Whether you’re a snowbird escaping the cold for warmer pastures, someone who always uses their annual vacation time right away or you just regularly travel this time of year as a pick-me-up following Christmas and New Year’s, getting away at any time – let alone during the winter – is always something to look forward to. That said, nothing can quite dampen your travel experiences like coming home with bad credit or no money.
So how can you travel and not go broke? Here’s a look:
Plan properly: The first step to traveling in a fiscally responsible manner is budgeting appropriately. Do your research on flights, lodging, meals, entertainment, etc. to come up with an accurate ballpark number of what you’ll need, then save until you meet this magic number so you’re not just charging everything and paying it off later.
Look for ways to save: If you won’t be able to hit your target budget or if you want to reduce your target budget, consider cashing in airline miles to help with flight costs or hotel rewards points for lodging. You may even be able to turn any earned credit card rewards points into something related to your trip. Some memberships, like AAA, can even get you discounts at certain places. If you don’t have a rewards account set up with certain vendors, start now. You can bank the points for future trips.
Consider cash: If you’ve saved enough to meet your projected budget, consider pulling the money in cash and paying for some of – if not all – of your expenses that way. This is beneficial for a few reasons. One, you likely won’t spend more than what you budgeted for. And two, paying in cash also helps prevent credit card fraud. Domestic and tourist hotspots abroad alike tend to be areas where identity theft is common.
Know the customs: This is especially true if you’re traveling abroad, as the country and city that you’re venturing to may have different customs on tipping. While it’s common in the U.S. to tip drivers and most service industry workers, this isn’t always the case abroad. You might think that a tip here or there wouldn’t add up, but if you spend $100 on dinner every night of a 10-day trip and think that 20 percent gratuity is the norm somewhere where it’s not, you’re throwing away a few hundred dollars that you don’t need to spend.
Look for low price alternatives: Conventional lodging and transportation methods might not be the best for your budget. That said, look into Airbnb for lodging to see if you can get a cheaper rate, take an Uber or Lyft instead of a taxi cabs, or consider public transportation for getting around town. The savings can significantly add up.
How to Survive a Financial Hardship and Not Ruin Your Credit
While we all hope we’ll never be in a situation where it’s difficult to pay the bills, things happen. You might be furloughed due to circumstances beyond your control, like the hundreds of thousands of people out of work right now with the partial government shutdown. Or perhaps you or your spouse were laid off, let go or forced to take a sizable pay cut. Maybe an unforeseen expense is making things difficult. Even if your financial hardship is temporary, that doesn’t mean it’s easy. Things can become especially dicey if you rely on your credit card to make ends meet on your bills, a strategy that can greatly raise your debt and lower your credit score.
The good news is there are certain tips and tactics you can follow if you’ve fallen on tough times to help you navigate your way through things without killing your credit score. Here’s a look at how to do it:
How to Keep Your Credit Score in Tough Times
Look into hardship plans with your credit card company: The credit card companies typically don’t publicize this benefit, so there’s a good chance that it’ll be up to you to initiate it. However, many companies do offer hardship plans to help people better manage their debt. Essentially, hardship plans are repayment plans specifically catered toward a particular consumer’s financial situation – and enrolling in such a plan has no direct impact on your credit. Be honest with your creditor about why you need to enroll in such a plan.
Stick to the necessities: You likely need to stay up on your car payments, mortgage payments, utilities and perhaps your phone bill. But your cable bill? Your Netflix, Hulu, Amazon Video and other streaming services? Eating out? Your daily morning Starbucks? Those are all things you can likely live without. Don’t be afraid to cancel or put a hold on these luxuries until you can get back on your feet. You’ll thank yourself in the long run.
Pick up a part-time job: If you’re out of work and your unemployment benefits aren’t cutting it, don’t be too prideful to get a part-time job to help you get through the tough times. Even just bringing in a few hundred dollars more per week can help you knock out some of the essential bills you’re on the hook for. Plus, you can always leave the part-time gig as soon as you secure full-time work in your desired field once again.
Minimally, always make on-time payments: Even if you can only pay the minimum payment on your credit card, make sure you do it. Credit scores are largely weighed on whether or not you make on-time payments. Skipping even once can cause your score to dip – and you don’t want to get docked for something so seemingly simple to avoid.
Most of all, if you’ve fallen on hard financial times – don’t panic. Come up with a strategy of how you’re going to address your situation, then act. It’s possible to do without sacrificing your credit score.
