Is Wells Fargo Getting Back Into Subprime Mortgages?

February 21, 2014 | Posted by Blair Warner | No Comments

Wells Fargo is testing the waters of subprime mortgages again. Will it make any difference in today’s real estate market? Tweet This Tweet: Wells is testing the waters of subprime mortgages again. Will it make any difference in today's real estate market? http://ctt.ec/d3en5+

Wells Fargo Subprime Mortgage Loans We at Upgrade My Credit like to keep you up-to-date on the mortgage and real estate industry. Today, we highlight some interesting news in the subprime market. Most people know that what is now non-affectionately called the mortgage crisis and credit crunch began toward the end of 2006 and “blew up” in 2007, effectively ending all subprime lending overnight. It was a disaster waiting to happen, and understandably so. People were buying homes who should not be, or, at least buying homes they could not afford.

Wells Fargo, then and now is a leader in the mortgage lending world, and is again leading the way, testing the waters of subprime mortgages, except this time with caution and armed with lessons learned from the past. Below is an excerpt from an article going into more depth.

Excerpt from an article at Credit.com

“Wells Fargo is once again setting sail on subprime mortgage waters, despite how choppy they were several years ago. The bank will consider mortgage applicants with credit scores as low as 600, announced Franklin Codel, a Wells Fargo mortgage executive. Previously, the minimum was 640, and this change applies to purchase mortgages to be guaranteed by the Federal Housing Administration.”

Read full article here…

This could be a good thing for the lagging real estate industry which has been trying to “recover” from the fall out of the mortgage and credit crisis of 2006 -2008. What do you think, is it a good move to lower credit score requirements for buying a home? Is it too soon? Will it stimulate home buying, or is the economy still too fragile?

Let us hear your thoughts, and feel free to share on your social networks

Bad Credit Scores Costs You Money!

October 28, 2013 | Posted by Blair Warner | No Comments

A Great Credit Score Can Save You A Lot of Money

A good credit score can save you money!Have you ever considered how much Money You can Save by having a Great Credit Score?

If you currently have low credit scores, you may be wondering if you should pay money to improve your credit score. Well, I’ll let you in on a little secret: if you ever get any kind of loan, you will make your money back many times over!

The reason is simple. Creditors of all kinds will charge you more – sometimes much more – to borrow money if you have a low or even a fair credit score.

Having a 720 credit score instead of a 640 score could save you thousands or even tens of thousands of dollars. Yes, it may seem unfair, but that’s the reality of the lending world.

As someone who has 12 years of experience in the lending world as a loan officer and manager, and now the editor of MyMortgageInsider.com, I could tell you countless stories of how people have saved tons of money by having great credit.

Let’s look at an example, taken straight from today’s rate sheets: Someone with a 720 score could get a $200,000 loan with a principal and interest payment of $1013 per month and a rate of 4.5% (4.652% APR)*.

The same person with a 640 score would pay $1073 per month and have a 5.0% interest rate (5.155% APR)*. The borrower with a 640 score would pay an extra $60 per month and an additional $21,700 in interest over the life of the loan!

How does that fee for credit repair services look now? Pretty low?

The bottom line is this: lenders want to see that you are a low-risk borrower. And it all comes down to the three little numbers on your credit report. The higher those numbers, the less you will pay for credit.

And a home mortgage is just scratching the surface when it comes to the money you’ll save by having a good credit score. Some other things you’ll save money on are:

    Car insurance
    Homeowner’s insurance
    Renter’s insurance
    Auto loans
    Credit cards

Heck, many employers look at your credit reports when you’re applying for a job these days, and some may even look at your credit scores! What if your bad credit cost you a great job? Reference NYTimes article on this subject.

When you add up all the money you could save and make over your lifetime by having a great credit score, the dollar amount could easily be six figures or more. This is no exaggeration.

Yes, it may seem like a lot of work to build, improve, and maintain your credit score. It takes a lot of discipline. But it’s that discipline that lenders are looking for. It proves you are a worthy candidate and will pay back the loan according to the terms you agreed to.

So if you can get help from an expert to improve your credit score, take that opportunity despite the time, cost and effort. You will get huge returns on your investment – more than you probably ever expected.

