Raising Your FICO Score on Your Own

We’ve all seen the ads for credit repair specialists saying that they can help us repair our credit, of course for a price, but isn’t this something that happens naturally, as we prove our financial reliability to our creditors and lenders?

Well, there are some steps apparently that you can take on your own to help repair your credit and increase your FICO score, which is basically the financial scoring system that creditors rely on when deciding first of all whether they want to give you credit, and second of all, what kind of interest rate they want to give you based on your FICO score.

Guess what? The better your FICO score, the better the interest rate offer you’ll get by creditors when doing everything from buying a home and car to getting a credit card offer, so it’s in your best interest financially to maintain a healthy FICO score by doing the following things regularly, and always staying within your financial means when budgeting your money and deciding where it goes each month.

1.) First of all, regularly monitor your credit report. You can do this for free I believe once a year, or you can pay a small fee to get your credit report information on a more regular basis. By keeping tabs on the information lenders have contributed to your credit report, you can make sure that any overdue balances are paid off right away, or contested so that they don’t appear on your credit report and tarnish your FICO if they simply don’t belong there.

2.) Paying your bills on time is the Golden Rule when it comes to your FICO score. Late and delinquent payments are one of the biggest contributing factors to low FICO scores, and need to be constantly kept up on if you want your score to stay in a respectable range and creditors to actually offer you the best interest rates. You may also see a lot more credit card offers for great low APR intro rates coming in the mail a lot more too if you have a good credit score. I’ve enjoyed quite a few generous offers since my credit has been put back on the right track.

3.) Credit cards and installment loans should be paid down as low as you can get them, because this is all used to calculate your reported income to debt ratio, a huge consideration on your FICO in determining what kind of risk a company is taking that you might not pay a loan back.

4.) Opening up too many credit accounts or credit cards can hurt your FICO score, so stop opening up so many. Stick with what you have and keep the number as low as you can. Stay away from playing the credit card game and switching to lower APR cards constantly by using balance transfer credit cards too often to get lower rates on higher APR credit balances. Supposedly even if your balances are low, if you have too many credit cards or credit accounts open at once, yoru FICO score could be negatively affected.

Amazon Offers “Amazon Prime”

Amazon has gotten into the credit card game I noticed today when I purchased a vaccum cleaner from the online retail giant. It’s called Amazon Prime,and it offers a pretty decent interest rate, and the incentive to sign up for the card is a clever one, I must admit. When you go to sign out for your purchase and check out, it offers very prominently, to take $30 off your purchase, with your new purchase price bolded, if you sign up for the credit card.

But hold up, make sure you could benefit before you go jumping into getting a new credit card just to save thirty bucks, right? I remember when I was younger, in my early twenties, and I would get sucked in by these incentives almost all the time. Of course, back then, my credit sort of was terrible, so many times the poor salesperson would have to tell me I was declined for the application to get the percentage off my order, or that I had been approved, but with a pathetically low line of credit.

Now, I admit, that Amazon offer to take thirty whole dollars off my order was tempting, but I didn’t need the credit card for anything, and couldn’t justify getting another line of credit for virtually no reason other than to save a few bucks off a purchase. Although I must admit, thirty bucks is quite a generous offering for just signing up for a new credit card.

If you shop a lot on Amazon, this card may be a good deal, as it does offer a good interest rate, and it may even offer some additional benefits for regular Amazon shoppers. I was in too much of a hurry to read the fine print on this credit card offer, so unfortunately I don’t know any more, but if you can, go to Amazon and read about it more if you’re interested.

Six Months Same as Cash Popular Financing Option for Furniture

We recently purchased a house, and on top of all the abundance of mortgage information, there are other financing options that you have to look into when buying things that are necessities or “home improvements” for you new home. One of those necessities is furniture and electronics such as TV’s, DVD players and stereos, and also outdoor stuff like riding lawn mowers, and gardening tools.

All this stuff really adds up cost-wise, as you can imagine, so most people opt to either put it on a credit card or use an available financing option that the place they are buying the product from either offer in-house, or through a secondary broker.

For example, we purchased a lot of our furniture through a local and huge furniture store that’s been in business for over sixty years, and they offered a six months same as cash financing option that we were more than happy to take them up on, considering the decent chunk of change we spent in the store.

However, when you read the fine print, you realize that you really have to get the thing paid off in six months or else you get charged retroactive interest to the date of purchase, and the interest rate is sky-high for this particular line of credit.

