Fraud Prevention & Wealth Building

Learn more about fraud prevention and how you can avoid the unwise use of credit…

 

As you build wealth in the current economy with technology improvements and data breaches occurring on a consistent basis, you want to know how to guard against the breaching of your data and do all you can on the front end to prevent data breaches or respond more effectively in the event of a data breach that involves your identifying information.

 

You also want to be aware of credit and finance promotional offers that you may be bombarded with at the various stages of your life as many offer credit to unsuspecting consumers at high rates of interest or terms and conditions that work for their (credit issuer’s) best interest–and not yours.

 

And just as you must be aware of how you build wealth from an internal point of view, you also need to be aware of fraudsters and scammers who are all around you (external or outside point of view), if you sincerely desire to achieve at a higher level than most.

 

In the last post in which the creator of TheWealthIncreaser.com submitted to the internet universe, the inspiration that was received at the time of that post was thought by the creator of TheWealthIncreaser.com to be a post that could help many, however the first week was unusually slow as visitors trickled in, however most recently visitors have taken a liking to the post and it is now helping many build wealth in a more thoughtful, engaging and eye-opening manner as visitor comments continue to come in on a constant basis about how the page has led them to analyze and approach the management of their finances in a different way and put them on a more prosperous path toward wealth building.

 

In this discussion TheWealthIncreaser.com will discuss what you can do to guard against fraud in various forms and also discuss why you must be more aware of unscrupulous creditors and others who are working day and night to entice you into making decisions that “are not” good for you and your family.

 

By utilizing credit monitoring, freezing of your credit and fraud alerts–you can better protect your finances and achieve more throughout your lifetime.

 

Credit monitoring allows you to review the accounts on your credit reports from one or more of the 3 national credit reporting agencies.  You can go to annualcreditreport.com (877-322-8228) to get a free report from each bureau once per year or you can purchase a copy.  Keep in mind that bank accounts and payday loans that could be opened up using your identifying information would not be picked up by most monitoring services.

 

Whether you utilize free sites or paid sites–in this day and time you want to monitor your accounts, either by self-monitoring or a paid service:

 

Transunion

PO Box 1000

Chester, PA 19016-1000

1-800-888-4213

www.transunion.com

 

Equifax 

PO Box 740241

Atlanta, GA 30374-0241

1-866-349-5191

www.equifax.com

 

Experian

PO Box 2002

Allen, TX 75013-9701

1-866-200-6020

www.experian.com

 

Freezing your credit allows you to freeze your credit file so that no new credit can be opened in your name “without” the use of a PIN or (Personal Identification Number) that is issued to you when you initiate a freeze.

 

The goal of freezing your credit is to prevent potential credit grantors from access to your credit report without your consent.

 

You must temporarily lift the freeze in order for creditors to gain access.  You will in essence have a “delay” in your ability to obtain credit.  If you were looking to buy a house and get a home mortgage–there would be a delay but generally not be of consequence.  By law credit freezes are available at no cost to you, however you must contact each credit bureau individually to implement the freeze.

 

Lifting of Freeze–online or by phone the credit reporting agency must do so within 1 hour–by mail 3 business days.

 

Implementing a freeze–online or by phone the credit reporting agency has 1 business day after receiving your request–by mail 3 business days.

 

NOTE: The IRS also offer an Identity Protection PIN or IP PIN that you can utilize to help safeguard against the fraudulent filing of your taxes.

 

If you are now or in the future become the victim of a data breach you may want to consider freezing your credit:

 

Transunion

PO Box 160

Woodlyn, PA 19094

1-800-916-8800

www.transunion.com/credit-freeze

 

Equifax 

PO Box 105788

Atlanta, GA 30348-5788

1-888-298-0045

www.equifax.com/personal/credit-report-services

 

Experian

PO Box 9554

Allen, TX 75013-9554

1-888-397-3742

www.experian.com/freeze/center.html

 

Fraud alerts will allow you to place an “initial” or “extended” fraud alert on your file(s) at no cost.

 

Upon seeing a fraud alert a business is required to take steps to verify your identity “before” extending new credit.  If you are a victim of ID theft you can extend the alert for up to 7 years!  By contacting one bureau and placing the alert–they will notify the other 2 bureaus.

 

You also have the option to put an initial fraud alert on your account that is valid for one year if you desire additional protection on top of monitoring and freezing of your credit:

 

Transunion

PO Box 2000

Chester, PA 19016-2000

1-800-680-7289

www.transunion.com/fraud-alerts

 

Equifax 

PO Box 105069

Atlanta, GA 30348-5069

1-800-525-6285

www.equifax.com/personal/credit-report-services/credit-fraud-alerts/

 

Experian

PO Box 9554

Allen, TX 75013-9554

1-888-397-3742

www.experian.com/fraud/center.html

 

By utilizing credit monitoring, freezing of your credit and fraud alerts–you can better protect your finances and achieve more in a safer way.  They are cost effective ways that you can use to prevent, respond to or minimize the effects of fraud in your life. 

 

Although setting up fraud alerts and freezing your credit will take time, it will be worth every minute if you can prevent unauthorized activity on your financial accounts.  Credit monitoring (make sure all 3 credit bureaus are being monitored with the service you select) will also take a few minutes a week of your time and it too can be time well spent.

 

You can now set up credit alerts and other alerts with your creditors, bankers and others whom you have a financial relationship with that will provide alerts and monitor your information on the world wide web, including the dark web.

 

Other Options:

 

Contact the FTC & Your State AG’s Office 

If you find information on your credit report that appears fraudulent or you feel information on you have been misused, you can also contact your local law enforcement and the FTC and your states Attorney General’s office.  Be sure to get a copy of the police report as the report can potentially relieve you of the debt obligation created by the fraudster with your creditor(s).

 

Federal Trade Commission

 

FTC Consumer Response Center

600 Pennsylvania Avenue, NW

Washington, DC 20580

1-877-IDTHEFT (438-4338)

www.ftc.gov/bcp/edu/microsites/idtheft

 

The above contact data for the 3 credit bureaus and the FTC are current as of 06/21/2024

 

Learn More about Consumer Reporting Agencies that You Need to be Aware of…

 

If you suspect Investment Fraud:

 

Call—800-732-0330 SEC Commission or go to www.sec.gov

 

To obtain background information on a broker or brokerage firm call 800-289-9999 or go to www.finra.org/investors/toolscalculator/brokercheck

 

How to choose a Financial Advisor…

Investments & Personal Finance Page…

Investment Simplification & Wealth Building

 

On your personal taxes you can help prevent fraud by getting an IP PIN that will help prevent the fraudulent filing of taxes by a fraudster as they will need to know your PIN even if they have your other identifying data.

 

Credit Solicitations & Wealth Building

In the current economy credit offers abound and if you are new to credit or lack the needed credit management skills, you can find yourself victim to unscrupulous creditors.

 

It is not uncommon for college graduates, undergraduates and others to receive offers from various creditors, and many jump at those offers with no real concern for their future obligations (they fail to begin with the end in mind).  Many creditors offer to loan you money or provide actual checks that you can cash immediately that are tempting and could put you on the hook of paying interest at rates over 30%.

 

Other offers may appear more reasonable such as 8% or less, however they too can put you in a more dire position if you jump at the offer and you do not have a comprehensive overview of your finances.  Still others will offer you credit cards of varying credit limits–even if you have no need or desire to utilize credit or have a credit file.

 

You want to look at the fine print of all offers that you are considering and know the details of your engagement on the front end–not after the fact.

 

Do your acceptance of credit offers line up with your goals and do you have mastery over credit so that credit issuers don’t have mastery over (they know you don’t know what you need to know) you, because you lack mastery over credit?

 

You want to know your APR, Finance Charge, Amount Financed and your Total Payments prior to engagement with creditors, as by knowing that information you can determine how bad (or good) the offer really is.

 

In many instances you have better options, and you want to pursue those options “prior to” making a bad decision or a decision that you will later regret due to lack of preparation, high pressure, lack of knowledge, time limit pressure and other negative occurrences whether created by you or outside forces!

 

Conclusion

 

The cloudy and cluttered view that you have of your credit and financial future ends now!

 

Learn why now is the time that you end your foggy view of your credit and finances and achieve at your highest level of excellence…

 

You want to guard against identity theft and other occurrences or potential occurrences of a negative nature in your credit and financial life.

 

Even the federal government in the United States are taking steps to reduce fraud as they now (2024 and beyond) require many small employers  that are LLC’s or Corporations to provide certain (BOIR) beneficial ownership information reporting, so that illicit pass-through activity and reporting can be better traced.  This reporting is required by FinCen and the deadline for reporting is January 1, 2025.

 

Phone and email fraudsters are out in abundance and their goal is to get you to provide personally identifiable data or click on dangerous links whether text or email.  Other fraudsters and scammers will attempt to gain your trust and get you to provide usernames and passwords so that they can access your data and ultimately breach your accounts.

 

If you desire a more comprehensive approach in the management and protection of your credit and finances, consider purchasing 1-2-3 Credit & Me and take life changing control of your finances from this day forward in a way that can put you on a path to achieving all of your goals in a more definitive way.

 

You already know the importance of “looking within yourself” and improving in areas that you are weak.

 

You also need to look externally (political, regulatory, economic, societal, technological and legal happenings where you reside) to see moves that you can make that will serve your better interests.  In the societal realm, you may have unscrupulous players who may be out to scam you out of your hard-earned cash.

 

In the event that your data is breached and your identifying information is under the care of a company or industry, many will notify you of the breach and often provide free credit monitoring for a year or more if you sign up–and if you find yourself a victim and the service is offered, you want to strongly consider it, particularly if you do not have a paid service at the time of the breach.

 

If you are elderly, you want to be particularly cautious about financial moves that you anticipate making!

 

You don’t have to put yourself in position to be taken advantage of by creditors, lenders, scammers and others–as you deserve a better approach when it comes to the management of your credit and finances, and you now have those approaches at your fingertips, if you are now ready to take action of a proactive nature!

 

To help prevent fraud, you want to implement common sense actions that you can take yourself to prevent scams such as:

 

*Filter unwanted emails to your spam folder and block unwanted calls and texts and do updates and use the latest internet search browser when possible!

*Don’t give in to anyone pressuring or threatening you into giving them your personal information!

*Hang up phone or don’t respond to requests for information or money on contacts (calls, emails, text messages etcetera) that you did not initiate!

*Even if you are contacted by a business that you recognize, don’t give out your personal or financial info to anyone!

*If anyone says you must act immediately, stop and ask–is this how a company that I wish to do business with should act?  If you feel uneasy, there is a good chance that you are right!

*Instead of clicking links in emails and text messages or calling numbers that you did not request, use a company’s real contact information from their “official” website!

*If someone tells you to keep a secret or say something suspicious and you are not comfortable, stop the conversation and discuss what has occurred with a trusted family member or someone else you trust!

*Be sure to consider multi-factor authentication with your banking, investment, retirement and other financial accounts–particularly those with large balances or high credit limits!

*Be on the lookout for those who pretend to be someone you know, offer you a prize or the ability to help you or a family member get out of trouble, pressure you to act before you have had time to think it over and ask you to pay in a specific manner whether by payment app, wire, gift card or check!

 

You want to remain vigilant and be alert for incidents of fraud by reviewing account statements and monitoring free or paid credit reports that are available.  Look for accounts or creditor inquiries that you did not initiate or recognize and make sure all of your data in your credit files from all three credit reporting agencies are accurate.

 

Also be alert for suspicious calls and emails and never give out identifying information unless you initiate the call or email and you are certain of who you are communicating with!

