There are some subjects about which people are enormously uncomfortable talking to their kids and money is one of them. It doesn’t make much sense to me especially when you realize by not talking about money you are simply perpetuating the fears and discomfort. Kids leave home without any idea about what to do or how to handle themselves appropriately and there is a stigma and a shame surrounding money. This was the way that I grew up and, unsurprisingly, I left home with all of the hang-ups that I just mentioned. I was determined not to pass this on to my son and I started talking to him about money at a young age – even though, I admit, it was uncomfortable for me at first.
However, as the years passed we worked through it together and I saw that in talking openly and honestly about money with my son it was making the whole subject less scary – for both of us. I was learning right along with him to deal with money upfront.
As he got older we talked about more and before he left for college I talked to him about his credit report and how poor financial decisions can impact that report for years to come – even hindering his ability to get a car or a home (which had happened to me when I was young). I even ordered free credit reports from each of the three credit bureaus so I could show him what a free credit report looked like up close and personal.
We went over the credit report and the score and I told him how important it was to order free credit reports each year to protect himself against errors and even identity theft. I surely hope that this new attitude about money has given him the confidence to act responsibly and without fear.
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Some surprises are fun; some are not. Throw me a party, send me on a trip, give a great gift – all terrific surprises. But the surprises that are not fun…those that have to do with your credit report. Imagine the feeling of sitting with a mortgage processor – thinking that you are about to be given approval for a mortgage that will allow you to buy the home of your dreams (at an unbelievable price considering the market) only to discover that you are not going to be approved at all because your credit score is too low. This is what happened to me and let me tell you there couldn’t have been a worse surprise. I was stunned. I had absolutely no idea that my credit score was as low as it was and no idea that even half of what was on my credit report was there. Talk about being caught off guard.
In retrospect this seems ridiculous and it is undoubtedly my fault – completely. At first I was angry and demanded to know what each and every thing on my credit report pertained to; a process I had to go through with each of the three credit bureaus. This may have been an appropriate reaction but it was too late. Had I been ordering free credit reports all along I would have seen all of these things as they appeared and would have had the opportunity to argue them if I thought they were mistakes. As it was I was left to deal with all of the information at once and it was confusing and overwhelming.
By ordering a free credit report from each of the credit bureaus throughout the year you can have the information you need to make the appropriate decisions; don’t skip these important opportunities to get educated about your finances.
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In the last post I talked about the divorce from my husband and how it had left me in a vulnerable and very confused position. I was emotionally devastated by all that happened and terrified about making my way in the world without a partner but it seemed that no matter how big the emotional challenges, the finances were the only thing that any of us talked about – me and my husband, as well as our respective attorneys. There was a lot to work out in terms of separating possessions, selling property, and splitting up our assets. I was exhausted already.
There was no taking a break, however. It was time for me to finally become the adult that I should have always been and get educated about my own finances. After all, everything that we had done as a couple – anything that had my name on it – was impacted by the decisions that ultimately my husband had made; and my credit report had suffered the impact. I was completely in the dark about what my credit report was saying about my financial responsibility; but that was going to change.
Throughout these two years I have done a lot to change my life but one of the biggest things that I have done is to work with a financial planner who has helped me to get my finances in order. I am now educated about my credit report – about what is on there, what had to be removed, and what my credit score means in terms of me getting financing. From the start to the finish of my divorce I have ordered free credit reports to keep in touch with what my credit score is doing and how every decision that I make impacts my credit rating. I have some work ahead of me in terms of building up my savings and getting my credit back on track but one thing is for certain – never again will I be in the dark about my own finances.
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These past two years have been an interesting journey for me. Separated and then divorced from my husband of thirty-five years I quickly found myself in a place that I have since referred to as the “dark times.” I was alone, confused, and not sure of what the next hour held, let alone the next day. I had to find my way in the world in a completely different capacity than I had done for over half of my life and I was scared out of my mind – as are most people in my situation. I had none of the exhilaration of freedom that some might also experience; I was only terrified of what was to come next and how I was going to handle it.
