Empowering Your Credit In The New Year

Now that the new year is upon us, it is time to start on our resolutions for the year. My group of friends all discussed what we wanted to work on this year to better ourselves and the  lives we live as we sat painting miniature figurines. A couple of us are looking to hit the gym more frequently while Chris wanted to work to progress his hobby. As we conversed over our drinks and brushes, my good friend Rylee said “I want an 800 credit score!” We all looked at him and asked what his game plan was to get his credit in order…his response… “I have no idea where to even start.”

Rylee, this blog is for you to go over 4 easy steps to begin empowering your credit and hopefully, get you closer to that 800 credit score!

Step 1- Be Informed

If I asked you off the top of your head “what is your credit score” you would probably respond with a broad range of numbers; ” I am around six or seven hundred maybe?” The first step to credit empowerment is to become well acquainted with your credit score and the items associated with it.  Thankfully, there are many different sites out there that can provide all three bureau reports along with each items listed information. Credit Armor is a wonderful sight that provides all three bureau reports, debt negotiation options, in depth item information and identity theft protection to assist you while empowering your credit.

Thanks to the Fair Credit Reporting Act, you can claim  a free credit report once every 12 months from all three credit bureaus as well!  To get your free reports, visit AnnualCreditReport.com!

Step 2- Start Correcting Your Errors

Now that you have an full copy of your report from all three bureaus, it’s time to start correcting your errors! Did you know that over 70% of Americans have a reporting error listed on their credit report? These errors can be anything from incorrect addresses to manner of payment issues. Any information on your account that is listed incorrectly could be harming you in an area that you have never noticed!

Step 3- Make Your Payments

There are many factors on your credit reports which can influence your FICO Scores such as your credit mix and types of credit . But the most important information that can hurt your score is your payment history . Payment history affects over one-third of your FICO Score—35%, in total!

To build yourself up for success, be sure to make these payments on the date and track your payments made. If needed, review your financial obligations and make a payment calendar to keep track of when exactly a payment is due and the funds are withdrawn from your account!

Step 4-Tackle Your Debts

Now that you have review your items that are listed incorrectly and assessed your financial situation, it is time to deal with your existing debt. Your credit utilization rate (the amount of credit you use from your credit cards) has a significant impact on your score. A good rule of thumb is to keep your credit utilization rate as low as possible and make payments higher than the minimum to keep those low rates.

Keep in mind  that the credit card balance that is appearing on your credit report could be different than your actual account balance. Many credit card issuers only update your account information with the credit bureaus once a month.

 

There is much more that goes into building your credit that just paying your cards and disputing some infractions, but that is a subject for a different blog. This is meant to be the starting point for Rylee and all of those out there that do not know where to begin.

Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help.

If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

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Credit Law Center Christmas Shopping

12 Credit Tips for the 12 Days of Christmas

With the holidays quickly approaching and the festivities in full swing, your budget is going to take a substantial hit. Whether it be a Christmas Vacation, holiday parties or gifts for your loved ones, the end of the year normally brings financial strain for most. In today’s blog, we are going to attempt to take away some of the stress of overspending with some helpful tips and tricks you can use to make life easier during the holidays.

 

Tip #1- Budget

I get it, with the current state of the world post Pandemic and the current state of the economy, budgeting is much easier said than done. Planning is not a sure-fire way to ensure that your finances will be healthy at the end of the year, but it can decipher how you will enter the new year. My fiancé loves to use this budget template when she wants to reevaluate finances and spending habits.

 

Tip #2- Make a List, Check it Twice

Appliances go out, things come up and surprise purchases appear. Along with budgeting, keeping a list with allocated emergency or “surprise” funds is always handy to have readily available when the unexpected happens.

 

Tip#3- Compare Prices

As the self-proclaimed “Ebay god”, price comparing is something I personally love. It is like a scavenger hunt for the best deal and occasionally, you can find amazing deals. Outside of online shopping, depending on the merchants inventory, small deals can really add up over time!

 

Tip #4- Choose Vendors Carefully

This one goes hand in hand with price comparison and I experienced this situation the other day. The Fiancé picked up a curtain rod from an “At Home” type store for a fairly high price. That evening I went to a supermarket and found the exact same rod for almost 15 dollars cheaper! Save yourself the hassle and do some prior research about your purchase. Be confident you are getting the best deal… and do not pick up a shower rod for $40!

