give yourself credit
TRANSCRIPT
-
8/2/2019 Give Yourself Credit
1/43
Give Yourself Credit!
-
8/2/2019 Give Yourself Credit
2/43
Setting Financial Goals
-
8/2/2019 Give Yourself Credit
3/43
Getting what you want
Getting what you want doesnt always come easily.
Chances are youll have to work hard to get what
you want!
-
8/2/2019 Give Yourself Credit
4/43
What are goals?
Something for which you work andwhich you achieve by planning andfollowing the plan.
-
8/2/2019 Give Yourself Credit
5/43
Short, Middle, or Long Term
goals? Replacing a TV set
Purchasing a vehicle
Paying for your childs college education
Planning for your retirement
Buying a home
Buying a refrigerator
Short, Middle or Long term goals?
-
8/2/2019 Give Yourself Credit
6/43
How to achieve your goals: Write down goals and place reminders where
youll see them everyday
Keep your goals in the forefront of your mind
Get people in your life to support you andfeed off their inspiration
Develop your goals hand-in-hand with yourspending plan, and figure ways you can applymore of your money towards achieving them.
-
8/2/2019 Give Yourself Credit
7/43
Which family will succeed?The Jones FamilyWILL be out of debt by January of nextyear based on monthly payments of $600WILL buy a home by March with $10,000
saved for a down payment.WILL have $14,000 saved for tuition by thetime their child is 18 years old.
The Smith FamilyHOPE to get out of debtWANT to purchase a homeWISH to eventually send
their child to college
-
8/2/2019 Give Yourself Credit
8/43
Organizing Financial Records
-
8/2/2019 Give Yourself Credit
9/43
Does this look familiar?
-
8/2/2019 Give Yourself Credit
10/43
Organizing Financial RecordsConsequences of not organizing financial records:
Time wasted in looking for important documents.
Confusion about how much money you have and howmuch you owe.
Difficulty in planning and meeting goals.
Not having documents when you absolutely need
them. Inability to answer questions regarding discrepancies
with your finances.
Extra fees for late payments and account overdrafts.
-
8/2/2019 Give Yourself Credit
11/43
How to Get Organized Use a file folder system, carton, box or expanding file
File regularly to avoid a file pile
Commit to staying organized
Tell someone where to find your documents in case ofemergency
-
8/2/2019 Give Yourself Credit
12/43
Which documents? Utilities Bill
Birth Certificate
Passport & Immigration docs
Credit & Debt Card Receipts Bank Account Statements
Copy of your tax returns
Insurance and InvestmentDocs
Social Security Card Credit Card Bill
Police/court documents
Will
Others????????
-
8/2/2019 Give Yourself Credit
13/43
When Credit Card Statement arrives OPEN IT.
Make sure the charges listed are yours, or authorized by you.
Make sure any payments you made were credited to your
account properly. Contact your credit card issuer immediately if you have any
questions about charges or payments.
-
8/2/2019 Give Yourself Credit
14/43
Bank statementsMake sure that all your Debits and Deposits are accurate.
Deposits - money paid into your account.
Debits money taken out of your account and include:
- Checks you write
- Transactions you make using your debit card
- Automatic deductions - car loan payments or insurance payments- Monthly service fees, overdraft fees, ATM charges, NSF fees
- Additional charges for exceeding monthly transaction limits
- Charges for new checks
-
8/2/2019 Give Yourself Credit
15/43
Organize your Checkbook- Always date your checks and debit transactions
Write the purpose for the check or debit in the memo area ofthe check or check register
Record every check you write in your check register
Keep ATM and debit receipts, and enter them promptly in yourcheck register
Balance your checking account statement and checkbookevery month
-
8/2/2019 Give Yourself Credit
16/43
Reconcile your Checking Account MONTHLY
When your Bank Account Statement arrives open it!!!!
Check every entry debits & credits against your records
Search for errors and investigate whyeven if its $1
If your balances are still different, ask your institution for help.
-
8/2/2019 Give Yourself Credit
17/43
What is Debt-to-Income Ratio ?
-
8/2/2019 Give Yourself Credit
18/43
Have you been declined for a loan?And you pay your bills
on time
Then maybe your
debt-to-income
ratio is too high?
-
8/2/2019 Give Yourself Credit
19/43
So, what is Debt-to-Income Ratio ?
Your earnings
Vs.
Your level of debt
-
8/2/2019 Give Yourself Credit
20/43
Why is it important to monitor my
debt-to-income ratio?
By staying aware of your debt-to-income ratio, you can:
Make sound decisions about buying on credit and taking out loans;
See the clear benefits of making more than minimum credit cardpayments; and
Avoid major credit problems.
-
8/2/2019 Give Yourself Credit
21/43
Calculating your debt-to-income ratio:
Step 1 Calculate your monthly take home pay
Multiply your paycheck amount by either 26 or 52 - depending onhow often you are paid.
Now divide your annual take-home pay by 12. This is your monthlytake-home pay.
If your take-home pay is inconsistent, estimate your monthly take-
home pay by dividing last years annual take-home pay by 12.
Remember to include: Alimony and child support, bonuses,commissions, tips and any other income.
EXAMPLE: TOTAL MONTHLY TAKE HOME PAY $2000
-
8/2/2019 Give Yourself Credit
22/43
Step 2 Calculate your monthly debt
Calculate how much you pay every month for your debts
Remember to include:
Car payment(s) Loan payment(s) (furniture, appliances, etc.) Financial institution loan(s)
Student loan payment(s) Other loans/credit accounts Credit card payments Payment for past medical care
EXAMPLE: TOTAL OF MONTHLY DEBT = $400
-
8/2/2019 Give Yourself Credit
23/43
Step 3 Calculate the Ratio
Divide your total monthly debt payments by your totalmonthly take-home pay, or income.
