Financial Superstitions

Today, on Friday the 13^th people everywhere are avoiding black cats, walking under ladders, throwing salt over their shoulder and knocking on wood. 

People are always looking for a “reason” something has happened or will happen,  and believing in superstitions is a common way to feel like we are a bit more in control.  It also can be comforting to think that a superstition will help you predict the future, and how much money you’ll have down the road.

Let’s take a look at some common financial superstitions.

“Don’t put your purse on the floor or you’ll stay broke.”

Do you think dropping your handbag on the floor is bad luck?   Well, this could be true if important information such as your wallet filled with identification and credit cards fall out, and into the hands of an identity thief.  Every 3 seconds a person becomes victim to identity fraud.  Instead of worrying about the superstition of where you put your purse, focus on keeping all of your financial information safe and secure. 

If you do happen to have your identity stolen make sure to take the proper steps with your creditors and the bureaus as quickly as possible. 

“Bubbles floating on top of your morning coffee signify money is on the way to you.”

Who would think that your morning cup of java can predict your financial future? Of course, it can’t, but for decades people have thought that the tiny bubbles in their coffee may mean that money is on the way.  

Tomorrow morning, try swapping counting bubbles in your coffee for counting how much you’ve saved in your retirement fund or the points you could tack onto your credit score by reducing your debt. That’s a more solid means to predict your financial long- and short-term future.

“Find a penny, pick it up, and all the day you’ll have good luck.”

Would you walk past a penny lying in the street that’s not heads-up and risk jinxing yourself with loads of tails-up bad luck?

The roots of this superstition have been traced back to our 17^th president, good old Honest Abe.  Legend states that a face down penny represents Abraham’s Lincoln ill-fated night at the theatre, so you think you’ll somehow suffer similar ‘bad luck’ if you handle a penny the wrong way.

Don’t worry about encountering bad luck if you pick up a penny—no matter which end is up. Instead, let the penny be a reminder of the steps you can take to control your debt and improve your credit score.  And then pick up the penny. It’s silly to walk past free money. 

Tuck that penny in your wallet or purse for a constant reminder that no matter how superstitious you are, you—and not luck, fear or tiny bubbles—are the one in control of your financial destiny.

Best of luck, I mean…..break a leg.

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Protecting Your Identity While On Vacation

Vacations are meant to be a time for you to relax and to enjoy yourself. It’s likely that the last thing on your mind when you’re vacationing is becoming the victim of theft.  However, vacation time is also when identity thieves are at their busiest.

With the peak travel season already in progress, here are several ways you can battle ID thieves while on the road:

■Place a hold on your mail. An overflowing mailbox can attract thieves looking for an easy way to steal personal information.

■Don’t announce travel plans on social media. The information invites ID thieves to target your house while you’re away.

■Clean out your wallet. Do you really need eight credit cards and your library card on vacation? If you lose your wallet, it’s just more that you have to deal with.   

■Leave your laptop at home. If you must bring it, update your anti-virus and anti-spyware programs. And don’t access bank accounts while in a hotel room, coffee shop or other public Wi-Fi location.

■Freeze your credit with the three national credit bureaus — Equifax, Experian and TransUnion. A freeze blocks access to credit reports that lenders use to grant credit, which should prevent thieves from opening new accounts in your name.  You can remove the freeze when you return.  Rules vary by state, but in some states, credit bureaus can charge a processing fee of up to $10 for a security freeze. There’s no charge to remove it. (People 65 and older and victims of ID theft can obtain a freeze for free. ID theft victims also can temporarily lift the freeze for a specific party or period of time at no charge.)

■Set up a travel alert on your credit card accounts. Call the 800 number to notify the card issuer where and when you’ll be traveling, especially if you’re going abroad. (If you don’t, the fraud department could mistakenly flag your account and deny your transactions.)

■While staying at a hotel, lock important documents such as your passport in a safe.

■Protect your smartphone. Create a password for access in case it is lost or stolen. Use an application with a GPS locator to find it.

■Use ATMs located at banks. Unbranded machines may be less secure and the fees often are higher.

■Don’t put your full name and address on luggage tags. The idea is to limit personal information that could fall into the wrong hands. Your last name and phone number are enough information to contact you if your suitcase is lost.

■Tear up and discard used boarding passes, which often contain personal information.

To learn more about identity theft and what to do if you become a victim, visit www.ftc.gov/idtheft.

How To Protect Your Identity After a Natural Disaster

After a natural disaster, you may not see identity theft as a primary concern, -but evacuations and a lack of home security can put your sensitive information at risk. Learn what can make you vulnerable and what measures you can take to protect yourself and your family after a disaster hits close to home.

