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Dear Credit's Blog

By Dear Credit | Real Estate Pro in Bridgeport, TX
  • Stop Digging

    Posted Under: Home Buying in Fort Worth, Financing in Fort Worth, How To... in Fort Worth  |  February 28, 2013 9:57 AM  |  305 views  |  No comments

    The only reason a great many American families don't own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. ~Mad Magazine

    If you find yourself in a hole, stop digging. If you are in over your head financially, First step? Stop spending. Start at the beginning. If you want to pay off debt, or to save money, or to accumulate wealth, you must first change your relationship with money. First step is the same for everything; stop the behavior that is causing the problem. To become debt-free, you must stop spending, stop digging your hole deeper.

    Spend less than you earn.

    Simple plan, spend less than you earn. Curb your spending. Re-learn frugal habits.

    Start to learn how to live on less than you make. Start with a little, but work up to living on 70% of your income, this will give you room to breathe and increase your wealth. When you get paid, immediately put aside a minimum of 10% into a high yield savings account or mutual fund (ask your bank). The remaining 90% can go into your checking. When you have done this, start to increase the amount you set aside, from 10%, to 15%, until you get to 30%. It can happen.

    While you work on spending less, do what you can to increase your income. If possible, sell some of the stuff you bought when you got into debt. Get an extra job. (ask about our affiliate program, become a rep for Clean Slate and build your business)

    Get educated about money

    Use the tools on our website in the Financial Makeover section and start developing good money habits. The more educated you become, the more skillful you will be in managing the biggest stress-inducer and home wrecker today.

    The most important thing is to start now. Don’t start tomorrow. Don’t start next week. Start tackling your financial situation now. Your older self will love you

     http://www.640orfree.com/

  • Reset Your Money Thermostat

    Posted Under: Home Buying in Fort Worth, Financing in Fort Worth, How To... in Fort Worth  |  February 19, 2013 9:54 AM  |  537 views  |  No comments

    We can often endure an extra pound of pain far more easily than we can suffer the withdrawal of an ounce of accustomed pleasure. ~Sydney J. Harris

    By now, hopefully you have reined in spending and set aside a portion of each paycheck to savings. By taking this action consistently over time you will decrease your debt, lower your monthly expenses, and increase your savings.

    This pattern of behavior will lead to greater sense of control and peace about your finances. Use wisdom to control spending, and not get suckered into the next, new model of anything. Peace and happiness does not come with more money.

    We seem to be hard-wired to raise our thermostat of lifestyle to meet any new income.

    What I mean is, we tend to raise our level of spending to match or exceed our level of income at any level. So, no matter what your income level is, you tend to match it, dollar for dollar with spending.

    Thus, we find ourselves in the same situation, high income or low, everyone is operating at the edge of their income or beyond. So your job is to reset your money thermostat. Did you know that Warren Buffet, one of the richest men in the world, still lives in his same 50 yr old house?

    Check this out:

    The real secret to Buffett's personal fortune may be his penchant for frugality. Buffett, who is worth an estimated $47 billion, eschews opulent homes and luxury items. He and his wife still live in their modest home in Omaha, Nebraska which they purchased for just $31,500 more than 50 years ago.

    Although he's dined in the best restaurants around the globe, given the choice he would opt for a good burger and fries accompanied by a cold cherry Coke. When asked why he doesn't own a yacht he responded "Most toys are just a pain in the neck."

    When I was a contractor bidding on a remodel job in a million dollar house, the owner left his “budget” out on the table. The same type of budget I encourage our customers to make. Curious for a glimpse into the lifestyles of the rich and famous, I rudely perused their budget.
    We are all in the same predicament.

    The owner had carefully documented their outgoing expenses line by line and then contrasted it against their income. I was shocked, although they obviously lived in a vastly upgraded lifestyle from my own, at the end of the month they had exactly $103 dollars left over. No wonder they kept giving me a hard time about my bid! I had more money at the end of my month than they did! Simple Lessons are the best: Spend less than you earn!

    This is first and most important step to financial peace. Don’t allow your taste for the finer things in life to creep up and overcome your income.

     

  • CBS "60 Minutes" Does An Expose On The Credit Bureaus

    Posted Under: Home Buying in Fort Worth, Financing in Fort Worth, Credit Score in Fort Worth  |  February 12, 2013 8:22 AM  |  314 views  |  3 comments

    The CBS show “60 Minutes” investigated the credit reporting agencies and their discoveries were astounding. They found that there are about 40 million mistakes on consumer credit reports, with 20 million of those errors significantly affecting credit scores, according to a Federal Trade Commission (FTC) study.

