Categories
Budgeting & Saving

How to Fix Bad Credit?

Wondering how to fix my credit myself? Or how to fix bad credit? There's no doubt that living in the modern world requires credit. Yes, you can live without a credit card and survive on cash or cashback debit cards.

I know because I did it for over two years as I paid off credit card debt. But what I really wanted to do was improve my credit score immediately.

However, when you are ready to buy a house, you'll need to get your credit straightened out. In this post I'll discuss getting a credit repair service as well as what steps you need to take if you decide you want to fix your credit score yourself. You might even be able to fix your credit in just 6 months.

These steps are so easy. Perfect guide for do it yourself credit repair.

Related articles from our approved partners:

How Can I Fix Bad Credit Myself? - 6 MonthCredit Repair Guide

First, watch this video from my friend Dominique over at Your Finances Simplified. He's going to tell you exactly how to fix your credit.

Watched the video? Good.
Feeling overwhelmed at the next steps?
Yep. I understand.
Let's take this step by step.

Take a deep breath. People think that having bad credit is the worse thing that can happen. But just calm down. You are taking the first steps which puts you on the right track.

Remember, it's just money.

No one is going to die. Take control and get back in the driver's seat!

Fix 1: Check Bad Credit

The first thing you'll need is your creditor information. Get the most recent credit card statements, loan balances, and installment loan reports along with addresses and phone numbers. I recommend printing everything old-school style. It's going to come in handy later.

Fix 2: Get a Free Credit Report

Then, take a second to get your free credit report from AnnualCreditReport.com. Each year you are able to pull your credit report for free from the three providers Experian, Equifax, and Transunion.

Optional: Get Your Free Credit Score

You can check an approximation of your credit score for free at Credit Sesame one of our approved partners, but if you are trying to fix your credit, you probably already know your credit score looks a little like this....

bad credit personified

But that's ok. We're going to put you on the good foot.

Fix 3: Review your credit report for errors (highlight each error).

You're getting ready to take charge and stop being a victim. Most people don't even realize what they could get removed from their credit just because of errors.

What should you look for?

Wait a minute. So, you're telling me you didn't watch the video above?

Scroll back up for me right quick and you'll find out exactly what you should look for.

Or keep reading...

Dispute incorrect names, addresses, SSN, and date of birth via the certified mail.

You will need supporting documentation and letters. You will have to write a dispute letter and include the specifics of the inaccuracies. You want to dispute inaccurate, erroneous, outdated, misleading, and unverifiable information in your credit reports.

Tired of being harassed by your creditors? Maybe you'd prefer that someone else handle all of this for you?

In that case, you might was to work with a credit repair company to improve your credit.


Are you ready to...

  • Remove bankruptcies to rebuild credit?
  • Permanently delete foreclosures and repossessions?
  • Erase debts that were in collection?
  • Completely get credit cards under control?
  • Get approved for loans?
  • Get the best financing on cars and homes?

In that case, check out our partner Lexington Law for more details on how they can help you clean up your credit report.

Finally, fixing your credit permanently also means creating good habits and getting out of debt.

How getting out of debt is like the MTV show, I Used to Be Fat.

I used to watch this TV show on MTV called I Used to Be Fat. The show documents young adults, usually high school seniors and high school graduates who want to lose weight before they start college. Each episode features a different teen. I absolutely LOVE this show. I like seeing the determination and perseverance of these kids, they are really focused on their goals. Most of them thought about quitting along the way but each one makes it to the end and they usually reach their goal.

I was thinking the other day about how the TV show is very similar to a battle with debt. When you're in debt, it can feel like you're carrying around a second person, experiencing frugal fatigue, or that you have a spare tire of bills around your waist. I know because I'm working on getting out of debt myself. I realized that there are 3 major points we can learn from the MTV show I Used to Be Fat when trying to take control of our debt.
debt

Improve Your Credit Step 1 - Give Yourself a Deadline

Before the teens even begin a weight loss program, their coach/personal trainer gives them a large tear off number calendar to place on their wall. It has the total number of days until their program completion date, and every day they rip off the next number.

