877.335.4072
The Economy – Time to check your credit.
THE ECONOMY – TIME TO CHECK YOUR CREDIT – TIME TO CHANGE YOUR LIFE?:
What an interesting year it has been, ups and downs, politics and promises, and the implementation of that new and popular word, BAIL-OUT, may be in the trillions!
Consumer spending has dropped over 1% since October and merchants are running for cover hoping that the Holidays will bail them out of this mess. Automobile spending is down 4.5 percent and has Detroit running for cover (and a BAIL-OUT).
Real estate? How far will it drop? Well, depending on what part of the country you live in, it is currently averaging 25% down, but even the experts don’t know where it will go. What does that mean to a home owner? If you paid $200,000 for your house a year or more ago, the value has dropped $50,000, so your current appraisal might be $150,000. If you borrowed $180,000, you owe $30,000 more than your house is worth. If you need to sell your house, can you afford that loss? All of the downside is a crisis of major proportions and it won’t go away for some time to come, government intervention notwithstanding.
What can we do about it? First, face the whole mess without fear. Fear is a counterproductive process that insures the poorest solution and personal and national progress. Americans are known for our ability to be resilient and to persevere through the worst of things. We may be a young country, but we’re a strong bunch. Secondly, consider new options to help get through it. How about a new career, honing skills on an existing career, setting up a home office, building your financial independence? How do you do that quickly and easily?
Look at the huge and ever-increasing availability of on-line education and the ability to do virtually all of it at home. You could be working within four months.
A bright hope for the future is the new administration. President Elect Obama clearly has a commitment to education which will go a long way to solving the problems we as citizens currently face.
While you’re at it, how about cracking your credit score. The primary reason for most credit is to buy a home, and the better your credit score, the lower the interest rate. Even with the potential of government-induced lending, credit will remain important. Credit cards, automobile loans, all rely on whatever scores you have earned. Scoring is confusing. Most people have to idea how to manage or improve their score, especially if it is a low one to start with. Your credit report is the summary of your financial reliability, and your score is the number lenders will use to calculate your credit worthiness. Many lenders use the FICO system which analyzes five types of data from your credit report:
1. Payment history
2. Debt
3. Length of credit history
4. Types of credit used
5. New credit
FICOs range from 300-850, with a score of 720 or higher being the most desirable. So, how do you find out what yours is? The Fair and Accurate Credit Transactions Act of 2003 entitles you to a free report from each of the three major credit bureaus ONCE A YEAR:
1. TransUnion
2. Experian
3. Equifax
Several websites offer free credit reports, however, make sure you are not signing on for more than that. Annualcreditreport.com is one provided by the credit bureaus to offer it. You should get a free report and if you want a FICO score, there is a small fee (typically less than $10).
You receive your report, interpret what the detail is, checking carefully for errors (and there are usually a few to a lot of them). How do you improve or fix the problems?
If you believe there is inaccuracy, notify the credit bureau in writing immediately. Federal law requires the bureaus to investigate any complaint you send them in writing (and within 30 days), and to send you a prompt response and correct any errors.
If the agency does not resolve the problem (and this requires that you get another report to confirm that they have), the law allows you to submit a brief statement that must be attached to your report and be provided to any potential creditor who accesses it.
Fraud is very common as well, identity theft being the catch words. If you are a victim of credit fraud or identity theft, you can place a “fraud alert” on your credit report (and though they may try to charge you for a more substantial package, the alert is free).
If no errors exist and you can see your score needs improvement, here are some ideas to do that:
* Pay your bills on time
* Keep your card balances lower than your maximum limit
* Keep your total debt to less than 30% of your available credit (debt to credit ratio)
* Close unused accounts
* Diversify your credit (using a credit card or two in addition to having an installment credit account like an auto or home loan), or get a new credit line and make payments on it.
* Pay off debt rather than transferring between cards or accounts
* Monitor your credit using the free annual report and review it carefully
Flags for potential lenders: (avoid these):
* Paying the minimum required for several months in a row
* Being late on payments (even 1 or 2 will affect your FICO score)
* Taking a very long time to pay off loan balances (on open credit, not installments)
* Borrowing from one lender to pay another. Using your Visa to pay your Mastercard is pretty obvious on a report
If your credit is a grave problem, we have some truly great tools to help you fix it. These are on-line credit instructional processes which guide you step by step through the process. Just email info@meditec.com if you would like information on those programs, please include the words “Credit Course” on the Subject Line of your email. The cost is less than $70 and could save you thousands on interest alone. You will become such an expert that you might even consider adding your expertise to a home business to help others with their credit problems.
Meditec is dedicated to making your “change your life goals” achievable. Our traditional lenders are so timid about making loans that we have decided to offer tailored loans to suit your budget AND NO CREDIT CHECKS!
While you are digesting the information and making decisions about your future, please accept our very best wishes for a MERRY CHRISTMAS and a HAPPY AND PROSPEROUS NEW YEAR!!
