Get Your Credit Score
When should you get your credit report? At least twice per year to check for fraud, as well as before any major financial decision (debt settlement/refinancing, home loan/mortgage, car loan, etc.) and after identity theft has been possible (wallet lost/stolen, robbery, break-in, car theft, etc.).
For years I’ve been writing about credit scores, telling people to obtain copies of their credit reports every quarter so they can check for fraud, inaccuracies, and strange occurences (you can check out some of my articles on the subject to the right).
Every time I wrote or spoke about this topic, inevitably someone asked me how they could obtain a recent copy of their credit report, or someone would ask which report is the best one to get, etc.
Finally, I posted some resources on how to get your report, how to read it, what to do if you find something wrong… the list goes on and on. The questions kept rolling in, however. Finally I decided I would find a way to solve this issue… and I think I have!
To the right you’ll see a bright orange form (can’t miss it). What this is is the result of negotiations with major credit reporting companies to get you the best credit reporting out there, from the most reliable sources, in the least amount of time. And all you need to do is put in a little bit of information.
Regardless of what state you live in, if your credit is good, bad, great or non-existent, this form will make it easy. To get started, just select the state you live in.
May 7th, 2008
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So this year the tax return fairy brought you $100, and you finally want to get started with investing the stock market. Good for you!
A friend of mine recently posed a similar question to me about how he can get started in with investing with a small sum. This, in short, was my answer.
The best way to get started in a hands-off way is to buy a stock or instrument that will closely mimic of the stock market as a whole. Because the market as a whole has increased in value over the years, they best you can do is invest in everything. Because you can’t do that, you’ll need to buy shares of an index or spider vehicle. Here are a few suggestions:
- Vanguard Total Stock Market VIPER
- iShares Lehman Aggregate Bond
- iShares Dow Jones US Real Estate
- iShares Dow Jones US Basic Materials
- S&P 500 Spider
Now, if you’d like to take a little more hands on approach, I would recommend putting 50% of your available cash in one of the above vehicles. This will help to ensure that you don’t lose everything.
To pick stocks for investment first make a list of companies you’d like to buy. Once you have a list of 10-15 companies you’re interested in, head over to your favorite finance website (Yahoo! or Google are good choices) and look them up. What you are looking for is a stock with a P/E ratio under or below 15. This basically means that the stocks are undervalued compared to what the company earned in the most recent period.
(For a more in depth explanation of P/E ratios, see http://en.wikipedia.org/wiki/Pe_ratio)
Buy a few of the stocks on your list that meet the P/E requirement and hold them for 1 year. At the end of the year check the stock’s stats again. See if you think you’re going to make more money in the next 12 months, if not, wait for the opportune time to dump the stock. If so, hang on to it!
Whenever you have some extra cash for investing, put half in the spider, and the other half in the next stock on your list.
Try it out and see how it works for you!
April 27th, 2007
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I’ve heard this a few times recently: that the homepage of your credit card company is not secure because the URL doesn’t begin with https://
Unfortunately, this rumor has been perpetuated by people who know just enough to be dangerous, but not enough to be right 100% of the time.
While it’s true that looking for the ‘https’ is a quick way to check for an SSL (Secure-Socket Layer) certificate, it’s not the end-all way of finding out which sites are secure, and which are not. Technically, https only indicates that the information was sent to you over a secure connection, not that you are sending over a secure connection. What really happens is that the form into which you enter your login ID and password encrypts your information before it leaves your computer.
In layman’s terms: the web page doesn’t need to be secure because they’re not sending you anything yet, but your information is scrambled and encoded before you send it to them.
If you are ever suspicious of a website’s security claim, and you are using the FireFox browser (which you should be anyway, more below*) you can go to Tools > Page Info then click the ‘Security’ tab. This page will tell you if the URL is secure, and what level of security they are using (companies that handle credit cards will use at least a 128-bit encryption level, if not 256).
* FireFox is a much more secure browser than Internet Explorer. It blocks pop ups, refuses the automatic installation of software, and just generally does a better job of keeping the web clean. Plus, you can get all kinds of nifty (free) extensions to enhance the browser features. FireFox works on both Windows and Macintosh machines, and it’s free!
To download the FireFox browser, you can use any of the links in the footer of this website.
