Author Archives: Norm Schriever

10 Ways to Start Saving Money TODAY!

Posted on February 8, 2018 by Norm Schriever

Do you want to save money?

Of course you do!

In this ongoing series, we’ll point out effective ways you can save a lot of money this year, next month, and even today!

Here are our first 10 ways to start saving money today:

  1. Cut down on beverage costs.

Did you know that the average American spends about $650 a year just on soda and soft drinks! For a family of four, that adds up to $2,600 – enough to pay off a credit card or put aside for savings, perhaps. Add in bottled waters (when you could just bring your own reusable bottle and fill up at water coolers), energy drinks, and expensive coffee drinks (more on that later), and you may be able to save $300 or $400 every month just by watching what you drink!

  1. Compare homeowners or renters insurance policies.

Most families purchase a homeowners insurance policy, pay the high premium, and forget about it. But it’s a good idea to contact your agent every six months or so, just to check in if there are new programs, specials, or lower rates available. It’s also prudent (and free!) to shop around a little and see if you could save significant money with another company or agent. Something as simple as installing new smoke detectors, adding an alarm system, or other health and safety upgrades may qualify you for a discount.

  1. Shop around for a better auto insurance plan.

While you’re at it, contact your insurance agent and ask him or her if there are better deals available for your auto insurance. You may get a discount for signing up with a company that holds your other insurance policies, too. Or, if your driving record has improved (or just stayed uneventful), you live or work in a different zip code, or your credit score has gone up, there may be a price break you’re not currently taking advantage of.

  1. Hit the OFF switch on electronics and appliances.

Sure, we know to turn lights off when we leave a room and shut off the TV before we leave the house. But even when you’re gone and things are supposedly off, certain appliances still drain a lot of electricity – and run up your energy bills. In fact, toaster ovens, coffee makers, mixers, kitchen radios, some microwaves, cable boxes, video game consoles, and other entertainment systems and appliances STILL draw electricity even if they’re off. As a general rule, if an appliance has. LED light or digital display, unplug it – don’t just turn it off – and you’ll start saving.

  1. Install a new SMART thermostat.

Heating and cooling costs add up big for most homeowners, whether you live in a place with the coldest arctic-like winters (hello, Chicago!) or sweltering, humid summers (hi again, Chicago!). But most home heating or cooling systems are outdated – and their thermostats are wildly inefficient, too. You don’t have to replace your whole HVAC system to save money, but switch out your old thermostat for an energy-efficient smart model.

In fact, a new Energy Star thermostat allows you to program specific temperatures for different times of the day. You can even program it higher or lower based on different zones of the house or adjust for when you’re not home. How much money will that save you? The U.S. Department of Energy estimates that you can cut back on energy costs by up to 15% per year just by getting a smart thermostat!

  1. Bundle your cable, internet, and phone services.

It’s ridiculous home much the average person pays for cable TV, Wi-Fi at home, home phone, and cell phone service every month. While you may not think you can live without all of those, you may be able to save a pretty penny just by bundling your services. In fact, most telecom companies are so motivated to get your business (and keep it), that they’ll give big discounts and special pricing for consumers that sign up for all of these services with them. Just by calling around and comparing bundled packages and offers, you may save $100 a month or more!

  1. Take a close look at your memberships and subscriptions.

From monthly magazine subscriptions to membership clubs, internet sites that require a monthly fee and smartphone apps with recurring monthly payment. In fact, the average household pays $129 in memberships and subscriptions like this every month! That’s well and good if you use them and like them, but most of us don’t even realize all of the things we’re paying for! Take a careful look at all of your memberships, subscriptions, and online recurring payments, cutting the fat where necessary

  1. Cut out those ATM fees.

The average American spends at least $290 in ATM fees every year. That’s not banking fees, but just the cost to access their own money at ATM machines. In fact, the average out-of-network ATM fee is now $4.52. There are even ATM operator fees of $2.50 to $3 for non-members, and steep international fees. Some opportunistic banks even charge ridiculous ATM fees based on location, such as many Las Vegas money machines that charge $10! In total, you may be wasting $30 or $40 every month in your household just by using the wrong ATM and the wrong bank.

  1. Pack your lunch most days of the week.

Of course, everyone loves to eat out when they’re at work. But the cost really adds up. Let’s do the math – if the average brown bag lunch costs about $4, but going out to a restaurant, sandwich shop (or even fast food) comes to about $9 a meal, you’ll be saving $5 a day by not eating out. Add that up over 20 working days, and you’re at $100 savings a month, or $1,200 a year. However, realistically, you probably spend more on nicer sit-down restaurants, tips, beverage costs, snacks, etc. So make it a policy to brown bag it Monday through Thursday and then splurge on Friday. You’ll save a lot of money and not feel you’re missing out!

  1. Request that your credit card companies lower their APRs.

Credit cards will often reward good customers with lower APRs, reduced interest rates, or by fixing a low interest rate if you’re currently paying a variable rate. It doesn’t hurt to call them and ask for some sort of better terms, rate, or savings. The worst they can say is “no!” But if you’ve paid on time and they value your business, they’ll often do something to keep you. Do this for all of your credit cards, and you may start saving significant money every year!

  1. Know your credit score.

About one-third of Americans have no idea what their credit score is right now, and nearly 45% of us haven’t checked our score or report in the last twelve months. That lack of attention can cost us big money. In fact, errors, inaccuracies, duplicates, and even ID theft cost American consumers countless millions of dollars each year.

To make sure you save as much money as possible, pull your credit report at least three times a year.

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Contact Nationwide Credit Clearing for a free credit report and consultation to make sure you aren’t overpaying!

5 Ways to jump-start your credit score.

Posted on February 1, 2018 by Norm Schriever

Is your credit score far less than ideal these days? If your FICO is lagging, just like about 30 percent of all Americans, it may be holding you back from getting a better credit card, applying for a mortgage loan to buy a house or even being hired for your dream job.

But the good news is that there are strategies you can use to build your credit, raising it to the point that you are considered a prime candidate for the best interest rates and credit approvals from banks, lenders, and other financial institutions.

Some of these strategies are part of a long-term plan to maintain good credit, but we also have ways to almost instantly boost your score.

