Meet the Credit Score Perfectionists
Erica SandbergWednesday, April 7, 2010
From Yahoo news
While most Americans strive for good credit scores, others take special care to achieve great ones. Meet some credit score superstars -- and learn why and how they keep those precious three digits so high.
Good Scores Key to Financial Health
Credit scores were developed as tools to help banks and businesses make objective decisions. To generate them, a mathematical formula pulls credit report data and transforms it into a numerical rating. FICO (FICO) scores range from a low of 300 to a high of 850, and according to MyFico.com, mortgage lenders consider anything above 760 as ideal. While it is the dominant score, FICO isn't the sole scoring model. For example, the three major credit reporting bureaus -- TransUnion, Experian and Equifax (EFX)-- produce the VantageScore, with a scale ranging from 501 to 990.
Despite ranking system differences, a higher score always indicate less risk, and having them makes you more appealing to lenders, employers and landlords.
Consequently, focusing on scores is only natural. "People are drawn to this subject because it allows them to measure something that they equate to financial health," says Jose Rivas, national education manager for Consumer Credit Counseling Service of San Francisco.
That focus, however, can turn into anxiety, with conflicting information often to blame. "One article states that consumers should close their unused accounts," says Rivas, "another states that consumers should never close their accounts." For this reason, getting the facts from reliable sources is essential. Like the following high achievers, you can create a terrific credit score with real knowledge and a specific sense of purpose.
Credit Score Vigilante
Dan Nainan, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" Nainan also cites the "feel-good" factor: "It's a comfort to know that wherever I go and whatever I apply for, I can get it."
Vigilance is Nainan's strategy. "If there's anything at all that might affect my score, I ask a ton of questions and go to the Internet and do as much research as possible. If I test drive a car, or sign up for a health club, I look at the fine print very carefully to see if they have a right to hit my credit file with an inquiry." He's also programmed everything online "so that all of the bills pay themselves, and any and all credit card balances are paid off immediately."
Protecting a Long History of Timely Payments
Want the very best vehicle loan available? Let your numbers do the talking. When Brenda Avadian, founder of Caregivers Voice, out of Pearblossom, Calif., was applying for a car loan, her 849 score helped her secure top financing. "Saving thousands on interest charges is a tremendous motivator," says Avadian, who locked in 0 percent interest for five years. A loan with a 4 percent rate would have cost her an extra $3,200 on the same vehicle.
Avadian attributes her impressive score to a long history of timely payments. "And on those rare moments when a bill sneaks under some paperwork and it's either late or due that day," says Avadian, "I call and take care of it." She believes her loyalty to the same banks (three credit accounts -- not too many, not too few) also helps. "Instead of constantly shifting to capture the best deal, discount rate, rebate points, etc., I've stuck with the same folks for years."
Regular Charging, Zero Balances
At last check, marketing company president Paul Entin, from Bloomsbury N.J., holds a 990 VantageScore. For him, it's a matter of honor and integrity. "A high credit score indicates your name and your signature on a contract have meaning. It's an indicator of certainty ... of character. It would be difficult to trust someone with a poor credit rating to the same extent you can trust someone with a higher credit rating."
Entin maintains his high score by using his business and personal credit cards regularly and paying them off every month. "It's not magic -- pay your bills on time and pay the debt. Make it a priority. Pay attention to spending."
Keeping the Right Mix of Credit
"Every time someone runs my credit they say, 'Wow, I almost never see someone with credit that high,'" says Carrie Rocha, founder of pocketyourdollars.com in Minneapolis. She keeps it first-rate to preserve her autonomy. "As someone who got out of $50,000 in debt in less than three years, I take a lot of personal pride in my financial freedom." Though Rocha has no plans to borrow money again, "I have no barriers when it comes to employment, insurance or other areas of life where my credit score is used to assess the kind of risk I am."
Besides "the obvious things like pay my bills," Rocha says she increased her score by talking to her credit union loan officer, who said an overabundance of idle retail accounts was driving it down. She had opened the cards randomly during in-store promotions, but never really charged on them, so there was no history to protect. After formally closing the accounts, her scores that were previously in the 720 to 740 mark rose to the 800s.
Does the Perfect Credit Score Exist?
Pursuit of excellence is often wise, but does 'perfect' exist? Yes, says Craig Watts, public affairs director for FICO. "Several thousand consumers do in fact have the highest possible FICO score."
While not everyone will reach the credit score apex, you can get close by consistently following three simple guidelines:
1. Pay all bills on time.
2. Keep credit card balances low.
3. Take on new credit only when you really need it.
Don't obsess over small credit score variations. "Lenders decide what score they will accept for their best interest rate product," assures Watts. "They genuinely don't care if your score is 50 or 100 points higher than that."
Clearly, A-plus credit has its advantages, but there is no reason to go overboard. Find balance between attentiveness and fixation by understanding what those numbers can do for you and knowing how you can improve them. And remember -- credit scores gauge your borrowing history, not your intrinsic value as a person.
Stay tuned.....
Showing posts with label Credit Freedom. Show all posts
Showing posts with label Credit Freedom. Show all posts
09 April 2010
29 November 2009
FICO Credit scores revealed
Your actions make a huge difference in your credit score and the cost of doing business.
FICO Reveals How Common Credit Mistakes Affect Scores
by Jeremy M. SimonSunday, November 29, 2009
Did you max out your credit card? Expect a credit score drop of 10 to 45 points. Declare bankruptcy? Your score will plummet by up to 240 points, and your odds of getting credit will nosedive with it.
The "damage points" data, unveiled recently by FICO, are part of the most revealing glimpse into the firm's once-secret -- and still mysterious -- credit scoring model. The new information discloses how many points borrowers' scores will drop when they make the most-common mistakes.
'Help People Understand' Scores
"I hope this information will help people to better understand FICO scores and the value for them of avoiding credit missteps. It illustrates key points such as the higher your score, the farther it can fall if you stumble," says FICO spokesman Craig Watts. "Getting and maintaining a good score isn't complicated. We all just need to pay our bills on time, keep credit card balances low and take on new debt sparingly. "
The greater transparency about FICO scores is important because American consumers' ability to get credit rises and falls with the number. FICO, the company that pioneered credit scoring, assigns consumers a three-digit number from 300 to 850, depending on how well they handle credit. Other companies also offer scores, but FICO's version is the most widely used by lenders in determining whether a consumer can borrow, and at what rate.
