Why Does Credit Matter?

Insurance providers use credit scores to provide customer premiums because research has shown that there is a relationship between how people manage their credit and finances and possibility of a consumer filing an insurance claim. Those with good credit who pay bills on time consistently are shown to be more stable than consumers who make late payments or miss them entirely.

How to Find a Good Premium

One way to ensure a good premium is to boost your credit score. You can clean up your credit relatively easily by paying bills on time consistently , not overextending your available credit, and keeping accounts active but to a minimum. Request copies of your credit reports and scores to see where you stand and then work to dispute inaccurate information. These simple steps can increase your credit score and help you find more options for your auto insurance coverage needs.

While repairing your credit does take some time, you can still find the best premiums available by exploring several insurance companies before making a commitment. You can get online quotes but you should also research insurance providers to see who has the best rates for your situation.

You can also investigate the provider you currently have insurance with for other reasons like house insurance. Many providers offer discounts for multiple policies so if they also provide auto insurance you may get a decrease in your proposed premium amount. You may also get discount for being a loyal customer. Check with your current agent to see if they can beat any of their competitor’s premium rates.

Be careful with insurance companies who advertise they cater to people with bad credit. Since some consumers feel they have no other options with providers, they may actually end up paying more by signing on with a ‘bad credit’ insurance provider. Without doing the proper research, consumers may not be aware of what other offers they can take advantage of for insurance coverage. Because it is the law to have auto insurance coverage, there is much more competition in the market these days, especially since many online providers have opened for business. Keep your options open and you will likely be able to find a good deal while you focus on cleaning up your credit.

What Is On Your Credit Report?

Your credit report will contain the vital information about you including your name, current and previous address, your phone number, and your Social Security number. This information is generated from your credit applications.

Also on your report is a listing of all accounts you have currently or in the past. It includes the name and address of the creditor, the date you opened the account, the credit limit or amount of the loan, the balance remaining on the account, the amount of the monthly payment, and the payment plan you currently use to satisfy the debt. The information is generated by the creditors who report your financial data to the three credit reporting agencies Experian, TransUnion, and Equifax. Information can be either positive such as you pay on time as agreed or negative, in that you have missed payments or made late payments on your account.

The credit report will also list information about the names and contact information for all persons who have made recent inquiries on your credit report. The credit reporting bureaus provide this data.

Consumers may also provide the credit card company with statements to dispute the account history which may be inaccurate. The statements are incorporated on the report when a consumer makes an official dispute and it has been investigated. The statements can help a lender make a decision in light of a poor credit history.

Who Can See My Credit Report?

Every consumer is entitled to receive a free credit report each year through AnnualCreditReport.com. A credit score is not included and must be purchased separately. Consumers can also request a copy of their credit history at any time for a fee. In addition to individual consumers, any business or persons who have a legitimate business reason for viewing your credit report can view the information. This information gives lenders insight as to where else you may be applying for credit.

Reporting Timeline

Creditors report the account activity each month to the credit reporting bureaus. Information that is positive is listed on the report for an indefinite amount of time. Negative information typically remains listed for seven years except for bankruptcies which stay on the report for 10 years and unpaid tax liens stay for 15 years. Inquiries into your credit history will show up for a two year time period.

What can you do to create a new life using what you have now? Here are some tips for improving your finances right now to create a better life for you and your family:

Better Planning

With bills mounting and too little pay to go around, there are still some small things you can do to make a big difference. In order to meet your goals, you have to make them. Planning for your future is the only way to clearly see what steps are necessary to reach the place you want to be. Writing down concrete goals for both the short and long-term is a good way to get a visual of what needs to be done. Just thinking about goals isn’t enough. Start with small things such as making an extra $10 payment on credit card bills and then look at the big picture like pay off student loan within a year. The ultimate goal of your planning should be to eliminate as much debt in the shortest amount of time so that your income will be available to you and not just your creditors.

Sacrifice with Short-Term Goals

In order to find the extra cash to make additional debt payments, you have two choices: either find supplemental income or start sacrificing. For most families, a second job is not possible so it comes down to cutting expenses. You might think you’ll never be able to live without cable television but it may be a sacrifice you have to make for six months or a year. Put the cable payment money towards other debts until they are eliminated. Everyone has some areas where they can cut spending but are often reluctant to follow through. You can make all kinds of little sacrifices to get save cash and funnel it towards paying off debts. It may not be convenient to use the Internet at the library for a few months but the hundreds of dollars you save can make a dent in your debt elimination plans.

Forget the Jones’

You may not be inclined to cut out certain things from your life for fear of what the neighbors, friends, and family may think. Here’s the reality: theses people are not paying your bills or suffering from debt stress of your bills. It should not matter what others think and just because you are living a more frugal life to get debt-free does not mean you are any less of a person than anyone else. If you seek success at overcoming debt, you need to forget your pride and focus on the end goal of living comfortably debt-free. Start checking out local thrift stores instead of department stores. Check in with local governmental programs that can help supplement your basic needs until you can get on your feet again. There are more people visiting food banks in the last year than every before to meet their basic needs. There is no shame in caring for your family.

