Saving Money – Part 2 

By Michelle Black

Have you ever found yourself in a place where you have more bills than money? Money shortages lead to a poor credit rating, marital stress, and the inability to provide the things your family needs.  One of the first things you will want to do if you find yourself in a situation where your budget is unbalanced is look for a way to start saving money. We hope today’s tip will be helpful.

Tip #2: Ask for your bills to be lowered.
Similar to yesterday’s tip regarding asking for your credit card interest rates to be lowered, you can also request for many of your monthly bills to be lowered as well.  Try calling your cable company, explain that you have seen some great offers for satellite TV and that you are considering switching services. However, before switching, you wanted to check with them to see if they could offer you a lower monthly rate. While you are at it, ask for your internet service bill to be lowered as well. I have personally saved money off both of these monthly services just by calling and kindly making the request.

Other monthly bills you may be able to get lowered with a request include your cell phone bill (even if you are currently under contract), your lawn care bill, your newspaper subscription, your insurance bill, etc. By calmly and politely making the request you can save yourself a lot of money. When making the request for your bill to be lowered please keep the following in mind:

1. Always be polite and calm. Getting angry will most likely insure that you do NOT get the bill reduction you need.
2. Explain why you need for the bill to be lowered. For example, “I have seen an offer for a better rate” or “I cannot afford to continue making such high payments and I’m trying to balance my budget.”
3. Ask for a supervisor if necessary. The first customer service agent you speak with likely will not have the authority to lower your bill.
4. Don’t take no for an answer. If the supervisor refuses your request politely explain your reason for needing the bill lowered again and ask “What can you do to help me please?”

Remember to check back with us again for part 3 of our money saving blog series. Saving money can help put you on the path towards a balanced budget and even a healthier credit report! If you need personalized credit or budgeting advice please feel free to give our friendly staff a call at 704-499-9696.

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HOPE will be moving to a new, bigger location on Friday, April 20, 2012. Our offices will be closed on Friday only and we will reopen on Monday, April 23, 2012. We are excited about the move and cannot wait for you to come see the new facilities!

Our new office is just a few blocks up the same street from our current location. The new address is as follows:

3525 Centre Circle Suite 101

Fort Mill, SC 29715

Where Do Credit Scores Come From?
By Michelle Black, HOPE (Home Ownership Program for Everyone)

Credit scores affect your life in many important ways.  First, anytime you apply for a mortgage, car loan, credit card, or financing of any kind your credit score will be looked at to determine whether you are approved or denied financing.  If you are approved, your credit scores are looked at again to determine what kind of interest rate you will receive.  Credit scores are the #1 factor considered when you apply for a loan.

Since credit scores are the first key to loan approval, let’s talk a little about where these credit scores come from and how they are calculated.  There are 3 major credit bureaus in the United States:  Equifax, Trans Union, and Experian.  Typically, each credit bureau will give you a different score.  The following chart shows the basic makeup of a credit score with any of the 3 major credit bureaus:

Payment History, an individual’s history of paying bills on time, accounts for 35% of your credit score. If a person has a high percentage of late payments on bills then his/her credit score will be lower.  It may sound crazy, but late payments can lower a person’s credit scores more than any other factor including bankruptcy, foreclosure, or repossession!  One late payment can actually drop someone’s credit score 30-100 points (especially if it is the first time a late payment is appearing on the credit report in a while).

Amounts Owed account for 30% of your credit score.  This factor can sometimes be a little confusing.  The credit bureaus will look at the amount of debt being carried by a person and compare it to that person’s available credit limit.  For example, if you have a credit card with a $500 limit and you owe $490 on the card then your credit score will be lowered.  However, keep that same credit card paid off and your credit score will receive a boost!  High credit card balances can significantly lower your credit score, even if you pay your monthly bill on time!

Length of Credit History makes up 15% of our credit score.  The credit bureaus look at the age of a person’s open credit lines to determine how many points will be awarded or taken away from the credit score for this category.  The older the accounts appearing on your credit report, the better.  Opening a new account can potentially lower your credit score even if you have never missed a payment on the account – so proceed with caution when applying for new credit.

