Maximize Credit and Eliminate Debt

A good credit score opens doors. Nearly every aspect of your life depends on your credit score. Banks, Insurance Companies and Credit Card Companies give you deals based on your credit scores. A good credit score is achieved only if you are appropriately managing your debt. Managing your finances is key so that you are always seen as creditworthy is the best way to keep FICO scores high and debt away.

The first method of maximizing credit and eliminating debt is to stop buying on credit and credit cards should be reserved only for emergencies. The more cash you pay the less you will spend on unnecessary temptations which minimizes costly credit based financing.

If you do need a credit card try and find a credit card that has a low APR or annual percentage rate and spend 30% less that your limit through credit cards. Maintaining a balance of less than 30% while maintaining on-time payment increases your score. Dispute any doubtful charge by the Credit Card Company or financial institution immediately and ignoring this will only complicate the matter. Start paying bills on time and make a resolution not to pay a late fee for one year for starters and keep renewing the resolution and remove debt from your life.

Periodically get a credit report from a credit reporting agency to check if you can eliminate any of the debts reported or if any dubious debt has been recorded. Always have a budget in place. A budget gives you financial direction as you navigate through the maze of consumer temptations. Deviating from the budget will only increase your debt. Maintain a daily household account and make sure that every single dollar you spend is recorded. You should make sure that your account never shows excessive expenditure.

Debt is not a dead end. Debt management is a tunnel through which you can go and the light at the end of the tunnel is your freedom from debt.

 

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Five Steps to Better Credit Scores - FICO

Your credit score is your financial reputation. A good credit score opens many doors and helps you get the goods and services you want. A good credit score gets you the privileges of discounts incentives and all other perks that a business offers when it regards you as a financially safe customer. If your credit does not look good and you need to perk it up, the following five ways are simple step for a big leap in your credit score. Take a good look at your financial situation. Bad financial management is not the only reason why your credit score falls. A divorce or job loss could be the cause of your bad credit. Once you deal with the basic problem management of your debt will become easier.

1. Make a list of payments every month and pay off most of the bills that can fit in your budget. Try and pay all future bills on time.
2. Stop buying items using your credit card unless its for emergency purposes.
3. Paying for everything in cash will stop you from the temptation of unlimited buying through a credit card.
4. Create a budget and do not stray from your budget. Controlling spending is the best way to improve your credit score. You can discipline your shopping by taking a list and sticking to the list no matter what the temptation.
5. Try and generate more income by taking on part time jobs because income is the backbone of a good credit score. More income helps faster repayments of debts.

Bad credit can be improved creditably with a little discipline and dedication to improving your credit score.

 

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Credit and Safety – The Emerging Chinese Threat

According to Slate Magazine and the financial times, Chinese hackers have breached White House computers and there is speculation that this was a Chinese government sponsored event. Individuals or groups with enough skill, time and resources to crack government systems are a definite threat to the average person.

There is nothing stopping these hackers from writing a program that compromises your financial account or obtains personal information off of you handheld device or home computer. And there is true financial motivation with little or no legal consequence. Good luck extraditing someone from China to prosecute.

Your Defense

Encryption on your laptop or desktop system along with strong passwords, anti-virus and personal firewall systems are a good start. If you do not have these basic areas covered then you need to look into solutions to protect your information.

Its also important to note that a Chinese Hacker or any hacker cannot remotely extract information from a piece of paper in a safe or file cabinet. You do have the option to “go analog” and focus on the old-school method of information storage and protection.

5 Safety Steps

1. Strong passwords – Use the longest and strongest passwords for key and important information such as bank accounts, social security numbers, taxes and other personal financial information. You know its a good password if you cant remember it and you need to write it down and place it in the safe or file cabinet.
2. Internet Access – The most secure computer systems in the world are the ones that have no network or internet access of any kind. While this may not be a possibility for you or your family it is important to consider where you are storing information and how easily it can be accessed remotely.
3. Computer Protection – Don't leave the front door open. make sure that you have anti-virus, a firewall and strong passwords for your computer systems. Security is no longer optional. If you need help with securing your systems seek out a local professional.
4. Email Use – Email is probably to worst place to store or transmit personal information. Do not use email to send any personal information such as social security numbers, bank account, passwords, home addresses or any type of potentially sensitive information.
5. Identity Protection – Your identity is a rather easy thing to steal with the right types of personal information. Make sure that you are checking your credit on a regular basis and consider purchasing services like LifeLock.

Credit and Job Loss

Losing your job is the most devastating thing that can happen to you next to the death of a loved one or divorce. Losing a job shatters your financial world till you get another job. There are many avenues to explore to remain financially stable even if you lose your job.

The basic requirement when inflow of money stops is self discipline and planning. Controlling your finances by cutting the unnecessary parts of your daily expenditure should be your fundamental step when you lose your job. Inform your credit card companies and other creditors as soon as you lose your job. They will usually be happy that you told them well in time and will negotiate reduced payments when you don’t have a job. Here are some suggested areas where you can consider cutting expenses:

1. Cable TV
2. Landscaping or gardening services
3. Pest Control Services
4. Alarm / Security Services
5. Internet (try the library or free wifi as an alternate)
6. Increase car insurance deductibles
7. Call your bank and creditors and ask for relief

Some experts suggest that you take two or three credit cards when you have a job and use them only when you lose your job. This is because you will not get credit card approval without a job and these unused credit card will give you credit when you are unemployed. Check all the benefits that your employer should give you before laying you off.

You are entitled to get medical benefits from your employer for the next six months or till you find another job. If you generate an income from alternative short term jobs till you find a regular job, your credit will not plummet though you are unemployed. Refinancing your mortgage or taking a home equity loan will help you get credit when you lose your job. By managing finances carefully, you can sail through the trauma of job loss in a creditworthy way.

 

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Debt Management

You can manage your debts by yourself or get professional help. Debts can overwhelm you and getting out of debt can seem like an unending process. Good financial management is all it takes to help you get out of any type of debt trap systematically. Discipline is the fundamental attribute for getting out of any situation including debt. Making a disciplined effort to save and repay debts by cutting your own expenditure till you get out of debt will keep debts away forever.

Stop buying on credit till you get out of debt. Cash down payments make it less tempting to be extravagant especially when there are a whole lot of debts to repay. Start paying bills on time and make sure that you never pay a late fee again.

Check your credit report by getting a copy from a credit reporting agency. Go through the report with a fine tooth comb and make a plan of what debts should be paid as a priority, which debts are doubtful and must be disputed and what debts can be deferred till priority payments are complete.  Design a plan for repayment based on your credit report and lifestyle change and make a strict budget. Stick to the plan and budget no matter what the temptation

Pay off all your credit card dues. They usually l form the major part of your debts and should be dealt with first. When you pay all your credit card bills it is likely that the debt will reduce drastically. Work with your creditors. Don’t try to evade or ignore your creditors. If you talk to them about negotiating new payment terms they will agree to help you because they will appreciate your sincere efforts in paying back the loan.

If you are unable to manage your own debt, there are professional companies that will help you with a plan and work with you by counseling and help you eliminate debt. This is a more expensive option because these companies charge a fee for the service rendered. Take a debt consolidation loan. The debt consolidation company will give you a loan at an affordable rate of interest to pay back all other loans giving you the convenience of paying a single loan at a low rate of interest.  Debt can be managed and if you manage debt carefully it can be eliminated permanently.

 

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