How Can I Fix My Credit?

Go Green While Saving Green

admin — Thu, 18 Mar 2010 20:32:17 +0000

Spring is here, and after the long winter many people are taking the opportunity to do some much-needed maintenance to their homes, lawns and gardens. While you are pulling together your "honey-do" list, consider making some eco-conscious or green changes, which will help you shrink your carbon footprint and save money.

According to the experts, a few easy do-it-yourself projects can make a big difference. "Now more than ever, homeowners can take simple steps to go green while saving some green," says Lou Manfredini, Ace Hardware’s home expert.

Take an inventory

Most homeowners have no idea how much energy they consume, so the first step is to take an inventory and find out where the energy in your home is going. Power meters, such as the P3 Kill A Watt EZ Power Meter, can be used to give an accurate read-out on the operating cost of your household appliances. Some models even break those costs down by the week, month and year.

"Studies have shown that once families know how much energy they are using, they are more likely to make changes that will bring that amount down," Manfredini says. "Power meters can help show the importance of making simple changes like turning off the lights when you leave a room or even opting not to turn on the TV."

Shedding light on your lighting

"The easiest way that people can save on their energy bills is by updating their current lighting with low energy light bulbs," Manfredini says. "Today, there are two options on the market, CFL bulbs and LED bulbs, and it’s important to know the difference so you can choose the light that’s right for you.

Compact Fluorescent Light Bulbs (CFLs) have been on the market for a few years. They use fluorescent light, which is about the same degree of brightness as traditional bulbs, but consume a fraction of the energy while also lasting eight to 15 times longer. Products like the GE Spiral CFL Bulb are Energy Star rated and give off an attractive, soft, white light.

Light Emitting Diodes (LEDs) were created to be used in indicator lights in cars and airplanes. Today, LED bulbs are making their way into households across the country, with GE’s Energy Smart LED Flood Light leading the pack. LED bulbs aren’t as advanced as CFL bulbs yet, and their light often isn’t as bright, but they use less energy than CFL bulbs, have a longer life span and don’t contain mercury – leading many experts to claim that LED bulbs are the light bulbs of the future.

Conserve water in your washroom

"If you think about it, it’s no surprise that toilets can be one of the biggest culprits of wasting water," says Manfredini. There are several different efficient models on the market today, but replacing your toilet can be a costly – and time intensive – project.

Instead of replacing your toilet, simply install the Hydroright Dual Flush Converter. This converter will turn your standard toilet into a dual flush model in minutes without the use of tools. Dual flush toilets allow users to select the amount of water that will be released into the bowl depending on the amount of waste, using on average 70 percent less water than standard models.

Let Mother Nature water your lawn

Now that you’ve taken care of the interior of your home, it’s time to focus on the outside, specifically your lawn and garden. "Good lawn care means making sure your lawn receives around an inch of water a month," Manfredini says. "In the warmer months, you may want to increase this to two inches to make up for evaporation."

Instead of turning on the hose, many homeowners are now collecting rainwater and recycling it to keep their grass green. When choosing a rain barrel, select one that holds around 60 gallons of water, has a spigot on the exterior and is easy to install, like Fiskars Salsa Rain Barrel.

Spring Credit Cleaning

admin — Fri, 12 Mar 2010 09:25:01 +0000

Spring is a time of renewal and rejuvenation, when many people focus on getting their homes cleaned up and ready for the warmer months ahead. It is also a great time to get your finances – including your credit – in order. So, if you’ve been neglecting your credit like those old dusty boxes of clothes you can’t quite part with yet, use the spirit of spring cleaning to spruce up your finances.

Experian has developed four tips to help you spring clean your credit:

1. Know your report and your score
Despite what you may have heard, accessing your own credit report does not affect your credit scores. Reviewing a credit report results in what is called a “soft pull,” or “soft inquiry,” meaning it will only be seen on a personal credit report, not the ones lenders use. Everyone should check their reports at least annually. It’s part of good credit management. You can get your credit report at www.experian.com. Purchasing a scored report will help you identify the factors in your report that are most influencing your credit risk.

