Tarra Jackson's New Virtual Coaching Program Transforms Financial Lives | PRESS RELEASE

FOR IMMEDIATE RELEASE

Week 1 Live Virtual Lesson: Mastering Money Mindsets

Press Release - Jan. 24, 2014 - Tarra Jackson, known as Madam Money, kicks off the Financial Lifestyle Transformation Virtual Coaching Program on Monday, February 3, 2014. The Financial Lifestyle Transformation Program is a 7 week online financial coaching program filled with online live educational sessions with other financial experts via YouTube, financial templates, as well as one on one private coaching sessions with Jackson.

Jackson designed this program for consumers who need a success support system to guide them through their financial transformation. "Some people just need an accountability partner, coach and cheerleader..." says Jackson.

The Financial Lifestyle Transformation Program tackles 7 Key Financial Components during the 7 Weeks:

Week 1: Mastering Money Mindsets

Week 2: Money Management

Week 3: Credit Management / Debt Elimination

Week 4: Income Tax Management / Getting the Best Return

Week 5: Risk Management / Insurance Review

Week 6: Wealth Management / Retirement Planning

Week 7: Estate Planning

Each week will feature a Virtual Educational Session that focuses on that week's topic. The first LIVE Virtual Educational Session will be held on Monday, February 3, 2014 at 8:00 PM EST. Jackson will host a panel of Motivating Men via Google Hangout Live on YouTube about "Mastering Money Mindsets."  During this educational session they will tackle the mindsets that keep consumers from meeting their financial goals and how to transform those defeating mindsets in to positive money mindsets for a successful Financial Transformation.

 The panel consists of Clyde Anderson (Financial Expert, Author, Speaker & CNN Contributor), Kenny Pugh (Relationship & Financial Expert, Speaker & Black Enterprise Contributor), Jack A. Daniels (Transformation Counselor, Psychotherapist, Author & Speaker), Paul Q. Fortson (Spiritual Advisor & Inspirational Speaker), Wahid Shakur (Investment Real Estate Guru, Personal Development Coach, Author & Speaker), and Walter Jackson (VP of Operation HOPE Financial Dignity Center & Speaker). They will discuss how our emotions, past, spirituality, relationships, fears and knowledge affects how we deal with money and ways to improve in key money mindset areas.

"This program offers three virtual coaching options for participation. We make it easy for people to get the tools that they need to be financially successful." explains Jackson. Consumers can learn more and register at http://www.MadamMoney.com to participate.

ABOUT TARRA JACKSON

Named #6 in January 2014 Top 100 Financial Experts to Follow on Twitter, Tarra Jackson is a financial expert and counselor. She is an internationally known Economic Empowerment Spearker and Blogger and is the host of one of the top 5 Financial Chats on Twitter, called #CashChat, every Friday at 12:00 PM EST. She is also the author of the best-selling book, "Financial Fornication." To learn more about Tarra Jackson, go to http://www.TarraJackson.com.

5 Financial Wellness Numbers (What Financial Institutions Don't Tell You) | Podcast

Do you know your Financial Wellness Numbers?  Don't sweat ... most of us don't!
 

We have all heard that we should know our Wellness Numbers that determine our physical wellness, like our blood pressure, cholesterol, weight, blood sugar or A1C levels, etc. These number tell us how physically healthy we are.

In the same respect, there are Financial Wellness Numbers that tell us how Financially healthy we are as well.
 
During my BlogTalk Radio Show "HeSaidSheSaid" that I co-host with my BFF, Gerald Robinson, a Financial Institution executive,  we did a Money Matters segment and shared the following first 5 of the Top 10 Financial Wellness Numbers that every consumer should know and how they are calculated.

1. Credit Score
2. Debt to Income Ratio
3. APR (Annual Percentage Rate)
4. How Much You Can Afford to Pay for a Loan Payment
5. Fees (NSF, ATM, Late Payment, etc) 

 
We also shared

• Easy tips about how to avoid ATM and other Fees, avoid High Loan Rates, and avoid "Un"Affordable Loan Payments,  
• Insider information from a financial institution perspective, as well as 
• Some rules of the Financial Game.

