Hey GaBbers & friends,
My summer break has ended and finally, Credit 101 is back in session. Yesterday, while preparing my data and research for this course; credit 101, my mind seemed to revisit the many expenses I have accumulated over my past four years of credit history. From the Gap and Express department store cards of my 18yrs birthday; $200 credit limits I thought I would"never have to repay." To the library books I checked out, never returned, never read, but cost me about $500 and a falling credit score...At 20yrs old, I lucidly remember the Capital One card that I never applied for that made its way into my mailbox without permission. Then, of course, I had a season finale episode entitled "shoulda, woulda, coulda's: what I wish I'd known about credit before exploited by ignorance. Abruptly interrupting the pity party, my friend called and asked if I had registered for summer session two at my fair Morgan State.
Suddenly, I realized just how pricey my undergraduate education has become. And, after all the money I have invested into my matriculation at Morgan, one would assume that I would have experienced at least one course in financial literacy before graduation. Is financial literacy only for business majors? Graduation requirements at institutions of higher learning would suggest so, but I beg to differ. In a capitalistic society, an individuals credit is one of their single most important strains of financial DNA and credit reports are likened to the physical structures that DNA forms. For example, lenders and employers never meet the people that apply for loans and even employment in some cases, and yet they can picture the person they've denied based on the vivid Credit report description.(I don't believe that you can see the charcter or moral of a person through a score of any type but it happens everyday) However, there are no orientation, or real life exit exams etc to teach what should be common knowledge to an educated person. After all the general education a bachelors of science degree supposedly provides, not once have I ever had a class on reading credit report templates. So... blindly I sit, wanting my tuition money back, as I look down at my Equifax credit report summary from www.annualcreditreport.com. This central site allows you to request a free credit file disclosure; credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and Trans union. Now I could repeat all the preliminary information that my Tag-team partner Gwen has already mentioned, but instead I'll just provide the link for my personal credit so we can all share the same looking glass. Meanwhile, lets look at a few vocabulary words for homework, we will discuss each sub-topic with a twist!!!
FICO: Fair Isaac Corporation ( Who knows what the O stands for)
Credit Summary
Accounts
Inquiries
Negative Information
Personal Information
Dispute File Information
Summary of Your Rights Under the FCRA
Remedying the Effects of Identity Theft
Your Rights Under State Law
Credit Score
P.S. If you decide to access your own credit report Do Not Use www.Freecreditreport.com!!! It is a scam for surveys etc.. Also, the www.annualcreditreport.com will only allow you to review your equifax report without credit card information. If you decide to review Trans Union or Experian reports be ready.
6/25/08
Outreach on loans
So lately I have been thinking of the best way to get my information on loans out to young people. I have looked at all the options and I have decided the best way to get my information out there is by doing a brochure. On each panel I will explain a different type of loan and the pro's and con's of each. I figure after I make the brochures I will hand them out in the downtown Frederick area. It is a very popular place for young people to hang out.
Also I just finished a book by Suze Orman called Women and Money and it was very good. I would encourage everyone interested in learning about different aspects of the financial world to read one of her many books. Her books are very easy to understand and also very interesting. She also has a show that airs on CNBC, which is very informative. Her books can probably help everyone out with their research topics because she covers everything from loans to budgeting.
6/21/08
Credit Card Power
Are young people doomed to credit card debt? Are we naive in failing to resist credit card vendors? I think being more educated about the threat of credit cards is the solution.
The power of credit cards is in our hands and it is a screaming temptation. We spend more when we have a credit card than cash (and that's a fact). All you have to do is swipe your card and sign to purchase. Voila, you have a loan! It's "all good" when you're using it, but when the bill comes you think, "How did I spend that much in so little time?" Right?
Can we really afford our credit cards? Well, I am in that circle, and trust me, being a young adult with that much freedom costs! So I am trying my new slogan called, "If you ain't got it at the end, don't dare spend." What that means is, if my bill comes and it surpises me with a big total, I will slow down and take another approach.
I think young adults don't have to be doomed by credit card debt. There are solutions, such as sticking to a budget or having a low credit limit on your card.
If you find you still can't handle a credit card, then go back to using a debit card. (A debit card withdraws money directly from your checking account, like a check.)