It is a good idea, when you are paying off debt, to set a deadline for your debt-free date, like 6 months. Setting a deadline is a way of making your goal specific. Every time you look at that calendar or see that date it will push your brain consciously and subconsciously to make it to your ultimate goal, to reduce spending and get out of debt.

Improve Your Credit Step 2 - Check in Regularly with a Coach

Every week, the kids had a weigh in. Their personal trainer was making sure that they were on track with how much weight they were supposed to be losing at each stage in the process. Sometimes they were attempting to lose one pound a day! I never thought that was possible or healthy, but most of the teens actually accomplished it under the supervision of their coach.

If you really want to prioritize your goal of becoming debt free then you really have to give yourself check points. You can enlist the help of a friend or even a debt counselor to help you along the way. Having a good support system can make all the difference.

Improve Your Credit Step 3 - Get Rid of Old Habits and Create New Ones

When one of the teens was at a restaurant with her friends, she ordered a lean meal instead of the greasy french fries that her friends had. The personal trainer also taught her how to cook healthier meals so that she would be able to maintain her new lifestyle change.

Becoming debt-free is not a one-time goal. It has to be a lifestyle change. When I decided to start getting out of debt, I had to first evaluate why I was in debt in the first place. I had to eliminate my habit of impulse spending and replace that habit with a good habit. Now I impulse buy stocks and my portfolio loves it! It's not easy to change a habit that took years to cultivate, but with a good support system, it is entirely possible.

Are you ready to make a change?

Some of you may be thinking, I’m still young, so why should I care about my credit score? Lots of people have debt and less than stellar credit, but they’re still enjoying a cushy lifestyle. As long as I’m able to buy the things that I want, why should I be concerned? The answer is simple. Life is easier when you have good credit.

Take a look at it this way. Landlords, employers, and lenders need to determine whether they can trust you, and they look at your credit score as an indicator of your financial reputation. You may not think credit affects you greatly, but it does. When you ruin your financial reputation (a.k.a. credit score), it will take you a long time to restore it.

Poor credit affects your ability to rent, buy a car, get a home loan, and even open up accounts. Creditors don’t want to work with people with bad credit because the risk of not getting paid is very high. How can they trust that you will pay them back if you haven’t even paid others? If you’ve already tarnished your credit, here are some tips to help you fix your credit score and reestablish your life.

Improve Your Credit Step 4 - Make Your Payments on Time

This may sound trivial, but we all know that money can be tight, and skipping payments on one bill can help pay for other expenses. But, timely payments are the biggest factor affecting your credit score. Keep a budget, and make sure you have sufficient funds to make your credit card and loan payments on time.

Improve Your Credit Step 5 - Consider Getting a Secured Credit Card

Obviously, it will be very hard to get a regular credit card if you have bad credit. If you don’t qualify for a credit card, you can get a secured card instead. This is when the bank gives you a credit line equal to the deposit you make. If used wisely, a secured card can help nurse your poor credit to better health.

Improve Your Credit Step 4 - Add an Installment Loan

You can improve your score quickly if you show that you can be responsible for both major kinds of credit: revolving (credit cards) and installment (mortgages, auto, student loans, etc.). If you don’t have an installment loan and feel you are ready to handle one, consider adding a small personal loan. Stay away from expensive finance companies and “teaser” deals, and use a company that reports the loan to all three credit bureaus.

Improve Your Credit Step 5 - Avoid the Minimum Payment Trap

Credit cards come with high interest rates. We all know how our $2,000 computer ended up costing $8,168 because we only made the minimum payments at 20% on our credit card. Ouch, that hurts! Keep constant payments on your credit card (and don’t run them up again) and your balances will drop.

Improve Your Credit Step 6 - Use Your Credit Cards Lightly and Check Your Limits

Even if you pay your bills on time and in full each month, having big balances can hurt your score. Try to limit charges to 30% or less of your card’s limit. Lenders typically like to see a big gap between how much you’re charging and your available credit limit.

Improve Your Credit Step 7 - Keep Old Credit Cards

Don’t close out old credit cards. The longer your credit history, the better. Leave the accounts open but once you pay them off, stop using them. Closed accounts tend to bring down your score.

Improve Your Credit Step 8 - Suspend Credit Inquiries

The more credit inquiries you have, the more your credit score drops. Fix your credit and wait a while before allowing your credit to be pulled again.

