Good News

Well we got good news, we got the loan to pay off all of our evil credit cards. Now all that is left to do is to put them to their death; by shredder with no blind fold and no last requests. Even though it seems far away it feels good to know that we will have everything payed off in four years or less and as soon as that is over with I'm sure it will be time to start looking for a larger house for us and our new addition. So the fight against debt continues, hopefully at a better pace. Will keep everyone posted.

Tags: Debt Reduction, Credit, Credit Cards

Being Mature About Debt

I found this article interesting on Yahoo finance called "6 ways to be a grown-up about debt" by George Mannes from Money Magazine. Since I've been down on our credit card debt I was happy to see that I was not the only one in this sinking ship. It seems that since 1990 credit card debt has more than doubled according to CardTrak.com. The reason why? Because it's so easy to charge things and have that "I want it now mentality". So what can you do to save your financial prosperity?

Money Magazine suggests this:

1) Admit that you're the problem. Almost sounds like AA, Hi my name is Mike and I have a credit card addiction. Actually this means taking responsibility for your credit dilemmas. Understand that eating out and using your credit card to pay for it makes for a very expensive meal.
2) Play Tricks on Yourself. Lock up the credit cards, shred them, burn them. Do anything to keep them out of reach and don't use them anymore. Start putting money aside for an emergency fund, so that if something comes up you aren't tempted to bust out a credit card.
Another good idea that they have is that if you need to get something big, pull the money out and put it in envelopes until you have enough for that large purchase.
3) Make success simple. Now that you've put a brake on your credit card debt, come up with a plan to start paying off your cards. Start by paying of the highest interest card and work your way down.
4) Beware of the easy out. Debt consolidation and Home equity loans can keep you in the same trouble if you don't change your spending habits and your mentality on credit card debt. Also with a home equity loan you are risking your home to get out of debt.
5) Get help if needed. Get help from a reputable credit counselor, who may be able to get you some better rates on your credit cards, just don't pay more than $75 and do your research.
6) Think outside the debt. Even though you are in debt don't forget to save some for an emergency and for retirement. Talk your expenses over with your significant other so that the future will look much brighter.

This article made me feel a little better, especially since I just figured out that we owe a ton of money on our credit cards. We didn't get in debt overnight, so I guess we aren't going to get out of debt overnight either.

Doing the Nasty, Figuring Out Our Credit Card Debt

So since this was one of my New Year's Resolutions, I figured it was time to recalculate our credit card debt. Pretty depressing. We owe around $25,000 in credit card bills and around $6,000 in a home remodeling loan. Someone shoot me if we ever pick up a credit card again. Actually most of the stuff was for our wedding, and stuff for our first house, so I shouldn't feel too bad, but if I had it to do over again I sure would do it a different way. Well enough wining it's time to come up with a plan to knock out our debt. I've heard of a lot of different ideas, but I think we are going to go with paying more on our highest interest credit card and working our way down. The only thing that worries me is that having an addition to our family may make this hard, so I am going to have to look at some alternate ways of picking up some income. I already have an simple IRA through work that matches my deposits, and have a Roth IRA to work on our retirement, so I am thinking about starting a Forex account to hopefully get some extra money going to pay off some bills. I really don't want to get a part time job or anything like that, so I better get a move on learning about the Forex Market. As of right now I am reading "Forex Made Easy: 6 Ways to Trade the Dollar" by James Dicks, but I was left a comment by Jon that says I should also check out a book called Forex Evolution so I will try to search for this book also. Thanks for the info Jon. Any other books or suggestions on forex would be appreciated.

Tags: Debt Reduction, forex, Credit

Cutting My Dish Network Bill

In an effort to cut our costs and to pay more on our credit card bills we have cut our Dish Network bill and package in half. We were paying $125 per month for every channel imaginable, and now we are paying around $49 for half. With the money we are saving we can invest more or pay more on our credit cards. Forget the latte factor, cut your cable/satellite factor. Anyway I know you are thinking that $125 is pretty crazy, but it was something I thought I could not live without. Now with work, school, and blogging. I don't spend a lot of time watching TV, except sports. So maybe when my contract is up I will drop it all of the way.