As more time passes, it will become easier to adapt to the new life you are living. Getting creative with frugality so that you can put more towards your debt payoffs means you’ll be debt-free faster. Once you have eliminated the bulk of your bad debts, you will be able to return to your former life and slowly add back the luxuries you took away if you are even interested in them anymore. If you want change, it is up to you to make it happen.

Frugal used to carry a stigma and even though more people are going back to basics, some still find frugality a hard pill to swallow. Cutting out some of the luxuries in your life is not easy but if you want to get rid of your heavy debt burdens, you have to start making some changes towards a more frugal lifestyle.

Frugality can be an eye-opening experience and one that actually stays with you long after a financial crisis is over. It can take some time to adapt to a more frugal lifestyle but it can be well worth the effort and set the stage for a life-long change for the positive. The trick to getting more frugal is to start small. A total overhaul likely won’t stick so you have to do things in stages. Small steps incorporated into your regular lifestyle are more likely to be successfully integrated into your routine so here are some tips to help you get started:

Check Out Discount Stores
If you typically only shop in big name stores for brand named items, take an afternoon to visit the local dollar store or discount grocery outlet. There is often a misconception that these types of store carry only outdated, expired, or low quality items but with the increase in consumer interest in these stores, those notions are far from the truth. There are so many good deals on so many different products (including name brand items), you’ll wonder why you never dropped by before. You don’t have to like everything but give it a try. The money you save can be put into a savings account or used to eliminate your debts.

Clip Coupons
Sure it takes time to clip, cut, and organize manufacturer’s coupons but it can really make a difference in your spending if you do it consistently. The Internet offers plenty of coupon-related resources that make it even easier to save these days but you have to make the effort to find them and use them. Some people think coupons are a waste of time or are only for ‘poor people’. With a few good coupons and store incentives, you can cut hundreds of dollars from your grocery bills in a month’s time.

Back to Basics is a Good Thing
Society is so fast-paced these days, some families can’t even keep up with themselves. A commitment to slowing things down can save a lot of cash. Cut out too many extra-curricular activities and stick with one a season for the kids. You’ll save on registration fees, supplies, and all the expenses that comes with running around from place to place. Make more time for family dinners at home instead of fast food on the go. Keep a list for shopping essentials instead of just hitting the store blindly or making several trips a week to the store for forgotten items. Create family fun at home instead of paying for high-priced tickets to something new every weekend. Living a simpler, family-oriented lifestyle will also likely cut down on the stress of living as well as the costs of living.

Old Dogs Can Learn New Tricks
You may never have fixed a thing in your life, relying on costly repair companies to handle the tasks around the home and with your vehicle. Learning to do some basic maintenance and repair tasks can save you thousands of dollars. Check out the television or a home improvement magazine. These days there are tons of shows of the do-it-yourself nature where you can learn to cut down on the expenses by learning to do things for yourself. The money you save can be saved for when a major repair is necessary. Plus, the skills you develop will stick with you for life and you may find a new interest and enjoy doing what you’ve learned.

Credit counseling agencies typically offer budgeting information, debt reduction tips, and lessons in better money management. Sadly, not all companies are operating on the up-and-up and consumers who do not research the agencies thoroughly can find themselves deeper in debt from incurred fees and without the proper tools to get rid of debt.

Before committing to a credit counselor, you should conduct a thorough screening of several agencies to decide which offers the services you need. Here are 8 questions you need to incorporate into an initial interview to help you weight the pros and cons of each company:

1. How experienced are the counselors?
Consumers need professional guidance and there are several fly-by-the-night individuals who promote themselves as such but have no proper training to help a debtor. Ask for credentials and check with your own state’s laws about what licensing may be required. Check also for affiliations with national organizations like the National Association of Certified Credit Counselors (NACCC), National Foundation for Credit Counseling (NFCC) or the National Institute for Financial Education of America (NIFE).

2. How much time is devoted to client consultation?
You want a counselor who is there when you need questions answered. Anyone presenting a high-pressured sales pitch but no extra time for guidance is not the right person to help. If during your initial consultation you feel rushed or spoken to in any condescending manner, thank the counselor for their time and move along.

3. How much are fees and how are they paid?
Some consumer credit counseling agencies offer their services for free but not all operate that way. Ask upfront for a written breakdown of services and total cost. A red flag for a bad company would be an insistence on retainer or enrollment fees. Be very clear on pricing so you’ll know exactly what to expect.