Improve Your Credit Step 9 - Get a Goodwill Adjustment

If you have been responsible about paying your credit cards on time, the lender may agree to erase a late payment from your credit history. For more troubled accounts, communicate with your lender about possible options to erase previous delinquencies. If the lender agrees, it will improve your overall record.

Improve Your Credit Step 10 - Check Your Credit Report for Errors

You can check your credit report without negative scoring (once per year, for free) with the three credit bureaus at AnnualCreditReport.com. Make sure to look for any mistakes that could be hurting your score. If you see something wrong, make the effort to have it corrected.

Improve Your Credit Step 11 - Seek Professional Help

If you are overwhelmed with debt and don’t feel you can handle the problem on your own, consider working with a professional debt relief agent. They can help you explore your options and give you guidance on this post

It’s very easy to ruin your credit, but it takes time to build it back up. No matter how bad your credit is, you can take steps to make it better.

Sometimes we mishandle our budget, and we spend more than we should. (You know that you shouldn’t have bought that expensive flat screen TV). And, sometimes we end up in tough financial situations because of things beyond our control. Whether you have experienced job loss, illness, or another type of financial disruption, it’s important to know that you can turn things around.

It may not be easy, but step by step, you will be able to fix your financial situation. Just don’t delay facing the issue. The longer you wait, the harder it is for you to recover.

Categories
Homeownership

4 Proven Ways to Save Money as a Renter

This post is sponsored by Fidelity Investments®. All thoughts and opinions are my own. Fidelity does not adopt, endorse or sponsor any other content on this website, including links to other third-party websites and is not responsible for any views expressed outside of this sponsored post.

Renting an apartment can be both an exciting and slightly stressful experience. Having a place of your own will grant you freedom but many financial responsibilities will be added to your plate as well.

Given the high market rent rates throughout the country, along with expenses like utilities, food, parking fees and a security deposit, many first time apartment renters are searching for a way to cut back on costs so they can avoid struggling financially.

Consider some of these money saving tips before looking for your next place.

Choose an Affordable Area

Location is very important when you’re trying to get more bang for your buck. The area that you choose to live in can significantly affect your rent. Most of the time, housing in a large city is going to be more expensive than in a small suburb.

But apartments closer to shopping malls, tourist attractions, and popular high-traffic areas of a city or suburb are going to cost more. The idea is that people who choose to live near these conveniences are willing to pay more.

Skip All the Amenities

Apartment complexes that have a gym, pool and clubhouse are nice, but if you’re trying to save money on rent, they may not be the best option. The apartments with the most amenities and luxury features will have higher rent because the tenants are expected to help pay for the extra add-ons.

If you leased an apartment at a complex that has a private gym and a hot tub, you may be paying an extra $100 in rent for luxuries you don’t often use. If you think your car will be safe parked outside of your apartment year-'round, then opt out of spending the extra $20 or $30 per month for a parking space.

It’s nice to have these things nearby but by choosing a basic apartment that has everything you need and little extras can really help you knock $200+ off your monthly rent. That will help you save $2,400 a year or more. That extra cash can go toward debt repayment or even help boost your savings.

When it comes down to it, you have to ask yourself what you value more and choose an apartment that fits your expectations in value, quality and affordability.

Get a Roommate

Living with a roommate can significantly lighten the financial burden that comes along with renting your own place for the first time. When you split the costs of rent and other bills, you’ll both save some money and you won’t be expected to pay for everything yourself.

If you choose to get a roommate, you’ll have to be okay with sharing your living space. Make sure you pick someone you can get along with and who has similar goals and values as you. Drafting up a brief agreement would be a good idea to lay out ground rules and make sure you and your roommate are on the same page. You’ll also want to make sure that both of your names are on the lease so you’ll both be equally responsible for paying the rent each month and maintaining the apartment.

Lower Your Utilities and Bills

As a renter, your landlord may cover some of the utilities like garbage and water and make a few repairs here and there, but you will likely be responsible for paying your own way as well covering your electricity, internet, gas and so on.