*Payment does not include taxes, insurance, or HOA dues. Rates are as of 9/10/13. Purchase price $250,000, loan amount $200,000, property in WA. Scenarios are 30 year fixed conventional loans.

by Tim Lucas – MyMortgageInsider.com

Tim is the Editor and Chief Contributor to the website MyMortgageInsider.com. He has been in the mortgage industry for more than 12 years as a loan originator and mortgage processor. He’s answered just about every kind of mortgage question over the years and has tons of experience to draw from. Please Send Mortgage Questions to: tim@mymortgageinsider.com

Has this been helpful? Please feel free to comment or share on social media. We like helping people.

Tweet for creditTweetable Takeaways Include:

  • Having a 720 credit score instead of a 640 score could save you thousands or even tens of thousands of dollars. (Click to tweet)
  • Lenders want to see that you are a low-risk borrower. And it all comes down to the three little numbers on your credit report. (Click to tweet)
  • Most employers look at your credit reports when you’re applying for a job these days! (Click to tweet)



Blair Warner – UpgradeMyCredit.com Editor & Chief Credit Consultant

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Can you really get your credit report for free?

July 28, 2013 | Posted by Blair Warner | 1 Comment

“What’s this about free credit reports? I have gone to several websites like freecreditreport.com and creditchecktotal.com, even CreditKarma.com thinking they offered free credit reports and scores. It seems they are not really free, and some include scores and others don’t. Credit Karma doesn’t even give you your real credit reports! It’s confusing!”


Get Your Free Credit Report and Credit Scores pic

Free credit Reports! Hhhmmm… really?


The above quote is what someone who called in from our website said almost word-for-word. Unfortunately, she is right. There is no free lunch, as they say. The sites she mentioned, and many more, are not really free, even if the word “free” is displayed somewhere. Furthermore, it is not always clear what you are getting. Creditkarma.com, for example, gives the impression you are getting your credit scores and reports, but in reality they have their own “credit management” platform that does not include your real credit report, only partial information pulled from it. In my opinion, it is this small word free coupled with credit reports or credit scores that throws people off because they have heard that you can get your credit reports somewhere for free. There is only one place where your credit report is 100% free, with no bait and switch, or “small print”, or a catch. More on this in a moment.

Here’s how they work:
Except for sites like creditkarma.com, here’s how most of them work. First, in various catch phrases and combinations of products offered (read each carefully), they tout in big print that you get credit scores and/or credit reports from all three credit reporting agencies, Transunion, Equifax and Experian , with call to action buttons saying things like “Try it Free”, or “Get Started Now” and “Click Here to Start”. However, usually in small print, they state it is a free trial for 7 or 14 days. At the end of the free trial you are immediately transformed into a monthly credit monitoring customer, which costs between $14.95 and $29.95 per month, depending on the company. The ones that only give a 7 day trial are particularly tricky. Your reports aren’t usually available for 3-4 days due to “processing”, which gives you 3 days to view it. There hope is that you will “accidentally” pass the 7 day mark without cancelling the trial. As a rule, it is my opinion to avoid the 7-day offers. If you don’t cancel within the 7 days, they immediately charge you their monitoring fee. Additionally, needless to say, it is not always easy to cancel.

Tip:  Some offer a printer-friendly version. if you print it out immediately,         and make sure to call to cancel, then, depending on the site’s offer, you         could actually get a free credit report.


Credit Karma is truly free, but you don’t really get all your reports and scores, only ONE score, as mentioned above, and their proprietary credit management platform. Credit Karma is, in my opinion as a credit consultant, useless, and useless translates in my book as a gimmick, of sorts, because customers think they are getting something useful. (Update 6/14/15: Since the writing of this original post, Credit Karma now offers scores and reports for two of the big three credit reporting agencies, Equifax and Transunion. They still don’t offer information from Experian. Keep in mind that the scores they provide are NOT your FICO scores).

The ONLY place you get a free credit report without pitfalls to avoid, and hoops to jump through is AnnualCreditReport.com. The Fair Credit Reporting Act (FCRA) requires the there major credit bureaus to provide one free credit report per year. You can get one at a time each quarter, or all three at once, once each year. Keep in mind, though, that this does not include scores, FICO nor VantageScores. Go here for a comparison of the FICO Score and Vantage Score. Most lenders use FICO, especially mortgage lenders.

