Credit Cards – What Is the “Magic” Number?
By Michelle Black

Have you been thumbing through your stack of credit cards lately and wondered, “do I have too many?”  This is one of the most common credit questions I receive, so I thought I would share a little bit of insight into the matter.

The answer to the “how many credit cards should I have?” question is not necessarily the same for every person. As a general rule of thumb, it is advisable to have 3-6 open credit cards on your credit report. So, I can very easily advise that if you have less than 3 credit cards, you need more.  That being said, if you have more than 6 credit cards open right now I am NOT advising that you immediately close any accounts.  It is very important to have some professional guidance when and if you decide to close existing credit card accounts.  Closing the wrong account can potentially cause your scores to drop significantly.

If you already have 3 or more open credit card accounts is much more important to focus on your credit card balances rather than the actual number of credit card accounts you have.  Did you know that if you have a credit card with a balance that is over 50% of your credit limit then your credit scores will be lowered even if you are paying your bill on time every month?!?! This means that if you have a credit card with a $500 limit and you charge more than $250 on the card then your credit scores are affected negatively.  Your best bet is to keep all of your credit cards paid off to a zero balance.  (HOPE members have access to our “Snow Ball Effect” debt pay off plan to help begin eliminating credit card balances during their membership.)  By keeping your credit card balances at zero you also get to avoid paying those pesky interest fees and, therefore, save yourself some money!

Another fact about your credit card accounts that you should be aware of is how extremely important it is to make sure that your credit card is paid on time every single month.  Since 35% of our credit score is determined by our payment history it is easy to see how one single late payment can cause a huge drop in our scores.  In fact, I have seen a credit score drop as much as 100 points due to a single late payment on a credit card account!  Keeping your credit card balances at zero gives you further insurance against late payments as well.

We at HOPE would like to thank those of you who participated in our Facebook credit poll last week which asked the question “How many credit cards should I have open?” If you are not already a fan of our HOPE Facebook page we want to invite you to follow us on Facebook and/or Twitter for access to HOPE’s latest credit tips, special offers, and giveaways! Congratulations to Jill Lowe who won our credit poll contest last week and will be receiving a free professional credit analysis with a HOPE credit specialist!

If you have questions or need credit related advice, please feel free to give us a call at 704-499-9696.  Our friendly staff is waiting to hear from you and will be happy to help.

I recently read a very good article by Dave Ramsey that I would like to share with you:

“Spring is in the air.

The birds are chirping, the flowers are blooming, and the temperatures are warming. Who doesn’t love this time of year? Not only does spring remind us of the beauty of the outdoors, but it also reminds us to get our homes organized—in other words, to do a little spring cleaning.

This year, though, while you are cleaning the garage, shampooing the carpet, and organizing the closets, we suggest that you do a little spring cleaning in another area of your life—your money. Regardless of what baby step you are on and where you are on your journey to financial peace, you’ve got to stay organized to win with money.

So what exactly does a financial spring cleaning look like? We have some suggestions:

Clean out file drawers

Do you really still need that cable bill from August 1999? Seriously? You need to keep old bills, bank statements, tax documents, and other important papers for varying lengths of time. But utility bills, sales receipts for minor purchases, and ATM and bank deposit slips can be shredded after a few months.

Prune unnecessary expenses

Are you really getting your money’s worth with that gym membership? Do you really need 250 cable channels? Is it necessary to have a landline and a cell phone? While you’re organizing your file drawer this spring, take an in-depth look at your finances and see where you can cut back costs. This is especially important—and should be a top priority—if you are still working your way out of debt.

Update important documents

When was the last time you checked your car insurance? Your home insurance? Tax withholdings? Your will, 401(k) or Roth IRA? If it’s been awhile, then now is the time to make sure you have all the coverages and investments you need. What made sense two years ago might not work for you today. In the middle of all this spring cleaning, make sure you are protecting yourself, your family and your future!

Spring is a great time to get re-energized and refocused on your financial situation before summer and all its distractions get here. The small amount of time you spend now getting your financial house in order will pay off for you in the long run.”

Every year at tax refund time we have many clients wisely choose to  invest part of their tax refund check towards achieving a healthy credit report. Wouldn’t you love for 2011 to be the year when you finally reach the higher credit scores you desire? Wouldn’t it be wonderful if 2011 was the year when you were finally able to stop those pesky collection calls and possibly even become a homeowner?

