Good Credit Score: 720 is the New 680

It is going to take a bit more in the good credit score rating department to get those great loan rates you see at banks and auto dealers.

Credit agencies that report your credit also have a “number” assigned to your status. This provides lenders an ultra quick snapshot at your credit worthiness. As of today, for the most part, 720 is that magic number.

What does a 720 good credit score get you?

Well, for starters, just about any time you see a 0% APR car loan, you are going to want a 720 score or above. And 715 is not 720, so expect them to be pretty hard and fast on that rule.

If you are looking for a bank loan, under 720 could mean hundreds or thousands of dollars difference in a home equality loan.

So what is a poor 680 to do?

Well, try and get that score up a bit. Whether you have 715, 680, or 600, here are some things to focus on that will help improve credit scores….

1. Pay your bills on time – That could not have been more obvious. Over the span of 10 years a payment or two missed won’t hurt you. Chronic late payments will be the first thing to lower your score.

2. Don’t take it to the max! – If you carry cards that are always close to their limit it will be reflected (poorly) in your score. If you can, try and keep any outstanding balances below 50% of available credit.

3. Not too many – Having to many accounts can also hurt you. Take a look at accounts that you have not used for a long time. Consider closing them. Continue reading “Good Credit Score: 720 is the New 680”

Banks Profit But Still Not Lending Money?

Ok, what is the deal? Banks are announcing great earnings yet the average Joe (or Joanne) can’t seem to get a loan let alone Fire Your Boss.

Here is the deal…

For starters, make no mistake; banks did take a big hit during this whole economic downturn. People missed house payments, stopped paying credit cards, and even lost homes back to the bank.

All those people that lost equity in homes and turned them over to the bank equaled real “lending” dollars for the banks gone.

The only positive side was the economic downturn gave banks an environment to dump marginal products and loans they probably should not have had to begin with.

This is where the “profitable” part comes in… Continue reading “Banks Profit But Still Not Lending Money?”

The 10% Savings Rule

Sometimes I think the simplest solution is often the best. This is a perfect example of this. In cutting to the point early on, you should always put 10% of the money you bring home into a savings account. But before we focus on whether to save in a CD, IRA’s etc., let’s focus on one thing first. Just save the money.

Often we find ourselves with such a tough budget we often don’t know where to start. I imagine when a mountain climber looks at some the tallest mountains in the world there is the thought in the back of their minds that it is insurmountable. And, approaching it from that angle – it is. One cannot take one big step and be at the top. It is a process of taking one step at a time and slowly making your way towards to the top. The good news is, given enough time and steps, they do make it to the top.

Building wealth for yourself is no different. Each step, no matter how small and seemingly insignificant, takes you closer to your goal. The harder it is to put away 10%, the more important it is for you to do it. Say 10% for you is $100 per month. After a year that is $1200, which, if that is all you could afford to put away, should be a pretty good sum for you.

There is another benefit. Your mindset begins to shift. Continue reading “The 10% Savings Rule”

7 Places to Find More Money

Now that you’re sold on the concept of savings, you’re probably wondering how you can get started quickly. Building up a savings a little bit at a time is always a great method. But sometimes I know we all want to get our savings built up faster.

It not only gives you a good starting point for your savings… it just feels great. Here are some solid tips on ways to gain some extra cash to set aside for savings quickly:

Have a Garage Sale – OK, sounds kind of funny, and maybe it’s a long shot, but you never know what you may find when you look around your house. This is a great excuse to do a little spring cleaning in an effort to make a nice start to your nest egg. The general rule of thumb here is, “Do I really need it?” So many of us find items around the house that were bad gifts, impulse buys that we never used, or things that we’ve outgrown/no longer use. Recouping capital in this method is a great start.

Online Auctions – An extension of the garage sale would be to use online Auctions to get rid of unused items around the house. I know several people that have made good part time income selling items on eBay (the ultimate flea market). Continue reading “7 Places to Find More Money”

Which Credit Card Do I Pay off First?

Before you can Fire Your Boss you need to reduce or eliminate all credit card debt.

The most common question I get about credit card debt is which card do I pay off first?

Some so-called “experts” say it is the card with the biggest monthly payment while other “experts” say it is the smallest payment first.

The real answer is the card with the highest interest rate.

If you put your credit cards in order, the highest rate card should be paid as much money each month as you can afford – everyone else gets the minimum payment. After that card is paid off, go to the next lowest rate and so on.

Both the payment amount and the balance are irrelevant. It is the interest rate charged each month that costs you the most.

Coming soon…How to get extra income to pay off those damn cards once and for all!