4. What debts are within the scope of counseling help?
There are some types of debts that a counseling agency can not help your resolve. Before you commit to getting help, ask what kind of debts can be handled and eliminated through the agency’s help. Be sure you know exactly what debts you owe and to whom so your consultation will be accurate from the start.

5. What are the additional services provided?
Eliminating debt is only half the battle. For those with financial problems, it is important to find help before, during, and after the debt elimination process. Ask if the agency offers debt management tools like budgeting course and find out if they have follow up programs for after care concerns.

6. How will the account be managed?
You’ll want to know how you can access your account information to better track your results. Some companies offer online services where you can log in to your account at any time and others only provide paper statements monthly. As a debtor, it is ultimately your responsibility to ensure your debts are handled properly and you must stay on top of how your account is being handled every step of the way.

7. How does the program work?
Be sure to get an outline of what the counseling agency will be doing for you and when. Ask if they will be handling collection calls and what you need to do to ensure the job is getting done. You’ll want to get an overview of what will happen and when so you can anticipate your own financial goals and ensure you can make payments on time.

8. What does the contract mean?
Before signing up with any agency, make sure you receive a copy of the contract or agreement you will be required to sign. Read the entire contract and make sure you ask any questions or address any concerns you have before executing your signature.

One of the wasteful spending habits of consumers occurs while shopping. There is a thin line between needs and wants and for some, there is simple no line to see at other than the one at the check out counter. If you have mounting debts and can’t understand why, you may want to consider what kind of shopper you are.

The Impulsive One
Impulse shopping is almost impossible to resist because the stores are working against the consumer. They have set up their displays and merchandise in such a way that many good shoppers still can’t resist the last item grab at the check out aisle. Seemingly innocent products suddenly become gotta-have-its. One goes in to the store for milk and comes out with a deck of cards, some hand sanitizer, and a candy bar.

Impulsive shopping all comes down to a shopper being cognizant of their wants and needs. The ‘needs’ category cover the basics in life like food, shelter, and clothing. The ‘wants’ are the items you just can seem to resist.

Beating the impulse shopping game means being aware of how you shop each time you go to the store. You can start by only running to the store when absolutely necessary and avoid the malls when you feel you have nothing else to do. Also, make every trip with a  specific list in your hand and be prepared to get only what is on the list. It may take some getting used to but impulsive shopping habits can be curbed. Once the reality of savings begins to see the light of day, many shoppers may find it easier to change their ways. Additional measures you can take to avoid the impulse is to shop only with cash and leave the credit cards at home. Making the decision to skip the impulses before even entering the store can make a world of difference in your success.

The Compulsive One
Compulsive shopping is a different scenario than impulsive tendencies in that it may be more psychologically hard to conquer. Compulsive shopping is an addiction and those who participate in the activity often use it as a form of self-medication. There is a high when the purchase is made and a low when the bill arrives. Instead of smoking dope, compulsive shopper’s drug of choice is spending.

If you feel you have racked up thousands in debt because you have little control over your shopping habits, it is important you seek professional help. Admitting you have a problem is the first step a compulsive shopper needs to take. Otherwise, spending can become totally out of control and debt will begin to take over. There is no shame is seeking counseling for compulsive shopping habits and the sooner you seek professional guidance, the faster you can leave your debts behind and get back on financial track.

Your fixed monthly expenses may be one area to review if you want to save some additional cash. One fixed expense that could be reduced through a refinance is your auto loan. Depending on the terms of your loan, you may get a better deal the second time around. However, everyone’s situation is different and a vehicle refinance may not always be the right decision for everyone.

Here are 4 signs it may be the right time for a vehicle loan refinance:

Your Car Note is Too High
If you can no longer afford your monthly car note because of a change in your financial situation, you may consider a refinance that will extend the term of your loan but give you smaller monthly payments. Depending on the terms of the new loan, you can save a quite a bit of money, keep your car, and have more time to complete the loan.

You Want to Save on Interest
If you borrowed on five year terms during the initial loan, you may want to consider a refinance to a shorter term. You’ll pay more money on your monthly note but at the same time can save hundreds of dollars in interest charges for an entire year.

Interest Rates Are Lower Now
You can save thousands by refinancing a old loan to one with a lowered interest rate. Perhaps when you initially made the loan your interest rate was high but you’ve been watching the current rates go lower and you know your credit score is good. By refinancing the remaining balance left on the vehicle, you’ll have a smaller payment and save thousands on the total price of your vehicle.

You Need Equity Cash
If you are in need of some cash for debt consolidation or an emergency situation, you might consider refinancing the loan for the equity. This will work if you are nearly done paying the loan and if you still have a good credit standing.

Remember that in order to get the best interest rate and terms for an auto refinance, your credit must be in good standing. Refinancing your vehicle should be done for the betterment of your financial situation and not to your detriment. Be sure you can afford the new loan terms and always shop and compare terms from other lenders before making a decision.