 

Always realize that you have rights under the fair credit reporting act (FCRA) which governs the collection and use of information about you by consumer reporting agencies.  You can learn more about your rights under the FCRA by going to:

 

www.consumer.ftc.gov/sites/default/files/articles/pdf/pdf-0096-fair-credit-reporting-act.pdf

 

In addition to being alert for fraudsters and scammers, you also want to be aware of marketing activity that may be aimed at you that promotes reward and other credit cards, retail cards, personal loans and other promotions of varying types as they can in many cases lead you astray–and off of your well planned path that you need or plan to take.  You want to determine as best you can on the front end if the promotion that is offered fits in with your goals–whether they be your short, intermediate, or long-term goals.

 

Generally, if you have 5 or 6 credit cards that would possibly be sufficient for building and maintaining your credit as long as you are managing them effectively over time on a consistent basis—ultimately it all depends on your goals.  If you have credit card debt and desire to pay the debt off efficiently with lower interest going to the credit issuer, let’s say you have credit card debt of $4,000 and you get a zero percent promotion offer and you generally know that you can qualify based on your credit score–you still want to run the numbers upfront to determine if there is a real benefit for you.

 

Can I pay off the $4,000 with the discretionary income that I have available in the 18 month zero percent interest payment promotional period or window and still meet all of my other obligations on a monthly basis? 

 

To eliminate the debt of $4,000 you would have to pay roughly $220 per month for the next 18 months!

 

In addition, if you apply for a new card you generally won’t know the credit amount that you would be approved for in advance and you would normally have a 3% or 4% transfer fee, meaning if you were to transfer $4,000 of debt, your new balance with the credit issuer would be $4,120 at a 3% transfer rate or $4,160 at a 4% transfer rate.

 

If you were paying interest monthly at 20% on a $4,000 balance prior to the transfer, your monthly interest would be roughly $80 per month–meaning in 2 or 3 months you would have paid more than the transfer fee–giving you a real opportunity to pay off your remaining balance in roughly 18 months at zero percent interest–saving you well over $1,000 whether the transfer fee was 3% or 4%–therefore there is a serious advantage for you to transfer in this scenario if you have the “discretionary income” and credit score that qualifies you for the promotional credit card with a credit limit of $4,000 or higher–and even less–depending on your goals!

 

You also must be disciplined and highly motivated to pay off the debt in an efficient manner!

 

Once that payoff of $4,000 has ended after 18 months, you could choose to invest that $220 that you have become accustomed to living without for say–10, 20, or 30 years and have a nice windfall in a relatively painless way!

 

In closing, realize that unscrupulous actors are all around you and particularly as it relates to your finances and the building of wealth, however there is no reason for you to fear your financial future if you get out in front of your finances.  It is your responsibility to put yourself in a winning financial position so that you can’t be easily taken advantage of as it relates to your finances!

 

By understanding the life stages of your finances and looking at your finances in a comprehensive way at the earliest time possible, you can put yourself in position for greater success and better guard against fraudulent actors that will eventually come your way at some point in your life.

 

All the best to avoiding fraud, being susceptible to non-beneficial marketing techniques and otherwise turning your finances into a mess…

 

Purchase 1-2-3 Credit & Me and totally take control of your credit and financial life…

 

Purchase Wealth Building Now today…

Read a Sample Chapter in Wealth Building Now…

Learn What is Inside Wealth Building Now…

 

FAQsTheWealthIncreaser.com

 

 

Return to Top

 

Return from Fraud Prevention & Wealth Building to What is the 3 Step Structured Approach to Managing Your Credit & Finances 

Return from Fraud Prevention & Wealth Building to Consumer Reporting Agencies & Personal Finance

Return from Fraud Prevention & Wealth Building to Anxiety & Personal Finance

Return from Fraud Prevention & Wealth Building to Coherence & Personal Finance

Return from Fraud Prevention & Wealth Building to Helpful Financial Websites

Return from Fraud Prevention & Wealth Building to Identity Protection & Personal Finance

Return from Fraud Prevention & Wealth Building to Fraud & Personal Finance

Return from Fraud Prevention & Wealth Building to Wealth Building Now–Sample Chapter

 

Purchase 1-2-3 Credit & Me and totally take control of your credit and financial life….

 

Copyright© 2014–2024–TheWealthIncreaser.com–All Rights Reserved

 

 

Credit Scoring & Wealth Building

Learn why you must know how to utilize credit effectively so that you can maintain or improve your credit score so that you can do more…

 

What is inside of Wealth Building Now latest book…

Read a Sample Chapter of Wealth Building Now…

1-2-3 Credit & Me (Frequently Asked Questions)

 

In the current economy many are in the process of making financial moves and their credit standing will play a major role.  If you are one who plan on making major financial moves in the future, it is imperative that you know the way the credit scoring system operates and you take a “proactive approach” in the management and improvement of your finances.

 

In this discussion you can learn what you can do to work toward improving your credit and using credit for your and your family’s best interest and not for the greater benefit of creditors and others who do not have your best path toward success in mind.  By making a serious commitment to comprehend and apply the “credit scoring” concepts below based on your unique goals that you have, you will put yourself on a path to attaining a credit score where lenders can’t say no!

 

Know the 3 Major Credit Bureaus & How They Operate

 

Transunion

Equifax

Experian

 

Transunion, Equifax, and Experian are the three major players when it comes to the credit bureaus or credit reporting agencies.  It is your responsibility to know the 3 major credit bureaus and an easy acronym that you can use is TEE.  Think of TEEing off, only it is not for golf but for managing your credit more effectively throughout your lifetime!

 

You can go to annualcreditreport.com to get your credit report from all three credit bureaus once per year at no cost to you.  Additionally, if you are denied credit or turned down from a job based on your credit file, you will be entitled to a free credit report.

 

The 3 credit bureaus or credit reporting agencies as they are commonly called, assemble files on you based on your name, addresses, social security number, date of birth, employment, and creditors that you owe or you have a relationship with such as credit card companies, student loan providers, auto loan providers, mortgage providers etcetera, and the agencies will note when you pay on time and when you pay late.  If you have public record data, foreclosures, liens, rental defaults and other debtor payments that you “failed” to make–that too could appear in your credit file.

 

If you have “credit issues” be sure to visit the credit improvement discussion on this site and/or be sure to purchase 1-2-3 Credit & Me if you desire to take control of your credit in a more forceful manner!  Although effective credit management throughout your lifetime should be your goal, an UltraFICO score and Vantagescore 4 plus are alternative scoring models that offers those with a poor or non-existent credit history to get a score that some creditors will accept based on your banking activity with your checking and savings account(s).

 

You can go to the following sites to see where you now stand as far as your credit reports are concerned.

 

                      Transunion                      Equifax                      Experian

 

Know How Credit is Scored

You want to know what factors go into the scoring of credit.  Negative information, utilization, time of credit, type of credit and hard inquiries all play a role in the scoring of your credit.

 

You can go to the following sites to see where you now stand as far as your credit score is concerned:

 

myfico.com/free

creditkarma.com

creditsesame.com

wallethub.com

creditwise.com

 

Others–your bank, credit card issuer and others that you may have a financial relationship with all offer free or nominal rate credit scores, monitoring and other products that could be of benefit to you.  Bankrate.com offers ratings on various financial products and services that can possibly be of help to you and your family.

 

Also realize that there are 2 major scoring models and they are FICO and Vantagescore and by effectively managing the 5 credit factors you can “maximize your credit score” regardless of the scoring model that a creditor or others may use during transactions that you engage in during your lifetime.

 

To get an exceptional (800 plus credit score) score with your credit, you will need to consistently:

 

  • Keep Negative information off of your credit report.  It is important that you stay current for a number of years and always pay on time as you will show that you are a good credit risk by doing so.

 

  • Keep your Utilization rate low.  It is important that you keep your utilization of your available credit under 7%.  You will pose less risk to lenders and your score will rise over time.

 

  • Keep older accounts open over Time, as your score will rise the longer your credit record is.  Once you get an average age of 9 years or more, you will be a serious candidate for the 800 club.  You can still get there in a shorter time frame as well, depending on your overall credit management, income and particularly how you manage the credit factors that you are now learning.

 

  • Know that the Type of accounts that you have are important.  Those who are in the 800 club normally have about 6 revolving accounts and 5 installment accounts on their credit reports.  In many cases they have several installment accounts in their credit file that have been paid off, but are still a part of their credit file.  Credit cards, installment loans, mortgage loans, retail loans etcetera will be weighted.  Always realize that your credit mix will be more important if your credit report doesn’t have a lot of other information to base a FICO® Score on.

 

  • Know that when you apply for new credit an Inquiry goes on your report.  A new inquiry has the effect of reducing your score for a period.  Those who are not actively looking for new credit pose less risk.  Those in the 800 club generally have not applied for new credit in the past 12 months.

 

Know How to Manage Your Credit Effectively

You want to be more than just aware of the credit bureaus and how your credit is scored.  You want to proactively get out in front of your credit and do the work upfront so that you can have a lifetime of credit success, or credit success for the period in your life that you desire to utilize credit.

 

By keeping late payments or negative information off your credit report, utilizing 10% or less of your available credit, keeping your accounts open over a period of time, having the right type of credit based on your goals and keeping hard inquiries to a minimum based on your goals, you can position yourself for a lifetime of credit and financial success.

 

You also want to ensure that you pay off or pay down burdensome debt like revolving accounts and you properly establish an emergency fund at the earliest time possible.

 

Conclusion

 

 

Read a sample chapter of Wealth Building Now–Now…

Learn what is inside of Wealth Building Now–Now…

 

It is important that you manage your credit and finances in an intelligent, consistent, and proactive manner and not show concern for your credit after you have damaged or mismanaged your credit and finances.

 

You also want to ensure that your credit usage align with your goals, as you don’t want to purchase a car or get a home mortgage if you have no need for the car or you prefer renting or don’t like the added responsibilities that come with home ownership.

 

Even if your “credit mix or type of credit” is not ideal, if you pay your revolving debt on time over time, you will see a gradual and steady increase in your credit score and you will have a good to excellent score that may allow you to achieve your short, intermediate and long-term goals successfully.  If your credit is not ideal and traditional credit card issuers won’t issue you a card, you may need to get several secured credit cards to help rebuild your credit if you have had several major dings in the past and your current score is not at the level that allows you to get a loan at a good rate.

 

If you are “exceptional” in paying on time over time and utilizing your available credit appropriately over time and you are good, very good, excellent, or exceptional by paying on time over time, having different types of credit and keeping your inquiries low–you will eventually get to the 800 plus club (800 or more credit score).

 

Again, you want to be aware that there are two major credit scoring models and they are FICO and VantageScore, and creditors may use either one of the models when you apply for new credit.  If possible, you may want to get information from the potential creditor in advance to determine the model they use–as well as the version so that you can plan, strategize and negotiate better.

 

Also realize that there are different versions and year of release of those versions when it comes to scoring models, as older and newer versions are on the market at the same time and creditors may use older or newer models and differing versions of those models.  Some models will even take your score up to 900!  In addition, there are “industry specific” models and versions that you want and need to be aware of!

 

In addition to managing your credit wisely, you want to do your due diligence in all areas of your finances by proactively knowing what you need to do and what you need to avoid–not re-actively as it is often too late to take corrective action or the action that serves your best interest and not creditors and others after the transaction has occurred!  It is imperative that you learn credit card basics prior to running up astronomical balances–as you want to manage your credit wisely from day one when possible!

 

By implementing the above steps in your life at the earliest time possible you can get out in front of your credit and manage your credit to your advantage and not creditors.  Effective credit management will put you in the “scoring range that allows you to have the “audacity to be you” as you pursue your goals and what you desire to see most come true!

 

However, the audacity to be you is contingent upon you doing what you need to do!

