Two Healthy Credit Habits to Begin

Whether your credit score is low because you have not maintained good credit or simply because you have never established credit, maintaining a good credit score is an important aspect of financial health. Below are two healthy credit habits you can employ now to establish a good credit ranking.

Use Less than 30% of Available Credit:

The amount of credit you utilize accounts for 30% of your total credit report. This number, however, only applies to credit cards, which have a total limit for credit.

Credit bureaus note consumers who use more than 30% of their available credit. Using too much makes the bureau think you rely too heavily on cards to fund your lifestyle. Even if you pay that balance off every month, the utilization is still reported to credit bureaus.

To avoid using more than 30% of your available credit, keep a close eye on your account to check the balance and divide that balance by your available credit. This calculation will generate the percentage of available credit you are using.

If you do go over 30% every month, pay half of your credit card bill before the billing cycle closes! This will help cut down your utilization ratio by the time it is reported.

Carefully Open New Accounts:

You can easily tank your credit score if you open too many new credit accounts. Credit bureaus ding customers that open too many credit card or loan accounts in a short period of time as it may be viewed as a sign of financial instability. This component makes up about 10% of your credit score.

Opening too many new accounts also brings down the average age of your credit history, a component that accounts for 15% of your credit score. Lenders look for borrowers with the highest credit history age possible so avoid opening too many accounts.

When you do open a new account, consider whether it is worth negatively impacting your credit score.

Thank You for taking the time to read our Blogs. 

Mr. Rafael Ulloa 

Ways to Save Money

8 Pain-Free Ways to Save Money

 

       Looking to get your finances under control? Follow these 8 pain-free tips!

 

1. Plan Your Meals. Eating out is one of the biggest expenses for most households. There’s nothing wrong with treating yourself every now and then -- but avoid going to restaurants merely for convenience’s sake by planning your meals ahead of time.
    
2. Buy Staples in Bulk. Take advantage of lower prices by buying frequently used items in bulk.
    
3. Go Green. Installing energy efficient lights, unplugging items you aren’t using and making other green choices is an easy way to save on your bills.
    
4. De-Clutter. Selling and donating your unused items can bring in some extra income and/or offer tax benefits. Moreover, it will make your home a more comfortable place, helping you spend more time at home rather than going out and spending.
    
5. Shop Smart. Make the effort to drive to the most affordable store in town and print out coupons beforehand and you are sure to save money. Making a list beforehand will help you avoid impulse purchases while guaranteeing that your don’t have to make a return trip.
    
6. Keep a Refillable Water Bottle or Two in the Fridge. Contrary to popular belief, bottled water is not held to a higher standard of quality than the water that comes from your tap -- but bottled water is marked up by as much as 280,000 percent compared to the price of tap water. The one real advantage that bottled water offers is convenience, so why not keep a couple of cold bottles in your fridge and save the need less expense?
    
7. Devote A Bit Of Time and Money to Maintenance Each Week. A penny saved is a penny earned -- and performing regular maintenance on your car, your home, and your appliances can save you a large chunk of change over time.
    
8. Take Advantage of Community Services. Libraries, parks, public pools, and a plethora of local services can help you save money and have a blast without spending a cent. You already pay for them with your tax dollars, so why not take advantage!

 

      If you have any questions or need further assistance please give us a call at

      877-346-2797 we are here to help you.

4 Finance Tips for Young Adults

Managing your finances might seem overwhelming. Money management is not exactly a required course in schools. Yet as soon as you’re out of high school, you’re expected to manage student loans and take on large financial commitments such as rent. All of this can seem daunting, but by building good habits now, you can create huge returns in the future and come out miles ahead of your peers.

 

1. Start Saving Now. A retirement fund is important, even at this stage in your life. Compounding interest means the investments you make now could give you a big payout further down the road. The sooner you start, the less you will have to worry when retirement is around the corner. Saving a bit of your income for an emergency fund isn’t a bad idea either. You never know when you might need it.
2. Practice Self-Control. Start the good habits now. Spending money on fast food and expensive coffee is okay occasionally, but if you’re not indulging with care, bad habits will start to form. When you’re 30, 40, 50 years old, you’ll find it harder to break those habits and harder to make up what you’ve lost. Stay mindful and vigilant when you spend.
3. Understand Taxes. Taxes can be complicated and daunting. Yet they are another fundamental part of life that schools neglect to teach. Learning how to calculate your taxes based on your income will help to determine your budget and will save you trouble in the long run.
4. Start Building Credit. Avoiding overwhelming debt is a no-brainer, but that doesn’t mean young people should shy away from credit completely: now is the time to begin building the credit reputation that will help you make big purchases down the road.