How to Maintain Your Credit in the New Year
What’s your New Year’s resolution?
To go to the gym more? To eat healthier? To be more patient?
The aforementioned are all great ideas, but we’d like to propose one additional resolution that’s worth considering: repairing and maintaining your credit score. That’s right, while many focus their New Year’s resolutions on their bodily health, we’d propose you put some focus on your financial health. And there’s arguably no more important number to your financial future than that little three-digit credit score. If your credit is less than stellar, make sure that you take the necessary steps to repair it. And if your credit is in good or excellent condition, then just as important is making sure that you stay in this range. Here’s a look at some tips and tricks for maintaining your credit score:
Tips for Maintaining Your Credit Score in 2019
Maintaining and/or repairing your credit score is all about knowing where your money is going. Between bill auto-pay and the convenience of just swiping a credit card when you need items, it can be very easy to lose track of where your money is going. And too free of spending can quickly undo any credit repair you made and cause those credit card bills to escalate.
That’s why one great tip is to track all of your expenses for a month to get a better idea of where your money is going and what you’re spending it on. This will allow you to analyze said expenses, eliminate ones that are unnecessary (or not in the budget any longer), and move on from there. Simply knowing where your money is going can help you prevent overspending and allocate additional funds that could go to repay certain debt.
Here’s a look at some other credit maintenance tips:
Consider a money management tool: If you want to keep a closer eye on your spending – and thereby your financial health – it’s never a bad idea to consider a money management tool. If you’re self-disciplined, a great one is Mint, which can be downloaded as an app. However, you may also choose to check with your bank to see what – if any – tools it offers.
Shop credit cards: Think your interest rate is too high on your current credit card? Don’t be afraid to shop around and see if someone is willing to give you a lower one. You could also circle back with your current credit card company and ask for a better rate. Studies show that most people who do are successful.
Budget for occasional expenses: The water bill that’s due quarterly. Your taxes twice a year. Some occasional expenses have a tendency to sneak up on you, potentially leaving you scrambling for a way to pay them. That’s why we suggest opening an additional account and allocating a certain amount of money per month toward any of these occasional expenses. You’ll be glad you did when you can pay these bills without having to get creative.
Picture this scenario: You’re applying for a home loan. It’s a big life event, so obviously you want to be prepared. So you’ve checked your credit score on one of the many online sites that offer the service, were happy with what you came in at and believe you’ll be able to secure a home loan with a low interest rate. Then you connect with your lender, and, as is customary, they pull your credit score too. It comes in tens of points lower than it did when you checked online.
It can be frustrating to be in a situation such as the scenario above, only to discover that what you thought was going to be your credit score is different from what the lender came up with. And in a situation such as a home loan, what the lender discovered obviously trumps what any website came up with.
So how do you get the right credit score? Credit scores vary based on the type of loan you’re applying for (i.e. auto, home, etc.), but what the lender comes up with is always the accurate score for whatever type of loan you’re applying for.
Why the Credit Score Discrepancies?
Just why do credit scores pulled by lenders sometimes vary from the ones you receive via online websites? It’s simple – websites are typically using either their own scoring models, or more updated versions of the FICO score. That’s why it’s important to keep in mind when pulling your score online that these websites serve more of an educational purpose than anything else. These sites can give people an idea of what their credit scores are, and also help them identify areas where credit repair may be necessary to improve. But they’re certainly not scores that are set in stone – those come from the lender.
In noting this, experts advise individuals to just start early in the loan process. For example, if you’re anticipating applying for a loan a year or two down the line, pull your credit score from one of the online sites, see how it looks and analyze whether or not there are areas you can improve it to make yourself a more qualified buyer. Then, when it’s closer to applying for the loan, simply get pre-approved by the lender to get a precise idea of what your score is.
In conclusion, it’s worth noting that there’s certainly nothing wrong with using one of the online credit sites – but don’t take it to be 100 percent accurate, just use it for educational purposes. In the end, the only way to truly get the right credit score is by having your lender run your information before starting the loan process. That’s why it’s best to plan ahead and not be afraid to start the process early.
Employment Troubles – How we may be able to help.
When it comes to debt management, you may want to think twice about overspending or missing a payment. It could have an impact on your employment. The simple fact is, bad credit can cost you a job. It’s important to know how credit impacts employment as well as what steps you can take to reduce this risk.