There are many things to consider when there is a divorce but even though it was an emotionally devastating time most of the conversations that we had – and most of the stress – revolved around financial concerns. I was caught off guard by how much of the process of separating was tied into finances but I guess had I looked at it objectively I would have seen that, of course, this was the primary concern considering we shared so much common property.
I have to be honest; I had never considered my credit report because I had never considered myself an independent financial entity. That, it turns out, was a big mistake because everything that my husband had done – and not done – was reflected on my credit report. I was going to have to step up to the plate and out of my comfort zone like I had never done before if I was going to salvage my financial future. It was time to get educated and it was most certainly time to understand how free credit reports were going to line the path of my journey.
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Everyone needs a progress report to see how they’re doing from time to time. At work that may be mean a review in which we are told how we are succeeding in our position and in which areas we could improve. In school it was through the report cards and progress reports that we got from our teachers. But, unfortunately, no one gives out progress reports for our financial wellbeing. That doesn’t mean they don’t exist; they are just something that we need to get ourselves and be proactive about using to the best of our ability.
In the grown up world of finance our progress report is our credit report which tells of our financial decisions and how they have impacted our overall credit score. Of course lenders look to that credit score as well as the information on our credit report to determine if we are a good enough credit risk with which to do business. We all actually have three credit reports – one report from each of the three credit bureaus. Unfortunately, however, most of us would not know our credit score or even what is on our credit report if lenders didn’t pull this information for us when they consider us for a loan. Then, and only then, is when most of us find out what we look like from a creditor’s perspective. What has been our financial progress and behavior over the years. And often it’s not a pretty picture, especially if it’s information we have avoided either intentionally or unintentionally.
There’s no better time than the present to get up and current on your credit report. Order free credit reports throughout the year to give yourself a basis of comparison on your credit score and to monitor what kind of progress you are able to continually make.
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In the last post I talked about the financial irresponsibility of my youth and about how my shortsightedness had me running up credit card debt without worrying about the bill that would inevitably come due at the end of the month. I was unable to keep up with the payments and would make payments late as well as avoiding payments altogether. I just figured I would deal with everything later and I did – the bill always comes due and sometimes the price you have to pay is much higher than you would have even expected.
I didn’t know the full state of my financial standing until I ordered free credit reports. I had graduated from college and was just starting my first job. I felt more grown up – mature – and I was ready to deal with whatever the implications of my past behavior. The free credit reports revealed the damage I had done by paying late or not at all. I paid outstanding balances and then set to work to rebuild my credit so that I could one day have the option of getting those things that are important to me – such as a home.
One of the things that I did was to seek out credit cards for bad credit. Traditional credit card companies, unsurprisingly, were not forthcoming in low interest offers to me. I didn’t have any more credit cards and that was part of the problem. Credit cards for bad credit offer higher interest cards and lower balances. I was actually able to find several secured credit cards from which to choose which meant that I had to deposit the amount of my credit limit into a secured savings account. This protects the lender and ensures that I do not get in over my head.
With these tools in place I am taking one step at a time to repair my credit report and make up for past financial mistakes.
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So here’s the deal – I’m not what you would call financially responsible; at least I haven’t been up until this point in my life. Now, as a graduate who is working a full time job in a career that I love I have fully embraced my adulthood and am ready to do what it takes to buy my own home, put money away, and live in a way that is in keeping with my earnings instead of maxing out credit credits to buy things I want but can’t afford.
Unfortunately, I had to admit that this was indeed my attitude throughout my teens and early twenties. I bought things as though the bill would never come; which of course it did and only then would I deal with the fact that I could not in fact pay that bill. So I would either pay the bill late or not at all. Needless to say I did untold damage to my credit report. I didn’t really have an inkling of the full extent of what I had done until I ordered free credit reports as a part of my bid to become organized in preparation for my first job. I really wanted this to be a clean financial slate for me but I figured that I had better find out what I was dealing with in terms of my credit score. I ordered free credit reports and wasn’t necessarily surprised to learn that my credit was a mess.
