Today on  the Transform Your Credit From Good to Great show, Co-Host Jeff Dalverny and I spoke with special guest Scott Doerhman of  The Finance Coach in a episode called Taking Control of Your Money.

There were several nuggets from the show that I thought were very important.

1. Families need to budget monthly not yearly and divide by 12. Each month your needs change. For example, some months children are out of school and usually requires more food to be brought into the home.
2. Put your budget on paper. By writing down your budget, adjustments can be made if necessary.
3. Look at your cash flow. Many people do not know how much they actually make and/or  bring home monthly.
4. Have a goal. Studies show that when we have set goals and we write down our goals we are more likely to achieve them.

I also promised the link regarding Parents’ 5 other card choices for college-age children. Click here to read the article in full posted on creditcards.com.

For more information contact The Finance Coach at 317-858-7270 or call Integrated Credit Specialists LLC at 317-527-1440.

Tags: budget, business, credit, Credit Education, debt collection, finance, money, Money Tips, saving, savings, small business

I know you are wondering how in the heck can paying off an account lower my credit score. Yes, I know it sounds backwards that by trying to do the right thing you get penalized. Here is he scoop. I have long taught that 35% of your credit score is past delinquencies. Obviously, paying your accounts in full and on time has the greatest positive impact on your score. So why would paying a collection potentially lower your score?

Here’s why, the last 24 months of activity has the greatest impact on your score. The newer the item the more impact it has. The credit scoring model uses the date of last activity to determine when the 24 month countdown starts. (Note: accounts older than 24 months still have an impact on your credit score). If you have an older collection that has not had any activity on it and you make a payment, you have restarted the clock because you have moved the date of last activity.

Many times collection agencies will try to contact you in order to have you make a payment so that they can keep the account on your credit bureau longer. Per the Fair Credit Reporting Act, collections can stay on your report up to 7 years plus 180 days from the date of last activity. Do not fall for it!

I am not suggesting that you not pay your debts. I am letting you know that there is a strategic way to handle past collections. Here are 3 simple steps:

1. Begin with accounts reporting in the last 12 months.
2. Before you pay anything, write to the credit bureaus and request validation of the debt. Validation is not verification. Federal law specifies what is considered validation. See Fair Debt Collection Practices Act for more information.
3. If debt comes back verified, contact the collection company and negotiate for a lower payment. We suggest that you ask for a pay for delete. A pay for delete is a request that the collection company deletes the entry from your credit report when payment is received. Pay for deletes are becoming increasingly more difficult to get. But, a paid collection is better than an unpaid one.

If you are applying or going to apply for  a home, we suggest you wait until you are instructed by your lender to pay off ANY collections. If your lender tells you pay off a particular account, then they have prepared for the impact it may have on your credit score.

There is nothing anyone can do for you that you can not do for yourself when it comes to your credit. However, if you want guidance and education about credit please contact us at info@intcredit.net.

Tags: budget, collections, credit, Credit Education, Credit Scoring, credit tip, debt collection, Fair Credit Reporting Act, money, Money Tips, Real estate, savings

Don’t let your credit keep you in bondage. You are more than your credit score. Do not let a three digit number stop you from realizing you financial dream. This is an open forum where we invite listeners to call in with their questions. http://www.blogtalkradio.com/victoriafinch

Tags: budget, business, collections, credit, Credit Education, Credit Scoring, credit tip, debt collection, Fair Credit Reporting Act, finance, money, Money Tips, savings

Past delinquencies make up 35% of your credit score. Obviously paying your bills in full and on time will have the greatest positive affect on your credit score. The credit scoring model looks at the level of delinquency. For example a judgment will have a greater negative impact on your score than a collection. Always try to avoid  public records such as bankruptcy, tax liens, and judgments.

Also, activity in the last 24 months has the greatest affect on your score. When looking a credit repair strategies concentrate on activity in the last 24 months first. Pay off collections in Escrow NOT before. By paying an old collection you will make it new again because the date of last activity will change.

If you would like to learn more about credit scoring  and how past delinquencies affect your credit score, please contact us at info@intcredit.net.

Tags: banking, budget, collections, credit, Credit Education, Credit Scoring, credit tip, debt collection, Fair Credit Reporting Act, finance, money, Money Tips, savings

There is a lot of misinformation out there about what a credit score really is.  Simply put – a credit score is a 3 digit number that seeks to quantify how likely a borrower is going to be 90 days late on a payment. Why 90 days? At 90 days, lenders spend more to maintain the account. Calls increase, increased notices go out, the lender may turn the file over to another department or collection company.

Each score is specific to each bureau.  The score is generated by analyzing the information in the consumer’s credit report at  THAT particular point in time. The higher the score the less the odds of default. For instance statistically, a consumer with a credit score of 800 and above has a 1292 t0 1  chance of becoming 90 days late while a consumer with a credit score between 620 to 659 has a 38 to 1 chance of being 90 days late.

Your credit score is more important than ever. When it comes to credit what you do not know can cost you big. Stay tuned for more Credit 101.

Tags: finance, Real estate

Today credit is more important than ever. Financial institutions are supposed to loosen their lending requirements, but the opposite has happened. As recently as 18 months ago,  you could qualify for prime lending with a 720 credit score. Now,  in most cases, you need at least a 750 credit score.

As lending requirements go up, so must your credit knowledge. When it comes to credit what you don’t know will hurt you. Below I have listed  five reasons I believe consumers do not get the credit help they need.

1. Credit denial. “My credit is not THAT bad.” Your credit may not be THAT bad, but if your score is not a 750, you need to work on it.

2. Procrastination. “I’ll get around to it.” The fact is that many consumers do not get “around” to working on their credit and the financial damage continues.