FICO's credit score has been around for decades, but only within the past decade have consumers gradually gained access to theirs. Though the raw numbers can be purchased, how they're figured remains a FICO secret, as closely guarded as the formula for Coca-Cola. Until Thursday, FICO revealed only broad categories of factors influencing the score, but not the number of points at stake for consumers who fail to pay as agreed. The "damage points" information, revealed in a report by personal finance writer Liz Pulliam Weston, will be made available through its myFICO.com Web site starting this weekend.
FICO's information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).
Those with good or excellent credit -- so-called prime borrowers -- put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score -- 780 -- that same delinquency can send a FICO score tumbling by 90 to 100 points.
The Cost in Dollars
In order to show just how badly a drop in your FICO score can hurt your wallet, we spoke with members of the home mortgage, auto and credit card lending industries. We presented hypothetical scenarios of a consumer who decided to apply for a $200,000, 30-year mortgage; a $20,000, five-year auto loan and a credit card. While all the industry insiders stressed that a FICO score isn't the only factor in determining who gets credit and at what cost (other factors they cited include the borrower's debt-to-income ratio and whether they have already established a relationship with the lender), they were able to provide an idea of what a borrower who had the following credit scores could expect.
For a Consumer Who Started With a FICO Score of 780:
Following a 30-day late payment, the consumer's car loan rate would jump nearly 3 percent, costing the borrower $26 more each month.
Following a debt settlement, the consumer would pay as much as $109 more each month on a home mortgage.
For a Consumer Who Started With a FICO Score of 680:
Following a 30-day late payment, the consumer would pay $41 more each month for a car loan.
Following a 30-day late payment, the consumer would pay as much as $95 more each month on a home mortgage.
Following a debt settlement, the consumer would no longer qualify for a credit card.
Some Surprised By the Details
Consumer advocates say it's important for borrowers to know what can damage their FICO scores. "If they know it in advance, they won't go out and step in a pile of doo-doo. They won't go out and do some of these things," says Linda Sherry, director of national priorities with advocacy group Consumer Action. Even experts found some surprises in today's news. "FICO imposes bigger hits than I would have thought for being maxed out or 30-days late just once, reinforcing my view that it is a cruder, blunter instrument than they like to claim. Nevertheless, it is a powerful, widely used crude blunt instrument," says Ed Mierzwinski, consumer program director for the U.S. PIRG consumer advocacy group.
Of course, knowing the impact on a FICO score and actually avoiding these mistakes are two separate things: Amid rising unemployment and other daily financial struggles, paying bills and staying on-track financially becomes a much bigger challenge for many borrowers.
"Some of these things are out of their control," Sherry says of consumers.
Additionally, as Weston points out, consumers with identical FICO scores can have different credit histories. That means the same slip-up -- such as maxing out a credit card -- could have different impacts on consumers who have the same FICO score. In the examples they provided, FICO assumed each borrower had several active major credit cards, a mortgage, car loan and student loans.
Sherry acknowledges the benefit of putting a number to a financial blunder. "I don't think we necessarily knew the numbers that a bankruptcy could apply to a credit score," Sherry says.
Helping You Make Better Decisions
While knowing the numbers may not keep you filing for bankruptcy if given no other choice, the information may help you make the best decision when faced with a bad situation.
FICO scores -- and the access to credit they provide -- are a valuable asset to consumers and supply a safety net when incomes are stretched. It's an asset that needs to be protected, Sherry says, even if job loss or catastrophic illness makes bill paying problematic.
"In that period of time, paying down debt is the last thing on your mind. Paying the minimum payment may also be the last thing on your mind, but you'll be doing yourself a big favor if you do," Sherry says.
Stay tuned....
FICO Reveals How Common Credit Mistakes Affect Scores
by Jeremy M. SimonSunday, November 29, 2009
Did you max out your credit card? Expect a credit score drop of 10 to 45 points. Declare bankruptcy? Your score will plummet by up to 240 points, and your odds of getting credit will nosedive with it.
The "damage points" data, unveiled recently by FICO, are part of the most revealing glimpse into the firm's once-secret -- and still mysterious -- credit scoring model. The new information discloses how many points borrowers' scores will drop when they make the most-common mistakes.
'Help People Understand' Scores
"I hope this information will help people to better understand FICO scores and the value for them of avoiding credit missteps. It illustrates key points such as the higher your score, the farther it can fall if you stumble," says FICO spokesman Craig Watts. "Getting and maintaining a good score isn't complicated. We all just need to pay our bills on time, keep credit card balances low and take on new debt sparingly. "
The greater transparency about FICO scores is important because American consumers' ability to get credit rises and falls with the number. FICO, the company that pioneered credit scoring, assigns consumers a three-digit number from 300 to 850, depending on how well they handle credit. Other companies also offer scores, but FICO's version is the most widely used by lenders in determining whether a consumer can borrow, and at what rate.
FICO's credit score has been around for decades, but only within the past decade have consumers gradually gained access to theirs. Though the raw numbers can be purchased, how they're figured remains a FICO secret, as closely guarded as the formula for Coca-Cola. Until Thursday, FICO revealed only broad categories of factors influencing the score, but not the number of points at stake for consumers who fail to pay as agreed. The "damage points" information, revealed in a report by personal finance writer Liz Pulliam Weston, will be made available through its myFICO.com Web site starting this weekend.
FICO's information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).
Those with good or excellent credit -- so-called prime borrowers -- put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score -- 780 -- that same delinquency can send a FICO score tumbling by 90 to 100 points.
The Cost in Dollars
In order to show just how badly a drop in your FICO score can hurt your wallet, we spoke with members of the home mortgage, auto and credit card lending industries. We presented hypothetical scenarios of a consumer who decided to apply for a $200,000, 30-year mortgage; a $20,000, five-year auto loan and a credit card. While all the industry insiders stressed that a FICO score isn't the only factor in determining who gets credit and at what cost (other factors they cited include the borrower's debt-to-income ratio and whether they have already established a relationship with the lender), they were able to provide an idea of what a borrower who had the following credit scores could expect.
For a Consumer Who Started With a FICO Score of 780:
Following a 30-day late payment, the consumer's car loan rate would jump nearly 3 percent, costing the borrower $26 more each month.
Following a debt settlement, the consumer would pay as much as $109 more each month on a home mortgage.