 

Have debt and bad financial choices taken over your life? Madison Monroe and Associates can help by negotiating away as much as half of your debts. Visit us online today to learn more! www.madisonandmonroe.com or give us a call at 877-346-2797 and speak with one of our counselors.

Are Minimum Payments an Effective Debt-Relief Strategy?

If you have found yourself deep in debt, you know what a destructive force excessive debt can be in life. It can limit your opportunities for receiving financing, it can affect your job search, and, of course, it can cost you a significant portion of your income. And this does not even begin to address the feelings frustration and stigmatization that come along with such situations. Many people believe that the only way out of debt is the option right in front of them: making the minimum payments and waiting for the debt to be paid off in whole. In this article, we will address that concept, and we will discuss why it may not be the best option for you.

 

Making minimum payments is the most conservative approach to paying off debts, and as long as you do not feel that your debts are having a negative impact on your life you may wish to go this route. However, you should be aware that you will end up paying nearly 50% of your balance in interest alone over the first three years, and that, if your rates are over 25%, it is almost a mathematical impossibility to pay off your debt through minimum payments. Repayment through this method can sometimes take 20 years or more, and if you stop making repayments at any time (regardless of the reason) you will be destroying your credit while doing nothing to help your situation.

 

Taking a more aggressive approach can get you out of debt faster, allowing you to move on with your life. Though it is true that not all debt relief programs are created equal, you owe it to yourself to look into debt settlement. Debt settlement is not a bank-managed program like debt consolidation, and it does not carry the ten-year stigma associated with bankruptcy. Rather, it is a way of negotiating and lowering debt on the friendliest terms possible. Debt settlement has helped countless people get back on track financially: could it be right for you? Visit Madison Monroe and Associates online today to learn more. www.madisonandmonroe.com or simply give us a call 877-346-2797 we are here to help.

 

How to Handle Phone Calls from Debt Collectors

Receiving unsolicited phone calls from debt collectors can be intimidating--but it’s not the end of the world. If you are being contacted by debt collectors, then we highly recommend following these simple tips in order to keep yourself in the best possible position both financially and legally.

 

• Don’t make promises.  Debt collectors are calling you to pressure you: any agreement that you make should be made after careful consideration, and after taking the time to consult with your lawyer and with other people you trust. Never make a spur of the moment promise, as this can complicate your situation.
• Avoid “good faith” payments. One of the oldest tricks in the debt collector book is guilting debtors into making small “good faith” payments. This extends the statute of limitations for your debt, thus robbing you of one of your biggest bargaining chips!
• Don’t hide. It can be tempting to simply ignore calls from debtors, but this is a big mistake: it can lead them to call your employer or your relatives. (More about this later!)
• Keep a call log. Note the time of each call you receive, as well as the exact nature of the debt you are being contacted about.
• Don’t get angry. If your case goes to court, transcripts may come to light, and any outburst on your part will only make you look bad and hurt your case.
• Tell your collector if you believe that the debt is not valid. If you do, they are legally obligated to prove the debt’s validity before contacting you again. If you are right, the odds are good that they will simply give up and focus on more productive cases.
• Tell the collector not to contact 3rd parties. They are obligated to listen to you, and this can save you a great deal of personal and/or professional embarrassment. If you’d like, you can even request that you not be contacted anymore--although this may make it more difficult to keep track of your debt.

 

If debt has taken over your life, you don’t need to suffer. Contact Madison Monroe and Associates today to retake control. (877) 346-2797 or visit our website www.madisonandmonroe.com

 

Reducing Credit Card Debt

Reducing and eventually paying off credit card debt is a challenging goal, but as anyone who has gone through the process will tell you, the freedom and peace of mind that come with regaining financial control are completely worth it. In this article, we will cover a few of the most important steps that you should take if you are serious about reducing credit card debt, as well as a brief overview of how services such as those offered here at Madison Monroe and Associates can help you achieve your goals.