CLICK ON THE LINK BELOW to hear the "HeSaidSheSaid" Money Matters podcast.
 
Money Matters: 5 Financial Wellness Numbers 12/11 by Tarra Jackson | Podcasts
 
After listening, share your thoughts or ask your most pressing personal finance question that you would like us to address on our show or via my YouTube channel.

Making Money Matters Manageable,

Tarra Jackson


PS. Click here for my upcoming training and events!

The CREDIT GAME Rule #1: Know the Players so You don't get Played

Have you ever wondered what a FICO Score is and/or what Credit Bureaus are and how they are used by financial institutions?  

Here is a great illustration to help you learn first rule of The Credit Game so that you don't get "played" .... "Understand The Players!"

Video by Khan Academy

Was this helpful?  Let me know by commenting below.

Making Money Matters Manageable,

Tarra Jackson
Madam Money

Madam Money's Q & A: Is Race Considered in the Credit Score?

Have you (or someone you know) ever wondered if a person's race for financial situation affects or is considered in the calculation of their Credit Score?

Great Question!  Here the answer ...

Do you have a personal finance or credit questions?  Ask me and get answers!

Just email your question to Tarra@TarraJackson.com.

Making Money Matters Manageable,

Tarra Jackson

5 Quick Tips to Divorce Finances Through A Divorce

Do you (or someone you know) know someone who is going through a divorce that needs a few financial preservation tips?  I do!

Even though I have never had the unfortunate experience of a divorce, I have helped several of my clients through the financial transition from joint to individual finances.  When couples go through a divorce, they are not only divorcing each other; they are also divorcing their finances as well.  Financial Divorce can be just as, if not more, emotionally draining and frustrating.  Depending on how amicable the separation is, may determine the ease or complexity of the separation of finances.

Regardless of where a person is in the separation, here are 5 quick tips about How to Divorce Finances through a Divorce.

  

Get Organized!

Gather as many financial documents as possible. Financial statements and documents will be requested and may be required during the separation process.  Here is a Divorce Financial Checklist of documents that may need to be gathered. Consult with a divorce attorney for all of the documents that will be asked for and required to remit to the court.

  

Separate Bank Accounts

Make sure to open separate individual savings and checking accounts.  Don’t just open an account in desperation … rather; make sure to open up an account at a financial institution that is conducive to the financial needs and usage. Open an account with great customer service because they may be needed for assistance through the financial transition.  Avoid accounts or financial institutions with excessive fees.

  

Update Direct Deposit

Don’t forget to update direct deposit or payroll deductions through the employer from the joint account to the new individual bank account(s) established.  If the joint account is responsible for paying bills that may affect the credit reports, continue to make deposits just enough to pay those bills OR stop the bill payment or payroll deduction from that joint account and set it up in the individual account to maintain a positive credit history.

  

Do a “Clean Break” with Loans

Having joint debt is like having a child together.  Regardless of the status of the relationship, both borrowers are equally responsible to pay the debt until it is paid in full despite what the judge or divorce decree says.  So, first things first … get copies of all three credit reports from Equifax, Experian, and Trans Union from www.annualcreditreport.com.  The best way to preserve credit history during a divorce is to do a “Clean Break.” Identify all credit accounts, and then try to negotiate who will take on what debt. Once that is agreed upon, each should try to get an individual loan to pay of the joint loan.  If either person does not qualify for an individual loan to do a “Clean Break,” try to agree that the other person will make timely payments on the joint loan. This is important because if the one person pays late or not at all, it will negatively affect the other person’s credit and ability to obtain the credit that may be needed after the divorce.  This is especially critical with credit cards.  Make sure to block the credit card lost/stolen and request a new card number to avoid future usage from the other part.

  

Update Beneficiaries

Don’t forget to update all financial documents! Update the beneficiary on your retirement savings account, insurance policies, bank accounts, etc.  Also, don’t forget to update the W-4 once the separation is final. During the divorce, many people forget to update this important information.

  

  

The best way to get through this tough situation is to try to think of the financial side as a business matter.  However, if the separation is not amicable, it may be best to have the divorce attorneys to discuss and negotiate these and other matters.

It is also a good idea to work with a financial professional or counselor for guidance during the financial divorce. Best wishes and contact us for further assistance.