 

All the best to your credit scoring success as you now should expect nothing less…

 

Return to Top

 

Return from Credit Scoring & Wealth Building to The 3 Step Structured Approach

Return from Credit Scoring & Wealth Building to Wealth Building Now–New Book

Return from Credit Scoring & Wealth Building to Consumer Reporting Agencies & Personal Finance

Return from Credit Scoring & Wealth Building to Fraud Prevention & Wealth Building

Return from Credit Scoring & Wealth Building to Medical Credit Card Cautions

Return from Credit Scoring & Wealth Building to Credit & Personal Finance

Return from Credit Scoring & Wealth Building to More on Credit

Return from Credit Scoring & Wealth Building to Who is the creator of TheWealthIncreaser.com

 

Copyright© 2014–2024–TheWealthIncreaser.com–All Rights Reserved

 

 

Medical Credit Cards & Wealth Building

Learn the ins and outs of medical credit cards so that you can determine if they are a good choice for you as you build wealth…

 

As the number of credit card companies and offerings continue to rise, so too are the number of credit card offerings increasing by those in the health care and medical industry.  As the year 2024 starts, the creator of TheWealthIncreaser.com thought that it would be an appropriate time to discuss credit card debt.  And with many running up credit card balances during the holiday season, this discussion is more relevant than most for many consumers.

 

Medical credit cards in specific will be focused on in this discussion as they are increasing in popularity at this time, and you want to proactively be aware of the advantages and disadvantages so that you can achieve more throughout your lifetime.

 

In this discussion TheWealthIncreaser.com will show the importance of scrutinizing medical credit cards to see if they are a good or best choice for you as you build wealth as they are now being offered by many health care providers.

 

Medical credit card basics

You must determine (when possible) prior to going to a medical office or health care provider if the credit that they offer to you is your best choice.  You want to look at the terms, and other factors to determine if medical credit cards are your best option based on your current financial and health position.

 

Before you decide to borrow by selecting a medical credit card you want to first get an itemized version of your bill from your medical provider and check it for errors as charges are on occasion wrong and you would want to talk with your insurer and medical provider to get the errors corrected to even see if borrowing for your medical balance is even necessary.

 

Medical credit cards are issued by credit providers–NOT–your medical provider and the major credit providers in the medical industry include the following.

 

Major providers of medical credit cards include:

*Synchrony

*Care Credit

*Wells Fargo Health Advantage

*Alphaeon Credit

*Barclays

*Others

 

Advantages of medical credit cards

  1. You may be offered zero percent interest for a stated time period
  2. They allow you to get medical services that you need when you otherwise could not get them
  3. Often used to fill financial gaps caused by high deductible and/or out-of-pocket costs
  4. Medical provider gets paid quickly
  5. If you pay off during zero percent introductory period, you can possibly avoid fees

 

Disadvantages of medical credit cards

  1. With many you can only use the cards for medical purposes, and they are marketed on the spot causing you to make a stressful decision under less-than-ideal conditions
  2. Fees can be higher than with traditional credit cards (be sure to pay off before high fees kick in).  If you don’t pay off within the zero percent interest period, you could face steep fees as the terms on the cards may not be the best that are available.  Depending on your credit, you can often find better terms elsewhere in the open market
  3. Your doctor or medical office is not the lender–the financial institution or credit card company is
  4. Medical credit cards require credit approval–and setup, and establishment is often of more benefit to medical provider than to you
  5. Once introductory period ends you could be charged 25% or more on the entire balance (full original balance), NOT what you owe at the end of the introductory period
  6. You may waive the 1-year agreement for unpaid medical collection debt that Transunion, Equifax, and Experian agreed to during the recent credit reforms.  However, by putting balance on your medical credit card that would also go on your credit report.  And if you were unable to pay using your medical credit card, you wouldn’t be able to negotiate or resolve problems directly with your medical provider, nor would the 1-year agreement for unpaid medical collection apply to your debt

 

Conclusion

In the current economy and future economies, you can expect the proliferation of medical credit cards to increase, and in this discussion, you have learned some of the advantages and disadvantages of medical credit cards along with the basics of what they are and whether they can possibly be of benefit to you and your family.

 

Health insurance and the coverage provided can sometimes be difficult to decipher, therefore consider assistance through charitable or other low-cost programs that may be offered by hospitals and non-profits.

 

Some hospitals offer financial assistance and other counseling services.  You may want to ask what the Medicare rate is and then “negotiate that lower cost for your payment” as some hospitals are flexible in payment amounts and payment options “if” you negotiate and are not shy.  Start off the negotiation by stating that you have limited resources but would like to pay if the amount is reasonable based on your budget.  Be sure to get the agreement in writing!

 

If you end up selecting a card, be sure you use the card with caution!  As is the case with other credit cards, once your balance goes on the card, you lose the opportunity to challenge the balance or negotiate a discount or a better payment plan.

 

Also be aware that the more “sign-ups” a medical provider gets at their office, medical credit providers may “lower the fees” that their office pays to them–thereby providing incentive to get them to promote medical credit card sign-ups more aggressively.  Also realize that medical collection debt “under $500” and medical debt that has been “paid off” will no longer appear on your credit reports due to new credit law adjustments that occurred in 2022.

 

It is up to you to determine and decide if medical credit cards can be of benefit to you and your family as you must decide if medical credit cards can move you forward and increase the odds of paying off your medical debt in a more appropriate manner.

 

You want to analyze medical credit cards in a careful, critical, analytical and accurate manner so that you don’t put yourself in position where the cards are doing more harm than good!

 

With many medical credit cards, if you were to owe $1,000 and pay all of the balance except $100, during the introductory period–you would normally owe 25% on the $1,000, not the $100!  You would owe $250 as opposed to $25–meaning you are being “taken to the bank” by the medical credit card company (paying a very high fee for their services)!

 

Whether medical credit cards can hinder or advance your wealth building efforts will depend on where you are now at with your finances, how you utilize them, how you utilize other credit options that may be available to you and how you manage your overall finances (your money management personality) on a consistent basis.

 

All the best to your new vision of credit card and wealth building success…

 

 

Return to Top

 

Return from Medical Credit Cards & Wealth Building to What is the 3 Step Structured Approach

Return from Medical Credit Cards & Wealth Building to Credit Card Basics

Return from Medical Credit Cards & Wealth Building to Credit & Personal Finance

Return from Medical Credit Cards & Wealth Building to Credit Improvement

Return from Medical Credit Cards & Wealth Building to 1-2-3 Credit & Me

 

Copyright© 2014–2024–TheWealthIncreaser.com–All Rights Reserved

 

 

Diligence & Wealth Building

 

 

             

Learn why you must diligently pursue your wealth building goals or any other goals that are significant to you…

 

If you are one who sincerely desire to achieve your wealth building goals (or any other goals), you must have a plan of action that will allow you to reach higher.  It is important that you diligently pursue the financial and non-financial goals that are of most importance to you.

 

Whether your goal is to build wealth efficiently or reach any other goal that you have a vision of attaining–it is important that you realize upfront that you will have to diligently work to make it all happen.

 

Isn’t it time that you know what you need to do–to make your dreams come true so that you can enjoy living your life on earth–and be a better you!

 

In this discussion TheWealthIncreaser.com will discuss the importance of you diligently seeking the goals that you desire so that you can reach a new level of inspiration that allows you to reach even higher.

 

Diligence is careful and persistent work or effort by you

Do you have a true desire to energetically go after what you want to occur most in your life?  If you don’t, it is important that you cultivate this quality at this time so that you can steadily pursue your goals.

 

It is important to determine “at the earliest time possible” what it is that you need to “diligently pursue” to work toward making your wealth building dreams come true.

 

Therefore, you want to ensure that you are in position for wealth building success by determining where you are now at financially–so that you can move forward at a more efficient pace during your asset accumulation and wealth building years.

 

It is important that you at this time analyze what you want out of life in a careful, accurate and critical manner–so that you can “diligently” work toward your championship banner (the goal(s) that are most important to you).

 

Diligence must be directed toward specific goals that you have

It is important that you contemplate in your mind what you want most.  What do you desire to achieve at this time–in 5 years–in 10 years and during your retirement years?

 

It is important that you spell out the goals that you want to achieve in clear terms!

 

Do you at this time desire to pay off or pay down certain debt that you have?  Well, if you do, you need a clear understanding of credit that gives “you” the advantage–not creditors.

 

Whether your goal is debt payoff, education funding for you or your child, adequate income during your retirement years or any other goal that you may have–you must identify and plan to meet or exceed that goal.

 

Diligence must be made into a habit by you

You must make “working diligently towards your goals” second nature or something that you do without even thinking about it.

 

By diligently pursuing your goals in a consistent manner you can bring what you desire most into reality.

 

By determining where you are now at, putting together plans that will take you toward the goals that you desire most and giving it your absolute best to achieve what you desire most–it will be you who will soon toast–at your own roast.

 

Conclusion

In order to be a better person or at least the best version of you–you must diligently pursue your goals and put forth real effort to really make your dreams come true.

 

Whether you desire to pay off or pay down your debt to a more reasonable amount, properly fund your emergency fund, master your understanding of credit so that you can make credit work for you as opposed to against you, increase your net worth to a certain level or achieve any other financial or non-financial goal–it is important that you do so at a level of diligence that will ensure that your dreams will come true.

 

And always remember that how and why you pursue your goals are of paramount importance.

 

Your challenges are to embark on proven ways of thinking through what you desire most so that you can gain additional clarity, implement a real plan of action that will produce results–and put strategic plans in action that “forces you” to make a diligent and real attempt to achieve long-term success!

 

The effort that “you determine” to put into achieving “your goals” is all about whether you will achieve those goals.

 

All the best as you “diligently pursue” a new path toward success….

 

Learn how you can open a new door and achieve more–by getting more income, cutting your expenses or doing a combination of the two–if you sincerely desire to make your dreams come true!

 

Return to Top

 

Return from Diligence & Wealth Building to Re-focusing Your Mind for Success

Return from Diligence & Wealth Building to What is the 3 Step Structured Approach to Managing Your Finances

Return from Diligence & Wealth Building to Effort & Personal Finance

Return from Diligence & Wealth Building to Financially Alert Mind versus Financial Literacy

Return from Diligence & Wealth Building to Due Diligence & Wealth Building

Return from Diligence & Wealth Building to Who is the creator of TheWealthIncreaser.com

 

Copyright©–2014–2022TheWealthIncreaser.comAll Rights Reserved

 

 

Credit Management & Wealth Building During COVID-19

Learn why it is imperative that “you manage your credit effectively yourself” in any economic environment…

 

When it comes to credit management it is important that you realize that it is your responsibility to manage your credit effectively in a proactive manner and not depend on credit repair and other credit improvement companies–when you have the opportunity to do what needs to be done on the front end.

 

Effective credit management (even during the COVID-19 Era) is not as hard as you may think if you make the commitment to get out in front of your credit transactions and learn wise credit and money management strategies on the front end.

 

Even if you have made credit mistakes in your past you can now start on a more effective path as it relates to the management of your credit!

 

In this discussion you will learn how you can take control of your credit management and manage your credit effectively throughout your lifetime, or during the period in your life that you desire to use credit.

 

By learning and applying the following principles, you will have no problem effectively managing your credit from this day forward–thereby ensuring a more prosperous future for yourself, your family, your loved ones and the society at large in which you live.

 

  • You must have a basic understanding of credit

It is important to realize that you don’t have to be a credit expert to manage your credit at a more beneficial level, however you must have a basic understanding of how credit works so that you can make credit work for you as opposed to against you!

 

You must know why you are using credit and you must know the purpose of credit so that you can use credit wisely and achieve more during your lifetime.

 

  • You must know when to use credit

It is important that you realize that whether you have poor credit or great credit you will be bombarded by creditors, advertisers, marketers and others who will promote products and services that may or may not be beneficial to you and your family from a credit perspective.

 

Therefore, you must know when to use credit and how to select the credit that will be in your and your family’s best interest!

 

The key types of questions that you must ask are: 

 

If I make a major purchase using credit cards and purchase a car (financing involved) at this time–what effect will that have “credit wise” on my intention to purchase my first home 18 months from now?

 

If I use credit to make a major purchase, do I know the time frame that I intend to pay off the creditor?