2. Pay your bills on time
Paying your bills on time is the single most important contributor to a good credit score. If a bill is not paid in a timely manner, the delinquent payment may be reported as late to a credit bureau. Delinquent payments and collections can have a major negative impact on credit scores. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you should minimize outstanding debt, avoid overextending yourself and refrain from applying for credit needlessly.

3. Start paying off your credit card debt and leave the account open
Paying down debts and paying off credit cards is always good for your credit, but closing a credit account could have a negative impact on your credit scores, at least for a short time. Some people start with their smallest debt. They can pay it off fairly quickly, which gives them a sense of accomplishment. That payment amount can then be added to the payments for a larger debt so that it can be paid off more quickly. Others start with a large debt and get it out of the way. Getting a big weight off your shoulders can help knock out the remaining debts faster. If one debt has a higher finance charge, it is always smart to pay the most toward the balance of that account. That’s because so much of your money is going toward fees and interest and is not lowering the amount of the debt. When it is paid off, all the money you were paying in interest can be applied to the balance of another account.

4. Use credit wisely
Once you’ve paid down your debts, continue to use your credit cards and pay the bills on time each month, and keep your balances low. Credit scoring systems not only look at individual credit card balances, they also consider something called your utilization rate (or balance to credit limit ratio). Your utilization rate is the total of the balances on all of your credit cards compared to the total of the credit limits on all of your credit cards. For example, if your credit card’s limit is $10,000 and you owe $2,500 – your credit utilization rate is 25 percent. According to Experian, consumers on average are utilizing more of their available credit. At the end of 2009, the average utilization was 22.1 percent compared to the same time last year when average utilization was at 19.1 percent. Closing accounts reduces your available credit, which can increase your utilization ratio or balance-to-limit ratio – a sign of risk that can negatively impact credit scores.

While there is no quick fix for bad credit scores, there are straightforward steps we can all take to help clean up and improve our financial well-being. So when you’re clearing out the clutter in your living room, don’t forget to review your finances and see what else you can do to get organized for the spring season.

Understanding and avoiding pitfalls of the Making Work Pay credit

admin — Mon, 15 Feb 2010 14:01:06 +0000

The Making Work Pay credit has many taxpayers confused, and for some, the confusion has led to the shock of smaller or delayed refunds. To help make sense and cents out of it all, TaxACT has provided the most essential information and tips for getting it right on your 2009 tax return.

Who qualifies and how to get it
The Making Work Pay credit replaced the 2008 federal stimulus checks for 2009 and 2010. Most taxpayers already received the benefit for 2009 through reduced federal withholding. You likely received an increase of $10 to $13 in your paychecks starting in April 2009. Even if you received this benefit in each paycheck, you’ll generally still need to claim the credit on your 2009 tax return. The credit on your federal return makes up for the reduced withholding throughout the year.

The refundable credit is worth 6.2 percent of your earned income, up to $400 for individuals and $800 for married couples filing jointly. If you don’t withhold federal taxes, you must file a federal tax return to receive the credit.

The credit phases out for married couples filing jointly with an modified adjusted gross income (MAGI) between $150,000 and $190,000, and for single taxpayers whose MAGI is between $75,000 and $95,000.

Why the credit means smaller refunds for some
When the federal withholding tables were adjusted for Making Work Pay, most taxpayers didn’t adjust their withholding. Although the IRS says the vast majority of workers withheld enough during 2009 and can still expect a refund, some may have had too little tax withheld, especially:

*Married couples with two incomes
*Individuals with multiple jobs
*Pensioners
*Dependents
*Some Social Security recipients who work
*Workers without valid Social Security numbers

As a result, these groups may receive smaller refunds or owe a small balance of taxes for 2009. If you happen to owe taxes because too little was withheld during 2009, the IRS may waive any estimated tax penalty if it relates to changes made to withholding tables.

