Financial tips for couples

Across the country there are thousands of cheerful couples saying "I do" to a lifetime of love and dedication. You have to wonder how many of these brides and grooms are aware that they could also be saying "I do" to hefty mortgage payments and troubled credit reports. Understanding the financial commitments that come with marriage can help to maintain marital bliss long after the ceremony. Here's what you need to know:

1. Talk About It - Openly discussing your finances with your fiancé is the best way to prevent future disagreements. Talk about your spending habits, your savings and your financial goals so that you will both be on the same page. Develop a plan for managing your money after the wedding. Will you open joint accounts? How much do you want to save each month? Work together to create a money management strategy that fits your needs.

2. Wedding Expenses - Planning the wedding of your dreams can sometimes lead to a nightmare of debt. The average wedding now costs $22,000, according to the Condé Nast Bridal Infobank, a hefty sum that can lead to big credit card bills after the honeymoon ends. Talk with your fiancé about how much you can afford to spend without breaking the bank. Be creative about cutting back your budget: using potted flowers and making the invitations yourself can help you shrink your costs without reducing your style.

3. Credit - Understanding your sweetheart's credit history can help you avoid future surprises. Your fiancé's credit could have a dramatic impact on your rates for co-signed loans and joint accounts in the future. If there are past credit problems, work together to clean things up and reduce debts. Starting your new life together could be a lot smoother with good credit.

4. Joint Accounts - Don't worry, your credit reports won't automatically merge together when you get married. Only when you open a joint account, become an authorized user or co-sign on a loan will a record appear on both your credit reports. Combining your finances this way can be a great way to get the best deal on a major purchase. Be careful though, any negative reporting associated with the account could mean double damage.

5. Love Nest - If you are planning on buying a home together, give yourselves at least six months to save up a down payment and reduce your debt-to-income ratio. A few months of financial improvement can help you save thousands on your mortgage.

6. Stay Focused - Above all else, don't let money problems come in the way of your love for each other. Talk honestly about your financial concerns and work together to get through the hard times. Your relationship is far more valuable than anything money can buy.

For more information contact Mark Bustamonte at 954-707-2932 or visit

Financial Education Services (FES) and FES Protection Plan

Are banks the only ones looking at my FICO score, and do they have to pay the same fee I do?

No and no. The sites show a scale of interest rates for different types of loans, but did you know that your insurance agent also uses an insurance score to help determine your premiums? The Fair Isaac Company developed the first insurance scoring model in 1998 and there have been some updates since then. Concrete information on this subject is very sketchy, but my personal insurance agent told me that home owners' policies cost up to 40% more if your credit is in the toilet, but vehicle insurance premiums more than double with bottom-of-the-barrel credit scores. I asked if I could get a table with this information and was told that I couldn't. Farmer's Insurance is not using the FICO score specifically, but they do have a score-based model that uses credit report data.

Employers are relying more on credit scores for hiring decisions and for promotions, but it doesn't stop there. Many utility companies will require a deposit prior to connecting service and some are using your credit score to determine your kilowatt/hour RATE! Just imagine, you might be paying more for electricity soon based on a low credit score.

I'm sure that no one is surprised to find that banks and insurance companies pay a fraction of what you pay to get the same information. On Myfico.com you will pay $15.95 to get FICO Standard, which only provides scores and bureau information for Equifax and Trans Union. Due to an on-going law suit between Fair Isaac and Experian, you cannot purchase your Experian FICO score at Myfico.com. As a national mortgage lender, we can purchase all three FICO scores with the matching bureaus for $9.86. I'm sure the big banks get an even better discount.

Short Sale effects on your Credit Report

Seller's often wonder whether it is better to go through foreclosure or a short sale when trying to get out from under a property debt. Foreclosures might allow you to stay in the home longer; however, each situation will likely cause the same generally effect on your credit score. A short sale is bascially the same process as selling your property when it has appreciated in value; the difference is in the fact that the lender agrees to accept less than the amount owed against your home. Not all lenders will negotiate a short sale, and that is why a real estate agent or lawyer can be a tremedous help by contacting the lender's loss mitigation department to find out.

Lender's used to not even consider a short sale if you were current with your payments, but that has changed. You must realize though, that lenders will be more agreeable to negotiation if your payments are in arrears. If you do have any cash assets, the lender might try to tap into those accounts to settle some of your debt.

Your credit will take a big hit by going through foreclosure or giving the lender a deed-in-lieu of foreclosure, providing you are more than 30 days in arrears. These hits will take 200 to 300 points off your credit score, depending on the overall condition of your credit. Short sales will often cause the same 200-300 drop in your credit score. Results often vary with some short sales incidences causing only a 100 point drop in your score.

