We teach our children about many things – some sensitive topics are even being taught at younger ages than ever. But while we can seemingly tackle the most controversial of subject matter with our children we still seem to be unable to talk about money – something that impacts us on a daily basis. Why – with so many seemingly more difficult subjects becoming the norm to discuss – is money still such a taboo?
I decided to take the stigma off of money with my own children and get right down to business as soon as they were old enough to understand even in the simplest of terms. It began early when they each had their own piggy bank and saved for small things that they wanted. I have tried to be as open as possible when it comes to money – something that was not talked about openly in my own home as I was growing up with my parents. Now that my oldest child is entering high school I am taking the discussion one step further by beginning to talk about financial responsibility and the impact of that on a credit report.
No one explained to me the importance of a credit report when I was her age. And while I know that it may not sink in the first couple of times, I will continue to have the conversation until she understands that actions have consequences; and I will do the same with my younger daughter when she is old enough.
In preparation for this conversation I have ordered free credit reports on my own behalf so that I can show her in detail what a credit report entails. I also plan on sharing stories from my younger years in college when poor decisions had an impact on my credit report for many years to follow.
It is my hope that addressing money openly will make it something that my daughters can manage with confidence.
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Several years ago I went through a terrible divorce. Not only was I dealing with the dissolution of my marriage and the emotional ramifications of such a split, but I was dealing with the powerful financial ramifications as well – something that I had not even considered. Of course money is something that most of us put on the back burner during such a situation but by the time I came up for air emotionally I was faced with the reality of my financial situation and was immediately thrown back into darkness. What was I going to do to pick up the financial pieces and still get myself together emotionally?
The truth of the matter was that my credit report had been severely damaged during the course of my marriage, and most seriously, after our split before we were legally separated. Because some of our credit cards were in both of our names and because my ex-husband was spending irresponsibly and not paying the bills I was paying the price as well. After the divorce became final and I was able to focus more clearly on my finances I began the arduous process of repairing my credit.
This is not easy work and certainly not something that I would wish on anyone. It was a process of untangling a lot of things that seemed irrevocably entwined. I got professional help in this regard and once we got everything sorted out and made a plan for me to start rebuilding my credit I set to work with a plan and some much needed focus.
But I knew that in doing all this work I would need something that would allow me to see my progress even if it was small steps and that’s where free credit reports came into play. More in the next post…
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In the last post we talked about the importance of knowing what is on your credit report; a financial compilation that is held by three separate credit bureaus. By ordering free credit reports every year we are able to keep tabs on what is happening on our credit report so that we are not surprised when we go to get a loan and so that we can take steps to make credit repairs as soon as we are aware of them instead of allowing them to drag out and cause further damage.
One of the things that we can do to help rebuild our credit even if we are not able to get a traditional line of credit is to look into secured credit cards.
Secured credit cards allow consumers to have access to a line of credit that is backed by money they have put aside as collateral. In other words, no matter what the credit limit on the credit card the consumer must first match that amount that is then deposited – by the lender – into a secured savings account. That way, should the consumer default on the loan the lender is able to cover the credit limit by the amount they have in the secured savings account.
Additionally, secured credit cards provide protection for consumers as well. Because consumers have to match the credit limit with cash to be deposited into savings the credit limit is most often on the low side – minimizing the possibility that the card holder will get in over their head in terms of charges.
Secured credit cards are only one of the ways in which we can take steps to improve our credit report. Making payments on time, keeping debt to income ratio low, and limiting our open lines of credit all help to improve credit.
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Everyone deserves a second chance, especially when it comes to finances. There are virtually none among us who have not made poor decisions at one time or another when it comes to money. It’s difficult to know what road to take, especially in this economy; and sometimes we simply do what we think is right at the time. Decisions we make with only the short term in sight, however, can prove to have vast ramifications in the long term and we are left wondering what would have happened had we chosen another route.