If you are planning to apply for a home mortgage, finance a new car, or try to get a job that checks credit as part of the hiring process (like about 45 percent of all employers these days), you’ll want to utilize these five tactics.

Remember that Nationwide Credit Clearing is the U.S. leader in fast, effective, and affordable credit repair, so call us if you’d like a free credit report and consultation to get started!

  1. Pay down balances.

We know that the ratio of your debt to total available credit – called credit utilization ratio – makes up about 30 percent of your credit score. Therefore, people with maxed out credit cards or high debt loads compared to their available credit will see their scores steadily sinking.

So, the first thing you want to do when improving your credit score is to pay down as much debt as possible.

It’s important to get your credit utilization ratio below 30 percent (so you only owe $3,000 or less on a credit card with a $10,000 available balance). Credit experts even suggest keeping a utilization ratio of 10% or less to achieve a great credit score. However, don’t go all the way to 0% because it won’t show an established payment history they can use in their calculations (since you won’t have any payment).

  1. Request a credit line increase.

Don’t have enough money sitting around to pay down your credit balances enough to raise your scores? Another sneaky-good way to improve your credit utilization ratio – without paying down one cent of debt – is to increase your total available credit. For instance, let’s say you had a $10,000 credit line but owed $4,000 (so your utilization ratio was 40 percent).

Instead of paying down your debt, if you could get the credit card company to increase your available limit to $15,000 from 10k, your utilization ratio just went down to about 27 percent – and your score would go up! To do this, simply call the credit card company or lender and make your case over the phone and they’ll either approve or deny your request or approve a lesser increase.

  1. Ask your creditors to remove late payments from your credit report

Did you know that you can simply ask your creditors to remove evidence of late payments from your credit report? Why not? It’s free for you to ask (nicely), and the worst thing they can say is “no.” Called ‘Goodwill late-payment removal,’ this practice is more common than you may think. In fact, any creditor has the power to remove a late payment from your credit report.

For instance, department store credit accounts and other retail accounts are usually pretty liberal with goodwill late-payment removals. They may do just that if you can make a good case that it was a one-time incident because you didn’t receive the bill on time, an address change, etc. and that you otherwise have a perfect record with them.

Once they tell you that the late payment is removed, ask for payment history update letter, which is your confirmation in case you need to present documentation to the credit bureaus.

  1. Pay for deletion of collections

Many of us have collections on our credit reports, which can do some serious and ongoing damage to your score But there may be a way to get it removed. If you’ve missed enough payments to have an account in collections, your creditors may agree to erase any negative credit reporting for that account if you pay it off.

The good news is that you can also negotiate your payoff, and if it’s in collections, they may accept less than the full amount to settle you up – sometimes even 50 percent of your balance or far less!

Once you negotiate the payoff amount AND they agree to remove the item from your credit report, only pay the collection via a mailed certified check, with “Cash only if you delete account from credit report” written above the endorsement line. Also, make sure you get their promise in writing via a letter of deletion. We can use the letter to apply for a rapid rescore instead for you, so you won’t have to wait a month or more to see your credit score rise!

  1. Dispute any errors on your credit report.

Most people don’t realize that credit reports often contain mistakes, misreporting, duplicate items, or outdated information. All of these things may be lowering your score, but they can also be removed. Start by contacting Nationwide Credit Clearing for a copy of your credit report, and we’ll help you review it carefully for any errors or inaccuracies.

By reviewing it line-by-line, we’ll be able to highlight inaccuracies or items that are lowering your score. Remember that there are three major credit bureaus and they each may report different information, so it might be a good idea to check all three. Look for errors on larger accounts first, length of history, payments reporting on time, and that your balances are accurate.

The last step is formally disputing each inaccuracy or error with each of the credit bureaus, Equifax, Experian, and TransUnion, separately. They are legally obligated to get back to you in a certain amount of time with proof that the information you’re disputing is correct – or they have to change it or remove it.

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If you have more questions about disputing items, how to boost your score quickly, or want a free copy of your credit report, contact Nationwide Credit Clearing!

 

 

 

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Are Americans illiterate when it comes to credit, credit scoring, and finances?

Posted on January 24, 2018 by Norm Schriever

As a nation, are we credit illiterate?

And if so, how much is it costing us?

Let’s start with that second question, which is easy to answer.

According to Marketwatch, the lack of financial literacy by the average American has cost us a collective $200 billion over the last 20 years! That’s the estimated cost of paying higher interest rates, late fees, not saving for retirement, and the impact of bad decisions caused by living paycheck-to-paycheck.

That comes to $20 billion each year from our lack of financial knowledge – including illiteracy when it comes to credit!

Likewise, The National Financial Educators Council just released a survey that found the average respondent lost $9,724 each year due to their credit and money illiteracy! That backs up the findings of another national study that found that with a mere 20-point increase to our average national credit score, each adult in the U.S. would save almost $5,000 each year!

Now, let’s try to answer the first question we posed, are we just as financial illiterate when it comes to credit scores – or credit illiterate?

On first glance, we might not think so. In fact, the average FICO score reached 700 for the first time ever in 2017, which is a very good score.

But there’s a lot more to the story.

Only 58 percent of Americans have a credit score above that golden 700 number.

And consider that 60 percent of American adults haven’t checked their credit report in the last 12 months, and 66 percent haven’t checked their credit score. That’s about 2/3 of all Americans that don’t even know what’s going on with their credit!

Only 32 percent have received a copy of their free credit report over the last year, and nearly one-in-five Americans haven’t pulled their credit in the last three years!

What’s even scarier is that about 1/3 of all American adults surveyed said that they really didn’t see any reason to pull their credit report or check their score.

Additionally, 56 percent of respondents confessed that they had no idea their credit score was the most important factor when applying for new debt like a mortgage, car loan, or credit card.

And while our national average may be healthy, there’s a wide discrepancy between credit score haves and have-nots.

According to Experian, almost 1/3 of all Americans (30%) have a credit score lower than 601 – which is considered sub-prime. VantageScore also estimates that of the 220 million U.S. adults, 68 million of them have poor or bad scores.

