibilities for yourself.
Grab a Pen and Paper
Sit down with a pen and paper. I want you to make a list of every single thing that you spend money on. Start with daily expenses. Don’t leave anything out. Bus fare, gas money, kids allowances, newspapers, lunch. Everything counts. Now move on to weekly expenses. Do you go out bowling on Monday night? Is Saturday your date night? Think hard. Move on to your monthly expenses; your rent or mortgage, your car, your credit card bills, etc. How about annual expenses? Do you go on vacation every year? Estimate how much you spend.
Add it Up
Now add it all up. This can be an eye opener. Figure out how much you spend each day, week, month, and year. How does it compare with your net after tax income? How about that vacation? Are you saving enough money each month to pay for your vacation? Vacation should never be an excuse to run up your credit card bills in the hope that you will be able to pay the balances down in the future. We see far too many people that pay a high price for those lingering credit card balances.
Pay Yourself
There is one more budget item that I want you to add to the list. You work hard to pay everyone else. Now it’s time to pay yourself. I suggest that you take ten percent of your monthly income and put it into a savings account. Being in the credit repair business this is a subject that comes up in my conversations with customers. You can’t achieve great credit without having a savings account. Without a savings account a single emergency can result in a string of late payments. Savings will turn out to be the best habit that you can establish. A growing savings account will eliminate a lot of the stress that you feel about your financial affairs. When it comes time to pay your bills put yourself on the list.
Luxury versus Necessity
The truth is that you must find a way to balance your budget. Figure out what you can give up to live within your means. Keep in mind that as your credit score goes up the cost of your borrowing will go down. If you have to give up something to live within your means, and that sacrifice results in better credit, you will end up paying far less on your bills. As hard as you work for your money you deserve the rewards of good credit. There is effort involved, but the results can have a profound impact on your life. In the final analysis you will discover that any sacrifice you make to balance your budget will be rewarded ten times over.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.