While in theory it makes sense that everyone should have a second chance, this is much easier said than done when it comes to damage that has been inflicted on our credit report. When we make poor financial decisions, when we are late on payments, and when we default on loans all of this information is detailed on our credit report. There are actually three credit reports when it comes to our financial information because there are three credit bureaus – Experian, Equifax and TransUnion. Each of these credit bureaus holds a credit report on every consumer and believe it or not information can vary considerably between the three.
This is why it is so imperative to order free credit reports from each of the credit bureaus every year; which is something, in fact, that we are entitled to receive.
But if you find through your free credit reports that your credit is damaged you need to take steps immediately to begin credit repair. Too many people find out at the most inopportune time that they have credit problems; most often when they go to secure a loan. But by taking certain steps, including getting secured credit cards you can begin to repair your credit. More to come…
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As we speak, young people are graduating from colleges around the country – setting out into the world of work for the first time in an economy that is less than hospitable. College graduates most certainly have their challenges to face at the present moment but maintaining a good attitude and being as prepared as possible can help smooth the journey considerably. There is much to consider when branching out on your own - employment, living arrangements, and budget to name a few. When it comes to handling finances – especially on your own for the first time – it is important to consider how you will make sure that your credit is looked after appropriately.
Most people of this age have hardly given any thought to their credit report. But in the world of post-graduation it becomes very clear just how important a role credit can have in a person’s life. Good credit can help with everything from mortgages to car loans and bad credit can have the opposite impact – taking the person out of control of their own financial decisions and sometimes creating problems for years to come.
Ordering free credit reports is something that every new college graduate should become accustomed to doing on a regular basis. In fact, we are all allowed one free credit report from each of the credit bureaus once within every twelve months. By taking advantage of this we are able to stay on top of our credit report by reviewing the information held by the bureaus.
Starting off in this manner means starting off responsibly and putting our best foot forward in terms of our financial independence. Better still, it allows us to put good habits in place so that we can become accustomed to being in financial control and continue to maintain good habits for a lifetime.
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In the last post I talked about the surprise I got when I went to get pre-approved for my first home. I had done everything right. I had one credit card that I paid on time, I was always on time with my rent and other bills, I had a solid work history, and money for a down payment. But the one thing I forgot was the thing that would cause me the most grief – my credit report.
When the lender who reviewed my information came back to me with the startling news that I had multiple lines of credit, many late charges, and even a default on a credit card that I had never opened, I was in shock. In the days to come I worked with the authorities who confirmed that I had been the victim of identity theft. It was – and continues to be – a complete mess to clean up and I have put hours upon hours into untangling the thief’s identity (and actions) from my own.
The most difficult part for me is the knowledge that I could have avoided much of the damage to my credit report. Had I only ordered free credit reports on a periodic basis I would have been made aware of what was happening much sooner and gone straight to the authorities. This would not have saved me the nightmare of having to close accounts and do all the paperwork and legwork that it takes to rectify such an event, but it would have saved me months of damage with which I had to contend.
You had better believe that now I order a free credit report from each of the three credit bureaus once every three months. As consumers, we are all entitled to a free credit report from each of the bureaus once within every twelve month period. By rotating my free credit report between all three of them I can have a free credit report three times a year and stay on top of what is happening. I have become a firm believer in free credit reports and I tell all my friends – knowledge is always power.
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I recently heard a report on the radio about how the incidences of identity theft have risen dramatically even in the last year and are currently at staggering proportions. This would have never been something I would have paid attention to - or I would I have just thought that identity theft happened to other people. But that was before it happened to me.
We still don’t even know how the thief got my information to begin with; it could have been anywhere – from my computer to my trashcan. But all I know is that he secretly took on my identity and quietly caused unbelievable damage to my credit report. Why quietly? Because by the time I realized that anything was amiss it had been going on for a whole year.
I had not been in the habit of ordering free credit reports and as a result I didn’t have a clue what was going on with my credit. During that time period I did not apply for any new loans and I had only one credit card; I just didn’t think I had to pay attention to what was going on with my credit report. But had I taken the time to check in every couple of months I could have saved myself a lot of aggravation and time.