But this isn’t just a snapshot of the good and bad when it comes to credit because we have to factor in those who are credit invisible, too.

Studies have found that about 26 million U.S. adults are credit invisible. While this means that they don’t even have enough of a credit history to garner a score, it’s effectively the same thing as having terrible credit.

Many people are also denied credit even though they want more of it. A reported 67 percent of people who applied for new credit cards in 2015 were denied, and one out of three were approved but for a lower available balance than they’d requested!

Younger adults are really scoring an F when it comes to credit score literacy.

An alarming 68 percent of Americans make at least one significant and costly financial mistake before they even hit the age of 30! These mistakes often cost them dearly as they’re trying to start down the right financial path, and credit score blemishes make take seven to ten years to fall of their reports.

But that doesn’t stop young people from getting credit, as 50 percent of respondents said that they received their first credit score by the age of 21, even though 72 percent had no financial education at all before going to college!

Millennials and Gen Xers are also taking out more debt than ever thanks to student loans, not credit cards. In fact, student loan balances are at an all-time high, with the average student loan balance at $23,186. Our national student loan balance is now $875 billion – higher even than credit cards – and increasing at a rate of $2,853.88 every second!

But it’s not just younger people that are fumbling when it comes to debt, especially credit cards. Seventy-seven percent of us have a credit card, and the average U.S. adult with credit card debt owes $16,048. With a sizable average interest rate of 13.66%, that means $183 is accumulated in interest every month.

One in three carry a balance month-to-month without paying it off, often paying just the minimum payment.

Even worse, nearly 16 percent of people with a credit card balance don’t even know their card’s APR, or true interest rate, and that’s even more prevalent (21 percent) among lower-income households.

So if we’re so credit illiterate, what’s the solution?

It seems the simple fix is just to start teaching financial education in schools. In fact, 99% of adults surveyed thought it would be a good idea to teach about credit, debt, interest rates, personal finance, and credit in high schools or even earlier.

However, the plan runs into a snag when you consider that only 1 in 5 teachers feels qualified to teach a class on financial or credit education!

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Until they start making the grade, the better solution is to contact Nationwide Credit Clearing for a free copy of your credit report, a complimentary consultation, and the #1 credit repair firm in the country!

 

 

 

 

 

15 Things to STOP doing that are still making you broke! (Part 2)

Posted on January 17, 2018 by Norm Schriever

Most of us have high hopes for a better financial situation this year. For some, that may mean saving more; for others, landing a better-paying job; and homeownership is still the American Dream for most families.

But before we can tackle this financial Bucket List and move forward, it’s important that we identify the money mistakes that we’re making that are continuously setting us back. We’ve identified 15 things that are common among the average American consumer, causing them to always be short on cash!

So, if you want this year to be your best yet for your finances and finally turn around your money mistakes, stop doing these 15 things!

In part one of this blog we covered the first seven things to stop doing if you don’t want to be broke, and here are the next eight:

 

  1. Not improving your credit score

Your credit score dictates so much about your financial picture, from credit card interest rates to mortgage payments, student loans to auto financing. But it also influences your insurance premiums, utility bills, and can even prevent you from getting a new job!

In fact, it’s estimated that for every 20 points you improve your credit score above sub-prime, you’ll save an average of $10,000 in interest and payments over the course of your life as a consumer!

The first step to improving your finances is always to take account of your present situation, so contact us for a free credit report and consultation!

 

  1. Not educating yourself about finances

Should you lease a car or buy it? What’s the best home loan for you? Should you be investing your money first or paying off your existing debt? From saving for retirement to healthcare options, choosing the right credit card to filing your taxes correctly, we can all stand to learn a lot about money.

However, too many people neglect to educate themselves when it comes to financial matters. Even worse, they often make critical financial decisions based on rumors, advice from their “expert” neighbor, or water cooler talk from coworkers. In fact, the average person spends much more time planning their vacation every year than they do planning for retirement!

Instead, empower yourself and make sure you have the best information to build a strong financial future by reading articles, credible blogs, books, and watching personal finance videos. You’ll be amazed what you learn in a very short time!

 

  1. Renting instead of buying a home

Home ownership is still the American Dream, and for good reason. In fact, there are a wide range of benefits to owning your own home instead of renting, from social, community involvement, family and, of course, financial advantages.

When you have a fixed rate mortgage, your monthly payment will never go up, but you’ll actually being paying it down to $0 over the years, owning your home free and clear. But when you rent, the monthly price can and will go up periodically, and you’re amassing no equity, no appreciation when the value goes up, and don’t even get tax advantages.

Studies show that the average homeowner has a 3.5x higher net worth than the average renter, as well as more savings, more funds for retirement, and pay less in total taxes. Their children are also more likely to do better in school, more likely to graduate from college and enjoy a much more stable and happier home life.

These days, with mortgage loans that are geared towards first-time buyers that require low down payments, there’s really no reason NOT to buy!

 

  1. Not planning for the future

Do you enjoy going to work every day, working long hours, coming home exhausted, and still only bringing home enough to live on until the next paycheck?

Well, get used to it, because many of us will be working way past traditional retirement age, or even well into their senior years. There’s no denying that Americans aren’t putting enough away to retirement comfortable any 65 (or anywhere close!). In fact, 40% of the workforce have nothing saved for retirement, and 60% aren’t on track.

But here’s the good news – you still have time to save, and the time-value of money dictates that the earlier you start investing, the faster your money will grow. So make sure you deduct the maximum retirement savings form your check, definitely take advantage of any employer matching, and focus on savings and acquiring assets that produce cash flow  – not racking up debt and liabilities. You’ll thank me once you can retire on schedule!

 

  1. Straight up wasting money

New polls show that we have learned our lesson from the past recession. In fact, 55% of households are still spending more than they take in every month (the difference made up in debt), and our personal savings rates are at a rock-bottom 2.2% annually.

Of course, many of our costs – from rent to health care to food – have increased sharply over the last few years, so it always feels hard to get ahead. But we’re still spending – or wasting – money on a ridiculous list of things that show that we’re living well above our means.