 

If I choose to pay off my current creditor with a “zero promotion” offer from another creditor, have I run the numbers to determine my real savings and my real advantage of doing so “prior to” the balance transfer and payoff–not after?

 

Those, and other relevant questions must be asked and answered appropriately up front–not after the fact!

 

  • You must have an effective payoff plan in place “prior to” your credit use

If you use credit in an advantageous way–you will position your finances in a manner where you can pay off your credit debt on a monthly basis and in the case of balance transfers and promotional offers that you may sign up for–during the promotional period or the zero percent interest period so that you can avoid or eliminate interest or other fees.

 

By having a payoff plan “prior to” your purchase and by adhering to that plan you put yourself in position for more effective credit management as well as maintaining or improving your credit position and hence credit score.

 

  • You must know how the credit scoring system works

It is important to know that there are two scoring systems that are in wide usage (FICO and VantageScore) and others that are used by credit bureaus to a lesser degree.

 

It is important that you learn about the credit scoring system in as relaxed a manner as possible. 

 

While learning you don’t want to be stressed, worried or otherwise distracted as the answer to your concerns could lie in front of you.

 

Although there are differences and similarities in many of them–the key is to know how to keep Negative information off your report, Utilize your credit appropriately, keep older accounts open as Time length is important, have different Types of credit and keep Inquiries (hard pull of your credit) at a low level  and you will have no problem managing and/or improving your credit–regardless of the version or model that is being used!

 

Keep in mind that when it comes to credit scoring models, there are industry specific versions, newer versions, older versions, in-house versions and other versions all on the market at the same time–the key for you is to know which version your creditor (or potential creditor) uses–and then proactively know what is in that version (your score or relevant score range) prior to formally applying for credit.

 

Conclusion

 

Your effective use of credit can be made easier if you have a basic understanding of credit, you know how to use credit wisely, you have a realistic payoff plan in advance and you know how the credit scoring system works and how it will affect your usage of credit.

 

You don’t have to be overly concerned about the scoring models as long as you pay on time, you use your credit sparingly (particularly your revolving debt), you pay off your debt in a timely manner, you have a good credit mix or different types of credit–and you keep your inquiries low.

 

By gaining a basic level of credit understanding at this time you put yourself well ahead of those in the general population and your effective credit management will now be made easier if you apply the concepts in this discussion and you are one who desire to manage your credit effectively from this day forward and throughout your lifetime, or the period that you desire to use credit during your lifetime.

 

By responsibly doing what you need to do on a consistent basis your credit score will reflect that responsible use over time and will put you in position to attain your credit goals and what you expect to happen at the various stages of your life.

 

Effective credit management starts with a thought by you, that you really want to manage your credit better and a real desire (by you) to find the best or appropriate way to do just that in a manner and style where excuses are a thing of your past!

 

All the best to your credit management success during COVID-19 and during tougher times ahead that are yet unseen…

 

Return to Top

 

Return from Credit Management & Wealth Building to more on Credit Management & Wealth Building

Return from Credit Management & Wealth Building to What is the 3 Step Structured Approach to Managing Your Finances

Return from Credit Management & Wealth Building to College Graduates & Wealth Building

Return from Credit Management & Wealth Building to All About Credit

Return from Credit Management & Wealth Building to Credit Improvement 

Return from Credit Management & Wealth Building to Who is the creator of TheWealthIncreaser.com

 

Copyright© 2014 to 2022–TheWealthIncreaser.com–All Rights Reserved

 

 

Credit & Wealth Building

 

Learn how you can understand how credit really works so that you can manage your credit effectively throughout your lifetime…

 

As TheWealthIncreaser.com  stated in the last discussioncredit and how you (and others) could thoroughly understand and benefit from would be discussed in clear and concrete terms.

 

In the most recent posts you gained a practical understanding of Personal Finance Statements, including a Personal Cash Flow Statement or Budget, an Income Statement, a Balance Sheet and a Net Worth Statement.

 

In this discussion TheWealthIncreaser.com will “hone in on credit” so that you will have an understanding and practical application of credit that you can use throughout your lifetime as you build wealth–therefore leaving all excuses behind as far as why you can’t achieve credit success!

 

Even though this discussion may be longer than most that you are accustomed to on TheWealthIncreaser.com–you will have no excuse for not managing your credit effectively throughout your lifetime after reading this blog and applying what you feel is relevant in the management of your finances.

 

How to Manage Your Debt Before a Major Purchase

 

A major purchase such as buying a house, car or boat is a big investment–and not only should you be prepared in advance—you should know what to expect throughout the process.

 

When you manage your credit you are in effect “putting on a show” (pun intended) for lenders of all types who have the power to grant you credit for various purposes.  Whether you are seeking approval for your home loan, car loan, boat loan or any other purchase, your lender would be agreeing to lend you all or a portion of the funds needed to cover your purchase.

 

Because a high-cost purchase often involves the use of borrowing, lenders (as best as they can) want to guarantee that you’re not a “risky borrower” and they want to know that you’ll be able to make your monthly payments on time and in full for the life of the loan.

 

Lenders will decide whether you’re a risk for a major purchase by looking at how well you’ve managed debt in your past, and how well you’re managing debt at this time.  Therefore, having some debt can be a good thing if you have managed your credit well in your past.

 

This should make sense to you because if you’re making a major purchase where borrowing is involved, you’d expect others who lend you money “would” want to ensure as best they can that they will be paid back according to the terms of the lending agreement.

 

It is important that you realize that whether you feel that it is fair or not, your payment history shows potential lenders your character and the real likelihood that they would be payed back in the future!

 

You may want to save as much money as you can before a major purchase—and in some cases that can be a wise strategy.

 

Even though you may not want your money tied up in debt—borrowing can serve a useful and beneficial purpose if used appropriately and in a wise manner.

 

You may have a need to borrow if:

 

  • You are hurting for cash to meet a current need and there are no other options

 

  • You anticipate a major purchase and borrowing makes good financial sense

 

  • Over a period of several months your bills are starting to pile up

 

  • You get interest rates that are better than the credit card payments that you are making

 

  • You desire to utilize credit as an overall strategy to build wealth more efficiently (use leverage to your advantage)

 

Even though you may use borrowing as an overall strategy to reach your goals more efficiently, always realize that “saving money” is always a good idea and cannot be overstated!

 

However, having some debt before buying your house or any other major purchase could actually be an important factor in getting you approved for your future loan(s)–including an auto loan, boat loan, mortgage loan or rental property acquisitions.

 

Why having some Debt can be of benefit

 

To see how well you manage your debt, lenders of all types, including mortgage underwriters will take a detailed look at your credit score, credit history and your debt-to-income ratio (DTI) to see if you are worthy of granting a loan.

 

In almost all cases where you want credit to work optimally for you, you’ll want to have a high credit score and a low DTI.

 

A high credit score indicates that you manage your debt reliably and responsibly.

 

A low DTI indicates that you don’t have too much of your income tied up in paying off debt and make you a less riskier borrower in the eyes of lenders!

 

Let’s take a closer look at your credit score–and DTI—so that you can achieve more:

 

Your Credit Score

 

Virtually every factor in your credit score is defined by your borrowing behavior.  If your goal is to create and improve your credit score, you need to take on debt and manage debt as responsibly as you can based on your finances and living circumstances.

 

Your credit score is usually impacted by the following five factors according to FICO:

 

(35%)

— Your “payment track record” is the most important factor considered in your credit score.  Lenders want to know if you’re a trustworthy borrower, therefore, they want to see if you make on-time payments on your debt.

 

(30%)

— Owing money on your credit cards, in particular, is not a bad thing.  However, if you’re using too much at one time, underwriters might take that to mean that you’re overextending yourself financially–and that is not good.

 

(15%)

— A longer credit history is favorable to a short credit history.  Therefore, if your credit history is limited you won’t necessarily be disqualified from borrowing money–but a longer history is looked at more favorably.

 

(10%)

— Underwriters want to see how you manage different types of debt or how you manage a mix (credit cards, auto loan, mortgage loan, personal loan, student loan etc,) of credit.

 

(10%)

— If you’ve opened multiple credit accounts at one time, this is a red flag for underwriters because it can suggest that you’re in financial distress–keep inquiries low if you are in the process of building your credit and you plan to use your credit for a major purchase in the near future (within the next 2 years).

 

If you were anticipating an auto loan, you want a minimum credit score of 640 and for a mortgage, you’ll typically need a credit score of at least 640 for a conventional loan and possibly 620 for an FHA or other government home loan–depending on the lender.

 

In many instances it could be best to shoot for a credit score of 700 or more in both instances, as you may be able to save thousands or tens of thousands over the life of the loan(s).

 

A higher credit score increases your chances of approval, and also increases the loan amount that you’ll be approved for–regardless of the “scoring model” being used.

 

In particular, a higher credit score could also help you secure a lower mortgage rate, which could save you a significant amount of money over the life of your home loan (in many cases from thousands to possibly tens of thousands)—depending on your mortgage amount and term(s) of the loan.

.

Your Debt-to-Income Ratio or (DTI)

 

Your DTI is a percentage representing how much of your income is put towards paying down debt.  Since a mortgage is such a large investment, and your monthly payments could be fairly substantial, underwriters, loan processors, lenders or anyone who plans on lending you money for the purchase will want to make sure that you’ll be able to make those payments on a consistent basis and repay the loan amount and interest.

 

Therefore it is imperative that you keep your DTI ratio low, the lower—the better—generally speaking!

 

In general, a DTI of 36% or lower (including housing) is ideal.

 

Generally, a DTI above 50% for conventional or government loans most likely would not be approved (although there are exceptions).  43% on the back-end and 31% on the front-end is what FHA loan grantors look for, meaning your debt of 31 percent excluding housing (front-end ratio) and your housing and debt income up to 43% (back-end ratio) would be preferable—however some lenders will allow you to exceed those limits–but it may not be wise to do so on your part–particularly if you do not have a properly established emergency fund or have a plan in place to create one.

 

To calculate your DTI, simply divide your monthly debt (debt that takes 12 months or more to pay off such as your credit cards, auto loan, student loan, personal loan, boat loan etc.) by your monthly gross income.

 

To calculate your housing plus debt ratio, simply divide your monthly debt (debt that takes 12 months or more to pay off) plus your anticipated housing monthly payment by your monthly gross income.

 

If your resulting percentage is higher than 50%, you’ll want to work on paying off some of your debt in most cases so that you can get a more favorable loan and also to help improve the odds that you will remain a home owner in the future as life can be unpredictable at times.

 

Homeowners who purchase with DTI ratios above 50% normally have other “compensating factors” at work such as an expected financial windfall, social security or pension income that will start in one year and other factors that compensates the high ratio–or makes the 50% or more ratio less risky.

.

Other Credit & Debt Management Tips

 

It is important that you reduce your debt to a more favorable level before making a major purchase such as buying a house.  It is very important that you maintain a solid credit score by making consistent credit payments, managing your debt at an optimal level and managing your overall finances at a level that is the best that is within you throughout your lifetime.

 

By maintaining a solid credit score you can get “more favorable loan terms” when you make a major purchase and particularly a mortgage loan–if you desire to become a home owner at this time or in your future.

 

A solid credit score can also reduce your daily stress levels and your money management will be made more efficient during your lifetime as well!

 

The following tips can help you manage your debt more efficiently whether you desire to make a major purchase such as buying a house or use credit for other purposes.

 

Whether you have already purchased your dream home and are currently making monthly mortgage payments or you desire to manage your credit for a home purchase or any other credit goal(s) in your future, you can more effectively and efficiently build your net worth to a more acceptable level by doing the following:

 

Take a Detailed Look at Your Credit Report

Your credit score is an important qualifying factor for building wealth and qualifying for a mortgage loan at a good or the best rate.