When I finally did find out about the identity theft it was at the most inopportune time. I was getting pre-approved for a mortgage to buy my first home. I thought I would take advantage of the buyer’s market – the low home prices and low interest rates, plus the tax credit for new homebuyers. When I gave all my information to my lender I wasn’t worried at all. I had excellent credit and I had been at my job for five years. Imagine my surprise when I found out that everything was not as it seemed. More to come in the next post…
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In the last post I talked about my recent marriage and about how my new husband and I were having some financial adjustment following our wedding. We had not lived together prior to getting married and there was just a lot of new things to get used to; not just the matter of sharing space with each other but also figuring out how the finances were going to work and who was going to take care of what. Almost immediately we knew that we needed help and we consulted a financial planner that would give us some insight on investments as well as help us budget for our new household.
The very first thing that our financial planner wanted us to do was to order free credit reports from each of the three credit bureaus – Experian, Equifax, and TransUnion. He told us that we were entitled to a free credit report from each of them once within each twelve month period; and this was the best way to determine our starting point. He knew that we had not talked much about money and so it stood to reason that we had not shared our credit report with each other.
We ordered our free credit reports easily enough – online in a matter of minutes. And then we sat down to go over our credit report. Armed with information we could now make a plan to improve our combined credit, put money away, and make wise investments for our future. We have a budget mapped out and we plan on staying with our financial planner to help us along the way. We also plan to continue to order free credit reports every year so we can stay informed about our finances. This whole period of time has taught us about embracing change and also about the importance of preparation; it’s a lesson we won’t forget.
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Having recently gotten married I am a credible source about the craziness of this time in a person’s life. In addition to all of the many events and celebrations surrounding your marriage you are also combining your life with another person’s and that can be downright stressful. My husband and I had made the choice not to live together before our wedding and so at the time of our marriage – in addition to planning a wedding - we were also making arrangements to rent our first place together and move all of our personal belongings. Needless to say we had a lot on our plate.
While money is supposed to be a conversation that you have prior to getting married I have to admit – while I am ashamed to say so – that my husband and I had not talked too much about our financial plans. We had not run a household together up until that point and it turns out that we each had different ideas about money. We have had a lot of conversations since then as we determine what our common goals are going to be and how we each perceive our financial roles in our marriage.
Along with all of this talking and planning we also ordered free credit reports for each of us. We were working with a financial planner who was helping us create a budget and also invest some of the money that we received for our wedding. He told us that we are all entitled to a free credit report from each of the credit bureaus once very twelve months. We knew that was the best place to start; to look at our credit report and find out what we were dealing with right out of the gate. More in the next post…
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Debt can easily be something that keeps us up at night; fills our every thought and literally casts a shadow on the rest of our life. Like or not, money impacts our daily life and when we owe a lot of money most of us can hardly think of anything else; especially if we are behind in our payments and it is likely that our credit report is being affected.
Right now may seem like the worst time to figure out a way to get out debt. There is a stunning lack of movement in the world of lending. Loans are not being approved even as financial experts say that things are improving and lenders are being encouraged to approve loans. Many people still find themselves in the position of having limited options when it comes to making headway against their mounting debt.
There is still the option, however, to find alternative means to at least consolidating debt even if your credit is bad. Bad credit loans still exist and while it may mean that you are paying higher interest rates in the short term it helps you to establish solid credit that can allow you to improve your credit report if you make on time payments – at it allows you to consolidate your debt and hopefully improve your cash flow and pay down what you owe more aggressively.
Using a credit card is still an option for consolidating debt if you can find a card that offers a lower interest rate than what you are currently paying. In order to find the best offer compare credit cards to determine what will work best for you and offer the most benefit.
When it comes to debt you want to see movement. Simply paying your minimum payment month to month will not get you anywhere. Make choices and get aggressive.
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