Sure, the average person has a closet full of new clothes they hardly wear, but we’re even talking about things more substantial. For instance, it’s estimated that Americans spend $443 billion every year in wasted energy bills, with most people overpaying by a whole one-third!

And we’re all eating out at restaurants and on the go WAY too much, which is costing us.

The average American household now spends $6,759 on food every year but $2,787 of that total is for meals in restaurants or outside of the home. We also spend an average of $1,200 on fast food every year – or $117 billion!

We also spend $65 billion on soft drinks and $11 billion on bottled water every year, we dump countless billions gambling, and this one will blow you away: the average cigarette smoker puffs away 14% of their total income on cigs every year, which adds up to about $80 billion, or 1/7 of our total discretionary income budget!

Stop wasting your money on things you don’t need – and won’t even miss!

 

  1. Paying too much for your car loan (not your car)

Of course, we all need transportation to get to and from work, school, and home. And transportation costs actually remain reasonable, with low gas prices and car buying easier than ever. In fact, it’s not the cost of cars that’s eating up our budget, but the high price of the financing we’re using to purchase them.

In fact, the average monthly payment for a new car is now almost $500, as the typical car shopper is financing $28,524 at 16-28% interest rates over terms of 73 to 84 months! Ouch!

So before you go shopping for a car, talk to Nationwide Credit Clearing about improving your credit score so you’ll qualify for a better auto loan. Then, you’ll be free to purchase that fantastic new car – on your terms!

 

  1. Paying late

It’s hard enough to manage our finances and get ahead without choosing to spend more, but that’s exactly what we do when we pay our bills late.

In fact, about 1 in 4 U.S. adults don’t pay their bills on time, and only half of 18 to 34-year-olds do so. When we pay late, whether it’s a credit card, a phone bill, or our rent or mortgage, we get hit with unnecessary late fees.

The typical American pays $250 each year in late fees just to their bank! So always pay on time if you don’t want to be broke!

 

  1. Getting whacked with unnecessary fees and charges

Likewise, overdraft fees, ATM fees, and other extraneous fees from financial institutions are really putting a dent in our wallets. Banks charge their own consumers an average of $412 in overdraft fees every year, adding up to about $33 billion annually!

We also pay about $329 per year in ATM fees, and they’re often tacking on charges just for doing business with them on many checking and savings accounts! Make sure to read the fine print and pay attention to how much you’re wasting in fees!

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Improve your finances this year starting with a free credit report and consultation from Nationwide Credit Clearing!

25 Facts about the U.S. auto industry (including how a good credit score will save you a lot of money when buying!)

Posted on January 10, 2018 by Norm Schriever

Since 1908 when Henry Ford rolled out the first Model T from his Detroit production line, America has been one of the world leaders in manufacturing and selling cars.

Here are 25 facts about the auto industry – including car loans and how a good credit score can save you a lot of money when buying!

1. In 2017, we bought a lot of cars! In fact, 6.2 million new cars were sold, as well as 11.1 million SUVs and light trucks, adding up to approximately 17.3 automobile transactions.

2. Considering that there are approximately 323 million people in the United States, that means more than 1 out of every 18.6 people bought a brand new car…just this year!

3. While those numbers are impressive, they’re slightly off of the high point of auto sales in 2016, when nearly 17.5 million light passenger vehicles sold, as well as 17.4 million in 2015.

4. Worldwide, 78.6 new cars sold in 2017!

5. In 2017, the motor vehicle industry (including manufacturers, dealerships, used part dealers, service centers, etc.), employed almost one million U.S. workers (approximately 940,000).

6. In fact, the auto industry is responsible for about 3 to 3.5% of our entire U.S. gross domestic product.

7. We also manufacture a lot of cars in the United States these days. In fact, nearly 12 million light passenger vehicles were built in the good ‘ole U.S. of A last year.

8. At least 2.1 million of those automobiles were exported and sold abroad, spanning almost every country in the world for a total value of $57 billion.

9. Additionally, the secondary automobile parts export market is worth an impressive $80 billion, and we also exported $5.5 billion in used cars.

10. While that’s a whole lot of new cars, the U.S. is still second to China for automobile markets, both in terms of sales and production.

11. Of course, a lot of car sales mean a lot of car sales dealerships. In fact, there are currently 18,250 new vehicle dealerships in the United States.

12. According to government estimates, there are about 222 million licensed drivers in the United States, which means that about 69% of our country has a driver’s license.

13. We also know that there are approximately 260 million passenger cars, trucks, and SUVs on the roads, which adds up to 1.24 automobiles for every person with a driver’s license in the U.S.!

14. In fact, there are 260,350,940 registered vehicles in the United States, which is an all-time high.

15. That also accounts for 20 million more automobiles than 2007, and in 1990 there were only 193 million registered autos in the U.S.

16. But the car market is still heating up around the world, with new car dealers expected to bring in 916 billion by 2020, with used car sales following with 106.6 billion in sales.

17. An interesting data point is the Scrappage Rate, which measures the number of cars sent to junkyards and put out of service every year. Over the last couple years, the Scrappage

18. Rate fell to only 11.5 million annually, a record low when compared to the number of cars on our highways and roads.

19. If we look at the monthly budget of the average America, their rent or mortgage payment tops the list, but transportation costs (including car payments) comes in second.

In fact, when added together, housing and transportation account for about 50% of the typical American’s income.

20. The average American’s monthly spending chart looks like this (based on a $51,442 per capita): income:

33% Housing, $16,887
17% Transportation, $8,998
13% Food, $6,599
11% Insurance, $5,591
7% Health Care, $3,556
5% Entertainment, $2,605
3% Clothing, $1,736
11% Total other expenses, $5,470

21. While we may be buying new cars at record rates, we’re still using financing to purchase the vast majority of them. In fact, in 2017, auto lending hit a new record with more than $1.1 trillion in car loans owed by consumers!

22. In fact, the average person with a car loan now has $18,694 in auto debt, and the average new car came with a sticker price of about $35,000 in 2017.

23. But last year, the average person who financed their car purchase borrowed $30,032 in loans (the first time that average exceeded $30,000). The average monthly payment for a new car loan is now $503, the first time that number has risen over $500.