Remember, though the threat and power of credit cards are there, they don't have to get the best of you!
If anyone feels strongly about this like I do or has any advice or experience to share, please post your views.
The power of credit cards is in our hands and it is a screaming temptation. We spend more when we have a credit card than cash (and that's a fact). All you have to do is swipe your card and sign to purchase. Voila, you have a loan! It's "all good" when you're using it, but when the bill comes you think, "How did I spend that much in so little time?" Right?
Can we really afford our credit cards? Well, I am in that circle, and trust me, being a young adult with that much freedom costs! So I am trying my new slogan called, "If you ain't got it at the end, don't dare spend." What that means is, if my bill comes and it surpises me with a big total, I will slow down and take another approach.
I think young adults don't have to be doomed by credit card debt. There are solutions, such as sticking to a budget or having a low credit limit on your card.
If you find you still can't handle a credit card, then go back to using a debit card. (A debit card withdraws money directly from your checking account, like a check.)
Remember, though the threat and power of credit cards are there, they don't have to get the best of you!
If anyone feels strongly about this like I do or has any advice or experience to share, please post your views.
6/17/08
Credit Reports
I have little credit history so I used my mother’s credit report as an example for me to learn from and share information.
The first thing I noticed was her FICO score. She told me she purchased it and it was not really part of her credit report. It is a good idea to get it so you can see where you stand. The score ranges from 300 to 850 credit points. When you have a high score you can select from a wide range of credit cards and loans. For the most part, it would be hard to get denied when you have an excellent score. With a good score you also will receive better interest rates. When you have a low score there are some negative marks on your credit report.
There are three different credit bureaus: Equifax, Experian, and Trans Union. Each of these companies allow us to receive one free annual credit report. You are entitled to your free report under federal law. When you order your report expect to provide your name, address, social, and birth date. You can order over the Internet, by phone or even mail. The bureau should give true and accurate information on your credit report.
It will show past and present information from your providers, such as bill-paying history, accounts used, employment history, and loans. You may see both positive aspects to your report and what you need a little help on, to improve your credit score.
If you come upon something inaccurate in your credit report then you need to contact the bureau to correct it or delete it. You can send the bureau a dispute letter. Some negative information can stay on your credit report for as long as seven years. Employers would be able to see and possibly hold that information against you. It’s very important for you to keep your credit report accurate. Because there may be a small or even a large mistake, get a free credit report from each of the bureaus during the year.
Most likely if you have a good credit report then you are able to receive low interest loans. It’s better to apply for a low interest loan because then you are able to pay back the loan faster.
Having bad credit makes it harder for you to apply for various things. Car dealers, employers, and credit card dealers may want to see a copy of your credit report before they take the next step with you, trusting you and maybe investing in you. If they find that your credit report shows late payments in the past, or even no payments, they may not work with you and tell you to resolve the problem. Credit history keeps dates on credit card bills. It includes things like “Are you paying on time? Do you have any outstanding balances?”
You will also notice a credit summary on the report. Included is a graph with percents as the factor of your range of accounts. The report details which accounts are newest and oldest. It may show some negative accounts or it may not. Also, any public records or collections will show under your summary of credit.
Installment accounts show what you have agreed to pay. For example, a car loan will show the total amount of purchase, how long you have to pay it back, and the monthly payments including the year. If you are currently paying back a loan, you have an Open Account. Closed accounts are also very similar but are no longer active.
The bureau puts information in the same form, Open and Closed Accounts, for loans in revolving accounts. You may have open accounts such as Discover Card and Master Card. The graph makes it easier for you to understand the information. It also shows scheduled monthly payments.
Making detailed notes on how to improve your credit will better serve you in the long run. It is likely that you may have one mistake on your credit report so it’s worth checking out.
Inquires on your credit report may or may not impact your credit rating. Some things don’t have an impact on your credit rating and are only seen by you.
Negative accounts may show up on your credit report for as long as seven years for late payments or missed payments. As for collection accounts, it may turn ugly and the accounts may be turned over to a collection agency to collect the amount owed. That’s not all that may be on the bad side of a credit report. There are the public records where any employer or automotive dealer or bank can see. It lists information on bankruptcies, and a category of In Debt. Many people fall under that category but there are solutions and ways to get back on track to a better credit rating.
