I ran across an article by Mary Fetzer that I tough was worth sharing with you:

10 Falsehoods About Credit That Can Cost You.

Facts and Falsehoods

When it comes to finances, it’s important to know where you stand — especially with something as important as your credit score. Are you clear on how to boost your score? “You have to be careful who you listen to,” says Dan Beck, president of Credit Management Specialists, a credit-restoration company in Greeley, Colorado. “Following the wrong advice can impact your score in a negative way.” Here, we present the 10 most common (and most costly) falsehoods about credit.

Falsehood No. 1: I have one credit score, and it’s locked in for a year.

Fact: The three credit reporting agencies — Equifax, Experian, and Trans-Union — operate independently and do not share data. “The information each reports is very different,” says Kate Lister, author of Finding Money. Accordingly, your credit reports and scores will differ from one agency to another, which is why Lister recommends getting a copy of each report every time you check your credit. And because your score is constantly changing (it’s recalculated whenever your credit report is pulled), “Review your credit report at least every six months to look for inaccuracies,” says Ann-Marie Murphy, co-founder of Quizzle, a credit-management site for consumers.

Falsehood No. 2: I shouldn’t check my credit too often, because a lot of inquiries can lower my score.

Fact: “You can check your credit report through a credit bureau as often as you like with no negative impact,” says Lynnette Khalfani Cox, a personal-finance expert. Checking your own credit is considered a “soft inquiry,” which has no bearing on your credit score. Other soft inquiries are those made by existing lenders reviewing your account and lenders trying to offer you pre-approved credit.

Falsehood No. 3: Closing unused accounts lowers my available credit and will improve my score.

Fact: Not so. While it feels fiscally responsible to close out an account that’s at zero, it’s actually a big zero for your score. “Credit utilization is how much credit you use compared to how much credit is available to you,” Murphy says. By closing accounts, you’re decreasing the amount of credit available to you, so your proportion of credit used will be higher — and that makes you a higher risk in the eyes of lenders, she says. And closing old accounts also removes your history, one of the biggest things that factor into credit score, Lister says. “If you cancel a credit card that has a lot of history, you may hurt your score,” Lister says.

Falsehood No. 4: Paying cash and carrying no debt will help my credit score.

Fact: “Having no credit history or never using credit has a negative impact on your credit score,” says Cox. “FICO reports that people with no credit cards tend to be higher risk than those who use credit cards responsibly.” The longer you have an account and pay on time, the greater the benefit to your score.

Falsehood No. 5: All debt is created equal.

Fact: Various types of credit will impact your score differently, and 10 percent of your score refers to your mix of credit. “If you are heavy in one area of credit, your score may be lower,” says Hallie Hawkins, co-founder the Certified Credit Report Reviewer Certification Program with the Institute of Consumer Financial Education. But the credit-scoring systems are chiefly concerned with credit-card debt. Though your mortgage or student loans are important, “Focus on lowering your credit card utilization in order to get a big boost in your scores,” Cox says. “Having a big credit-card debt will hurt you.”

Falsehood No. 6: Paying off my credit-card balances every month improves my credit score.

Fact: Not necessarily. “When you pay off your credit-card bill, the bank doesn’t notify the credit bureaus,” says Wayne Sanford, author of The Credit Reality Today. And if your credit is pulled mid-month, before you pay your bill, your score will reflect that balance. “The only way to be sure your balance shows as zero is to cease using the card for a month or more,” says John Rackley, a certified mortgage-planning specialist. “Unfortunately, this is an example of how someone who handles their credit responsibly can be penalized by the credit-scoring system.”

Falsehood No. 7: If my debt is less than 30 percent of my income, it has a positive effect on my score.

Fact: The credit-scoring agency has no record of your income, and is therefore not factored into your credit score, says credit administrator Michele Brander. What’s vital is that you establish your ability to pay your debts on time.

Falsehood No. 8: Incorrect personal information negatively impacts my score.

Fact: Your personal information has no impact on your credit score. “Income, employment history, race, religion, national origin, gender, marital status, and age are not factors in credit scoring,” Brander says.

Falsehood No. 9: Once a collections account is settled, derogatory information will be removed from my report.

Fact: Paying a collection account in full is the fiscally responsible thing to do, but it won’t make the collection red mark on your report go away. The account may be marked as paid in full, which is important, but it will remain on your credit report for seven years, says Hawkins.

Falsehood No. 10: One missed payment won’t hurt my credit score.

Fact: Think again before you flake out on that one payment. “The single biggest determinant of your credit score is how well you’ve paid your bills in the past,” says Cox. Credit-scoring formulas take into account your late payments, how late they were, and how long ago the late payments occurred.

Free of Falsehoods

“Ignorance is not bliss when it comes to your credit score,” says Murphy. Now that you’re free of falsehoods and armed with facts, you can take complete control of your credit score.

Retroactive Interest Rate Hikes Will Be a Thing of the Past

Credit card changes are coming. Many people are finding themselves with the dilemma of credit card companies changing there existing interest rates on their existing balances. This placing many who have been consistently on time in a very difficult situation. The new minimum payments jump drastically in many cases.

Help is on the way. Come next February, card issuers will no longer be able to retroactively raise rates on your existing balances unless you’re more than 60 days late on your account. Instead, they will only be able to raise your rate on new purchases going forward.

