Beating Broke

Personal Finance from the Broke Perspective

How To Give Your Credit Score A Makeover in 90 Days or Less

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If you want to get ahead financially, good credit can be a huge help. Lenders may be more inclined to give you a car loan or a home loan at a great rate when you’ve got a strong financial history. But how do you build better credit? And how long does it take?

Surprisingly, not as long as you might think. It all comes down to planning. If you’re wondering how to improve your credit score — and do it quickly — these tips can help.

Know your score

First things first, get your free credit score so you know where you’re starting from and how many points you’ll have to make up to reach your target score. For example, if your score is 650 and you want to raise it to 700, that’s a 50-point gap you’ve got to cover.

Check your score but also check your credit report. Your credit report includes all the information that’s used to generate your score, including your payment history, how much of your available credit you’re using, the age of your credit accounts, the types of credit you’re using and how often you apply for new credit.

Two things, your payment history and credit usage, have the biggest impact on your score. If you have late payments on your credit or high balances on your credit cards, those are two trouble spots you’ll need to work on right away if you want to fix your credit fast.

Target one debt

Credit usage just means how much of your available credit you’re using. The closer you are to your credit limits on your credit limits, the worse that is for your score. Paying one of your cards off, or paying down a significant chunk of what you owe, could trigger a quick credit score turnaround.

Pick the card with the balance that’s closest to your credit limit. Or, you can pick a card that has the lowest balance overall if you think you can pay it off in just a few months. The goal is to widen the gap between what you owe and your total credit line as much as possible.

There is an alternative way to do this. You could ask your credit card company to raise your credit limit, or you could open up a brand-new credit card account. Remember, though, that applying for new credit can ding your score by a few points.

Get caught up on past due payments

Paying your bills on time is the most important thing you can do to help your credit score. If you’ve fallen behind on any of your credit cards, loans or medical bills, getting paid up should be at the top of your to-do list. Once you’ve done that, focus on paying your bills on time each month going forward.

Automating your payments from your bank account is an easy way to do this. You could also set up payment alerts to keep track. Either way, the fewer late or missed payments on your credit, the better for your credit score in the long run.

If you are reading this and really, really want to improve your credit you have options.  One choice you could consider is something called tradelines.  What is a tradeline?  The term refers to the accounts listed on a credit report.  A tradeline is basically when you become an authorized user on someone else’s credit account.   Its risky, but you can buy tradelines.   There are companies that will  help you.  You can also ask a friend or relative to add you to one of their accounts.

Is It Time to Give Up Your Debt Free Dream?

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From the time my son was three, I’ve been a big Dave Ramsey fan.  When my youngest children were young (two under two), I quit my job to stay home with our three kids.  We decided to get gazelle intense with our debt.  Since my husband was working part-time and attending graduate school, that meant I had to work from home.  Work I did.  I worked a lot, and I compromised my health.

While we reduced our debt a lot, we never got debt free.

Then we had a cross-country move.

We also had significant medical bills this last year when one of our children had a medical crisis, the treatments of which were not all covered by insurance.

Our income, while more than it was years ago when I was gazelle intense, has never really grown much.

My husband and I were talking about finances recently, and I mentioned that I’d like to get gazelle intense again.

But, my husband, not so much.

Give up on your debt free dream
Is there a better way?

He sees our children growing up, and he doesn’t want to work, work, work trying to pay off debt.  Instead, he wants to spend more time with the kids, take vacations with them, and just enjoy them before they fly the nest.  As fast as time is going, that will be all too soon.

Turns out, my husband is not alone in this sentiment.

Recently, I stumbled upon a Daily Worth article where the author’s husband felt exactly as mine did.  He didn’t want to spend all of his time working and penny pinching, not enjoying life, in the hopes that he would one day be debt free.  The author writes of her husband, “He didn’t want to wait another five years to take our first family vacation.  He didn’t want to give up a decade of our lives in order to live my extreme version of the American dream.  He wanted a house in a better neighborhood that was actually big enough for our family.  He wanted to spend some of the money he had worked so hard for.  He was done.”

