Guest Post by Lacey Cook
Hello all. My name is Lacey Cook, and this is my personal credit card debt story. I was always taught to spend my money wisely. From the age of eight, I started to save for my first car. By the time I turned 18, I had saved enough to buy a six year old car at about $8,000. I paid in full with a check, and I’d never felt so great.
After that, I went off to college, where I had some trouble keeping my finances afloat, but I made it through with the help of my parents. After graduation, I got married and started a new chapter of my life. That’s where everything started to go south. I had no student loans or credit card debt, and we’d just got a few thousand dollars for our wedding, but that wasn’t enough. He was about $40,000 in debt from student loans and credit cards, and we had no way of paying our bills. We struggled to find jobs, and we ended up having to use my credit cards to make ends meet for the first few months of our marriage.
Finally, we found jobs and started to slowly dig our way out of the hole. Everything was great, but we still wanted something more, so we decided to get a dog. We went to the pound to adopt one, and found the most adorable little puppy I’d ever seen. She was fun, yet still wanted to cuddle, and I knew she would be the perfect addition to our new little family. We spent our weekly budget for groceries on her and decided to eat bologna and mac and cheese to tide us over.
The second day after we got her, she started to look lethargic, and I wanted to make sure she wasn’t sick so I took her to the vet. Turns out, she had a very draining virus that could have killed her if we hadn’t caught it in time, and even with the treatment, she still only had about a 50% chance of survival. I handed over my credit card. Two days and nearly $2,000 later, we finally got to take her back home to nurse her back to health.
We knew, at that point, that we had to make some drastic changes in our spending to get us back out of debt. We sat down, made a list of all of our monthly expenses, and created a budget to suit our life. I started clipping coupons and stopped buying name brand items to cut down our grocery bill. We discontinued our cable bill as well and used digital rabbit ears instead. We cut down our budget so much that we were able to start paying way more than the minimum payment on our debts each month, which I know is important when you are trying to save your credit score.
We’re not out of the woods yet, but we’re getting there as fast as we can. In fact, we’ve been so successful, that we’re also able to put away a little money each month to start a retirement fund. I know you may be thinking that we shouldn’t have to worry about such things yet because we’re young and have plenty of time, but I have realized that I definitely don’t want to have to work until I’m too old to stand. The sooner a person starts to save for retirement, the sooner they can actually retire. I am determined and motivated to get out of this debt and live my life to the fullest.
Author Bio:
Lacey Cook is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about getting their first credit card.
Saturday
Friday
3 Steps to Building a Superhuman Credit Score
Guest Post by Jacelyn Thomas
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
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