It’s very rare that a landlord will pay your electric bill because this utility can vary a lot based on your usage and it’s usually the most expensive bill you’ll have. Therefore, it’s important to do a quick sweep through the house before you leave for the day to make sure everything is turned off and if you have programmable thermostat, set it to automatically reduce heat or air at certain times during the day or night.

Budget

Delay turning your heat on for as long as you can during the fall and do the same with your air conditioning in the spring. Be very conscious of how often you use certain things in your home and try to conserve energy, water usage etc. You can also reduce your cable expense by opting for the most basic cable package. You can track your spending and saving using a tool like Cinch from Fidelity. With Cinch you can see your spending in one place and create a customized savings target. I can think of several times that I missed a payment because I didn't pay attention to all of my spending. Cinch helps with this.

Living on your own for the first time is full of financial challenges making it crucial that you prioritize your spending and cut expenses however you can.

Figured out the renting thing and looking to take the next step? Use this helpful tool from Fidelity to see if you should rent or buy.

Learn more about MyMoney, a website created by Fidelity Investments® to help you make sense of your personal finances. Fidelity Brokerage Services Member NYSE, SIPC.

Originally posted 2016-03-14 09:00:34.

Categories
Budgeting & Saving

3 Simple Ways to Travel on a Budget

At some point in your life the travel bug hits you. For some people it happens earlier than for others. I remember always wanting to travel. So much so that my career ambition was to be a travel agent. After speaking with my guidance counselor, I learned that my career of choice was not as viable as I had hoped. So I decided to travel for fun instead. I traveled out of the country for the first time while attending college.

In college I signed up for a study abroad program. If you are still in college I highly recommend this way of travel as a first timer out of the country. It's an easy way to get acquainted with the whole process of leaving the country. Spending time outside of your natural habitat and in unfamiliar surroundings really helps you grow as a person. But travel can be expensive and as a college student or recent graduate, you have to watch every penny. So here are some tips to travel on a budget.

Plan Your Travel Budget

If you are a recent college graduate, then you may not have the money to blow on a five-star vacation to Dubai. But if travel is important to you then you should at the very least have a travel budget. I have a separate 'savings' account that is specifically for my spontaneous travel and each month I put aside 25 dollars. This process is as simple as setting an automatic transfer and at 25 dollars it doesn't affect my normal budget significantly. If there is not enough in my normal discretionary spending for a plane ticket, I can tap my travel savings account. I also try to deposit extra money in that account when I have it. This is savings in addition to my 401k and emergency account savings so I feel absolutely no guilt about emptying it every few months. I recently went to the Bahamas for my birthday and I emptied my travel account to enjoy a dolphin encounter. It was amazing! And I am already beginning to save for my next trip.

I want to make two important notes here. Nothing should trump your normal savings plan and you shouldn't 'dip' into normal savings for a trip. Secondly, it's OK to enjoy what you've worked so hard for! Just don't let it put you off track of your ultimate goal. But traveling doesn't have to be expensive and I'm going to tell you exactly how to budget for travel.

Search for Deals to Fit Your Travel Budget

While saving money for travel is beneficial, it’s important to stretch that travel dollar as far as it will go. Searching for deals on flights and hotels can help you save even more money. Try Kayak.com to find flight deals leaving from your city. You can also set an alert to track the flight prices as they fluctuate. I search for flights with Kayak and watch the confidence meter. It estimates whether the price of a flight will increase or drop over the next seven days. And snagging a good deal while it’s hot is a great method to stretch your travel dollar.

BONUS: Maximize Your Travel Budget

One of the best ways to travel on a regular basis is by using points or Miles that you earn with everyday purchases. For example, with the Discover it® Miles card, you can earn 1.5X Miles on every dollar spent. The card also allows you to fly any airline at any time. And you can also redeem your Miles for a variety of travel purchases including hotels or rental cars! As a new cardmember, Discover will automatically double all the Miles you’ve earned at the end of your first year on your Miles card. Now you can travel even more.

Traveling as a college student or recent college grad does not have to be expensive. If you take the time to search for travel deals and put money aside into a travel fund, you can travel more often this year. And by using a card like the Discover it Miles card, you can even maximize your travel budget.

This post was created in partnership with Discover.

Originally posted 2016-01-27 16:58:57.

