Posts Tagged ‘News’

Why Your Credit Score Could Be Costing You A Fortune

We all know a low credit score will make everything in the world of finance more expensive because of higher interest rates from lenders due to being considered a greater credit risk (i.e. higher interest rates on car, homes and credit cards). While this may be considered common knowledge by some, it’s truly devastating effects are understood by few.
EXAMPLE: if you purchase a $200,000 home on a 30 year fixed mortgage at 8% interest instead of 6% (because of your credit score); that 2% is going to end up costing you a total of $96,934.11 over the term of the loan. Now, think about how many “extra” years you’ll have to work to pay off $96,934.11 because of an extra 2% in interest?
The part few people talk about is all the other areas in life where a low score will increase your cost of living on an annual basis. For example, in addition to paying more for a car, home and credit cards, a low credit score will most likely have you paying more for the following as well.
1. AUTO INSURANCE. As many as 92% of the 100 largest personal automobile insurers use credit information to underwrite new business, according to a 2001 study by Conning & Co., an insurance-research and asset-management firm.
2. HOMEOWNERS INSURANCE. Many insurance companies see a correlation between low credit scores and increased property insurance claims. Therefore, a low score will result in higher rates.
3. LIFE and HEALTH INSURANCE. Customers who are unable to pay their monthly insurance premium thereby pass along that increased cost to the insurance company whose stuck with the bill… resulting in a loss for the company. Since customers who pay without lapse are more profitable it is felt by many that a low credit score now even affects a monthly life and/or health insurance premium negatively.
One of the more shocking areas where a low credit score will you cost you is in the area of employment. It’s estimated as many as 42% of employers now do credit checks on applicants before hiring them (according to a 1998 survey by the Society for Human Resource Management).
While many employers claim they only do it to “verify” information on your application (such as where you live and where you have worked etc.) we can both assume they are taking the liberty to “have a peek” at how you handle your financial affairs as well. According to the
to Public Research Interest Group (PIRG) as many as 79% all credit reports contain errors — 25% of which are serious enough to cause the denial of credit (according to a 2004 report).
And that’s all the more troubling in light of the increasing impact a bad credit report can have, says Ed Mierzwinski, director of PIRG’s consumer program.
“It’s outrageous that the credit bureaus are claiming their scores are accurate enough to take people’s lives and screw with them like this”.
Remember that nobody else is going to look after your credit for you. The credit bureaus certainly won’t. It’s up to you to make the decision and take action to improve your credit score, your financial well-being, and your life.

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Can you change your due dates?

The short answer is yes. In fact, it can be a great way to avoid late penalties and taking a hit on your credit score while you are on vacation or traveling to an area that you wont have the ability to pay your credit card bills. Many companies and lenders, including Discover and Barclays will allow you to switch your due date as long as it is within that billing cycle.

How is this useful though? In the past if you were traveling you either had to have access to the internet to pay online or pre-pay your statements to avoid any late fees or score penalties. This might still be a great option though because pre-paying statements and getting those balances paid down can free up more spending power without having to worry about going over that magic 30% number we have talked about so many times.

But If you are unable to pre-pay or you know that your budget depends on a check coming in you are able to move that due date and still make on-time or early payments before, during, or after your vacation.

It is important though to stick to your budget each month and especially for your vacation. Be sure to check out 3.5 Tips To Keeping Your Wallet & Credit Safe This Summer before you plan your next summer trip.

Be sure to also grab your copy of our free e-book on 28 credit secrets that banks and credit companies don’t want you to know!

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Holiday Credit Balance Got You and Your FICO Score Down?

Your Best Strategies for Balance Transfers, Debt Reduction and Credit Card Issues After The Holidays
Now that they’re over (the holidays) and the fun and merriment of both giving and receiving
gifts has become a thing of the past has your holiday cheer started to turn to anxiety and
worry over racking up a larger credit card balance?

Worried about your credit score?

How to pay the cards off?

Unsure about whether to apply for more credit or to transfer a balance to another card?

You’re not alone. And, it’s not your fault.

Well….maybe you did go a bit overboard, but there are literally billions of dollars spent
every year trying to convince you to overspend.

The social pressure is killer.

And, you’re a good person, you want to be kind, and many people are nice to you and deserve a gift in return.

So what now?
Well… take a deep breath.

Relax (you’ll feel better) and let’s look at the options and what really works …or doesn’t.

Let’s look at the traps, pitfalls, and the best way outta this little mess.

First, you should know that there are a lot of balance transfer credit cards out there, designed specifically for anyone who is carrying a balance on their credit card and paying high-interest fees each month. In fact, there are so many it can be challenging to determine how one is better or worse than the others. We took an in-depth look at some of the card offers out there to answer the question “is it good to transfer a balance from a high-interest credit card?”