  

  

Making Money Matters Manageable,

Tarra Jackson    

5 Things I Wish I was taught "How To Be" when I was a Teenager (to be Financially Better Off)!

Do you, or someone you know, have things you wish someone taught you "how to be" when you were a teenager, to be financially better off?  I do!
  

“If I knew then what I know now.” This has got to be the theme song for most adults, especially when it comes to finances.  There are hundreds of things that I wish I was told, taught or nagged about when I was a teenager.  But, here are my top 5 Things I wish I was taught “how to be” when I was a teenager, to be financially better off.
 

I wish I was taught how to be …

  

A Boss!

No, not Bossy, but A Boss of my own business. Instead of being encouraged to go to school so I can get a good job, I wish I was told and taught to go to school to learn how to make jobs. Or to go get a job to learn what it takes to run a business. Seriously, we are told what to do and what not to do when we are children, only to go to school to get a job for other adults to tell us what to do and what not to do when we become adults.  Seems like a set up to me now.  
  

So teens … go to school and get a job, NOT to just be an employee, but to learn how to become an entrepreneur. Besides, there are not that many jobs out there right now anyway. Create your own business and Be A Boss!

  

A Giver

The first principle of Prosperity is Giving! In order to reap a harvest, a seed must be sown.  Always remember, there is no room to receive in a closed fist.  Whether your giving is spiritually, morally or emotionally based, give gladly and on good ground. Giving is not always about money. Sometimes your old clothes, knowledge, or time may be just as, if not more, valuable.
  

So teens … learn the power and pleasure of giving early to a church, non-profit or worthy organization or individual. You’ll be surprised of the blessings you will receive because of your openness to give.

  

A Saver

Who knew that if I had saved only $100 per month when I got my first job at the age of 14 in a savings account with an interest rate of 0.50% until now (25 years), I would have saved over $32,000? And if I had saved $200 per month, it would be almost $65,000.  The point is, if I really understood the power of saving at a younger age when I could afford it, I would be able to afford almost anything I wanted when I got older.
  

So teens … Start Saving Sooner!!! The younger you are when you start saving, the more you will have when you really need it when you get older. Trust me on this one.

  

Financially Proactive

Enjoy today but Live for Tomorrow!  Tomorrow is your future. Live like you are going to be alive for a long time and you want to be financially comfortable for the rest of your life. True story … If I had planned for the things that I wanted “tomorrow” (in the future); I would not have borrowed money to get what I wanted “today” that I would have to be paid back “tomorrow” (in the future). Well, it’s tomorrow for me now and I’m still paying for what I borrowed “yesterday” (in the past).  My point is that using credit to get what you want right now will limit what you can afford tomorrow, when you really need it. It’s no fun not being able to afford to buy a home because you owe too much in credit card debt.  Credit is designed to be a leverage to help you acquire real “assets” (read Robert Kiyosaki’s book, Rich Dad Poor Dad) or to be an anchor and drown you deep in debt.
  

So teens … use credit wisely and do not use it until you are mature enough to handle its consequences (read my book, Financial Fornication).

 

Wealthy!

Not rich, but Wealthy! Rich is predicated on how much money you have, but Wealth is determined by how much you are able to do with the money you have. I’ve met hundreds of broke “rich” people, but I’ve never met a broke “wealthy” person.  Also, don’t believe the bling you see on TV! Nine times out of 10, the bling is borrowed! #IJS
 

So teens … follow my Financial Freedom Formula early and be wealthy for the rest of your life!

 

      

Those are my top 5 things I wish I was taught, but believe me there are more. Come to think of it, I was probably told to be a few of them, but I just didn't listen. Typical teenager.  ;-)

   

Best wishes on your journey to Financial Freedom!

   

Financially True,

   

Tarra Jackson, Making Money Sexy!

5 Ways to Avoid Financial STDs (Substantially Tremendous Debt)

Have you or someone you know been infected with Financial STDs? I have…
   

In my book Financial Fornication, I talk about Financial STDs (Substantially Tremendous Debt).  This financial dis-ease is not only financially and emotional painful, but families and cosigners can get infected as well because it can be contagious.

