August 21st 2010

Financial Education = Financial Freedom



Did you know that the individual debt in this country is growing 23 times faster than the economy? Did you know that the average person spends $1.05 for every dollar that is earned? Did you know that although it is tougher to declare bankruptcy; bankruptcies are higher than they ever have been in our history, and that the average family is only about three months from trying to declare a bankruptcy? Wow, some sobering facts, wouldn’t you say? The trouble is that the rules are changing and they are changing rapidly. Some of the wealth builders that we have relied on in our lives are no longer as reliable as they once were. One of the perfect examples is owning your own home.

Certainly owning a home is still a good thing, but the housing boom over the past couple of years have done us no favors. The foreclosures, by some statistics are up 50%. Mark Zandi, chief economist at Moody’s Economy.com estimates that every foreclosed home lowers the value of all homes on that block nearly 1.5%. Many experts predict that home prices will continue to fall to the tune of an additional 10% by the end of 2009. Hold on to your seats..the roller coaster is still going strong…

Foreclosures and credit card debt seem to go hand in hand. Again, the average person spends $1.05 for every dollar that is earned; this is called negative spending. On average, nearly half of what we purchase is purchased on our credit card. We as an American society have accumulated a mind boggling 2.2 trillion dollars in credit card debt in 2007. Yet an additional sign that credit card debt is stressing our wallets is that most credit card users pay only the minimum and are typically delinquent in their payments. What this does is increase fees, increase rates, cuts the actual credit limits and gives poorer and poorer credit rating..which then again starts the cycle of higher interest rates, lower credit limits, and higher fees. The circle continues to go around and around.

So what is an individual to do in this challenging economy? The answer is relatively simple: start to take responsibility in becoming financially educated. People are finally starting to turn the corner on understanding that they need to know and understand more about their own financial situation. Amazon Books has reported more than 3,500 book titles on the topic of building wealth, and Time Magazine recently named financial expert Suze Orman as one of the World’s Most Influential People of our time. So, people are starting to understand that they need to take ownership and responsibility for their finances.

But where do people go who need help and advice in becoming financially educated? Depending upon what type of education you are looking for; realize that you may need to access more than one expert. Expert….you must demand the individuals that you seek advice from are actual experts in their respective field. Ask about their credentials, experience and their successes. Do your own due diligence on these people who are calling themselves the expert. You are starting to set up your personal financial freedom, you owe to yourself to have the best of the best.

The areas you might consider looking for financial experts to help you in becoming financially healthy are debt elimination and restructuring; the quicker the better, asset protection, tax minimization, and credit restoration to name just a few. While looking for experts in these areas, can they also offer solutions that help you save the money you will need for an emergency fund? What’s an emergency fund you ask? It’s savings that you have set aside specifically for the emergencies that pop up in life unexpectedly like a tire blowing out on your car, like a new hot water heater that you need, like being in a car accident and needing to get your car repaired. This money is used for unexpected emergencies and nothing else.

Now that you are on your way to becoming financially healthy, can your experts help you choose the right investments that will help you to meet your retirement goals. Can they help you with investment opportunities that are not your typical 401K’s and mutual funds? Many experts believe that you will need at least one million dollars in your savings account to retire comfortably. If you are relatively young and reading this article, that is terrific, but if you are the average 50 year old American..guess what..the average 50 year old American has saved only $50,000.00 towards their retirement. That is a far cry from the one million dollars that experts are predicting that we will need to have in savings and this is with only ten years to go until retirement age.

A word of caution; you may not be able to find one person who is the expert in all of these areas. I would tend to think that if they are a true expert, you won’t, however there are companies out there who have experts in each of these areas under one umbrella so you don’t have to search from one company to another to find the best of the best.

So, if you are like so many Americans and are in debt, living on credit and you see no way out..there are educational lifeguards out there. Now that you know what to look for..go out and find yourself the best of the best.

Disclaimer: You shouldn’t make any investment decision based solely on what you read here. This is not an offer to buy or sell a security. Should you choose to invest in the markets, it should be only after exhaustive due diligence and possibly in consultation with a licensed investment advisor.

