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7/2/2019 0 Comments

11 Benefits of a Great Credit Score

A great credit score is 750++ on all credit scoring models. Having such scores is an important part of living a MoneySmartLife.

Here are 11 benefits of having and maintaining great credit scores.

Lowest Interest Rates on Credit Cards, Loans, and Leases
Easier Approval for Rental Houses and Apartments
Better Car Insurance Rates
Get a Cell Phone on Contract with No Security Deposit
Avoid Security Deposits on Utilities
Bragging Rights
Get Better Interest and PMI Rates on Your Mortgage
Improve Your Chances of Getting Hired
Get Approved for Higher Credit Card Cash Advance and Credit Limits
- Part of your safety net
- The proportion of balance to limit is 30% of your score. An increased credit limit automatically lowers the proportion to limit.
More Negotiating Power on Financial Products terms and services
Increases Your Partnerships Potential

It is hard to go it alone in life all the time. There are seasons in your life when you may want to form mutually beneficial partnerships with others. Having great credit scores can help you contribute to both personal and professional cooperative relationships. It allows you to both set and achieve higher standards.

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5/14/2019 0 Comments

Here is a very non-exhaustive list of the things that will cost you more because of the tariff war with China with a link to the full list.

The recent announcement of increased tariffs on Chinese goods will increase the price for thousands of consumer goods that are purchased every day. Here is a very abbreviated list:

On The List

TV
Cell phones
DVR
Tablets
Kitchen Appliances
Air Conditioners
Furniture
Auto Parts
Luggage
"Outdoor Gear, Like Travel Bags, Backpacks And The Knit Fabric Used In Fleece Vests"
Dog Collars
Baseball Mitts
Ski Gloves
Sledgehammers
Saw Blades
Lighting Fixtures
Toilet Paper
Art Supplies
Ceramic Tiles
Windshield Glass
Antiques That Are More Than 100 Years Old
Cd Players and Cd Cases (Really! Is anyone still buying Cd stuff?)
Cassette Tapes And Cassette Players (See above)
Apparel Made From Reptile Leather
Wooden Shingles
Dyed Knitted Or Crocheted Cotton Fabrics
Anvils
Mattress Supports
Christmas Tree Lights (Bah humbug)
Cabbage
Kale
Carrots
Beets
Hundreds Of Types Of Fish
Mustard Seeds
Stuffed Pasta, Whether Cooked Or Otherwise Prepared Or Not
Olives (Not Green), In A Saline Solution, In Airtight Containers Of Glass Or Metal But Not Canned
Strawberry Jam
Rice Wine Or Sake
Soy Sauce

Not On The List

Clothing — From Tariffs
Highchairs
Infant Walkers And Other Baby Items.
Alaskan-caught Fish That Are Exported To China For Processing And Then Reimported To The United States.

Link To Full U.S. Government Tariff List (196 Page Pdf)
Source https://www.nytimes.com/2019/05/10/business/china-tariffs-list.html

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5/4/2019 0 Comments

Don't Co-sign! Make them Authorized Users instead

"But adding someone as an authorized user can be the gift that keeps on gifting. As with most successful credit score improvement strategies, the more time you give this one, the better. ... But the gift isn’t for everyone."

If you have done some things right and your financial house appears in order, a relative will ask you to co-sign a loan for them. Co-signing is only one of the ways available to help your credit-challenged relative. There are other ways that may deliver the desired results with less exposure and risk for you, especially with a little bit of planning.

Let’s look at your options and so you can make an informed choice about co-signing.

When you co-sign you become a JOINT account holder. Each and every member on a joint account agrees to be individually responsible for 100% scheduled repayment of the outstanding debt regardless of the other members' payments or promises. When you co-sign if a payment is missed, your credit score will receive the full negative impact of the late payment.

This could be catastrophic if it compounds an already diminished credit score. No doubt, the new co-signed loan’s high-balance-to-limit ratio, and short history have already reduced your credit scores several points. That happened just by signing up; missed payments or not. So be prepared to take a credit score hit when you co-sign.

How long will it take your score to recover from these factors assuming a pristine repayment history? The answer depends on several factors. Credit scoring is an art and a science. Whatever calculations the algorithm conjures to determine our scores, the following is empirically factual for every credit score. They go down a helluva lot faster than they rebound. It is never down one month; up the next for any credit scoring model in existence regardless of the previous history.

If you do, you will almost immediately transfer your credit history to theirs. And without any risk or exposure to new debt for either of you. Now, this strategy will not work for impulse or emergency “gotta have a co-signer or else “ situations. But adding someone as an authorized user can be the gift that keeps on gifting. As with most successful credit score improvement strategies, the more time you give this one, the better.

