"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Four - Understand Why Credit Scores Are Necessary

What is the number one reason why someone would want a great credit score?

To obtain more debt!

Think about it! I am not a fan of debt at all. It robs people of peace and places tremendous strain on relationships.

What exactly is debt anyway?

Debt is nothing more than pledging tomorrow's income to someone else.

If one has zero debt, then they will have no credit score. They could have $10,000,000 in the bank, but have a zero credit score.

A credit score does have an impact on other areas of life, however. It can affect insurance premiums, deposits required for utility hook-ups, and approval to rent real estate. It can also impact one's ability to be hired! Military personnel have been denied or lost security clearances due to their credit.

So

read the entire series, work on building a decent credit score, and do it all with a written spending plan!

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Three - Pay All Bills On Time - Consider Automatic Bill-Pay

If you do not pay your bills on time, the late payments will be reported to the credit reporting agencies.

This means that you need to pay your utility, cell phone, and other monthly bills on time. This is why I am such a huge fan of a written monthly spending plan (budget). When you have a plan, the chances of paying a bill late are greatly reduced.

If you live an exceptionally busy life or are notorious for procrastination, consider automating bill payments. This will ensure that bills are paid on time, and can greatly reduce stress and the potential for your credit score to be dinged.

Read the entire series

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Two - Swipe Purchase And Immediately Pay Off

A great way to boost one's credit score is to obtain a department store credit card. Here is how it works.
1. Ensure that a small purchase from that store (something you truly need) is included in your monthly budget.
2. Pull the money planned for that purchase out in cash and head to the store.
3. Purchase the item with the department store credit card.
4. Immediately after being given the receipt, tell the cashier that you want to make a payment on your credit account and give them the cash for the purchase to bring your credit account balance to EXACTLY ZERO.
5. Do this once each month.

Your credit score will soar as the length of the credit relationship increases and as the balance remains at zero. It might be helpful to go back to Part One to see what comprises of your credit score.

NOTE: If you do not trust yourself with a credit card and controlling your spending using a written monthly spending plan, then DO NOT use this method!

Read the entire series

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part One - What Determines My Credit Score?

It is important to first understand how one's credit score is calculated. There are some key characteristics that are used by credit monitoring companies (Experian, Equifax, and TransUnion) to determine your credit score.
* Type of Credit There are two key types of credit. Installment (car payment, house payment) or Revolving (credit card, line of credit)
* Total Available Credit This is the total of all credit limits.
* Total Credit Utilized This is the total of all current debt.
* Length of Credit Relationship The longer the credit relationship, the better.
* Payment Timeliness Obviously, payments need to be paid on time to achieve the highest scores!
* Requests For Credit Made For Potential Purchases
* Public Records Bankruptcies and judgments are not helpful to one's credit score!

You can check out some of the related articles/links below to learn more about credit scores.

Related Articles/Links
*

Experian's "What's In A Credit Score?"
*

Text is TransUnion's "Credit Scoring 101" and Link is http://content.truecredit.com/sites/LearningCenter/creditScores/creditScoring101.page

TransUnion's "Credit Scoring 101"
*

Text is Equifax's "Keeping Score On Your Credit Score" and Link is http://learn.equifax.com/cs/Satellite?c=DS_General_Cont_C&childpagename=DecisionSimple%2FDS_General_Cont_C%2FDSGeneralContentTemplate&cid=1189578994233&pagename=DecisionSimple%2FPage%2FDSLayoutTemplate&ParentLinkID=1162919656130

Equifax's "Keeping Score On Your Credit Score"

I had the outstanding opportunity to go skiing on Friday before the Financial Learning Experience in Cheyenne, Wyoming.

I went skiing at Copper Mountain in Colorado, and it was INCREDIBLE! Over a foot of fresh snow over the past week had fallen, and the slopes were in terrific shape. It was the warmest day of the week (33 degrees) and sunshine too!

Here is a picture.


It was incredible, and I want to go back RIGHT NOW!

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I recently spoke in Ottumwa, Iowa.

I was there to teach the Financial Learning Experience at

thebridge church (pastor is Marty Schmidt).

I learned a lot about Ottumwa, Iowa.
* It is the hometown of Radar from M.A.S.H. and Tom Arnold
* It is about 1.5 hours south and east of Des Moines
* There is a huge need for financial training (just like all other areas of America!)
* I like Ottumwa
* It is home to a cool new church called "thebridge"

I also have realized that I have been living in the South for awhile. I showed up in Des Moines (8 degrees F and snow) wearing a light jacket, running socks, and Crocs.

Guess what? I was cold. Snow came in direct contact with my legs just above the ankles, and snow went right through the holes in the Crocs and soaked my socks.

So for those of you who were wondering: Crocs do not work well in snow.

It made me think about the number of times I have showed up ill-prepared to address financial issues. For example, I used to think that earning more money would solve my credit card balance and impulsive spending decisions. I was wrong. The fact was that I could earn millions of dollars a year, and I would still have an outgo problem.

I was ill-equipped. My monthly written spending plan using INCOME - OUTGO = EXACTLY ZERO was the correct tool to address my problem.

My Crocs have been replaced with nice leather waterproof shoes.

Text is Read recent posts and Link is http://iwasbroke.savingadvice.com

Read recent posts