Our favorite paid site is Privacyguard.com and instructions for pulling your credit so that we can give you a free credit report evaluation can be found here. You get all three full reports, and all three VantageScore credit scores. Privacyguard.com gives you a 14-day trial for free, and then only costs $19.95 per month for monitoring. Monthly monitoring is not necessary all the time, but we do recommend it if you are in credit repair and re-building phases, or looking to do something requiring credit in the near future. (We are NOT affiliated with privacyguard.com)

Has this been helpful? Please feel free to commment or share on social media. We like helping people.

Tweet for creditTweetable Takeaways Include:

  • There is only one place where your credit report is 100% free, with no bait and switch, or small print (Click to tweet)
  • The Fair Credit Reporting Act (FCRA) requires the three major credit bureaus to provide one free credit report per year. (Click to tweet)
  • Most lenders use FICO (credit scores), especially mortgage lenders. (click to tweet)

By Blair Warner

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Perkstreet Financial Reward Debit Card

July 23, 2013 | Posted by Blair Warner | No Comments

A Debit Card For Everyone

Perkstreet Financial for better credit Who would have thought 10 or 15 years ago that debit cards would become the most popular way to pay for purchases? I grew up in an era where cash was king, and you primarily used checks to pay for bills that where paid via mail. We used checks because everyone knew you didn’t put cash in the mail. Some people liked to carry checkbooks around with them, but to me it was one more thing in my pocket and too many places said “No Checks Allowed”. Today, I hardly carry cash, and prefer to pay by debit card even if I do have cash on me. Why?

There are many reasons, but here are a few:

  • Convenience. debit cards fit nicely in my wallet.
  • No more “No checks allowed” signs to get in the way. Debit cards are accepted everywhere.
  • You get the convenience of a credit card without the debt.
  • You get a record of all your expenditures for budgeting and reconciling purposes.
  • You can use it for online purchases like a credit card.
  • If it gets lost or stolen it is easy to freeze it, or cancel it and get a new one.
  • My favorite, many banks offer rewards for using them.

Most, if not all, banks now offer debit cards to use with your current account at that bank. It is, basically, an extension of your account, like checks. However, not all debit cards are created equal, and, like many of my clients in credit repair and debt reduction plans, not everyone can open a standard checking account at their local bank down the street due to low credit scores. (banks do check credit before opening a new account). Problem solved! The debit card I use myself and recommend to everyone is Perk Street Financial Debit Card.

I recommend all my clients in Upgrade My Credit’s credit repair and transformation program to use Perk Street Financial Debit Card, especially if they don’t already use one. There is no credit check, for one thing. And zero fees – not even checking account maintenance fees. Nada! (click here for FAQ on fees).

To see all the wonderful benefits of using their card Click for Perk Street Debit Card >>

By far, the best part of PerkStreet Awards Debit Card is the rewards and perks. They pay you to use it.


Image from their websitePerk Street Cash Back Rewards Debit Card

Check it out and let me know what you think. Do you already use their debt card? Please share in comments below.


By Blair Warner – Credit Transformation Coach

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Don’t make this credit mistake!
credit cards Arlington, Fort Worth, Dallas, Texas
This is going to be a really short post, but one of the most important you could read concerning maintaining, or building a good credit score. What is the worst mistake people routinely make related to their credit and credit reports? You may be surprised, for it is not obvious, and on the surface actually seems like a good thing to do. In fact, most people make this mistake when actively trying to rebuild their credit scores, and reduce their debt, making it very frustrating, to say the least. Click to Tweet

What is this mistake? drum roll…..Closing credit card accounts. Go ahead, admit it. You have thought about it at least once, and understandably so. For a lot of us, it’s those darn credit cards that got us in trouble in the first place, (so we like to say). Therefore, why not just close them and cut them up? That’s what some of the financial and money management gurus on the net will say. Depending on your financial situation and goals, for most of us there is a very important reason you don’t want to close out your credit card accounts, especially if your goal is to repair and build your credit score. If you have other goals, like getting out from under an ill-controlled mountain of debt, and curtailing credit card spending, then you will want to talk with a credit and debt counselor first to put in place a comprehensive money management plan, including a budget. For this particular credit blog post with emphasis on credit score repair and building, closing out your credit cards could be a mistake. I am going to direct you to a well written CBS article by Adam Levin of credit.com that does a great job explaining why you don’t want to make this most common credit mistake.

Go here for the CBS News article

Check out this previous article for more information on How FICO Scores Are Determined

It is our sincerest desire that you found this article helpful for your journey to restoring your credit and reducing your debt.

By Blair Warner and the Upgrade My Credit team.