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November 15th 2009

How to Report an Error on Your Credit Report

Credit Reports

Have you been turned down for a loan recently? Have you applied for store credit and been refused? Did you really want that car and find out that because of your ‘credit score’ that they would have to require an unreasonable down payment?

Credit reports are designed to help businesses evaluate the risk factor in giving you money or valuable products on a line of credit.

The Fair Credit Reporting Act promotes the accuracy, fairness and privacy of information in the files of the nation’s credit reporting agencies. The act is enforced with regard to the consumer’s rights and requiring new responsibilities for the credit reporting agencies.

For example, a reporting agency must give you a copy of your report and they must provide a list of every inquiry about your credit report within the last year.

The agencies collect data on personal identification (name, address, social security number, current employer, etc), payment histories with all current and closed lines of credit that details how much you owe, when you’ve paid on time and what, if any have been reported to a collection agency.

The final two items are all inquiries that have been made on your credit report as well as anything that is considered a matter of public record such as bankruptcies, foreclosures and tax liens.

To repair or report errors on your credit report, you must obtain a copy of your personal report and score. The reports themselves are not uniform from company to company.

Experian may not list all the data of Equifax and vice versa. So, be sure to obtain credit history reports from the same company as the creditor who turned down your application. In some states, that may require a small fee, but after September 1, 2005 all states will have to be in compliance with providing a free credit report.

Once you have the report, verify the information. Every report is also scored. Scoring is the system that creditors use to determine your credit experience. These scores are valid for all three companies and are uniform in value.

Credit scores range from 375 to 900 points, but those numbers mean little on their own. A score of 650 or better usually indicates a very good credit history. Scores between 620 and 650 are considered average, while scores below 620 may prevent a person from getting a loan. If they do receive one, it is likely one with prohibitive interest attached.

If you look at all the information on your credit report and it’s correct, then you are faced with having to improve either your payment history, lower the number of debts.

If the score is low because you possess very little credit history, investing in a secured credit card can help generate good feedback to your credit report or a co-signer who can provide the creditor with a good credit history as security for your lack of one.

Inaccurate information, however, such as reported late payments that you disagree with or a listing for a debt that is not yours is repairable. Some companies offer debt consolidation or credit repair. Before getting involved with either type, be sure you thoroughly check out the company to avoid scams.

Doing the credit repair on your own is simple enough. Write a letter, detailing the inaccuracy to the reporting company. Send the letter and copies (copies only) of any documents supporting your claim to the credit-reporting agency. Some agencies allow you to do this online through their websites; however, if you need to send them hard data it’s better to use regular postal mail.

The credit agencies are then required by law to investigate the item in question, usually within 30 days. They must forward all information to the reporting creditor and if they cannot verify the veracity of their report or the creditor does not respond, the report will then be changed and updated to reflect the data provided.

The company must then notify you in writing of the change as well as provide you with an updated credit report.

It’s important to note, that if there is an inaccuracy on Experian that there is likely a similar one on Trans Union and Equifax. Each company must be notified, separately for each item.

Also, if you have more than one item you are disputing on your credit report, then you may have to send a separate letter for each instance, to be certain that each item is addressed.

While this can be a time-consuming task at first glance, it is the best way to remove inaccuracies from your credit history and repair misinformation damage to your credit report. If you request it, the reporting agency must also send notices of any corrections to anyone who received your report in the previous six months.

If the negative information reported to your credit history is accurate, then only time can repair the damage of the negative score. Most information rolls off after 7 to 10 years, but felony convictions, information on jobs paying you over $75,000 a year or credit of more than $150,000 has no time limit.

If you had a car repossessed, you’ll have to wait about 8 years to see the repossession removed from your credit history. Open credit lines, whether the information is negative or positive, will remain active on your credit history whether you actively use the credit or not.

Applying for credit is never a fun, even for people who are considered to have good credit. There is always an inherent fear of rejection by the creditor you are applying for. If you are concerned about your credit history, keep an eye on it.

It’s recommended that you check your credit history once a year at least, because in an age of identity theft, negative credit history can be part of the collateral damage.

For more articles and suggestions, visit http://www.bills.com/credit-report-errors-articlebills/

Justin narin has 5 years experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com

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