Most of them do work in some way where it benefits the purchaser to definitely get this paid off in that six month time frame, or in the end, they are paying much more interest, sometimes even more than what the actual goods they bought are worth!

You may want to look into balance transferring any high interest debt that’s left over if it’s through a bank of line of credit that a lower interest balance transfer credit card will take as a balance transfer, if for some reason you don’t get it paid in those six months or however long the interest free grace period happens to be. Or, you may want to see if you qualify for a longer grace period if they have the option available, say one year or two years, then you can budget yourself a little better with the payments.

Baby Boomers More Prone to Bankruptcy?

Supposedly, according to some new data, baby boomers, that age category that many of our parents fall into, or you yourself may fall into, are falling prey to increasing bankruptcy filings. The reasons are thought to be the fact that health care costs are much higher now and since they start requiring more health care around age 55, this can greatly affect them since not everything is covered even under the best health plans.

Also, mortgage debt is growing out of control, and people who’ve financed and refinanced find themselves in a big financial sink hole when they find they don’t have any real equity built up in their home to help bail them out. The fact that rising health and living costs in general are outpacing inflation in many cases, and more importantly, raises given by employers, has led to aging Americans using their credit cards more and other forms of revolving debt that is considered to be in the “bad credit” category.

Specifically, bankruptcy filings are rising in the age group of 55 and older right now and analysts are saying that the number will keep increasing and attorneys will see more people wanting to petition for bankruptcy if the mortgage and health costs keep rising like they are.

This new report and study findings is set to be published in the May 2007 edition of the “American Bankruptcy Institute Journal”. Gee, I didn’t know they had a whole journal dedicated to this stuff! I guess the harsher line taken on bankrupticies isn’t really affecting this shift in socioeconomics much then, is it?

Feds Keep Interest Rates Steady

For one piece of good news in what seems like a constant stream of either bad or so so news for our economony and for our personal financial situations, the “Fed” as they’re affectinoately called, has decided to keep interest rates at an even keel for just under a year now, deciding to keep consumers happy and maybe our economy a little less gun shy.

Well, OK, I’ll admit I dont’ know the reason WHY the fed decided to keep it the same. It’s probably all some statistical and math jargon that none of us regular people can understand, but I’m sure at the heart of it all lies what’s best for the economy, right?

What does this mean for us? Well, it means that as borrowers, we can rest assured the rates (for now) aren’t budging for the worse, and as savers, we can rest assured that our savings accounts will be giving a more steady than usual interest rate yield since the rates are leveling off.

While you may not think it affects you, in fact it does in small ways, all our finances are connected in one way or another, and as the economy steadies, so does our job market, and consumers become more “confident” and start buying stuff again.

So that means, small business owners, people will start buying more things and make your business prosper, and those of you that want job security, this can also be a boon for job security and also the new job market if you happen to be in the market for a new job.

Specialty Credit Cards

Specialty credit cards are quite a novelty nowadays, with everything from earning points toward some obscure merchandise sent out in a catalogue every year, to earning cash back from spending on the card, to one of my favorite, ingenius cards, the awesome airline miles credit card where you earn points toward a certain airline’s plane tickets depending on how much you spend on the card.

So, do you have a specialty credit card in your wallet, and what are you missing out on if you don’t have one? Well, my whole mentality, or theory or whatever you want to call it, on the points system for credit cards is that, if you have a credit card anyways, why not carry a credit card that will actually pay you back in some way by simply using it?

Say if you do have a cash back card, or even a gasoline points credit card through Sunoco or BP or some other gasoline station, every time you use it, you are actually earning points toward something of monetary value. So you’re not just paying interest on your purchases for nothing, you are actually getting something in return for your patronage.

I hope the credit card companies keep these sorts of offers coming, it certainly does help with the thought that you’re lining their pockets with every purchase you make, knowing that you are being rewarded in some way in return.

Much Needed Mortgage Reform Debate in Congress

What is mortgage reform? Well, I think since the amount of bank foreclosures on homes that the owners simply cannot pay for is alarming to many, and has been so bad in these past few years, that it is drawing attention on Capitol Hill from lawmakers who are concerned that people are being sold mortgages that the mortgage companies are not looking at the risk assessment thoroughly enough.

Also, they are looking at curbing and eliminating something called predatory lending, which is basically where mortgage lenders are “preying” on those that they know have a high chance of defaulting on a loan who do not have adequate income or a higher than desired debt to income ratio, just in order to get more mortgages and get their numbers higher.