 

Therefore, it can be a good idea to take a look at your credit report at this time to ensure that everything has been reported correctly and that there aren’t any errors that need correcting.

 

You wouldn’t want your credit score to be negatively impacted because of mistakes in your credit report–and now you can eliminate that possibility by pulling your credit report at this time and challenging inaccuracies if and when they exist.

 

You can order your credit report for free from any of the three major credit bureaus:  TransUnion, Equifax and Experian, once per year by going to annualcreditreport.com.

 

Once you have your credit report it is important to look at the following:

 

  • Your personal information

 

  • Your credit accounts

 

  • Your credit inquiries

 

If you see any errors or inconsistencies anywhere in your credit report, they can be challenged with the credit bureau that created the report and you must exercise your right to do so as soon as you become aware of them.

 

Consolidate Your Debt if it makes Good Sense to Do So

 

If you find that you’re making payments on various loans and/or credit accounts, it could possibly save you money (and help you avoid negative stress) to consolidate your debt into one loan.

 

By doing so you could possibly pay interest on one loan instead of multiple loans!

 

Therefore, you won’t have multiple payments to keep track of and your stress levels could possibly be reduced.  Depending on your debt level and credit position you may be able to use zero percent credit promotions to consolidate a number of credit card payments and pay the debt off faster during the zero percent promo period to avoid high interest charges.

 

There are caveats that could make this and other approaches unwise—therefore you want to ensure that you have a wholesome approach to managing your finances prior to consolidating your debt and making other financial moves.

 

Always realize that what may appear prudent on the surface–could work against your best short, intermediate or long-term goals if not analyzed in a careful, critical and accurate manner.

 

In Many Cases it May Not be Wise to Make Drastic Changes to Your Credit

 

It can be tempting to pay off debt right before applying for a mortgage–however, doing so could actually hurt your credit score.  In many cases when you pay off a debt, your credit score will actually drop temporarily in the short run.

 

On the flip side, if you’re trying to build credit and try to open multiple credit cards, or take on other debt before applying for a loan, this will also reduce your credit score.

 

If you are applying for a loan (or anticipate doing so in the near future) a lot of change in your banking activity (large deposits that are not your norm etc.) and taking on new debt before applying for a loan (and particularly a mortgage) is a red flag to lenders and underwriters.

 

It can indicate that you might not be financially prepared to take on a mortgage! 

 

To put it bluntly, your credit pay off, opening new credit and overall credit and financial behavior must align with your goals!

 

Create a Budget or Cash Flow Statement as Soon as Possible

 

Whenever a financial discussion is taking place, budgeting or cash flow management often comes up and many are not enthused by the coversation.  Even though you are possibly bored by the conversation, it’s a meaningful way to track your income and expenses and ensure that you’re managing your finances as best you can.

 

There can possibly be a lot of costs involved with buying a house, and many other major purchases, therefore, you’ll want to make sure that you can afford your monthly payment and meet your other debt obligations in a manner that allows you to enjoy life on a consistent basis.

 

In most cases, creating a budget or cash flow statement can help you map out your current debt and other expenses in relation to your income so that you can meet your debt obligations from a more advantageous position!

 

By doing so you can improve your vision and see what’s happening with more clarity and make adjustments as needed.

 

A personal cash flow statement or budget can give you the peace of mind, confidence and clarity that you need–so that you can truly succeed.   You can therefore avoid overspending, and meet all of your other financial responsibilities from a position of strength as opposed to having a cluttered and in many cases overburdened mind that leads to unhealthy stress levels.

 

Properly Build Your Emergency Fund

 

Building and properly funding your emergency fund before getting a mortgage may be one of the most important things that you can do to proactively prepare for long-term success.

 

Even so, it is often overlooked by even those who consider themselves to be savvy money managers!

 

In life, emergencies of all types will occur and you never know what expenses might arise once you purchase your home or even while you are renting or leasing an apartment or house.

 

You don’t want all of your money tied up in your mortgage payment (you must manage your DTI effectively) and other monthly payments if, for example, your roof needs to be repaired, car issues occur, your HVAC goes out, plumbing issues occur and you encounter water damage or other concerns.

 

Many financial professionals suggest that you set aside three to six months worth of expenses in an emergency fund–and that is a wise suggestion in almost all cases.

 

Conclusion

 

 

A major purchase, including buying a house is a big purchase, and it can be daunting to think of getting a mortgage if you are trying to pay down student loans, an auto loan, credit cards, your monthly utility bills and other burdensome debt.

 

To help you save money and avoid or reduce unhealthy stress, work on paying down your other debt so you can be confident in your ability to make mortgage payments and enjoy your new home–if there is a need for you to do so.

 

However, you don’t need to be debt-free to buy a house.

 

In reality, some well-managed debt can boost your credit score, showing mortgage underwriters that you are a responsible borrower and can manage debt effectively!

 

Your goal is to avoid a financial hole that you’ll never come out of or  makes it difficult to manage your finances from month-to-month.

 

By taking the time to create a budget and analyze your credit report, you can see how you’re doing financially and where some changes (improvements) can or need to be made.

 

You may be able to consolidate some of your existing debt if it makes good financial sense to do so, or you could completely pay off some of your debt to improve your credit score and financial ratios and make your housing payment more comfortable!

 

In the end, you just want to make sure that you’re comfortable taking on a mortgage and you can afford to do so in a manner that allows you to enjoy life and live in as stress-free a manner as possible.

 

You already know how FICO scores are calculated and how you can improve your credit report and credit score.

 

Additionally you want to be aware of the VantageScore as well, as it is increasing in popularity and has slight differences from the FICO score.  VantageScore is the other scoring model that is widely used by some lenders but is not as popular as FICO–but you should be aware of.

 

However, if you manage your credit well based on the FICO standards—your VantageScore will improve as well!

 

Just so you are aware of and have a point of comparison the VantageScore consists of:

 

Payment history (approximately 40%)

 

The biggest factor in your VantageScore 3.0 credit scores is payment history.  VantageScore 3.0 puts more weight than FICO on your payment history–therefore you want to consistently pay your bills on time  and avoid being delinquent on your accounts.

 

A late or missed payment on the VantageScore 3.0 scoring model can significantly harm your credit scores, therefore you must pay all of your creditors in a timely manner.

 

Your payment history is a record of how often you pay your bills on time and how often you miss your payments or pay late.  Therefore, it is imperative that you make your payments on time as that can help improve your payment history and give lenders confidence that you’re likely to make future payments in a timely manner as well.

 

Age and type of credit (approximately 21%)

 

VantageScore 3.0 also factors in how long you’ve had different types of credit accounts open.

 

Ideally, lenders like to see long-term, established lines of credit , therefore having a variety of account types is preferred—as long as you stay up-to-date on your payments.  Lenders and underwriters normally like to see that you’ve used a mix of accounts or different types of credit on your credit report to see if you can effectively manage debt.

 

Your credit history or age of your accounts will indicate the types of credit accounts that you have and will show how long you’ve had them open and active.

 

By having a longer credit history and showing that you have different types of credit you will improve your score more than if you have a short credit history or  just one type of credit on your report, like credit cards or short-term loans.

.

Credit utilization (approximately 20%)

 

The purpose of the credit scoring industry is to help lenders get a clearer picture of the type of borrower you might be if they were to grant you a loan.  They want to see how you use credit and using a lower percentage of your available credit at any given time is preferable.

 

You want to ensure that your credit utilization ratio is below 30% or more preferably below 10%.  Another important goal to aim for is to pay your revolving (primarily credit card debt) debt off monthly.

 

You also want to get into the habit of using all of your credit cards every 4 to 6 months or so to keep the credit cards in your active mix as that will help ensure that your current credit issuers will not close your account due to inactivity.

 

If you have 6 credit cards use a different one every month for 6 months and then repeat the process–pay them off in full once you get your credit card statement if you are in financial position to do so and you will improve–or at a minimum maintain your credit score and lending power.

 

In a nutshell, your credit usage compares the amount of credit you’ve utilized to what you can still borrow.  You do not want to consistently use all of your available credit, like maxing out lines of credit or carrying high balances on credit cards or loans.

 

If you carry large balances–particularly on revolving debt, that will hurt your credit score, therefore you must do your best to maintain your balances at less than 30% of your credit limits or preferably 10% to help improve or maintain your credit score.

 

Balances (approximately 11%)

 

Be sure to keep the total amount of recently reported balances (current and delinquent) on your credit accounts low as lenders generally like to see low balances as it suggests the chances of you making on-time payments each month is higher.

 

Paying off your balances monthly is a good way to improve or maintain your credit and is something that you should strive to do–if you are not doing so at this time as you must avoid delinquent payments as best you can.

 

Your total balance includes all of your credit balances, and by maintaining low balances (primarily and particularly on your revolving debt) and making your required payments on time you can help improve your score and give lenders more confidence that you’re financially responsible.

 

Recent credit (approximately 5%)

 

If you applied for a new credit card lately or you have taken out a personal loan–lenders will want to know.  Your recent credit activity, including recently opened credit accounts and credit inquiries, can be an indicator of your future financial behavior.

 

Your recent credit activity typically covers credit checks made over the past two years.  It factors in any new credit cards or loans that you’ve applied for or opened.  A large number of recent credit checks, also known as credit inquiries by lenders could indicate that you’re in financial distress or opening credit lines in an irresponsible manner.

 

On the other hand, few, if any inquiries in your credit history may help your score.

 

Available credit (approximately 3%)

 

Although not a huge factor, lenders typically like to see that you’re only taking out the credit that you need.  By having available credit that you don’t use you are showing lenders that you are not over-extending yourself.

 

Therefore, you want to keep a good amount (70% or more of your available credit) of credit available that you don’t use.

 

Your available credit has the least impact on your credit score in the Vantage 3.0 scoring model.  This factor takes into account the amount of credit you can access and use.  Therefore, maintaining a low balance at or below 30% of your available credit could help improve your credit score.

 

Although you generally can’t control how your score is calculated, you can protect your credit score by paying your bills on time, maintaining a good mix of credit, avoiding high balances, and using only a fraction of your total available credit.

 

Key Points

 

  • Your credit score is a number, typically between 300 and 850, that shows potential lenders a snapshot of your credit history. Whether your score falls into an “excellent” range, “poor” range, or “somewhere” in the middle, it may impact your ability to access loans and services at a good or the best rate.

 

  • Many credit scoring providers use the VantageScore 3.0 scoring model which calculates your score based on six factors.  Each factor has a different impact on your credit score.  However, the majority of lenders use the FICO 8 scoring model which calculates your score based on five factors.  Factors and the applicable percentages on both scoring models are based on your unique credit file, so “percentages that are applicable to you” may vary according to your unique credit file.

 

  • Paying your bills on time, using only the credit you need, and maintaining different types of credit may have a positive impact on your credit score–regardless of the scoring model.  Also keep in mind that there are other scoring model versions for specific industries and other scoring models (including FICO and VantageScore) are updated to new versions and many lenders will use older versions, newer versions, industry specific versions and the like.

 

  • A good credit score might make a difference in whether you get favorable rates when applying for credit whether a major purchase such as a car or home, a credit card, employment, insurance, rental property and other areas of commerce (the 4th bureau–cell phones, utilities etc.).

 

  • Your goal should be to gain a general understanding of credit and not have a cluttered mind about credit and your finances, including what has been discussed above in this article.  Even so, you always need to know that Negative information, credit Utilization, the Time length of your accounts, the Type of accounts that you have and the number of Inquiries in your credit file are very important to understand and apply to your unique credit position.  Your understanding of a “budget or cash flow statement” and “properly establishing an emergency fund” are also a key takeaways from this discussion on credit.

 

Credit score ranges

 

To further drive home credit scores you must understand that FICO ranges from 300 to 850 while VantageScore also ranges from 300 to 850 but have slightly different weighting factors and weights as mentioned above!

