How to Attain a Free Credit Report 3 Times a Year

The Fair Credit Reporting Act states that you are eligible to one free annual credit report from Experian, Equifax, and Transunion each year.  You can request this report at https://www.annualcreditreport.com/cra/index.jsp.

You can also request a report by phone at 1-877-322-8228 or by mail by completing the request form found at https://www.annualcreditreport.com/cra/order?phone

The site will allow you to select which agency you would like a report from.  I recommend requesting a report from one agency at a time and spacing it out every 4 months.  This will allow you to look into your credit 3 different times during the year.

You will need to submit your information (Name, date of birth, social security number, address, etc.).  The site with then ask you some verification questions about addresses where you may have lived, credit cards you may use, etc.

After successfully answering the questions you will be provided with your credit report.

NOTE: YOUR CREDIT REPORT DOES NOT SHOW YOUR CREDIT SCORE.
You can view the Fair Credit Report Act at http://www.ftc.gov/os/statutes/031224fcra.pdf

The Smart Way to Make Big Purchases

We all want nice things, isn’t that the point of saving money for down the road, so we can someday afford to have the lavish lifestyle that we’ve always dreamed about?  Stuff like that comfortable king-sized bed, air conditioning for the house, surround sound for the big screen, you get the idea.  The problem is many Americans purchase these things on credit before they actually have the money to pay for them.  The new question is; Does the person own the item, or does the item own the person?  If the person who buys everything on credit before and can’t cover it with their savings were to lose or quit their job today, could they still afford purchases that had made weeks sometimes years (cars) prior?  We become slaves to the things we “own” when we buy on credit with money we don’t already have.  People ending up having to work just to pay for things they already bought months ago and are constantly behind.

The solution is still to make purchases on credit.  Credit is a great tool we can use in our favor.  We are still going to make our big purchases, but we are going to wait until we have the money in our savings account to cover the expense in full.  Here’s the strategy.  Big purchases (usually totaling over $300) generally offer financing deals (The worse the economy generally the better the deals because these establishments are enticing you to buy).  Finding “no interest or payments for a year” is not uncommon as many consumers know; the problem is we have to mentally allocate that money for the purchase because that money is technically already spent.  The money that we saved to make these purchases is just in case we make a mistake.  The “fine print” is notorious for screwing over the consumer.  It happens to the best of us.  The bottom line is everyone misses details now and then but through proper planning we can minimize the damage to our credit and our savings when we make one of these mistakes.

Let me give you a scenario to illustrate this point:

John N. Debt and Bob B. Saving both purchase an identical flat screen TV on a store credit card that offers no interest but minimum payments each month on the TV.  The payments will only be around $80 per month which is a great deal.  3 months down the road they both get busy and forget to make a payment on their respective TV’s.  The fine print of the deal now states that a late payment defaults on the original 0% interest and send it to a regular rate of 11%.  John N. Debt is mad about his mistake but doesn’t have the extra money to cover the cost for the TV.  He will now have to eat the extra interest each month that he hadn’t budgeted for.  Bob B. Saving on the other hand is also mad about his poor financial decision but he had the money in savings to cover the cost of the TV he quickly pays off the cost of the TV and avoids paying the 11% interest.

Another more advanced solution would be to shop around for other 0% intro credit card balance transfer offers with no fees and to transfer the balance of the TV.  This would extend the life of the 0% interest rate and allow you to retain your money for longer.

I have some money saved, should I invest in the stock market?

I am no longer a fan of the stock market, as I lost a lot of money when the market crashed.  In fact that is the main reason I turned back to running my own business and web marketing.  At least with your own business you control your fate, and you aren’t at the mercy of people who manipulate the market (I’m still a little bitter about it as you can see).  For those that do choose to get into the market anyway, you may like trading the Indexes.  It is much easier to track (daily announcements on radio and almost any finance homepage), and they tend to outperform most mutual funds. 

The stock market is basically high stakes gambling for the beginning investor.  You read up on a company, and hope that they become successful.  If they succeed, the price goes up and you make money.  If they fail, you lose your money.  Even when things are looking profitable you can never count your money from the market until you sell the stock.  One day you may make large profits and feel untouchable, only to watch them disappear the following day as the market crumbles.  This type of investing is not for the faint of heart.

Be wary of the market advice out there.  Everyone states to “Diversify your portfolio,” meaning buy stocks in several different types of unrelated companies (Sectors like medical, oil, industrial, etc.) however most famous people that have made it big in the stock market did it on one large gamble.  They came across what they perceived to be a good opportunity, went all in buying as many shares as they could, and when the stock performed well they made a lot of money.  Only after they became successful did they promote diversification.  What you don’t hear about are those that invested heavily on a position and ate a huge loss.  These people are the majority.

There are many people that make a great living investing in the start market, just ensure you know what you are getting into before proceeding into this type of investment.  Remember we are in a recession, and while the market has somewhat recovered, we have not fixed the issues with our economy that got us into this trouble in the first place.

I am an advocate of keeping money in a high interest savings or checking account where it is safe, until you have enough put away to start your own business.

Loose Change – Put it to Work

Loose change gets lost all of the time; in the seat cushions, the floor of your car, the bottom of your purse, etc.  This change is wasted money that could be working for you, earning you interest in your savings/checking account.

Think of your finances as a business and each penny as an employee; would you let you employees go for vacations for years at a time, just sitting around on the sofa, or in a jar on your desk?  NO, you would put them to work.

If you are following the strategies I outline by using your rewards credit card for every purchase and paying it off each month then you won’t have change lying around, however if you do, here’s what to do.

Take your change to your local bank or credit union.  Just about all banks and credit unions have a change counting machine that you can use for FREE if you are a member/customer.  DO NOT USE KIOSKS like CoinStar.  These will charge you fees just for allowing use of their machine.  Why would you pay for this when you can already get it for free?!  It’s like throwing money away. 

Your change will multiply as it sits in your interest bearing checking or savings account.  I recommend People’s Community Credit Union as it is currently paying the highest amount in the Clark County area. 

*For other areas conduct a Google search and look for accounts in your area that pay high amounts of interest and have no monthly fees.