Month: December 2015

Credit Card Holiday Aftermath: I Maxed Out My Credit Card


Holiday spending is fun, and at times, addictive. Online sales alone are projected to exceed $70 billion in 2015, and the average American household spent hundreds shopping for family, friends and even themselves. If you maxed out your credit card, you aren’t alone. Millions of consumers struggle with the aftermath of holiday spending in the New Year. Right these impulsive wrongs by creating a game-plan to protect your finances and credit score. Follow the steps below to get started.

  1. Put your cards on ice. I mean this literally. If you cannot trust yourself to stop spending, put your credit cards in a cup of water and stash them in the freezer. Overspending is impossible to remedy without overhauling bad habits. While you can’t change the past, you can control future debt. Make better choices by pulling the plug on unnecessary spending.
  2. Assess the damage. How much did you spend during the holidays? Did you max out one credit card or many? Make a list of the affected accounts, their limits, current balances and interest rates. For example:

Screen Shot 2015-12-22 at 8.52.54 AMTally your total debt. In this case, the sum of all credit balances equals $21,400. While this step may be daunting, it’s important to understand your financial status.

arrow Read this post

How to Protect Yourself from Other People’s Credit Problems


Credit health is an individual endeavor—in theory, anyway. Although your credit score is based on personal information alone, the truth is, the financial habits of friends and relatives can affect your stability as well. Read on to learn how to minimize the influence of others’ financial habits on your credit and savings.

  1. Say no to cosigning. We’ve talked about the dangers of attaching your credit to another person’s loan. A loved one with poor credit will need a cosigner to qualify for an auto or other personal loan, and may even ask to become an authorized user on your credit card. Cosigning is a kind gesture, but it isn’t always wise. Vouching for a relative on a financial agreement means you are responsible if they fail to make payments. This consequence has the power to strain your budget and damage your credit score as well.
arrow Read this post

Top 5 Reasons You Should Improve Your Credit Score


Your credit score acts as a report card for your financial responsibility. It is an indicator of your ability to pay off loans and other acquired debt.

Whether or not you are satisfied with your current credit score may determine how much you should do to improve it. However, it is always a good idea to work toward raising it.

Here are the top five reasons why strengthening your credit score is important:

  1. Purchasing a new home or renting an apartment

According to Top Ten Reviews, one of the primary reasons you should raise your credit score is to position yourself in a positive way when buying a home. If you are interested in investing in real estate, you will want to ensure you will be approved for a home loan and that you qualify for the lowest possible rate. The lower your credit score, the higher your interest rate.

Even if you don’t think purchasing a home is the right option for you, applying to live in apartments also requires a credit check. Landlords want tenants who have demonstrated dependability in the past, and a credit score serves as evidence. Ensure it works in your favor, and keep your credit score as high as possible. 

  1. Your romantic relationships

Nothing kills the mood like a terrible credit score, right? Well, sort of. According to U.S. News & World Report, a bad credit score can have rippling effects when it comes to your personal life. Just like emotional baggage can cause issues with your special someone, so can financial baggage. When purchasing larger-ticket items in unison or taking out loans, your credit score may impede your lover’s ability to qualify since lenders consider both you and your partner’s credit history. 

  1. Starting a business

If you are thinking about starting your own business, you may want to think twice about it if you know that your credit score isn’t optimal. To secure small-business financing you need to demonstrate that you can handle the finances of a new business well. A good credit history can show lenders that you are capable of making the proper financial decisions and ensuring optimal success.

  1. Buying a car

Another reason you will likely want to improve your credit score is for when you decide to invest in a vehicle. When buying a car, it is very common for consumers to take out a loan to finance their decision. If you want to take out a loan for a car, it will be much more difficult if your credit score is lower than what the lender deems acceptable.

In addition, you will likely need to supply a more substantial down payment than if your credit score was good or excellent.

After purchasing the vehicle, your insurance may also be higher. Good credit will help you save the highest amount of money when financing this purchase and all the additional expenses associated with a new car.

  1. Bad scores are hard to forget and improve

If you find yourself in a situation where you have a poor credit score, it is very difficult to improve your score. Typically these numbers are far easier to drive down than they are to bring up, so staying on top of them and maintaining responsible spending habits is critical.

Your credit score follows you for the rest of your life, so making sure it accurately reflects your financial history and keeping it high is very important.

MyFico suggested  regularly checking your credit report and evaluating it for errors. Some negative items on your credit report may be responsible for bringing your score down, but they are actually mistakes. Removing these inaccuracies will improve your credit score and help you move forward with your credit situation.

