Lite the Fuse: 6 Low- and No-Cost Start-up Steps You Can Take Right Now

Ready to get into action and give yourself some credit? Here are 6 low- and no-cost steps you can take this week. The are all easy and cost very little or nothing at all.

Hidden in this list is the fuse that will light an explosion of momentum in your credit building project. Good luck!

1) Get organized
Create a list of ALL your creditors including lender, address, contact telephone, current balance, current minimum payment, monthly payment date and interest rate. (COST = FREE)

2) Pay all bills on time
Create a schedule and way of reminding yourself to pay all bills on time. Examples: place reminders in Outlook, your cell phone calendar, the calendar on the wall, or by setting up auto-pays (make sure you control thru your bank's on-line payment system, if they offer it, NOT an auto debit with the lender). Whatever system works best for you -- maybe split up your accounts with your spouse so you can share the burden. (COST = FREE)

3) Pay down balances
Prioritize your balances and bring ALL past due accounts current ASAP. Then, target those accounts you can bring below 50% debt to credit limit ratio. The more active accounts in good standing with balances below 50%, the stronger your score. (COST = FREE)

4) Get educated
Visit http://www.myfico.com/ and http://www.truecredit.com/. Downloand and read "Your Credit Score" and the other free resources available from myFICO, sponsored by Fair Isaac--the company that actually creates the scores. They are the best source for your TRUE Fico score. myFICO offers a free 30-day trial for their credit monitoring service, but we recommend you use TrueCredit, which offers more complete credit reports and it's own credit monitoring service. Set your account up for $14.95/month, no contract, and free for the first 30 days. Review for mistakes and inaccuracies you can begin challenging. (COST = FREE 30 days, then $15/month)

5) Get your credit report
Visit http://www.annualcreditreport.com/ and order your free credit report (no scores) -- one from each bureau. Review for mistakes and inaccuracies you can begin challenging. (COST - FREE)

6) Set up and follow a budget
You Need a Budget -- yes, you! Go to http://www.youneedabudget.com/ and invest $20-40 towards your financial future. This system will have you living off last month's income (vs. this month's) in no time and give you some power back in terms of managing your cash flow. Awesome product, easy to use, simple to understand. I use it and everyone with cashflow problems should as well. (COST = $40 or less)

BONUS: Get plugged in!
Go to http://www.getcreditwise.net/ and put it on your favorites list. Find more bonuses there. Put the next Chicago Get Credit Wise Club meeting on your calendar. Do it NOW! (COST = FREE, . . . ALWAYS)

Back To Basics: The 5 Key Components That Make Up Your Credit Score

To those of us with more in our lives to worry about than how are tradelines look or how many points up or down our score went last month, credit matters are often complex and confusing. Sometimes, it pays to get back to basics.

Today, we feature a clip from Linda Ferrari, President of Credit Resource Corporation. Linda is an expert on credit remediation and is great at putting it plain and simple.

No matter where you go, every effective credit repair or score-building program will start with and build upon these 5 key components.

In fact, one of the easiest ways to take control of your credit profile is to start right here: review each of these 5 basic components and see how you are doing with each. You’ll be surprised what a difference addressing just a few of these can make.

For additional resources, review the links under DOLLARWISE in the sidebar at the right. To learn more about Credit Resource Corporation, visit www. http://www.creditresourcecorp.com/.

Source: LoanToolbox
www.loantoolbox.com

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What's In Your Wallet? More Than You May Want!

If you were to stop what you were doing and give yourself 10 seconds to list everything in your wallet or purse, what would be on your list?

Cash, driver's license, credit cards, debit cards, membership ID, a receipt or two and a subway card -- that's my list.


If after making your list, you actually emptied your purse or wallet in front of you, would there be more than you expected? An unpaid bill with your address and account number on it? A credit card receipt with your card number on it? An expired ID you haven't used in months?

With one in four US households falling victim to identity theft in the last five years (FTC)--many of us are walking around with ticking time bombs in our own back pockets.

Author "Fox" of the Squawkfox blog emptied her purse recently and found she had already lit the fuse. The result of her exercise was "Ten Things You Should Never Carry in a Purse or Wallet" to avoid identity theft. Besides the obvious social security card, passport and birth certificates, some surprising items also made the list: business cards, flash drives, checkbooks and even condoms!

In addition to Fox's post, Truecredit.com and MyFICO.com offer excellent resources for protecting yourself from identity theft--from simple common sense practices to identity theft insurance.

Are you toting more than the bare necessities? Do yourself a favor and purge the purse of risky business.

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You're Not Immune -- No Matter What Your Credit Profile Looks Like

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions.

One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening.

The chart at right is from the April 2008 survey and it illustrates what we already know: It's getting tougher and tougher to get approved for a home loan. Some of the areas in which mortgage guidelines are tightening are well-known:

• More thorough income documentation
• Higher credit score requirements
• More "money in the bank" post-closing

Some areas are less well-known:

• More scrutiny of prior delinquencies
• Strict review of appraised values

Overall, getting a mortgage approval from a bank is more difficult than in months past and the tightening trend is expected to continue throughout the rest of the credit cycle.

No "class" of buyers is immune, either -- not even the "prime" ones. Home prices may fall going forward but stricter mortgage guidelines means that fewer home buyers will be able to take advantage.

If you're unsure about your credit profile, check with your loan officer to see how additional restrictions could impact your ability to purchase (and finance!) a home.

(Image courtesy: Federal Reserve)

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Why Free Credit Reports Are Worth What They Cost

The ubiquity of "free" credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans.

Because credit ratings have more importance to everyday life than in years past, this is a welcome development. For example:

• Lenders use credit ratings to determine borrowing rates
• Insurers use credit ratings to determine premiums
• Employers use credit ratings to make hiring decision

Unfortunately for Americans, though, not all credit reports are created equal. And when it comes to actually applying for credit in the form of a new credit card or mortgage, the free reports are worth precisely what they cost.

This is one reason why home buyers should have their credit reviewed by a mortgage lender as soon as possible in the home buying process -- the free reports offered by the major credit bureaus may be misleading and incomplete. Free credit reports are useful for identifying identity theft and reviewing active accounts, but do very little to help a potential creditor gauge your creditworthiness.

As the chart shows us, each industry's creditors has a way they like to do business and that way is the "standard" way.

(Image courtesy: The Wall Street Journal)

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