Credit Dusters

Okay, I mentioned freecreditreport.com because everybody has heard of them, funny, goofy commercials, yatta yatta yatta.  Truth is, it is not only NOT free, but the most expensive credit watch service on the market today (somebody has to pay for those ads).  So don’t do it.  There are, however, some other great services out there and we have seen and used a lot of them.

Why should you have a credit watch service? I personally am a big fan of having the service.  First, of course, because I am in the business of getting people into a better position with their credit, but also because it has personally saved my rear a few times.  I once was alerted that I purchased a VW, which was news to me because at the time I only owned a broken down Honda Accord that was collecting weeds in my driveway.  I sent out a letter and it was taken care of.  Another instance I was notified I purchased a new cell phone (an expensive one, too) over the holidays.  Funny thing was the purchase was made from a state I have never even visited before (oh, yeah, and I also own a freebie phone from T-Mobile)!  This charge was made on the internet and I was immediately notified.  A few phone calls and a letter and it was taken care of.  Moral of the story is that these things could have been major hindrances down the road and I was able to avoid them simply because I had this service.

Does pulling my credit through a credit watch service hurt my scores? Pulling your credit through a credit watch service is a “soft inquiry” and therefore does not affect your scores.  Only a “hard inquiry” will affect your scores.  A hard inquiry is a credit pull for the purpose of someone extending you credit (such as a bank, mortgage company, car dealer, etc).  Since you want to avoid hard inquiries, the credit watch is a great way to stay on top of your credit without it hurting you.

Can I see my credit scores? Yes.  You want to be sure you choose a service that gives you all three bureaus, all three scores.  Many services will offer one bureau for free or for a trial, but then charge exorbitant fees to add the other two bureaus.  If you are not looking at all three bureaus you really don’t know what is on your credit, because all three bureaus report different information (which is why your three scores are different).

What credit watch service do you recommend? There are many good ones out there, but of all I have seen, used, tested, etc., I like Trans Union’s truecredit.com the best.  They charge $14.95 per month and give all three bureaus, all three scores.  They allow you to pull a new Trans Union report every day if you like, and the other two bureaus every 30 days.  The layout is nice and easy to read and they give a nice explanation and breakdown of what is on your report.  This is the service we recommend to our customers because of the ease of use and cheap price.

Once you have the credit watch service, would you like someone to review your credit for you?  We’d be glad to!  We will show you what is keeping your scores down and what you can do personally to get your scores moving up.  Give us a call for a free consultation 812-406-0600

I will be quick and painless.  It’s Friday and a holiday weekend, so I really do not even want to think about how much money I may have spent this week.  Since I already started though, here goes:

$4.04 Jay C (drinks)

$16.00 Pizza Night

$1.50  Diet Coke

Grand Total Today:  $21.54

If only Saturday and Sunday could look this good ~sigh~  Have a great weekend!

As a Dave Ramsey fan myself, and having been through Financial Peace University, it sounds blasphemous to admit that I do have credit cards.  I’ll be honest, if it were not for the fact that I am in the credit business, I would not have credit cards at all.  I do not even have a personal debit card  because it is too easy to spend what I don’t have.

Twice I have charged up credit cards until I got into trouble,  and twice I have cut them up and paid them off.  It is no wonder, too.  If you think about it, our lives as Americans are simply one big advertisement.  The American Dream – wow, what is that?  Our forefathers dreamed of liberty, freedom from tyranny, a dream of providing for ones’ family.  What is it now?  Typically it is in the context of acquiring more, having more “stuff” and having the freedom to work and buy, and buy some more.

Most people wake up and turn on the tube…advertisement.  They get in their car and turn on the radio…advertisement.  They get to work, which is an all day advertisement, follow the billboards home, relax on the couch with the tube or a magazine…more ads.  Even the web, one big ad.  Is it any wonder we have trouble with credit card debt?  We are never happy with what we have for very long.  Then we need something new, something fresh.

The irony is that you cannot have a great credit score without a credit card (at least it is very difficult).  Most people I speak with who admit they do not have any credit cards and may have some collections will tell me their scores are in the mid 500’s.  Like clockwork.  I gave in myself and got a few credit cards.  I figured if I own a credit business I should try to have a great score   So how do I control these irrisistable urges to spend, spend, spend?

First, if you do not have a credit card and your scores are poor (which likely are if you don’t have a credit card), go with a good, secured credit card with a reputable bank.  A secured card requires a downposit (usually $200-300).  You borrow against your own money, charging and paying it off monthly.  If you pay $300 for the card your credit limit will be $300.  These typically charge a $50 processing or annual fee.

So how do you use this card to your advantage and not get in trouble?  I’ll tell you what I do and what I recommend for all of our customers.  When you get the card and activate it, pay off the initial fees in full the first month. Then set up your credit watch service (see post on credit watch service for more information) to be charged directly to your new credit card automatically each month.  This is usually about a $15 fee for the credit watch service.  Then put the credit card in a drawer and forget you own it.  Do not carry it on your person!  This is too much temptation for you to spend $$ you don’t have.  Every month simply pay off the $15 charge in full and be done with it for that month.

So how does this help your credit?  First of all, the highest factor in your credit score is paying your bills on time.  This shows you can do this (and paying it early is even better).  Second highest factor relate to your revolving credit cards:  Your debt to limit ratio.  If you have a $300 limit you do not EVER want to charge more than $100 to the card, and we recommend much less (hence the $15 monthly charge).  If you go over your scores will be hit negatively.  However, if you use the card exactly as I have described, you will begin to see an AMAZING difference in your credit scores.