3. Timing. “I am not going to apply for credit, so I can wait to fix my credit.” Credit restoration can be a long, drawn out process. If you wait until you need it, it may be too late.

4.Affordability of credit repair. “I can’t afford to pay someone to fix my credit.” The fact is, there is nothing a credit repair company can do for you that you cannot do yourself. If you are not going to take the time to work on your own credit, you cannot afford not to get help. Which brings me to number five.

5. Underestimating what your credit is costing you. Even with today’s rates you could be paying more than over $3400 per year in interest on a $200,000 home if your credit score is a 620 versus a 760. That’s OVER $280.00 per month. Could you use an extra $280.00 per month? For more information see mortgage calculators on banrate.com and myfico.com.

Do not play into the hands of the banks by not working on your credit. If you do not have the time, knowledge, and patience to work on your own credit, hire a professional. Working with the right professional will save you thousands of dollars in the long term.

Tags: Credit Scoring, credit tip, FDCPA, homebuyer, Money Tips, saving, savings

It’s 8:00am on Saturday morning and you are looking forward to sleeping in. Suddenly you are awakened by the telephone ringing. You answer the phone only to be greeted by, “Is this….”  it is a debt collector. As you wipe your eyes, the debt collector begins to telling you “This is a an attempt to collect a debt, any information obtained will be used for that purpose.”

Most debt collectors are very good at informing consumers that they are attempting to collect a debt, how much the alleged debt is, and telling you to pay up. But there are things you need to know that a debt collector won’t tell you. Knowledge is power. A debt collector won’t tell you:

1. You do not have to disclose personal information such as place of employment, banking information, and  sources of income.
2. You can prevent debt collectors from calling you by notifying them in writing to stop calling you. Once the debt collector recieves written notice they can only contact you to tell you they won’t call you anymore or to notify you what actions they may take such as filing a lawsuit.
3. You may be “judgment proof” or “execution proof”. If you are unable to meet your current living expenses or you recieve certain types of income they cannot collect from you.
4. They are attempting to collect on a debt that is past the statute of limitations. If you make a payment, you renew the debt.
5. They may not report to the credit bureaus. Not all collection companies report the credit bureaus.
6. Debt collectors cannot call you before 8:00am or after 9:00pm,. This time is based upon your local time not theirs.
7. Debt collectors cannot use profane or abusive language.
8. You can report any problems you have with a debt collector to your state Attorney General’s office (www.naag.org) and the Federal Trade Commission (www.ftc.gov),
9. It is imparative that you familiarize yourself with the Fair Debt Collection Practices Act (FDCPA). This federal law protects consumers against unfair debt collection practices.
10. That you may be able to settle with the debt for pennies on the dollar.
11. That medical collections should not appear on your credit report due to current privacy laws. Your medical information is protected under the Health  Insurance Portability and Accountability Act (HIPAA).

Knowing your rights is the first step to dealing with any debt collector. Familiarize yourself with the FDCPA and other consumer protection laws by visiting www.ftc.gov,

This article is also posted on http://www.examiner.com

Tags: collections, debt collection, Fair Debt Collection Practices Act, FDCPA, HIPAA

After a bankruptcy filing many consumers feel that their credit is ruined. Consequently, they do not check their credit reports. There are two major issues with that train of thought. First, bankruptcy will hit your credit hard, but your credit can recover. Secondly, even though your credit score is typically lowered by a bankruptcy there are steps you can take to minimize the impact.

Steps To Take:

1. Get a copy of your credit report. You can obtain a free one by going to http://www.annualcreditreport.com (I suggest you do this 3-6 months after discharge).
2. Carefully review your credit report for errors.
3. Make sure any account listed in the bankruptcy is notated as “Zero” balance and “Included in bankruptcy”
4. Also review the public record section of your credit report to ensure that judgments included in the bankruptcy have been released and are notated “bankruptcy”
5. If you find errors on your credit report, send a letter of dispute to the 3 credit reporting agencies.

Be diligent in your efforts. Dealing with credit reporting agencies can be time consuming and frustrating. If you feel you would like to consult a professional please contact me at 317-410-4110 or email: info@intcredit.info.

Tags: banking, bankruptcy, credit, Credit Scoring, credit tip, money, Money Tips

According to Moebs Service, an economic research firm, banks in the United States are poised to make $38.5 billion in customer overdraft fees this year.  Most of these fees will come from financially strapped customers.  I often hear clients complain about bank fees. There are steps you can take to avoid these bothersome fees.

1. Keep track of how much money you have in your checking account by keeping your account register up-to-date.
2. Pay special attention to your electronic transactions. Don’t forget to record your ATM withdrawals and fees, debit card purchases, and online payments.
3. Don’t forget about automatic bill payments you may have set up for utilities, insurance, or loan payments. I advise you do not use automatic bill payment. Online bill pay is a better option. You can control the date something gets paid.
   
4. Know your banks cut off time for deposits. Most banks will post deposits to the next business day if the deposit occurs after 4:00p.m.
5. Take advantage of overdraft protection program that your bank offers.
6. Avoid making deposits at the ATM. They can take longer to post.
7. Ask the bank to only honor your debit VISA/MASTERCARD purchases if you have the available funds.
8. Avoid point-of-sale fees by opting to sign for purchases instead of using your pin.
9. Ask your bank to waive fees. It never hurts to ask.
10. Review your account statements each month. Between statements, you can find out which payments have cleared and check your balance by calling your bank or by checking online or at an ATM.

If you find yourself constantly getting bank fees, I would advise you to stop using your bank account and pay with cash or money order. Beware of using money orders unless they are from the post office. It may be difficult to get your funds back if you decide not to use it.

Tags: bank fees, banking, checking, Money Tips, savings