The first rule of thumb when going through a divorce is, protecting yourself. This means protecting your credit as well and so often it seems that this piece is over looked very often.

During divorce proceedings or before divorce proceeding, close any joint accounts to avoid further charges to your credit accounts. Do your best to pay off, or reduce the balances on joint accounts, and completely close the accounts when balances are repaid. These steps can help prevent your ex-spouse from running up debt during and after the divorce. If you know you are about to go into a divorce start this process as soon as possible.

Next, close all joint accounts and ask your attorney or legal adviser to draft an agreement between you and your spouse that clarifies splitting the debt. Although this is usually part of the final divorce agreement, in some cases divorce proceedings drag on for months, even years, so try to settle your credit situation as soon as possible.

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H & I Credit Solutions

Why do a lot of people suffer from low credit scores?

The importance of credit score is undeniable. Yet, many Americans today have errors and other problems on their credit reports that drag down their credit score. Why is this so? Chances are, your credit score is lower than it should actually be.

Most people would like to believe that the credit reporting system is accurate because they think they can do nothing about it for seven years. But here is where they are wrong because the Fair Credit Reporting Act and other laws give you the ability to do something about it. You can make your credit score as good as it can possibly be!

Disadvantages of negative credit scores

Your credit score can mean the difference between paying $1,500/month and $2000/month for the same house. With this apparent benefit in mind, you might be wondering why only a few people decide to take action to improve their credit score. Well, the common reason why people do not undergo credit repair has something to do with apathy and their lack of understanding with regards to the credit reporting system.

Many people assume that the credit reporting system is an official government bureaucracy that has a thorough process of checking and balancing every aspect of a person’s credit history. But you need to realize that this is not the truth.

What you can do about it

The credit bureaus that rate your credit score are not actually official organizations. Rather, they are corporations that collect data from your creditors and they make money by using this information in the form of the credit report. So the question is how can they ensure that the data provided by the creditor is correct?

The answer to this is that they don’t. When a creditor reports inaccurate information, the credit bureau will record it, and the story will end there for most people. No one in the credit bureau or even the government is going to make extra effort to ensure that your credit reports are correct; that becomes your responsibility.

You are the most important factor in the credit reporting system because you are the one who will either suffer or benefit from your credit score. Make it a point to dispute any questionable items found in your credit report. Remember, the sooner you start, the better.

Getting help from an expert

If you are interesting in improving your credit score but don’t know where to start, you can consult with a credit repair expert. By taking a role in improving your credit score, you can improve your lifestyle and quality of life because of the amount of money you can save from smaller interest payments.

In getting help from an expert though, you should also consider how reliable the credit repair organization is. In the past, a lot of people have already been deceived by companies that offer credit repair services. You need to check their credibility as well as the feedback of other clients to ensure that you are not being tricked.

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H & I Credit Solutions

There is a lot of confusion about soft and hard inquiries and the subject can be confusing. Some factors include credit card promotions, limit increase reviews, requesting a loan, or requesting a personal loan through your bank. These different types of inquiries have different effects on your credit report and there are some types you never want to have happen.

Hard Inquiries

These types of inquiries are requested by the consumer through a financial institution or loan generators. These financial institutions or loan grantors include: Car Dealerships, Lenders, Credit Card Companies and some Pay Day Loan Companies.

Keep in mind that these types of inquiries are requested from the consumer through another organization in hopes to obtain an unsecured loan. This means that the consumer is asking to borrow money.

If a consumer is requesting to borrow money the loan grantor will need to determine the consumers credit standing or credit worthiness. This is will generate a hard inquiry.

Soft Inquiries

These types of inquiries are also requested by the consumer but for a different purpose.

Examples would include when a consumer pulls their own credit report, when a consumer applies for car insurance or applies for a new job, when a consumer request a credit limit increase on their credit card.

Federal Law states that a consumer shall not be penalized when pulling their own credit report. This is because consumers have the right to know what’s in their credit and what items are affecting their credit score.

When you apply or inquire about some form of loan, credit card or any type of account that you may think will affect your credit, just ask. Just ask if they run a credit check, ask if they perform a hard or soft pull. Being proactive will eliminate the guess work and you will feel more confident in your own actions.

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H & I Credit Solutions

Budgeting is a complete nightmare and is mostly full of disappointment. We always tend to look at how much money we don’t have and wish we could just win the lottery. For some people, budgeting on a budget is very difficult because you first have to have money to budget. However, when you take a closer look at your priority spending vs your want spending it can get pretty ugly.

We as humans are born with this little voice in our heads that always say’s “I want this”, but, with the right direction you can accomplish miracles. There are a few little tricks you can do to help you get through the pain of budgeting.

