Saturday, June 11, 2011

Know Your Credit Scores.... for FREE!

I recently stumbled upon this website called Credit Karma. Its a free credit checking website, and I do mean FREE.  You simply sign up for a free account and they pull your credit info for you. Credit Karma gives you helpful tips on how to save more money, and does not require a $1 hold with your credit card like the major credit bureaus do.  They have different types of "calculators" and a credit simulation page where you can pretend to add different things that will effect your credit like a new credit card, a loan, or closing a credit card, or raising your credit limit on a card. When you click on these certain things it will then tell you how its going to effect your credit, either negatively or positively. 

It is so important to success in life, if you have poor credit banks view you as a risk, so this means no mortgage loans, no car loans, no student loans, or a loan with an incredibly high interest rate. Yeah, you may get the money you want, but you spend the next 30 years paying off the interest.

Some corporations only hire people with great credit, because it shows that you are responsible. Regardless of the situation that got you into debt, corporations don't look at the why, they look at the numbers.

Another important reason to have good credit is that rental places, if you aren't planning on buying a house just yet, look at credit scores too. They, like the corporations, use it as a way to view how responsible you are. If you pay your bills on line and aren't head over heels in debt, then you will have enough money to rent from them. Ask yourself, do you really want to be sleeping on the streets or living in a 'dump' because of your credit score?

There are many ways that your credit can be damaged:
  • Your "identity" or social security or has been stolen. 
  • You own multiple department store credit cards and they are all maxed out.
  • You have been late on credit card payments in the past.
  • You haven't paid your student loans
  • You late on your car payments
  • Have been turned over to collections for money issues.
  • Are behind on mortgage or rent payments
  • Have had to file for bankruptcy in the past 10 years.
  • Late on child support
If you find that you fall under anything in the list above, don't freak out. First go to Credit Karma, make a profile and find out if your credit is in serious trouble. Second, grab all your bills and sort through them. Even though you have back payments due on your credit cards it is important to not get further behind, so make sure you are paying the minimums on all your cards, this will protect your credit from becoming worse.

Once you have paid the minimums, find the biggest thing that is effecting your credit at the moment. Whether its your mortgage, car loan, or a credit card, find the one that is most deliquent. For the next 5 months you should then try your best to pay double or triple payments on this card. It will be amazing to you how much money you can put toward a deliquent account if you put your mind to it.

Now, this may mean that for the next 5-6 months you wont be able to buy those adorable gray suede pumps you have had your eye on, even if they just went on sale. It also means that you might have to pass up on dinner with friends, or going to the movies. But if you let them know that you are trying to be responsible and get some things paid off, they will most likely understand. Whats more? Just think how great you will feel once you can finally pay off that card or past due loan!!  

After you pay off your first deliquent account, then move onto the next one. Take the money that you were paying toward the first bill and combine it with the minimum you are paying on the next one and with the new (larger payment), you will pay that one off FASTER!!  It's like a snowball effect, but in a good way!!  It may take you a few years, but hey! Once it is all paid off you will finally be debt free and your future will be bright once more. So get your credit check on at Credit Karma, and start tackling your debt today!