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5 MORE Things You Should Stop Doing For Better Credit

June 14, 2013 | Posted by Blair Warner | No Comments

Last week we looked at 5 Things to Stop Doing For Better Credit. We had so much response on various social media networks like Google+ and Twitter, that we decided to share with you 5 MORE Things You Should Stop Doing For Better Credit.

These first 5 things plus the 5 more below will set you on the path to credit restoration and better scores.

1. Stop waiting for a better time
2. Stop blaming others and whining
3. Stop not planning and setting goals
4. Stop making your payments late
5. Stop robbing Peter to pay Paul



Stop doing these things for better credit scores

6. Not checking your credit report regularly
Knowing what is on your credit reports is key to having and maintaining good credit scores. With the advent of the Fair Credit Reporting Act (FCRA) years ago primarily put in place for the purpose of helping and protecting consumers there is no reason not to take advantage of the very important provision for every person to get a free credit report from each of the major credit bureaus, Transunion, Equifax and Experian once a year.The official site for getting your free credit reports is http://annualcreditreport.com. It is the only truly free credit report provided by the 3 major credit reporting agencies. Watch out for Free Credit Report advertisements that aren’t really FREE, not even http://freecreditreport.com . Note, http://annualcreditreport.com does not provide credit scores, FICO Score nor Vantage Score. Start checking your credit reports regularly.

7. Spending money on things you don’t need
I would be the first to admit that we often mistake the “I want” for “I need” when buying stuff, often because it just seems cool to own it. The saying “You can’t buy happiness” is a true statement. Things don’t last long; when you first get it, you experience a certain joy of a “a new toy”, but not long afterwards, the joy is gone, the newly acquired item is no longer new, and joins the rest of things in your house– or in a garage sale. Think very carefully whether you absolutely need something or you just want to own it. There is a time for buying unnecessary things, but not when you want to get out of debt and improve your credit score. Quick encouragement: Invest in experiences instead things– experiences that will stay with you in memory for the rest of your life.

8. Depending on others for change
I was talking to a Realtor the other day, and she was talking about some of her production goals for 2013. Actually, to be more precise she was complaining. She was describing how she and her partners had set down together in December and mapped out some goals and plans for the new year. It is now May, and they are nowhere close to being on schedule. I asked her why, and she replied that her partners were not doing their part. Essentially, she was waiting on them; She was depending on them for change. Granted, when you are a part of a group or team, others’ activities or lack of activities will effect you, but you must resist the temptation of depending on, or waiting on others for real change. The same applies to improving your credit and debt circumstances. Take the bull by the horns and make things happen to the best of your ability. Even if you have to hire help from a credit repair company, you still are taking initiative by reaching out to them and then doing your part in the process.

9. Not taking chances
take a riskSometimes we wait for a sure thing to come along for us to follow and then, when it never comes, we wonder why nothing wonderful and exciting ever happens to us. It’s true not just in regard to life in general but also important things like one’s credit. We often overthink, overanalyze and create possible scenarios in our head – then come up with the most negative outcome, and end up never trying anything at the end of the day. We are afraid to take a chance. If you want to improve your credit rating, you must be willing to take a risk. If you are truly afraid of something going wrong, ask yourself: “What is the worst thing that can happen?” and if you can live with that worst case scenario – maybe you should give it a try. Naysayers will try to discourage you, but if you know it is right, go for it!

10. Asking for help
Most of us resist asking for help until we are desperate, especially we independent, do-it-yourself (DIY) Americans. When we have gotten to the end of our efforts and pride we finally consider asking for help. If you want to have better credit scores, stop not asking for help when needed. Granted, there are many things you can do to improve your credit yourself, and really should. It’s your credit, your future. In fact, the consumer credit laws like FCRA and FDCPA were put in place to not only protect consumers, but empower them to have more control over their credit and financial life. However, there are times and situations where you feel like you are in the credit pit, and can’t get out, or you just flat don’t have time with all that is on your plate. it is best and easier to let people who have specialized training and experience help you.

Don’t let pride get in the way of your goals and plans. If you need help, ask for help from a reputable credit repair specialist.


Improve Your Credit Scores By Stopping these 5 Things:


1. Waiting for a better time
There is never a good time to start something.. yet it is also true that often there is never a better time than the present. With the myriad of activities vying for our attention and time these days, admittedly, working on improving one’s credit score is not the most exciting option. However, we usually make time for things that are important to us. Is it important to you repair and improve your credit scores, stop waiting for a better time. The time is now!