The average loan term is now 67 months (5.58 years) for new automobiles and 62 months (5.16 years) months for used autos, both record highs.

24. However, car loans are being extended to people with marginal or even poor credit scores like never before. These days, almost 20% of all auto loans go to people with credit scores of 620 or less – called “subprime” (a score of 680 is typically considered good.)

According to Experian, 19.3% of auto loans now go to consumers with subprime or deep subprime credit scores. That means less than two-thirds of auto loan borrowers (61.3%) have prime or super-prime credit.

25. There’s no denying that it’s a great feeling to buy a new car, and reliable transportation is a must for most of us. However, subprime auto loans tend to come with sky-high interest rates and cost us way too much in total interest. For example, a person financing a $23,000 car might spend $9,615 just in interest with a 66-month loan at 14.99 percent!

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So, in order to get a great car loan, have a better monthly payment, save a lot in total interest, AND get that beautiful new car you love (and deserve), talk to Nation Wide Credit Clearing first about improving your credit score!

50 things you didn’t know about credit scores, credit reporting, and debt. (Part 1)

Posted on January 3, 2018 by Norm Schriever

1. The first credit card ever was released in 1951 and issued by the American Express company.

2. People often talk about their “credit score” as if they had just one. In fact, there are more than 100 credit scoring models used by banks, lenders, and financial institutions.

3. But FICO is the biggest and most recognizable credit scoring model. FICO is an acronym for the “Fair Isaac Corporation” and is based on the risk-predicting algorithms developed by mathematician Earl Isaac and engineer Bill Fair in 1956, and then rolled out in the 1980s as a credit scoring system.

4. Did you know that these days, credit scores are even influencing people’s dating decisions? It’s true, as surveys show that the majority of people would consider someone’s credit score before dating them or getting in a relationship. There’s even an online dating site called CreditScoreDating.com with the motto, “Credit Scores are Sexy!”

5. Millennials – and especially college kids – are really missing the boat when it comes to keeping good credit scores. In fact, Millennials have the lowest Vantage credit scores of any generation, including Gen X (ages 30-46), Baby Boomers (47-65), and the Greatest Generation (66+).

6. Speaking to that point, surveys show that 85% of U.S. college students don’t even know their own credit score!

7. These days, your credit score impacts far more than just buying a house or getting a good rate on your credit card, as many employers now check the credit reports of their potential applicants. In fact, 1 in 4 Americans looking for a job have been subjected to a credit check, and 1 in 10 has been disqualified from getting hired because of something on their credit report!

8. According to reports by the Department of Labor, occupations that routinely check a job applicant’a credit include: 1) parking booth operator, 2) the military, 3) accounting, 4) mortgage loan originator, 5) Transportation Security Administrator (TSA), 6) law enforcement and 7) temporary service positions and many more.

9. FICO scores are based on a complex (and secretive_ algorithm that factors every nuance of credit behavior from tens of millions of consumers. Their programs then look for patterns that will help them predict future defaults (or on-time payments) for borrowers, which they then translate as a numeric spectrum of risk for lenders, or your credit score.

10. These days, an estimated 33% (one out of every three) of all American adults do not pay their bills on time every month!

11. How much bad credit card debt do the big banks take a loss on every year? Last year, the top 100 banks in the U.S. had an average charge-off rate of 3.87%, which means that nearly 4 out of every 100 people don’t pay,

12. Last year, the average Annual Percentage Rate (APR) for all U.S. credit cards was 13.14% – another great reason to build up your credit score and get out of debt this year!

13. About 19 countries around the world use some form of FICO scores, and many more have their own credit scoring system.

14. Nearly two-thirds of U.S. adults – or 144 million people – haven’t even looked at their credit report within the last 365 days.

15. And one-third of working-age Americans don’t even have a clue what their credit score is!

16. Visa is by far the biggest credit card in the U.S., with 278 million cards at home (that’s about one for every adult in our population!). Mastercard is next with 180 million cards

But while Visa has 522 million cards across the globe, MasterCard just beats them out with 551 million cards abroad.

17. Visa is also the largest credit card in the U.S. by sales volume, with $981 billion in annual charges. MasterCard is second with about $534 billion in yearly debt from cardmembers.

18. The average U.S. consumer has 13 credit accounts listed on their credit report, which includes 9 credit cards and 4 installment loans. (But remember, that doesn’t mean they’re all open and active, just reporting.)

19. In the 1990s, America saw an explosion of personal debt levels that was unprecedented. One of the main causes was the fact that banks, lenders, and financial institutions starting using credit scores en masse to help them gauge risk and make faster, more accurate decisions.

20. In fact, in 1995, the nation’s two largest mortgage financing agencies, Fannie Mae and Freddie Mac, started advising lenders to use FICO scores for their borrowers, allowing the floodgates on lending to tens of millions of Americans.

21. But at first, FICO didn’t want to reveal how they calculated a consumers credit score, opting to keep it a secret. But under intense pressure from financial advocates and governmental influence, in 2003 they released a list of 22 factors that go into their credit scoring model. That same year, the U.S. Congress passed a new law that granted consumers the right to access their credit score.

22. Remember that credit scoring systems weren’t designed to help consumers and the general public, but lenders and companies. Therefore, credit scoring models, reports, and computations weren’t supposed to be easy for the average person to understand!

23. Insurance companies are using credit scores and reporting like never before. In fact, insurance actuarials prove that the lower a customer’s credit score, the more likely they are to file an insurance claim – costing their insurer money.

24. These days, 90% of homeowners and auto insurance companies use credit score as a factor when assigning and rating premiums! Therefore, insurance companies reward customers with good credit scores, and your premiums will be much lower than for those with a low credit score.

25. If you want to improve your credit score (and keep it high), then try to only keep credit cards from well-respected, major banks, like VISA, Mastercard, American Express, etc.). They’ll show that you’re a better steward of your finances and a more responsible debt holder than if you open accounts with lesser known finance companies, retail cards, etc., and your credit score will reflect that.

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Look for part 2 of this blog, with 25 more things you didn’t know about credit scores, credit reporting, and debt!