If you want to reduce the amount of debt you owe, consider setting up payment reminders or make automatic payments for bills. By eliminating debt and staying current on all types of loans, you will improve your current credit score.

Your financial history is captured by a credit score, and it is up to you to make sure it accurately reflects your reliability. If you have questions about how to improve your credit score, call Lexington Law Firm for a free credit consultation.

arrow Read this post

Identity Theft & The Holidays

The holidays are upon us. If you’re like me, you are making a list and checking it twice to find the perfect gift for your loved ones. This is a great season that unfortunately harbors some financial crimes that we all should be aware of.

Be aware of your surroundings. Even though we live in a high tech society, low tech crimes such as pick pocketing still occur. Another crime that we see this time of year is “shoulder surfing.” Some criminals are known to watch the information that you put into the pin pad while you are making your purchase. This information can be used in turn to access your accounts. It is important to watch your wallet and/or your purse while you are shopping and watch those around you to make sure your information is not being surreptitiously intercepted.

Be cautious about to whom you provide your personal information over the telephone. Identity thieves can and will use the telephone to take advantage of the unsuspecting consumer. Be suspicious of calls from major retailers, banks and government agencies that request your personal identifying information to take care of some emergency or problem. Be informed about the charities that will solicit donations from you during this season. Take time to research the charity and make sure it is legitimate prior to giving the charity any information.

Be careful with the ATMs that you use. As a rule, I try to avoid freestanding ATMs because of the risk of “skimming.” Skimming is the practice where credit card information is lifted from a legitimate card and put onto a fraudulent card through use of software or hardware installed by criminals at ATMs and/or points of sale. You are generally safer to use ATMs at banks or other financial institutions where security cameras monitor the ATMs. This may not be so with ATMs at freestanding sites giving the criminal an opportunity to set up their skimming apparatus. For this reason, I would only use ATMs at banks or other financial institutions.

In closing, we should not be afraid to enjoy the season and shop for our loved ones. We should be smart and aware while going about our holiday season.

arrow Read this post

Don’t Be Overwhelmed by Debt


Debt can get in the way of many aspects of life, leading to stress, underperformance at your job, relationship issues and a host of other problems. Not only is debt easy to acquire, but it is also difficult to not worry about.

But stressing and feeling overwhelmed with debt is not going to make it go away. In fact, it will only make the situation worse for you. You certainly have options when it comes to debt, but you need to face them head on. You are in charge of making your debt disappear, and if all you can do is be frustrated with it then that process might seem to take forever.

If debt is constantly pulling at you, then consider the following approaches:

Be realistic

It is going to be impossible to get your debt under control and pay it down if you are unrealistic about it. This can be anything from ignoring due dates to not keeping up with interest payments. Essentially, debt is not a big scary monster, but if you treat it like one then it will certainly do more harm than it needs to. It is up to you to not let this happen.

When you face your debt, and have an accurate picture of how much you owe and when the due dates are, only then can you establish a plan for paying it down. According to Credit Karma, if your debt doesn’t seem to be going anywhere then the budget you have in place is not getting the job done. It’s time to revise.

Take an honest look at your spending, eliminate unnecessary costs and organize a realistic approach to paying down your debt.

Talk to someone about it

While discussing your situation with an industry professional is a good idea, you don’t have to take it so formally right away. According to The Simple Dollar, just speaking with someone to get it off your chest can be helpful. Sure, this won’t make your debt go away, but you’ll realize that you aren’t alone in this situation and that many people have experience, in one way or another, with debt eating at them.

This can also be beneficial as maybe this person you are choosing to confide in has a strategy that he or she previously used toward debt. But if anything, just saying it out loud will help you put the entire situation into a bit of perspective. Yes, you have debt, and you are not alone – and knowing that in that simple way will encourage you to take next steps.

Tackle it

At the end of the day, the only way to rid yourself of your debt is to pay it off. Certainly there are alternatives if you are in dire situations, such as consolidating loans or asking for extensions, but more often than not you will just have to tackle it.

If you are realistic about it and approach it as something you have to do and not as some scary monstrosity, then you will be just fine. It is when you allow yourself to see only big numbers and feel the pressure that you run the risk of letting it get the best of you. Stay ahead of your debt and follow whatever plan you put in place. No debt or financial situation is the same, so your plan for repaying it will be unique as well.

Be confident in your ability to repay your debt, and you’ll be able to.

arrow Read this post