2. Blaming others and whiningKeep Calm Stop Whining - repair your credit scores
This may sound harsh, and it is not the intent at all, but if you want to improve your credit scores, blaming others and whining about your credit woes is NOT allowed. You can blame your spouse, or ex-spouse, your parents, the government or economy, the list goes on, but it won’t change a thing. No crying over spilt milk. Take responsibility and move on with a plan to change the future. Nuff said.

3. Not planning and setting goals
Failing to plan, is like planning to fail. If we don’t set credit improvement goals, not only can we expect to not get far, but how would we know if we have arrived? We can’t control everything. Life has the tendency to decide some things for us and take us down routes we never thought we would ever consider for ourselves, but don’t let it dictate everything. We have a certain power to influence our future. Having a specific plan for better credit scores, even if not complete, at least sets you in a direction of achievement and is a guide of sorts for a better tomorrow. We often give up and just let events take over, but reacting all the time is not the same as acting of your own free will with a specific plan to improve your credit standing. Take control, set targets and get a strategy, because just living the same way that got you here won’t work. For some tips on how to do that click here.


NOTE: These last two are very important to improving your credit scores.                Without them it won’t happen.

4. Making your payments late
In just about every article one reads about credit repair and credit rebuilding the admonition to make your payments on time as the best way to get good credit scores is abundant. The reason is that 35% of FICO’s credit scoring model is based on payment history. There is no getting around it. The good news, though, is that FICO also weighs most heavily on the most recent 12 months’ history, which means it is never too late to start making your payments on time and turning the corner from back credit to good credit. Start this month never making late payments and watch your credit score rise!

5. Robbing Peter to pay Paul
While writing this post, my daughter asked me to explain what this idiom means, and after explaining she asked me “why Peter, and why Paul?”. I didn’t have an answer for her except that it must mean that it is a very old idiom. This means this concept of taking, or borrowing from one place to pay your debt somewhere else goes back ages. It doesn’t work, though, for it is essentially an endless cycle. You never get out of debt. Rarely does this series of activities bring about a positive benefit. If you find yourself in this never-ending rut, stop it. I know it is easier said than done, but a plan must be put in place to be ruthless with yourself, and find a different way to satisfy your debors. A better solution is the snowball debt reduction method.


Helpful Online Resources for Getting Out of Debt
->> The Snowball Method of Paying Off Debt.
->> Snowball Method Tools, spreadsheets, calculators. – GO HERE….



By Blair Warner

credit report imageThere are a lot of myths surrounding credit scores and how they are calculated, or, put another way, what information is and is not considered in your credit score. Credit scores are based upon information on the credit report. This is the only information used to calculate scores, and predict credit behavior. Since there is often confusion of what is and what is not used in credit score calculations, below should help out a lot.


Which data is and is not included in a credit report?

Personal Information such as name, address, date of birth, Social Security Number and employment data (where you work(ed) only) are included.

Account information. Account information includes loan amount, credit limit, balance, payment dates, payment rating and history, to name a few.

Collections by 3rd party collection agencies.

Public records like judgements, tax liens, bankruptcy, etc. are reported.

Inquiries, when and where, but not for how much, and why you applied for credit. Inquiries initiated by you are called “hard” inquiries, which are results from applying for new credit such as credit cards, vehicle loans, mortgage, etc. Go here for more on inquiries and the myth surrounding their impact on your credit score.

Information NOT included in credit reports:

No salary or income history whatsoever is included

Medical history is not included, although medical collections via a 3rd party collection agency may be.

No arrest or criminal records are reported.

Property tax records are not included.

Insurance premiums or insurance claims are not reported.

Personal information like gender, marital status, race, religion, nationality, political affiliation and personal lifestyle is not a part of your credit reports.

Payday loans (unless in collection), debit cards and prepaid debit cards are excluded

Inquiries initiated by you online, called “soft inquiries” are not reported and have no effect on your credit score.

Financial Institution accounts like checking accounts, savings accounts, CD’s, or investment accounts. NSF checks will appear if sent to collections.

While some of the above information like income and assets may be considered by lenders such as mortgage banks, and auto finance companies, etc., in their decision process, you need only be concerned about the information that is reported on your credit reports as far as your credit score in concerned. Information not reported on your credit reports does NOT impact your credit score.