Tags: debt reduction

Credit Score Hell

If you are wondering about the past couple of titles, it's October and close to Halloween. Money Central has an excellent article called "Weird stuff that hurts your credit", as if I did not have enough to worry about rebuilding my credit and paying off our credit card debt. One of the things that I didn't know about is that Capital One and American Express do not share you credit limit with the credit agencies and this can hurt your score. I have a couple of Capital One cards, but I have maxed them out a couple times so my credit report shows my highest limits on each card. Another thing that I didn't know is that the credit agencies have different scoring groups or score cards. Depending on where you fall, you credit activities can move you up or down to a better or worse scoring group. As if I didn't have enough worries about jacking up my credit. Transfering all of your credit debt onto one low interest card can also hurt your credit score. It seems that they would rather you have lots of cards with lower amounts owed on each. Settling debts with companies you owe is also bad for your credit score. It seem's that waiting for it to go into collections is better for you (this makes no sense to me). Here is my favorite one, unpaid traffic or parking fines, and old library fines will be reported and effect your credit score. Nice huh? So return all those old library books and pay your fines. Be happy that they aren't reporting late video fees yet or I would be in some serious trouble.

Credit Card Horror Story

Even though we are trying to get out of credit card debt, I still find myself wanting to charge more stuff. It's like being a credit card junkie. The worst part is that it is me, not my wife who finds it so easy to bust out the credit cards from their hiding place. Well reading some different blogs, I can't remember which, but when I find it again, I will give credit to the author's idea. To keep herself from using her credit cards she actually froze them in the freezer. I thought what an awesome idea. If it's a real emergency you can bust them out and thaw out the ice, otherwise it would be too much hassle to mess with. If this doesn't work my next option will be to shred them all. Which I might end up doing anyway. Anyone have any other ideas that might work better?

A Snag on the Road 2 Financial Freedom

I have hit a snag down the road, literally. Well I actually hit this snag a couple months ago. While on the way to work and flying down the highway I got a speeding ticket. So I had to shell out $100+ to be able to take defensive driving. As usual I forgot all about it and now have to shell out another 40 some dollars to take the class online and get my driving record shipped to me before my deadline. I may see if I can get an extension so that I am not rushing it and can find a cheaper class and buy me some time by ordering my driving record myself (it's $25 for a rush). The moral of the story is don't break the laws, follow the norms. For me since I am trying to get out of debt and watching all of my personal finances I am finding this a big waste of money. That's almost $200 that I could have spent paying off credit debt or investing. Like the commercial says that is going to cost me 200 Jr cheeseburgers. Oh well live and learn.

Credit Report Update

So my saga to get my credit report clean continues. Luckily with some happy news. When I received my free credit report this year I noticed a couple of unpaid debts that weren't mine. So I disputed them with the credit agencies. I had all of them removed except one from American Airlines that said that I owed them money on an employee voucher that was used in 2000. Well the funny thing is that I have never worked for American Airlines. So yesterday I called and talked to the collecting agency that is in charge of this account. I got myself all pumped up and ready to fight. I make the call and end up with a very nice, helpful collection agent. We discussed what the problem was, he talked to his supervisor, and resolved the problem. I just need to send in some paperwork describing my grievance and I am done. I definately was not expecting this. So thanks to the friendly collection agent I am one step closer to having my credit report fixed.

No More Junk Mail

Since the time that I opted out for telephone telemarketers, we have been receiving a ton of junk mail, credit card offers, preapproved loans etc.... Anyway when I ordered my annual credit report at http://annualcreditreport.com/ I was given the option to opt out of pre-approved credit offers. You can either opt out for 5 years or you can opt out forever. Of course I chose forever. Well it's been a couple of months and my flow of junk mail has slowed down quite a bit. Which means less time shredding. Bizrate.com has a great article on "How to Opt Out of Everything", not just pre-approved credit cards, but also junk mail, telemarketing calls (if you haven't already) and they even tell you how to get your financial institutions to stop sharing your information with others. Check it out. Lots of good information, and I will be sending a letter to opt out of the rest of the junk mail we have been getting.

Twelve Myths About Credit Reports

Seeing that I have been trying to clean up my credit report, I found this pretty interesting. Julie Sturgeon has an article on yahoo called, you guessed it, 12 myths about credit reports.

