As a Credit Specialist, I am often approached with questions about credit cards.  Having credit cards are essential in maximizing a good credit rating.  Credit Utilization is 30% of the credit score and the mix of credit you have is 10% of your credit score. If you have no credit cards you are missing out on major components of the credit score.  What you need to know:

• Ideally you want to have 3-4 major credit cards.
• Major credit cards are best. You don’t need to have a bunch of department store charge cards.
• Keep the balances down to around 10% of available limit. If you can’t manage that, keeping balances at 30% of limit is still acceptable.
• DO NOT exceed 50% of available limit or your credit score will take a BIG hit.
• Keep credit cards in your name separate from your spouse.

Here’s what I suggest:

• Keep credit card spending within limits described above.
• Have a spending plan. For example: I will use XYZ credit card  to purchase only gas for my car this month.
• Pay your bill on time.
• Pay the balance in full if you can when you get the statement.
• Spread the balances out among your cards, but keep one for emergencies.
• Make sure you use your card at least once every three months so that it will not go unrated on your credit report.

In conclusion, you MUST have credit cards to optimize your credit score. Credit cards are not the problem.  It is the misuse of credit cards that create problems.

Tags: budget, credit, Credit Scoring, credit tip, homebuyer, money, saving

We are bombarded daily by advertisers claiming to save us money if we purchase their services in a bundle. I call “foul”. Typically these bundle discounts are only available if you purchase another service. For example, I have cable television and I only have their “stater plan”.  However, anytime I call with a question. They try to sell me a “cost savings package”. For x amount of dollars I can have t.v., internet, and telephone.  In this particular case I can have it all for a low $99.00 per month for 2 years.  Folks this is NOT  good deal. Here’s what you can do.

1. For Internet: Check with you local internet provider and tell them in detail what you use your internet for. You may be surprised to find out you are paying for features that you do not use. Try out different speeds. In most  applications, you probably won’t notice a huge speed difference.
2. Love movies? Don’t pay cable or other services for movies that you are usually are too busy to watch. Consider joining a movie rental service such as Net Flicks or Block Busters. Movies are delivered to your door. You can rent several movies at a time and keep them for as long as you want. Or better still find a RED BOX movie dispenser and rent movies for $1.
3. Once you have internet, I suggest looking into the MagicJack for phone service. They sell them at Walmart and  many other retailers. The Magic Jack costs approximately $40.00 and the service is good for 1 year and only $19.99 per year after the that.

Here’s my breakdown:

• Cable television   $29.99 (75 channels)
• Internet                  $40.00
• Home Phone:        $1.67 ($19.99 per year)

Total:                            $71.61  per month

Monthly Savings: $27.34 per month Yearly Savings: $328.13

Bottom line, if you have to spend money to save money, you are NOT saving money.

Tags: budget, credit, credit tip, money, saving

Many people who have credit issues are misinformed about credit repair companies.  Many consumers feel that these companies are all scams. Like in any other industry, there are those that are not honest. However, there are reputable companies like Integrated Credit Specialists that seek to educate consumers.

Credit restoration can be a lengthy process and requires a lot of work.  Just like you can do your own taxes, you can repair your own credit. However, due to knowledge and time involved most people choose to use a professional.

If you decide to use a credit repair company, watch out for the following:

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company advises you to dispute all of the negative information in your credit report, regardless of its accuracy or timeliness. You can be prosecuted criminally for disputing information that’s accurately and timely reported.
• The company makes claims such as: “We can erase bad credit”, “Remove negative credit! Guaranteed!“

In conclusion, credit repair companies cannot do anything for you that you cannot do yourself. But, if you do not have the time, knowledge, or patience to work on your own credit, you should hire a professional.

For more information about the Credit Repair Organizations Act  click here.

Tags: credit, Credit Repair, Credit Scoring