By Blair Warner (see About US page for more info.)

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After Credit Repair: How to Avoid Credit Card Debt Again

March 1, 2013 | Posted by Blair Warner | 2 Comments

So, you are out of debt? How do you avoid going into credit card debt again?

by Blair Warner

Debt Free
You have finally done it! Congratulations! Your hard work paid off! You pulled yourself out of credit card debt and restored your credit rating through credit repair, and now, no doubt, want to avoid making the same mistakes that drove you into debt in the first place. In one sense, it is easy, but, as we all know, it is just as easy to get back into credit card debt again unless some habits are changed, and systems in place to avoid it.

Consider the following simple strategies for credit and financial management.

Make a budget

The best way to avoid going back into credit card debt is by making yourself a budget. You will want to be realistic about your budget. Think about what your spending was before that got you into debt and figure out how you are going to avoid overspending on the same things. The secret to budgeting success is to keep on track with your budget. You may want to enter in your expenses every day, weekly or pre-determined, regular times so that you do not get behind without realizing it. If you spend too much in one area, try to make up for it from another one.

Think about whether you really need all of your credit cards, and possibly get rid of some.

Some people will just spend what they have available. If you do not need all of it, which most people don’t, then you might want to start cutting down on them. This is a tricky one, though. You don’t want to get rid of all of them, yet you have to be a bit strategic on which ones to close and which ones not to, so that the hard work of building a new credit score is not wasted. If done right, it might also help your credit rating. Here are some suggestions:

You might want to start with all of the miscellaneous store credit cards that you have. Not only might this make it less likely for you to go shopping when you really don’t need anything, but store cards often charge more interest, and don’t report to the Transunion, Experian and Equifax as often as credit cards like Visa, Mastercard, Amex, etc. — not adding as much benefit to your credit scores.

You do NOT need a gas card. It is better to use a general credit card and then pay it off each month. Things like gas and groceries really shouldn’t be bought on credit anyway, but if you want to use your credit card as a type of debit card (it is not, though. It is indeed credit), then paying it off each month is important.

During your previous credit repair journey you should have been advised which cards to close and which ones to leave open. If you have not done that yet, consider closing the younger ones first, and/or the ones with higher interest rates. Again, this must be done somewhat strategically. Ask your credit specialist for advice.

Pay with cash most of the time.

Some people who are survivors of credit card debt want to deal with credit cards as little as possible. They may just take out how much cash they want to spend at any given time and just bring that with them when they go to the store. They will not have the option of overspending.

Do not go shopping. (easier said than done, right?)

Some people just cannot help themselves when they are at the store. Do you get a “Must have it, gotta have it, can’t live without it” mentality when you go shopping? If this is you and caused you problems in the past, then you might want to just avoid the stores altogether. That also goes for the online shopping websites if that is your weakness.

When you get the urge to spend, think about how hard you worked to get out of debt and repair your credit. Be proud of yourself when you see your bank account growing and as you see yourself getting in charge of your finances. This simple tips above will help you stay out of credit card debt for good.

Learn more about this author, Blair Warner.
Click here to send this author comments or questions.

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10 New Year Resolutions For Better Credit

January 5, 2013 | Posted by Blair Warner | 2 Comments

2013 it here! Now what?

Well, it’s that time again—time to start rolling out the New Year’s resolutions. Some of us will vow to eat less, exercise more, live in the moment, be more grateful. You may even decide to bury the hatchet with the family member who makes you so crazy.

This time of year is a great time to start making—and keeping—financial and credit managment resolutions, too. But sadly, like other type goals, we often make them year after year with sincere intent only to see them quickly fall by the wayside, as we revert to bad habits that we have vowed to break.

But what about the most financially successful people and their resolutions? Have you noticed how the most accomplished people just seem to identify important things and consistently get them done? Study successful people long enough and you start to pick up on the resolutions they seem to consistently make.

Here are ten for better credit:

#1 Spend some time making a general plan Successful people plan, period. There is no getting around it. You have probably heard of the old axiom “aim for nothing and you will hit your target 100% of the time”. That holds true for resolutions and making plans to do something different this year that will improve your credit and debt standing. If you don’t know what you want or where you are going, you will not make much progress. Get out paper and pen, a calendar, and be like Nike, just do it, and you will see how it flows. To prime the pump, start with asking yourself some questions, beginning with general, and getting more specific using the 5 W’s, who, what, where, when, why, and lastly, how. Emphasize what and when questions. Go here for more on setting goals.