The myths are:

1) Paying my debts will make make my credit instantly pristine. Not true. Your poor payment history will still show on your credit report until it drops.
2) I must give permission for a for a company to see my credit report. Wrong. Pretty much any company can see your credit report with out your permission, only if ordering your report has to do with employment does the company need a signature for your permission.
3) Credit Counseling always destroys my credit score. Credit counseling doesn't count against your credit score, and most creditors don't even look at your credit report manually anyway so chances are that they will never see it.
4) Cancelling credit cards boosts my score. False. "Creditors want to see at least two or three pieces of active credit to prove you can manage debt responsibly" and the credit cards that you aren't using are not affecting your credit score.
5) To many inquiries hurt my score. Believe it or not this is not true anymore. If you are shopping around for mortgages or car loans, the credit agencies understand that you are trying to get the best rates, so this does not affect your credit score. Now if you are going to every department store in sight and applying for credit it will affect your score because these are considered hard pulls. Even checking your credit score at fico is not considered a hard pull.
6) Checking my own credit report harms my standing. As I said above checking your credit doesn't harm your credit score, but beware of companies giving free credit reports for purchasing their products. These companies are merchants the hits do count.
7) FICO Scores are locked in for six months. Not true, fico scores are dynamic so they constantly change as the information on your report changes.
8) I don't need to check my credit report if I pay my bills on time. In this day and age of Identity Theft you can't trust that you have perfect credit, or that the credit agencies have all of your information right. I knew that I didn't have perfect credit but when I pulled all of my reports it was full of wrong information. So check your reports yearly.
9) All credit reports are the same. Most creditors do report to the major credit agencies- TransUnion, Equifax, and Experian, but some don't. So your credit score accross the boards will never be the same because something showing up on one report may not show up on the other two. So if you are gonna check one report, you may as well check all of them.
10) A divorce decree automatically severs joint accounts. Actually it doesn't so if you want your ex off of your credit you better contact your creditors, and either close your current accounts or have your ex sign off of them.
11) Bad news comes off in 7 years. Some of it does, but some bankruptcies can stay on your credit report for up to 10 years and if you pay off a previous outstanding debt, it may stay on your report longer than 7 years.
12) I can always pay someone to fix or repair my credit. You can, this is done by the company flooding the creditors with letters of dispute. If the creditors can not verify the listing it must come off, but if the creditor is able to prove later that the listing was correct it gets put back into your file after 30 days.

I hope that this helps some of you out there. I know it cleared up alot of the myths I had about credit scores and how companies report your information.

Credit Report Update

Well I have finally received some updates on my credit report disputes. It looks as if they have removed all of them except for one, which is for the smallest amount-$92. I am tempted just to pay it to be done with it, but maybe I will try calling the company and seeing if I can resolve it on my own. I am pretty excited because with cleaning up the charges that were not mine, my credit should be a lot better now. Well I will continue working on that one last dispute and see if I can get rid of all of them.

Credit Report...

So in an effort to continue reaching for our financial freedom, I ordered my credit report to see how bad things were. If anyone is interested you can get a free credit report each year from Transunion, Equifax, and Experian from http://annualcreditreport.com. They charge extra if you want to receive your credit scores, but it's a good way to check out your credit history.

After getting over my fear of knowing I have horrible credit, I pulled up all my reports and it turns out my credit is not so bad after all. I have a couple of things to take care of, but all in all it didn't look as bad as I thought it would. I have some discrepencies that I need to take care of, but nothing that will keep me from reaching our five year goal. My wife by the way does not have to worry about these problems. Anyway I am feeling much better about getting our finances in order and meeting our goals.

Our 5 year plan

Hope everyone had a safe and happy July 4th. The wife and I worked on our five year plan over the past couple of days.

Here are some of the goals we came up with:

1) Get out of Debt! Especially credit card debt
2) Have Children
3) Invest for Retirement
4) Remodel Kitchen
5) Landscape our yard
6) Get in Shape/ Lose weight
7) Learn a craft or hobby that will bring in more income
8) Continue my education, College and Investments

We have already started working on paying off our debt and have worked on a 5 yr budget that will allow us to not only pay off our substantial credit card debt, but will allow us to be finacial free, so that we can get into a bigger house and rent our current cozy little house out for some passive income. The other goal we have already started working on is investing for our retirement. I have gone back to college to work on a business degree and am trying to read everything I can on finances and investing. I will continue to post our progress as we meet our goals.