New Credit makes up 10% of your credit score.  This refers to how often a person applies for new accounts.  Every time your credit report is pulled to apply for a loan your score is typically lowered 1-3 points and you do not regain those lost points for at least 90 days.  However, a “soft pull” of your credit report (that is an individual requesting a copy of his/her own personal credit report to review the file) does not hurt your credit score at all.  If you have not reviewed your credit report in a while, you are entitled to a free copy every year from www.annualcreditreport.com. Checking your report at least once a year for errors is highly recommended.

Types of Credit Used account for the final 10% of your credit score.  It is important to have the right balance of accounts on your credit report.  Too many accounts can hurt your credit scores, but so can too few accounts.  Also, loans with consumer finance companies (i.e. paycheck advance loans) will hurt your credit scores just by opening the account and should be avoided.

Have specific questions about your credit report? Our caring credit specialists are here to help. Please contact us via email or call 704-499-9696. We would love to hear from you!

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Congratulations to Mrs. Smith, another HOPE client who is very close to her dream of homeownership!  In a mere 7 weeks of membership in the HOPE Program Mrs. Smith has already seen tremendous results!  Here are just a few of the successes she has already experienced as a member of the HOPE Program:

*Middle credit score increased from 542 to 619! (That’s 77 points in 7 weeks – wow!!)
*Over ¾ of the negative items on her credit report have been erased!

With only 21 points to go before achieving a “loan ready” credit score, we cannot wait to see Mrs. Smith successfully complete the HOPE Program with a healthy credit report that she can be proud of.  Wouldn’t it be nice to never be turned down for a loan again due to credit issues?  This will soon be a reality for Mrs. Smith and it can be your reality too!  Stop letting bad credit control your life! You can begin to take control of your credit situation today.  Check out our recent blog, 5 Ways to Give Your Credit a Kick in the Pants!, containing tips on how to improve your credit scores and you could find yourself with a success story like Mrs. Smith before you know it!

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Why Are Credit Scores Important?
By Michelle Black

So, you likely already know the basic principle about what a credit score is used for and, therefore, why it is important to have a good one.  Whenever you apply for a loan (car loan, mortgage loan, credit card loan, personal loan, etc.) a lender is going to look at your credit score and decide whether or not you qualify.  If your credit score is high enough, you can likely expect to be approved for the loan (provided you earn enough income to qualify). However, a low credit score could result in you being declined for the loan you want or, if you are approved, it could mean a higher interest rate and a bigger down payment.

To put it simply, credit scores (and your credit report) are a type of report card which future lenders get to look at when you apply for a loan.  The “report card” shows lenders a picture of how you pay your bills – on time, late, or not at all.  If your credit report shows that you have a history of paying your bills on time then future lenders will want to loan you money as well since, chances are, you will pay the payments on time and they will be able to earn a profit from you in the form of interest.  However, if your credit report shows that you have a history of paying your bills late or not at all then future lenders will be scared to loan you any more money.  The reason they will be hesitant to loan you more money is because chances are higher that they may not get paid back for their investment, much less make any kind of profit through interest fees.

In our current culture, credit scores impact our lives in many ways.  I already mentioned how you will need a good credit score to qualify for any type of loan.  However, did you also know that your credit score may be used to determine you auto insurance rate and whether or not you have to put down a deposit when opening a new utility or cell phone account?  Plus, it is now a common practice for employers to pull your credit score when you are applying for a new job.  Depending upon the industry in which you work, your current employer may even access your credit report to determine whether or not you are “credit worthy” to remain employed with the company.

Since credit affects so many different aspects of our lives, it is more important than ever to have a healthy credit score.  However, if you find yourself in the uncomfortable situation of having a subprime credit score (a consumer score of 649 or lower) then HOPE would like to encourage you to give our credit experts a call.  Remember, you do not have to feel embarrassed or defeated due to a subprime credit score!  Bad credit scores happen to good people all the time. In fact, over 60 million American currently have a subprime credit score so, if you are in the same boat, you certainly are not alone! You still deserve to be treated with dignity and respect. Don’t ever let anyone make you feel otherwise.

You can make a plan today to start improving your credit scores.  Please contact us via email or phone at 704-499-9696 to learn more about how the HOPE Program can help you to achieve the healthier credit you desire!  Over 85 graduates have completed our program in the last 4 and ½ months with credit scores healthy enough to purchase a home! We would love the opportunity to help you achieve your success story as well.

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