October 10th, 2006
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Ever since I saw the episode of the popular Dream House television program where the crew built a brand new dreamhouse for a disabled woman, living with HIV, who had also infected her two daughters, all of whom lived in one of the worst neighborhoods in (if I recall correctly) Southern California, I’ve wondered what they do for those people regarding their new property taxes.
I understand there is some kind of cash prize that goes along with being on the show, but for a woman who probably has enough stigmas attached to her that no one will hire her at a Denny’s, I can’t imagine it will last long.
The house was huge, at least 3000 sq. ft., with a pool and rock waterfall in the backyard. This was built in a neighborhood where the next more comparable property is a 3 bedroom, no bath crack house with 3.67 walls. The more likely neighbor was a single-wide trailer on cement blocks.
Despite the fact that they pay off the mortgage, the property tax assessment on a mansion is not something people think about, nor is it something everyone can pay.
When I worked in real estate in Tucson, I was astounded by some of the assessments people needed to pay. Some of the nicer, 6000 sq. ft. foothills mansions had tax bills higher than $20,000 due every year. Tell me someone in South Hell, California can afford that (let alone what that would cost in California taxes!).
I just read an article which brought to my attention something I hadn’t considered at the time: taxes on your winnings. Think about going to a casino. If you win big, the casino reports that gain to the IRS, who want their cut. Your winnings are cut nearly in half by the taxes you pay. Not such a big deal when you win a liquid (cash) asset.
However, now you’ve just been on a television show that gave you a 3 million dollar house and $250,000 in cash. Guess what? Uncle Sam still wants his cut of that $3,250,000 in assets.
So apparently the winners on these shows end up taking out mortgages on their new property to pay the tax bill, a particularly ironic (and cruel) twist considering that the end of every show usually ends with the host announcing they’ve paid the homeowner’s loan, and they can now tear up the mortgage document.
If you want to read a (probably sensationalized) story about this, you can check it out here:
http://money.aol.com/cnnmoney/realestate/canvas3/_a/the-house-that-swallowed-don-and-shelly/20060627161909990001
October 10th, 2006
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Microcredit involves making small loans to persons who are not ‘bankable’ (meaning they could not get a loan from a traditional bank). This audience often consists of the very poor, unsuccessful entrpreneurs, or unemployed people.
Although the business models differ, there exist many non-profits that supply microcredit, as well as several businesses, and individuals.
Individuals seeking to begin lending in a microcredit situation need to be very careful about who they choose to work with, as it can very risky to invest in this market.
Some businesses exist to assist investors in making micro-credit loans. Often, these businesses provide aggregation and risk-sharing models. This means that if a person requests $10,000 in micro-credit, the business can split it up between 10 investors who each invest $1,000. This helps to spread the risk of deault around, meaning you can invest your money more widely. One such service is Prosper.com.
Non-profits have also shown much success in the micro-credit market. The common idea of success in this arena is that a poor person takes a loan to do something, and then ends up growing their business to employ other poor persons in their neighborhood.
One such example is a woman in India who took a small micro-credit loan to buy some fish from a fisherman at a local wharf. She cooked the fish and then sold it to others in the same area. She then repaid the loan and took the extra money to the wharf to buy more fish. Once again she cooked and sold the fish. After repeating this process quite a few times, she was able to buy her own fishing boats, which she now rents to local fisherman, for the price of bringing her enough fish to cook and sell.
Of course, not all stories can end like this, so do the proper due diligence when investigating this type of investing. Also, keep in mind that a non-profit such as this could make an excellent tax shelter should you find your income too high for your liking.
September 17th, 2006
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As summer kicks into high gear and many people begin to feel the pinch of higher energy bills we could all use some quick tips on improving the efficiency in our homes.
This list is by no means complete, but it should at least get you thinking about things you could all year ’round to help use your energy better.
There are thousands of ways to help your home be more efficient. So keep your eyes and ears open for more suggestions!
September 16th, 2006
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This is a classic example of a trainwreck of a financial situation, and the best way to get out of it. I found this story floating around the internet, and I think the lessons from it are valuable enough to post here.
If any part of this sordid tale describes you, then please seek help immediately, and begin to make moves to get yourself out of the situation.
A young man (we’ll call him ‘Sam’) lived with his mother and two brothers in a small home in rural Wisconsin. In 1998, Sam’s mother had the opportunity to purchase the home that they had rented and, because she was living on social security, asked Sam to cosign the loan for $32,000 with her.