Why the credit has delayed refunds
The same tax act that included the Making Work Pay credit included two provisions that reduce the credit amount.

Retirees, disabled individuals and Supplemental Security Income recipients receiving benefits from the Social Security Administration, disabled veterans receiving benefits from the Department of Veterans Affairs and those receiving benefits from the Railroad Retirement Board received a one-time economic recovery payment of $250 in 2009.

Government retirees who don’t receive social security can claim a one-time $250 refundable credit on their 2009 federal tax return.

Economic recovery payment and Government Retiree Credit amounts must be subtracted from any Making Work Pay credit amount. Many taxpayers have failed to do so, resulting in rejected returns and delayed refunds.

For example, if you’re eligible for both the Making Work Pay and Government Retiree credits, your $250 Government Retiree Credit will be subtracted from the $400 Making Work Pay amount. You’d still receive the full $400 through two credits, with $150 coming from the Making Work Pay credit and $250 coming from the Government Retiree Credit.

Get the credit right on your 2009 return
If you’re uncertain whether you received the $250 Economic Recovery Payment, verify that information before doing your taxes. Contact the Social Security Administration, Department of Veterans Affairs or Railroad Retirement Board.

Taxpayers filing Form 1040 or 1040A should figure the Making Work Pay Credit amount using Schedule M. If filing Form 1040-EZ, use the worksheet for Line 8 to figure the credit.

One of the surest ways to get the credit right is to use tax preparation software like TaxACT at www.taxact.com. Answer simple questions and TaxACT will figure your credit amount and report it on the correct line of the appropriate form. It will also identify other credits and deductions you may qualify for, and includes a maximum refund pledge. Best of all, you can prepare, print and e-file your federal return for free with TaxACT Free Edition.

Think ahead
Because the credit also applies for 2010, adjust your federal withholding if necessary through Form W-4, Withholding Allowance Certificate. Married couples filing jointly and individuals with multiple jobs should complete the W-4 dual earner worksheet.

Since the credit is being spread out over 12 months rather than nine months, your 2010 paychecks will likely be a few dollars less than last year’s. However, you’ll still receive the full credit amount you’re due.

Get a healthy business credit score in 2010

admin — Sat, 06 Feb 2010 14:09:37 +0000

For owners of new and young small businesses, there are a plethora of elements that need to be managed and overseen every day to ensure success. While focusing on income, expenditures, employees and marketing, thinking about your business’ credit can sometimes fall by the wayside.

To ignore your business credit score could be a fatal mistake. It’s an essential link in the chain of success. If you’re concerned about your company’s image that your customer base sees, you should be just as concerned about how your business credit looks to essential people like lenders and potential business partners. And, just think of how your personal credit can affect your life – the difficulties that bad credit poses for an individual can end up plaguing your firm too. It’s also important to remember that anyone can view your business credit report and score for any reason, unlike the information in your personal credit file.

With the everyday rush of tasks that comes with small business ownership, it can seem difficult to add yet another thing to monitor, but your company depends on it, especially small businesses looking to grow. There are good resources out there that can help you learn to manage your business credit. Experian is one company that excels in helping businesses with their credit, offering business credit reports (singly or in subscription packages) that detail payment trends, credit risk scores, monitoring alerts, industry benchmark data and more.

Now, as the economy begins to recover, is the time to start focusing on your business credit score. Here are some tips from Experian to get you started.

1. Check – Know what is in your business credit report at all times and understand your business credit score. Your business credit report is used to make important financial decisions about your company – how much money lenders will loan, how much credit suppliers will extend and what interest rates to charge.

2. Correct – Be proactive. Make sure your business information is accurate and up-to-date. Outdated or incorrect information can give the wrong impressions about your business, resulting in unfavorable decisions that negatively impact your bottom line.