   
Here are 5 ways to avoid Financial STDS.
   
Use Financial Contraception.
Financial Contraception is better known as a budget or spending plan. Create a budget or spending plan that works with your lifestyle. Using a budget is the best protection against acquiring Financial STDs.
    
Avoid being financially promiscuous with multiple credit cards.
Pick a credit card that has the lowest rate and provides bonus points if you must or choose to use a credit card for purchases. Using multiple credit cards may result in excessive spending, which result in Financial STDs.
    
Limit or Avoid Financial One Night Stands.
A financial one night stand is a financial transaction, usually less than $50-$100, that should be paid in cash or paid in full if purchased with credit. If you choose to use credit for these types of transactions, avoid turning those financial one night stands into a long term financial relationship by revolving the balance and not paying it off in full. Vernacularly speaking, “Hit it & Quit it!”
   
Become Financial Abstinent.
When your finances feel like they’re getting out of control, sometimes it’s best to just STOP using credit to get a handle on your finances. Being financially abstinent stops the leaks in finances so a budget can be created to build up immunity against Financial STDs.

 

Get out of Financially AbusiveRelationships.

If you are getting your butt kicked with ridiculously high loan rates, low deposit rates, lots of fees and poor customer service, they’re probably really not that into you, which means that it’s time to plan your exit strategy from that financially abusive relationship.  You don’t have to stay. Date financial institutions to find the best one for you.

 

For more tips, check out my book “Financial Fornication.”

 

Financially True,

 

Tarra Jackson, Making Money Sexy

Owing Taxes SUCKS!

… Have you (or someone you know) filed your taxes and ended up owing taxes back? I have.
  

Yes, owing taxes SUCKS, especially when it is an absolute surprise.  Some of us have owed taxes for several years. Owing the IRS is sometimes an unexpected bill that can’t fit in our already tight budget. Despite how we may “feel” about it, owing taxes is essentially another "Loan" that is owed.  Here’s how it is like a “loan," how it can affect your Credit Score and 3 Tips of things to do to avoid having to pay back taxes next year.

 

TOO MUCH, TOO LITTLE, TOO LATE

  

When “not enough” taxes is OR “too much” taxes are being taken out during the course of the year, it means that the exemptions on your W-4 or your tax deductions may be incorrect. But, here is how taxes are like a "loan.”

  

If “too much” taxes are being taken out of your check throughout the year, the government is essentially “borrowing” that money from you.  They pay the amount they “borrowed” in a lump sum called a “Tax Refund.”

 

Conversely, if “not enough” taxes are being taken out of your check throughout the year, you are essentially “borrowing” the money from the government.  The amount you owe in taxes is the “borrowed” money you must pay back.  The great thing is that if you are not able to pay it back in a lump sum, payment plans over a period of time are available to avoid additional fees and penalties.

  

HOW TAXES CAN AFFECT YOUR CREDIT SCORE

 

If the Taxes Owed is not paid within a timely manner, the IRS may report the delinquent taxes as a “Tax Lien” on your credit report under the Public Records section on your credit report. This will negatively affect the Payment History category of your credit score, which is 35% of the calculation. Also, the amount doesn’t matter. Whether you owe $500 or $5,000, the negative affect to the credit score will be the same.

  

If it is reporting on your credit report and you have paid the taxes due in full, make sure you get a copy of the Satisfied Tax Lien notice from the IRS. Also, dispute the information on your credit report, if necessary to have it updated as “Satisfied.”

As promised, here are 3 Tips of things to do to ensure that you don’t owe taxes next year.

 
 

TRUST BUT VERIFY

  

Some people love to DIY (Do It Yourself) everything, including their taxes. And there are great Tax softwares available to help you do your own taxes. You can even do your taxes online. If you choose to do your own taxes, just remember President Ronald Reagan’s quote, “Trust but Verify.”  This is important, especially if you owed taxes for last year.  Simply take your completed taxes to a tax accountant or tax professional so they can make sure that you didn’t leave out any new deductions or, better yet, you didn’t write off something that didn’t qualify.

