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

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.