I recently tried to get a credit card in my name. Easier said than done, it turns out. While I had always had a card as a user on my husband’s account I had decided that it was important to have something that was entirely in my name. I thought that this was a perfect time to apply considering that the holidays were coming up and cash flow was a little tight. I wanted to be able to budget out my holiday shopping and having a small credit limit in my name was, I thought, a good idea. However, I was denied credit - even a small limit. This was the first time that I had really given any thought to my own personal credit report.
It turns out that having little to no credit is just as detrimental as having bad credit. I just had very little in my own name and it was counting against me. I needed something in my name and I needed it quickly so I began to look at secured credit cards.
Secured credit cards allow for the cardholder to carry a particular limit that must first be deposited into a secured savings account that is held by the lender; this is to protect all parties involved. For instance, I could have a $1,000 limit by first depositing $1,000 for the lender to hold. Most importantly, this manageable credit limit would allow me to work towards building credit in my name - improving my credit report.
The way that I can keep track of my credit in the months to come is by ordering free credit reports on a regular basis in order to watch the improvement of my credit score. In the weeks and months to come I hope to see improvement so that I can look to get a traditional card in my name.
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In the last post we talked about the importance of really taking a step back and looking objectively at your credit report; something that can very easily derail financial plans that many people may have in their heads - including the purchase of something fun or travel plans. The fact of the matter is that if you don’t have a complete picture of your finances then it’s easier to make plans with abandon; when in reality these are plans that you really can’t afford. When you are ready to really get serious about your finances, however, the first step is making sure that you get a copy of your credit report from each of the three credit bureaus. Your credit report is the most complete picture of your finances and will give you the most comprehensive understanding of what you are up against in your quest to get financially informed.
Ordering free credit reports is the best way to go. Luckily we are all able to order a free credit report from each of the credit bureaus once within every twelve month period. Free credit reports can give you a variety of information; telling you:
• If there are mistakes on your credit report. One credit bureau may be reporting erroneous information that could be impacting your credit score and ability to get a loan. Having your credit report in hand will allow you to catch potential mistakes and take care of them quickly.
• What your credit score is and how it moves. You need to know where you’re starting before you can get to work. Your score is likely differ – albeit slightly – between the credit bureaus but you’ll get a general idea of your standing. Then you can watch it change as you make financial changes.
• If there’s anything strange going on. Free credit reports are a good way to catch identity theft because you will be well aware of the information on your report and will notice if things change drastically.
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It’s difficult sometimes to take a step back and look at your finances from an objective point of view. There are things you want to buy, places you want to travel and taking an honest look at the reality of your money situation may put a damper on all of the fun stuff that you think you can afford if you’re not really looking closely at things. For those who want to get serious about their money, however, and really make headway on their financial objectives, there has to be a reality check and it starts with a credit report.
There are far too few of us who are disciplined enough to really have a handle on our credit report. In fact, we may be surprised to learn what is on our credit report and how it subsequently impacts our financial health. We may only learn about the details of our credit report when we apply for a particular loan and are given our credit score. But even then that may only be the information derived from one credit bureau.
There are, in fact, three credit bureaus and a credit report is held by each of them. So when we investigate into our credit standing it is important to get the information from each of the credit bureaus. The way in which we can stay informed about our credit information is by ordering free credit reports from each of the credit bureaus – once within every twelve month period. Once you order a free credit report from each of the bureaus you must be able to examine it objectively in order to make changes if changes are necessary. There is only one way to approach a credit report and that is with your eyes wide open.
More to come in the next post…
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In the last post I talked about my ignorance regarding my credit report. In fact I had never given my credit report a bit of thought until I was forced to face it after being denied for a mortgage loan. That was when I knew that I had to deal with my finances once and for all. I ordered free credit reports from each of the three credit bureaus – something that I have continued to do every twelve months as is allowable by law. Each of the free credit reports from each bureau gives me insight into what my financial standing looks like to potential lenders and keeps me abreast of changes to my credit score and information that could potentially be linked to identity theft should it occur.