 

  • Knowing where your credit score falls within the FICO and VantageScore ranges can help you get a sense of whether you might qualify for a loan or credit card—and what kind of rate you might be offered.

 

  • There are a few key differences between the VantageScore and FICO scoring models, including how they weigh different factors in determining your scores.  They both have a score range of 300 to 850, but there primary difference is the way the ranges are considered–poorfairgood or excellent.

 

Vantagescore 3.0

 

 

   FICO 
Excellent 781–850 800–850
Very good N/A 740–799
Good 661–780 670–739
Fair 601–660 580–669
Poor 500–600 < 580
Very poor < 500

 

Why does a good credit score matter?

 

  • A  good credit score varies across credit scoring models, however a score of 680 or higher is generally considered a good score with virtually all scoring models.

 

  • For FICO, a good score ranges from 670 to 739.   VantageScore considers a score of 661 to 780 to be good.

 

  • A credit score that falls in the good (680 and above) to excellent (800 and above) range should always be your goal.  Lenders will look at a variety of factors when considering a loan or credit application and higher credit scores play a huge role in getting approved at a good or the best rate.

 

  • You want to get the lowest interest rate possible and the most competitive terms possible, therefore an excellent credit score allows you to have an even better chance of being offered the best rates and terms available.

 

If you have poor or bad credit scores, you may be able to get approved by some lenders, but be prepared to pay higher rates than if you had good to excellent credit.

 

You may also be required to make a down payment (or larger down-payment) on a loan or get a cosigner.  Consider improving your credit position and pursuing your loan options at a later time if at all possible if your credit position is not ideal at this time.

 

The Consumer Financial Protection Bureau recommends keeping your credit utilization ratio below 30%.  This may not always be possible based on your overall credit profile and your short, intermediate and long-term goals, but it’s a good benchmark to keep in mind.

 

Aim for under 10% if possible!

 

Also realize that there are many credit resources available that can help you manage your credit and credit score more effectively and it is “your responsibility” to know what is available and can possibly benefit you and your family.

 

Micro lending companies, investment companies, banks, credit card issuers and many others now offer credit products and services that can assist you as you manage your credit and finances at a nominal or free level–and may be appropriate for you depending on your financial position and future goals.

 

Many different credit scoring models are available and it is important that you know what model is in use or what model your potential credit grantor will use when you apply for a loan!

 

Credit Score FAQ

 

How long will it take me to improve my credit to an acceptable level?

  • Your current credit position is unique and the time needed will vary from person to person and the type of loan that you will be pursuing along with your credit behavior over the past few years.

 

If you anticipate a major purchase such as a home purchase it may take anywhere from 1 month to 2 years to get your credit file in position to get a loan at a good rate.  However your credit patterns over the past few years will determine the real time frame.

 

By addressing your credit concerns at this time you are getting out front of your credit and your utilization of credit in the future will be more advantageous for you and your family.

 

Does checking my credit scores affect my credit?

  • Checking your credit scores and reports yourself won’t hurt your credit—it’s considered a soft inquiry. By keeping tabs on your credit scores you can spot potential issues early.  If your scores suddenly drop, it could be a sign that there’s an error in your credit report information, new credit was opened or that you may be a victim of identity theft.  In addition to your credit scores, you also want to check your credit file at the credit bureaus on a planned basis as well.  Also, credit checks by your current creditors are also considered soft inquiries.

 

  What is the maximum credit score that I should aim for?

  • Getting an 850 credit score is possible, but uncommon and unrealistic in most cases. Only about 1% of all FICO scores in the United States are 850, according to most public data.  Those with credit scores of 850 generally have a low credit utilization rate, no late payments on their credit reports and a longer credit history than most.

 

  • Keep in mind that having a “perfect” credit scores of 850 shouldn’t really be your goal.  You can still qualify for the best loan rates and terms if your credit scores are considered  excellent (roughly 800 or higher)–therefore aim for a score of 800 or more and then maintain that score and you will put yourself among the best potential lending candidates in the eyes of most–if not all–lenders.

 

What credit scores do I need to get approved for a credit card?

  • There’s no agreed upon minimum credit score needed to get approved for a credit card and issuer’s have their own criteria. Credit card issuers have different score requirements for their credit cards, and they often consider factors beyond your credit scores when deciding to approve you for a card.

 

  • In general, if you have higher scores, you’re more likely to qualify for most credit cards–and at a good or best interest rates.  If your credit is fair or poor, your options will be more limited and you may receive a lower credit limit and higher interest rate or you may have to start with a secured credit card.  If you are new to credit, you can establish a credit file within 6 months.

 

Which credit score is more important?

  • No one credit score holds more weight than the others generally speaking.  Different lenders use different credit scores and versions. Regardless of the scoring model or score that is used, making on-time payments, minimizing debt utilization, paying on time over time, maintaining different types of credit (cards and loans) and limiting new credit applications or inquiries, can help keep your credit in good to excellent shape and you will be looked at favorably by most lenders.

 

By stretching your mind and learning more about credit and wealth building, you are now on a serious path toward reaching your goals and ensuring a more prosperous future for yourself and your loved ones.

 

All the best as you are no longer “frightened” as you pursue a lifetime of credit and financial success…

Return to Top

 

Return from Credit & Wealth Building to What is the 3 Step Structured Approach to Managing Your credit & Finances

Return from Credit & Wealth Building to Consistency & Personal Finance 

Return from Credit & Wealth Building to Credit Basics

Return from Credit & Wealth Building to Credit Tiers

Return from Credit & Wealth Building to Credit Mastery

Return from Credit & Wealth Building to Credit Improvement

Return from Credit & Wealth Building to Credit Management & Wealth Building

Return from Credit & Wealth Building to Income & Personal Finance

Return from Credit & Wealth Building to Mental Fortitude & Personal Finance

Return from Credit & Wealth Building to Financial Goals & Objectives

Return from Credit & Wealth Building to Who is the creator of TheWealthIncreaser.com

Return from Credit & Wealth Building to Wealth Building & You

Return from Credit & Wealth Building to Financially Alert Mind & Wealth Building

 

Copyright© 2014–2022–TheWealthIncreaser.com–All Rights Reserved

 

 

Personal Income Statement & Wealth Building

Learn how you can use your knowledge of what you earn on an annual basis to achieve more…

 

It is important that you know your income that you earn along with your expenses that you pay out on an annual basis.

 

In this discussion TheWealthIncreaser.com will discuss the importance of looking at your income over a period of time so that you can more effectively pursue and reach your future goals.

 

In the last article TheWealthIncreaser.com discussed the importance of creating a budget or cash flow statement in concrete terms so that you could achieve more throughout your lifetime.

 

This discussion will build on that theme as it is important that you have a real grasp on how you can use personal finance statements to achieve more throughout your lifetime.

 

Although creating a “personal income statement” for the first time can be difficult and challenging for some, the benefits and time spent will be well worth it if you are now sincere in your desire (efforts) to achieve real success and build wealth in a manner that allows you to give it your best.

 

If you have a yearning to reach higher and achieve more–you can do so with a high level of determination and the inclination to look at your yearly inflow and outflow of cash into your household and use the results of that analysis to plan for a more rewarding future as you build wealth.

 

By utilizing the following 3 steps you can start on a more definite path to building wealth in the current economy–or any economy!

 

1) Complete a self-analysis of where you now are financially on an annual basis

It is important that you know what amount of income comes into your household and goes out of your household on an annual basis or a set time or interval as that knowledge is invaluable when you are in the process of building wealth.

 

Does your annual income exceed your annual expenses or is there a shortfall? 

 

You can think of your personal income statement in the same manner as your personal cash flow statement but realize that instead of monthly, it is over an interval of time such as 6 months or more commonly 12 months.

 

The following personal income statement provides you a blueprint of what you need to enter to come up with your income and expenses over a 12 month interval to help you better determine financial moves that you can possibly make in your future that can lead to more success for you and your family.

 

How to Prepare a Personal Income Statement in Simple Form:

 

Yearly Receipts (2021)

 

Wages                                                                     $_________

Dividends                                                               $_________

Interest                                                                   $_________

Rental                                                                      $_________

Royalty                                                                    $_________

Other                                                                        $_________

TOTAL Yearly Receipts                           $_________

 

Yearly Expenditures

 

Auto loan payment                                              $_________

Auto maintenance                                               $_________

Child care                                                               $_________

Clothing                                                                  $_________

Contributions                                                        $_________

Credit card payments                                           $_________

Dues                                                                         $_________

Entertainment                                                       $_________

Food                                                                         $_________

Household maintenance                                     $_________

Income & SS taxes                                                $_________

Insurance                                                               $_________

Personal care                                                         $_________

Property taxes                                                       $_________

Rent payment                                                        $_________

Mortgage payment                                               $_________

Retirement Investment                                       $_________

Saving/investing                                                   $_________

Transportation                                                      $_________

Utilities                                                                   $_________

Other                                                                       $_________

 

TOTAL Yearly Expenditures                     $_________

 

 Net Cash Flow

Total yearly receipts                                             $___________

Total yearly expenditures                           –       $___________

 

Annual Discretionary Net Cash Flow                 

$___________                                                                             

 

The above income statement is rather simplistic, however if you enter accurate data it can be used as a template to transform your financial future and help you build wealth more efficiently.

 

It is important that you know what amount of income you earn annually and the amount of payments that you pay out on an annual basis and an income statement allows you to determine in a real sense where you can go financially  in not only the coming years but also decades, if used properly.

 

If your income and expenses listed above are of a fixed amount (same dollar amount) monthly you can multiply by 12 to come up with your annual numbers.  If you have variable expenses you may want to use estimates (be sure that the estimates are realistic) or average on a monthly basis.

 

If you have 12 consecutive months of cash flow statements available you may want to total them up and use them to construct your annual personal income statement on a fiscal rather than annual basis.

 

2) Determine where you want to go based on what your income statement allows you to do

By knowing the amount of income that you have available on an annual basis (or knowing if you have a shortfall) you can plan your future with more certainty.

 

You will know the amount of income that you have available so that you can formulate goals and objectives that can move you forward and make your existence on earth a more pleasurable one.

 

You will know if you need to get more income, reduce your expenses and/or put together debt payoff plan(s) so that you can truly reach your desired goals.

 

You no longer have to live your life in a manner where anxiety rules the day–as you now are aware of a more effective way–to keep financial problems at bay!

 

3) Determine that you will manage your finances in a comprehensive manner so that you can achieve more throughout your lifetime

Now that you have a handle on your annual income and expenses you can use what you now know to plan more appropriately for a more prosperous and rewarding future.

 

You can also expand your mind by learning new areas of your finances that you may not have addressed appropriately at this time or in your past.

 

By looking at your finances in a comprehensive manner at this time you position yourself and your family for a more rewarding financial future where success is even more likely to occur.

 

Conclusion

A personal income statement may be what is needed to give you the mental picture of what you can achieve in your financial future.

 

By seeing what you earn annually and what you pay out annually with more clarity–you can move forward confidently toward who you were meant to be.

 

You can think of your annual personal income statement as a budget or cash flow statement, however instead of a monthly time period it covers a 12 month or other designated time period.  You can also more clearly visualize your “personal income statement” by looking at the net discretionary cash flow for the year as your household profit–or if you come up with a negative number(shortfall)–your household loss for the year!

 

You now know that success lives in you–use your practical knowledge of personal income statements and how you can enhance your mental qualities for the better–to really make your dreams come true!

 

Now is the time that you display your commitment to your future by mapping a path forward where you are “all in” and the wealth building that you desire is more likely to occur–due to your efforts to put yourself in position to  win–again and again!

 

All the best as you achieve a new level of success…

 

NOTE: You or your in this discussion could mean you as well as other members of your household who contribute financially whether it be your spouse or other members of your household.

