There are many ways to get ahead financially: attend seminars where you cut your credit cards with hundreds of other people, participate in the financial assistance service that helps you get a home equity loan or refinance your home, or you can transfer debt from one credit card to another credit card with a 0% introductory rate (which rises to 12% in six months).
The reason these methods don’t work is because we don’t reduce our expenses while implementing these strategies. Even if we are making more money, unless we reduce expenses, we will continue to spend more money than we have and incur debt. Manage your money and yourself. Money is like food; We don’t eat only when we’re hungry, and we certainly don’t spend only when we need something.
Be careful: debt forgiveness can hurt you. The company that forgives your debt can issue a 1099C, which means that the forgiven amount is added to your taxed income.
When there is a will, there is another way:
Your credit score (also called your FICO or Beacon score) will affect the interest rate you can lock in. Credit scores range from 500 to 850. Where is it on the scale?
What’s in a number?
500 and under: you’re in serious trouble
650 to 680 will probably have a hard time getting credit, and if you do, it will be at higher rates
700+ – excellent score
How You Got Your Credit Score:
a) Payment history (35% of the score). Make payments on time or earlier.
b) Amounts owed (30% of the score)
c) Credit history (15% of the score). The longer you have credit, the higher your score.
d) New credit (10% of the score). New credit cards.
e) Type of credit you have in use. Mortgages, Bloomingdale’s, etc.
There are three reporting services that can give you your score: Equifax.com, Experian.com, and Transunion.com. At least once, do an experiment and request a report from all three. They will probably provide a supplemental report each year, per person. You will most likely find inconsistencies in the reports, such as missing or incorrect information.
Every time a credit report is run on you, your score is lowered by two or three points. You still want to shop around for a mortgage, but consider using a mortgage broker who runs a report to compare loan prices. If you go to five different banks, your score may drop 15 points.