Here’s the scary figure that prompted this congress interest : National foreclosure rates supposedly jumped about 47% in March from just one year ago. That was just two short months ago, and the new figures aren’t mentioned yet, but those are some very startling figures.

The problem many say congress is having in weighing in on this complicated issue is figuring our who all the players are and considering any legislations effects that may be unintended, and for that, lawmakers have to understand the complex mortgage industry, which many say is not an easy task. However, they still want to step in where public interest is at stake, so they are really looking at a catch 22 situation here if you ask me.

SEC Investigates Another Insider Trading Scheme

Seems like there’s been lots of news about insider trading lately huh? Well, this time the accusations are directed at a Hong Kong couple who bought about 15 million dollars worth of Dow Jones Inc. stock about two weeks before a big announcement that Rupert Murdoch’s giant company News Corp. had made a bid to purchase the company.

Many times, when a huge company offers to buy a smaller one, or one of equal size, if the buy offer actually happens, then stockholders get a windfall of cash in dividends or increased stock value because the stock can double, triple, or even more of an increase in value due to the added assets of the buying company.

Insider trading is when someone has knowledge that is not supposed to be public, as is the case here, no one but the companies and certain priveledged “insiders” is supposed to know about this offer, and uses it to their financial gain advantage by buying the stock before the knowledge goes public and anyone can take advantage of it. It’s illegal, and it can land you in a lot of hot water with the governing arm that is responsible for policing the Securities market, the SEC, or Securities Exchange Commission.

The Hong Kong couple could be looking at jail time if convicted, and of course now a lot of that money they allegedly aquired illegally may be used on high priced attorney fees, especially since a lawyer who wants to take on a case this big will have some very big fees. I always wonder in cases like this, who actually leaked the information?

A Solid Investment Plan

One very important component to investment planning is to learn how to become a saver. If you can not do 10 percent of your income right away, then start small with a 1 percent contribution to your 401 K.

Gradually, as your conditions allow, increase this amount to 10 percent, If you can push past the 10 percent mark and you’re still young, you may afford yourself the opportunity to retire early.

When you take the next step from saving to investing, clearly define what your goals are. Know yourself and know what degree of risk you’re willing to take. If the stock market is too risky for your demeanor, then money market investments may be the best option for you.

If you have some risk tolerance, you may want to put 20 percent into the market and the remainder diversified into more conservative investments. If you go past your risk tolerance, you may give up and change your strategy too readily.

When deciding where to invest your assets, consider not only the return on investment, but the risk factors involved. The asset classes are as follows, starting with the safest to the most risky.

The first asset class is the cash or money market, which includes T-bills, certificates of deposit and commercial paper. Next in asset classes comes bonds, which are also called fixed income. Bonds may be short term, intermediate or longer.

Be wary of junk bonds as they are high risk.

Next in asset classes are the domestic equities, which includes S + P 500 and the companies of the New York Stock Exchange. The last equity asset class is the international large companies and small companies.

When building and keeping an investment portfolio, keep in mind that you are investing for the long term goal.

Remember the principle of the higher the expected rate of return, the higher the risk. Diversify your portfolio according to your unique goals and clarify where you need to be for retirement years.

Waiters Indicted on Credit Card Fraud

It’s one of those stories that you hope to God you never become a part of – as the unwitting victim, that is. This is one of the most heinous and gutsy credit card fraud stories I’ve heard in quite a while, and it will definitely have you thinking a little more about the integrity of those waiting on you and serving you in a public restaurant, retail environment, or anywhere else where random people have access to your credit card number and personal information, which is just about everywhere nowadays!

I have no idea if this was a big recruitment effort by a mastermind, but it sounds like it most likely was, because it involves waiters and waitresses in about 40 different restaurants, spread throughout the US, which would imply is was a master scheme.

The whole scheme went something like this. People stole other people’s credit card information to make counterfeit credit cards. They then purchased items with the credit cards, and someone else then bought the stolen items for cash.

Then it gets even crazier. The mastermind(s) recruited people in restaurants to steal their patron’s credit card information with small, undetectable handheld devices that could scan for the information (way too high tech and scary to imagine).

The waiters would receive anywhere between 35 to 50 dollars for each credit card that they scanned, giving them incentive to scan as many credit cards as they could. I’d like to know who in their right mind thinks this is ok and how they could get away with it, not the least worry being selling your soul for a little cash! Makes prepaid credit cards look pretty darn good, doesn’t it?