3. Protect – Monitor your report regularly and sign up for alerts that warn you of changes that could indicate fraudulent use of your business credit information. Popular alerts include notifications on inquiries and new trade lines. Furthermore, protect your business from non-paying customers, partners and suppliers by checking their business credit report before doing business with them.

4. Separate – Many small business owners don’t separate personal from business expenses and therefore don’t build business credit tradelines. In the beginning when starting a business, using personal guarantees and credit is needed. However, the weakness of relying solely on personal credit is clear. If your business ever becomes at risk, your personal credit score becomes at risk as well. Failing to separate business from personal credit also can limit your business growth potentials.

5. Grow – Managing the factors that drive your score can make a positive impact and lead to more opportunities to grow your business, ranging from gaining capital to gaining customers. Therefore, take good care of your small business name and reputation. Choose to work with lenders, suppliers and creditors that report your payment history to the credit bureaus. And of course, pay your bills on time.

When you take the time to build and maintain your business credit report, you’ll be building your business’ reputation and ability to succeed.

Discovering financial aid opportunities in the current economy

admin — Wed, 03 Feb 2010 21:54:48 +0000

If you are still searching for that silver lining in the present economic doldrums, going back to school this year might be the remedy for you. Whether you are a first-time freshman or a returning student looking for a new degree to move your career forward, for many the timing could not be better.

College enrollment across the United States has risen more than 40 percent, according to an October report issued by the Pew Research Center that was based on data released from the U.S. Census Bureau. America is still witnessing not only record highs in unemployment rates, but also in setting college enrollment records during the recession.

Of course, the age-old dilemma still remains for most present and potential scholars: “How am I going to pay for college? If I’ve lost my job, or I’m still looking for a job, how do I start to fund my education?”

“Dedicated students who want to study can always find a way to make it happen,” says Tressa A. Brush, director of Student Financial Services at South University in Savannah, Ga. “After a student applies to college, the first place students should look for financial aid is with the U.S. Department of Education. Financial aid is available for those who qualify.”

As part of the American Recovery and Reinvestment Act of 2009, the Department of Education bolstered student financial aid resources for post-secondary education. Hope Scholarship Credits are widely used, and the moneys available via Federal Pell Grants for students who are eligible have been increased.

“When students begin looking for money to attend college, I provide them with many possibilities, but then, the real work begins. Students must begin conscientious and thorough searches for scholarships and loans. These searches can reap very positive results from public and private organizations,” Brush says.

In addition, the current outlook for interest rates on some federal college loans is favorable. The current rate has held at 5.6 percent since July 1, and the rate is expected to be even lower in July 2010.

“Funding, and sustaining funding, for educational endeavors can be a rigorous, but worthy task. If you do the work well, great payoffs can happen, and of course, the biggest payoff is the investment you will make by getting an education. Earning a college degree can lead you so much further on your career path,” Brush says.

Seeking financial aid for education? Where to start:

* Visit the Department of Education online, www.fafsa.ed.gov.

* Check out the benefits of your present workplace. Often, employers offer their employees tuition reimbursements. Ask your human resources department.

* Talk to your close friends and family. New trends indicate increasing financial assistance is coming through the benevolence of one’s own kin.

* Check with your local college’s financial aid office to research the availability of loans.

* Check with your local civic and non-profit entities such as the Daughters of the American Revolution, the Lions’ Club, and Elks’ Club for scholarship opportunities.

* Check out these other Web sites: www.finaid.org, www.fastweb.com, www.gacollege411.org, www.wiredscholar.com, www.usafunds.org, www.familiesoffreedom.org, www.rotary.org, www.ed.gov/finaid, www.collegeboard.org, www.salliemae.com, https://ugsp.nih.gov and www.nsdar.org.