Avoid getting yourself into a trap of any negative status. Make sure you can make all of your payments on time and make sure you can afford your monthly payments.
You may also expect to see on your credit report much of your personal information. Creditors can fully identify you. They will view your full name, address and where you are currently employed. Lastly, the credit report insures us of our rights to a copy of our credit report and shows some rules. As for identity theft, if you are a victim of someone using your identity then you may file for “fraud alert” so that creditors will see you may be a potential victim.
Taking the time to read and learn more about credit reports has helped me to be better informed. Credit reports should not be taken lightly but should help us stay organized.
Stay out of debt!
The first thing I noticed was her FICO score. She told me she purchased it and it was not really part of her credit report. It is a good idea to get it so you can see where you stand. The score ranges from 300 to 850 credit points. When you have a high score you can select from a wide range of credit cards and loans. For the most part, it would be hard to get denied when you have an excellent score. With a good score you also will receive better interest rates. When you have a low score there are some negative marks on your credit report.
There are three different credit bureaus: Equifax, Experian, and Trans Union. Each of these companies allow us to receive one free annual credit report. You are entitled to your free report under federal law. When you order your report expect to provide your name, address, social, and birth date. You can order over the Internet, by phone or even mail. The bureau should give true and accurate information on your credit report.
It will show past and present information from your providers, such as bill-paying history, accounts used, employment history, and loans. You may see both positive aspects to your report and what you need a little help on, to improve your credit score.
If you come upon something inaccurate in your credit report then you need to contact the bureau to correct it or delete it. You can send the bureau a dispute letter. Some negative information can stay on your credit report for as long as seven years. Employers would be able to see and possibly hold that information against you. It’s very important for you to keep your credit report accurate. Because there may be a small or even a large mistake, get a free credit report from each of the bureaus during the year.
Most likely if you have a good credit report then you are able to receive low interest loans. It’s better to apply for a low interest loan because then you are able to pay back the loan faster.
Having bad credit makes it harder for you to apply for various things. Car dealers, employers, and credit card dealers may want to see a copy of your credit report before they take the next step with you, trusting you and maybe investing in you. If they find that your credit report shows late payments in the past, or even no payments, they may not work with you and tell you to resolve the problem. Credit history keeps dates on credit card bills. It includes things like “Are you paying on time? Do you have any outstanding balances?”
You will also notice a credit summary on the report. Included is a graph with percents as the factor of your range of accounts. The report details which accounts are newest and oldest. It may show some negative accounts or it may not. Also, any public records or collections will show under your summary of credit.
Installment accounts show what you have agreed to pay. For example, a car loan will show the total amount of purchase, how long you have to pay it back, and the monthly payments including the year. If you are currently paying back a loan, you have an Open Account. Closed accounts are also very similar but are no longer active.
The bureau puts information in the same form, Open and Closed Accounts, for loans in revolving accounts. You may have open accounts such as Discover Card and Master Card. The graph makes it easier for you to understand the information. It also shows scheduled monthly payments.
Making detailed notes on how to improve your credit will better serve you in the long run. It is likely that you may have one mistake on your credit report so it’s worth checking out.
Inquires on your credit report may or may not impact your credit rating. Some things don’t have an impact on your credit rating and are only seen by you.
Negative accounts may show up on your credit report for as long as seven years for late payments or missed payments. As for collection accounts, it may turn ugly and the accounts may be turned over to a collection agency to collect the amount owed. That’s not all that may be on the bad side of a credit report. There are the public records where any employer or automotive dealer or bank can see. It lists information on bankruptcies, and a category of In Debt. Many people fall under that category but there are solutions and ways to get back on track to a better credit rating.
Avoid getting yourself into a trap of any negative status. Make sure you can make all of your payments on time and make sure you can afford your monthly payments.
You may also expect to see on your credit report much of your personal information. Creditors can fully identify you. They will view your full name, address and where you are currently employed. Lastly, the credit report insures us of our rights to a copy of our credit report and shows some rules. As for identity theft, if you are a victim of someone using your identity then you may file for “fraud alert” so that creditors will see you may be a potential victim.