#2 Determine all possible major expenditures over the next year When scoping out your year to plan and budget think what possible major expenditures may be coming up. Will you need to replace an air conditioner this spring, or a major applicance? Are any kids starting – or graduating from – college, or getting married? Is your car on its last leg? The possibilities are endless and specific to your situation and family. Try to determine the exact month the expenditure will occur. If this is your year to improve your credit, though, don’t purchase anything not necessary. Since these may require the use of credit, also consider how it will effect your credit score and debt load. Call us anytime for a free consultation.

#3 Create a budget As a type of sub-plan under your general plan is a budget, which focuses on your finances. There are two kinds of budgets, one that considers all your current expenses and income over a specific period of time, usually monthly, and one that includes a deliberate, aggressive plan of debt reduction, often called debt snowball-ing. The debt snowball is more than just paying the minimum payment. More on debt reduction below. If you have never made (and tried to keep) a personal/family budget, It’s time. 2013 is the year! A whole blog could be written on how to create a budget, so for now here is a link to an example. The trick is to be realistic and as accurate as possible, and stick to it. Sometimes having an accountability partner helps.

#4 Make a “vow” to make all payments on time. This one should be self-explanatory. It is the cornerstone of good credit. There is no getting around that since 35% of FICO credit score is calculated from your payment history, you have to make yourself the promise to make your payments on time from here on out, and keep it. You will be amazed how much your score will go up if you do nothing else different in 2013 over 2012 except make your payments on time on your current debt each month. Try using your bank’s auto-pay system online. Call your banker to find out how if you are not already set up with online banking.

#5 Create a debt reduction plan As mentioned, this is also called the debt snowball. It is a specific plan of reducing or getting out of debt that requires paying more than the minimum payment each month and the availability of extra cash to do so. The concept is that you start out small, and on specific accounts, that as paid off frees up money you were paying on those accounts to then apply toward remaining, and probably, higher balanced accounts. It may or may not be done in a year, depending on your debt load and it is most importantly applied to unsecured, credit card type debt. A future post will be written explaining it in more detail. Warning: Don’t just jump into to randomly paying off debt. In order to improve your credit standing and increase your score as desired, it needs to be done strategically.

#6 Cut back on expenses One of the best ways to free up some money for debt reduction and financial goal setting is to cut expenses. Even when you think you can’t get blood out of turnip look at your expenses and spending habits and see if you can find something to cut out or down on. Only you know what can be cut out or not, but remember, since 2013 is going to be your year to improve your credit and reduce or get out of debt, be ruthless with yourself. It may take some sacrifice. See Cut Utility Costs – Improve Your Credit for some tips as a place to start.

#7 Check your credit reports and scores As we have mentioned in our article Ten Commandments of a Good Credit Score, it is crucial to know what is on your credit reports and monitor it regularly. If you are looking for a place to pull them, try www.privacyguard.com. it only costs $1 the first 30 days, then if you want to monitor them monthly it is reasonably prices at $14.95/month. We suggest monitoring your credit during times of credit repair and rebuilding, but it is not necessary.

#8 Deal with any derogatory or erroneous items on your credit reports Once you have pulled your credit reports, go over them with a fine toothed comb, checking for any errors, accounts that don’t belong to you, and making a note of all derogatory items. You also need to make sure you have plenty of good credit. Analyzing your credit reports can be confusing, call us, or go here for a free credit report evaluation by a credit professional at Upgrade My Credit.

#9 Refinance your home to 15-year mortgage with a lower interest rate (if applicable) This may not apply to everyone, but sometimes refinancing your home to a lower interest rate will save you significantly each month, freeing up more money for debt reduction and credit building, especially if you can reduce it to a 15-year mortgage. Here is a free mortgage calculator to compare. If you think this may apply to you, or are just want to inquire more about it, we have many mortgage lender partners we can introduce to you. Give us a call. 817-886-0302

#10 Finally, get a free credit consultation from Upgrade My Credit. We love to help people reach their financial goals that require good credit, and we have an even softer spot for folks who have poor credit and just don’t know where to start to repair and re-build it.

This was a bit longer than most of our articles, but hopefully well worth the read. You will probably want to return here through out the year to refresh your determination and keep on track.


By Blair Warner – Sr. Credit Consultant, Upgrade My Credit

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