5 Ways You Can Quickly Build Credit

build creditThe global economy is slowly starting to rebuild itself. Even if it hadn’t crashed, it would still be important to maintain a high credit score. But the fact that it did crash makes it all the more important that you build credit.

Having a high credit score indicates that you’re responsible and reliable. With a higher credit score, you’re much more likely to get a loan or successfully rent a property. Additionally, some places of employment won’t hire you if your score is low.

But let’s face it: Life happens.

Sometimes your situation spins out of your control, and your score drops as a result. When that happens, you need to start utilizing ways to build your credit back up.

Here are five easy tips for building credit:

1) Pay All Bills On Time To Build Credit

One sure-fire way to drop your credit is to skip out on your bills.

Paying them even a few days late could affect your score in negative ways. Businesses that require monthly payments often sell bills to collection agencies.

Internet companies, phone services, utility businesses–these are all organizations that bill you monthly.

And let’s not forget your insurance, rent, and car payments.

Make sure you pay them on time every month.

2) Consolidate Cards Instead of Canceling Them

When your credit score is low, it’s awfully tempting to just cancel most or even all of your credit cards.

After all, not having the cards removes the temptation to use them. Unfortunately, having credit cards presents a catch-22:

If you have too many of them, you increase your chances of lowering your credit score.

But if you have too few of them, you also increase your chances of lowering your credit score. Because fewer cards mean fewer opportunities to raise your score.

One way to get around this situation — check to see if you have cards from the same company.

If you do, you can call and ask about consolidating them.

3) Negotiate With Your Creditors

If you’re already sinking in the bad credit pool, one thing you can try is negotiating.

This entails communicating with your creditors for missing payments. Explain the situation and ask them to work with you.

For example, let’s say you were laid off from work and missed a few utility payments. After you found work, you started paying on time again. Highlight that fact when talking to them.

Creditors may be creditors, but they’re also people.

4) Pay Off Your Debts

In some situations, this one is easier said than done.

But to build credit, you’ll have to pay off your debts.

Talk to your creditors. See if they’re willing to arrange a payment plan with you.

5) Use Credit Cards Sparsely

Again, you shouldn’t give up on using credit cards because using them does help build credit.

Plus, if you don’t use your cards, they may become inactive.

A good compromise is to use them sparsely. Use them to pay for only certain items, such as food and gas.

As for paying for the rest? Depending on what you want to do, you may not have to pay anything!

There are plenty of free forms of expression and entertainment. Draw! Write! Read! Shamelessly sing karaoke at the top of your lungs with your friends!

If you need additional tips or want a consultation, feel free to contact us!

How to Budget As a Homeowner

financial budget

Now that you have left the ranks of renters, it’s time for a new approach to your financial budget. Being a homeowner brings a new set of financial challenges to navigate.

If you have not yet made the switch, this read will help prepare you. (And if financing is standing in the way of your home ownership, you might benefit from credit repair.)

If you’ve already been making a mortgage payment, this article will keep you on track.

In order to work with this information, you will need a tangible financial budget. You can use a paper budget form or an online tool or app such as Mint.

Three Ways Your Financial Budget Should Be Different as a Homeowner

Have a “Depreciation Fund”

You will be responsible for various repairs and replacements in your home. These can include minor water fixture repairs or new appliances.  They could also mean more high ticket items like a new roof, a new driveway or plumbing fixes that require exterior excavation.

You should also account for regular seasonal maintenance such as lawn care/landscaping (unless you are in an HOA) and regular biennial servicing of your furnace/air conditioning unit.

You will also want to periodically update the home to enhance its resale value.

The “1% Rule” is a good guideline for how much to allocate in your financial budget.  For example, if your home is worth 100,000, you would set aside $1,000 per year for repairs and improvements.

A $1,000 per year allowance for your home’s “depreciation” comes out to be about $83 per month.  This money should be placed into a special bank account earmarked for home repairs and home improvement.

This account is separate from the emergency cash fund that you should have as part of your financial budget.

Factor Insurance Expense

You may have had renters insurance as a tenant. Some landlords require this as a condition of moving into a leased dwelling, while others recommend it but make it optional.

As a homeowner with a mortgage, your bank will require you to have a homeowner’s insurance policy.  Even if and when your home is paid off, homeowner’s insurance is something you do not want to be without.

Homeowner’s insurance is not necessarily something to go cheap on, either.

Having good insurance can protect you from financial disaster. It is extremely important to read your policy to see what it might exclude.  For example, some insurance policies will cover damage resulting from a tree landing on your roof and others will not. Some policies will cover flood/water damage, and others will not.

Paying for Utilities

As a homeowner, you will be responsible for all utilities.  Some landlord-tenant agreements make renters responsible for all utilities, but many cover at least part of them.

As a homeowner, you will be responsible for all water, trash, wi-fi, telephone, cable, electricity, gas (or other heat sources). Some energy companies will put you on a “budget” so that you pay the same amount every month and aren’t subject to seasonal fluctuations.

A Final Word

Financial budgeting for home ownership is one aspect of your overall financial strategy. Saving money and a strategy for paying off debt are two others important aspects.

Sign up for our e-mail list for other great tips for staying in financial shape.

