Thursday, September 24, 2009

10 things that can affect your FICO Score?


Steer clear of these 10 things experts say can mangle your score.

  1. fico_scoreDon´t avoid using credit. If you don´t use credit, you won´t have much of a credit score. “A credit score is an important tool companies use to protect themselves,” Sweet says. The lower the score, the higher the risk, and this can affect whether or not a loan is approved.
  2. Don´t miss payments. Paying a bill late will hurt your credit, but missing a payment will damage it even more. “If you do so, you can´t make it up,” Sweet says. In other words, making two payments in the next billing cycle will not remove the blemish from your credit report. Whether or not you pay your bills on time determines 33% of your score.
  3. Don´t limit loan types. Despite what your bank account may state, a car payment and a mortgage may not be enough. Also managing an installment debt, such as a credit card, is a good indicator of credit savviness. There are five elements to the credit score model and revolving credit, which allows consumers to charge and owe different amounts each month, is one of them. “It´s 10% of the score,” says Gail Cunningham, Vice President of Public Relations for National Foundation for Credit Counseling.
  4. Don´t close unused credit card accounts. Actually, just use caution, says Sweet. A factor in credit score models is your utilization, which is your debt vs. how much is available. For instance, if you owe $4,800 on a card with a $5,000 limit, you´re using most of your available credit and this “utilization” will have a negative impact on your score. Counting toward 30 percent, your utilization is the second highest factor in your credit score. You should charge no more than 30% of your available credit, recommends Cunningham.
  5. Don´t be a credit tease. Don´t run up charges all over town or apply for several cards at once while looking for the best rewards program. Recent inquiries means that you have accessed your credit and this can affect your score negatively. “This signals that you´re desperate for credit and don´t have enough cash available for your purchases,” says Cunningham. She adds that if you are shopping for a major purchase, such as a mortgage or car loan, the inquiries will usually roll together into one.
  6. Don´t rob Peter to pay Paul. Don´t charge anything unless you know how and when you are going to pay it back. One of the benefits of credit is the ability to spread out payments on a big purchase, not to delay paying with hopes that the money will come in - from somewhere. If you need to use a credit card for convenience, use a prepaid card or a secured card that enables you to make payments to your own line of credit.
  7. Don´t get on the call list. When a debt turns into a collection account, it´s an indication that you got yourself in hot water. Once a collection agency jumps into the arena, it becomes the owner of the debt, which will show on your credit report. Trying to make payments to the original debtor will not make the collection agency or the negative mark on your credit go away.
  8. Don´t forget the little things. That library fine you didn´t pay or the health club contract you signed but didn´t honor can show up on your credit report. Any debtor has the right to report unpaid bills to the credit bureaus, and many of them exercise that right.
  9. Don´t negotiate. On paying less than what you owe, that is. If you cannot repay a debt in full and a creditor agrees to settle for less than you owe, you haven´t won the battle. Instead of negotiating to lower the overall amount of the debt, ask to have your interest rate or monthly payment lowered so that you can continue to pay the debt off in full.
  10. Don´t give up. If you have late payments, missed payments, defaulted loans, and similar credit mess-ups in-between, don´t give up and think that your credit report is ruined. Although offenses like these generally stay on your credit report for seven years, the recovery clock doesn´t start ticking until you have one full month of paying all of your debts on time, says Sweet.

Wednesday, September 16, 2009

One millionaire’s advice on attaining wealth

These are quotes from an individual who did not make a lot of money, yet understood the basic principles of attaining wealth. Wealth is not accumulated by what you do, but it is accumulated by what you are. It is a state of mind where the natural consequence tends to be wealth as you define it. This is different for each individual, therefore I will not provide a static definition. Therefore, if you have goals to achieve a desired level of wealth, then the simple solution is to be that which you strive for. Once you become that, then you will ultimately bring all that you want into your life. Opportunities will begin to present themselves to you, you will come across financial information that are aligned to your goals, people will come into your life to help you…it is great how this works.

These are the quotes from one of our blogging relatives…FreeMoneyFinance

  • “The real secret is to spend less than you earn. I don’t care how much you earn, you spend less than you earn. Spend less than you earn. This is true whether you’re on welfare or a millionaire.”
    The idea here is presented by most personal finance professionals; a very simple and fundamental formula. The opposite to this leads to leverage. Avoid leverage at all costs.
  • “No smoking or alcohol consumption. This has nothing to do with morals and health – okay, maybe health – it’s all about the money.”
    This refers to expensive habits.
  • “No-load mutual funds are the only way to go. To give anybody 3-4% of your money off the top is insane.”
    No-load mutual funds are funds where you do not have to pay the managers commission up front when purchasing. I agree, this is the way to go. There are many no-load mutual funds that are also low cost (very low expense ratio). See Vanguard to begin with.
  • “Volunteer to help others.”
    Giving is always useful. I wrote an article a while ago on the benefits of charitable giving as it pertains to wealth. See Wealth and Charitable Giving.
  • “I can buy whatever I want. Not need, but want. I just don’t want very much.”
    When you don’t want very much, you do not have a desire for a lot of material possessions. This allows you to retain a lot of your wealth. This is a great mindset to develop. Focus on what you need, not want. When you do so, everything becomes available to you, because you desire nothing.
  • “Wealth is created by investing money, not by working longer and harder.”
    Invest now. There is no point to wait. Your money should be working for you; it should not only be the other way around. Each year you wait reduces the amount of money you can earn through the power of compounding over time.

