Credit Score's Effect on Your Insurance Premiums

Still not convinced that your credit score is important? Well do you drive a car? If so you most likely have car insurance and guess how most insurance companies determine your premiums......yep you got it......your credit score is one the determining variables!

"A decade ago, insurers priced policies by putting customers into about half a dozen categories based on perceived risk of reporting an accident, Morgan Stanley's Wilt said. Now insurers offer thousands of prices tailored to individuals based on variables such as their credit score or zip code."

Read more.

So it does matter, not just because of premiums but more companies are using your credit score to determine hiring you and promotions, if that ain't incentive enough to increase your score, I don't know what is lol. ; )

Increasing Your Credit Score Series

Here are the links to the full series on the steps I took to increase my credit score:

• Why Your Credit Score is Important
• Increasing Your Credit Score; Step 1
• Increasing Your Credit Score; Step 2
  
• Increasing Your Credit Score; Step 3
  

Increasing Your Credit Score; Step 3

Please review these posts, if you haven't already, before reading Step 3:

• Why Your Credit Score is Important
• Increasing Your Credit Score; Step 1
• Increasing Your Credit Score; Step 2

In Review of the first two steps, you have a credit card and you have used 40% of your credit limit. Now we continue on to Step 3:

3. Make Payments every month, at least $15 more than the minimum

Now you will start making regular ON TIME - NEVER LATE payments each month to your card. I recommend already having the FULL balance that you owe in a savings account or set aside somewhere and then taking each monthly payment from that. No matter what you do, don't ever miss a payment and don't ever be late.....everyone get that?

NEVER, ever, ever pay just the minimum! I recommend paying at least $15 more than the minimum payment every month and not ever going lower than that. Let's use an example here:

Your minimum payment is $15, so you would pay $30 that month or more, but NEVER pay just $15!

I think on average $50-100 is a good monthly payment. It really depends on your credit limit and what 40% of that is and interest rates, etc. Your goal is to show that you are a responsible individual with credit and can make more then the minimum payment each month but you DO NOT want to pay your card off in full! The whole point of credit and increasing your score is to show consistent payments over time, THIS is what helps increase your score!

After 6 months of consistently making payments $15 or more than the minimum you should see an increase in your score. After a year of using this system, get another credit card and continue the same. It works and I did it and got my score from the low 400's to 849!

This isn't an advocacy to go into debt, REMEMBER you should get OUT OF DEBT first before even thinking of increasing your credit score. If you are already in debt up to your eyeballs, then you must work on paying that off and then work on improving your financial future and having a high credit score ensures low interest rates and nowadays a nice place to live sometimes, seeing that landlords are beginning to check your credit. AND...make sure you have the full balance in funds before charging it, in case emergencies arise.

Any Questions on any of these steps or your credit score, feel free to email me:

thefrugaladdict@gmail.com

Real Financial Heroes

This was so hilarious that I had to share! It's actually sad in a way because it describes a lot of Americans who buy stuff they can't afford!

My Blog Feed

Since I got this new template, my feed somehow is not there anymore and I have no answer to this. So some of you may have subscribed to my feed but since I got the new template, you will not get updates because the feed address has changed.

Save Money On Your Water Bill

Increasing Your Credit Score; Step 2

Please see the first part of this series: Step 1 here.

We learned in my last post in this series that the first step to increasing your credit score is to "Get Credit". The next step is:

2. Spend 40% of credit limit

Once you have gotten a credit card, you will need to go ahead and spend 40% of the credit limit and NO MORE than that! Also you must have this amount in your bank (checking or savings) to make sure you will be able to pay the card off in full in case of emergencies that may come up.

If you are the type of person who can not be trusted with a credit card, have a family member or a trusted friend do this for you! Don't risk yourself getting in debt and not being able to pay off the balance on the card. The whole reason for this series is ways to increase your credit score. If you are in debt up to your ears.......WORK ON GETTING DEBT FREE first.