EXAMPLE:
Monthly take-home pay = $2,000
Monthly debt = $400
400 divided by 2,000 = .20
DEBT-TO-INCOME RATIO = .20 OR 20%
-
8/2/2019 Give Yourself Credit
24/43
Is your debt-to-income ratio ok?
16-19% or lower and youre probably okay!
20% or higher and you may:
Jeopardize your ability to make major purchases,such as a car or a home.
Keep yourself from getting the lowest interest ratesand best credit terms.
Have difficulty getting additional credit in case ofemergencies.
-
8/2/2019 Give Yourself Credit
25/43
Communicating about money
Family situations can make it
difficult for one person to control
the spending: Dual incomes
Blended families
Childcare costs
Eldercare costs Multiple credit, checking, and savings
accounts
Debts
-
8/2/2019 Give Yourself Credit
26/43
Why we need to communicate about money Set ground rules for your money discussions
Leave the judgments about who is right or wrongout of the discussion
Identify your common problems Agree on common solutions - such as sticking
to a budget or allocating savings
Establish common goals
Decide on which things are important to the entirehousehold
-
8/2/2019 Give Yourself Credit
27/43
Credit Reports Facts & Myths
-
8/2/2019 Give Yourself Credit
28/43
What is a Credit Report? A report which details, in depth information about
your credit history.
Creditors, insurance providers, employers, leasingagents and any other person you authorize hasaccess to it.
Reveals your Credit Score.
-
8/2/2019 Give Yourself Credit
29/43
Your Credit Report Reveals-
Your level of debt Your bill-paying habits
Length of credit
Inquiries made aboutyour credit
-
8/2/2019 Give Yourself Credit
30/43
How can I get a free copy of my
credit report?
Go to www.annualcreditreport.com
You are entitled to 1 free copyof your credit report each year
-
8/2/2019 Give Yourself Credit
31/43
Plus.
You can also get a FREE copy if.
Youve been denied credit, insurance, oremployment.
You have 60 days to order a report
Youre on welfare
Your credit report is inaccurate because of fraud.
-
8/2/2019 Give Yourself Credit
32/43
Do you know what your credit score is? If you answered no then you could be a victim of identity theft.
You could have accounts on there that are paid, yet still
reflecting a balance.
You may not receive the best terms when applying for creditcards or loans.
Scores range from 300 900
The higher the score the better! Average score - 680
-
8/2/2019 Give Yourself Credit
33/43
Whats theVantageScore?
Created in March 2006
Used by all three reporting agencies
(Equifax, Experian, TransUnion) Scores range from 501 to 990
Number score goes with a letter grade
Example: 501-600 = F, 901-990 = A
-
8/2/2019 Give Yourself Credit
34/43
Whats in my Credit Score?
-
8/2/2019 Give Yourself Credit
35/43
Whats not included in my Credit Score ? Race, color, religion, national origin, sex and marital status
Your age
Your salary, occupation, title, employer, date employed oremployment history
Where you live
Any interest rate being charged
Any items reported as child/family support obligations
Certain types of inquires
Information taken from www.myfico.com
http://www.myfico.com/http://www.myfico.com/ -
8/2/2019 Give Yourself Credit
36/43
How can I get a good Credit Score?
Pay all your bills on time
Keep your debt-to-income ratio level low
Dispute all negative information
Correct inaccurate information with all 3 major reporting bureaus
Make sure old accounts are closed at YOUR request
Request that all missing positive credit information be included inyour report
Notify in writing your creditors of any change of address Fill out all credit applications the same
Review your credit report at least once a year!
-
8/2/2019 Give Yourself Credit
37/43
Innocent mistakes are madeCredit Reports can contain incorrect and inaccurate
information from innocent mistakes being made:
A person applied for credit under different names.
Someone made an error when transferringinformation from a hand written application.
Payments were applied to the wrong account.
-
8/2/2019 Give Yourself Credit
38/43
My report contains inaccurate and
incorrect information..You must notify all 3 credit bureaus in writing:
Detailing what is inaccurate/incorrect and why
You will need to provide evidence/proof to verify your claim
The Credit bureau has 30 days to investigate and respond to you.
Information that can not be substantiated, must be removed.
If the disputed information is confirmed as accurate, you can include anexplanation to be included in your credit report.
It isyourresponsibility to have the information corrected!
-
8/2/2019 Give Yourself Credit
39/43
Am I responsible for a co-signed debt?
YES!
If a co-signed debt goes to collection:
A collection agency may try to collect the debt from you.
Institutions can sue you and get a judgment against you for thedebt plus interest and legal fees.
Lenders may consider co-signed amounts when calculating yourdebt-to-income ratio before extending you more credit.
-
8/2/2019 Give Yourself Credit
40/43
How do I repair my credit?You are fully able to dispute inaccurate
and incorrect information yourself!
You can use a Credit Repair Company: Beware of scams and large upfront fees
Some companies illegally and deceptively promise toclean up credit reports, erase bad credit, or providea new credit history
-
8/2/2019 Give Yourself Credit
41/43
Debt Options Try and arrange a repayment plan directly with your
creditors.
Contact a reputable non-profit Credit CounselingOrganization to pay off your unsecured debt within48-60 months with greatly reduced interest.
Contact a reputable Debt Settlement company to
settle your debt.
-
8/2/2019 Give Yourself Credit
42/43
Where to get more information:
1 888-DEBT-USA
www.americandebtcounseling.org
-
8/2/2019 Give Yourself Credit
43/43
Thank you!
American Debt Counseling, Inc.
1 888 DEBT USA
www.americandebtcounseling.org