For a Consumer Who Started With a FICO Score of 680:
Following a 30-day late payment, the consumer would pay $41 more each month for a car loan.
Following a 30-day late payment, the consumer would pay as much as $95 more each month on a home mortgage.
Following a debt settlement, the consumer would no longer qualify for a credit card.
Some Surprised By the Details
Consumer advocates say it's important for borrowers to know what can damage their FICO scores. "If they know it in advance, they won't go out and step in a pile of doo-doo. They won't go out and do some of these things," says Linda Sherry, director of national priorities with advocacy group Consumer Action. Even experts found some surprises in today's news. "FICO imposes bigger hits than I would have thought for being maxed out or 30-days late just once, reinforcing my view that it is a cruder, blunter instrument than they like to claim. Nevertheless, it is a powerful, widely used crude blunt instrument," says Ed Mierzwinski, consumer program director for the U.S. PIRG consumer advocacy group.
Of course, knowing the impact on a FICO score and actually avoiding these mistakes are two separate things: Amid rising unemployment and other daily financial struggles, paying bills and staying on-track financially becomes a much bigger challenge for many borrowers.
"Some of these things are out of their control," Sherry says of consumers.
Additionally, as Weston points out, consumers with identical FICO scores can have different credit histories. That means the same slip-up -- such as maxing out a credit card -- could have different impacts on consumers who have the same FICO score. In the examples they provided, FICO assumed each borrower had several active major credit cards, a mortgage, car loan and student loans.
Sherry acknowledges the benefit of putting a number to a financial blunder. "I don't think we necessarily knew the numbers that a bankruptcy could apply to a credit score," Sherry says.
Helping You Make Better Decisions
While knowing the numbers may not keep you filing for bankruptcy if given no other choice, the information may help you make the best decision when faced with a bad situation.
FICO scores -- and the access to credit they provide -- are a valuable asset to consumers and supply a safety net when incomes are stretched. It's an asset that needs to be protected, Sherry says, even if job loss or catastrophic illness makes bill paying problematic.
"In that period of time, paying down debt is the last thing on your mind. Paying the minimum payment may also be the last thing on your mind, but you'll be doing yourself a big favor if you do," Sherry says.
Stay tuned....
18 November 2009
Life Partner Choices Can Affect Your Credit
One of the biggest reasons for a marriage to break up is MONEY! Make sure you talk about your views, spending habits, values, and current financial situation. Know what you are signing up for as your partners credit history can affect you.
Also while we are in love our significant other's habits seem cute - but change to a major irritation once you are committed to each other. You are trying to save for a house and they are out buying shoes or buying sporting equipment.
When I think through conversations with my friends and family - their biggest grip is how their significant other views and spends money. To the point of keeping things from them to avoid fights. Do you really want to go there?
Make sure you have conversations and agree on your goals prior to making a commitment.
Marriage doesn't wipe out credit history
BY don taylor, ph.d., cfa, cfp,
Bankrate
© Copyright 2009 Bankrate, Inc. All rights reserved.
Bankrate — 11/10/09
Dear Dr. Don,
I am worried that when my fiance and I get married anything negative on either credit report will affect us. Will it affect us if it is not a joint account together and it happened before we got married? Please help me ease my mind so I can get back to planning my wedding.
— Melissa Matrimony
Dear Melissa,
You both bring your credit histories with you into the marriage. When you jointly apply for credit, the lender will review both credit reports. In a community property state, the lender may consider both credit reports in all cases. That's because in such states, debt taken on during the marriage is a joint obligation even if only one spouse applied for credit.
The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. Alaska allows couples to elect community property treatment. Contact your state's attorney general if you live in a community property state and want more information about community property statutes in general or as it relates to consumer lending. The National Association of Attorneys General Web site provides the contact information for your state.
I think it's better to be proactive and review your credit reports and credit scores to see if one or both of you need to work on improving your credit history. The feature "How to get your free credit report" explains how to get your credit report for free, but you have to pay to get your credit scores.
Correcting mistakes on a credit report through the dispute process can clean up a credit report. Because the information in your credit report determines your credit score, the score will improve. The feature "Fixing mistakes on your credit report" explains the dispute process. Even if everything on the report is accurate, most negative information will drop off a credit report after seven years.
Figure out if there's a problem. If there is, figure out how you're going to handle it as a couple. Then, you can go back to planning your big day.
© Copyright 2009 Bankrate, Inc. All rights reserved.
Also while we are in love our significant other's habits seem cute - but change to a major irritation once you are committed to each other. You are trying to save for a house and they are out buying shoes or buying sporting equipment.
When I think through conversations with my friends and family - their biggest grip is how their significant other views and spends money. To the point of keeping things from them to avoid fights. Do you really want to go there?
Make sure you have conversations and agree on your goals prior to making a commitment.
Marriage doesn't wipe out credit history
BY don taylor, ph.d., cfa, cfp,
Bankrate
© Copyright 2009 Bankrate, Inc. All rights reserved.
Bankrate — 11/10/09
Dear Dr. Don,
I am worried that when my fiance and I get married anything negative on either credit report will affect us. Will it affect us if it is not a joint account together and it happened before we got married? Please help me ease my mind so I can get back to planning my wedding.
— Melissa Matrimony
Dear Melissa,
You both bring your credit histories with you into the marriage. When you jointly apply for credit, the lender will review both credit reports. In a community property state, the lender may consider both credit reports in all cases. That's because in such states, debt taken on during the marriage is a joint obligation even if only one spouse applied for credit.
The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin. Alaska allows couples to elect community property treatment. Contact your state's attorney general if you live in a community property state and want more information about community property statutes in general or as it relates to consumer lending. The National Association of Attorneys General Web site provides the contact information for your state.
I think it's better to be proactive and review your credit reports and credit scores to see if one or both of you need to work on improving your credit history. The feature "How to get your free credit report" explains how to get your credit report for free, but you have to pay to get your credit scores.
Correcting mistakes on a credit report through the dispute process can clean up a credit report. Because the information in your credit report determines your credit score, the score will improve. The feature "Fixing mistakes on your credit report" explains the dispute process. Even if everything on the report is accurate, most negative information will drop off a credit report after seven years.
Figure out if there's a problem. If there is, figure out how you're going to handle it as a couple. Then, you can go back to planning your big day.