Sunday, September 13, 2009

Forbes 50 Most Powerful Women in Business

Full list

Rank | Name | Company

1 Indra Nooyi PepsiCo
2 Irene Rosenfeld Kraft Foods
3 Pat Woertz Archer Daniels Midland
4 Angela Braly WellPoint
5 Andrea Jung Avon Products
6 Oprah Winfrey Harpo
7 Ellen Kullman Dupont
8 Carol Bartz Yahoo
9 Ursula Burns Xerox
10 Brenda Barnes Sara Lee
11 Ginni Rometty IBM
12 Safra Catz Oracle
13 Ann Livermore Hewlett-Packard
14 Sheri McCoy Johnson & Johnson
15 Melanie Healey Procter & Gamble
16 Anne Sweeney Walt Disney
17 Heidi Miller J.P. Morgan Chase
18 Carol Meyrowitz TJX
19 Colleen Goggins Johnson & Johnson
20 Judy McGrath Viacom
21 Ann Moore Time Warner
22 Sheryl Sandberg Facebook
23 Carrie Cox Schering-Plough
24 Susan Chambers Wal-Mart
25 Barbara Desoer Bank of America
26 Susan Ivey Reynolds American
27 Charlene Begley General Electric
28 Abigail Johnson Fidelity
29 Liz Smith Avon Products
30 Sallie Krawcheck Bank Of America
31 Christina Gold Western Union
32 Jan Fields McDonald’s
33 Sue Wagner BlackRock
34 Pam Nicholson Enterprise
35 Joanne Maguire Lockheed Martin
36 Claire Babrowski Toys “R” Us
37 Deirdre Connelly GlaxoSmithKline
38 Gail Boudreaux UnitedHealth
39 Meredith Whitney Meredith Whitney Advisory Group
40 Lorrie Norrington eBay
41 Kathleen Murphy Fidelity
42 Cathie Lesjak Hewlett-Packard
43 Linda Hudson BAE Systems
44 Marissa Mayer Google
45 Lynn Elsenhans Sunoco
46 Cathie Black Hearst Magazines
47 Bonnie Hammer General Electric
48 Lauren Zalaznick General Electric
49 Amy Pascal Sony Pictures Entertainment
50 Maggie Wilderotter Frontier Communications

Friday, September 4, 2009

Suze Orman’s Debt Loyalty List

Which debt to pay off first

As we all know, there are many solutions to the same problem. This idea applies to debt payment as well. Many professionals provide different approaches to paying off debt. As I mention in many of my posts, the goal of this blog is to create an environment where readers are provided with relevant information of varying schools of philosophy in order to make informed decisions based on ones personal financial situation. This way of debt payment is Suze Orman’s way. Check it out.

Suze Orman states that there are fundamentally six (6) kinds of debt.

1. IRS Debt

2. Student Loan Debt

3. Personal Loan Debt

4. Mortgage Debt

5. Car Loan Debt

6. Credit Card Debt


1. IRS Debt is debt owed to the IRS. Suze declares that owing money to the IRS is the worst possible scenario and should therefore be focused on first. Why? Well, the IRS has the ability to legally seize your money via your bank account at anytime.

2. Next is paying off for your college education. Suze says that one reason to keep paying your student loan is that it cannot be discharged in a bankruptcy filing. The interest will continue to accrue. They can also garnish your wages to get their money back if you decide not to make your student loan payments.

3. Personal debt is ranked this high because of the deleterious effect it can have on relationships. You must be responsible to those who have loaned you money and make it a point to pay them back.

4. Mortgage debt is bad for obvious reasons. Does the term foreclosure mean anything to you? The last thing you want to lose is your home.

5. Car Loan debt is important as well if it is your means of transportation to work. If it assists you greatly in earning your income, be sure you make your car payments so that you can continue to earn much needed income.

6. Credit Card debt is unsecured debt. This means that if you don’t pay it, they can’t seize your home or your car. They also can’t take your money or seize your accounts. Many would say this is the most important one to pay off because of the high interest rates charged, however, this is another perspective on it.


Once again, it is important to look at your own financial situation and seek professional advice before making huge financial decisions. Educating yourself financially is the first step to financial success. Be well.