Improving Your Credit Score

Your Credit Score is probably the most important number associated with you. More important than your Social Security number, even. How can this be?

Your Credit Score tells things about you like if you are responsible, if you are a good person to loan money to, what your interest rate will be, if you will be hired for that big job. Your Credit Score is suppose to be gauge for risk factor for anyone who is going to be loaning you money, or even hiring you. Of course, there are circumstances when your score may be out of your control, but those moments are what we call life.

There are many reasons your score may not reflect you in a positive way. Medical bills and unpaid bills are 2 of the biggest reasons I have found to be an issue for most people. That, along with a lack of credit. Yup, not having "enough credit" is a bad thing too. To find that "perfect" balance, here are some tips:

- Pay your bills on time. Paying bills on time, for my clients, is often an issue because if they had the money to pay their bills on time they wouldn't need me. Paying your bills on time is important because it builds a history of being financially responsible. Even if you are only paying the minimum amount due, make sure it's on time. If you can't pay a bill on time, call and let the company know. They will probably work with you.




- Having a credit card is important in your Credit Score. Having a credit card does a couple things for you. Part of your credit score is HOW LONG you have had that card, your HISTORY of paying revolving debt, and your CREDIT-TO-DEBT RATIO. Your credit-to-debt ratio is how much avaliable credit you have compared to how much debt you have. Use your credit card for small purchases and try to pay the balance off every month. Most people carry a balance, so make sure you are paying, at least, the minimum payment due each month.





- Have an Emergency Fund. An emergency fund gives you room to live when life happens. An emergency fund stops the use of credit cards for emergencies. The emergency fund gives you room to breathe when something unexpected happens. A good rule is to start with a goal of $1,000 and work your way up to 6 months of BASIC expenses.





- Educate yourself. Learning the methods and tips of good financial habits is something most of us weren't taught growing up. There are too many personal finance blogs out there to use the excuse of not knowing better. There are too many people willing to help you learn the right things to do financially. You can only use the "I was never taught" excuse for so long before you have to teach yourself.





- Plan YOUR work! Work YOUR Plan! Sit down and develop a plan. Plan for things you want, for things you need, and for things you need to want. Have a plan A, B, C, even a plan Z if you need it.





- Check you credit report. You get one free report from each of the 3 companies once a year from the government at http://www.annualcreditreport.com/ . There are also other ways to keep an eye on your credit. Your bank might offer a service to monitor your credit, things like this usually come with a fee so keep that in mind.




These are small but important things you can do to make sure your credit is where you need it to be. You have a life to live, don't let your lack of financial knowledge keep you from living the life you want.

If you need assistance, contact us by email, Facebook, Twitter, Phone.

personalfinance4thepeople@gmail.com

http://www.facebook.com/#!/PF4TP

@peoplesfinance

202-431-8008



Ponder This...

Money is better than poverty, if only for financial reasons. — Woody Allen

Be Careful! It's a Trap!

Pay Day Loans suck! They are a trap designed to hold you hostage for as long as possible. I would even say Pay Day Loans and those who run Pay Day Loan places are evil.



They prey on those who need financial assistance and education the most. Offering money with high interest rates attached to it. They offer no financial advice and serve no real purpose, besides preying on the misfortune of others.

Pay Day Loans become a cycle. Once a loan is taken out, the interest makes it very hard to get out from under the loan. Next thing you know you are giving the loan place your whole pay check to pay for the loan, or loans, you have taken out. Then you have to take out more loans just to survive, until the next pay day when you use that check to pay off the loan you took out the pay day before. It's a trap!


All you are doing is handing over YOUR hard earned money!

I know times get tough and we have to do what we have to do to make it to another day, but what good do Pay Day Loans do? They don't teach people about financial management. They don't offer a way out of debt. They do continue the cycle of poverty.

Look around and see where the Pay Day Loan places are. Who is their target? More often than not, you will find Pay Day Loans places in areas where the community is already in financial trouble. You find them in minority neighborhoods. You find them in cities close to rural areas. Why? Because those are the people who need financial education the most due to their low economic standing.