 

KNOW YOU’RE PLACE

 

One of the reasons why people end up owing taxes is because they have the wrong number of exemptions on their W-4 forms.  Make sure to review, and update if necessary, your W-4 form with your employer annually, preferably at the beginning of each year. Consult with a tax accountant or tax professional for guidance.

 
GIVE YOURSELF CREDIT
 

Many people have turned their hobbies into a business. However, some of those people don’t give themselves credit by not taking advantage of available business tax write offs.  Not taking advantage of every eligible business tax write off is like giving away extra money. So, whether it’s selling your homemade secret recipe cakes or providing consultation, make sure you keep your receipts for all of your business related expense in one place, like an envelope for next year’s tax return.  You never know, certain business meeting meals up to your cell phone bill used for your business may be business tax write offs. Consult with a tax accountant or tax professional to understand what business expenses are tax deductible. 

The moral of the story is that winning the Tax Game is to GET NOTHING and OWE NOTHING! #IJS

   
Financially True,

   
Tarra Jackson ... Making Money Sexy 

Financial Spring Cleaning Tips

... have you (or someone you know) ever thought about doing some Spring Cleaning with your Finances? I have.
  

It's SPRING!!! Yes! It's that time again.  Out with the old to make room for the new!  Spring is the season of newness!  Time to put away all of the winter clothes and blankets and bring out or make room for the Spring and Summer stuff. If you are planning to do some spring cleaning this year, are you planning to do some Financial Spring Cleaning?


Financial Spring Cleaning is just as, if not more, important as Spring Cleaning in your home and closet. Here are a few tips on Financial Spring Cleaning with your Paperwork, Wallet, Credit Report and Budget.


PAPERWORK - SPRING CLEANING

• FILE ESSENTIAL DOCUMENTS / SHRED NON ESSENTIAL DOCUMENTS. If you have a desk, filing cabinet, drawer or box full of old bank statements, checks, bills, or other financial documents, sort through them carefully and keep only the important documents that you know you will need to reference at a later date. Do NOT just throw the documents away in the trash. If you do, you are begging to be a victim of Identity Theft.  If you do not own a shredding machine at your home or do not have access to one at your job, take your shred box to a local Shredding Company.  They are awesome!  Just dump, watch it get shredded and drive away! Search for a local Shredding Company or ask your local financial institution if they do Shred Events.

• GO GREEN / PAPERLESS.  Most financial institutions encourage their customers to sign up for electronic statements. This is more cost effective for them because they save money on paper, ink, postage and mail service. This is beneficial to you because you don't have to worry about more paper coming in the mail.  Don't fret! If you need to have a hard copy of your statement to audit or review, you can simply print you statements via online banking.

WALLET - SPRING CLEANING

• REDUCE THE PLASTIC.  If you have more than one debit or credit card in your wallet, you may be setting yourself up for over spending. Or worse, you may give that thief who stole your wallet access to all of your money and credit. Save the planet and just PICK ONE already! Only having one debit or credit card in your wallet to use for a purpose is the best way to control spending.  

• USE CASH! A wallet is for cash!  Keep cash in your wallet to see exactly how much you are spending.  The may help you with a new financial reality check.

CREDIT REPORT - SPRING CLEANING

• GET IT FREE! Before you decide to apply for credit anywhere, you should know your credit status. Lenders should NOT know your financial reputation before or better than you! Being afraid of what is reporting is no excuse for not getting a copy of your credit report.  You should know what creditors are saying about you. You never know, the stuff they are saying and reporting about your could be false "rumors."  You will want to nip that in the bud sooner than later. You can get a FREE copy of your credit report at least once a year at www.AnnualCreditReport.com or by calling (877) 322-8228.

• SET THE RECORD STRAIGHT! If there is false information reporting on your credit report, it is your obligation to set the record straight and get it corrected.  Creditors are going to notify you that they are reporting information incorrectly!  This is YOUR financial reputation we're talking about.  It will suck when you are declined for credit because of information that is incorrect. Each credit reporting company (Equifax, Experian and TransUnion) has an online process to dispute incorrect information. They also provide detailed instructions on how to dispute information via mail as well.  Get started at www.AnnualCreditReport.com.