© Copyright 2009 Bankrate, Inc. All rights reserved.
30 August 2009
Understand Your Credit Score
To get the best deal on a loan, you need some new strategies to bump up your score - and keep it there.
Borrowing money today requires impressing an increasingly hard-to-please crowd. With creditors of all kinds more cautious than ever, you need an A+ application to land the best terms -- and that means an A+ credit score, the number lenders use to judge your risk of default.
The most commonly used credit scoring system, called FICO, rates people from a very risky 300 to a pristine 850. And right now we're in the middle of a credit score crunch: "You need a 750 or better today to have the same treatment you got with a 700 two years ago," says John Ulzheimer, president of consumer education at Credit.com.
John D'Onofrio, CEO of Autoloandaily seconds that: "Two years ago a 680 was enough to get a great car loan rate. Today it's often the minimum to qualify at all."
Think you're still in the clear? Don't be so sure. Lenders have been making changes that could cause your score to slip from excellent to average. Improve and protect your number with these strategies:
Learn Your Score. You have three FICO scores, based on your credit reports at the three credit bureaus: Experian, Equifax, and TransUnion. The numbers tend to be in the same ballpark, so pony up $16 to get one representative score at myfico.com. You can get an estimate free at Creditkarma.com. But the FICO score gives you a better sense of what lenders see.
Scout for Mistakes. Your scores are only as good as the information they're based on. And a third of people who've pulled their reports have found errors, according to a Zogby poll. That's good reason to read your report.
When you buy your FICO score, you'll get a copy of the report it was based on. Get gratis histories from the other bureaus via annualcreditreport.com (you're entitled to one free from each bureau every 12 months).
Spot an error? Request a correction, following the instructions on the bureau's website. Let's say the size of a credit line was misstated or an account was mistakenly marked delinquent. Getting the error fixed could raise your score as much as 200 points, says Ulzheimer, who has also worked for Equifax and FICO.
Never, Ever Be Late. As you'll see in the pie chart on the right, the biggest chunk of your credit score comes from your payment history. Just one late payment can shave 100 points off a 750-plus credit score, says Ulzheimer. Lenders can't tattle on you to the bureaus until you're 30 days past due, adds credit expert Gerri Detweiler. But don't risk it. For all your bills, enter recurring due-date reminders on your computer calendar.
Source: CardRatings.com
Missed a payment? Get back on track within the next 30 days, and you should "get back the lion's share" of points lost, Ulzheimer says. More than 90 days late? The damage can stick for years. If it was a one-off lapse, call your issuer and plea for a good-will adjustment to your credit report. (It's a long shot.)
Remember the Magic 20%. The second-biggest factor in your score is how much you owe vs. how much credit has been extended to you. The part of this that's easiest to finesse is your credit card utilization rate, or your total card balances compared with your total credit limits, as well as each card's balance relative to its limit.
Example: If you've charged $5,000 on cards and have $50,000 in credit, your rate is 10%. For the best score today, 10% is ideal, but you can probably creep up to 20% and keep a high rating.
Unfortunately, with banks lowering credit limits and canceling unused cards, it's harder to maintain such a low percentage. In the previous example, if your available credit is cut to $20,000, your rate shoots to 25%. That could sink your score by as much as 50 points, says Ulzheimer. The lesson: Know your limits, watch for changes, and stay under 20% on each card and in total (0% if you'll be applying for a loan soon).
Already above 20%? Paying down debt is the obvious way to lower your utilization rate, but another strategy is to apply for an additional credit card to increase your overall credit limit. That may cause you to lose a few points in the short term -- so don't do it if you're about to apply for a mortgage -- but it should pay off in the long run.
Keep Oldest Cards in Play. As noted, credit issuers these days are eagerly canceling cards that are not in use. Besides reducing your limit and increasing your utilization ratio, having an account closed can hurt you in another way, especially if it's among your older ones.
See, 15% of your score rides on the length of your credit history. The longer you ably manage revolving debt, the better you look. So don't cancel your oldest cards. And don't let them get canceled on you: Move a recurring charge to each so they stay active.
Already ditched or been ditched? A new card (see previous) can help with your utilization rate, but there's little you can do to help the "history" component of your score, except to keep other old accounts in use.
Accept Fate on the Rest. There are other factors involved in your score, but they're not so easy to manipulate. For example, 10% is based on how well you manage a mix of credit types, such as mortgages, car loans, and credit cards. But you don't want to go out and, say, finance a car just for a score boost; besides, you can easily get 750-plus with just a few well-tended credit cards.
Along the same lines, 10% is based on "new credit," but the effects of a new application can be positive or negative, depending on your history.
Along the same lines, 10% is based on "new credit," but the effects of a new application can be positive or negative, depending on your history.
In other words, if you want to be among the crème de la credit crème, accept what you can't change, and focus on what you can.
Copyrighted, CNNMoney. All Rights Reserved.
08 August 2009
Credit Basics
Today we are going to talk about credit. A great resource is Credit Abuse Resistance Education Program (Care) We all have a credit score. The range will be between 300 and 850. People with high scores are more likely to pay money borrowed back and are a better risk. Your credit score will determine how much you pay for things the rest of your life! You will get a lower interest rate if your credit score is high. The magic number is 700. Items on credit report: General personal information, history of on time and late payments for almost all areas of life, bankruptcy and employment. Stop right now and request a free credit report! You are entitled to a free report every year. Mark your calender and make this a habit. Do not use any other site.
Go to www.annualcreditreport.com Print off the report and review. If your score is lower than 700 there are ways to improve it! Ways to increase credit score:
1. Check for mistakes and if you find one - request correction.
2. Pay your bills on TIME
3. Pay off credit card debt
4. Have 1 credit card and use it responsibly. By purchasing on card and paying off every month - it will show you are responsible. Do not use it for everything pick one or two small items and then use a cash system for the rest of your purchases.
5. Stop applying for credit cards. Do not get sucked into a free t-shirt, or saving 10%. Every time you apply for a new card they check your report and this affects your score.
The opposite problem is having no credit history. If you have no history you will not be eligible for a mortgage or car loan. While you build your credit the trick is to do it responsibly.
Tip #4 - 1 credit card, use it each month for small purchase and pay it off. Use cash for everything else! Your job this month is to continue to track your expenses and stop the leaks on little purchases take the money and put it into savings! Work on understanding your credit score. Get your credit report and review it, understand it and make sure it is accurate. Continue to work on paying off debt. Any questions or concerns send me a comment or shoot me an email.