 

• Assess your situation. The first step you need to take is to find out exactly how much debt you have. A great deal of people who are in serious debt do not know their exact situation, oftentimes because by this point they are already dealing with several credit cards and perhaps several other forms of debt as well. As with many problems, however, the first step toward recovery is a bit of brutal honesty--so sit down with your computer and your bills and figure out how much you owe, and what the interest on each loan is.
• Negotiate a lower rate. Depending on factors such as your credit and the lending philosophy of your creditors, you may be able to negotiate a lower rate on your debt simply by calling your credit card company, explaining your situation, and asking for a reduced rate.
• Track costs. If you have found yourself in debt, it is almost certainly due to the fact that you are spending more than you are making. (Though sudden and unforeseen one time expenses such as medical bills do oftentimes play a role as well.) Take stock of your expenses and make an effort to reduce spending.
• Develop a strategy. The fastest path out of debt is to make the minimum payment on all credit cards except for the card with the highest debt, and to put the remainder of what you can pay into that card.
• Avoid using plastic. Store your credit cards away and don’t use them except in case of a sincere emergency!
• Track your progress and stay motivated! Don’t dwell on your debt, but seeing your progress every once in awhile can be a real confidence booster!
• Consider 3rd party help. A 3rd party debt reduction service such as Madison Monroe and Associates can help you by negotiating lower rates (oftentimes from a stronger position that an individual could) and consolidating your debt into a single, lower payment. We can also help you get on the path toward rebuilding your credit!

The Most Common Forms of Personal Debt (And What You Can Do About It!)

High monthly debt payments feel overwhelming regardless of why they were taken on--but the truth is that each type of debt does have a couple of unique characteristics that are worth examining. In this article, we will give a brief summary of a few of the most common forms of personal debt, and we talk about how such debt can be dealt with.

Credit Card debt. Credit card debt can be very insidious because it tends to creep up slowly on people. When somebody takes out a mortgage, for example, they usually understand: “I am going into a significant amount of debt that I will need to plan for, and this will allow me to purchase a home.” With credit cards, people oftentimes don’t imagine that they will end up in significant debt, instead they tend to think: “I will make this purchase,” or “I will pay for this meal,” but before long all those small debts start to add up.

 

Mortgages. No one purchases a home imagining that they will one day be overwhelmed by their mortgage payments: but changes in employment or in the economy can sometimes lead to this unfortunate situation.

 

Student loans. Student loans are tricky because they tend to have relatively high interest rates, and they cannot be discharged even in bankruptcy. These factors are both due to the lack of collateral: if you purchase a car and fail to make payments, your creditor can repossess and resell your car; if you attend university and then fail to make payments, your creditor cannot repossess and resell your education!

 

Medical debt. Especially for the uninsured and the underinsured, an unexpected accident or illness can result in serious debts that can be very difficult to pay. Huge medical bills can drain your bank account and lower your credit score, so it’s important to take action quickly!

 

IRS/back taxes. For those working in traditional jobs, a portion of your income is held back by your employer and paid directly to the government. For the self employed, however, the situation is a bit more complicated: you are obligated to pay taxes out of your pocket, which means if you were unable to plan ahead you may get stuck owing money that you do not currently have.

 

Payday loans. Payday loans can seem like a good solution to being short on cash, but all too often they result in a downward spiral of debt that accrues at very high interest rates. If you owe money on a payday loan, you need to act fast before interest continues to pile up.

 

Madison Monroe and Associates can help you solve your debt problems. Visit us online today to learn more. www.madisonandmonroe.com

Getting out of debt is still possible

According to a study published by the Pew Charitable Trust, roughly 80% of Americans now find themselves in debt. This debt can be piled on in a plethora of ways. For example, the majority of Americans own credit cards--and falling behind on payments can cause debt to pile up surprisingly fast. Mortgages represent another form of debt that, for the vast majority of working and middle class people, is going to be necessary in order to own a home. Student loans, medical bills, and back taxes can also pile up very quickly, and sometimes this can happen completely unexpectedly. (For example when an unexpected illness forces a hospital stay, or when that job you were planning on beginning upon graduation doesn’t pan out right away.) The point is if you have found yourself in debt, you are not alone!

 

The truth is a healthy level of debt can even be a good thing. Think back to the examples of mortgages and student loans: both of these types of debts can actually enable people to attain dreams such as owning a home or completing college that may have been out of reach without outside funding. So debt in itself can be a valuable tool. (This is precisely why credit is so important.) The problem, of course, is when debt reaches a point where you are struggling to make payments.

 

Once this happens, getting out of debt can seem impossible--and your financial life can become very discouraging. All of your disposable income (and then some) may begin going toward making payments that you still struggle to pay. Debt collectors may begin contacting you and your credit may become so damaged that many financial options that were previously available to you (i.e. getting a credit card, taking out a student loan, etc.) become infeasible. The situation can begin to feel hopeless.

 

We’re here to tell you that hope is not lost. At Madison Monroe and Associates, we have helped countless people reduce their debt by 40 to 60%--and we can do the same for you. Visit us online today to learn more. www.madisonandmonroe.com