If you are looking for a new job, hoping for a promotion, or just trying to remain in the same position, your credit score can get you in trouble if it is less than ideal. Employers are using credit checks as a key component of their hiring routine, in fact. They do so for various reasons, but studies don’t indicate a direct link between a bad credit score and poor job performance. So, why is this happening?
3 Reasons Why Employers Care About Your Credit
It is important to consider your financial health before and during your employment. While you may not be looking to finance a purchase through your employer, he or she is still using your credit information to make hiring, firing, and even lay-off decisions. This happens for these reasons:
A poor credit score can mean a person is less dependable in the eyes of the employer.
Someone who mismanages money in their personal life may be more likely to embezzle or make bad decisions managing company funds (a key reason financial managers and those in most management positions will have credit checks before being hired.)
In some cases, hiring someone with a bad credit history could lead to a lawsuit down the road if the employee does something wrong. Liability risks are a big factor for many employers even as far-reaching as this.
In short, employers are allowed to use credit scores in most states as a key component of the hiring process. They tend to use them when seeking individuals for financial-related positions, including senior executive positions. They want to know they can trust their employees to be responsible and reliable.
What Else You Need to Know
Should you work on credit repair? While you should work to repair credit for your benefit, keep in mind that laws are changing. Some states, including Washington, Oregon, Hawaii, Illinois, Maryland, and Connecticut, have cracked down on the practice of credit checks for employment. Second, the employer has to get your written permission to conduct such as check as directed by the Federal Fair Credit Reporting Act.
Most employers are not looking at the details of your credit report. They want to know what the big picture says about you in terms of responsibility. As a result, it is important to read through a few credit tips and work on your debt management skills. These steps can help increase your ability to get and maintain your job.
Medical Collections – The Credit Score Killer
Making on-time payments, enacting a debt management strategy so that you don’t owe more than 30 percent of your total credit limit, and having a variety of different types of credit are all things that you can do to ensure a good, healthy credit score. But one common credit score killer is medical bills – and many times, your score could suffer due to a misunderstanding with your insurance or your doctor, potentially docking you big points for something that isn’t necessarily your fault. Other times, your score could suffer because you simply just can’t afford the cost.
In fact, medical bills that go to collections are treated the same way as any other type of bill that goes to collections in the FICO score formula. Analysts say that just one medical bill that has gone to collections could drop your credit score by 100 points, thereby forcing you to enact a lengthy credit repair strategy to bring the score back up over time.
So what can you do to ensure that a bill doesn’t go to collections? Here’s a look at some credit tips:
Understand your insurance: Many medical bills go to collections because people can’t afford to pay them. One way to better plan and prepare for potential medical costs is to know and understand your insurance plan. For instance, does it cover wellness visits? What’s the deductible? Will you have to pay money out-of-pocket after you meet the deductible? Knowing all these things can better help you prepare in the event of a surgical procedure or emergency rather than take a “wait and see” approach for when the bill arrives.
Go on a payment plan: Surgeries, procedures and hospital stays can all add up. And many people can’t afford to pay the total bill in full right away. Check with the hospital to see if you can go on a payment plan to make regular installments toward the bill. Many hospitals won’t charge any interest as long as the balance is paid within a year or two. Others may allow you to finance bills.
Keep records: Be sure to retain all your medical bills and check your credit report regularly to watch for inaccuracies. It’s estimated that four out of every five credit reports have errors in them, so if your report doesn’t line up with your personal records, take action to have any discrepancies removed from your report. Otherwise, you could have to repair credit for nothing.
Paid Collections – Why Are They Still on My Report?
Are you one of many Americans who have collection accounts on your credit report? If so, you unquestionably want it to just go away. This is a pivotal part of credit repair but raising your credit score back up to a favorable status is much easier said than done. That’s because according to U.S. law, collection accounts can be reported in your credit history for seven-and-a-half years from the original date you fall behind on payments.
Seven-and-a-half years. That’s a long time a bad record can weigh down your FICO score. Even worse, it’s possible that you can settle your debt with a collection agency and the record will still weigh down your credit score. Why? Because collection agencies are required to report information that is both accurate and complete and that includes this negative aspect of your credit history.
So now that you know why collection agencies won’t wipe a record clean, even after you’ve settled your debt, you might be wondering if there’s anything you can do? I mean, 7.5 years is a long time to wait out a bad record.