After a disaster, you’re focused on the basics: finding a place to stay, securing food and water, and, above all else, protecting your family. But during this uncertain time, it’s important to pay attention to more subtle threats as well-including the heightened risk of identity theft and fraud.

One reason identity theft is such a big concern after a natural disaster is that criminals know that affected areas have been evacuated and are ripe for looting. Not only may many of your personal papers be strewn about the area, but In the rush to flee with only the essentials, many people leave behind important documents, such as birth certificates and social security cards. MCMF recommends storing those items, along with a copy of other important financial or identifying documents in a locked box or large waterproof plastic bag and taking them with you when you evacuate.

Common types of scams include:

• “Phishing Scams”: Thieves pretend to call from a company that lost data-such as your bank account, credit card or social security number. No matter how official the caller sounds, never give them your information. Legitimate companies will not contact you this way.

 

• Relief Group Solicitations: Scam artists call and ask for donations in the wake of a disaster. Remember, however, that during a time of crisis groups don’t really have time to do anything but attend to the needs of disaster victims. You should donate to a reputable organization-only if you are the one to make contact first.

 

Preventative Measures:

Contact all of your credit cards and alert them of the situation—they may advise you to cancel the card, and reissue you another one. 

Contact your bank and explain the situation.  Many banks offer various types of fraud protection.  Now may be the time to sign up for one of those services.  At the very least you will want to change your password to all of your accounts.

Set up on-line payments.  More than likely you may not be getting mail at your home address immediately after the disaster.  Setting up all of your bills to be paid on-line, is an easy way to keep track of everything during this stressful time.  You may even want to set up direct drafts—whatever you choose—keep it simple and easy—and make sure you don’t miss a payment. 

Check your credit report—I wouldn’t advise placing a credit freeze or fraud alert on  your credit report at this time, because more than likely now more than ever you will be making quite a few purchases and will need access to credit.  By pulling your credit report—you can see everything that is on your report and note it’s accuracy.  Check it again every Quarter for at least the next year to ensure accuracy.

 

 

Credit Scores Continue to Be Misunderstood

Key factors about credit scores continue to be widely misunderstood, and the misconceptions are potentially costing consumers tens of thousands of dollars, according to a conference held today by the Consumer Federation of America and VantageScore Solutions, a FICO competitor.

“People who fail to understand exactly what can impact their score have little incentive to manage the things that can truly make a difference,” said Barrett Burns, president and chief executive of VantageScore Solutions.

Today FICO released data showing just how malleable credit scores are. For consumers with FICO scores of 750-799 in October 2011, a year later, 21% of them had moved into the 800-850 score range (850 is the top FICO score); 58% stayed in the same range; and 21% moved to a lower score range.

Here’s what you need to know to keep your score up.

Student loans

If you co-sign a student loan for a child, your score is likely to decrease. Then it will improve if your child makes payments on time. Just one missed payment—even if it’s 10 years later—will impact your score. Defaults can be “devastating” to a consumer’s credit profile.  Statistics show only one –third of those surveyed know about all of these consequences of co-signing a student loan.

Shopping for a mortgage or car loan.

More than a third of folks surveyed thought that each time a lender makes an inquiry re your credit score, it can lower your score. But multiple inquiries relating to a mortgage or auto loan won’t lower your credit score if bunched into a one to two week window. The multiple inquiries are counted once to make sure rate shopping isn’t penalized. This is important because consumers who believe inquiries will lower scores will be less likely to shop around for loans and that can cost them an additional tens of thousands of dollars in interest costs.  On the other hand, applying for a lot of store credit cards would raise a red flag,and could potentially lower your credit score.

Age and Marital Status.

Two-fifths of folks incorrectly believe that age and marital status can impact their credit scores. Ethnicity, religion, and geographic location also don’t affect your score. A credit score measures the risk that you won’t pay back a loan. What impacts your score? High balances on credit cards, personal bankruptcy, missed payments and taking out unnecessary loans.

The cost of a low score.

On a $20,000, 60-month auto loan, a borrower with a low credit score would typically pay more $5,000 more than a borrower with a high score. Only one out of five folks got this one right.

Raising your credit score.

The good news is that 58% of folks know how to raise their credit score by taking action. Pay your bills on time every month. Don’t max out—or come close to maxing out—credit card limits (try to keep any balance under 25% of the credit limit). Pay down debt rather than just moving it around. Don’t open multiple new credit accounts. And finally, check your credit reports to see that they are error-free either online at www.annualcreditreport.com or by calling 1-877-322-8228.