But the gift isn’t for everyone. Here are six questions whose answers will help you decide if your situation is a fit for the authorized user strategy:

Can the authorized user be added to “good news only” tradeline?
1. Ratio ** less than 30% balance to limit
2. Payment history ** On time every time
3. Length ** Longer the better
Who can be your authorized user?
1. Check the CC policies
2. No age limit
3. Anyone you decide
4. No credit check
What are the rights and responsibilities of an authorized user?
1. Not responsible for debt or payments
2. Can charge up to account limit without further approval
3. Adhere to relevant portions of the credit card agreement
What are account holder’s duties, rights, responsibilities, and exposure?
1. Maintain an unblemished tradeline for both ratios and payments
2. Control access to credit
3. Monitor account
4. Remove authorized user before negative impact event reports
What are the authorized user’s qualifications and duties?
1. Fully trustworthy with access to your credit card limit
2. Appreciates the privilege
3. Maintains your security and trust
4. Not curious
5. Gets off the account ASAP!!
How to add an authorized user safely?
1. Don’t give them a card
2. Don’t give them the account number
3. Notify them when they have been added or removed

Pro-actively adding authorized user to your credit card accounts can be an effective MoneySmartLife strategy and give a good credit legacy to your offspring. It is part of monitoring/mentoring your children’s credit. Having good long-term authorized user tradelines on the credit reports means they are more likely to be approved without the need for a co-signer when they apply for credit.

Good credit grandparents can leave good credit legacies safely to multiple generations since there are rarely limits on the number of authorized users. Just make sure that each of the six questions has the right answer.

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4/30/2019 0 Comments

JUST DO THE ARITHMETIC and Get the most for your money

It is not just how much money you make; it's how much you keep that makes the difference in your life.

Getting the most for your money is one way to do that. Making the right buying decision is an important skill to master. And a great habit to develop. Here's a way to do that:

Comparison shop everything, all the time, not just the "big items." To do that successfully you must be able to compare prices on your most frequently purchased items. To do so, you must use Unit Pricing. You can compare “apples to apples” with the Unit Price. Here is how to know and evaluate the unit price:

Check the shelf tag.
Do the arithmetic. It's only arithmetic. It is not math.You know: just add, subtract, multiply, divide.
Use your phone's calculator and data storage functions to find and recall unit prices.
Don't assume bigger is always cheaper. Bulk, warehouse and other "value" sizes don't always have the lowest unit price.
Use Base Units for comparison
- Oz
- Gram
- Liter
- Pound/lb
- Gallon
- Sq ft
Be able to recall the numbers on your most purchased items
- Organize and use your phone's data storage and recall capabilities
- Delegate to different family members items that are important to them
  - Kids can keep track of the price and find "deals" on their favorite foods, clothes, tech, travel, etc.

Click here to go the webinar

Webinar Link

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11/15/2018 0 Comments

2 Steps to a Good Credit Score

Everyone can have a great credit score (750+.) How long it takes depends on from where you start. It will take a person with a 450 score longer than a person with 620. And both longer compared to a 720 score. But it can be done. The journey of 1,000 miles begins with the first step. Here are 2 steps to having a great credit score.

Step One STOP putting BAD news on your credit report.
If you do nothing, your credit will clean itself up in 7 years. The Fair Credit Reporting Act (FCRA) requires that.

Once you commit to improving your credit score start paying your bills: On time; Every time; All the time. Just one late payment can be devastating to a credit score for a long time. So, no more late payments--pay your bills on time--every time.
Improve credit utilization ratios. You can do this by reducing debt and/or raising credit limits. Your credit utilization ratios significantly impact your credit score in both the Trended Data and various FICO credit scoring models; independent of your payment history.

Step One will “clean” your credit report of all negative references in a maximum 7-10 years depending on the negative tradeline type. But a clean report is only part of having a great credit score. You can take Step Two before you complete the first. And you should. Especially if you had a bankruptcy in the last decade.

Step Two Put some good news on your credit report. Gotta Do It!
Current positive tradelines on your credit report have a greater impact on improving your credit score than older negative ones. They will improve your score faster and easier than just doing Step One alone. Here are some ways to put positive tradelines on your credit report.

Lend yourself money. Then pay yourself back in a way that reports to the consumer reporting agencies. If you have either no score or a “bad” score you will find it hard to get credit. Financial services institutions are very reluctant to lend money to the “untried or unworthy.” So you must borrow from yourself with the assistance of a financial services instrument such as a (1)secured credit card or (2)self-collateralized installment loan from a credit union, bank, etc or (3)a Credit Builder account from Self Lender. The first two options require you to have money to get started. Self Lender Credit Builder account only requires you to make self-selected on-time payments. You’ll need no money upfront.
Responsibly open and use new types of credit accounts. If you want a great credit score you must proactively manage it. Having and properly using credit when necessary can improve your financial well being. Educate yourself about credit scoring. Know how to move your score on purpose when you need it. Doing so can save you money on interest rates and result in more favorable terms when you borrow.

Bonus Step Repeat Step One and Step Two as needed.

Credit Score improvement Chart

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Author

Mansa Musa is a homeownership counselor and homebuyer educator. He is currently the Principal at MoneySmartLife.org. He blogs and speaks on subjects of financial well-being and financial capability. Helping working class families live a sustainable MoneySmartLife through pragmatic solutions and behavior changes.

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11 Benefits of a Great Credit Score

Here is a very non-exhaustive list of the things that will cost you more because of the tariff war with China with a link to the full list.

Don't Co-sign! Make them Authorized Users instead

JUST DO THE ARITHMETIC and Get the most for your money

2 Steps to a Good Credit Score

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