Debt Solutions to Get You Back on Track

debt solutions

Debt is a real downer. You get your paycheck only to see all of your hard-earned cash disappear within a day or two.

And, given the amount you owe, this is probably what life will be like for years to come.

Fortunately, there are debt solutions out there that can ease your load.

What exactly are these solutions? From good budgeting to bankruptcy, we’ve got a handful of tips for you. Stay tuned.

Plan to Pay Your Debts

We know: This is exactly what many of you have been trying to do.

Still, how much actual planning have you put into paying off your debts?

Do you know how much you owe and to whom you owe it? Have you estimated how much time you’ll spend paying off the debts?

After you’ve done those things, you need to put a budget into place. The budget should be specific, and you should hold yourself to it.

Of course, holding yourself to a budget is not always easy. That said, don’t hesitate to enlist professional help if you really need it.

And if you can’t afford professional help?

There are cheaper alternatives. Budget planner apps, for instance, are a valid option for those of you who are on a budget.

See what we did there?

…On Time

Paying off your debt is arguably one of the most effective debt solutions in existence.

You have to, however, make your payments on time for the solution to be effective. If you fail to do so, you risk paying more in the long run.

To be fair here, you’re already paying interest on some of your debts. This technically means that you’re paying more in the long run anyway.

Even so, late fees are a beast that you don’t want to tackle. They’ll only make paying off your debt more difficult.

Consider Filing Bankruptcy

Quite a few people misunderstand what bankruptcy really is.

Some people just assume that filing bankruptcy means that you’re low on cash. Even millionaires and billionaires, though, opt to file bankruptcy sometimes.

So why do they do it?

Well, to improve their financial situations.

There are multiple types of bankruptcy that you can consider. Some are geared towards business owners. Others are designed to suit the average person’s needs.

Keep in mind, though, that there are some debts you can’t eradicate by filing bankruptcy.

If you want to find out more about bankruptcy, check out this piece about filing bankruptcy.

Stop Borrowing Money

No, we’re not trying to be funny. The fact of the matter is that some people are serial borrowers.

Sometimes you need to borrow money. We understand that. Before borrowing money, however, think about whether or not you really need it.

Don’t just take our word for it. Others have already warned the general populace about the dangers of borrowing.

Other Debt Solutions

There are several other debt solutions we haven’t even touched on here.

If you’re looking for more solutions, take a look at our much longer list of solutions.

Consider getting your free credit score at Credit Karma. Your score will no doubt come in handy on your journey to paying off your debt.

Our 7 Best Frugal Living Tips You Need To Have

best frugal living tips

There’s a difference between living frugal and living cheap. Living cheap means denying yourself. Living frugal means being smart about money.

It means living below your means so that you can save or invest money. If you’re looking to start being smarter about your money, we’ve got the best frugal living tips to start you on your way.

7 Best Frugal Living Tips

You want to start saving money by living below your means. Great! Where do you start? Try these tips to kickstart your frugal living lifestyle:

  1. Shop generic brands.
  2. Pick the right credit card.
  3. Avoid credit card debt.
  4. Create and stick to a budget.
  5. Clip coupons.
  6. Comparison shop before you buy.
  7. Plan meals ahead of time.

Keep reading to learn how these tips can help you live frugally.

Shop Generic

When you buy name brands, it’s probably because your parents or someone else you trust told you those are the best products on the market. Or maybe it’s because you saw them in a commercial.

Before you buy name brands though, check out the generic labels. In many cases, generic products work just as well as name brands for a fraction of the price.

Choose the Right Credit Card

If you’re going to use a credit card, make sure you’re getting the most out of it. Want to travel? Look for cards that offer frequent flyer miles.

Are you a foodie? Find a card that provides extra points for dining out. If you’re on the road a lot, look for cards that let you double or triple points at the pump.

Don’t jump at the first offer that comes your way. Take the time to find a card that will help you save in other areas of your financial life.

Avoid Credit Card Debt

Credit card debt makes it hard to save. This is a fact–so staying out of debt, to begin with, is one of our best frugal living tips

The average household in America has $15,310 in credit card debt. If you have credit card debt, you can still achieve a frugal lifestyle, but you should avoid racking up more.

Create Your Budget

Budgeting is crucial if you want to live frugally. If you don’t know what money is coming in and where it’s going out, how can you live below your means?

Creating and maintaining a budget can be tough, especially if you’re new at it or on the go a lot. The good news is that there are many budget planning tools you can use.

Clip Coupons

Remember when we were talking about buying generic? Sometimes the name brand is better. For those products, coupons can bring the price down.

Comparison Shop

Cheaper products aren’t always better, but sometimes you can get what you need for less if you comparison shop. Whether you’re looking for the best price for a type of product, or you’re looking for the store that offers the lowest tag for the same product, comparison shopping can save you money.

Plan Your Meals

Planning meals before you go to the grocery store not only helps you save money, but it can help you eat healthier too. It also makes the question, “What’s for dinner?” a piece of cake to answer.

By planning meals ahead, you can go to the grocery store with a list. This can keep you from buying things you don’t need. 53% of shoppers plan the foods they will buy before even setting foot in a grocery store.

For more help with achieving the frugal lifestyle, contact us today.