| Additional
Resources about Credit Reports |
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| Credit
Check-Ups Start with Your Credit Report: get
your report |
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you
will be connecting to our affiliated sites
within the
SayPlanning / SayLending network
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Tell
Me About My Credit Report |
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The
credit report is a history of your activity
in repaying debt obligations |
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Banks, lenders, and even many employers
use the credit report to approve you
for a loan and in many case, employment.
Your credit report shows a history
of your credit transactions and your
behavior on repaying your obligations
in a timely manner.
see our
credit report summary sheet
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What
is a Credit Score |
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Credit
scores above 700 get favorable interest
rates |
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The credit score
is a mathematical calculation the measures
your capacity to repay a loan. Lenders
often use the credit score when reviewing
an applicant's request for credit.
An applicant with a high score will
likely receive instant approval with
better than normal rates and terms —
which means lower cost when borrowing
money.
view credit
score summary list
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Checking
Your Credit Report |
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The
risk of ID Theft requires a frequent check
of your credit report |
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You need to check it for accuracy.
A tarnished credit report can lower
your credit score. That can cost you
money and career opportunities.
Identity theft if another
reason why you should check your report
regularly. Identity theft occurs when
someone assumes your name and social
security number to open credit accounts,
divert card statements to another address,
and drive up debts.
Identity theft can destroy your credit
and trap you into a complicated process
to clear your good name and background.
Federal law now requires reporting
agencies to provide FREE
of charge your credit report
on an annual basis. However, you might
consider credit monitoring services
to detect fraudulant activity to your
account.
credit
report services and monitoring
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Understanding
My Debt Ratio |
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Lenders
use a ratio between your income and debt
obligations to approve or decline credit
requests |
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The debt ratio is the amount of monthly
loan oblibations that you have as compared
by your monthly income. Example:
If your monthly income is $4,000
per month and your monthly debt obligations
is $1,200, your debt-to-income ratio
is 30% ($1200/$4000).
Debt obligations include mortgage
or rent payments, auto loan payments,
loan payments, credit card payments,
alimony, and other payment obligations.
Lenders like to see debt ratios of
36% or below. A debt ratio above 36%
places you in a high risk area where
some lenders will decline your credit
application or charge you more interest.
link to debt
ratio calculation
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Building
Credit for the First Time |
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Building
a strong credit record will ease your need
for credit cards, mortgages, and other future
credit needs. |
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If you are
new to the credit game, such as
a recent HS graduate or divorcee,
it is important that you establish
good credit habits at the beginning
of your credit-use life.
Good
credit habits will help when you
need to buy a home, apply for a
key career position, start your
own business, and manage your finances.
There are three
criteria that establishes good credit
(commonly referred to as the "three
Cs":
- Character:
the measurement of your "willingness"
to repay the debt (measured by
your past credit experiences,
length of employment, length of
residence, etc.)
- Capacity:
the measurement of your "ability"
to repay the debt (measured by
your employment, income, current
outstanding debts, monthly expenses,
etc.).
- Collateral:
the measurement of available "resources"
that the lender can assume in
the event that you fail to repay
the debt (savings, property or
investment).
go
to buiding your credit
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Maintaining
Good Credit |
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Good
credit management means successfully managing
your credit by paying your debt obligation
on time and for the required amount. |
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How you handle your debt obligations
are reported by your lender to credit
agencies, who keep a history of all
of your credit and loan transactions.
Any time that you fail
to make a payment on time may be reported
to the credit agencies. Example:
If you fail to make payment on your
credit card or loan within 30 days
of the payment due date, your lender
may report this to the credit agencies
as a 30-day late payment.
Your credit report will then show
"1x30", which means that
you have failed to make payments "1
time" in thirty days.
If you continue to delay payment past
60 days from the due date, your credit
report may show "1x60",
which means that you have failed to
make payments "1 time" in
sixty days.
Your credit information
is maintained for other parties
to review when you make an application
for a loan, apply for insurance, and
in some cases, seek employment.
Some lenders may not
approve your application for credit
if your report has any "1X60"
or greater on your report. Other lenders
may not give your the best interest
rate if your report shows any "1x30".
Likewise, employers who see more than
3x30, or 2x60, etc., on your credit
report may consider you at risk since
your credit history shows that you fail
to meet your credit obligations.
That is why maintaining a strong credit
report is extremely important.
click
for credit management tips
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Repairing
Your Credit |
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Your
first step is getting a copy of your credit
report from all three credit agencies |
- Check each
one thoroughly for notations made
to the report that has damaged your
credit:
click
to obtain a copy of your report
- The most likely
areas that you should investigate:
— late payments
— collections
— incorrect marital status
— incorrect account histories
— closed accounts incorrectly
listed as open
— judgments, tax liens, and
lawsuits
— credit histories of someone
with the same name or SSN,
— other
- You need to
check your report accurately and take
corrective action where needed to
remove or clean up negative assessments.
You have the right to dispute any
remark on your report that you believe
may be inaccurate or incomplete.
link
to repairing your credit report
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Managing
Your Debts |
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Good
debt management can avoid credit errors
and credit reporting issues |
- Pay on Time:
Pay your debt obligations on time, every
time.
Send payments at least 2-3 days before
the due date to ensure that your payment
arrives on time.
- Keep Good Records:
Keep and maintain all records when speaking
with your creditor. Note the date and
time, the person's name with whom you
are speaking with, the issue that you
called about, and the recommendation the
creditor offered. Request a confirmation
or other ID number that proves that you
spoke with your creditor.
These records are important proof in the
event you receive non-payment notification
with penalty fees and other "account
suspension" or "account collection"
notices.
- Avoid Late Payment
Charges:
Fees charged for scheduled payments that
are past due.
Creditors generally have a 5-10 day grace
period beyond the due date before charging
late payment fees. But note that creditors
are in the business to make money. So
many are moving the grace period back.
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Working
on a Family Budget |
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Setting
a family budget can help manage your financial
goals and spending plans |
- There is only so much money from month-to-month.
Question: where does it all go?
Budgeting allows you to track your monthly
expenditures so that you can plan key
savings strategies for important short-
and long-term goals.
- Having a financial
budget may find that about 5-10% of your
total spending may be for purchases that
are not needed.
Think about it. What could you do with
that extra 5-10%? Perhaps your future
plans include buying your first home,
going back to school, saving for your
child's college, paying down debt or simply
setting aside cash for a special trip.
A budget will identify expenses that can
be cut so that you can set goals on making
important long-term savings.
more
information about budgeting and working
with budget planning models
click
here for the online budgeting form
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Lowering
Your Monthly Bills |
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Use
our monthly spending guides to lower your
monthly costs |
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Monthly expenses can be tight when you are
paying off debts and other obligations.
A little saved in housing, food, entertainment,
and other can be used to reduce debts faster
and plan for future needs.
view
our gudes on lowering your monthly costs |
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