15 Things to stop doing that are making your broke!

Posted on December 28, 2017 by Norm Schriever

Many of us set resolutions every new year, and chief among them is the goal to improve our finances. For some, that may mean saving more; for others, landing a better-paying job; and home ownership is still the American Dream for most families.

But before we can tackle this financial Bucket List and move forward, it’s important that we identity the money mistakes that we’re making that are continuously setting us back. We’ve identified 18 things that are common among the average American consumer, causing them to always be short on money and even hurting their families.

So, if you want 2018 to be the best year yet for your finances, stop doing these 15 things that are making you broke!

  1. Maxing out credit cards

We’re certainly a nation that loves debt, as we now have more than 1 trillion in credit cards and other revolving debt, an all-time high. Add in mortgages, student loans, car loans and medical debt, etc., and U.S. consumers personally owe more than $12.9 trillion – the GDP of about half the countries in the world!

In fact, the average adult with debt in the U.S. has 8 credit accounts, $16,000 worth of credit card debt alone, and is paying about $430 a month just in minimum payments.

While there’s nothing at all wrong with having credit cards and using them responsibly (you should keep some revolving debt), the problem comes when we max them out – with no plan to pay them off.

Paying only minimum payments means that the average $10,000 balance at 15% interest will take 15 years and about $22,000 to pay off completely.

Maxing out cards also impacts your credit score, since about 30% of your FICO is calculated by the amount of debt you hold compared to your total available credit (called credit utilization.)

So stop maxing out those cards and make more than just the minimum payment this year!

  1. Not saving

We understand that money is tight and there’s usually more month than paycheck; not the other way around. But one of the principal ways you can ensure that money isn’t always this tight in the future is to start saving. And there’s no better way to put away funds for a rainy day than automatically saving out of every paycheck (or tax refund).

In fact, the majority of Americans couldn’t even come up with $600 today without borrowing or selling something, and sudden financial setbacks like a job loss, medical problem, broken car or other unexpected expense can send about 40% of families into dire financial circumstances.

The best way to combat that – and make sure that you’re always prepared and won’t make even worse short-term financial decisions – is to save a certain percentage of your paycheck automatically, before you even see that money. To resist the temptation to spend it, keep a savings account without an ATM card so it’s not easy to access. You’ll be amazed how it adds up!

  1. Using payday loans, check cashing, and rip-off credit accounts

Remember how we just mentioned financial emergencies? When the roof leaks, someone gets sick, or the job starts laying people off, those cash crunches often result in people making panicked, short-term financial decisions just to get by. Frequently, those result in cash advances on credit cards, payday loans, using check cashing establishments, applying for a bunch of new credit cards at once, or looking for other personal loans.

The terms and interest rates on these loans can range from incredibly high and expensive all the way to usurious and illegal, and usually put people in a much worse financial situation than when they started.

  1. Making impulse purchases

Have you ever noticed that retail, department, and grocery stores line the checkout aisles with certain items? They do that on purpose, of course, because they understand that the majority of consumers will make impulse purchases; buying things they don’t need and didn’t plan on purchasing.

Just how much can you save by skipping the magazines, sodas, electronic knick-knacks, and other impulse purchases every month? Furthermore, do you even know how much you’re spending on coffee, lunches, and meals out? It all adds up.

Try this: For one month, carry around a little notepad (or just use your smart phone – there are great apps that help you track every dollar you spend), and write it down every time you spend a dollar. At the end of each week, add it all up according to categories. You’ll probably be shocked how much you’re spending on things you don’t need or necessarily even want – and that money could be going to savings, paying down your credit cards, or other good use.

  1. Not checking your credit periodically

Did you know that only 1 in 4 people check their credit report annually, and 60% of Americans don’t even know what their credit score is now? Checking your credit report regularly is so important for a host of reasons:

  • 25% of credit reports contain errors, inaccurate or duplicate information.
  • ID theft and credit fraud now affects nearly 10% of the population every year, and the recent Equifax Hack saw the personal data of about 167 million Americans compromised.
  • These days, your credit score is so more important than just getting a mortgage or applying for a new credit card. Getting an apartment, the insurance rates you pay, your utility and cell phone accounts, and even getting a new job may depend on a clean credit report and a good score.
  1. Not looking into refinancing your mortgage

If you do own your home already, congratulations! While it may be the best investment you’ll ever make, there’s no denying that you’ll be paying it off for a long time (usually 30 years) and for a huge sum of interest – probably more than the original home price! So every smart homeowner should inquire with their mortgage broker if a refinance is available and something that would help them save.

It’s free to talk to your favorite loan officer and get an idea about your options, and lower-interest mortgages or refinancing into a product like a 15-year loan may save you tens (or even hundreds) of thousands of dollars over the years. You may even be able to save money on your monthly payment AND pay the home off faster, but the worst that can happen is that they tell you that you don’t need to make a change.

By the way, the better your credit score, the lower your interest rates and payments will typically be!

  1. Not reading the fine print

That 0% credit card offer sure looks great, but what will the rate be after that introductory period? Is that great low mortgage payment fixed, or will it go up as other interest rates rise? What are the fees and charges associated with that new student loan or business loan?

Too often, we’re offered new credit that looks like a no-brainer, but comes with some important stipulations that will make it way more expensive in the future.

Nothing is free in this world (except great credit advice from Nationwide Credit Clearing!), so make sure to read the fine print and know exactly what you’re getting into before you sign on the dotted line. Any loan, investment, or other financial vehicle is sure to come with fees, charges, and interest rate details that are crucial to understand. Read all you can but it’s also a good idea to ask questions – and get the answers in writing!

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Look for part two of this blog soon, where we’ll cover the next eight things to stop doing if you don’t want to be broke!

 

 

What do couples fight about? Money, finances, and even credit lead the list – but it doesn’t have to be that way. 

Posted on December 6, 2017 by Norm Schriever

Ask any couple that’s been married for a while and they’ll probably tell you that marriage is difficult – but well worth it.

Likewise, people in longterm relationships or even just dating often have ups and downs, bumps in the road, and even fights.

But did you know that the number one cause of arguments and disagreements among couples?

You might be surprised that it has more to do with spending, savings, and even use of credit than more romantic concerns.