In addition to ordering free credit reports I also began checking out secured credit cards as a way to manage my financial comeback. Secured credit cards offer a credit limit to users but the amount of the credit limit must first be deposited into a secured savings account. This protects the lender from the possibility of the cardholder defaulting on their loan. But secured credit cards also protect the cardholder from getting in over their head with a huge credit limit that they can’t pay.
I finally found a credit card that worked for me and I have been using it ever since; only buying things that I need and keeping the balance low and manageable, and making on-time payments every month. My secured credit card is just one stage in my financial reform and a way that I have been rebuilding my credit piece by piece. One thing is for sure – when I go to get a mortgage the next time around I will have a very clear understanding of my credit report.
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When it comes to your credit report nothing can make you believe in the importance of it until you are face to face with the impact it can have on your financial life. I had never given any thought to my credit report; not before I had it brought to my attention. Unfortunately the way in which my credit standing was brought to my attention was during a loan process in which I was trying to get a mortgage for a home. I honestly didn’t know enough about my credit to make a determination which way it was going to go but I thought for sure, in the end, I would be okay and would be approved for the mortgage. With the loan process being what it is right now, however, I was denied for a mortgage loan in short order and I had nothing to blame but my credit report – something that I had actually never laid eyes on until that time.
Since then, my credit report has been a huge part of my life as I work towards fixing my finances and my credit standing. Part of what I am doing on a regular basis is ordering free credit reports from each of the three credit bureaus – something that I am at liberty to do with each of them once within every twelve month period. Having a free credit report on hand allows me to know right away when something needs to be addressed on my credit report and also to watch as change is made through my efforts and my credit score approves.
Additionally I began looking at secured credit cards to help me start to repair my credit; something that I could do that was within my control. More in the next post about secured credit cards…
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Information is the foundation for success in every respect. This is the philosophy by which I run my own business and it has allowed me to achieve success in what I do. I wouldn’t say that I micromanage things per se but I do like to know everything that is going on from day to day – just so that I can stay informed and nothing will catch me off guard.
This is the same philosophy that I apply to my finances although it wasn’t always. As top of things as I am in business it certainly doesn’t make much sense that I haven’t been as educated about my finances over the years; but I guess that this part of my life just took backstage to everything else that I was doing in terms of building my business. I have recently changed the way in which I work with regard to my finances. I have learned over the years that information is my strength in this area as well and, to that end, I now order free credit reports from each of the three credit bureaus on a regular basis.
We are entitled, as it turns out, to order a free credit report from each credit bureau once within every twelve month period. I take advantage of this ability by sticking to a rotating schedule so that I can always know what is happening on my credit report.
With free credit reports in hand I can stay in the loop of my finances and make decisions that will benefit my credit score and my financial standing in the long run. It’s impossible to make the right decisions when you don’t have the correct information at your fingertips; free credit reports make that possible and allow me to stay just as informed about my finances as I do about my business.
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Right now, everything in the world of finance seems topsy-turvy and that’s putting it mildly. Many of us fear for everything from our jobs to our homes and struggle with feeling completely out of control of our own destiny. This is a completely natural feeling and something that most of us share with each other right now. But there are ways in which we can at least maintain some sense of control in these chaotic times and it starts with getting organized on the home front. When we are able to get our finances as organized as possible then we are at least prepared emotionally speaking for what may come around the corner. Conversely, if we face job loss or economic vulnerability and are already in a disorganized state (with unopened bills, a variety of accounts, and no idea of what’s what) then the chaos can only compound.
Some of the ways in which we can get organized at home and prepare ourselves as best as possible include:
• Order free credit reports. It helps to know where you stand before you get started and now it’s easier than ever to find out. By getting online you can order a free credit report from each of the three credit bureaus within a matter of moments (something that you can do once within every twelve month period). This will give you a better picture of your credit report and what, if anything, you need to address.
• Budget. Creating and maintaining a realistic budget is paramount to staying financially organized right now. Put money away for a rainy day if you are able. Cut expenses, trim down spending, and live lean. When you know where every dollar goes you will feel much more in control and prepared for whatever is ahead.
• Compare credit cards. Debt from credit cards plagues many of us. Consider consolidating your credit card debt into one lower monthly payment. Compare credit cards to find the best offer.
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