Money Walks

As I have stressed the level of importance regarding your credit score in my previous posts, now I want to talk about how you can improve your credit score. We all know that credit is very important and useful to us in many ways. That little slip of plastic opens up a whole new world of possibilities and you want to make sure that credit is on your side. Here is a quick list of 5 things you can do to improve your credit score:

1. Pay your bills on time. This is probably the most important of all the steps when trying to improve your credit score. Missing just one payment on a credit card or car loan can take 50 to 100 points off your credit score. And if you miss an entire month’s worth of payments, your score could easily drop 100 to 200 points.
2. Don’t automatically close older accounts you have paid off.This way of thinking has been updated over the past few years. The rule of thumb had been to automatically close every account that had a zero balance to improve your score. Now the strategy is just the opposite. By closing your oldest accounts, you may actually be considered less creditworthy
3. Try credit counseling. Legitimate credit counseling agencies, like InCharge Debt Solutions, a non-profit consumer organization, can help you improve your credit situation, which in turn can help improve you credit score.
4. Avoid bankruptcy. The worse thing that can happen to your credit score is to declare bankruptcy. This can take off around 200-300(or more) points on your credit score!And declaring bankruptcy will typically stay on a credit report for a very long time, up to 10 years.
5. Pay down your debts, and once you have paid them off, charge less in the future. Creditors expect a certain amount of room between the amount of debt on your credit cards and your total credit limits. The more debt you pay off, the wider that gap and the better your credit score.

Like most of my friends, who loves to flash their plastic cards, they don’t always make the best decisions when choosing their credit cards. Instead they chose the cards that has the highest credit limit and then spend away. Here are some things to consider when looking for a credit card:

• Many banks and credit cards charge you annual fees for the card to lend you the money. You want to make sure you find out all the (hidden) fees that they come with before making that decision to accpet the card. If the card has an annual fee, call and negotiate. Most lenders will take the fee off if you threaten to take your business elsewhere.
• Some cards have no annual fee, or don’t charge the fee if you spend more than a certain amount with them each year. You want to carry a card that has no annual fee, a 25-day grace period and an APR thats 12% or lower. If the card’s APR is higher than 12%, call and negotiate.
• Many cards now have introductory offers, such as 0% charges on your old balance for six months if you transfer to them. Beware of being landed with a very high APR at the end of the interest-free period.
• Your introductory rate should last at least 6 months.
• If you’re already in debt, not very organized or good at handling money, maybe a credit card is not necessary for you.

Some credit cards also offer purchase protection, temporary insurance against damage to your goods or theft and this is generally free of charge. Payment protection can also be arranged at a cost, which you can design to pay it on a monthly repayment plan. When choosing your credit card, you should definitely do your research and don’t be so quick to take the card with the highest credit limit.

Hey everyone, it’s almost that time of the year to be thinking about our goals we want to accomplish for the year 2007. Later on this week, I’m going to be posting my New Years Resolution for 2007 and was wondering if you have any that you want to share with us. If so leave a comment or send me an email to moneywalks(at)gmail(dot)com and I’ll post them here along with mines. I plan on posting it up on New Years so you have til the 31st of december, Cheers!

Happy Holidays!

One of the Chirstmas gifts I got this year was a book called Retire Young Retire Rich, from the same author who wrote the best seller Rich Dad Poor Dad, Robert Kiyosaki. I am looking forward to reading this book and possibly share some key points and post them here. My goal is to read at least one chapther a day so that means I should be done in twenty one days which is the 16th of January.

So far I have read the introduction to the book called ”Why David Met Goliath” and want to point out some parts that I liked. Robert Kiyosaki talks about how one the most important word in the world of money is leverage. He says, “Leverage is the reason some people become rich and others do not become rich.” The book is broken up into four sections based on leverage.

1. The leverage of your mind (chap 1-8)
2. The leverage of your plan (chap 9-13)
3. The leverage of your actions (chap 14-20)
4. The leverage of the first step (chap 21)

In the introduction, he noted that David and Goliath was one of rich dad’s favorite stories. Saying that he suspects that his rich dad may have seen himself as David, a man who started with nothing, yet to rose to compete against the giants of business. Rich dad said,”David could beat Goliath because David knew how to use the power of leverage. A young boy and a simple slingshot were far more powerful than the feared giant, Goliath. That is the power of leverage.”

I’m looking forward to starting this book.

Oh man, Thank God Christmas shopping is over and done with. So I was one of those last minute shoppers and waited til the last minute and did my Christmas shopping on the 24th and let me tell you…it was no fun. I ended up spending $334.11 for christmas gifts, which was still under my original budget of $400.00 but probably could have saved about 50 bucks if I wasn’t so much in a rush. That’s why it’s a baaad idea to wait til the last minute.

Anyways, so there was a huge mistake in my countdown counter. For some reason, my counter was set to go off a month later than I had set it so there’s actually 62 days left in my countdown for getting out of debt. I was looking at the counter and thinking to myself it didn’t look right so that’s how I caught the mistake. Although the counter was set to go off a month later than what I wanted, it shouldn’t make a difference using my original expected goal date, Feb of 26th, because I had made the goal date based on the date veruses numbers of days left.

So here are the stats for this past week: I was able to pay off a nice round sum of 500 dollars and now I am currently at -$5029.61, which looks a lot better than my previous balance of -$5529.61. However, I will not be able to pay off much of anything next week because I will miss out on a weeks worth of paycheck due to my trip to Florida which will be from the 25th of December to the 3rd of January. I should still be okay though. After my two refund checks of $1400.00 comes in, I will be back on track ;D