The good news is that there are some things you can do to wipe bad records from your report early, thereby allowing you to advance and repair credit. The bad news is these things are not sure-fire. Here’s a look at a few credit tips for working with collection agencies on this matter:
First, pull your credit history so you know what’s being reported. There’s a chance you might find an inaccuracy within the report, which can lead to a favorable outcome, as collection agencies aren’t legally allowed to report inaccurate or incomplete information.
Negotiate a “pay for removal” debt management deal: If you haven’t settled any debt yet, contact the collection agency and see if they will remove your record should you settle the debt. Many will likely respond and say that they’re unable to remove the record, as credit reporting agencies frown upon this policy. But it’s worth a shot.
Build new, positive credit: Part of your credit score is based on any new credit you’re building. So if you’re striking out with getting records removed from your credit report, it may just be best to cut your losses and focus on building new credit. As time goes on, these negative records will have less of an impact on your overall score, as long as your finances and credit history are headed in the right direction.
For more information on how to repair your credit after a collection you can request a free consultation by filling in the form below.
Bad Credit Score – It Hurts!
Everyone knows that a good credit score is essential to getting approval for everything from car insurance to car loans—and for getting the best possible interest rate that’s currently being offered—but what many people don’t seem to realize is just how much of a toll a poor FICO score can have on you.
So if you have a poor score, it’s important to take it seriously and enact credit repair, whether it means deploying debt management techniques or implementing good bill-paying habits. Here’s a look at how a poor credit score can hurt you and your finances.
High credit card interest rates: Credit cards are notorious for the high interest rates they charge. After all, it is how the card companies make their money. However, if you have poor credit, you can anticipate paying 22 percent and upward, should you even be approved. That’s a far cry from the 10 to 19 percent that’s likely with a good score.
Loan interest: How much more can you expect to pay on a car loan with a poor credit score? Possibly up to 2 whole percentage points of interest! Mortgage loans, too, can mean you that you will have to pay potentially tens of thousands more over the course of a loan with a poor score. Repair credit, and take it seriously to avoid these preventable expenses.
Miscellaneous: Can you imaging trying to sign up for a cell phone plan only to find out at the store that you’re ineligible because your credit score isn’t good enough? It happens. The same goes with car insurance. Presently, 47 states are permitted to check your credit score to determine the rate.
As you can see, a poor credit score can really hurt! So if yours isn’t satisfactory, make sure you’re taking the proper steps to correct it.
More Insurance Tips
Understanding General Insurance coverage: Suggestion For The Smart Consumer
When it comes to dealing with insurance coverage, it may seem like it is you versus the globe in some cases. With the huge quantity of information available online, it can be almost overwhelming at. This article will certainly offer much practical info for you to obtain begun on the appropriate course.
When you make any sort of improvements to your house that price over a specific amount, you should make sure to call your insurance company and allow them find out about it. If requirement be, many insurance carriers make you state renovations to them that cost a lot so that your plan can be readjusted.
Keep your broker or insurance firm updated on anything that may affect your policy or protection. If they do, then they could propose the next program of activity in concerns to your insurance coverage plan.
When you decide on insurance coverage for your auto, certify your insurer. Evaluating protection, it is additionally in your best passion to look for evaluations on their client solution, case responsiveness and also also rate increases. Understanding which you are dealing with ahead of time can aid you set assumptions with your insurance firm.
Commonly, you will want to get in touch with other client testimonials of specific insurance policy business just before spending your cash in their policies. By speaking with sites like Angie’s listing as well as other such customer remarks, you can acquire a sense of the current popular opinion towards an insurance policy business. If the majority of the firm’s patrons are pleased, that may aid you develop a choice, and also vice-versa.
Have your insurance coverage company reconsiders your scores if your credit history rating has gone up. Insurance business do base component of your preliminary premium on your credit report. Without your consent though, they could just inspect it when they initially supply you protection unless you have had a lapse of insurance coverage. If you know your credit has risen, having your credit rating reconsidered could possibly bag you a reduction in your costs.
When comparing insurance business, the wise customer will certainly take their own loyalty right into account. An insurer that has supplied years of reliable, hassle-free and also reputable service need to not be deserted the instant a slightly more affordable different becomes available. It is fairly most likely that an insurance firm that provides rock-bottom prices is cutting corners somewhere in the solution they provide their clients.