Keep working on your New Year’s resolution and get out of debt

admin — Mon, 01 Feb 2010 21:51:03 +0000

Year in and year out, getting out of debt consistently ranks among New Year’s top 10 resolutions. If your household is like many American households struggling with the recession, or worse, unemployment, getting out of debt will be close to the top of your list again for 2010. Unfortunately, like other tough habits to break, it can be difficult to get out of debt after developing spending habits that have heavily relied on borrowing from credit cards and home equity loans.

While some households can slowly work their way out of debt, others that have been affected by a recent job loss may have no choice. If you’re among the more than 70 percent of American workers who are living paycheck to paycheck or must immediately cut expenses due to sudden unemployment, here are seven tips from FindLaw.com, one of the world’s leading online sources for legal information, on how you can get your new year off to a great start by reducing and eliminating your debt.

* Write down your goal. Give power and energy to your goal to get out of debt by writing it down on a piece of paper and taping it to your refrigerator. Be clear. Write down how much you’re in debt, your goal date for being debt-free and your determination to cut expenses and stop needless spending. In addition, write down what you dream of achieving – buying your own home, or paying for a child’s college education – to give you and your family added purpose as to why it’s so important to get out of debt now.

* Get help now. Some households need expert help to get out of debt and create new spending and saving behaviors. Seek the assistance of a debt management or credit counselor, available through many social service agencies. Try visiting the United Way at www.liveunited.org. If you are at risk of going into foreclosure, call (888) 995-HOPE for a toll-free foreclosure prevention hotline sponsored by NeighborWorks America and the Homeownership Preservation Foundation. Beware of any debt management companies that demand payment up front for their services, which is a telltale sign of a scam.

* Call your creditors. Don’t wait for your creditors to call you. Call them to negotiate a new payment plan that you can realistically handle, including lower interest rates on your credit cards. It’s not uncommon for many Americans who are deeply in debt to be strapped with interest rates as high as 30 percent. Don’t be afraid to ask a creditor to settle a debt for a lower amount than what you currently owe.

* Cut back to the essentials. Cut your expenses to the essentials – food, clothing, shelter and transportation. Stop eating out. Cut out the afternoon candy bar and soda pop and start drinking more water. Stop buying lottery tickets. Start taking the bus or the train to work or, better yet, start biking or walking to and from work. Drop cable and your cell phone.

* Don’t skip these expenses. Depending upon the laws in your state, there may be some expenses that you must incur, such as auto and medical insurance, student loan payments, child support payments, license fees and, of course, paying local taxes as well as state and federal income taxes, according to FindLaw.com. Skip any of these expenses and you may wind up with much bigger legal headaches.

* Go automatic. Have your employer automatically deposit your paycheck into your bank account. But don’t stop there. Arrange for the most essential bill payments – mortgage, electricity, heat and water – to be automatically withdrawn from your checking account. If you have a mortgage, escrow property taxes to ensure that they’re automatically paid.

* Make more money. At some point, you might realize that you can’t cut any more expenses to make enough headway on your goal of getting out of debt. You might need to make more money by either taking on another job or selling some of your household items. If you take on a second job, look for an opportunity to work for a retailer that offers benefits to part-time workers such as discounts on merchandise and health care benefits.

Your top priority should be checking your credit report

admin — Mon, 01 Feb 2010 21:35:14 +0000

With many signs pointing to the beginnings of a recovery in the housing market, potential home buyers can still find plenty of selection, low prices and low interest rates. If you’re thinking of buying a home, now might be the right time, but before you contact a real estate agent or apply for a mortgage, your top priority should be checking your credit report to see if your credit is in good shape.

Credit – specifically misuse and misunderstanding of credit – spurred the housing crisis, many experts agree. The consequences have included tighter standards from lenders and the need for borrowers to better understand how to use credit wisely.

Interest rates remain low and those with good credit will be better positioned to take advantage of the opportunities currently available in this unique housing market. A good credit report and score can open doors for you in the real estate world, and empower you to secure the best loan and terms possible before you ever tour a single house. Being preapproved for an affordable mortgage can help you move quickly to secure a deal when you find the home of your dreams.

