Give Yourself Credit

8/2/2019 Give Yourself Credit

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Give Yourself Credit!


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Setting Financial Goals


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Getting what you want

Getting what you want doesnt always come easily.

Chances are youll have to work hard to get what

you want!


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What are goals?

Something for which you work andwhich you achieve by planning andfollowing the plan.


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Short, Middle, or Long Term

goals? Replacing a TV set

Purchasing a vehicle

Paying for your childs college education

Planning for your retirement

Buying a home

Buying a refrigerator

Short, Middle or Long term goals?


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How to achieve your goals: Write down goals and place reminders where

youll see them everyday

Keep your goals in the forefront of your mind

Get people in your life to support you andfeed off their inspiration

Develop your goals hand-in-hand with yourspending plan, and figure ways you can applymore of your money towards achieving them.


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Which family will succeed?The Jones FamilyWILL be out of debt by January of nextyear based on monthly payments of $600WILL buy a home by March with $10,000

saved for a down payment.WILL have $14,000 saved for tuition by thetime their child is 18 years old.

The Smith FamilyHOPE to get out of debtWANT to purchase a homeWISH to eventually send

their child to college


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Organizing Financial Records


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Does this look familiar?


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Organizing Financial RecordsConsequences of not organizing financial records:

Time wasted in looking for important documents.

Confusion about how much money you have and howmuch you owe.

Difficulty in planning and meeting goals.

Not having documents when you absolutely need

them. Inability to answer questions regarding discrepancies

with your finances.

Extra fees for late payments and account overdrafts.


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How to Get Organized Use a file folder system, carton, box or expanding file

File regularly to avoid a file pile

Commit to staying organized

Tell someone where to find your documents in case ofemergency


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Which documents? Utilities Bill

Birth Certificate

Passport & Immigration docs

Credit & Debt Card Receipts Bank Account Statements

Copy of your tax returns

Insurance and InvestmentDocs

Social Security Card Credit Card Bill

Police/court documents

Will

Others????????


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When Credit Card Statement arrives OPEN IT.

Make sure the charges listed are yours, or authorized by you.

Make sure any payments you made were credited to your

account properly. Contact your credit card issuer immediately if you have any

questions about charges or payments.


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Bank statementsMake sure that all your Debits and Deposits are accurate.

Deposits - money paid into your account.

Debits money taken out of your account and include:

- Checks you write

- Transactions you make using your debit card

- Automatic deductions - car loan payments or insurance payments- Monthly service fees, overdraft fees, ATM charges, NSF fees

- Additional charges for exceeding monthly transaction limits

- Charges for new checks


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Organize your Checkbook- Always date your checks and debit transactions

Write the purpose for the check or debit in the memo area ofthe check or check register

Record every check you write in your check register

Keep ATM and debit receipts, and enter them promptly in yourcheck register

Balance your checking account statement and checkbookevery month


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Reconcile your Checking Account MONTHLY

When your Bank Account Statement arrives open it!!!!

Check every entry debits & credits against your records

Search for errors and investigate whyeven if its $1

If your balances are still different, ask your institution for help.


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What is Debt-to-Income Ratio ?


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Have you been declined for a loan?And you pay your bills

on time

Then maybe your

debt-to-income

ratio is too high?


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So, what is Debt-to-Income Ratio ?

Your earnings

Vs.

Your level of debt


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Why is it important to monitor my

debt-to-income ratio?

By staying aware of your debt-to-income ratio, you can:

Make sound decisions about buying on credit and taking out loans;

See the clear benefits of making more than minimum credit cardpayments; and

Avoid major credit problems.


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Calculating your debt-to-income ratio:

Step 1 Calculate your monthly take home pay

Multiply your paycheck amount by either 26 or 52 - depending onhow often you are paid.

Now divide your annual take-home pay by 12. This is your monthlytake-home pay.

If your take-home pay is inconsistent, estimate your monthly take-

home pay by dividing last years annual take-home pay by 12.

Remember to include: Alimony and child support, bonuses,commissions, tips and any other income.

EXAMPLE: TOTAL MONTHLY TAKE HOME PAY $2000


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Step 2 Calculate your monthly debt

Calculate how much you pay every month for your debts

Remember to include:

Car payment(s) Loan payment(s) (furniture, appliances, etc.) Financial institution loan(s)

Student loan payment(s) Other loans/credit accounts Credit card payments Payment for past medical care

EXAMPLE: TOTAL OF MONTHLY DEBT = $400


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Step 3 Calculate the Ratio

Divide your total monthly debt payments by your totalmonthly take-home pay, or income.

