Free Credit Report Repair Guide

The IRS is cracking down on some of the largest credit counseling services.
LAURIE KELLMAN from the AP reports the following:

“The Internal Revenue Service has canceled the tax-exempt status for some of the nation’s largest educational credit counseling services after audits revealed they exist mainly to prey on debt-ridden customers, Commissioner Mark Everson said Monday.”

For people in this industry or people who have used credit counseling this will come as no surprise. There are a lot of “sharks” in the water trying to take peoples money. Do a search online for Credit repair or debt consolidation and you will get many choices and many of those choices will be scams.

The IRS crack down validates much of what we have advised for sometime. Repairing your credit by getting out of debt is not easy and takes time, management, and personal responsibility.

The study took over 2 years and reviewed 41 companies. The other 740 companies will be reviewed for tax-exempt status. Nice to see the Federal Government standup for the little people.

Ok so you really want to make your Mother Happy? Why don’t you start attacking that debt and paying off your credit cards today? Show your Mom you are responsible and know the value of the dollar. Every dollar you pay off can at a later time be used to invest and earn interest. Your mother will be very happy to know you are building for your future. You should still get her the flowers. She is your Mother after all.

Plus you will get great satisfaction from earning interest rather than paying it.

Enjoy the day!

If you think your financial situation is touch check this out.

Tricia has 3 kids, 2 mortgages, 1 car payment … and a salary of about $31,000. While it’s not easy, she’s doing OK, thanks. Here are 15 lessons she learned the hard way.

You can find all 15 tips here, but here are a few of the highlights

Pay off debt weekly. Tricia has about $4,000 in credit-card debt on two cards. In addition to making the monthly minimum payment, she sends an additional payment each week. “Another good strategy is to add whatever interest you were charged that month to your minimums. Every little bit helps.”

Think different. “A big thing that’s changed over the last two years is the way I think of shopping and purchases. I used to be more impulsive. I’ve learned to ask myself: ‘Why do you need to buy that? Why does my kid need that?’ Give me a reason to spend the money. I’ve really learned the difference between necessities and luxuries.”

Never pay full price. “Clearance is my favorite word,” Tricia jokes. Her other trick for finding high-quality items at low prices: consignment shops. Now her daughter is a fan, too.

A year without spending, Judith Levin decided to live a very frugal life for a year and then recounts the details in her new book. I have not read the book so I have no idea if it’s worth buying, but I would say the premise is a good one when trying to cut your debt.

Cut out the things that are “luxury items” and take the money and apply it to paying down your debt.

Levin, states it was much harder than she thought. But she was able to cut her credit card debt in half. She allows learned controlling her impulse buys. These two lessons are fantastic to learn. For more on her book click here.

What makes up a credit score?

Fair Isaac uses 22 pieces of data collected from the three major credit bureaus to produce a FICO score with the lowest possible score of 300 and 850 as the highest possible score. There are 5 categories used to determine your score.

• Payment history 35%
• Debt 30%
• Length of Credit history 15%
• New Credit 10%
• Types of Credit used 10%

The two largest factors in obtaining a good credit score is to make sure you pay on time and keep your debt load low. The sad reality is only 13% of all Americans have a FICO score above 800. This means many Americans are paying more money for the exact same items.

Car purchase example:

Very Good Score
Loan amount $35,000
Term: 48 months
Interest Rate: 3%
Payment: $775

Average score
Loan amount $35,000
Term: 48 months
Interest Rate: 9%
Payment: $871

That means the customer with an average score will pay $96 more a month for the exact same car. Over the life of the loan that extra $96 equals $4608 extra!

So what’s next?

Pay on time! Take action to reduce your debt. Don’t just pay the minimum on your credit cards. Get focused and realize the lower your FICO score the more you will pay for items bought with credit or loans. This is like being a second class citizen right here in the Untied States of America. It’s time to fight back.

• Pay on time!
• Take action to reduce your debt. Don’t just pay the minimum on your credit cards.
• Don’t close old accounts.
• Don’t open new lines of credit.

It takes time and discipline to increase or maintain a high credit score, but the cost of not doing so is dramatic. A higher FICO score is in reach. Begin with the four “next steps” listed above and over time your score should improve.

The Tax Deadline is Today!

Ok fellow Americans today is the day we all must file our taxes. So what should you do if you can not complete your returns by today’s deadline? You can always file for an automatic extension. http://www.irs.gov/newsroom/article/0,,id=156073,00.html

What if you are submitting your completed returns today? First off, good job, but remember if you are getting any money back you need to use this money to Crush Your Debt!

See my post from a couple weeks ago. http://www.havegoodcredit.com/blog/tax-time.htm

“Treasury prices sold off Thursday, pushing the 10-year yield above 5% for the first time in nearly four years, after unexpectedly strong retail sales and consumer-sentiment data advanced a case for the Federal Reserve to keep lifting rates”

This is an all time high since 2002. What does this mean to you? Well if you have an ARM then its time to re-finance and get yourself into a fixed rate mortgage. This increase in 10 year bond will force the rates of ARM’s to increase which means your monthly payment will go up. For some it will hurt there budgets some and for others this will be the difference between making your mortgage payment and not.

The good news is if you are a bond investor you can look forward to a more higher return on your investment.