While using a credit card wisely will not solely get you a great credit score, it will be a foundational key.  Coupled with good credit repair you are on your way to higher scores!

So what is right for you?  If you cannot follow these instructions to the lette, if you know you are going to get that $300 card and immediately charge $300 to the card and pay minimum payments for the next year, DO NOT get a credit card. It is not worth having a good credit score.  On the other hand, if you know you can control your spending habits and use the card as described, you will be thrilled at the results.

Most people get paid on Friday (I even pay myself on Friday!).  There is some sort of euphoria surrounding payday.  Never mind that if you really think about it, most of the money is already allocated and spent before your hungry fingers get stained green at the teller drive-through.  Well, I am no exception.  I find that Friday’s euphoria turns into Monday blues and by Thursday…well, we are scrounging change off the floorboard of our car, sweeping under the washing machine for fallen and forgotten coins, and checking yesterday’s jean pockets.

This may seem a little extreme to most, but we are really trying to live out this budget thing.  Don’t get me wrong, we are not suffering, but if we followed all our whims and inclinations we would spend NEXT Friday’s paycheck, too.

So here is a breakdown of my week so far.  I did do all our grocery shopping before I started tracking our money, so our spending looks rather thrifty for a reason.  Oh, and it helps that I have not been anywhere this week, besides church and a trip to the creek:

8/31/09 Monday: (not too shabby, eh?)
$13.00 Beef O’Brady’s (hubby went out with a pal over dinner, so this one’s on him)

9/1/09 Tuesday:
$58.37 Medicine (for allergies, which is not helping at all, by the way ~ sniff ~)
$4.95 Live Bait (Fishing day!)

9/2/09 Wednesday:

$2.33 Large Sweet Tea (Captain D’s)
$1.99 Rally’s Double Cheesebuger
$1.07 Mcdonald’s Diet Coke

9/3/09 Thursday:

$1.59 Gas Station – 1 Liter Diet Coke (ice-cold)

$13.87 – Jay C (making pies for a dinner tonight)

Grand Total So Far:  $97.17

What helps you budget your money?

My dear hubby used to cringe and flee when talk of money came to the table. If I went so far as to mention the dreaded “B” word, he was like a wounded bronco, kicking, foaming at the mouth, desperate to get away. Well, budgeting does not have to be all that! What it can be, though, especially in the beginning, is a tool to find out where those greenbacks are going.

I admit, I’ve gotten sort of sloppy myself, lazy. I cash my check on Friday and by Monday I am jiggling spare change in my pocket. By Wednesday night the gas tank is running on fumes and the kids are looking in the corners for lost dimes and quarters. So maybe, just maybe, if I could track my spending a little closer, things would not be so painful. A little planning never killed anyone…right?!

So to celebrate the art of knowledge, I am going to track my own spending for you over the next few weeks. You can see the habits of a person through their spending, their value system, their addictions and their lifestyle. Track your own spending and post your results in the Comments. So here goes:

8/31/09 Monday: (not to shabby, eh?)
$13.00 Beef O’Brady’s (hubby went out with a pal over dinner, so this one’s on him)
9/1/09 Tuesday:
$58.37 Medicine
$4.95 Live Bait (Fishing day!)

When you feel down or anxious about  the economy just remember that it is the PEOPLE (You and Me.) that makes this country go round and not the government. We are the engine of commerce! So read this article to get some inspiration and then figure out a way to make more money. You can do it! Others are doing it..don’t be a victim.

Some Indie Facebook Developers Pulling In Over $700,000 A Month – You should be inspired by this article. You don’t have to make this kind of money, but even just an addition $500.00 a month would make a huge difference in most homes.

If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income.

Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.

Taxpayers may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.

If you qualify, you claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to your federal income tax return for the year.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other tax relief provisions, (for example, insolvency), may be available. See Form 982 for details.

If your debt is reduced or eliminated you will receive a year-end statement, Form 1099-C, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

The IRS urges borrowers to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).

Unclaimed refunds totaling approximately $1.3 billion are awaiting over a million people who did not file a federal income tax return for 2005, the Internal Revenue Service announced today. However, to collect the money, a return for 2005 must be filed with the IRS no later than Tuesday, April 15, 2009.

Especially in these tough economic times, people should not lose out on money that is rightfully theirs,” said IRS Commissioner Doug Shulman. “People should check their records, especially if they had taxes withheld from their paychecks but were not required to file a tax return.  They may be leaving money on the table, including valuable tax credits that can mean even more money in their pockets.”

The IRS estimates that half of those who could claim refunds for tax year 2005 would receive more than $581. Some individuals may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments.  In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 2005 returns, the window closes on April 15, 2009. The law requires that the return be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.

The IRS reminds taxpayers seeking a 2005 refund that their checks will be held if they have not filed tax returns for 2006 or 2007. In addition, the refund will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans.

By failing to file a return, individuals stand to lose more than refunds of taxes withheld or paid during 2005. Many low-income workers may not have claimed the Earned Income Tax Credit (EITC). Generally, unmarried individuals qualified for the EITC if in 2005 they earned less than $35,263 and had more than one qualifying child living with them, earned less than $31,030 with one qualifying child, or earned less than $11,750 and had no qualifying child. Limits are slightly higher for married individuals filing jointly.

Current and prior year tax forms and instructions are available on the Forms and Publications web page of IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). Information about the Earned Income Tax Credit and how to claim it is also available on IRS.gov. Taxpayers who need help also can call the toll-free IRS help line at 1-800-829-1040.