Taking the time to read and learn more about credit reports has helped me to be better informed. Credit reports should not be taken lightly but should help us stay organized.
Stay out of debt!
Budgeting
How many people make spending plans for their money?
And actually stick to their budget?
Well for me, working three jobs and attending school can be a handful at times but somehow I manage. I love the the fact that I don't have to ask my parents for anything. so budgeting my paychecks responsibly is essential to my everyday life.
For this assignment, I tracked my own spending. I took a blank sheet of paper, a calculator and a calendar to remind me when payments are due. It turned out great! It was easy, I wrote down my incomes from all three jobs, and then I scribbled out my monthly expenses honestly. When I did that I actually realized how much frivolous spending I was actually doing.
My monthly expenses were: my phone bill, car insurance, gas, food, cosmetics, personal hygiene, fun expenses like going out with friends, shopping, personal payment plans, and savings. All of these in total came to about 1,220 dollars a month.
I also pay for school out of pocket every semester, so I calculated the amount that I need to save in order to attend Coppin State University which is 3,337 including books and supplies. This is my goal I strive to save for every six months.
I quickly noticed somethings that I could cut back on like shopping, I have way too many clothes, I need to wear them instead of buying more. Spending money on fast food instead of dinning out, I should cook more. Activities like going out, I can cut back and do more personal activities in the house. As for cosmetics, I can style my own hair instead of going to the hairdressers every two weeks. Rather than spending money on shopping, food, fun activities and cosmetics I can save it and deposit it into a savings account for school.
Through this assignment, the difficult part was analysing myself and my own spending. No matter whether it was outrageous. I forced myself to write down the real amount for certain categories. So once I forced myself Irealized somethings that I was doing wrong and I need to fix it. That is how I came to make my budget, which will improve the areas that my pockets fall short on.
The most important thing to have in your budget is your savings....no matter if its 25 dollars or 50 dollars a week, put it aside to save for the future. You never know what might happen today or tomorrow so save. The money that you set aside and save can prevent you from hitting rock bottom. It actually works!
And actually stick to their budget?
Well for me, working three jobs and attending school can be a handful at times but somehow I manage. I love the the fact that I don't have to ask my parents for anything. so budgeting my paychecks responsibly is essential to my everyday life.
For this assignment, I tracked my own spending. I took a blank sheet of paper, a calculator and a calendar to remind me when payments are due. It turned out great! It was easy, I wrote down my incomes from all three jobs, and then I scribbled out my monthly expenses honestly. When I did that I actually realized how much frivolous spending I was actually doing.
My monthly expenses were: my phone bill, car insurance, gas, food, cosmetics, personal hygiene, fun expenses like going out with friends, shopping, personal payment plans, and savings. All of these in total came to about 1,220 dollars a month.
I also pay for school out of pocket every semester, so I calculated the amount that I need to save in order to attend Coppin State University which is 3,337 including books and supplies. This is my goal I strive to save for every six months.
I quickly noticed somethings that I could cut back on like shopping, I have way too many clothes, I need to wear them instead of buying more. Spending money on fast food instead of dinning out, I should cook more. Activities like going out, I can cut back and do more personal activities in the house. As for cosmetics, I can style my own hair instead of going to the hairdressers every two weeks. Rather than spending money on shopping, food, fun activities and cosmetics I can save it and deposit it into a savings account for school.
Through this assignment, the difficult part was analysing myself and my own spending. No matter whether it was outrageous. I forced myself to write down the real amount for certain categories. So once I forced myself Irealized somethings that I was doing wrong and I need to fix it. That is how I came to make my budget, which will improve the areas that my pockets fall short on.
The most important thing to have in your budget is your savings....no matter if its 25 dollars or 50 dollars a week, put it aside to save for the future. You never know what might happen today or tomorrow so save. The money that you set aside and save can prevent you from hitting rock bottom. It actually works!
6/16/08
Budgeting Money
Hi everyone, I am still researching the budgeting topic. My budget usually consist of alot of saving because I pay for school out of pocket but since school is out I have included alot of extra activities to keep me busy and allow me to have fun. I will post more on the 17th because today we celebrated father's day.