 

Find out what you can do to make your dreams come true–by visiting our most frequented page–Wealth Building & You…

 

Return to Top

 

Return from Personal Income Statement & Wealth Building to What is the 3 Step Structured Approach to Managing Your credit & Finances

Return from Personal Income Statement & Wealth Building to Consistency & Personal Finance

Return from Personal Income Statement & Wealth Building to Income & Personal Finance

Return from Personal Income Statement & Wealth Building to Mental Fortitude & Personal Finance

Return from Personal Income Statement & Wealth Building to Goals & Objectives & Personal Finance

Return from Personal Income Statement & Wealth Building to Personal Financial Statements & Personal Finance

Return from Personal Income Statement & Wealth Building to Finance Improvement & Personal Finance

Return from Personal Income Statement & Wealth Building to Who is the creator of TheWealthIncreaser.com

Return from Personal Income Statement & Wealth Building  to Financially Alert Mind & Wealth Building

 

Copyright© 2014–2021–TheWealthIncreaser.com–All Rights Reserved

 

 

Cash Flow Analysis & Wealth Building

Learn how knowing your cash flow position and acting on that knowledge can lead to a lifetime of financial success…

 

In the current economy many are concerned about their financial future and are interested in improving their finances in an efficient and highly effective manner.

 

In this discussion TheWealthIncreaser.com will make a shift from the most recent discussions that focused on inspiring you to take action and showing you action steps that could lead you toward achieving more, to discussing in concrete terms how you can improve your “cash flow position” and finances throughout your lifetime.

 

Although managing your cash flow or budget can be difficult and challenging for many, it really is not as difficult as you may think if you have an effective plan of attack and you are sincere in your desire (efforts) to achieve real success.

 

If you have a yearning to reach higher and achieve more–you can do so with a high level of determination and the inclination to look at your monthly inflow and outflow of cash into your household at this time.

 

On many occasions in the past TheWealthincreaser.com sent visitors to other pages and sites when it came to constructing a budget or cash flow statement, however in this discussion the creator of TheWealthincreaser.com will show you in precise terms how you can budget effectively in your future by taking the following 3 actions.

 

1) Complete a self-analysis of where you now are financially

In the following data (cash flow statement) you will find information that you can use to start on a path of life that you choose.  Whether you earn $50,000 per year or if you earn $100,000 per year or any other amount–you can plan your future in a more certain manner by analyzing your income and expenses on a monthly basis by creating a cash flow statement or budget–at a minimum.

 

How to Prepare Your Monthly Budget (Cash Flow Statement) in Simple Form:

 

Monthly Receipts

 

Wages                                                                     $_________

Dividends                                                               $_________

Interest                                                                   $_________

Rental                                                                      $_________

Royalty                                                                    $_________

Other                                                                        $_________

TOTAL Monthly Receipts                           $_________

 

Monthly Expenditures

 

Auto loan payment                                              $_________

Auto maintenance                                               $_________

Child care                                                               $_________

Clothing                                                                  $_________

Contributions                                                        $_________

Credit card payments                                           $_________

Dues                                                                         $_________

Entertainment                                                       $_________

Food                                                                         $_________

Household maintenance                                     $_________

Income & SS taxes                                                $_________

Insurance                                                               $_________

Personal care                                                         $_________

Property taxes                                                       $_________

Rent payment                                                        $_________

Mortgage payment                                               $_________

Retirement Investment                                       $_________

Saving/investing                                                   $_________

Transportation                                                      $_________

Utilities                                                                   $_________

Other                                                                       $_________

 

TOTAL Monthly Expenditures                     $_________

 

Net Cash Flow

Total monthly receipts                                             $___________

Total monthly expenditures                           –       $___________

 

Monthly Net Cash Flow                 

$___________                                                                             

 

The above cash flow statement is rather simplistic, however if you enter accurate data it can be used as a template to transform your life and particularly your financial future.

 

In simple form in the end you are basically subtracting your monthly outflow (expenditures) from your monthly inflow (receipts) to come up with your monthly net cash flow (discretionary income).

 

Your wages would be your “gross wages” for the month  and would be entered in the monthly receipts category along with other sources of income (cash or equivalents) that you receive on a monthly basis.

 

Your federal and state (if applicable) income taxes paid, social security and medicare (amount withheld on your pay stub(s) for the month) would be entered in the monthly expenditures category along with your other expenditures or monthly payout of cash or cash equivalents.

 

If your retirement contribution is made on a pre-tax or post-tax basis include that as well.

 

Keep in mind the statement can be further broke down into categories such as fixed and variable expenses to add further clarification as you formulate your goals.

 

The key point is that you are ready to get started on a path toward financial success and you are fully committed in doing so.

 

It is very important that “you” want to determine your discretionary income  (monthly net cash flow) or lack thereof, so that you can plan accordingly or make adjustments so that you can reach your desired goals.

 

If you come up with a low or negative “net cash flow number” there is no need to panic at this time as that is not uncommon.

 

The key is that you may need to change your habits, get more income, cut expenses or do a combination of actions to get your cash flow in the positive column in the future so that you can more effectively reach your goals.

 

In a future discussion TheWealthIncreaser.com will provide an actual cash flow statement with real numbers so that you can have a real blueprint of what you can do to further enhance your finances and use the data entered as a guide to give you ideas that you can readily comprehend so that you can make your dreams come true.

 

2) Determine where you want to go based on data from your self-analysis

Can you use the data derived to move forward or must you come up with a payoff or pay down plan before you can actually make real progress?

 

Either way, as mentioned earlier there is no reason to panic! 

 

You can manage your money better on a consistent basis by being open to learning new and more empowering ways of doing so and putting what you learn into action on a consistent basis.

 

You can reach your retirement goals, you can pay off your credit card debt, you can get more income to make your life more meaningful, you can donate and spend time at your favorite charities–however it starts by leaving excuses or reasons why you can’t (or won’t) move forward behind you!

 

3) Determine to do even more to improve your finance and wealth building position

You must realize that improving your finances is a lifelong process.

 

That means you must build off of your financial analysis and decide to do even more by looking at your finances in a comprehensive manner.

 

By making a sincere effort to analyze your insurance, investments, taxes, education planning, estate planning/wills and retirement planning in a more congruent manner you can set yourself up for a lifetime of success where you control the direction as opposed to being pulled in directions that are not of your choosing.

 

Conclusion

By knowing your cash flow position at the earliest time possible you can position yourself and your family for a more prosperous and relaxing future.

 

You can use the above blueprint to change the direction of your life right now and leave all excuses and reasons that you can’t have a successful financial future behind you–once and for all!

 

Your actual numbers from your cash flow analysis will be unique to you, however the basic concept or understanding of how to move forward will remain constant for the most part.

 

If  after entering your data above you find out that you have adequate discretionary income that allows you to reach your desired goals–great!

 

If after entering your data above you determine that you don’t have adequate discretionary income you must make adjustments and possibly cut expenses, get more income or more than likely do a combination of the two!

 

It really is just that simple!

 

Isn’t it time that you forge a new and brighter future where success is more likely to occur and not just move about daily with no certainty of where you are headed?

 

All the best as you “analyze your cash flow” and set meaningful goals in an attempt to reach your highest level of success and make your money grow–so that you can once and for all put excuses to rest…

 

NOTE: You or your in this discussion could mean you as well as other members of your household who contribute financially whether it be your spouse or other members of your household.

 

Find out what you can do to make your dreams come true–by visiting our most frequented page–Wealth Building & You…

 

Return to Top

 

Return from Cash Flow & Analysis to What is the 3 Step Structured Approach to Managing Your Finances

Return from Cash Flow & Analysis to Consistency & Personal Finance

Return from Cash Flow & Analysis to Mental Fortitude & Personal Finance

Return from Cash Flow & Analysis to Goals & Objectives & Personal Finance

Return from Cash Flow & Analysis to Personal Financial Statements & Personal Finance

Return from Cash Flow & Analysis to Finance Improvement & Personal Finance

Return from Cash Flow & Analysis to Who is the creator of TheWealthIncreaser.com

 

Copyright© 2014–2021–TheWealthIncreaser.com–All Rights Reserved

 

 

Credit Tiers & Wealth Building

 

Learn why understanding “credit tiers” can help you fly at a higher level as you increase your credit score, build wealth and achieve more…

 

When it comes to credit scoring there are tiers or ranges that are better for you when it comes to getting loans at a good or the best rates when dealing with creditors.

 

Your repayment habits that you have throughout your lifetime helps build your credit file and hence your credit score.

 

The more responsible you are—the higher your credit score and the greater the probability it is that you will get a loan at a good or the best rate.

 

It is very important that you manage your credit and financial affairs at a level that is the best that is within you! 

 

By doing so you will be able to obtain credit in a way that is best for you and your family throughout the period in your life that you desire–or have a need to use credit.

 

Credit scores fall into 3 different ranges or tiers that lenders use to grant credit and the higher you fall in a credit range or tier, the better your credit terms in most cases.

 

 What is a Tiered credit score?

 

A tiered credit score falls into “3 ranges” and they are used by creditors when it comes to credit decisions from credit cards, auto loans, home loans, student loans and many other credit and consumer loans that are of a certain type, along with insurance and employment purposes.

 

Tier 1 credit cards are for people with “excellent” credit (750 and above).

 

Tier 2 credit cards require “good” credit and falls in the 700 to 749 range on the standard 300-850 point scale.

 

And Tier 3 credit cards are for “fair” credit and falls in the 640 to 699 range on the standard 300-850 point scale.

 

In addition to getting the best interest rate on credit cards, the higher your credit tier, the better the chance that you will get the best rate on home loans, student loans, auto loans and many other credit and consumer loans that are of a certain type, along with insurance and other purposes that you may have where your credit profile would be used.

 

How lenders rate credit…

 

Lenders must evaluate the risks of lending money to you and generally follow the same guidelines to evaluate a borrower’s creditworthiness.

 

By knowing what they evaluate at the earliest time possible you can put yourself in a better position for success throughout your lifetime.

 

In addition to the “5 credit factors” that will be presented later in this discussion, a creditor usually looks at three factors known as the “three Cs” and also known as Capacity, Capital, and Character when evaluating you as a credit risk.

 

  • Capacity is your present and future ability to meet your financial obligations.  Some of the areas examined would be your work history and the amount of debt that you already owe and that would be used to determine your ability to repay.

 

 

  • Character  is your trustworthiness and promptness in paying your existing bills and other debt.   Your credit history in a real sense defines your character whether you believe it is fair or not, as many lenders look at your past payment habits to determine the likelihood of future repayment.

 

In short, lenders are looking at how responsible you have been in your past when utilizing credit and accumulating assets!

 

The 3 C’s show in a real way whether you have the capacity, capital and character that is required of you when lenders are determining your ability to repay loans of various types.

 

In the past the “three Cs” was all that was needed to get a favorable decision on a loan, but in today’s information age, much more is required, such as a credit report(s) and credit score(s), and the higher you fall in the credit tier range with your credit score–the better your chances are to obtain a loan at a good or the best rate.

 

Your credit report represents a long list of your payment history, credit accounts, and other information.

 

Your credit reports are available for free at annualcreditreport.com, however your credit score is not included, and would normally have to be purchased.

 

Most importantly, you must understand what makes up your credit file and credit score—and what the major criteria is that goes into your FICO score.

 

The FICO score is named after the company that developed it—Fair Isaac and COmpany and you can get that score for a stated fee at (www.myfico.com).

 

The score is a three-digit number that falls between 300 and 850 and the higher your number, the more confidence lenders will have in your repayment ability.

 

Although other companies provide credit scores, the FICO score is the most prominent score used in the credit industry.

 

Your score will fall into a basket with other scores and it is important to know that generally more than 60% of people will have scores of 700 or more—therefore if your score is below 700, you have work to do if you desire to get in the TIER 1 range.

 

At 720 or higher (depending on the lender and type of loan), you would be considered a safer risk and you would generally receive a loan without a problem and also at a lower interest rate.