According to research, here are the top 5 things couples fight about:

1. Money

2. Division of domestic responsibilities

3. Sex

4. Parents

5. Power dynamics

It turns out that the number one cause of relationship disagreements, squabbles, and wars of the roses is money.

What specific money issues count as a relationship red flag?

Here are the most common financial issues or topics we couples fight about:

• The cost of raising children

• Taking care of aging parents or family

• One person makes more than the other

• Risk tolerance

• Financial objectives

• Personalities and values

• Power dynamics in the relationship

• Previous debt or debt accrued during the relationship

So why is money such a hot button issue, to the point that it breaks up so many seemingly happy relationships? 

For most people, money is one of the most stressful and emotional problems. In fact, data from the American Psychological Association reveals that money is the leading cause of stress for Americans today.

Our attitudes, background, and values about work, money, security, and retirement are passed down from our parents starting at an early age, and so they are deeply ingrained, right or wrong.

In fact, many people won’t jump into marriage – or even start dating someone – if they don’t feel they are financially compatible. A recent national survey found that 57% of men and 75% of women say that the other person’s credit score factors into their decision to date them or not. And about 30% of women and 20% of men say they won’t marry a person with a low credit score!

The truth is that arguments over money compound, more than any other reason, except perhaps infidelity, and this type of fight is the most likely signal that the relationship is ending. In fact, studies have shown that fighting over money is a leading indicator of rocky relationship roads in the future. In fact, only substance abuse problems and cheating are bigger predictors of divorce than money issues!

These days, the average couple getting married has a 40-50% chance of getting divorced at some point. But couples with no significant assets at the time of their marriage are 70% more likely to get divorced than couples that are solid financially. In fact, if your income is at least the U.S. median (about $50,000), your risk of divorce is decreased by 30% (compared to those who make $25,000 or less).

It’s no wonder why money plays such a critical role in our relationships, as “financial infidelity” is also on the rise, a form of dishonesty when partners hide their financial dealings from their better half – or even lie about them.

However, if you feel that your spouse spends money irresponsibly, your likelihood of divorce is increased by 45%. Researchers also found that newly married couples who took on a lot of credit card debt became less happy over time. But newlyweds who cut back, saved, and paid off or stayed out of debt measured higher levels of happiness over their marriages.

But before you start second guessing your current relationship because you have disagreements about money from time to time, note that relationship experts and marriage counselors say almost all couples have these heated exchanges over dollars and cents.

“People should expect to fight about finances,” says Laurie Puhn, a New York City-based couples mediator. “It’s a part of any marriage and any long-term relationship. You will fight about finances.”

What’s a “normal” amount of fighting over finances? About 31% of all couples — even the ones that say they are very happy – have at least one fight over finances and money once a month or more.

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Look for part two of this blog where we cover tips and tactics to help ensure that money doesn’t ruin your relationship!

10 Credit and financial tips for the holidays

Posted on November 27, 2017 by Norm Schriever

The holidays are here, and while it’s a golden time to enjoy family, friends, give back to others and the many blessings in our lives, it’s also a time of year that can be dangerous financially. In fact, most households see a huge spike in spending and debt over between Thanksgiving, Christmas or Hanukkah, New Years – so much so that many retailers make 15-20 percent of their total annual sales during that period. Add in Valentines Day, winter family vacations and possibly a couple of birthdays, and it’s a time of year that could break the budget and crash your credit score.

The good news is that the holidays don’t have to time to see your debt and spending spin out of control. Here are 12 tips to help you save money, plan responsibly, keep your debt level down, and protect your credit score.

1. Set a budget

Did you know that the average American plans on spending $812 on Christmas or holiday gifts? While that is a significant amount of money, the reality is that we often shoot far past what we intended to spend, especially if you add in extra holiday meals, entertainment, decorating, parties, etc. So this holiday season, set a realistic budget and stick to it, skipping those extra money wasters that are necessary.

2. Consider spending cash

Studies show that we spend far more when we pay for purchases with a credit or debit card compared to cash. So this holiday season, visit the bank and take out the cash you’ll need for each gift on your list. You’ll end up spending less overall and also won’t have a big credit card bill come January or February – or a potential hit to your credit score. 

3. Set gift limits

Have you ever given someone three presents totaling $150, only to receive a $20 gift in return? Have a conversation with your friends and family to determine if you’ll exchange gifts, how many, and set a spending limit. You may be refreshed to hear that many of your friends would rather spend time with you or go out to dinner than receive a gift, which means you’ll have more money to spoil the kids!

4. Don’t open store cards

You’re at the cash register at your favorite store at the crowded mall, doing some late Christmas shopping, when the friendly cashier asks the inevitable question, “Would you like to open a store card and get an additional 20 percent off your purchase today?”

You look at the pile of your things and do the math – saving 20 percent on the bill would add up to enough to buy you a nice lunch AND a Starbucks for the ride home.

Wait!  Stop!  This scenario is played out millions of times during the holiday season and throughout the year, with virtually every big retailer offering store credit cards these days.  But even though it seems like a hospitable offer for a generous discount, applying for additional credit may really hurt your credit score. Store retail credit accounts often have high interest rates, low balances, hidden fees, and aren’t looked at favorably by the credit bureaus. Instead, skip the store cards and keep a responsible, low-interest card that gives you cash back or rewards points. 

5. Be wary of identity theft

Identity theft and crimes of financial and data theft are more prevalent than ever in the United States, especially with the recent Equifax hack. Each year, approximately 20 million people see their identities used fraudulently, with the bill on that theft upwards of $50 billion dollars. (That’s three times more than the combined $14 billion in losses from all other types of consumer theft – burglary, motor vehicle theft, property theft, etc.) combined.

It also takes a lot of time and often money to clear up the mess identity thieves leave behind, as a compromised credit report will set off a domino effect of raising interest rates and even insurance premiums. On average, each identity theft victim suffers direct losses of $9,650, up from just $3,500 a few years ago.

So review your credit report with the help of Nationwide Credit Clearing, don’t use credit cards on fishy sites, don’t ever make purchases or give your financial details on public or unprotected Wi-Fi networks, change passwords frequently, and generally stay vigilant and protected.

