How should I pay off my debts?

     So, your in debt. Its got you down and you cannot sleep. You think about it all the time and it has destroyed your credit score. Well you are not alone!

Man lying awake in bed

According to a 2016 NerdWallet analysis, the average U.S. household holds approximately $17,000 in credit card debt. 
Here are some simple ways to get back up on the horse.

     Create a budget. By creating a budget you will be bale to keep track of your spending as well see where you can cut costs.

     Pay your most expensive debts first. Pay off your credits cards with the highest interest rates first. Pay more than the minimum, try to double it. Continue to pay the minimum payments on the others. Once it is paid off rinse and repeat for the rest of the cards.

     Pay more than the minimum payment. Paying the minimum gets you no where fast. Aim to double your payment or more to actually make a dent in your debt.

     Try a balance transfer. If you can confidently pay off a card in a few months, try transferring the balance to a card with a zero interest balance transfer. Pay off the debt before the balance transfer expires. and you can save hundreds.

     Stop using your credit cards. This is important. How can you pay down your debts if you are still making purchases with the same card? Wait until your finances are in control to use your credit cards again and become a cash shopper on a budget.

     Put your bonuses from work toward the debt or possibly consider putting some of your tax return towards your debt. It can help to remove a good chunk at one time.

     Delete all off your credit cards from online stores that your frequent. It makes it easier to resist clicking the pay button for unnecessary items. Start using your debit card instead or nothing at all.

     Have a yard sale. Sale old or unwanted items from your house and use it to put towards your debt. Be fair in the pricing and you can use online resources to help such as Craigslist or Facebook.

     Chang your habits. You will likely ending saving lots of money by changing little habits such as eating out for lunch. try bringing lunch from home. Instead of ordering pizza for dinner try making your own, its much cheaper. What can you change without sacrificing your lifestyle too much? A few less beers, less fast food and less cigarettes could go along way.

     Most importantly, reward yourself! Once you see there is more money in the bank treat your self to something reasonable. After not eating fast food for like, ever, I was finally able to treat myself out to a nice dinner at a real restaurant that used plates!

Good Luck!

Man thinking to himself

Sources:
https://money.usnews.com/money/personal-finance/articles/2017-05-10/10-
easy-ways-to-pay-off-debt

What is a secured credit card?

     A secured credit card is a credit card that you have to make a security deposit on first. This makes it less risky to the card issuer because if you do not pay they can take it from the deposit. 

wallet and credit cards

     This is a good option for people with bad credit. Often the best way to build credit is with a credit card, but it takes a good credit score to obtain a decent one. 

     If you use this card responsibly it reports favorably on your credit report building your credit if you have none and raising your score if you have bad credit.

wallet and debit cards

Click the link to learn more

Secured credit card




















Sources:

https://www.nerdwallet.com/blog/credit-cards/secured-credit-cards-vs-unsecured-difference/

What is the Fair Debt Collections Practices Act?

   

Old woman on phone with debt collector.

     The Fair Debt Collection Practices Act (FDCPA)  out lines what a debt collector can and cannot do in order to collect on a debt. The law pertains to third party debt collectors like collections agencies, not original creditors. An original creditor is the credit card company that you currently owe, the debt collector is the one who purchases your delinquent accounts in hopes of collecting from you and making money. If these laws are violated by a debt collector they face fines and penalties.

 These are the rules the debt collectors must adhere to:

 1. Debt collectors cannot call you to collect at inconvenient times. The times that are generally considered acceptable are between 8 am and 9 pm. A debt collector may call outside these times only with permission from the debtor.

 2. A debt collector can call your place of employment to collect a debt, but if you tell them either verbally or in writing to stop calling your workplace, the debtor cannot call that number again. Also, if you request in writing for them not call your home they must stop calling.

 3. A debt collector can call relatives and associates, but he cannot divulge any information about the actual debt or that he is a debt collector. They can only contact third time parties one time each.

 4. A debt collector can only inform the debtor of the debt and request some form of payment.

 5. It is illegal for a debt collector to harass and threaten bodily harm or arrest. If the debt collector does not intend to sue in court it is illegal for them to say so.

It is also good to understand these terms:

debt- A debt is money that is owed.

debtor- A debtor is the one who owes money.

debt collector- A debt collector is the third party trying to collect a debt.

original creditor- An original creditor is where the debt originated.

Debt collectors have rules about when they can call.

Sources:
https://www.investopedia.com/terms/f/fair-debt-collection-practices-act-fdcpa.asp

What is a credit score anyway?