 

By gaining mastery of your credit at this time you can position yourself and your family for a lifetime of success.

 

Your FICO score is weighted as follows:

 

  • 35% Payment history.  Having a long history of making payments on time and no missed payments on all credit accounts is very important and one of the top things that creditors look for.

 

  • 30% Utilization or amount owed.  The amount that you owe relative to all of the credit that you have available is your overall utilization rate.  If you are very close to the limit on all lines of credit, you will be deemed a potential risk in the ability to repay your debt on time with many lenders.

 

  • 15% Time length of credit history.  In general, you want a credit report containing a list of accounts that have been opened for a long time–as that will help your credit score.  Your credit score would be enhanced by having older account(s) and the average age of all of your accounts would be weighted more favorably as well.

 

  • 10% Type of credit in use.  Your credit type or mix of credit cards, retail accounts, finance company loans, auto loans and mortgage loans are evaluated and weighted when your credit score is analyzed.

 

  • 10% Inquiries or new credit.  If you plan on opening several new credit accounts in a short period of time–use caution as that can result in the lowering of your credit score.  Depending on your future goals, you may want to ease into the process of opening new credit.

 

Multiple credit report inquiries can represent a greater risk, but multiple inquiries “do not” include requests made by you, an employer, or a lender who  sends you an unsolicited, “pre-approved” credit offer.

 

This type of inquiry is called a soft inquiry and would have little to no effect on your credit score.

 

In addition, to compensate for rate shopping, your credit score generally counts multiple inquiries of the same loan type in any 14-day period as just one inquiry.

 

General Guideline of How Lenders Rate Credit Scores

 

TIER 1 750 or higher is “excellent”—some lenders consider 720 or higher as tier 1

 

TIER 2   700 to 749 is “good”—some lenders consider 660 or higher as tier 2

 

TIER 3     640 to 699 is “fair”—make plans to improve

 

  • 720-higher A

 

  • Take your choice of loans at the lowest cost, including risk-based loans such as stated Income and Interest Only.  Be aware that stated Income and Interest Only loans are more difficult now even with scores over 720.

 

  • 620-719 A-

 

  • You qualify for conforming, conventional loans.  You’ll pay slightly more for risk based loans.

 

  • 600-619 B

 

  • You may take a FHA/VA loan or even a low-down payment loan with desktop (automated) underwriting.  FHA/VA now require a middle score of 620 or higher with many lenders.

 

  • 575-599 C

 

  • You can qualify for a sub-prime loan, but your interest rate will be significantly higher.  Expect a prepayment penalty.

 

  • 500-559 D

 

  • Most lenders will deny your loan, however there are a few “hard money” sub-prime lenders who will approve a loan if you have sufficient down payment.  Mortgage brokers have access to these wholesale lenders.

 

  • Only the rare sub-prime lender will approve a loan for someone with a score below 500, and a large down payment will be required—usually 25 to 50 percent.

 

  • Other conditions will apply as well.

 

  • Other Key Tips:

 

  • If your home is foreclosed—5 year moratorium on purchase of another house with many lenders

 

  • After Bankruptcy Discharge (Chapter 13) you can apply for a loan if middle score is 620 or more.

 

  • Chapter 7 with no foreclosure, FHA loan available after 3 years with many lenders.

 

  • Judgments on your credit report.  Judgments must be paid.

 

  • Judgments not paid will stop the progress of your score going up.

 

Closing Thoughts

 

It is important that you know prior to applying for a loan the importance of why you need to understand your credit position and how you can improve your credit position so that you can get a good—or the best loan available based on your credit profile.

 

By keeping in mind the above credit tiers, and knowing how to use the five credit factors to your advantage, you put yourself in position to manage your credit more effectively and efficiently at the various phases of your life.

 

You can make your stay on planet earth a more joyous occurrence by using credit wisely and mapping out your future with more clarity–so that you can go where you need to be, regardless of the chaos that you now see!

 

Even though you may take small steps now to achieve what you desire, your consistency in action will lead to you flying higher and achieving from wire to wire.

 

Now is the time that you put into motion ways to manage your credit at an optimal level and achieve the goals and dreams that are uniquely your own.

 

All the best to your credit management and “credit tier” success…

 

Return to Top

 

Return from Credit Tiers & Wealth Building to 1-2-3 Credit & Me 

Return from Credit Tiers & Wealth Building to All About 1-2-3 Credit & Me

Return from Credit Tiers & Wealth Building to FAQ’s about 1-2-3 Credit & Me 

Return from Credit Tiers & Wealth Building to What is Inside 1-2-3 Credit & Me

Return from Credit Tiers & Wealth Building to Auto Purchase & Credit Tiers

Return from Credit Tiers & Wealth Building to The 3 Step Structured Approach to Managing Your Credit & Finances

Return from Credit Tiers & Wealth Building to Who is the Creator of TheWealthIncreaser.com

 

Copyright© 2014—2024—TheWealthIncreaser.com—All Rights Reserved

 

  

Smallest to Tallest & Debt Payoff

Learn how you can pay your debt off faster and start to build wealth efficiently throughout your lifetime…

 

In the current economy many are contemplating ways that they can pay off their debt effectively and more efficiently.  Many are over-thinking their situation and remaining idle or are moving forward at a snails pace.

 

The real key at this time is determining if you are truly motivated to pay down or pay off your debt, and if so–putting together a debt payoff or debt pay down plan that you believe in and will get you the desired results.

 

There are many approaches that you can take to pay off your debt such as the debt snowball approach where you attack the smallest debt and go to the largest, debt avalanche approach where you attack the highest interest rate and move to the lowest interest rate along with many others that are too numerous to discuss at this time.

 

It is important that you realize that the real key to paying off or paying down your debt is determining “why” you want to pay off or pay down your debt and then making a real commitment to focus in on a consistent basis according to a plan that works for you and your cash flow position.

 

Do you desire to save time and interest by using the debt avalanche approach or do you feel more comfortable eliminating debt faster but paying more in interest overall by using the debt snowball or some other method?

 

Your money management personality will play a role in the debt payoff method that you consider–and ultimately choose!

 

Many of those who now have credit card debt and other revolving or installment debt are looking for creative and highly effective ways of paying off their debt.  And even though we are in the COVID-19 era–NOW may be the time for you to start on your debt payoff or debt pay down journey.

 

In many cases, the simplest and most effective path is paying off the smallest (the one with the lowest balance) debt that you now have and then working your way up to the tallest ((the one with the highest balance) debt that you owe.

 

Conceptual Understanding

 

Keep in mind that there are many other ways to pay off your debt and this strategy may not be right for you, but is one worth at least considering.

 

Even so, you still want to know that in case of a financial emergency you will find yourself in a comfortable position to still be able to pay off your debt.

 

In this discussion TheWealthIncreaser.com will detail ways that you can pay off your debt and at the same time build a better future for yourself and your family—in the current economy.

 

If the amount of debt that you owe is at a high level and it looks difficult to pay off or pay down at this time—it is ok if you are outraged at your past behavior—however you must leave anger behind as it has the potential to slow down your progress!

 

Your outrage (motivation) at this time can get you on a path toward major debt payoff and turning your finances around and achieving meaningful goals.

 

At this time TheWealthIncreaser.com  will discuss ways that you can pay off your debt that will force your mind to take a more visual look at your debt that could lead to you becoming more inspired to pay off or pay down that debt in a more timelier manner so that you can enjoy life on your terms.

 

Let’s now look at how you can reduce your debt efficiently at this particular point in your life.

 

Smallest to Tallest Credit Card Debt Payoff

 

By starting your debt payoff method by looking at what you owe from a comprehensive perspective (analyzing all of your outstanding debt) you can put yourself in position to come up with a more efficient debt payoff or debt pay down plan.

 

By knowing your monthly income (and outlining your total debt that you have at this time) you can put yourself in real position for real success throughout your lifetime!

 

It is important that “you” know your current balances on all of your outstanding debt  and your interest rates along with what you spend based on your standard of living on a monthly basis.

 

Assuming your credit card and other monthly debt are as follows:

 

Credit Card 1  $1,560–minimum payment $30–17.99% interest rate

 

Credit Card 2  $1,970–minimum payment $30–13.99% interest rate

 

Credit Card 3  $2,460–minimum payment $50–20.99% interest rate

 

Credit Card 4  $3,975–minimum payment $70–11.99% interest rate

 

Auto Loan  $1,260–payment $300

 

Mortgage $115,600–payment $800

 

Utilities and other monthly expenses including auto and mortgage were $1,800 in total:

 

If your income on a monthly basis is now at $2,500 you would have $700 ($2,500 minus $1,800) to apply toward your credit cards and other debt on a monthly basis.  By paying the minimum amount on credit cards 2, 3, and 4 ($150) and an additional amount of $550 on credit card one you would eliminate credit card 1 which has the smallest balance in 3 months and move along to credit card two that has the second smallest balance.

 

You now have $550 that you were paying on credit card one and $30 that you were paying on credit card two ($580 total) to use to pay off credit card two and in just over 3 months from the time of paying off credit card one–or 6 months from your debt payoff start day credit card 2 would be paid off.

 

You now move to credit card three and you now have$580 plus the $50  ($630 total) that you were paying to credit card 3 to pay off credit card three in about 4 months from the payoff of credit card 3–or 10 months from your debt payoff start day–and credit card 3 would be paid off.

 

You would then have $630 that you were paying off for credit card three to apply to credit card 4 that you were paying $70 per month to pay off–meaning you would have $700 after 10 months of paying off your credit card 1, 2, and 3 to apply to credit card 4 (your tallest credit card debt).

 

Therefore, at a payment of $700 per month in less than 6 months credit card 4 would be paid off and you would be in position to use the $700 that you now have available on a monthly basis to properly establish an emergency fund if you have not done so, establish an education savings account for your child, pay off or pay down your car payment or mortgage payment more aggressively, save more aggressively for retirement or pursue other goals that you may have.

 

By using your motivation, an effective action plan and putting forth the required effort– in 16 months from the start of your debt payoff journey you would have all of your credit card debt paid off and you would be in a better position for lifetime success!

 

If your income was at $5,000 per month you could do even more by paying off the above debt even more aggressively,

 

If you lacked the income at this time (say your income on a monthly basis was less than $1,900) you would have to get more income, cut expenses or do a combination of the two.

 

If your debt payoff under the best of circumstances would take 4 years or more bankruptcy should be given real consideration “prior to” depleting your savings, retirement and other accounts.

 

That is why you must “at this time” determine ways to increase your income or cut your debt level (or do a combination of the two) so that you will not overthink your situation,  remain idle, or make bad choices by not seeing a realistic way out.

 

You now know that you can achieve optimally during your relatively brief stay while here on earth, however it is your responsibility to get the ball rolling and stay committed even when adversity occurs.

 

Conclusion

 

It is not only important, it is imperative that you come up with a plan to reduce your debt or save more aggressively so that you can reach your desired goals.

 

By making a decision at this time “you can put yourself in position to control your future” as opposed to having credit control your future.

 

You can lead your family and loved ones on a positive journey where success lives!

 

All the best as you journey toward a lifetime of success and pay off your debt from smallest to tallest or in any other manner that you see that will work for you and your family…

 

 

Return from Smallest to Tallest Debt Payoff to Credit & Personal Finance

 

 Return from Smallest to Tallest Debt Payoff to Credit Card Payoff

 

Return from Smallest to Tallest Debt Payoff to Debt Payoff & Wealth Building

 

Return from Smallest to Tallest Debt Payoff to Effort & Personal Finance

 

 Return from Smallest to Tallest Debt Payoff to Responsibility & Personal Finance

 

Return from Smallest to Tallest Debt Payoff to Why You Must Have a Financially Alert Mind 

 

Return from Smallest to Tallest Debt Payoff to Who is the creator of TheWealthIncreaser.com

 

Copyright 2014—2020—TheWealthIncreaser.com—All Rights Reserved