Say you have $10,000 in debt on a card with a 10% annual percentage yield. Once the new rules take effect, even if the rate jumps to 15%, you’ll still pay the old rate on that balance. The difference in rate means you can eliminate the balance four months faster and save $1,276 in interest. And even if you do miss your payments by more than 60 days and see the rate on that old balance jump higher, issuers must revert to the original, lower rate after you make six months of on-time payments, says Duncan Douglass, a partner with Alston & Bird, a law office in Atlanta.

To Prepare: Issuers have been jacking up interest rates across the board. If you carry a balance, make sure it’s on a card with a low rate come 2010.

At HOPE we help our clients stay updated about existing law changes so they can make wise credit decisions. If you would like to know more please call our staff at 704-503-3669. We are waiting on your call.

Save money on auto insurance.

The only thing better than having great car insurance is having great insurance that doesn’t cost an arm and a leg. These programs will help you slash your auto insurance premiums without compromising on coverage.

1. Some insurers are test-driving “pay-as-you-drive” plans for cars equipped with on-board systems that track driving time and mileage. The insurer provides a wireless device that securely transmits information to the carrier about your driving habits to help determine your rate.

2. Before renewing your policy, ask your agent if you qualify for any discounts resulting from membership in a union, a religious affiliation, fraternal or professional organization, service in the armed forces, or through your employer. And check in your wallet for potential savings. The credit cards you’re carrying might net you discounted car insurance.
   
3. Up-front payment, up-front savings? Some companies offer as much as a 10% discount if you pay for your entire policy upon renewal (instead of making payments).

4. Bundle up? Most carriers offer a multi–policy discount if you purchase both auto and homeowners coverage, or insure more than one vehicle.

5. Savings for safety? Ask about discounts for cars equipped with safety features, such as anti–lock brakes, anti–theft devices, and automatic seat belts. And if you have three or more years without an accident or moving violation, ask – or rather, brag – about it; many insurance companies offer discounts to drivers with spotless records.

6. Ask about discounts for completing a defensive driving course, and find out about any savings offered for those with low-risk occupations. Statistics have shown individuals in professions like nursing, engineering and lawyers pay close attention to details and are less likely to get into accidents. Some carriers reward these folks with occupational discounts.

These are just a few ways you can save money on autmobile insurance.

At HOPE we help our clients every day save money and make wise credit decisions. If you would like to know more please call us at 704-503-3669. We are waiting on your call.

I am often asked, “How will my credit scores effect my home loan.”

With the new guidlines set by lenders the requirments are bringing greater demands on the home buyer. The definition of what is a good credit score has changed drastically over the past year. It is important to get your scores as high as possible. It can make a diference of thousands of dollars over the life of your home mortgage.

It is important for you to know where you stand on your credit scores. It is good to get professional help in reading your credit file. Lenders are looking for certain criteria before they will approve you for a loan. While your credit scores are very important they are also looking today at many other factors in considering your approval.

So what is a solid credit (or FICO) score? The aggressive new FICO classifications are as follows:

– 740 – 850: Excellent borrowers qualify for the best financing terms.

– 700 – 739: Very good borrowers receive favorable financing.

– 660 – 699: Good borrowers should qualify for most loans.

– 620 – 659: Fair borrowers may qualify but may pay higher interest.

– Below 620: Poor borrowers will likely not qualify for a loan.

At HOPE we help our clients improve their total financial picture so they can qualify for the best interest rates available to them. If you would like to know more please call our friendly staff at 704-503-3669.

I am often asked what do I look for to be sure I get the best credit advice. I think there are at least 10 things to look for.

1. Be sure the company has a good reputation. Many companies over promise and under deliver. It is important that the company has a good track record. See what former clients have to say about the service the received.

2. Be sure the company did not just start doing business last month. Again a proven track record goes a long way toward being sure the company will perform well and will be around for some time in the future.

3. Ask how long it will take to help you achieve your goals. Some companies want to keep you in their program as long as they can to make more money off of you. Pick a company that will help you achieve your goals in the shortest amount of time possible.

4. Ask the company exactly how they are going to help you obtain a healthy credit report. Find a company that will do more than just put a temporary band aid on your credit. Find a company that will teach you how to obtain a healthy credit report and how to keep it healthy for the rest of your life.

5. Find a company that will keep you informed about the process all along the way. Communication and the ability to ask the company questions will go a long way toward helping you obtain your goals faster and with better results.

6. Find a company that will charge reasonable fees and is not out to gouge you. I know of a company that charged almost $2600 to work on a clients file with little results.

7. Using a company that has been in business for years will help you negotiate and pay off accounts at great savings, sometimes thousands of dollars in savings. These companies will have contacts all over the United States that will work with you.

8. Find a company that will counsel you on making wise credit decisions. To maintain a healthy credit file you need proven and trusted professionals that know what they are doing so they can advise you properly.

9. Find a company that will keep you updated about current credit issues that will affect your financial future. Part of our credit education is staying on top of new laws and news that can benefit your total credit picture.

10. Find a company that reveals everything upfront with no hidden fees or rules that you will find out about later. Look carefully at the materials and web site to see if they disclose things clearly to you up front. Also be sure they do not pressure you to sign up today. If they are a reputable company there services will be available to you tomorrow, next week, next month and even next year. Be sure you feel comfortable and have confidence in the decision you finally make.

HOPE USA will offers all of the things listed above to clients every day. If you would like to know more please call our friendly staff at 704-503-3669. They are waiting on your call.