  
BUDGET - SPRING CLEANING

• GET ONE! If you do not have a written budget, this is the time to get it together.  Once you see where your money is going money, it will help you make better financial decisions. If you need help creating a budget or spending plan, click here for my FREE eBook on 5 Steps to Building a Budget that Works. 

 

• UPDATE IT! A budget or spending plan is a living and breathing document. There are some things that may have changed within a year, which may require changes to your budget. So, if you do have a budget established, now is the time to review it and update it as necessary. Who knows, you may have a few extra bucks to save or to pay off another debt. Better yet, treat yourself if you were able to stay on target with your budget! You deserve it.

  

Click here for more tips or to schedule your FREE Financial Consultation.

3 Ways to Sabotage Your Credit Score

...Have you (or someone you know) ever wondered why when you think you are doing everything right regarding your credit, your credit score still takes a dive? I have.

  

Don't worry.  You are not alone.  I have been asked about this by numerous consumers and almost all of my clients.  The Credit Score is a calculation of credit performance behaviors that tell how risky you are to lend or provide a certain service to.

The quick way to remember the Anatomy of the Credit Score is S.P.A.D.E.  SPADE stands for 

• Spending (30%) - how much  of your credit cards or revolving debt do you use? 
• Payment History (35%) - how are you paying on all of your credit accounts? 
• Age of credit (15%) - how long have you had experience with credit? 
• Diversity (10%) - what experience do you have with different types of credit? 
• Exposure (10%) - how many times do you allow your credit report to be viewed?

What makes the credit score calculation so complicated is that there are some things that we do, that seem to be good common sense actions, that actually reduce our credit scores.

Here are the Top 3 Ways to Sabotage Your Credit Score.

#1:  CLOSING PAID OFF CREDIT CARDS

This seems like a wise and financially responsible thing to do right? RIGHT!!!  But, this action will actually have a negative impact on your credit score.  This affects the Spending category of the credit score, which is 30% of the score.  Credit scores rely heavily on utilization of revolving debt, like credit cards or lines of credit. So, if you close your credit cards, your utilization will be Zero. Not Good!  This is why you may see a dip in your credit score.

HELPFUL HINT:  Keep your credit card or line of credit balances at or less than 30% or the credit limit.

#2: OPENING DEPARTMENT STORE CARDS FOR 10% DISCOUNT
OK, Reality check ... You will not get a 10% on your purchase if you revolve a balance at 18% APR or higher.  The purchase will actually end up costing you more than the 10% you thought you saved.  Besides this misnomer, this action will have a negative impact on your credit score because it affects up to 3 categories of your credit score: Age (15%), Exposure (10%), and possibly Spending (30%)!  That's potentially 55% of the credit score negatively affected.

Here's quickly how this works: 1) You now have a new account reporting on your credit report, which affects the Age category; 2) That inquiry when they pulled your credit report to see if you qualified for the card affects the Exposure category; and 3) if the credit limit given is right above the amount you charged, this will affect the Spending category.

HELPFUL HINT: Don't believe the hype! Use a card you already have or better yet ... use budgeted CASH!

#3: THOSE PESKY SMALL COLLECTION ACCOUNTS
You know ... that small balance you didn't know you owed your doctor because your insurance didn't pay for it. Or that ticket you got in Atlanta. (Sorry ... venting).  Yeah, those.  Here's the thing, the amount doesn't matter when it comes to collection accounts.  So, whether the amount is $50 or $5,000, the negative hit is the same.

HELPFUL HINT: Check your credit report regularly or at least once a year. You can get a copy of your credit report for free at least once a year at www.annualcreditreport.com.


Financially True,

Tarra Jackson, Making Money Sexy!

"It's what they DON'T report that HURTS!"

... Have you (or someone you know) noticed that there may be some accounts or positive information that is not reporting on your credit report that could help your credit score? Well, I have!

   

We may all be familiar with the fact that there might be incorrect information reporting on our credit reports that are hurting our credit scores with Equifax, Experian and TransUnion.  However, were you aware that there may be positive information that is not reporting on your credit reports that may help your score?

    

Here are TWO (2) things to consider if positive information is not reporting on your credit report.

   

#1: SOME LENDERS DON'T REPORT! 