6/12/08
What is the biggest financial challenge facing young adults?
Heyyyyyyyyy!
I'm reading scholarship entries that we received for this year's SECU State Scholarship contest. One of the topics that people could write about was, "what is the one biggest financial challenge facing young adults? Explain and provide a solution."
Here are the top two challenges that many young adults named:
I'm reading scholarship entries that we received for this year's SECU State Scholarship contest. One of the topics that people could write about was, "what is the one biggest financial challenge facing young adults? Explain and provide a solution."
Here are the top two challenges that many young adults named:
- The cost of a college education/how to pay for college
- Credit (i.e. how to understand it, build it, and refrain from going under because of it)
Regarding the first challenge, Nicky Gazy, one of our winners wrote the following:
"Many families simply cannot afford to pay college costs without going
into debt because they either do not make enough to support the cost of college
or simply do not know how to save and plan properly. An intervention by the
federal government could help to mitigate this problem.To solve the issue at hand, the Federal Government could help families to
save by placing a percentage of each family's income tax aside into a college
savings fund."So, my question for you is what do you think is the one biggest
financial challenge facing young adults today?Also, what do you think about Nicky's solution?
6/10/08
Time to Budget
Hey GABbers, Long time no see just wanted to see how everyone is doing seen our last meeting, it was great meeting you all then.
So I've been researching budgeting, now I've been just doing research on what people have to say about budgeting and different options banks offer to help people save money. The concept sounds so easy so i figured I would put myself to the test. Can I do as I say?
So for the last few weeks I have taken all my credit and debt cards out of my wallet and have limited myself a certain amount of cash I can use per week. Turns out that is harder then it sounds. Im used to going to the store or hanging out at the mall with my friends and when the bill came I just swiped my card. Now I'm counting pennies by the end of the week.
So does anyone have any good budgeting methods? Thanks
Steven
So I've been researching budgeting, now I've been just doing research on what people have to say about budgeting and different options banks offer to help people save money. The concept sounds so easy so i figured I would put myself to the test. Can I do as I say?
So for the last few weeks I have taken all my credit and debt cards out of my wallet and have limited myself a certain amount of cash I can use per week. Turns out that is harder then it sounds. Im used to going to the store or hanging out at the mall with my friends and when the bill came I just swiped my card. Now I'm counting pennies by the end of the week.
So does anyone have any good budgeting methods? Thanks
Steven
6/9/08
"Credit 101" class in session
Hey Gabbers & Friends,
As you may already know, I will also be discussing the baffling world credit and credit reports along side Gwen. Hopefully our tag-team approach to credit 101 will spur each reader on a quest to develop the literacy needed to lead a healthy financial life style. With a running start, Gwen has laid a strong foundation for our shared topic. Next week I will take the baton and continue this momentum, as I attempt to prove that members of Generation Y can lead a culture of change, free of the enslavement of debt. Being the product of a capitalistic, consumer driven environment, I am a testament of "what and what not to do." From my personal credit history, mistakes, scams etc., like an open book, together we will explore my journey to financial literacy.
P.S. Check out http://www.freecreditreport.com/ I hear its a good source! I'll check it out too and tell you if it works!!!
As you may already know, I will also be discussing the baffling world credit and credit reports along side Gwen. Hopefully our tag-team approach to credit 101 will spur each reader on a quest to develop the literacy needed to lead a healthy financial life style. With a running start, Gwen has laid a strong foundation for our shared topic. Next week I will take the baton and continue this momentum, as I attempt to prove that members of Generation Y can lead a culture of change, free of the enslavement of debt. Being the product of a capitalistic, consumer driven environment, I am a testament of "what and what not to do." From my personal credit history, mistakes, scams etc., like an open book, together we will explore my journey to financial literacy.
P.S. Check out http://www.freecreditreport.com/ I hear its a good source! I'll check it out too and tell you if it works!!!
6/8/08
Gwen on Credit Reports
Sorry I didn't post my blog sooner. I accidentally posted the wrong information.
Credit reports are the subject of my first financial project.
I tried to get my credit report, but I have wasn't successful because I have not yet established credit. Since I don't have any credit history, I'm using my mother's to learn from.