Categories
Investing

How to Create an Automatic Investing Plan

This post is sponsored by Fidelity Investments. All thoughts and opinions are my own. Fidelity does not adopt, endorse or sponsor any other content on this website, including links to other third-party websites and is not responsible for any views expressed outside of this sponsored post.

Let’s face it, learning to invest can be scary. The thought of investing can often seem like giving away your money with no idea when that money will return. On the other extreme, it could feel exciting, like you are on the verge of earning a large payday. While it’s natural to be apprehensive when you’re just learning to invest, letting your emotions get the best of you could cause you to withdraw your money from the markets before you have a chance to earn anything. On the flip side, becoming overly-excited or confident could cause you to make irrational decisions as well. As a general rule, it’s best to leave emotions out of the equation when it comes to investing. One way to do it involves a strategy called automatic investing.

Automatic Investing Like an Intelligent Investor

A few years ago, I read a book and it has shaped the way that I invest ever since. In the book, the author Benjamin Graham, recommends a diligent, steady approach to investing. For example, income investors diligently consider future dividends when looking for dividend paying stocks. Choosing to automate your investment plan following a diligent, steady approach can help to remove emotions from your investment strategy, and help you become a more intelligent investor.

How To Invest on a Regular Schedule

Investing on a regular schedule makes the process of investing an automatic activity. As measured by the S&P 500, over the last ten years, the broad market index has returned 6.8% on an annual basis, including dividends. While past performance is no indicator of future results, and all investing involves risk of loss, this example can help paint the picture. An investor that chooses to buy and sell based on concern and excitement, might see investment returns different from the broad market index; especially since the market has seen some significant highs and lows over the last ten years. Let’s take a look at how a monthly deposit could change things.

Depositing on a Regular Basis

Depositing just $100 per month on a consistent basis is better than sporadic deposits. Here’s why. Automatic investing removes the human element. The easiest way to create a monthly deposit plan is to use the percentage system. With this system, you portion out your necessary expenses, rent, utilities, etc, and then you take a percentage of the remaining income for goals. If you have $500 per month remaining after your bills are covered, then a twenty percent investing goal would allow you to put $100 away each month for investing.

Take Advantage of Free Money

Your employer can also help you invest on a regular basis. If your employer offers a retirement plan such as a 401(k), check to determine if they also offer a matching contribution. A matching contribution works like this: when you choose to put away a portion of your salary into an employer sponsored 401(k) plan, the employer will choose to contribute as well. The "match" depends on the specifics of the plan. Some employers will contribute dollar for dollar while others may contribute 50 cents for each dollar you contribute. Then, check to see what funds are offered as options in that 401(k). Each time you receive a paycheck, your choice of contribution percentage is automatically deducted from your paycheck and allocated to the funds that you choose. And if your employer matches your contribution, then you are getting additional free money towards your retirement fund.

Emotions can cause you to make irrational decisions when it comes to money. But learning to invest without those emotions is possible. An automatic investment plan can help you begin building your confidence and a nest egg as well.

Learn more about MyMoney, a website created by Fidelity Investments to help you make sense of your personal finances. Fidelity Brokerage Services Member NYSE, SIPC.

Originally posted 2015-12-16 10:00:02.

Categories
Budgeting & Saving

What’s the Deal with the New EMV Cards?

Whenever I shop in Target I always have a goal to spend less than $100.

I swear, I try to limit my purchases but I always seem to find something that I need!

I think it's the bull’s-eye that draws me in.

On a recent trip to Target, I was in the self-checkout line and I swiped my credit card. Normally, as soon as I swipe my card, I see the receipt printed a few moments later and I’m on my way; my wallet approximately one hundred dollars lighter. However, this time, the screen prompted me to insert my card. “What?” I immediately thought. What if the machine eats my card? But I inserted my card and my transaction finalized a few moments later.

You might have had a similar experience in the recent months. On October 1, the U.S. credit card industry completed the formal migration to EMV chip-enabled credit cards. When I swiped my card at Target, I was prompted to insert my card in the terminal so that the chip could generate unique, dynamic data. So what is the deal with these EMV chip cards?

