The Frugal Files: Spring Cleaning for Your Credit Report

452, 583, 648, 773...what do all these numbers mean? They are various credit scores. What is a credit score? Well, the short answer is that it's a snapshot of how you treat your money and  how responsible (or not so responsible) you are with it. When you're young, these numbers don't mean anything to you, but when you become grown, they are numbers that can greatly assist you in life or haunt you forever.

Learn about your score and how to use it early; meaning make good financial decisions initially. When you leave your parents' home and want to obtain your own "big girl" stuff, and you haven't minded your money business, this three digit number will make decisions for you. While most people want to watch numbers decrease, in contrast, you want this number to go up. In fact, the closer you can get to 850, the better life for you and anyone financially attached to you.

I know my savvy Belles have heard this term ad nauseum AND understand it's a risk predictor to any person or entity from whom you want to borrow in the future. I'm not a fan of debt and believe you should pay it off, but I'm not naive or that idealistic to think no one will ever get a car loan, a house note or even a credit card. Understanding and maintaining a good score helps those entities determine the interest rate they will attach to your loan. The better the score, the less you pay back in interest.

Over the last decade, credit scores have become increasingly important to not just consumers, but those seeking employment. More employers are checking credit reports and using it as a character witness to determine if your employment worthiness. Talk about putting your best foot forward; don't bring your "A" game on your resume and at the interview, then when they check your score, you fail. Make sure the character of your credit score matches and it speaks for your true character: taking care of business, personally and professionally.

How? Well, before they beat you to it, pull your credit report. There is no excuse not to because you can get one, from EACH main credit bureau, for FREE. These are the bureaus, which are credit reporting agencies and it's their job to collect all your credit information and report it.

Experian - http://www.experian.com/
P.O. Box 9595
Allen, TX 75013-9595
888-397-3742

Equifax - http://www.equifax.com/home/en_us
P.O. Box 740241
Atlanta, GA 30364-0241
800-685-1111

TransUnion - http://www.transunion.com/
2 Baldwin Place
P.O. Box 2000
Chester, PA 19022

800-493-2392 for Credit Monitoring
800-888-4213 for Free and Purchase Credit Report
800-916-8800 for Dispute item
888-909-8872 or 800-680-7289 Fraud and Identity Theft

Here's where to get your reports for free: Annual Credit Report

Once you pull the reports, compare them, making sure all reports are reporting the same information. I know I don't have to tell you this, but I will anyway. It's YOUR job to make sure the information is accurate. Just like us, companies and credit bureaus make mistakes. Part of the reason you're pulling the report is to verify that it is correct. If so, great. If not, then start getting your verification ready. It's time to dispute!!

**Tip** If you have ever paid money to ANY person, place or thing, then you should have a file folder on them. Keep document of everything you have ever paid. It will pay off when attacking your credit report. Keep receipts and documentation of all pertinent conversations there too. Note the date, time and the person's name. Don't mess with me, I have file on you!!

Begin to mark up your reports, checking off the correct items first. If you find errors, go online or call them to correct them. They will ask for supporting documents and you will most likely have to mail them in. Attach a letter telling about the error, how they should correct it and attach the documents of verification.

Once that part is done, create a plan to remove anything unsatisfactory on the report. If you have debt there, clear it up and pay what you owe. Most debts expire on your report and negative reportings are supposed to come off in a certain amount of time. Here's a secret...if you absolutely can't pay a debt off, and it's scheduled to be removed from your report, leave it alone. Once you make a payment on a debt, the time for it to stay on your report will start over, giving you another 7-10 years of character assassination on your record. Attack your debts like they are brussel sprouts...whole!! Do not make partial payments, instead pay the entire amount. Then copy that receipt and send it to the credit bureau as proof of debt payment, so they can update your report.

The process of getting your credit straight can be a tedious one, but I promise it will feel good to rid yourself of not only the debt, but the stigma and misconception that you may not be taking care of your financial obligations. Let's change that this season. It's the first day of Spring, so let's grow up!!

Frugalicious Diva

The Frugal Files: Mission Student Loan, Be Gone!!

Hello! We're back for another edition of The Frugal Files!! I'm glad to be here and excited you join us here at Belle-Noir Magazine every week for sharing about money, self love and motivation!!

Last week we chatted about getting our children ready for the future; they are our future. I touched on proactive preparation to send our children to college; be it community college, university or trade school, someone has to pay for it. I know we don't mind paying because we love our kids, but should it cost us our life savings or our sanity, when we can simply put it aside gradually? I think we both know the answer.

College educations and future planning is something we can act on right now. It's time out for the belief that we have plenty of time. While you're changing diapers and thinking like this, your child will be be in preschool before you throw pamper away; will be hitting puberty before you pick up all his crayons and will be going to Prom before you pop his first zit. It's coming and soon, not "one day" but soon. Prepare yourself or you just might find yourself...

...in the same boat as YOURSELF. Do you still have student loans hanging over your head? Aren't you tired of paying them? Well, PAY THEM OFF ASAP!!

Last week, I had an ongoing, frugal discussion with an online group regarding debt reduction. The revolving theme for many was student loans. All my life I've heard people complain about student loans, in many cases from those who'd been out of school ten or more years. This dialogue was no different, but what was different was the amount owed in contrast to what I've heard over the years. While I revealed knowing people who owed $50,000+, some of these women admitted to only being responsible for a few thousand dollars. I was so shocked they were still carrying that little bit around, drawing interest, no less.

Then the challenge came...

For 2011, this group had a debt reduction challenge for all members. The moderator who proposed it was inspired by Dave Ramsey's radio show, one of my favorite money gurus. We were to report all monthly debt payments including mortgage, credit cards, as well as car, personal and even payday loans. Oh, and of course, the reason we're here today; student loans.

I'm unsure of the final results, but I can say I was pleased with my own debt reduction, shaving several thousand dollars off my mortgage. For 2012 though, Frugalicious Diva decided to provoke the ladies in my group to another dare; one I know they can achieve and be proud of their results!! I want them to say GOODBYE to their student loans FOREVER!!

I introduce to you "Mission Student Loan, Be Gone" (pronounced with a long "o") to you and anyone else who wants to pay off student loan debt this year!! I don't care how you do it, just get it done; no amount is too small. Here's a few suggestions while you're making your plan:
- put it on an autodraft
- donate a portion of your personal or business sales to it
- give up a luxury or a bad habit and put that money on your loans
- work it into your current budget

You can try anything you can handle, except bankruptcy. You won't be very successful trying to rid yourself of them that way, as they are rarely cleared. I have one tip for those of you fortunate enough to be in the helping fields; you might be eligible for student loan forgiveness. Take a look here for resources to jump start your research: Student Loan Forgiveness

Now, while the prize is only for those in the group, paying it off will be reward enough. This year, purpose to not be a slave to student loans anymore (even if the interest rate is low). Whether it was for your undergraduate or graduate degree, do your research and pay them off!! I would love for you to let me know when you do!! I will celebrate with you and might even send you a small token of Congratulations!! Let's do this!!

Frugalicious Diva