Yikes! I have a Judgment on My Credit Report!!

A judgment is a decision by a court describing the outcome of a lawsuit. Any amounts owed will be described in the judgment. With a judgment the creditor often has the ability to go after wages, bank accounts or other property to collect the judgment, depending on state law.

How to Find If You Have a Judgment Against You

In most cases, when a creditor gets a judgment against a consumer it will be reported on the consumer’s credit reports. That’s because court judgments are a matter of “public record” — information available to the public through the courts. That information, like bankruptcy or foreclosure data, is collected by companies that provide it to the credit reporting agencies.

Your first line of defense, then, is to check your credit reports. At a minimum, order your free credit reports once a year at  AnnualCreditReport.com  Judgments will typically be listed under the section describing negative items on your report.  If a judgment does appear, you will want to know as soon as possible, for several reasons, not the least of which is that your score will likely drop significantly.

Ok, so you do indeed have a judgment….now what do you do?  You generally have three options.

1. Fight it.

Before a creditor gets a judgment against you, it must typically serve you with the summons and complaint. The procedure varies by state and by court.  If a person hadn’t been properly served and knows the legal process, then they can type up a motion to vacate a judgment or a motion to set aside a judgment.   Then there will be a hearing,  But even if the judgment is successfully set aside or vacated, it may not be the last the debtor hears about the matter. It may start all over again.  My advice is to seek an attorney and let them advise you on how to best fight it.

2. Pay if off or settle it.

If your financial circumstances have changed since the time you fell behind on the debt, you may now be able to pay the judgment, either in full or for less than you owe as part of a negotiated settlement. Make sure the creditor files a “Satisfaction of Judgment” with the court indicating that it has been paid. When you pay in full, they are required to do so within a specific time period, so don’t be afraid to push for that.

If you negotiate a settlement, ask the creditor or collection agency to agree to file a satisfaction of judgment when you pay the agreed upon amount.  Make sure you get everything documented! Often,  it’s not always followed through on. If the court records haven’t been updated within 60 days or so, you may have to file your own motion with the court.

Paid judgments can be reported for seven years from the date that they were entered by the court, while unpaid judgments can be reported until the statute of limitations has expired — a much longer time period in most cases. That means that if the judgment is more than 7 years old then paying it should result in it being removed from your credit reports. It may take a little while, though, for the court and credit reporting agencies records to be updated. You should expect results within no later than 60 days after you have paid it.

3. Wipe it out in bankruptcy.

If there is simply no way you can pay the judgment and you don’t want it hanging over your head indefinitely, find out whether you can discharge some or all of it (erase it) by filing for bankruptcy. Most court judgments can be included in bankruptcy.

Whatever you do, don’t ignore a judgment. In most states, judgment creditors have 10 years or more to collect, and can renew judgments that remain unpaid for another decade — or longer. And that means at any time you may find your bank account or wages at risk (again, depending on state law).

To avoid an unpleasant — and potentially expensive — surprise, find out if there is a judgment against you. If there is, find a way to put it behind you.

 

The Road To Improving Your Credit

Among the realities of modern life is that most of us, at some point, will need to borrow money. Even if all you do is borrow to buy a home, you will still need good credit when the time comes.

Additionally, even if you decide that you don’t need to borrow money at all, there are still those who are interested in your credit. Even if you aren’t borrowing, there are some ways that your poor credit may be costing you, from higher insurance rates to problems finding the rental you want.

The road to good credit, is not always an easy one, but if you want to improve your credit in 2013, here are 5 simple ways to help you construct a solid credit score

1. Dispute Inaccurate Information

Credit report errors are surprisingly common, and some of them can even impact your credit score in a meaningful way. One of the best ways to improve your credit is to dispute inaccurate information on your credit report.  .

If you find wrong information, write to the credit bureau to have the situation resolved. This is especially important if the inaccurate information is a fraudulent account. Check your credit report for free to find out if your credit score is being impacted by negative items.  While you can’t have accurate negative items removed, you can have the errors taken care of, and that can help your credit situation.

2. Make All Your Payments on Time

Your payment history is the most important part of your credit score. If you pay on time, and in full, each time you owe money, this will help you keep your credit in good shape. Even non-credit items should be paid on time. Even though paying the rent or your utilities when you should won’t positively impact your score, realize that paying late can negatively impact it if your laxity is reported.

3. Reduce Your Debt

Another important factor is your credit utilization. If you are utilizing a great deal of your debt, it can serve to bring your score down. Pay down some of your debt, and you could see an improvement in your credit score this year. Combine paying down your debt with making your payments on time, and you could see a significant improvement in your credit situation over time.