I have already done some research about credit reports. The information you receive on your report is about loans, credit cards, and how you manage your bills. For instance, it will say whether you are paying back things on time. The report will show the dates on which the payments must be made. If you don't pay on time, it will show up on the report.
Credit reports are helpful when trying to buy a car, a house, or to get another kind of loan. The better the credit report, the easier it will be to invest or borrow a lot of money. You will most likely be approved, if your report is good.
Any one with more information on credit reports, perhaps from your own, let me know!
Gwen
Credit reports are the subject of my first financial project.
I tried to get my credit report, but I have wasn't successful because I have not yet established credit. Since I don't have any credit history, I'm using my mother's to learn from.
I have already done some research about credit reports. The information you receive on your report is about loans, credit cards, and how you manage your bills. For instance, it will say whether you are paying back things on time. The report will show the dates on which the payments must be made. If you don't pay on time, it will show up on the report.
Credit reports are helpful when trying to buy a car, a house, or to get another kind of loan. The better the credit report, the easier it will be to invest or borrow a lot of money. You will most likely be approved, if your report is good.
Any one with more information on credit reports, perhaps from your own, let me know!
Gwen
6/4/08
Cool site for College Cash or Lack thereof
I read an article this morning about College Debt and I thought I should pass some of it along to you all!
Here are some key points to remember about funding school:
Financial Aid information
Here are some key points to remember about funding school:
- Do whatever you can to avoid taking out student loans (scholarships, grants, work-study etc)-- but since we all know this can be unrealistic...
- Borrow the least you can get away with, NOT everything which you might qualify
- Your total debt for your total college career should not be more than your first year's salary (this includes interest)
- If possible, keep your monthly payments to 15% of your income. Example: If you borrow $35,000 at 8.25% interest on a 10-year repayment plan, your monthly payments after college will be approximately $414.00.
This website has a lot of cool stuff about funding your education.. check it out!
Financial Aid information
Hey Again
I'm back again to comment on Abby's post about Loans. I too have a loan for school only I never knew I did. As a senior at Morgan State University, I have learned many things abour financial aide since freshman year. When debt was high and funds were low, I found myself at the mercy of the Montebello Monster.(Ie: The financial aide office at Morgan State University) Instructed by a financial aide officer that knew just as much about aide as I did, I was doomed. Then, after filling my late FASFA(federal financial Aide) she informed me that my schedule, drop due to non payment had been reinstated. Great!!! Right!! Well The next semester I realized I had signed for financial aide in the form of a loan. A loan that I did not have to pay interest on til 6 months after graduation. Who Knew!
Fastforward one year and a bad transcript later, I "took a break" and left school for a semester. To say the least, my loan quickly came out of deferrement and I had four bill invoices before I could say.. "hey, I'm still enrolled" Any who, it took forever to prove that I was still in school even after I registered for my fall classes. In a nutshell, I wish I just found a good scholarship instead of that quick fix federal loan, even though its interest free til after graduation. Read the fine print before you sign and if it sounds too good to be true, it probably is.. Even at the hands of your financial aide officer!
Fastforward one year and a bad transcript later, I "took a break" and left school for a semester. To say the least, my loan quickly came out of deferrement and I had four bill invoices before I could say.. "hey, I'm still enrolled" Any who, it took forever to prove that I was still in school even after I registered for my fall classes. In a nutshell, I wish I just found a good scholarship instead of that quick fix federal loan, even though its interest free til after graduation. Read the fine print before you sign and if it sounds too good to be true, it probably is.. Even at the hands of your financial aide officer!
Finally Think I have the hang of this
Hey Gabbers & Friends,
I'm so glad to finally join the conversation! Were all going to learn so very much from each other. At our first meeting, after everyone introduced themselves, I realized the diverse backgrounds we all came from. My topic of expertise will be Credit 101.... I'm sure my score will be an example for you all to learn from... Til next time..
I'm so glad to finally join the conversation! Were all going to learn so very much from each other. At our first meeting, after everyone introduced themselves, I realized the diverse backgrounds we all came from. My topic of expertise will be Credit 101.... I'm sure my score will be an example for you all to learn from... Til next time..
Subscribe to:
Posts (Atom)