The short answer is that it can be a great choice to transfer a balance and it can save you hundreds or thousands of dollars if you’re currently paying interest on another credit card.

But, and this is a big one….you have to understand how your credit score works and some fundamentals about getting rid of debt (click here for the debt free Bible Holiday Discount Offer) (to learn more about FICO click here).

And the bottom line is that if you apply and qualify for a new card then it might help your credit rating . However, you cannot add more to the balance. You will have to use the low or zero interest rate period to methodically payoff that credit balance before the introductory period runs out. Add to the balance will probably hurt your credit and get you deeper into debt.

So if you’re going to do a balance transfer, look for a card with the combination of a lengthy 0% intro APR and no balance transfer fee. The in-depth answer, as well as the card’s pros and cons, is explained below.

A strong solution, would be a card offering a 15-month 0% intro APR on both balance transfers and purchases. A shorter into is fine but remember, you have to get that balance paid off during the introductory period.

Many cards offer a 0% intro APR, but you’re looking for a card where you won’t pay any balance transfer fees to move your balance(s) onto the new card.
That’s a huge win, since these fees are typically 3% of the balance you’re transferring, which can add up to big money. For example, if you’re transferring $10,000 you’d probably pay $300 in fees with many cards – and that just adds to your woes.

In review, ideally, you should try to find a card where you pay absolutely nothing to transfer your money, and where you have 12-15 interest-free months to make payments against the balance.

For example, if you were making $700 monthly payments on that $10,000 balance and had a 20% interest rate, it would take you 17 months to pay it off and you’d pay over $1,500 in interest. If you transferred that balance to a new card with the features we’re reviewing, you’d pay it off in 15 months with no interest, saving $1,500 and paying absolutely no fees. Also, make sure you transfer your balance in the first 60 days (or the permitted time) to take advantage of the as after that time there will frequently be a fee.

In addition to the 0% intro APR on balance transfers, you’ll also want a card with no or low interest on purchases and if possible, a lower permanent APR or interest fee. This is a great way to make any big (or small) purchases you need and save money on interest fees for over a year. If you’ve been known to make a late payment or two you’ll appreciate a card that has a no penalty APR.

This means your interest rate won’t increase if your payment is delayed. We don’t recommend ever, or worse yet, habitually, paying your bill late, but it’s nice to know if it does happens you won’t be penalized for it in the interest rate.

NOTE HOWEVER, that late payments will affect your credit score and this may drive other costs such as loan interest rates, car leases and other costs including insurance higher. Pay on time and reap the advantages of a better FICO score.

Other Things To Consider

So to get a handle on what’s out there and if things like foreign travel fees and travel or other rewards are important to you then check NEXT’s Balance Transfer Calculator to see which card is the best choice for your particular situation. We have no relationship with that site but it does offer a good side by side review of a number of different.

Whatever choice you make, consider our Debt Free Bible to help you to reduce or eliminate debt and those burdens from your life and/or Our Credit Repair Intelligence System to make sure you clean up and understand your personal credit.

Want the best deal?

Get a discount and a jump on a better 2016 and beyond when you order both…just click here for our new year 2016 discount offer and make 2016 the year when you get things under control.

P.S. Not ready to tackle your debt or credit? But want to know more? Click here so we can keep you up to date. And get a complimentary e-book”

Chip Cards- What Are They? And Why Are We Using Them?

You may have noticed over the last few months a transition of your credit and or debit cards. Recently new regulation was passed that required card issuers and financial institutions to issue EMV chip cards. EMV stands for Europay, Mastercard, and Visa. This method of payment became the world standard almost ten years ago now and the United States is just catching up now.

Still you might be asking what is EMV, what are the benefits, and why the switch? Well EMV is really a system that was created by three different credit issuers. Instead of using the prehistoric swipe and sign method EMV incorporates a high-security technology that reads a microchip embedded in your card. It will then need a pin and/or signature to complete the purchase or transaction. So I mentioned higher security. I also mentioned that EMV chip cards have pretty much been the world standard for almost a decade. So it should come as no surprise that almost 50% of all credit card fraud in the world occurs in the United States. Seems we were a little late getting to the game.

What is going to happen now? If you haven’t gotten a new chip card in the mail yet you probably will soon. And you should start to follow the chip card method of payment. Not only is it near impossible for your information to be harvested thus providing identity and credit score protection but it also helps to build a more secure network of payment methods and services. While many different vendors and card issuers have already made the switch to the new EMV system there are still some to complete the change. Before late 2016 or early 2017 all vendors must switch to this new system. The new regulation in place puts the responsibility of loss on the party with the least up to date technology. This is important if you are taking credit cards in your business or would like to inquire your bank or card issuers for a new chip card. Most banks and credit issuers will provide you with a new chip card, at no cost to you, to replace your old card. This is important to do now so you have the most up to date credit card security out there.