6. Don’t max out credit cards

It’s really easy to max out credit cards during the holidays, but that could cause serious harm to your credit score. In fact, consumers with a score over 760 have an average credit card utilization (aggregate credit card balances relative to credit limits) of only 7 percent, and keeping under 30 percent will keep your score healthy.

7. Have a plan to pay off debt

If you don’t do you your holiday shopping with credit cards, not cash, make sure you have a sound plan how and when you’ll pay them off. It’s best to pay it off in one lump sum before interest charges even kick in, but if that’s not possible, then set a schedule of extra payments you’ll make to get your card paid off at least within the first couple months of the next year.

8. Put some money aside for emergencies

Murphy’s Law dictates that the least convenient time something can go wrong, it will. So put a few hundred dollars aside in case of emergencies or special events over the holidays. That way, if the water heater explodes Christmas morning, the car breaks down on the way to the office holiday party, or you run up your cell phone bill wishing everyone a happy New Year, you’ll be covered. The best part is that if nothing happens that warrants spending your emergency fund money, you can use it to pay off debt, add it to savings, or invest the money.

9. Start saving for next year

Now that you’ve had a great holiday, it’s time to start thinking of next year! Open a separate savings account or out aside an envelope and deposit some money every month once you get paid, not to be used for anything else. Even $25 or $50 a month will add up to big bucks that can cover most of your holiday gift-giving budget come next winter!

10. Keep your resolution to improve your credit score

Our credit scores factor into just about every lending and financial decision we make these days, including even renting a home or getting a job with some employers. Furthermore, just be improving your score from the Fair or Poor range to Great (around 720 or 760 and up), you can save a LOT of money over time. In fact, over your lifetime as a consumer, you could potentially save tens or even hundreds of thousands of dollars in interest payments on mortgages, student loans, credit cards, and auto loans, just by keeping a great score.

Therefore, it’s more important to make a firm resolution to finally improve your credit score The good news is that it’s easy to analyze your credit report and see what needs fixing with the help of Nationwide Credit Clearing – and free!

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Contact us at MyNationwideCredit.com for to set up your free credit report review and consultation, and make it a happy holiday!

 

 

Can your credit score go down because of your social media activity?

Posted on November 22, 2017 by Norm Schriever

 Like it or not, social media is a big part of our lives. In fact, 81% of Americans have at least one social media profile, and we now use 2,675,700 GB of Internet data per minute! Twitter, Instagram, Snapchat, LinkedIn, and YouTube are popular social media platforms, but Facebook is still the biggest, with more than 2 billion users worldwide.

People post just about every detail of their lives these days, share droves of links and content from others, and reach far past their circle of friends that they know in real life.

But it might not just be other social media users who are watching your Facebook and social media accounts and judging you. In fact, banks, lenders, and credit bureaus may soon be paying attention to your social media usage – denying you for a loan or lowering your score based on what they see.

Already, the scope that our personal data from social media is collected, shared, and sold is startling. Pretty soon, you might be denied for a loan on a credit card, a car, or even a mortgage because of who you’re friends with on Facebook. For instance, the average credit score of your social media friends and network could be a factor that influences your credit worthiness, too – a scary proposition. It’s not as far-fetched as you may think.

Back in the “good old days,” lending in the U.S. usually took place on a more personal level, with consumers walking into the local branch of their hometown bank. They sat down with a banker whom they already knew a long time and made their case for approving the loan during a conversation, with the bank granting or denying their request based on their character and reputation.

We’ve come a long way since then, and now, lending decisions are made uniformly with mountains of data collected and interpreted by nameless, faceless credit agencies with advanced algorithms – the credit bureaus.

But even with all of our advanced technology, some things never change, as credit bureaus and lenders may well be turning back the clock and trying to gauge your character, lifestyle, and reputation before approving you for a loan. Not only can they look at what you post, but check-ins, what content you like and share, and even the groups or brand pages you belong to.

The U.S. Patent office recently granted an updated patent on technology that combs social media for evidence of a person’s closest network of friends. It then relays that information to potential creditors, who can make lending decisions based on the friends’ perceived financial stability.

The patent, which Facebook first acquired from Friendster and inventor Christopher Lunt in 2010, actually has a much broader scope of intended use than just data mining for lenders. In fact, the main purpose of the patent is to protect technology that formulates and tracks how social media users are connected in a social network, protecting them from spam

But another use in the patent’s official application (called use cases in patent-speak) definitely outlines that same technology functioning as a way for lenders to aggregate credit scores and financial data from your Facebook friends when you apply for a loan.

All of this can eventually factor into their complex algorithms that gauge you as a solid candidate for a new loan – or a big credit risk.

However, there are several reasons why credit risk monitoring via social media may not be practical, ethical, or even legal.

First off, we have the Equal Credit Opportunity Act, a federal law that states that credit must be granted to all creditworthy applicants without paying credence to their race, religion, gender, marital status, age and other personal characteristics. That’s the exact reason you aren’t asked your race, religion, etc. on any loan application or credit form. But that information is often readily available on many Facebook and social media profiles, which opens the door for discriminatory practices.

Next, credit decisions are all supposed to be transparent and disputable. That means you’re supposed to know why your score goes up and down, and there can’t be mysterious or secret factors that play into your score that are disclosed on your credit report. Likewise, you have the right and ability to dispute incorrect items on your credit such as duplicate items, bad information, or even accounts opened and used by ID thieves.

But when credit bureaus track and use your social media usage to help determine your credit worthiness, they’re using factors that are neither transparent or disputable.

Furthermore, pundits point out that social media accounts can be easily manipulated. For instance, if a social media user knows that creditors are watching, they might purposely post certain things, like certain brands, check-in at certain places, etc. that would reflect positively upon them in the eyes of creditors. Basically, they could also set up fake or duplicate social media accounts, or you have the risk of someone else setting up a social media profile in another real person’s name.

Lenders will always look for “alternative data” to improve the accuracy of their credit lending decisions, some things. Cell phone usage, paying rent on time, and even bank account activity could possibly impact your credit score shortly.

But the potential for creditors to track your social media usage raises some serious concerns.