HOPE would love the opportunity to help you reach your goals! You can join the ranks of the 70+ HOPE graduates who have completed the program with credit scores healthy enough to purchase a home in just the last 4 months! Call or email us today to schedule your own personal, no obligation credit analysis with one of our credit experts to see if the HOPE Program is right for you. We can’t wait to hear from you soon!

Check out our article in the December issue of At Home Magazine! You can pick up a copy of At Home Magazine at your local Harris Teeter, BP gas station, or Lowes Food Store as well.

Credit Myths Exposed!
Part 2
By Michelle Black

Last month we discussed 3 very common credit myths and the impact they can have upon your credit report.  Since there are so many credit myths, and since this is such an important subject, we will continue our article this month on the same theme.  Misconceptions about credit and following bad advice can damage your credit score and could even cost you thousands of dollars.  We encourage you to educate yourself regarding credit, take control of your financial future, and don’t let yourself fall victim to any the common credit myths listed below.

Credit Myth #1:  I shouldn’t check my credit too often because too many inquiries can lower my credit score.

The Truth:  You can personally check your credit report with no negative impact.  You are even entitled to a free credit report every year at www.annualcreditreport.com.  This is called a “soft” credit pull.  A “hard” credit pull happens when a lender pulls your credit to see if you qualify for a loan.  “Soft” pulls do not affect your credit score; however, “hard” pulls typically cost you 1-5 points and affect your credit score for approximately 6 months.  So, while it is fine to check your own credit report often (HOPE recommends checking your credit 1-2 times per year), it can damage your score if your credit is pulled by a lender too often.

Credit Myth #2:  One late payment won’t hurt my credit score.

The Truth:  Payment history is actually the #1 factor used by the credit bureaus to determine your credit scores.  Late payments can have a huge impact upon your credit scores.  To give you an example, several years ago we had a HOPE client whom we had helped to clean up his credit report to the point where he could qualify for a great interest rate on his home loan.  He was moving to North Carolina at the time.  During the busyness of moving he forgot to make a $15 credit card payment.  When his credit report was pulled later that month for his mortgage application his scores had dropped over 100 points!  Thankfully, we were able to walk him through talking to his credit card company in order to request that the late payment date be removed due to the circumstances.  Once the late was removed his scores recovered and he was still able to purchase his home.

Credit Myth #3:  Once a collection account is paid the account will be erased from my credit report.

The Truth:  Paying a collection account won’t automatically make the red mark on your credit report go away.  In fact, a paid collection account can remain on your credit report for up to 7 years.  Often times the creditor never bothers to update your credit report to reflect a $0 balance after receiving payment for a collection account.  It is always best to use a professional debt negotiator, like HOPE, to make sure that your paid collection accounts are updated on your credit report properly and promptly.

Credit Myth #4:  It’s best to work on cleaning my own credit report because all credit repair companies are scams.

The Truth:  “Credit repair” has a bad name, for a good reason.  Most credit repair programs are incomplete and, while they may help improve your credit report somewhat, they almost never help you to achieve a completely healthy credit status.  It’s always best to work with a credit education program like HOPE which provides negotiations and personal credit advice in addition to the dispute services provided by your average “credit repair” company.

Also, everyone has the legal right to work on their own credit report.  If you encounter a company that tries to misinform you regarding your rights, you should run the other way!  Still, please keep in mind that while you are legally able to work on your own credit report it is usually best to have a professional to assist you when cleaning up past credit issues.  You are legally allowed to represent yourself in a court of law as well; however, most of us would prefer to have an attorney represent us in order to ensure we receive the best result possible.  Repairing your credit follows the same principle.

If you have credit issues or low credit scores which are keeping you from achieving your goals of homeownership or financial freedom please give us a call!  HOPE can proudly announce that we have had over 70 graduates in the past 4 months alone to complete our program with credit scores healthy enough to qualify for a home loan!  You can overcome the credit problems you are facing too and we would love to help you achieve a wonderful success story of your own!  Please visit us online at www.HOPE4USA.com or call 704-499-9696 today for more information or to schedule your personal credit analysis with a HOPE Credit Specialist. We can’t wait to hear from you!

This year you can give your friends and family a Christmas gift that can dramatically improve their quality of life – the gift of clean credit! At HOPE we recommend checking your credit report at least once per year.  For only $30 you or your loved one can have a full, detailed, professional credit analysis with a HOPE Credit Specialist including personalized tips on how to improve his/her credit report.  Call or email today to order your gift certificates for this Christmas season! We ho-ho-hope to hear from you soon!

*Special Offer: Buy $100 worth of gift certificates during December and receive a $25 gift certificate for free!