    The credit bureaus, Experian, TransUnion, and Equifax keep records on more than 200 million Americans. This is a 4 billion dollar industry. They make money by gathering consumer information and selling it to banks and other creditors.

    The expose revealed how the credit bureaus “investigate” a consumer dispute, by outsourcing the process to foreign countries where the employees have no power to actually make any changes.

    FTC Chairman Leibowitz says “legitimate credit repair firms are an alternative for consumers. Dealing with credit agencies can be a tough and grueling process for consumers, which is why many consumers choose to have a credit repair firm do the work for them, especially when they are trying to buy a home, maintain a job security clearance, or achieving financial self-sufficiency”.

    If you have errors on your credit report and would like a FREE credit analysis, please call us at 1-866-726-3535. You can also visit our website at www.640orfree.com.

    See complete video HERE

  • Top Ten Credit Card Mistakes

    Posted Under: Home Buying in Fort Worth, How To... in Fort Worth, Credit Score in Fort Worth  |  January 31, 2013 1:56 PM  |  351 views  |  No comments

    When you are in a financial crunch, credit card offers landing in your mailbox might look like an answer to a prayer. Don't succumb to temptation. The experts’ advice can steer you away from the top 10 credit card mistakes.

     

    1. Having too many

    Bypass the shredder and you could make one of the most common credit card blunders by collecting too many credit cards. Probably 95 percent of us don't need another credit card to keep in the sock drawer or in the little metal box in the kitchen.

    Even if the cards have zero balances, multiple open accounts could cause a lender to question what could happen if the account holder gives in to temptation and maxes out all that plastic.

     

    2. Misunderstanding introductory rates

    You may argue that new card will help you manage your money better, because you can transfer other balances to a no-interest account. Welcome to credit card mistake No. 2: being misled by introductory rates. "People don't look at what the rate's going to be once the teaser is over," says Daniel Wishnatsky, certified financial planner and owner of Special Kids Financial in Phoenix.

     

    3. Not reading the fine print

    Your homework is reading the offer's fine print. Not doing so, is credit card blunder No. 3. The tiny text insert is where you'll discover when the fun is over and it’s time to pay up.

     

    4. Choosing a card for the wrong reasons

    You might be tempted to ignore the fine print because the card has other attractions, such as a rebate or rewards program. Credit card granters are not a consumer's friend, it is a business. They don't know what's right for you. Their job is to extract as much money from you as they can. Your job is to not let that happen.

     

    5. Not rate shopping

    Look for the best possible interest rate. Not shopping around is credit card mistake No. 5. It's especially important to note the rate on unsolicited offers. If you're struggling financially, you're not likely to get the most favorable rates or terms. You'll be paying higher interest rates. So, do your comparison shopping for a credit card.

     

    6. Making minimum payments

    OK, what if you do need another card. You’ve read the fine print, you completely understand the terms, and you got a competitive rate. But even after choosing the perfect credit card, people still make mistakes, such as No. 6 on our list, making minimum-only payments. If you only pay the minimum, you can add decades onto your repayment of even low balances, increasing the chances of never getting debt-free.

     

    7. Paying your bill late

    Making late payments, blunder No. 7, is better than not paying at all, but not by much. Not only will you face a late-payment charge, which could be higher than your minimum payment, your tardiness will show up on your credit report, damage your FICO score and make it harder to get better terms for future loans and accounts. Check your account statement for the due date and make sure you send your check in ahead of time. But the date alone isn't enough. Some companies have cutoff times. If your check arrives on the 22nd as required, but in the afternoon mail, your payment is counted as late because your account terms called for payment by 9 a.m. that day.

     

    8. Ignoring your monthly statement

    You can avoid late payments by checking your credit card statement. Not doing so is mistake No. 8. Checking your statement will help you pay your bill promptly, as well as allow you to make sure that the charges on it are correct. If you wait too long to dispute a wrong charge, it becomes difficult to change. By waiting, you’re essentially accepting it.

      

    9. Exceeding your credit limit

    Checking your statements also can keep you from exceeding your credit limit, mistake No. 9. This creates poor credit scores and is frowned upon in the credit scoring model. It also creates excess charges and fees, and diminishes you chances for better rates, or increase of your credit limits.