   

That's Right!  The credit reporting system is voluntary!  Therefore, it is NOT required for financial institutions, buy here pay here organizations, or apartment rental organizations to report to credit reporting companies. Therefore, you may find that your positive payment histories may not be reporting to help increase your credit score.  Some organizations only report negative information; or they may only report to one or two of the credit reporting companies but not all three.

   

HELPFUL HINT:  Before you sign a credit agreement for a loan, ask the organization or financial institution if they report to all three credit reporting companies. 

   

#2: MIX UPS!

   

If you share the same name and may have shared the same address with someone, like a family member (parent/child), trades may be mixed up and reported on the wrong credit file.  Credit Reporting Companies use the Name and Address as the primary matching triggers.  The secondary triggers are date of birth and social security number.  Therefore, this is a common mix up with parents and children who share the same names.

   

HELPFUL HINT:  Include any name suffixes like Jr., Sr., III, etc., on all financial documents and credit applications and agreements. Also, check your credit reports regularly to make sure all information is correct for you.  If there is incorrect information reporting, dispute the information immediately with each credit reporting company, if necessary.

   

Click Here to schedule your FREE Consultation!

What Your Credit Score Actually Means

Tom Murphy owns and manages rental properties in one of the Top 25 markets in the United States. His rents range from $750 to $1200 a month, but every tenant must pass the same test before they get a key to the front door.

“They've got to have a good credit score,” Tom told Debt.org. “I want to know if they have demonstrated responsible financial behavior.

“It’s nice if everybody says he’s a good guy and takes his family to church every Sunday and all that … but what I really want to know is whether he has a history of paying on time.”

Bankers, insurance companies, car dealers, utilities and plenty of other businesses would say “Amen” to that!

Are You a Good Financial Risk?

What a credit score really indicates is whether you are deemed a good financial risk, based on your history of paying bills. If you’re trying to get a home loan, a car, insurance for that home or car or just get the electricity turned on, the most influential factor in making it happen, is probably going to be your credit score.

“If you’re irresponsible about paying your bills, the general feeling is you’re likely going to be irresponsible about how you drive or when you pay your mortgage,” said Dave Viola, an insurance broker in the same city. “You still might get some insurance with a bad credit score, but you’d be flabbergasted by the rates.”

Representatives from banks, insurance companies, car dealers and property owners confirmed that credit scores do affect the terms and conditions of any agreement they make with a consumer. In most cases, the higher the credit score, the lower the monthly payment. And if the consumer’s credit score is at the low end of the scale, some companies won’t do business with them at all.

Credit Score Range

The lines of demarcation in credit scores, also known as FICO scores, range from 300 at the low end to 850 at the high end. The median FICO score is 723, meaning half of people with credit scores are below 723 and half are above.

The FICO scores are compiled by three companies:  TransUnion, Experian and Equifax. Each one claims to use a different formula in arriving at their score, but generally speaking it’s computed like this: Payment history (35%); amount owed and credit available (30%); credit history (15%); new credit (10%); and type of credit used (10%).

It would be wise to note what doesn’t affect your credit score, namely how much money you make, age, sex, race, religion, marital status and where you live. 

The problem for most people is that they don’t know their credit score and haven’t reviewed their credit report. Consumers are entitled to a free credit report every 12 months, one each from TransUnion, Experian and Equifax. The free report is available at annualcreditreport.com, but credit scores are not included. The Consumer Financial Protection Bureau estimates that only 20 percent of consumers request their free credit report.

If you receive your credit report and aren’t satisfied with what you see, there are some steps you can take to improve your credit history:

• Check the accuracy of the report. Incorrect information is the leading cause of consumer complaints about their credit history. Remember, all three companies that issue reports use different data, so get a free one from each company and check all data.
• Pay your bills on time. This is especially significant with credit cards and bank loans. Set up a bill payment reminder system, if necessary.
• Pay down the balances on credit cards.
• Do not open a new credit card account unless absolutely necessary.
• Maintain a good mix of credit (mortgage, car loan and credit cards).

Having a good credit score can mean hundreds or even thousands of dollars’ worth of difference in what you pay for a loan or insurance coverage. You can go online to see examples of the relationship between your credit score and the interest rate charged on your loan. In today’s tight lending market, consumers need to be at the high end of the spectrum to receive favorable treatment for loans or insurance.