 

Tip #5- Cash is King

It is exceptionally easy to over extend yourself financially during the holidays, but make sure your generosity does not put you in the red. To avoid overspending and high interest rates, try to purchase your gifts with cash. This also keeps you from spiraling into what I call “The Holiday Pit” from using your credit card for each purchase. This is when a consumer is unable to keep up with the interest rates they experience from their holiday purchases.

 

Tip #6- Save That Money

When I was younger, I would always freak out when Christmas time came because I never had finances to spare. With 12 months between the holidays, I learned to save a little bit every paycheck to help around the holidays. I went to my bank and added a “Christmas Funds” savings account and would toss $10 in ever pay check. Though it isn’t a huge amount, this left me with $240 to use for my holiday purchases.

 

Tip #7- Search for Sales

This tip ties into tip #3 closely. No matter if you shop online or venture out to a brick-and-mortar store, everywhere has sales going on at some point. Cyber Monday deals, Black Friday, Labor Day and Summer Sales are just a few ways you can find some amazing deals for the holidays…or for yourself!

 

Tip #8- Say No to “Buy Now, Pay Later”

During the holiday season, many retailers try to offer ways to make a purchase now and pay for it later. Be sure to be extremely cautious with these offers and read the fine print to make sure you are not penalized when making payments early or late. Also, keep an eye out for the interest rates associated with the tactic, it could end up costing you more than the product was originally listed for!

 

Tip #9- Track What You Spend

This one comes from the Fiancé (as she is extremely strict when it comes to list creation and management). If you need to use your credit card for purchases, make a list of your budget and deduct the purchase from the amount. This way, you can track how close you are to your maximum budged and you can make sure you are not overextending.

 

Tip #10- Know What You Owe

Piggy backing off tip number 9, keeping track and documenting what you owe can save you the headache of interest rates and overspending. Keep your receipts or keep a log of your purchases so that you can refer to them when budgeting and spending. Knowing what you owe before the bill comes in will help keep you out of debt and set you on track to eliminate any debt you may have.

 

Tip #11- Budgeting for the New Year

Assess how much disposable cash you have each month to pay down credit card balances and use the remainder toward holiday debt. Paying more than the minimum balance will keep you from having to combat interest rates and going upside-down on your purchases.

 

Tip #12- Do Not Overextend

The final tip is harder than it sounds but happens to many of us. Do not let your generosity be your downfall and don’t go overboard. With holiday deals and new ways to purchase, ask yourself, “does Grandma really need the 6 speed, Bluetooth enabled, Alexa compatible blender so she can smash protein shakes before leg day at the gym?” The answer is no, a regular blender will do the same thing and she will still be able to dominate at the gym. All jokes aside, flashy does not mean better…but it does mean more expensive!

For more information about your credit score, please give Credit Law Center a call at 1-800-994-3070.

A note from the author:The opinions you read here come from our editorial team. Our content is accurate to the best of our knowledge when we initially post it.

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Debt Collectors and Social Media

Since the beginning of the pandemic, the amount of debt  held per average American citizen has increased exponentially. With more debtors comes more collectors looking for new ways to track down those who owe them money.

With the implementation of new collection rules, debt collectors have new means of chasing down debtors outside of mail and phone calls.  Now debt collectors have the ability to reach you through social media platforms such as Facebook and Instagram in an attempt to collect.

The new changes to the Fair Debt Collection Practices Act (FDCPA), which is designed to  reduce and eliminate abusive debt collection practices, saw their first integration during the Trump administration when the Consumer Financial Protection Bureau (CFPB) looked to provide assistance to the business community.

Kathy Kraninger, The CFPB director at the time, said these new rules were meant to “modernize the legal regime for debt collection.”

With this new rule, the fear is that this expanded access to consumers through social media platforms could contribute to new ways to harass struggling consumers.

TransUnion reported that this year, 77.6 million consumers had at least one debt in collections leading to a total of 118 billion dollars of outstanding debt.

The collection industry praised the update, arguing that text and email are now the preferred methods for communication for many people.

“The CFPB’s debt collection rule is a small step forward in modernizing communications with consumers,” Mark Neeb, chief executive of ACA International, the association of credit and collection professionals, said in a statement.

  Article by Joe Peters Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help. If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.
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