If you’ve already assessed your finances to determine how much mortgage you can afford, you’re ready for the next step – making sure your credit is in top shape to help you get the best possible loan.

Understanding your score and what it means

Lenders consider your credit score and your current credit report when deciding whether or not you’re a good credit risk. Your credit score is a number generated by using statistical models that factor in elements from your credit report. The number can change when information on your credit report changes and it’s calculated at the time a lender requests a copy of your credit report. Different lenders may use different scoring methods, so your score may vary from lender to lender.

Because credit scores are objective and are based on the information in your credit report, they are fairer than the old opinion-based ways of determining a person’s risk level. Your score is a prediction of your likelihood to repay debt responsibly, based on your past credit history and current credit status.

Before you begin contacting potential lenders, check out your credit report, which can be accessed online at Web sites like FreeCreditReport.com.

Know what’s on your credit report

Your credit report is the other major piece of information a lender will consider when deciding whether or not to give you a mortgage loan. Your credit report is basically a summary of your financial behavior, including how you’ve used credit in the past and how well you manage repaying debt. The information on your report comes from creditors, public records and other reliable sources, which report it to the credit bureaus through automated processes.

Credit reports generally include personal data such as variations on your name, your driver’s license number, Social Security number, birth date, current and past employers, and current and past addresses. You’ll also find a listing of your credit accounts, when each account was opened and your payment history for each. If you’ve been involved in court action like bankruptcy or monetary judgments, this information will likely appear on your report as well.

Your report will also show past requests for your credit reports (inquiries) that might come from lenders, insurers, employers or stores. Too many inquiries on your report might make potential lenders think you are trying to overspend, so think carefully before applying for new credit; inquiries stay on your report for two years.

Because your credit report changes every time you use credit, it pays to enroll in a credit monitoring product. Web sites like FreeCreditReport.com make it easy to track both your score over time and monitor your credit report, ensuring you know what’s on your report before a potential lender looks at it.

Buying a home is likely the largest investment you’ll ever make – one that will impact your credit for many years to come. Before you jump into the process of applying for a loan to buy a home, it pays to understand credit, review your report and know your score.

Five ways to save time and money on your taxes

admin — Mon, 28 Dec 2009 15:51:55 +0000

The typical taxpayer is expected to spend more than three business days and more than $200 completing his or her tax return.

“That’s too much time and too much money,” says Gary Lundberg, product management director for CompleteTax (www.CompleteTax.com), an online income tax preparation program. “The good news is, there are a few easy things people can do that will help them save time and money doing their taxes, as well as make sure they get the biggest refund they’re due.”

As people get ready to file their 2009 tax returns, there are a few things they can do to save time and money.

1. Make sure you’re prepared.

Having a few key items available when you start your taxes will save a lot of time. These include:

* Your tax return from 2008
* Social Security numbers for you, your spouse and children
* All W-2s (wage and tax withheld form for 2009 supplied by your employer), 1099s (statements on investment income provided by your financial services institutions), mortgage interest statements and other statements related to income
* All statements related to expenses that you will be claiming on your tax return
* The routing numbers and account numbers for the accounts in which you want to directly deposit your tax refund.

2. Use an online tax program.

One advantages of using an online tax program is that many of the items you need to start your taxes – like your prior year’s return – can be stored by the program. So, you don’t have to waste time hunting down information every year.

More than 32 million people filed their tax returns from their home computers during 2009, up nearly 20 percent from the prior year, according to Internal Revenue Service data. That number is likely to continue to increase as more people realize the benefits of online tax prep and electronic filing.

Using the right online tax program makes it a lot easier and faster for people to finish their tax return with no need to go to the store or download a program onto their computer.

Online tax programs also are a lot more accurate. In fact, the IRS reports that an electronically prepared and filed return has an error rate of less than 1 percent, compared to an error rate of about 20 percent for a paper prepared return.