     

    10. Buying things you don't need

    Careful statement examination could also prevent the 10th credit card blunder, using plastic to purchase things you don't need. Just carrying a credit card is statistically proven to increase purchases by 30%. Go slow, and rethink every purchase. You will be paying more for the item due to interest charges. Credit card charges should be carefully considered and examined before running the card through the machine.

  • Revolving Credit vs. Loans

    Posted Under: Home Buying in Fort Worth, Financing in Fort Worth, Credit Score in Fort Worth  |  January 22, 2013 10:55 AM  |  180 views  |  No comments

    Basically, there are two ways to borrow money: closed-end credit and open-end credit. A loan is an example of closed-end credit. When applying for a loan, you and the bank agree on the exact amount of money you will borrow, the exact amount of time you'll have to pay it back and at what interest rate you'll be charged. These are called the terms of the loan. A loan is called closed-end credit because there's a set date when all of the debt needs to be paid back in full, plus interest.

    A loan is typically repaid through fixed monthly payments. Each monthly payment includes both principle and interest. A mortgage is a good example of a closed-end loan. If you take out a 30-year mortgage for $100,000 at an annual interest rate of 8 percent, your monthly mortgage payment would be $733.76. After 30 years, you would have paid back the entire $100,000 plus interest ($164,153).

    Revolving credit is called open-end credit because the length of the loan isn't fixed, it is ongoing. The two most important terms of a revolving credit loan are the line of credit and the interest rate. The line of credit is similar to a credit card limit. Essentially, it's the maximum amount of money you can borrow at any given time. The interesting thing about credit cards is that the issuer of the card can change your credit limit and interest rate at any time. But we'll talk more about this later.

    ­­With revolving credit, there are no fixed monthly payments. You have several payment options every month. Your monthly statement will list all of the money you've borrowed from your line of credit in the past month (the total amount of the purchases you've made). This is your balance. If you have the cash available, it's wise to pay back the full balance immediately. Then you won't be charged interest for carrying a portion of your balance into the next month.

    Even if you can't pay the full amount, you are required to pay at least a minimum percentage of the balance, typically between two and four percent for credit cards. When the next month rolls around, your statement will show the new balance plus the interest charged on the old balance. Once again, you can choose to pay it all off or pay only a portion of the balance. You'll continue to make monthly payments on revolving credit accounts until you pay for all outstanding charges and cancel the account.

    A home equity line of credit is another popular form of revolving credit. Like with credit cards, a credit limit is placed on this account. The credit limit is based on the equity in your home. You can calculate equity by subtracting any outstanding mortgage payments from the current value of your home. So the longer you've been making mortgage payments, the more equity you'll have built up in your house.

    With a home equity line of credit, you can borrow cash whenever you need to make home repairs or improvements without having to apply for separate home equity loans. There are also no fixed monthly payments, so you can pay it back when the cash is available.

  • How deep is your hole that you have dug?

    Posted Under: Home Buying, Foreclosure, Credit Score  |  December 11, 2012 1:49 PM  |  133 views  |  No comments

    So, where are you? What does your life look like? How deep is your hole?

    Take a moment to assess your situation. The reason most people are under our care is because something happened to interrupt the life they thought they were going to have and something uglier emerged instead. Something unforeseen impacted their life, or overspending crept up little by little and series of bad choices ultimately led to unsustainability.

    You have decided to take action and put the past behind you and get on with your future. But bad credit history reflects some type of emotional pain, not just financial pain. Pain of divorce, medical problems, and loss of income, failed or strained marriage, and now you find yourself starring in a movie that isn't following the script you planned for yourself.

    Climbing Out

    Warning: To climb out of an emotional and financial hole and restructure your life to have joy, peace, prosperity, and abundance, takes honesty and long term discipline. By honesty, I mean understanding that there is only one person you can fix, only one person you can change, and that person is not your spouse (no matter how much they need it!) It’s YOU. To change your life, you must change yourself, your habits, your thinking. You cannot see yourself as a victim, but as the author of your life, and the cause of the problems in it. This is a big change of thinking for most, and it will take time to really sink in.

    Complete Restoration

    Complete restoration is possible, but you must first take a painful assessment of how your choices contributed to end result. Examine your decisions, your contribution to your situation, and your lack of action when action was needed, if your fears washed away confidence, if your habits contributed to your medical problems, if your words, attitude and your thought life eroded relationships. The first step up and out is to own your part.

    Like any project, in the beginning we must honestly assess the situation and begin clearing out the old stuff before the new stuff begin. You can’t build a new life on old habits and wrong thinking.
 
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