Go to www.annualcreditreport.com Print off the report and review. If your score is lower than 700 there are ways to improve it! Ways to increase credit score:
1. Check for mistakes and if you find one - request correction.
2. Pay your bills on TIME
3. Pay off credit card debt
4. Have 1 credit card and use it responsibly. By purchasing on card and paying off every month - it will show you are responsible. Do not use it for everything pick one or two small items and then use a cash system for the rest of your purchases.
5. Stop applying for credit cards. Do not get sucked into a free t-shirt, or saving 10%. Every time you apply for a new card they check your report and this affects your score.
The opposite problem is having no credit history. If you have no history you will not be eligible for a mortgage or car loan. While you build your credit the trick is to do it responsibly.
Tip #4 - 1 credit card, use it each month for small purchase and pay it off. Use cash for everything else! Your job this month is to continue to track your expenses and stop the leaks on little purchases take the money and put it into savings! Work on understanding your credit score. Get your credit report and review it, understand it and make sure it is accurate. Continue to work on paying off debt. Any questions or concerns send me a comment or shoot me an email.
Stay tuned.....
05 February 2009
February Financial Series Continued.........
January was the month to gain understanding of where your money goes. Did you track every purchase - from rent, electric, vending machines, every cup of coffee and fast food run? If you did I am sure you were surprised at how much money is spent on items that keep you from getting closer to your goal and really is not enhancing your quality of life today.
The extra money you now have should go into a savings account. Let's start to build a reserve while we learn more about personal finances.
Today we are going to talk about credit. A great resource is Credit Abuse Resistance Education Program (Care) We all have a credit score. The range will be between 300 and 850. People with high scores are more likely to pay money borrowed back and are a better risk. Your credit score will determine how much you pay for things the rest of your life! You will get a lower interest rate if your credit score is high. The magic number is 700.
Items on credit report: General personal information, history of on time and late payments for almost all areas of life, bankruptcy and employment.
Stop right now and request a free credit report! You are entitled to a free report every year. Mark your calender and make this a habit. Do not use any other site. Go to www.annualcreditreport.com. Print off the report and review. If your score is lower than 700 there are ways to improve it!
Ways to increase credit score:
1. Check for mistakes and if you find one - request correction.
2. Pay your bills on TIME
3. Pay off credit card debt
4. Have 1 credit card and use it responsibly. By purchasing on card and paying off every month - it will show you are responsible. Do not use it for everything pick one or two small items and then use a cash system for the rest of your purchases.
5. Stop applying for credit cards. Do not get sucked into a free t-shirt, or saving 10%. Every time you apply for a new card they check your report and this affects your score.
The opposite problem is having no credit history. If you have no history you will not be eligible for a mortgage or car loan. While you build your credit the trick is to do it responsibly. Tip #4 - 1 credit card, use it each month for small purchase and pay it off. Use cash for everything else!
Your job this month is to continue to track your expenses and stop the leaks on little purchases take the money and put it into savings! Work on understanding your credit score. Get your credit report and review it, understand it and make sure it is accurate. Continue to work on paying off debt.
Any questions or concerns send me a comment or shoot me an email.
I should have my web page live very soon and we will have printable versions of each months steps to financial success.
Stay tuned......
The extra money you now have should go into a savings account. Let's start to build a reserve while we learn more about personal finances.
Today we are going to talk about credit. A great resource is Credit Abuse Resistance Education Program (Care) We all have a credit score. The range will be between 300 and 850. People with high scores are more likely to pay money borrowed back and are a better risk. Your credit score will determine how much you pay for things the rest of your life! You will get a lower interest rate if your credit score is high. The magic number is 700.
Items on credit report: General personal information, history of on time and late payments for almost all areas of life, bankruptcy and employment.
Stop right now and request a free credit report! You are entitled to a free report every year. Mark your calender and make this a habit. Do not use any other site. Go to www.annualcreditreport.com. Print off the report and review. If your score is lower than 700 there are ways to improve it!
Ways to increase credit score:
1. Check for mistakes and if you find one - request correction.
2. Pay your bills on TIME
3. Pay off credit card debt
4. Have 1 credit card and use it responsibly. By purchasing on card and paying off every month - it will show you are responsible. Do not use it for everything pick one or two small items and then use a cash system for the rest of your purchases.
5. Stop applying for credit cards. Do not get sucked into a free t-shirt, or saving 10%. Every time you apply for a new card they check your report and this affects your score.
The opposite problem is having no credit history. If you have no history you will not be eligible for a mortgage or car loan. While you build your credit the trick is to do it responsibly. Tip #4 - 1 credit card, use it each month for small purchase and pay it off. Use cash for everything else!
Your job this month is to continue to track your expenses and stop the leaks on little purchases take the money and put it into savings! Work on understanding your credit score. Get your credit report and review it, understand it and make sure it is accurate. Continue to work on paying off debt.
Any questions or concerns send me a comment or shoot me an email.
I should have my web page live very soon and we will have printable versions of each months steps to financial success.
Stay tuned......
28 January 2009
Credit Alert
You are doing everything right. Living within your means, paying off your credit card in full every month, not opening and closing credit cards for a free T-shirt or to save an extra 10%. Then you receive a letter from your credit card company saying they are lowering your credit limit because of where you shop.
It is called data points, the credit card companies compare where you shop to where people who are a credit risk shop - and then regardless of your history - they lump you into a category and change the rules on you. The biggest part of the scam is they won't tell you what stores affected you.
Consumer awareness is also a part of managing your finances. This is a practice that is unfair and if you are subject to this practice - contact your congressmen and continue to make this issue known. It is not right that you do everything correct and then are penalized for where you choose to shop!
Stay tuned.......
It is called data points, the credit card companies compare where you shop to where people who are a credit risk shop - and then regardless of your history - they lump you into a category and change the rules on you. The biggest part of the scam is they won't tell you what stores affected you.
Consumer awareness is also a part of managing your finances. This is a practice that is unfair and if you are subject to this practice - contact your congressmen and continue to make this issue known. It is not right that you do everything correct and then are penalized for where you choose to shop!
Stay tuned.......
19 November 2008
Ways to Ruin Your Credit......