Credit score

     Your credit score is a 3 digit number ranging from 300-850 that is intended to gauge your credit worthiness. Lenders use this number to decide if they want to approve your loan or application for credit and how much interest and fees you will be charged. Generally, the higher the score the easier it is to get approved and the lower the fees and interest will be.

Your credit score is made up of five major parts:

1. Payment history (35%). Are you paying bills on time? 30 day delinquencies are reported on your report. Some creditors wait till as long as 60 days. This does leave you a small grace period. If you miss a payment but can pay it before 30 days is up, you should be fine.
2. Amounts owed. (30%)The total amount of what is owed by you is being tracked on your report. This is the amount of credit that you are currently using.
3. Length of credit history. (15%) This is how long your accounts are open and time since last used.
4. Types of credit. (10%) The variety of accounts such as installment and revolving.
5. New credit (10%) How you have attempted to acquire new credit and number of inquiries.

What is the Fair Credit Reporting Act?

Government building

The Fair Credit Reporting Act.

    The Fair Credit Reporting Act passed (FCRA)  originally in 1970. Combined with the Fair Debt Collection Practices Act (FDCPA) it forms the basis of consumer rights law in the United States.

The responsibility to enforce this lies on the Federal trade Commision (FTC) and the Consumer Financial Protection Bureau. It mostly deals with the protection of consumer data and information privacy.

The key points are:

1. There will be no secret databases used to make decisions about a person’s life.
2. Individuals have the right to see and challenge the information in such databases.
3. Information in such a database should expire after a reasonable amount of time.

The main database that collects such information and is used to make decisions about people’s life is the consumer report or “credit report”. It contains information about credit usage, repayment history and the status of your accounts. It contains such information as your credit limit, how much of your limit that you are using and whether a debtor or bill collector is collecting money owed money. They also contain rental repayment information if you rent your home. Also, it contains public records such as tax liens and bankruptcy.

Ever asked yourself "How can i fix my credit"? Here is some credit advice.

     Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here. Never charge more than 30% of the available balance on any of your credit cards.
      Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority. Do use your credit cards – Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home. ​

Consumer report or credit report

      Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, then pay it off. How long each of your accounts have been active is a major factor in your credit score. Remember that this all takes time – Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Repairing your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.

Books related to finance courtesy of Amazon

The benefits of good credit

Credit score range

       There are several benefits to having good credit and good credit saves you money. A good score means that you can get loans and credit cards at lower interest rates and lower finance charges. Your chance of being approved for a loan or credit card rises. You have more room to negotiate and bargain for better interest rates. You can have a higher limit on loans and credit cards. It makes getting approved to rent a home easier. Your car insurance will offer better rates. And, you can get utilities and cell phones with no deposit.
     Get a free credit consultation to see where your credit is at and what can be done to improve it. Do not be left in the dark about your credit report. Never, go apply for any kind of loan or credit without checking your credit report first. Having the knowledge of your own credit report can also help you avoid unscrupulous lenders. 
     Visit Blueforce1credit, LLC by clicking the link below.
                             Get your free consultation


Sources:
https://thecreditpros.com/credit-scores-built-payment-history/
https://www.thebalance.com/having-good-credit-score-960528

Credit monitoring protects your credit

     Your credit is important to your life. Credit monitoring is a service that can prevent identity theft. It can monitor your credit activity. You can be alerted every time an account is opened or when your score changes. They can help you place a freeze on your accounts and they can help you through the process of fixing the situation. People can use your personal information to open up new credit cards, apply for loans and worse.
      According to 2018 Identity Fraud: Fraud Enters a New Era of Complexity from Javelin Strategy & Research, in 2017, there were 16.7 million victims of identity fraud, a record high that followed a previous record the year before.

(https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime).

     Fixing the mess that identity theft can cause often causes much heart ache. You have to create a fraud alert for your banks and the credit agencies. You have to file a police report that needs to be sent in to those agencies. Creditors and banks may still hold you liable for the money that was stolen and the time to resolve it may take years. 

    Protecting your credit and identity is as important as protecting your home and family. Having a credit monitoring service is a great way to ensure you have the protection you need. 

    IdentityIQ is one such service and it is a top notch and affordable service. They offer a wide range of services from credit reports to identity monitoring to identity theft insurance. This service can protect your whole family.

     See for yourself click this link and take a tour with the $1 dollar trial through IdentityIQ.

                                                       

IdentityIQ $1 trial

Credit monitoring

Source links:

https://www.identityiq.com/

https://www.forbes.com/sites/forbesagencycouncil/2018/06/01/the-hidden-costs-of-identity-theft/#714ba358357b

(https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime)