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Make Your Money Work Harder and Smarter

2011-12-21T19:23:00.000-08:00

Make Your Money Work Harder and Smarter

MyCredit Matters is one of the few companies that makes available money management tools. These tools will help someone who has never made a budget get a working plan so they have their money in balance and it will also help those who already have a budget get a super charged budget.

Its suprising how many individuals have sketchy budgets especially in this economy. I have yet to meet a client that has money to pay bills, money to spend AND money to save. I've considered that I am good with money and when I reviewed the program that is now available to MyCredit Matters clients I improved my money plan.

Its scary that there are households across America that not only live paycheck to paycheck but have no money set aside for 'what if' situations. The really cool thing about doing that type of planning is the emergencies either slow way down or come to a screaching halt. Murphy's law- If anything can go wrong , it will. Well Murphy goes away and bothers someone else when you plan for an emergency fund.

People fall into either of two categories: those who overspend and are always faced with the drama that creates and those who pay bills, pay bills and pay more bills. No matter how much money you make or how little you can learn to allocate your dollars to pay household bills, spend some money and save some money. The problem is most folks don't know where the balance should be. Nor do they know what method to use so when their income fluctuates they end of having a major budgeting crash. There is light at the end of the tunnel and it isn't an oncoming train.

Can you go from having your money out of whack to in balance in thirty days or less...........most likely no. You can take steps to move in that direction and within six months to a year be in a much better position than your current situation.

At MyCredit Matters, we haven't reinvented the wheel but we're using it to its best capacity. It does take separating your emotion from your money. Too many purchases are made on emotion and not on objectivity. If you don't think that's true, the next time something is calling (screaming) your name, take a deep breath, back away and wait three days. In that length of time forecast the best and worst case scenario of making that purchase. If you have to forego paying core bills: rent, car payment, food or utilities to make the purchase, DON'T. If you want it that bad take an affordable amount of money, put it away and save until you can buy it. Don't use credit. The amount of money Americans spend on interest could possibly put a child through college.

So do yourself a favor! Realistically look at how you're spending your money, be honest with yourself and if there is room for improvement let the professionals at MyCredit Matters help you. While your at it, invite a friend or family member too.

To Tax or Not To Tax Is That The Question

2010-07-24T07:06:00.000-07:00

Image by on1stsite . via Flickr

OR is the real question for the government to cover their _ _ _ with getting more money from the average Joe, us, the tax payer?

You can actually owe 0 tax and get penalized over $1000 for filing late. How can that be? Businesses are required to file their corporate tax on or before March 15 each year. Since the IRS had a bunch of late filers, they imposed a penalty beginning in 2008 and notifiying businesses that they would be taxed $89. If you were a conscientious tax payer which I don't know to what degree because you're filing late anyway, you might call to find out what is going on. So I did. For 2009 the IRS waived the penalty and told me that both 2008 and 2009 would be waived. I received a letter stating that 2009 was waived and currently the penalty for 2008 is $1025.68. Why would the penalty not be the same for both years? Both years there was zero tax owing.The reason for the late filing was an extreme emotional hardship, a death in the family, my mom. I spent a good portion of 2008 making trips to be with her and it became quite necessary to invite her to come stay with me. Subsequent to that she got sick and died. During the next year I spent my time in a fog. It's one of those things that when you're in it, you don't know you're in it but once you come out of it, you know definitely you were in one.
Let's not forget how this game got started. Insurance companies created a product to sell to Banks so Banks could get paid on loans that defaulted. Banks like the big dogs BofA, Chase, Countrywide, just to mention a few decided to write loans to anyone who had a pulse. Didn't matter how poor your credit was you could get a loan. Is it really a surprise that the rate of loans defaulting was on the increase? Really?! Insurance companies couldn't cover the claims. Both of those industries got money from the government. At the same time credit bureaus raised the top score to 990 and didn't automatically move everyone up. The losers were rewarded and the winners penalized. Instead of the principal making the bullies pay up, they went to the little boys and made them empty out their pockets. Why would we hold the big spenders to the same set of rules as everyone else?
The biggest Ponzy scheme of all was created by Goldman&Sachs and no one went to jail there. How much more tax will be heaped on the little boys to bail out the bullies? What's next?

Fact or Fiction How Credit Saavy Are You?

2010-06-18T03:54:00.000-07:00

1) All I have to do is pay my bills on time. Fact or Fiction
2) I gain points by paying a debt that has been charged-off
or has gone to collection? Fact or Fiction
3) I can do my own credit repair Fact or Fiction
4) Obsolete negative pay history is automatically purged
after 7 years. Fact or Fiction
5) I can use up to my total limit on my credit card without
losing points as long as I pay my bill on time. Fact or Fiction
6) Positive pay history is automatically purged after 10 years. Fact or Fiction
7) I don't lose any points when I apply for credit. Fact or Fiction
8) Initially I lose points when I get a home loan or car loan. Fact or Fiction
9) When I get credit card applications in the mail that means
my credit score is high enough to get approved. Fact or Fiction
10) My money is in balance as long as I can pay my bills each
month. Fact or Fiction

E-mail your answers to http://www.mycreditmatters.biz/contactus to see just how well you did.

Is Your Money In Balance?

2010-06-14T09:49:00.000-07:00

When your money is in balance you have money to pay bills, money to spend and money to save.

Reply to this post and tell me what the correct percentages are in the equation below:

_____% basic bills + _____% wants + _____% savings= 100% of net income

Who's Who For Business

2010-06-14T09:12:00.001-07:00

Cambridge to Honor Pamela Wheeler in Who's Who For Business 2010-2011. Just approved this morning. Completed a phone interview with Cambridge Exec. Press release to follow.

When Do Points Come Back?

2010-06-13T09:30:00.000-07:00

When a collections is paid or when it is removed from your credit report? Sadly it is the latter and not the former. Don't get me wrong, it is always a great idea to pay your debt. If a collection is paid during the first thirty days that it goes to collection it can come off of your report. If it is later than that, paying the collection stops the clock on additional interest, finance charges and possibly lawyer fees. Don't expect that a computer will automatically purge this information. It must be requested off.

The way in which you make that request will make a difference. We, at MyCredit Matters work diligently to get you the best results in the shortest period of time.

Will I Lose Any Points By Using Up To My Limit On My Credit Card?

2010-06-13T09:06:00.000-07:00

Yes, to simply state it. By applying for a credit card you had to have a score high enough to be approved. It had to be higher than 650 and currently it may be necessary to have a score higher than 720. A FICO score of 720 is considered 'C' rated paper. Once you were approved, you gained 50 pts for getting the card. If you use over 30% of your total limit on a monthly basis you have lost half of the points that you originally gained. Just fyi I'm not even talking about whether you have missed a payment of not. You've lost these points even if your pay history with this creditor is perfect. No worries! You can gain these points back.

We help our clients do exactly that along with gaining points back in other critical areas of your credit report.

Countrywide's Mozilo, Two Ex-Executives Accused by SEC of Fraud

2009-06-05T09:37:00.000-07:00

June 4 (Bloomberg) -- Former Countrywide Financial Corp. Chief Executive Officer Angelo Mozilo and two other people were accused of fraud by the U.S. Securities and Exchange Commission following an investigation of the firm's role in the subprime mortgage crisis.

The agency will hold a press conference at 4 p.m. today in Washington to discuss the case, it said in a statement. The SEC may accuse Mozilo of withholding information from investors about the mortgage lender's condition and selling shares based on inside information to avoid losses, people familiar with the matter said, requesting anonymity because the case isn't public.

Mozilo, 70, is the most prominent executive targeted by U.S. regulators examining the subprime mortgage crisis. In April, the SEC reached a $2.45 million settlement with Michael Strauss, the former CEO of American Home Mortgage Investment Corp., over claims he understated loss reserves before the Melville, New York-based lender's bankruptcy.

The agency also sued former Bear Stearns Cos. hedge-fund managers Ralph Cioffi and Matthew Tannin last year for allegedly misleading clients about pending losses and redemptions. They have pleaded not guilty to criminal charges.

SEC spokesman John Heine declined to comment on the allegations. All three defendants are expected to dispute the case, one of the people familiar with the matter said.

David Siegel, an attorney for Mozilo at Irell & Manella LLP in Los Angeles, said today in an e-mail before the SEC's announcement that, "We won't comment on rumors concerning the matter."

'Scandalous' Allegations

In a statement last month, Siegel said there is no "fair basis for allegations to be made against Mr. Mozilo" and that assertions he had sold stock on nonpublic information are "scandalous and inconsistent with even a cursory examination of the facts" surrounding the sales.

Mozilo co-founded Countrywide in 1969 and built it into the nation's biggest mortgage lender, helping trigger the subprime bubble by offering loans to customers with below-average credit scores. Mounting loan defaults slashed the company's stock price, prompting its sale to Bank of America Corp. last year.

The agency may also target former Chief Operating Officer David Sambol and former Chief Financial Officer Eric Sieracki, the Daily Journal, a Los Angeles legal newspaper, reported yesterday, citing unidentified attorneys familiar with the situation. The regulator may accuse the executives of inadequately describing the company's lending standards in its 2007 annual report, it said.

Mozilo sold the lender's stock in 2007 under at least two automated trading plans, according to regulatory filings at the time. He said that year that he had arranged to reduce his stake after being advised to diversify his investments. The SEC doesn't have jurisdiction over mortgage-lending practices.

To contact the reporter on this story: David Scheer in New York at dscheer@bloomberg.net ; Karen Gullo in San Francisco at kgullo@bloomberg.net .

Want a Better Job? Boost Your Credit Score

2009-05-11T13:06:00.000-07:00

Financialy fit individuals pay as much attention to the liability side of their personal balance sheet as they do to the asset side. Theoretically, at least, you have a lot more control over the amount and terms of your debt than on how the markets might impact the value of your investments. But do you really have as much control as you would like? Or are the currently low interest rates you’ve been reading about out of reach for you because your credit score isn’t as high as it needs to be? It’s never too late to get your debt under control and take steps to boost your credit score. Here’s how: Why does your credit score matter?The most widely accepted measure of credit worthiness is the so-called “FICO® score.” Named for its originator, the Fair Isaac COrporation, your FICO score is used by lenders as a quick gauge of your ability to repay debt. Think of your FICO score as the grown-up version of a high school grade point average or Scholastic Assessment Test (SAT) score—the higher the better. A high credit score can not only help you secure a lower interest rate when you do need to borrow—it can also help you get hired or reduce your insurance premiums because, generally speaking, the companies that use the FICO score believe that people with higher scores tend to act more responsibly in other areas of their lives. Conversely, a lower score makes it all the harder to land a job, get a loan or qualify for the best terms on a wide variety of consumer contracts. FICO scores can range from 300 to 850. Only a small percentage of consumers have scores above 800. The median score is around 725, but a score of 760 or higher typically gets the best deal on interest rates. Income and assets (which are not included in the credit score formula) can also affect the amount and terms of your loans. But a good job and net worth might not be enough to overcome a poor credit score, depending on the lender’s standards. A higher credit score will give you more leverage in negotiating the best terms, while a lower score will limit your options. See the difference: MyFICO.com estimates that someone with a FICO score of at least 720, who takes out a 36-month $20,000 auto loan, will pay a 6.098% annual percentage rate (APR)—translating into $609 monthly car payments. In contrast, someone with a score between 500 and 589 will pay a 16.240% APR—$706 monthly car payments. That’s $3,492 more over 36 monthly payments than the person with the higher score.1 Five primary factors impact your scoreThese are the five areas that determine your FICO score:
Payment history: Someone once said that 90% of success in life is just showing up on time. That’s certainly true when it comes to paying your debts in a timely fashion. If you make a habit out of paying late, your credit score will suffer.
Length of credit history: The longer your history, the better. Anyone can look good or bad over a short period. Borrowing and repayment patterns over a longer period of time carry more weight.
Credit utilization: Never confuse what you can borrow with what you should borrow. Your score will suffer if you utilize more than 50% of the available limit on your credit cards and lines of credit. The level of outstanding debt relative to available borrowing power has a big impact on your score.
Frequency of new credit requests: Just as a hiring manager might frown on a job applicant who has worked for a large number of employers over a short period of time, frequently applying for credit cards or loans in a given period can negatively affect your score.
Types of credit used: A combination of different types of installment (such as auto or mortgage loans) and revolving (e.g., credit cards) debt is better than having just one category of debt on your credit history. How to boost your credit scoreHere are some steps you can take to improve your FICO score:
Pay your bills on time. This is the most important thing you can do, as your payment history accounts for roughly 35% of your score. If you’re behind, get caught up as quickly as possible and then stay current. If you’re struggling, contact your creditors as early as possible to work out a payment schedule. The sooner you get current, the better. The negative impact of old late payments will diminish over time and is likely to be completely erased from your credit report after seven years.
Increase the length of your credit history. It accounts for 15% of your FICO score. Cancelling an old card or getting a lot of new credit within a short time span can hurt your score because it lowers the average age of your accounts.
Keep your credit card balances low. Credit utilization makes up 30% of your total credit score. Ideally, you should keep the amount you borrow below 25% of your available credit—for example, borrow no more than $2,000 from a card with an $8,000 limit. Surprisingly, even if you pay off your credit cards every month, the average balance will still impact the utilization component of your score.
Minimize the frequency of new credit requests. It accounts for 10% of your credit score. Your credit report records an inquiry every time a potential lender requests a copy of the report—and that can make lenders nervous. If you’re thinking about taking out a mortgage or applying for some other type of loan in the near future, don’t apply for any new credit cards beforehand, especially those individual store credit cards that are offered at the time you make a purchase. You can also ask the three main credit reporting agencies-- Experian, Equifax and Transunion
—to stop unsolicited credit card offers.
Keep a combination of different types of installment and revolving debt. About 10% of your score depends on the types of credit used. The way you handle revolving credit (like credit cards) carries more weight than the way you deal with installment debt (such as car loans and mortgages). Check your credit report for free. The three main credit reporting agencies— Experian, Equifax and Transunion--—are required to provide a free copy of their credit reports to consumers once every 12 months. It’s a good idea to request a free report from one of these three agencies every four months on a rotating annual basis. As you check out your credit reports be sure to look for errors (e.g., accounts you never heard of or closed long ago, late payments that were actually paid on time, debts you paid off that are still shown as outstanding, etc.) and follow instructions for correcting any mistakes.

Bottom Line
For most people, some level of debt is a practical necessity. If you’re in a position where you need to borrow, then take appropriate steps to make sure you’re in charge of the terms and conditions—not the lender. For additional tools and information, check out www.mycreditmatters.biz

As always, if you have questions or need help, please contact your MCM consultant. If you're not yet an MCM client but would like to learn more, an MCM consultant can help. Call 888-270-6792 to get started.