What is all the talk about credit? It seems to be all the buzz. So what can you do to protect yourself from making some common mistakes that could take you years to undo.
Top 10 Mistakes
1. Accept all the preapproved credit card offers you receive and open in store credit cards to save 10% on a purchase.
2. Buy everything you want on credit- spend more than you make or can pay each month.
3. Pay your bills late or miss a payment if money is tight.
4. Let your accounts go to collection. Ignore creditors.
5. Close credit cards account soon after opening them.
6. Max out your credit cards - use every bit of credit given to you.
7. Co-sign for other people to get credit or let others use your cards.
8. Mismanaging student loan money.
9. Not having a budget.
10. Not getting and reviewing your free credit report every year.
In the next few posts I will discuss what a credit score is , what is credit and ways to establish and maintain good credit. By being responsible with your credit - it can lower interest rates on loans, give you opportunity for home or car ownership, obtain employment, and on a personal note it makes you a more desirable partner, less stressed out when the phone rings or the mail arrives, and a feeling of self respect.
Stay tuned......
Top 10 Mistakes
1. Accept all the preapproved credit card offers you receive and open in store credit cards to save 10% on a purchase.
2. Buy everything you want on credit- spend more than you make or can pay each month.
3. Pay your bills late or miss a payment if money is tight.
4. Let your accounts go to collection. Ignore creditors.
5. Close credit cards account soon after opening them.
6. Max out your credit cards - use every bit of credit given to you.
7. Co-sign for other people to get credit or let others use your cards.
8. Mismanaging student loan money.
9. Not having a budget.
10. Not getting and reviewing your free credit report every year.
In the next few posts I will discuss what a credit score is , what is credit and ways to establish and maintain good credit. By being responsible with your credit - it can lower interest rates on loans, give you opportunity for home or car ownership, obtain employment, and on a personal note it makes you a more desirable partner, less stressed out when the phone rings or the mail arrives, and a feeling of self respect.
Stay tuned......
13 November 2008
Another Piece of the Puzzle - Credit
A brief summary of previous blogs - go to the archives to review.
We have discussed responsible choices in your purchases - do you NEED it or WANT it for instant gratification.... Values - what are yours ... do you have a list of goals, did you do a top 20 list (things you would like to do before you die, who you will do it with, cost, time frame). This exercise really helps you live a more conscience life, as well as, more meaningful.
Then we went into budget - living within your means and actually under them. Take some money and save for an emergency and for retirement. Give up a few of the fast food meals, video games or as simply as getting water instead of pop while eating out will save you money. These small changes will NOT affect the quality of your life today but will definitely change it LATER.
Student Loans - this is a big concern for most of you. How much to take and repayment. As I always state I am not a fan of debt however if you are getting student loans and maximizing your opportunity at school - you will never make a better investment than in yourself. If you use the above steps - you can limit how much you will need to borrow.
The next very important piece to consider is your CREDIT. You can go to annualcreditreport.com. and get a free credit report every year. There are three credible firms you can get your report from: Experian, Equifax and Transunion. Do not use other free credit sites such as Free credit report - they ultimately aren't free and may not be secure.
Having bad credit will create you many many problems. You do not want to go there. You will have problems trying to rent an apartment or buy a home, purchsing a car, getting into graduate school or obtaining a job, you may have to pay higher interest rates if someone is willing to give you credit (which just continues the problem) and on a personal note may affect your relationships... Do you want to be with someone who isn't responsible and already has a ton of problems?
A great site for information is Credit Abuse Resistance Education to learn additional ways to avoid the pitfalls of bad credit and actionable steps you can utilize everyday to create good financial habits. It takes a second to create bad credit and years to undo.
The next post will discuss what creates bad credit..... You may not even realize you are setting yourself up for a problem.
Stay tuned......
09 November 2008
GenM You Can Avoid Bankrupcy - Part 2
Okay quick reminder - we are reviewing Hon John C Ninfo II tips on creating a budget in college. His organization Credit Abuse Resistance Education - CARE Program is working hard to teach financial responsibility.
This is geared toward someone who is just leaving for college - HOWEVER, these tips can be applied to people already at school. It will give you some basic concepts on getting control of your money so you can start to save TODAY - for your future.
For the first 5 tips read the post from Nov 8, 08.
6. Make sure you have researched the direct expense at your particular college and the costs of things in the surrounding area. Check out all the activity fees at the school and what the cost of living is in the area. (Washington D. C. vs. Harrisburg PA) so you know what things like gas prices are.
7. Know exactly what your parents will contribute. Remember, although your parents may agree to pay for things at school like clothing, it may be because they think you will only be buying a few things a month. If you go to the mall every weekend and come back with an armful of clothes, your parents may change their mind and not pay for them at all.
8. Do a first draft of your budget with realistic expenses. Does it balance? Are you in the BLACK because you have some extra funds or in the RED because your expenses are higher than your available funds?
9. Start making adjustments (I will work more hours at my school job) or reducing expenses (I need to get a coffee maker for my room) if you are in the RED. If in the BLACK - increase your savings in your emergency fund.
10. When you get to school, try to stick to your budget faithfully in the first month so that you can see how it is working. Then, if the budget needs adjustments because you over looked or miscalculated something, discuss it with your parents and decide what you can do to make it balance. Be flexible. Creating a budget and then sticking to it is a life long process.
Remember Generation Millionaire - the goal is Freedom - Financial and Mental.
WISDOM BEYOND YOUR YEARS. You will reverse the current trend of overspending and thoughtless financial decisions.
Stay tuned..........
This is geared toward someone who is just leaving for college - HOWEVER, these tips can be applied to people already at school. It will give you some basic concepts on getting control of your money so you can start to save TODAY - for your future.
For the first 5 tips read the post from Nov 8, 08.
6. Make sure you have researched the direct expense at your particular college and the costs of things in the surrounding area. Check out all the activity fees at the school and what the cost of living is in the area. (Washington D. C. vs. Harrisburg PA) so you know what things like gas prices are.
7. Know exactly what your parents will contribute. Remember, although your parents may agree to pay for things at school like clothing, it may be because they think you will only be buying a few things a month. If you go to the mall every weekend and come back with an armful of clothes, your parents may change their mind and not pay for them at all.
8. Do a first draft of your budget with realistic expenses. Does it balance? Are you in the BLACK because you have some extra funds or in the RED because your expenses are higher than your available funds?