The implementation of enhanced security measures such as chip-enabled cards in the United States was prompted by the new “BuySecure” initiative, put into place by executive order. Identity theft is a serious issue. In 2014, the FTC reported identity theft as the top consumer complaint with a total of $16 billion stolen from 12.7 million fraud victims in 2014. The same 2015 Identity Fraud study found that in 2014 a new identity was stolen every 2 seconds. With such a prominent issue affecting Americans, President Obama signed an executive order to protect consumers from identity theft and a component of that “BuySecure” initiative includes implementation of the new chip technology.

Discover has created an EMV resource center to answer questions that you might have as a consumer. Here are a few questions that I had and answers that I learned from Discover.

How does the security of a chip-enabled card compare to a non-chip card?

  • The new chip cards have an extra layer of protection against fraud at point of sale. If you don't have a chip card, or the merchant you are shopping at isn't EMV ready, your magnetic strip card will still work the same way as it always has.

How does the chip-enabled card work?

  • Using a chip card is simple. At chip-enabled terminals, consumers can insert their cards into a terminal and follow the guided instructions on the terminal screen. In the case that a retailer does not have chip-enabled terminal, consumers can use the magnetic stripe on their card as they’ve always done before.

How are EMV cards more secure?

  • The microchip in chip cards generates unique, dynamic data every time a consumer completes a transaction in a store, making it harder for fraudsters to collect their card information. In turn, it is more difficult for hackers to copy and use credit card information.

While it might be an adjustment at first, ultimately, the EMV card technology aims to make each transaction more secure. And even though the technology can’t cure me of my Target shopping addiction, or change how much I spend on each visit, at least I will feel more secure knowing that those purchases are my own.

This post was created as a part of the Discover partnership program.

Originally posted 2015-10-26 10:00:30.

Categories
Earn Extra Income

Top Ways College Students Can Earn Extra Money

Good students spend the extra time to get better grades. Sometimes that means late nights, missing out on fun, and stressful days. But getting good grades can also mean more cash in your pocket. You can often get approved for more financial aid if you have good grades in college, and you may even get scholarships. However, scholarships are not the only way to get paid for good grades. Here are a few more ways to benefit from good grades.

 

Save Hundreds by Skipping College Classes

You can begin earning extra money as early as middle school. If you are a relatively good student and you choose the more difficult classes, you might get an advanced placement in high school. This will allow you to skip some lower level college courses which could save you hundreds. If you skip enough classes, you might even be eligible to graduate early, saving thousands and starting your career early.

 

Get Cash Back on Your Student Loan

If you decide to borrow student loans, consider this: good grades can mean cash. Some student loan servicers offer incentive programs that will give you cash back based on regular payments or auto draft payments. But others will offer cash back simply based on the grades that you earn. Consider the Good Grades program from Discover Student Loans that offers 1% cash back on each new student loan if your GPA is a 3.0 (or equivalent) or higher.

Get Rewarded with Cheaper Insurance

As you begin paying your own bills, you might be surprised to find out that your good grades can earn you cheaper car insurance and even cash back on your credit card. Insurers like Allstate, Nationwide Geico and State Farm, offer discounts up to 25% off your monthly bill. If you pay $100 a month for car insurance, that could mean a savings of up to $300 dollars a year! Add that to the cash back your good grades could earn you via your credit card, and you will have extra cash to grow an emergency fund or save for a short getaway.

 

Get Rewarded with Credit Card Cash Back

The Discover card gives cash back for good grades. Discover card recently launched its Good Grades Reward Program, which exclusively rewards new student cardmembers who apply after July 23, 2015 with $20 in Cashback Bonus® if their grade point average is 3.0 (or equivalent) or higher each year they are enrolled in school, for the first five years from the account opening.

 

The Good Grades $20 Cashback Bonus is in addition to the current rewards structures for the two student credit cards Discover has available:

 

Discover it® chrome for Students offers an automatic 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases quarterly.

 discover it chrome

Discover it® for Students offers 5% cash back in categories that change each quarter, up to the quarterly maximum in combined purchases, when you sign up.

discover it

Both cards earn 1% cash back on all other purchases.

 

Now you have no reason to complain that college only drains your bank account. With these programs you can easily earn extra money as a college student. Making the choice to study on the weekends instead of party? Well, that’s a totally different story.

Originally posted 2015-09-16 10:00:00.