• Variable expenses are the ones that change from month to month including groceries, gas, clothing, and entertainment.
• Fixed expenses are the ones that remain relatively the same from month to month such as your auto loan, mortgage loan, or student loans.

Consumers have several options for cutting expenses if they stay on top of their spending. Typically people look to their budgets and cross out spending for entertainment, dining out, cable television, and other luxuries usually categorized under variable expenses. Seldom do consumers consider the huge savings that can come from reducing fixed expenses.

Granted it may be easier to buy less groceries than it would be to shop for a new loan, but if you are looking for a way to cut costs each month, here are some reduction areas you might consider for saving money.

Mortgage Loan Refinance
Even if you have no problem making your current loan payment each month, you may want to consider the original terms of the loan and see if you can do better now. The interest rates may be lower and you may have better credit now than in the past so a refinance would make sense. Additionally, you can get a new loan term that would enable you to pay off your home in a faster period of time, eliminating even more debt.

Vehicle Loan Refinance
Your current vehicle loan may be at an interest rate that is too high for current times so a refinance would help you not only cut costs but save in interest charges over the life of the new loan terms. A better deal during a refinance may mean you pay less for the vehicle, pay less monthly, and satisfy the loan early.

Home Equity Loan
If you have decent equity in your home and have the good credit to qualify for a home equity loan at this time, you can use the money to eliminate other debts and reduce your overall monthly expenses. A home equity loan may be a great way to become debt-free but it doesn’t come without risk. With your home as your collateral, a default on the loan could mean losing your house. Only go with a home equity loan if you know you can afford to make on-time, monthly payments and still satisfy your other monthly obligations.
 

Not one bit.

The solicitations you are receiving stem from your credit report and third-party companies have the ability to purchase your information from the credit bureaus. The program, known as a trigger lead program,

How Does a Trigger Lead Work?

Any time you apply for credit and authorize a lender to request a copy of your credit report, the information on your report is automatically reported into the trigger lead program. The information is pooled into a searchable database so that third-party companies can search specific criteria in the data pool and select individuals that make up their target audience. The search data can include your gender, age, residence state, monthly mortgage amount, annual income amounts, and credit score.

For instance, companies who are targeting consumers in Ohio that make $50,000 a year and have a credit score of 600 or less can purchase the names of all qualified individuals from the credit bureaus and use the data to solicit business. The process of selling trigger leads is rather fast and your information can be in the hands of other within 24 hours.

Are Trigger Leads a Good Thing?

For some people, trigger leads make it easier to comparison shop among different companies offering the same services and products. Since the information is sent directly to you, there is less research to do on your own. For other people, the idea of having their private information sold and bought is dangerous and leaves the door open for incidents of identity theft, especially since there are no limitations being place on how much or how often the data can be sold.

How To Stop the Leads

Consumers can opt out of the trigger lead program and stop information from being sold to other companies. To stop the leads, you can complete the consumer credit bureaus’ official online form at this website. Your opt out confirmation will eliminate trigger leads for a period of 5 years. If you visit the site and complete the mail-in form for opting out, the request will stop the trigger leads permanently. Once your application is completed, it will take at least five days for your request to be confirmed and effective.

Here are some tips to help you save money on your homeowner’s insurance:

Compare to Save

When you first purchased your home, you may have felt pressured to find an agent and a policy to make it to closing. Since some time may have passed since that day, you may want to reconsider the policy you currently have as well as the provider you use. Use friends and family for referrals or look at different insurance companies online. Speak with several companies to find out what discounts they offer and what they can do to beat your current policy.

Consider Your Deductible

Your deductible is the amount of cash you have to pay out of pocket before the insurance coverage will kick in. The higher your deductible is, the less you may have to pay monthly which can save you considerably over time. Be sure you can afford to pay the deductible you select should something happen.

Ask for Discounts

Whether you plan to stay with your current insurance company or if you have chosen to venture somewhere else, you can ask for discounts directly. There may be loyalty discounts or updated breaks based on your home’s features. In some cases, you may never discover the discounts you can get unless you ask first.

Make Improvements

There are some simple things you can do to your home that can reduce the cost of your insurance premium. Adding smoke detectors or an alarm system can help you save money. Ask your insurance agent about inexpensive adjustments you can make to cut down the costs of your insurance.

Choose Your Dog Wisely

Large dog breeds like Rottweiler and Dobermans can increase the cost of your insurance premium. Before you pick out a puppy, check with your insurance agent about which breeds have an effect on your insurance premium.

Stop Smoking

Some insurance companies will offer discounts to customers who do not smoke so make sure you let your agent know if your home is completely non-smoking.

Put All Your Eggs in One Basket

If your insurance provider offers coverage for other things, ask about the savings you can get by adding coverage for your vehicles and life insurance coverage with one company. By consolidating, you can earn significant discounts on all of your insurance premiums.