Now, you have 40% of your credit limit spent, do not put anymore on the card. Why? If you carry balances at 50% or more of your credit limit it will decrease your credit score and you always want to keep any credit cards you have at 40% or lower of the limit. Keeping it at 40% allows for increases from interest, which you really won't have to worry about, but for less risk it is best to do 40% (although you can do 45%, I just don't recommend it).

What could you buy to reach your 40%? You could put your rent, electric bill, phone bill or groceries on the card. Just something to spend that 40%.

Here is a scenario to make sure everyone understands what this means.

You get a credit card with a $1,000 credit limit. Your purchases should total no more than $400 on that card. That is 40% of your $1,000 credit limit.

Does everyone follow me now? If you have any questions about Step 1 or Step 2, leave a comment below or email me at:

thefrugaladdict@gmail.com

Step 3 here.

Dave Ramsey Show (Debt-Free!)

Free Suze Orman Book

Hurry and download your free copy of Suze Orman's book: "Women and Money" here:

http://flv.oprah.com/suze_orman_eng.pdf

The free book will be over at 8/7 c time, February 14th, so hurry! Save the PDF file to your computer and you will have the complete 274 page book.

Increasing Your Credit Score; Step 1

Here I will show you the steps I took to raise my credit score from the low 400's to 849. It took a few years, a lot of work and meticulous attention to the details but it worked. (I will also be sharing something that happened to drop my score 100 points in a later post)

Before reading these tips, be sure to check out my post; "Why Your Credit Score is Important" here.

Let me start in the beginning when my score was at the low 400's. You may ask HOW did my score get that low? Well I was a victim of assault in 98. At the time I had no insurance and was hospitalized for all that had been done to me. Later on, I won in court and the judge ordered the other party to pay all my medical bills and I was not responsible for them. HOWEVER, the bills had already been on my credit report since they had been sent to collections. The collectors could really CARE LESS what the judge says, and that I had the papers to prove it; they said I was the responsible party.

My attorney told me not to pay the bills, they were not my responsibility as the judge had ruled and it was documented. The man that did this to me got away, "somehow" the police have been unable to capture him once he violated a probation and he disappeared. So here I was left with this terrible scar on my credit report and there was NOTHING I could do to remove those bills.

A few years later, I started researching how I could get my credit score higher and what I needed to do. I found that I actually needed to GET some credit and prove that I was a responsible individual with it for at least 6 months. So that brings me to the first step I took to increase my score:

1. Get Credit

I don't see how you can increase your credit score without credit. I mean the whole concept of a credit score is to show HOW you handle CREDIT given to you and whether or not you are wise with it or not. Sure other things can decrease your credit score but to increase you need credit. So you must first get some credit.

In researching, I found the best way was to get a credit card. I finally found someone who would give me one (not an easy task with my low score!) and the interest rate was high, but I needed something to get the ball rolling.

Getting credit is your first step to improving your credit score. If you already have credit in the form of credit cards, just bear with me, I will get around to where you are at in a few posts! I'm just showing you how I did this from 1998 to the present.

Step 2 here

Bare Bones Budget Ramen Meal

This meal is used in times when our budget is extremely tight or we are sacrificing to save to purchase something. It is GOOD and you won't even realize you are eating Ramen. ; )

• 3 packages of Ramen broken up
• 1 packet of Ramen seasoning (save the other 2 for another meal)
• 4 cups water
• 15oz tomato sauce
• 2 6oz cans tuna; drained
  
• 1/2 t Parsley
• 1/2 t Marjoram
• 1t Mrs Dash Tomato, basil and garlic
• 2 Laughing Cow Herb and Garlic cheese wedges (optional)
• salt and pepper to taste

Pour 4 cups of water into a medium sized pot and bring to a boil. Add the 3 packages of Ramen with 1 packet of seasoning. Reduce heat to medium high, cook only for 2-3 minutes and then drain and return to pot and set aside.

In a saucepan, combine tomato sauce, tuna and seasonings and cheese and bring to a light boil and then reduce to medium low, stir often and if needed use a whisk to separate cheese.

Pour sauce into pot with Ramen and stir and serve!

Makes about 8 servings.

I serve this Ramen meal with homemade whole wheat buttered toast.