Bill Fay writes and blogs for Debt.org. He is an award-winning writer with more than two decades of experience in the areas of news, sports and public policy.

Teaching Money and Credit Management - Whose Responsibility is it anyway?

In the United States, our school system requires all children to take and pass Reading, Writing, Arithmetic (I hated Geometry), a foreign language, Social Studies, Science, and in some schools they still require Physical Education.  However, it still baffles my mind that Money and Credit Management Education is NOT required. 

There may chapters that teach the denominations and how to count currency in elementary; as well as a little bit of finance education in high school.  And yes, there may be a financial management class offered in college as an elective.   Huh?  An Elective?   Yes, I use Reading and Writing every day of my life.  The other required courses … maybe on occasions or for fun, but I deal with MONEY EVERYDAY OF MY LIFE.  As a matter of fact, I dealt with money before I could read or write when my grandfather gave me a dollar bill when I was 2 or 3.

So, the question of the day is… Who is responsible to teach a child how to manage money, to leverage its potential wealth building power and to avoid ending up in tremendous debt and bad credit?

…I hear someone in the audience yell… The Parents!  OKAY…  And who taught the Parents?   

Many parents don’t teach their children about how to manage money because they either assume that the schools are doing it or because they don’t know or weren't taught themselves.  They may have “Colorful Credit” and could be drowning in debt.  They probably were never taught how to balance a checkbook properly.  “Checkbook?  Who uses checks nowadays?  We have debit cards.”  HINT: you still must balance your account when using your debit card. 

So, the second question of the day is…If the Parents don’t or can’t teach their children how to manage money & credit, who is now responsible to teach the child?

…I hear someone else in the audience screaming, “The Church!”  The Church is its people.  Most of those people have not been taught and are seeking financial counsel.

I do believe that Financial Institutions, such as banks and credit unions, are the most qualified to teach the world how to manage money.  Makes cents (sense) right?  “Herein lies the rub…”

LACK OF RESOURCES TO EDUCATE THE MASSES

IF the financial institutions teaches money management to the communities it serves, it may not have the resources to share the information to every consumer that needs and wants it.  Some financial institutions, do share money matters information to communities, organizations and schools, when they can get in there; but that is a small drop in a large bowl.  BUT…it’s a start!

CAN’T TEACH THE UNWILLING

You can only teach a person that wants to learn.  There are thousands of resources online, in the communities, independent professionals, etc. that provide some form of Financial Education.  However, reality check… the target audience may be set in their ways and probably afraid or unwilling to make necessary changes or sacrifices to help their financial situation.  Money & Credit Management should be taught before bad habits are formed. 

  

IT JUST DOESN’T PAY!

Here is the Oxymoron Answer to this million dollar questions (Pun intended):  It is frankly not advantageous for financial institutions to educate consumers on money management.  Consumer ignorance is a multi-million dollar business. Financial Institutions make money off of financial ignorance, poor money management, and financial irresponsibility of consumers.  Those consumers should take a close look at their monthly bank statements or check out the interest rate on their loan.  The less educated/informed and disciplined a consumer is with their money, the more money they will pay in fees and interest.  Simple math. So… if that is the case, is it really advantageous for financial institutions to have a massive Financial Literacy Campaign for the world?   

I believe that  1) it is the responsibility of the schools to provide the information as a core class from Elementary through Higher Education, 2) it is the responsibility of the Parents to reinforce the information by modeling the behavior of proper financial management for the child and instilling discipline, and 3) it is the responsibility of the Financial Institutions to provide the Financial Educational resources for the Parents to learn more and continue to be informed and fiscally responsible consumers.

Call me a Dreamer or Optimist!  I believe that Financial Knowledge is power. And … Hopefully one day the US Board of Education will understand the significance of and require Money and Credit Management Education as a curriculum in all schools.  Until then…Private Schools / Charter Schools…here is your opportunity to including Money and Credit Management Education to your curricula. (I'm Just Saying!)

For more information about money and credit management curriculum for your school, contact Madam Money at info@tarrajackson.com.

  

(c) 2010 Tarra Jackson Enterprises