9. Start making adjustments (I will work more hours at my school job) or reducing expenses (I need to get a coffee maker for my room) if you are in the RED. If in the BLACK - increase your savings in your emergency fund.
10. When you get to school, try to stick to your budget faithfully in the first month so that you can see how it is working. Then, if the budget needs adjustments because you over looked or miscalculated something, discuss it with your parents and decide what you can do to make it balance. Be flexible. Creating a budget and then sticking to it is a life long process.
Remember Generation Millionaire - the goal is Freedom - Financial and Mental.
WISDOM BEYOND YOUR YEARS. You will reverse the current trend of overspending and thoughtless financial decisions.
Stay tuned..........
08 November 2008
GenM you can avoid Bankruptcy!
All we seem to hear about is the financial crisis. Globally, National, Corporate, Small Business, Charities, and Personal. It doesn't seem like anyone is a good role model for fiscal responsibility. I believe your generation with education and action can change the headlines all over the world. It will be a slow and gradual shift. No one will really notice until the credit card companies start to panic while you are traveling and enjoying your freedom - debt free.
Let me paint a picture of what you can avoid. I went to a presentation last week from a wonderful organization. Credit Abuse Resistance Education. - The CARE Program.
The Hon. John C. Ninfo II started this program and has created chapters in all 50 states by recruiting volunteer bankruptcy lawyers to run the educational program. They go to schools, organizations and anywhere people will listen to teach them to avoid bad financial choices.
If they are successful they will put themselves out of business. Noble cause to say the least.
They discuss creating a realistic budget for college students, top 20 mistakes made by people who file bankruptcy, top 10 financial tips for high school and college students, using credit cards and predatory lending traps.
I am going to start with "Creating a realistic budget that you can stick to" by Hon. John C. Ninfo II. He lists 10 steps. I will list 5 today and 5 tomorrow. This will give you an opportunity to figure out how you are going to track your spending and implement the steps into your life.
Budget - a comparison of all your expenses to the funds you have available to pay for these expenses. If your expenses exceed your available and you want to stay out of debt, your only choice is to balance your budget by either increasing your available funds or decreasing your expenses.
Let me paint a picture of what you can avoid. I went to a presentation last week from a wonderful organization. Credit Abuse Resistance Education. - The CARE Program.
The Hon. John C. Ninfo II started this program and has created chapters in all 50 states by recruiting volunteer bankruptcy lawyers to run the educational program. They go to schools, organizations and anywhere people will listen to teach them to avoid bad financial choices.
If they are successful they will put themselves out of business. Noble cause to say the least.
They discuss creating a realistic budget for college students, top 20 mistakes made by people who file bankruptcy, top 10 financial tips for high school and college students, using credit cards and predatory lending traps.
I am going to start with "Creating a realistic budget that you can stick to" by Hon. John C. Ninfo II. He lists 10 steps. I will list 5 today and 5 tomorrow. This will give you an opportunity to figure out how you are going to track your spending and implement the steps into your life.
Budget - a comparison of all your expenses to the funds you have available to pay for these expenses. If your expenses exceed your available and you want to stay out of debt, your only choice is to balance your budget by either increasing your available funds or decreasing your expenses.
How to create a balanced budget...........
1. Start now to carefully observe and record your spending. Keep a journal and write down EVERYTHING you are actually spending your money on. You may be surprised. I was recently in a clothing store and overheard a conversation between a mother and her high school daughter who didn't have enough money left to buy some things she had seen in the store the week before. They were trying to figure out where all the girl's money had gone. Finally, the daughter acknowledged she had been buying specialty coffees two or three times a day.
2. Take a realistic look at your habits, interests, lifestyles, and activities. Determine whether while at college will you be continuing, discontinuing or adding some things that you regularly do. That way you can plan and budget for them. Do you have an expensive hobby like skiing that you may want to participate in on a regular basis if you go to school in Vermont, but will only do if you go to school in Florida? If you are an avid golfer at a club where your family has a membership, how many times will you be able to afford the greens fees to play golf at school? Do you have enough cloths so that you won't have to do laundry that often? Are you likely to be involved in extra curricular activities at college that can be more costly, or will you spend most of your time studying and hanging out with friends? Are you going from an area that does not have professional sports to a school in a city where there are professional sports teams that you will want to see? Do you have some health issues that may make your expenses for prescriptions or over-the-counter medicines higher?
3. Ask yourself, what are you doing now that you don't have to spend money on because your family is paying for it, but that you or your family will have to pay for separately for when you are at school. For example, now when you have a headache you just go to the medicine cabinet and take an aspirin, your favorite snacks are always in the kitchen and laundry soap is always in the utility room and you don't need quarters to use the washer and dryer.
4. Be honest with yourself so you can determine whether some of your actual or projected expenses are wants or needs, and if you have to, how you might be able to reduce some of the expenses that are not truly needs. Almost every one of the expenses on the budget template can vary. For example, you can buy a brand new lamp for your dorm room or a really cool one at a garage sale; you can buy designer clothing or find interesting things at a discount stores, second hand shops, or retro clothing stores; you can buy your friends and family expensive gifts, or make them relatively inexpensive gifts or take them for an inexpensive breakfast or lunch instead of buying a gift; you can buy store brand over-the-counter medicine that is just as effective as the name brand medicines; you can fly home with a discount fare if you purchase your tickets in advance or pay full price if you wait to long; or you can buy your school supplies at the campus bookstore or at one of the discount office supply stores.
5. In addition to keeping any particular expense down by looking for the best buy, you can and should set a limit on how much per week you will spend on certain items like eating out or ordering in, buying beverages, going on road trips to see your friends, attending concerts or sporting events and shopping at the mall.
I will have the last five steps in tomorrows post.
Your next steps - review your attitudes, actions and decisions starting today. You have the power to do it differently. Have financial and mental freedom which creates options everyday of your life.
Stay tuned.........
06 November 2008
The World is Watching......
The election is over and the American people have overwhelming voted for CHANGE. Let's hope the politicians here our voices and start to work together and fix some of the issues we are all facing. With change comes - discipline, open mindedness, and cooperation.
The challenge to our politicians is the same one Generation Millionaire asks of you. To really make a change - it starts with putting your ego aside and making a conscious choice everyday.
Do I need or just want what I am spending my money on?
Does my purchase fit into my value system or get me closer to my goals?Is this instant gratification which will not make an impact on my life? or actually may hurt my financial future?