4. Think Twice Before Cutting Up Your Credit Cards

It might be tempting to cut up your credit cards and cancel your accounts, but that might do more harm than good — especially if you haven’t yet paid down your debt significantly. Additionally, the length of your credit history matters, so you could end up causing problems for yourself if you cancel an older account.  Canceling your credit cards can be problematic. So, if you want to improve your credit in 2013, you might want to think twice before cutting up your credit cards. Carefully think about your situation, and consider keeping your card accounts open a little while longer.

5. Open a New Type of Account

If you are on track with the other aspects of your credit, it makes sense to open a new type of credit account. If you don’t have an installment account, it might make sense to borrow a small amount to pay back over time. Varying your accounts can be beneficial to your credit profile.

As you work to improve your credit in 2013, it’s important to understand that good credit doesn’t happen overnight. It can take three to six months, or even longer to see any improvement.  There are no shortcuts if you want good credit that lasts a long time. Instead, you need to develop solid financial habits, and approach your credit carefully. It’s important to think through your money decisions, and carefully watch out for pitfalls. Your credit is an important part of your finances, and you don’t want to jeopardize it. And, if it is already in trouble, you want to start improving it right now.

 Make a plan to boost your credit in 2013, and you will be in a better position to save money over time.

 

Strategies to Help You Erase Debt in 2013

if you are like most you started the year off with a list of “Resolutions”.  You probably started the year by saying to yourself “This will be the year I finally erase all my debt.”  But now that spring is already here, how have you done with sticking with your financial resolutions?  With almost 88% of all New Year’s Resolutions failing, sticking to your budget may be harder than you think.  The reason?  Our brain is wired to do the same thing year in, and year out, therefore making it very hard to actually change the behaviors that got you into debt. 

Here are some Tips to help you understand your debt behaviors, as well as tools to help you combat the temptations of spending.

We all tend to overestimate our own willpower and self-control when we set resolutions.  We REALLY believe that for whatever reason THIS YEAR will be the year “I stick to it”.  Planning to be virtuous is easy and it feels achievable. Actually avoiding temptations is much more difficult.

• Be realistic with your reaction to temptations.
• Give yourself room to re-adjust the budget if the original plan isnt feasable.

 

Our brains discount future consequences for ourselves when we want instant gratification. How many times have you eaten a calorie laden meal right before you started your big diet?  That is because our brain is saying “go ahead, eat the cake…those calories are for that person starting a diet tomorrow”, it almost makes  you feel like that is a different person, therefore not recognizing the consequences for yourself right then and there.

• Take the decision-making out of your own hands.
• Set up your paycheck so a portion automatically goes into savings without you ever seeing it and being tempted to spend it instead of save it.
• Keep credit cards at home—this completely eliminates those impulse buys

 

Credit card spending doesn’t feel as “REAL” as spending cash. When we pay with cash, we feel the pain of losing the money immediately, but paying with a credit card delays the sense of pain until the bill comes. And because we pay our credit card bills electronically, there is a further sense of unreality to the amount of money you owe. The further you get away from cash transactions, whether that is in the initial point of purchase or in the bill paying, the less likely you are to feel the pain and urgency of your debt.

• Start paying with cash instead of credit
• Disperse your monthly “allowance” into envelopes of cash.  As long as you have money in the “shoe envelope” you can buy shoes.  If it’s empty, you got to wait until next month—even if they are on sale! 

These strategies will help you change your behavior habits, by giving yourself  time to actually think about your spending habits.  By understanding WHY you spend, you can begin to develop the discipline necessary to pay off your debt.

 

Understanding Your Credit Report: Taking a Close Look at Each Component

You are ready to tackle your bad credit and you want to increase your credit score so you just ordered your credit report. But, if you are like most people, you have a hard time understanding what your credit report means let alone interpreting all of the information it contains.

Although each credit reporting agency may have a slightly different format, all credit reports contain basically the same categories of information.

We at MCMF have created a list of everything included in your credit report.   

Please review each item for accuracy. 

Personal Information

• Your name, spouse’s name, Social Security number, birth date
• Current and previous addresses
• Current and previous employers
• Comes from your past credit applications

Summary

• An overview of your accounts and credit profile
• Use to compare information from all three credit bureaus

Account History

• An account record all of your creditors i.e., credit cards, installment and mortgage loans, and other sources
• Includes date opened, amount, balance, monthly payment and payment pattern going back several years
• Shows how much credit you have and how you’ve repaid your debts – on time or past due
• Includes if you have a payment plan or arrangement with a creditor, if the account was turned over for foreclosure or repossession or if it was in collection
• Creditors are especially interested in your  last 24 months of payment history.  This helps them predict how you will pay in the future.
• Can stay on your report for up to 7 years 

Public Record Information

• Bankruptcy, foreclosure, tax liens, monetary judgments, court ordered alimony and child support, garnishment
• Bankruptcy information can stay on your report for up to 10 years

Inquiry Information

• Shows who asked for your credit report within the past two years.
• Pre-approved offers and on-going inquiries from companies that you do business with will not affect your credit score. 
• Filling out too many credit applications can have harmful effects on your credit score.
• It’s wise not to have more than six inquiries a year.