Since then I have paid any outstanding debt that I had but I really want to do what I can to start rebuilding my credit in a more positive way. Credit cards for bad credit may have a bad connotation but the fact remains that if used properly they offer a way to put credit back on track. More to follow…
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In the last post I talked about the financial decisions that I had made as a young kid and how they were coming back to haunt me – something that was, I’m sorry to admit, completely unexpected on my end. I had no understanding of how a credit report works and didn’t understand that all of those late payments and maxing out of my credit lines when I was in college were bound to show up on my record. I had received credit cards at eighteen – two to be exact – and without thought to how it would impact me later on in my life, I set to work burying myself in unbelievable debt.
Now five years later I was out of school and working at my first real job. With money in my pocket and my finances under control I actually thought I was in a good position to buy my first home. After all, with the housing market at a standstill (along with the rest of the economy) it was a buyer’s market – especially for first time home buyers who have nothing to sell, provided, of course that they get approved for a mortgage. To be honest, I thought this would be the least of my problems considering my job and my salary. But I forgot all about my credit report.
When the lender pulled my credit report we were all surprised to see late payments and a variety of other infractions that were all combining to lower my credit score. While the upside of the current market was the availability of homes at much lower than typical prices, the downside was the strict lending criteria. My credit score was not adequate to get a mortgage and it looks like I’ll have to wait while I do what I can to build up my credit report.
The lesson for me was this – there’s no getting away with anything, no matter how young or inexperienced you are; it all comes back in the end. I’ll work hard on raising my score and I’ll order free credit reports from here on out to make sure that I’m making progress and that there aren’t any surprises when I eventually do buy my first home.
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When you’re young nothing can hurt you. You have no concept of your own mortality, the fact that you can become physically hurt or that anything that you do today will have consequences tomorrow. I was one of those young, stupid kids who only saw the few steps in front of me instead of the road that stretched long ahead and by the time I was mature enough to understand the bigger picture the damage had been done. In my case the damage was financial. I was lucky (or unlucky) enough to get my hands on a couple of credit cards at an early and impressionable age. I don’t know who had any business giving an eighteen year old a credit card but they did and I was happy for it.
With a part time job that barely paid the bills I very quickly found myself over my head with minimum credit card payments on cards that were maxed out. In the short term I was stressed out and wondering how I was going to pay my next bill. But that was nothing compared to the long term effects that this period of my life was going to have on my finances.
Fast forward five years when I was just out of college and starting to work a full time job. I was making good money and I was finally able to pay off the debt that had been haunting me for years. I thought I was finally in a position to buy my own home but had I really looked at the situation I would have realized that all those late payments and accumulated debt would have certainly impacted my credit report – something to which I had given no thought as a teenager with a brand new credit card.
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I don’t know how you operate but I am someone who constantly has an endless list of things to do. This list used to be written in pencil – and when I was feeling brave, pen – but now it’s an electronic list that exists not only on my computer but also on my phone. It may have been easier to put together – being able to type it up rather than write it and rewrite it – but having it electronically has not made it any easier to accomplish anything on that list. I still juggle it around but nothing ever really gets done. I figured out that if I don’t do something instantly – like right when I think of it – then it could be months before it gets done and that includes scheduling doctor appointments.
So enough with the list. I have to just get it done. That’s my new motto. If I think of something I try with all my heart to get it done that very day. Sometimes it works because it’s something that is relatively convenient to do – and with the Internet that has certainly been the case more often than not – and sometimes it doesn’t work. But I keep on plugging.
Free credit reports, however, were something that I could do on the spot; something that I could quickly and easily accomplish within a matter of moments. I had watched this special on identity thefts one evening and made a (mental) note for myself to order free credit reports so that I would begin to become familiar with my credit report and therefore more in tune if anything should look decidedly out of place. This was not anything that I had done before. The next morning I immediately got online and was so happy to discover that I could order free credit reports from all three of the credit bureaus on one website. Which I did. One thing off the list.
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