Generation Millionaire - Wisdom beyond your years... Be the role model the world needs.
Start saving now - it is NEVER to early.
Pay yourself first always........ life on 10 -15% less than you actually gross and contribute to your employer plan, an IRA or savings account until you are eligible.
Debt is a trap - pay cash for your purchases. Once you start the credit card trap - and carry a balance it is an endless cycle of paying interest and being burdened by stress for things you probably really didn't need. A recent study showed that Americans spend $1.22 for every $1.00 they earn. This is a problem and one you want to avoid.
I went to a presentation on bankruptcy on Monday night and will do a blog on their organization. This group is made of bankruptcy attorneys and they are trying to help young adults avoid the debt trap with education. Care Program
Start with these simple changes and as your savings grow talk with a financial advisor and get it invested into a well allocated portfolio that matches your risk tolerance and time frame.
You can always send me a comment or email and I am happy to address any concerns or celebrate your success.
Remember to go to the contest post and submit your ideas! The deadline is Nov 16th You can win a free Chipotle card.
Stay tuned........
The challenge to our politicians is the same one Generation Millionaire asks of you. To really make a change - it starts with putting your ego aside and making a conscious choice everyday.
Do I need or just want what I am spending my money on?
Does my purchase fit into my value system or get me closer to my goals?Is this instant gratification which will not make an impact on my life? or actually may hurt my financial future?
Generation Millionaire - Wisdom beyond your years... Be the role model the world needs.
Start saving now - it is NEVER to early.
Pay yourself first always........ life on 10 -15% less than you actually gross and contribute to your employer plan, an IRA or savings account until you are eligible.
Debt is a trap - pay cash for your purchases. Once you start the credit card trap - and carry a balance it is an endless cycle of paying interest and being burdened by stress for things you probably really didn't need. A recent study showed that Americans spend $1.22 for every $1.00 they earn. This is a problem and one you want to avoid.
I went to a presentation on bankruptcy on Monday night and will do a blog on their organization. This group is made of bankruptcy attorneys and they are trying to help young adults avoid the debt trap with education. Care Program
Start with these simple changes and as your savings grow talk with a financial advisor and get it invested into a well allocated portfolio that matches your risk tolerance and time frame.
You can always send me a comment or email and I am happy to address any concerns or celebrate your success.
Remember to go to the contest post and submit your ideas! The deadline is Nov 16th You can win a free Chipotle card.
Stay tuned........
04 November 2008
Election Day - Student Loans and Debt Management
First and foremost - today is election day! Hopefully, you all went out and voted! It is a historic election and it is your future at stake. So just like everything else with Generation Millionaire - take a good look at your values and your beliefs and use your power and vote!
Plus on a funny note -You have to love this country - that we can have comics make fun of everything! I watched the Saturday Night Live Prime Time Special last night and haven't laughed that hard in years!! Freedom nothing like it - whether in free speech or personal finance!
Okay, so more on student loans. I am going to talk about repayment schedules. In previous blogs we discussed lifestyle options and ways to increase your payback methods, reduce the amount you borrow and choices on how you spend your money. So let's put some numbers out there.
The average undergraduate student loan amount is $20,000. We will assume a 7% interest rate. Private loans in the past 5 years have been as low as 4% and as high as 9%, they fluctuate with prime interest rates. The distressing issue is they are not fixed rates and just like with housing - the amount you pay in interest will vary depending on the current rates.
My opinion is 20 years to repay a loan is way to long..... Again, do you want to finish paying off your loans as your kids are starting college???? So now is the time to make decisions. I used the calculator at Finaid
5 year repayment - $396.02 a month. Interest on loan - $3761.49 = $23,761.49
10 year repayment - $232.22 a month. Interest on loan - $7865.87 = $27,865.87
15 year repayment - $179.77 a month. Interest on loan - $12,357.22 = $32,357.22
20 year repayment - $155.06 a month. Interest on loan - $17214.29 = $37,214.29
By extending the payments you are looking at paying an additional $13452.80 and will be strapped an additional 15 years!!!!
Your budge will never be simpler than as a college student. Once you graduate if you continue to live simply for a few years - you can free yourself and have additional money as you make other life changes. Buying a home, getting married, kids, travel etc. Read through some of the earlier blogs on choices that recent graduates made to get a jump on paying back their loans.
If you have other concerns please post a comment or send me an email. The next blog will be on the basic concepts of Generation Millionaire - then I will discuss credit card debt.
Stay tuned.......and enjoy your freedom and vote........
Plus on a funny note -You have to love this country - that we can have comics make fun of everything! I watched the Saturday Night Live Prime Time Special last night and haven't laughed that hard in years!! Freedom nothing like it - whether in free speech or personal finance!
Okay, so more on student loans. I am going to talk about repayment schedules. In previous blogs we discussed lifestyle options and ways to increase your payback methods, reduce the amount you borrow and choices on how you spend your money. So let's put some numbers out there.
The average undergraduate student loan amount is $20,000. We will assume a 7% interest rate. Private loans in the past 5 years have been as low as 4% and as high as 9%, they fluctuate with prime interest rates. The distressing issue is they are not fixed rates and just like with housing - the amount you pay in interest will vary depending on the current rates.
My opinion is 20 years to repay a loan is way to long..... Again, do you want to finish paying off your loans as your kids are starting college???? So now is the time to make decisions. I used the calculator at Finaid
5 year repayment - $396.02 a month. Interest on loan - $3761.49 = $23,761.49
10 year repayment - $232.22 a month. Interest on loan - $7865.87 = $27,865.87
15 year repayment - $179.77 a month. Interest on loan - $12,357.22 = $32,357.22
20 year repayment - $155.06 a month. Interest on loan - $17214.29 = $37,214.29
By extending the payments you are looking at paying an additional $13452.80 and will be strapped an additional 15 years!!!!
Your budge will never be simpler than as a college student. Once you graduate if you continue to live simply for a few years - you can free yourself and have additional money as you make other life changes. Buying a home, getting married, kids, travel etc. Read through some of the earlier blogs on choices that recent graduates made to get a jump on paying back their loans.
If you have other concerns please post a comment or send me an email. The next blog will be on the basic concepts of Generation Millionaire - then I will discuss credit card debt.
Stay tuned.......and enjoy your freedom and vote........
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