Consumer Statement

• Can attach up to 100 word statement to your report.
• Can explain a change in your payment history –for example, why you were late making payments.
• Only mortgage lenders review the consumer statement.

Alert Messages

• Military alert or fraud alert from being a victim of identity theft.
• Fraud alert is good for 90 days and can be extended for seven years

 

A Tribute: The 7 Habits of Highly Effective People

Stephen Covey’s Book, The 7 Habits of Highly Effective People was deemed one of the 25 most influential business books by Time Magazine.  It seems everyone I know has read it, and it is one of those business books, that simply makes sense.

Today I wanted to pay tribute to this great author by showcasing a summary of his most famous book.

Enjoy!

• Habit 1: Be Proactive

Take initiative in life by realizing that your decisions (and how they align with life’s principles) are the primary determining factor for effectiveness in your life. Take responsibility for your choices and the consequences that follow.

• Habit 2: Begin with the End in Mind

Self-discover and clarify your deeply important character values and life goals. Envision the ideal characteristics for each of your various roles and relationships in life. Create a mission statement.

• Habit 3: Put First Things First

Prioritize, plan, and execute your week’s tasks based on importance rather than urgency. Evaluate whether your efforts exemplify your desired character values, propel you toward

 

The next three have to do with Interdependence (i.e., working with others):

• Habit 4: Think Win-Win

Genuinely strive for mutually beneficial solutions or agreements in your relationships. Value and respect people by understanding a “win” for all is ultimately a better long-term resolution than if only one person in the situation had gotten his way.

• Habit 5: Seek First to Understand, Then to be Understood

Use empathic listening to be genuinely influenced by a person, which compels them to reciprocate the listening and take an open mind to being influenced by you. This creates an atmosphere of caring, respect, and positive problem solving.

• Habit 6: Synergize

Combine the strengths of people through positive teamwork, so as to achieve goals no one person could have done alone. Get the best performance out of a group of people through encouraging meaningful contribution, and modeling inspirational and supportive leadership.

The Last habit relates to self-rejuvenation:

• Habit 7: Sharpen the Saw

Balance and renew your resources, energy, and health to create a sustainable, long-term, effective lifestyle. It primarily emphasizes on exercise for physical renewal, prayer (mediation, yoga, etc.) and good reading for mental renewal. It also mentions service to the society for spiritual renewal.

4 Reasons to Monitor Your Credit Report Annually

In a tough economy people will do what they can to make ends meet, even if it’s illegal. Unfortunately this has sent identity theft skyrocketing in recent years. This makes it more important than ever to protect your most important financial asset, your credit history. Identity thieves can destroy your credit history leaving your life in shambles. Credit monitoring services promise to help prevent identity theft and may even provide insurance in the event that your identity is stolen.

#1: Prevent Identity Theft

When you use a credit monitoring service you will be updated immediately when changes are made to your credit report. This can help you to stay one step ahead of any potential identity thieves. The sooner you discover that your identity has been stolen the better your chances will be to prevent serious damage to your credit report and credit score. Only a credit report monitoring service can help you detect any fraudulent activity on your credit report as soon as it happens.

#2: Prevent Unauthorized Updates

Most people don’t know it but there’s a form of identity theft where the thieves will actually change personal information on someone’s credit report to hijack accounts. These updates can be detected instantly by a credit report monitoring service. If you find an unauthorized update has been made you can quickly freeze your credit report and prevent any additional unauthorized access.

#3: Additional Tools

Credit report monitoring services will typically provide a wide range of tools you can use to analyze your credit report, look for areas to improve upon and even submit disputes online rather than by mail. This can help to save you time when viewing your credit report as a detailed analysis can quickly show you blemishes on your credit report which may be inaccuracies that need to be reviewed.

#4: Security

Most credit report monitoring services also offer additional levels of security such as internet scans they can use to identity whether or not your personal information is being bought and sold online. You just can’t get that type of service anywhere else. If you’re serious about keeping your credit history perfect, a credit report monitoring service may be the perfect choice for you