One year later, Sam moved to Chicago and started a new life, eventually he got married and had two children. His relationship with his mother soured and they lost touch. In the summer of 2004 Sam got the news that his mother had fallen behind on mortgage payments. The payments were around $250 each month, and she was 3 months behind.
Sam had built excellent credit for himself and decided he would look into refinancing the home to lower the payments and put the house in his name. He asked an appraiser to evaluate the house.
A few days later Sam received a call from the appraiser that he had been to the house: it was abandoned, the grass was uncut (and approx. 3 feet high) and the house was infested with 30 or more cats. The waste from the cats was producing a smell outside the house. When the appraiser walked in and saw dead cats and feces everywhere, he called the local sherriff, fearing a health hazard.
The sherriff called the fire department and humane society, who extracted the cats and put down those that were too sick to be cared for, leaving the house full of cat urine and feces.
Needless to say, the appraiser thought the house was only worth the land under it, and the county was now on the hunt to find Sam and fine him for the violations.
What could Sam do?
Stay Tuned for Part II…
July 27th, 2006
Related Topics: home abandonded (1)-
As summer kicks into high gear and many people begin to feel the pinch of higher energy bills we could all use some quick tips on improving the efficiency in our homes.
This list is by no means complete, but it should at least get you thinking about things you could all year ’round to help use your energy better.
There are thousands of ways to help your home be more efficient. So keep your eyes and ears open for more suggestions!
July 27th, 2006
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Sometimes it is difficult to know how different actions are going to affect your credit score. Recently free credit reports have become available to people once a year (or more often, in some states). Because of this, you may want to estimate what your score is in between free credit checks (although it is recommended that you check your credit report more often than once per year).
The following scale is based on a good credit score (750 or higher FICO). Due to this, some of these actions may cause a more severe change in credit scores lower than this. This also explains why having a large amount of inquiries has no change associated with it (since a person with good credit will be likely to use it to shop around for the best deal).
Keep in mind that this scale is only a simulation of how your FICO may be affected by credit-related actions. Don’t take anything you see here as certainty!
Revolving Credit Line Usage (such as Credit Cards):
0-15%: Baseline
16-29%: -3
30-50%: -5
51-64%: -7
65+%: -15
Bankruptcy Filing:
No: Baseline
Yes: -170
Number of Inquiries:
0: Baseline
1-2: -5
3-4: no change
5-6: -5
7+: no change
Delinquent or Past Due Accounts:
No: Baseline
Yes: -50
Open Lines of Credit/Loan Balances:
0: Baseline
1-2: no change
3-4: -3
5+: -5
Open Mortgage:
Yes: Baseline
No: -5
It is not unheard of for credit scores to drop 30 points based on a 50% usage of revolving credit, so these are more guidelines than hard and fast rules.
May 16th, 2006
Related Topics: simulation fico scores (2)- credit report simulation (1)- "credit score 750" (1)- credit card simulation (1)- credit score simulation (1)- "FICO " credit score simulation (1)-
Yes you can. There are two ways to make a mortgage payment with your credit card.
The first way is to use the convenience checks that credit card companies send out every so often. These checks work like those you would write from a checking account, but they draw against your credit rather than available bank funds. You can write, sign and mail these off to mortgage companies.
The second way is to use an online billpay feature (such as the type available at MBNA). This allows you to pay a certain amount to the specified company. The amount will be drawn out of your available credit and paid to the mortgage company similar to a check.
The downside to these two methods?
You won’t receive any cashback, miles, points or other credit card rewards for these transactions; which is the main reason for paying with a credit card anyway.
So, is there a way to pay with a credit card and still get the bonuses?
Yes there is. Well, there was.
There was a time when you could purchase Charter One gift cards using your credit card. These worked just like ATM/Debit cards and could be loaded with up to $500 each.
Basically you just needed to purchase these gift cards, take them to an ATM and pay the withdrawal fee (around $3) and pocket the $497 cash, while still receiving your credit card bonuses. You could then deposit enough cash to pay your mortgage and write a check to cover the payment.
Of course, this all required a lot of planning, but being able to get cash from a credit card without paying huge cash-advance fees AND still getting your bonus rewards is a huge plus.
Naturally, this program was abused in this way, and when they realized they weren’t going to make much money from it, the program was cancelled.
But be on the lookout for another loophole like this, because they come up all the time!
April 28th, 2006
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