3. Free file if you can.

Depending upon how complicated a person’s taxes are, they may be able to prepare and e-file their tax return absolutely free. For example, if you don’t need to itemize, and only have a few simple requirements – such as claiming the Earned Income Tax Credit – you may be able to use a free online tax program. For example, CompleteTax offers a free version of its program and the IRS lists other providers participating in the Free File Alliance.

If your tax situation is more complicated – for example, you have itemized deductions, investment income or you are a small business owner – you will want to make sure to purchase the online solution that is tailored to your needs. Good online tax programs for people with general tax needs are available for less than $20 and even investors or small business owners who have more complicated returns can find solutions for less than $75.

“Completing your tax returns does not need to be a drain on your wallet,” says Lundberg. “The right tax program can save a taxpayer both time and money.”

4. Maximize your credits and deductions.

The average tax refund for 2008 was nearly $2,800. However, many taxpayers have the sinking feeling that they are not getting the tax breaks they should. In fact, according to an independent survey conducted by CompleteTax, two-thirds of 1,000 randomly surveyed taxpayers fear they may overlook tax breaks or make mistakes that could cost them in fines or penalties.

“There are dozens of credits and deductions that people may have available to them. So it’s important to make sure that the tax program they’re using is geared to identify these and guide them to options that will maximize their refund,” says Lundberg.

Some programs will also provide tools to help further ensure accuracy. For example, while millions of people donate clothing and household items to charities, few have any idea of the value. A tax program, such as CompleteTax, with a charitable donation calculator, provides an easy way for determining and documenting the fair market value of these items, helping you realize the greatest charitable contribution deductions you can.

5. E-file and use direct deposit.

Electronically filing and using direct deposit significantly increases how quickly taxpayers have access to their refund. Generally, e-filers can have their refund deposited directly into their accounts within a few days, compared to the weeks it takes to receive a mailed check. Certain tax programs also allow customers to split their refund and deposit it into three separate accounts. For example, you could deposit part in your checking account, part in your savings account and part directly into a tax-advantaged IRA account.

“E-filing and direct deposit don’t cost you anything, but they can mean you have your refund faster so that it can start working for you – whether that’s paying off debt, buying something you want or saving for the future,” Lundberg says.

Resolve now to get your debt in check

admin — Sun, 27 Dec 2009 15:45:30 +0000

The charges are coming in, complete with due dates, minimum amounts due and debt dollars adding up. Sure, you had a fantastic time over the holidays, but now it’s time to determine how you’ll be able to prepare yourself to begin the new year off right with your finances.

Consumers are in a financial crisis; they are well beyond treading water; they’re drowning in their debt, says Steve Ely, president of Equifax Personal Information Solutions. Overspending during the holidays will only worsen their debt burden and make getting out of debt seem like even more of an impossibility. That is why having a plan for getting out of debt- a plan that they can actually stick to- is so important.

Here are some tips that may help you get your debt under control:

Get your debt organized.
If you don’t know how much debt you have, or how much you’re spending on interest, you’ll never be able to get it under control. Equifax Debt Wise can help you to overcome one of the biggest challenges to paying off your debt- getting started. The Fast Pay Plan Wizard makes it easy because it automatically imports debts from your Equifax Credit Report so that you can easily select which debts to include in your plan. Your progress is monitored regularly and you’ll receive monthly updates of whether you’re on or off your debt payment plan.

This allows you to select the debts that you want to include in your plan. You determine how much money you have available to pay toward your debt each month, as well as whether you can afford to pay any additional money. The Fast Pay Plan Wizard selects a target account to be paid off first, and you pay the minimum balance- plus any additional amount you are able to over the minimum payment- while continuing to pay the required minimum payments on your remaining balances. Once your target account is paid off, the payments(including the first target account’s minimum balance) are then applied toward the next debt on your list. This means you’re still paying the same total amount of money each month, but the debt stacking strategy accelerates how quickly you can pay off your remaining debts. You follow this process as you pay off all of the different debts in your plan until you are debt- free.