Utilizing credit to your advantage can be complex but it really doesn’t have to be. While these new chip cards and the EMV system does not directly change your credit score it can prevent against possible fraud which effects so many every single year. The more power and knowledge you unlock now can help build credit for the future. Understanding credit and how credit works is extremely important. To discover more about utilizing your credit to its fullest potential click the link below and discover the Credit Repair Intelligence System.

The WSJ recently interviewed Carolyn Balfany, Mastercards EMV Expert, to find out more about how the new system will work and what it means for the consumers and the vendors. To read the article you can click here: Its a great read if you want to learn some more about the EMV system and chip cards.

As always if you have questions we are here to help. If you are already a member of our Members-Only Forum that is the best place to post or ask your questions. If you need some more information please feel free to contact us at

OCR: How Three Seemingly Harmless Letters May Hurt Your Credit

If you haven’t already heard the news, here’s the sum of it: the bureaus are now using “OCR” (Optical Character Recognition) technology to “read” disputes via computer and, if possible, automatically categorize them and even possibly flag them as frivolous.

For the credit bureaus, OCR is an attempt to automate more of their process.  By reducing the need for human labor and categorizing and cataloging disputes via computer software as they are received, the credit bureaus can accomplish several things:

  1. Reduce the likelihood of human error
  2. Reduce staffing costs
  3. Automatically “fingerprint” disputes and store in a database
  4. Detect if similar disputes have been received before
  5. If the dispute can be automatically categorized (with a numerical e-Oscar code), the dispute can be forwarded to the creditor via e-Oscar with no human intervention whatsoever.  At the very least, the computer can do all the work and a human can just review the results and click a button to approve it.

Where the problem really gets kicked into high gear is starting at item #3.

Here’s the problem:

  • 100% of credit repair companies use form letters of some kind.
  • 99% of credit repair books tell you to do the same
  • If the bureaus can tell you are using a letter that they’ve seen before (such as a template from a credit repair product), they may flag your dispute as frivolous “right out of the box”.

So let’s say you buy some “Dummy Credit Repair” book and do what it says.  You use their templates (the ones that match your problems) to send to the bureaus.  Maybe you have been a victim of identity theft and have several accounts that are genuinely “NOT YOURS”.  So you pick the appropriate template, and send them away.

Then the bureaus receive your letters and their computers say “Hey, we’ve already gotten hundreds of letters that look just like this… this is obviously frivolous.”  And before you can say “OCR”, your dispute is rejected (or in many cases seemingly ignored).

Here’s the thing you really need to know about OCR: The only way it will hurt you is if you aren’t prepared for it.

If you are aware of it, and will take steps to protect yourself, the letters O C and R will remain mostly harmless for you.

What steps can you take? We’re still working on what we believe will be the best answer for this, but for now, the following will have to suffice:

- Don’t use a credit repair company.
- Hand write your disputes, or use strange fonts with unusual colors. This makes it difficult for the “OCR” scanner to read your dispute, requiring (hopefully) an actual human being to take a look at it.
- Make sure your disputes are HUMAN READABLE… use standard letter formats that make sense.  The delicate balance is to thwart the computer without totally screwing up your chances when your dispute reaches a live person.

We are working on methods to help consumers better deal with the potentially negative effects of those three innocent letters. I’ll be sure to keep you posted as we further develop those methods.

Million Dollar Discount

In a recent WSJ article it tells how a woman named Susan reduced the asking price of her home by $1,000,000 to $2.25 million… and even after the million dollar discount, nobody was apparently interested.

She got an offer for $1.6 million, which is LESS than what she paid in 1999, and HALF of her original asking price.

These numbers are huge, and I personally would not buy a million-dollar home… but this certainly presents a worthwhile opportunity for those who are paying attention.

Housing prices are dropping and mortgage troubles are multiplying, and if you and I are smart, we will do two things in response to this:

1. Get our “stuff” together now… our ducks in a row, if you will, and start building or rebuilding our credit (and our financial picture) to where it needs to be, and…

2. Hopefully as a result of #1, position ourselves so that when the right half-price housing deal comes our way, we can jump on it.  Many who think ahead will jump on not just one, but several.

So rather than stress about the economy and healthcare and whether or not you’ll have a job tomorrow (and believe me, I understand all of these stresses), my advice would be to use that energy to work on positioning yourself for financial success in the future. (That’s what I’m doing.)

Worrying will not make you 1 single cent richer.  Getting over it and building credit, saving money, taking action to make more money, and doing more with the money you have–these things will make you a lot of cents richer.

If you start preparing today, EVEN IF YOU MISS YOUR MARK, you will be much better off than those who sat, and worried, and did nothing.