An annual review of their insurance plan is a routine every person ought to exercise. Make certain that all details on your plan is correct and also update it with any type of adjustments. See to it you are receiving credit report for such points as automated seat belts on your automobile policy and safety surveillance on your property owner policy.
In summary, you would like to do all that you can to learn concerning insurance policy. There is a lot of information available, yet we have given a few of the most essential pointers. Ideally we have supplied you with sufficient details to not only provide you a strong background, however additionally further spark your passion to come to be a professional in it.
If they do, then they could recommend the following course of action in regards to your insurance policy. Typically, you will certainly want to speak with other consumer assessments of certain insurance coverage companies just before investing your cash in their plans. If your credit history rating has gone up, have your insurance provider company rechecks your ratings. Insurance policy firms do base part of your initial premium on your credit rating rating. An annual testimonial of their insurance policies is a routine every person need to engage in.
Business Credit – How Does it Work?
If you’re a start-up company, chances are you’re going to be falling back a lot on your personal credit in the early days of your operations. And while that’s perfectly normal, your goal as a business owner shouldn’t be just to grow your business over time but to grow it in a way that you can also build business credit.
What is it though? It’s similar to your personal credit score, except from a business perspective. For instance, while your personal credit score is important, your business score should be kept separate in order to increase your company’s financing ability and credit capacity. This helps a business acquire the likes of equipment, office space, loans and financing and anything else that is pertinent to current and future operations. And it’s important to build business credit because starting a business can be a real struggle at times, potentially exhausting any personal credit options. By building a good business FICO score, you’ve now got another avenue to draw from.
We already mentioned how it works very similarly to personal credit. So in order to build it, you’ll have to borrow money, repay the borrowed money responsibly and make sure that the payments are reported to a credit reporting bureau. But just like your personal credit, your business score isn’t something that’s built overnight. In fact, just like your personal score, one of the key factors that lenders often look at when analyzing what type of a borrower you are is the length of your credit history. That’s why it’s important to begin to establish business credit immediately after you start your company.
As a reminder, your business credit is not the same thing as personal credit, so don’t treat them the same way. Apply for business credit under a Tax Identification Number, not your personal social security number, and make sure you’re meeting all the federal and state guidelines for operating a business within a given area. One other thing that can help your business score is incorporating your business. Incorporating helps limit personal risk, which can make you a more qualified borrower and increase your credit score. It’s not uncommon for many businesses to incorporate as part of a credit repair plan.
There are three big benefits of business credit: a big credit capacity, to increase company value and to protect your personal credit. Here’s a closer look at these three key benefits:
Large credit capacity: It’s estimated that successful businesses can have up to 100 times more of a credit limit than a personal credit score. This alone gives a company a lot of latitude to pursue new ventures and increase revenue within the business.
Increase company value: The better the credit score, the more attractive a company becomes, not only in terms of increased revenue but in terms of how it looks to potential investors and potential buyers.
Protect personal credit: As previously noted, being able to rely solely on your business credit for company matters helps protect your personal credit score, keeping the two entities separate. It’s not uncommon for new businesses to rely on one’s personal credit in the early days until an adequate enough amount of business credit can be built, but ideally, there’s a separation of church and state between a personal credit score and the business part. It’s best for business owners and the business.
Tips-Build Business Credit.
So now that you know a little bit about business credit and why it’s important to build it, just how can you go about doing it? Here’s a look at some tips and pointers for getting your business credit score up:
Start a business bank account: One of the first things you should do as a new business is open up a bank account. Banks report to the credit bureaus, so it helps start a line of credit. And opening up a business account will help you keep business and personal matters separate.
Don’t let your personal credit score slip: Business and personal credit scores are not the same, but you still shouldn’t let your personal credit score slip. That’s because in the early days of your company when your credit is still being built, it’s likely that you’ll be viewed as more of a high-risk borrower when applying for loans. Because of this, it’s not uncommon for the bank to grant the loan and rest liability with the owner on a personal basis. In order for a bank or lender to do this, the personal credit score needs to be adequate. So it’s important not to give up on the personal credit score, as in such cases it’s important to also build your credit for your business.
Be responsible: Responsibility is the key to building good credit. Make sure all bills are paid on time; monitor your credit score as you begin to grow it; and even consider consulting with a credit expert to help you and your business in the early days.