Unlike other online budget and debt- reduction products, Debt Wise does not require you to import, synch or disclose the user names and passwords associated with your financial accounts to create a debt payment plan.

In addition, you will have credit monitoring, a commitment calculator estimating how long it will take for you to free yourself from debt based on the amount you are able to pay toward your debt, spend smart tools, four FICO scores each year and identity theft insurance.

Stop adding to your debt.
Paying down your debt doesn’t mean you’re going to be able to get out of debt unless you curb your spending. Create a budget for yourself, including your debt payments, and stick to it. In addition to your debt, add all of your required expenses like utilities, insurance, taxes and food costs. Also, to keep the January bills to a minimum next year, consider creating a savings account just for holiday presents, and contribute to it all year long.

Make cuts if needed.
As you start budgeting, you might find that your money isn’t stretching as far as you’d like. Look over your expenses and determine whether you can make cuts. Consider cutting back on cable or satellite services and cell phone extras, switching to generic brands of food and clothing, leaving your car at home and taking the bus or walking or biking, and selling items you don’t use. You might also decide you need to take on a second job to bring in a bit more money.

By getting a handle on your debt this year, you’ll be less likely to feel the squeeze of holiday debt after the decorations come down.

Get your 3 credit score before a counselor

admin — Wed, 16 Sep 2009 02:19:20 +0000

Dear Action Line: I need to improve my credit score to qualify for a home loan, and I’m told I should go through credit counseling for this. How do I find a legitimate credit counseling agency? — S.P., Tulsa.

Fair Isaac Corp., inventor and owner of the “FICO credit score” (used by 90 percent of U.S. banks in making loan decisions) says on its Web site that the last thing a financially struggling consumer needs is to be stung or misled by an unscrupulous credit counseling agency. Some are in it just for the money — not for you.

Certification: The quickest way to find a legitimate agency is through the National Foundation for Credit Counseling. It educates and certifies each member as a Certified Consumer Credit Counselor. It requires strict quality, financial and ethical standards of its members, annual audits by independent CPA firms and written action plans to be provided to each client with quarterly statements. NFCC certification means counselors have passed a rigorous battery of tests measuring their financial knowledge.

Accreditation: The agency should also be accredited by an independent third party — “self-accreditation” is not what you want. A reputable third party accrediting body is the Council on Accreditation — at tulsaworld.com/CouncilAccred . Such accreditation signifies that appropriate checks and balances are in place to protect consumers from being victimized by excessive fees or even fraud.

Tax status: The agency should be a 501(c)(3) “nonprofit community organization.” Being a nonprofit doesn’t guarantee it is legitimate, but this status is a good sign.

Board of directors: Board members should not be paid nor be family members or friends of the president but should represent a wide cross section of community and civic interests.

Services offered: The agency should offer a wide range of services, including budget counseling for those who are not in debt; debt counseling for those who may need professional assistance digging out; and housing counseling for pre-rental, pre-purchase, first-time homebuyer, reverse mortgage and foreclosure prevention. It must also offer court-mandated bankruptcy pre-filing counseling and pre-discharge education.

Fees: Details on service fees charged by the agency should be available to callers. No fee should be assessed prior to provision of services. Beware of agencies that say their fees are “voluntary” — you get what you pay for. Any set-up fee or monthly fee should be reasonable: $50 or less for set-up and around $25 monthly. The agency should be willing to waive all fees for true economic hardship.

Counseling method: Does the agency offer in-person counseling, counseling by phone or Internet counseling? Does it provide educational classes or workshops, and is there a fee to attend? Are any of these tools offered online? The absence of any true education offered to the general public is a red flag. See more NFCC advice at tulsaworld.com/NFCCguidelines .

Source: Tulsa World