EXAMPLE:

Monthly take-home pay = $2,000

Monthly debt = $400

400 divided by 2,000 = .20

DEBT-TO-INCOME RATIO = .20 OR 20%


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Is your debt-to-income ratio ok?

16-19% or lower and youre probably okay!

20% or higher and you may:

Jeopardize your ability to make major purchases,such as a car or a home.

Keep yourself from getting the lowest interest ratesand best credit terms.

Have difficulty getting additional credit in case ofemergencies.


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Communicating about money

Family situations can make it

difficult for one person to control

the spending: Dual incomes

Blended families

Childcare costs

Eldercare costs Multiple credit, checking, and savings

accounts

Debts


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Why we need to communicate about money Set ground rules for your money discussions

Leave the judgments about who is right or wrongout of the discussion

Identify your common problems Agree on common solutions - such as sticking

to a budget or allocating savings

Establish common goals

Decide on which things are important to the entirehousehold


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Credit Reports Facts & Myths


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What is a Credit Report? A report which details, in depth information about

your credit history.

Creditors, insurance providers, employers, leasingagents and any other person you authorize hasaccess to it.

Reveals your Credit Score.


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Your Credit Report Reveals-

Your level of debt Your bill-paying habits

Length of credit

Inquiries made aboutyour credit


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How can I get a free copy of my

credit report?

Go to www.annualcreditreport.com

You are entitled to 1 free copyof your credit report each year


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Plus.

You can also get a FREE copy if.

Youve been denied credit, insurance, oremployment.

You have 60 days to order a report

Youre on welfare

Your credit report is inaccurate because of fraud.


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Do you know what your credit score is? If you answered no then you could be a victim of identity theft.

You could have accounts on there that are paid, yet still

reflecting a balance.

You may not receive the best terms when applying for creditcards or loans.

Scores range from 300 900

The higher the score the better! Average score - 680


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Whats theVantageScore?

Created in March 2006

Used by all three reporting agencies

(Equifax, Experian, TransUnion) Scores range from 501 to 990

Number score goes with a letter grade

Example: 501-600 = F, 901-990 = A


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Whats in my Credit Score?


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Whats not included in my Credit Score ? Race, color, religion, national origin, sex and marital status

Your age

Your salary, occupation, title, employer, date employed oremployment history

Where you live

Any interest rate being charged

Any items reported as child/family support obligations

Certain types of inquires

Information taken from www.myfico.com
http://www.myfico.com/http://www.myfico.com/


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How can I get a good Credit Score?

Pay all your bills on time

Keep your debt-to-income ratio level low

Dispute all negative information

Correct inaccurate information with all 3 major reporting bureaus

Make sure old accounts are closed at YOUR request

Request that all missing positive credit information be included inyour report

Notify in writing your creditors of any change of address Fill out all credit applications the same

Review your credit report at least once a year!


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Innocent mistakes are madeCredit Reports can contain incorrect and inaccurate

information from innocent mistakes being made:

A person applied for credit under different names.

Someone made an error when transferringinformation from a hand written application.

Payments were applied to the wrong account.


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My report contains inaccurate and

incorrect information..You must notify all 3 credit bureaus in writing:

Detailing what is inaccurate/incorrect and why

You will need to provide evidence/proof to verify your claim

The Credit bureau has 30 days to investigate and respond to you.

Information that can not be substantiated, must be removed.

If the disputed information is confirmed as accurate, you can include anexplanation to be included in your credit report.

It isyourresponsibility to have the information corrected!


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Am I responsible for a co-signed debt?

YES!

If a co-signed debt goes to collection:

A collection agency may try to collect the debt from you.

Institutions can sue you and get a judgment against you for thedebt plus interest and legal fees.

Lenders may consider co-signed amounts when calculating yourdebt-to-income ratio before extending you more credit.


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How do I repair my credit?You are fully able to dispute inaccurate

and incorrect information yourself!

You can use a Credit Repair Company: Beware of scams and large upfront fees

Some companies illegally and deceptively promise toclean up credit reports, erase bad credit, or providea new credit history


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Debt Options Try and arrange a repayment plan directly with your

creditors.

Contact a reputable non-profit Credit CounselingOrganization to pay off your unsecured debt within48-60 months with greatly reduced interest.

Contact a reputable Debt Settlement company to

settle your debt.


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Where to get more information:

1 888-DEBT-USA

www.americandebtcounseling.org


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Thank you!

American Debt Counseling, Inc.

1 888 DEBT USA

www.americandebtcounseling.org

Documents

Give Yourself Credit