Five Tips for Easy Budgeting

1. Identify your monthly pay
2. Identify needs vs. wants
3. Identify due dates
4. Round up and down method
5. Save just a little

Identify Your Monthly Pay

If you are like most consumers now day’s, then you’re probably budgeting paycheck to paycheck. This may work for a little while, but you will be more likely to fall off more often than none. Some consumers get paid weekly, bi-weekly or monthly and the variations of pay dates can be extremely problematic. It is best practice to identify your monthly pay then divide by two. This will allow you to properly align yourself for bill due dates.

Identify Needs vs. Wants

Now, I completely understand the wants in life and as hard as it is for me to say, we have focus on what we need to survive first. This means writing down rent, , food, electricity, water bill, car, insurance, phone, clothing and gas. These items are all needs and these items are must never be negotiated when you budget. Everything else that is not on this list is a complete “nice to have’s” or wants. Yes, it’s hard to look at it that way but it is true.

Identify Due Dates

After you write down your needs and wants you will need to write beside these items the due dates when these bills are to be paid. Once you identify the due dates you will need to allocate portions of your paycheck to either pay all at once or set aside partial payments until you can make the full payment.

Round Up and Down Method

You will probably not like this at all but, if you give it a chance you may find that you actually love this. The science behind the Round Up and Down Method is very simple. When you get your paycheck always round down.

Example: Your paycheck is $1156.72 every two weeks. You will need to round down approximately $20 to $25 dollars from your pay amount.

This means that you will actually say you make $1130.00 every two weeks; this will give you a great start on easy budgeting.

The round up portion is for your monthly bills. Let’s say your car insurance is $132.00 a month, you will want to round up to $135.00 for this bill. Keep in mind that these amounts are just on paper to help you organize your budget. You will continue to pay $132.00 a month for your insurance.

Note: If you are not on average billing for your electricity call your electric company and tell them you want it.

Save Just a Little

I know this part is extremely hard but good habits will come out of it. Even if you just put back $10.00 a paycheck, this action will allow you to develop consistency. Budget your savings just as you would a regular monthly bill.

Now one thing to remember is when you start this type of budgeting you will notice that you actually have just a little bit more in your monthly budget. The reason for this is because of the Round Up and Down Method which is a great habit to form. Even if it’s as little as a $2.00 over budget on every bill you could end up with $20.00 extra from your needs budgeting. Remember that your wants will be the most difficult to take into consideration.

Remember, even if you don’t have a goal for budgeting always take note of these easy steps and you will be amazed at how much you can accomplish.

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H & I Credit Solutions

Millions of consumers struggle with real life circumstances every single day. We wake up and tell ourselves that “one day” we will be in a better position to take action on our bad credit situation. We struggle with not enough credit, no credit history, collection accounts, charge off’s, repossessions and even foreclosures.

How do we bounce back after these devastating events show up on our credit report? When we apply for credit we get told, “You don’t have enough credit” or “You have a negative credit history”. The normal response is usually you need to rebuild your credit history. But, how do you rebuild your credit when no one is willing to extend you credit? Where do you turn to for help?

Now, you may hear all the time that a secured credit card is the best way to rebuild your credit. This is very true but there are some things that you need to watch out for.

1.       Does the secured credit card report to all three credit bureaus (Experian, Equifax, & Transunion)?
2.       Does the secured credit card report as a “secured credit card”?
3.       Can you increase your line of credit?
4.       Is there an option to convert a secured credit card to an unsecured credit card?

The first two questions are the most important, the last two questions are nice perks to have. When you start rebuilding your credit with a secured credit card, you need to find out if that secured credit card reports to all three credit bureaus. It is a must to report to all three credit bureaus to get the maximum benefit of the secured credit card. If the secured card only reports to one credit bureau then it may not be your best option. You want to be able to change all three credit report scores in a positive way.

Think of it like this, when you buy a house, lenders base your approval on your mid score. If your credit scores are 578, 605 and 620 your mid score would be 605. Now, if you choose a secured credit card that only reports to one of the bureaus, you’re still in the same situation as before. So, let’s say that 620 credit score jumps up to 640, a 640 credit score is perfect for FHA approval, however this only got reported to the one credit bureau, so you mid score did not change. Your mid score is still 605 so the secured credit card that you thought was going to be the difference to help you get that new loan did not benefit you at all!

If the secured credit card reports on your credit report as “secured” this doesn’t look good either. I’m not saying that it will not have a positive effect on your credit score, but, you really don’t want this. In a sense, when a lender sees only unsecured credit lines on your report, they may be influenced to think that you are not trusted with an unsecured line of credit. There are secured credit cards out there that report as unsecured, but they are very few and far between. One card that I can recommend is the Public Savings Bank secured credit card. This credit card reports as unsecured and it will also report to all three credit bureaus. This is a great way to rebuild your credit and show that you are trusted with an unsecured line of credit.

Empower – Educate – Take Action

H & I Credit Solutions