So, too, is my husband.

That doesn’t mean we’re going to go crazy spending.  What it does mean is that we will save money to take a vacation with our kids.  (The only vacations we’ve ever had were when we took the kids along when my husband attended conferences.  I took the kids to see fun things while my husband worked—not exactly a family vacation.)

We’ll finally start putting money in the kids’ college funds, and we’ll also start funding our Roth IRAs.  (We didn’t want to do these two things until we became debt free.)

My husband is expecting a substantial raise soon, and we will use some of that money to pay down debts, but we’ll also use some of that money to enjoy now.  After all, you’re never guaranteed tomorrow. . .or retirement.

If you’re in debt, is your goal still to be 100% debt free, or are you choosing to live and enjoy your life now while paying down debt?

 

Staying out of Debt Means Keeping Your Personal Information Safe

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One of the worst debt tragedies that can happen is when you have done everything right, and still find yourself underwater, drowning in debt. You didn’t overspend. You didn’t forget to make a payment. And you even put a little back for a rainy day. Yet when you go to pay for those groceries with your credit card, you find that you are over your limit. Something has gone horribly wrong.

Chances are, you have become the victim of identity theft. Someone is running around in a brand new pair of Nikes, while dragging your good credit through the mud. There are things companies are doing to keep your personal information safe. But we know from recent headlines about data breaches that it is not enough. Here is some of what they are doing, and what you should be doing to supplement their efforts:

Advanced Security Software

The more conscientious companies are using advanced network security packages, which Internet security software company TrendMicro states “enables you to detect, analyze, and respond to today’s stealthy, targeted attacks in real time.” These types of packages are often deployed in small and mid-sized businesses. Large corporations often use in-house solutions that are not always very robust. Or, like Sony, make a conscious decision not to spend money on security, mistakenly think that the short-term benefit would outweigh the long-term risk.

On a personal level, you should also be using strong security software on your Windows PC and Android phone. Fanboy pride does nothing to change the fact that these are the easiest attack vectors for criminals, and the places where your information is most vulnerable to exploit.
Disliking this fact will not make it less true. Refusing to use protection software on your personal devices that are most vulnerable to attack is as shoddy as large companies using less than excellent security packages. Your credit is your responsibility. Protect it with the best software you can afford.

Secure Passwords

How secure does your password need to be? Don’t feel bad. Companies don’t know either. There is a tug of war between you and the companies with which you do business. Everybody loses, especially you. You can’t do any business online without creating a user name and password for each site you visit. Often, they demand your user name be your email address. For any of a number of reasons, that is a horrible idea.

But the real war is over the password. You want to create the simplest password you can for ease of input and memory. They want to force you into the most complex password possible for maximum security and covering their liability. Neither extreme works for you. And there really is no middle ground.

Your password is practically guaranteed to be something you can’t remember, If you had only one such password, you might be okay. But the truth is we have more like 19 passwords to remember, most of which are still not strong enough. Currently, there is no full-proof solution as even password managers are vulnerable. But as of now, they are still probably our best defense against weak passwords.

Encryption

One of the most important tech topics of the decade, perhaps the century, is encryption. It speaks to a basic human right. Snowden taught us that our own government is spying on us. Since then, we have come to the realization that there is nothing we can do on the legal front to make them stop. What the government knows but does not care about is, if they have backdoor access to our personal information, so do the hackers.

Governments around the world are actively working to make data security weaker on consumer devices. They do not care who steels your identity and makes hash of your good credit. They only care that they have unfettered access to all of your personal information anytime, anywhere.

Tim Cook reiterates Apple’s stand on encryption; says privacy and national security can co-exist. By contrast, Blackberry has criticized Apple’s stance on privacy, and vowed to cooperate with government requests for information on their customers. As a consumer, you need to use security software on vulnerable systems, use better passwords, or password managers, and do business with companies that provide end-to-end encryption.