The New York Times had an article on Pay Day Loans awhile back and a few parts really stood out to me:

"While such lending is effectively banned in 11 states, including New York, through usury or other laws, it is flourishing in 39 others. The practice is unusually rampant and unregulated in New Mexico, where it has become a contentious political issue. The Center for Responsible Lending, a private consumer group based in Durham, N.C., calculates that nationally payday loans totaled at least $28 billion in 2005, doubling in five years.

The loans are quick and easy. Customers are usually required to leave a predated personal check that the lender can cash on the next payday, two or four weeks later. They must show a pay stub or proof of regular income, like Social Security, but there is no credit check, which leads to some defaults but, more often, continued extension of the loan, with repeated fees.

In many states, including New Mexico, lenders also make no effort to see if customers have borrowed elsewhere, which is how Mr. Milford could take out so many loans at once. If they repay on time, borrowers pay fees ranging from $15 per $100 borrowed in some states to, in New Mexico, often $20 or more per $100, which translates into an annualized interest rate, for a two-week loan, of 520 percent or more."

I can't place all the blame on Pay Day Loans. I can't place all the blame on the people who use them. I can't place all the blame on schools. I can't place all the blame on society for not properly educating about money. I can't fully blame society for the cycles of poverty; making Pay Day Loans appealing.

A piece of the blame should be shared. People have to do what they must to survive and Pay Day Loan place take advantage of this. The people who use Pay Day Loans need to develop an exit strategy, no matter how bad their current financial situation happens to be. Have a plan for getting out from under the loans and building a strong financial foundation. Find organizations or individuals that educate AND help you build this foundation. Take control of YOUR money!

As the old saying goes, "Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a lifetime."

If you find yourself in Pay Day Loan hell or are considering using Pay Day Loans, let us help instead!

PF4TP: We're Here to Help

Personal Finance 4 The People (PF4TP) aims to reach out to those individuals who lack financial education including budgeting, saving, prioritizing, and debt reduction and management all while instilling the importance of being Financially Independent. Financial Independence occurs when an individual has control over their finances and has at least a basic understand of their cash flow allowing them more control over their daily lives. We realize this journey is a whole personal make-over and we provide support for those moments during the journey when all seems impossible and one step forward leads to two steps back. With a societal focus, PF4TP focuses on those types of behaviors that are often cyclical and universal to those who are minorities in the general society who are underemployed, unemployed, or disenfranchised by a system that is failing to meet its own expectations. We teach that controlling one’s Financial Independence allows for a sense of empowerment that alleviates stress, as they will have an Emergency Fund, debt management skills, an understanding of priorities, and even possess the knowledge to pass this information to their children so future generations will not be trapped in the negative cyclical patterns. Alleviating this stress from their lives will, in turn, alleviate stresses from their communities as the residents will provide newly increased tax revenue into their communities; resulting in a positive cyclical effect on the community as a whole.

With a background in Sociology, PF4TP sees the “big picture” of how these underserved groups are being disenfranchised by their lack of financial knowledge and the lack of financial education provided to them. Cycles of negative financial habits have been passed from generation to generation leaving these groups underserved and disenfranchised more and more each generation. PF4TP firmly believes with education and guidance those who want to be Financially Independent should be able to set financial and life goals and reach them.

What sets PF4TP apart from other financial type businesses is our focus on personal finance from a societal view point. Believing this understanding of the importance Financial Independence leads to individual and communities these groups represent – often times overlapping – becoming more productive and self-sustaining.

Aside from working with individuals, we intend to teach basic financial classes where the education will be accompanied by optional guidance just as one would receive if they were working with PF4TP on an individual basis. Ideally, we aim to work with community organizations, churches, and schools to teach financial education as an additional aspect of the services provided.

Becoming Financially Independent is not just an individual accomplishment, it is a community accomplishment!

Plan YOUR work! Work YOUR Plan!
Email: personalfinance4thepeople@gmail.com
Blog: http://personalfinance4thepeople.blogspot.com/
Twitter: @peoplesfinance
Phone: 202-431-8008