We obviously want to clear our credit as soon as possible after such an event and hopefully get back into a home again one day. A seller will often have to wait 24 to 72 months before a lender will offer any kind of interest that makes sense after such an event. With a short sale you are often able to buy a home within 2 years, where a foreclosure can often lead to a 5 to 7 year waiting period. There are no hard and set rules for either; however, over the long term short sales have historically been less damaging to your credit than a foreclosure.

Keith Dienstl is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Ultrafitcredit for more information on Keith Dienstl.

Your Credit Score Is Yours to Control

Are you confused by credit, and how to create a better credit score? Don't feel bad, many consumers and business people find it hard to understand why their credit score is low. They pay their bills. And when they are a little late on a payment, they pay extra fees to the Lenders to make up for that. The Lenders enjoy great profits, and yet, the Borrower gets penalized more. Is it fair? I say NO! Enough! It's time for us to take control of our credit scores, and get them to reflect accurately, what kind of people we really are. In fact, the United States government agrees. Toady, there are laws to protect us, and allow us to take back control of our credit histories and credit scores.

Use these laws to make sure you aren't forced to pay more for auto loans, credit cards, mortgages, insurance and utilities. Besides costing you more money in monthly bills, we've been hearing more about people who get job offers that are later taken back, because of a "bad" credit score, a result of having been out of work for a year or longer. They didn't use credit to support a luxurious lifestyle. Ironically, they are penalized by taking away the very thing that they need to get back on their feet and to get back to paying their bills. Is it just me, or does it seem ridiculous to you as well? Credit reporting agencies, and Lenders, seem to believe that it's their right to penalize consumers to any level that they choose. The US government says it isn't their right. It is their right to report late payments and defaults on payment agreements, to the extent that they report it accurately. Is the information on your credit report accurate?

Frits Tessers is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Personal Coaching for more information on Frits Tessers.

Credit Reporting Guidelines

Below are some very important credit reporting guideline that you as a consumer should be aware of.

The Fair Credit Reporting Act (FCRA) was designed to promote accuracy and to ensure that the credit reporting agencies maintain precise information regarding consumer credit.

The Federal Trade Commission (FTC) enforces the FCRA and is the watchdog over the three credit reporting agencies. The FTC enforces fines and may shut down any business that does not operate in compliance with the FCRA.

The FTC stipulates the maximum length of time a negative item can stay on a consumer's credit report is 7 years, unless it is a Public Record. Bankruptcy and other public records may be legally allowed to remain on the credit report for 10 years.

The Credit Reporting Agencies have 30 days to investigate our challenges according to the FCRA. The agencies can verify, modify, or delete a negative item in question. If a creditor takes longer than 30 days to respond back to the CRA for their request for investigation, the information should be automatically deleted.

It is important to note that the agencies are allowed to temporarily delay sending the consumers back their updates by sending a notification within the 30 days that they have received the requests and an investigation is pending.

The FTC also regulates the Fair Credit Billing Act (FCBA), which is designed to protect consumers from inaccurate information by their original creditors. The FCBA states that the consumer is not liable for unauthorized charges and other billing mistakes by their original creditor. The FCBA also states that that the original creditor is responsible for verification of any adverse account that the consumer challenges, and also responsible for any illegal activities by third party collection agencies that the original creditor assigns the account to.

The FCBA bounds original creditors to correct inaccurate reporting of information to the credit reporting agencies.

Fair, Isaac and Company of California originally developed the concept of the credit scoring model for use by financial institutions. Today, most credit agencies and lenders calculate your credit score (FICO) based on their formula.

Credit scores are being used increasingly by potential employers as a considering factor for hiring.

Credit scores are now being used on a small scale to determine auto insurance and utility rates.

The credit score is a computation of many different factors, including payment history, proportion of debt to available credit, and amount of credit used.

The length of a consumer's credit history counts towards 15% of consumer credit scores.

A consumer's payment history counts towards 35% of credit scores.

The type of credit a consumer has open determines 10% of their credit score. The different types of credit include: secured - mortgages, unsecured/revolving - credit cards, installment - car payments and small home improvement loans.

In calculating credit scores, the amount owed is an important indicator of a consumer's credit worthiness, and equates to 30% of their credit score. If a consumer is carrying high balances on many accounts, creditors may see this as a sign of financial overextension, or possibly irresponsible credit use,  and may assign the consumer a high risk. Consumers should make every attempt to keep account balances at 35% of their allowable credit limit.

The amount of newly established credit accounts for 10% of the credit score.

The best way for a consumer with little or no credit history to establish good credit is by applying for a secured credit card and making the payments on time.

For more information go to: Credit Reporting Guidelines

How to Establish Good Credit

When you have little or no credit history, applying for loans and credit can be difficult, if not impossible. Lenders like to see a record of payment history and a current credit score before they extend credit or loans. This information also helps them determine what interest rate to offer. If you do not have a credit history, here are some ways to build it one: Understand What Lenders Are Looking For If you are looking to establish credit for the first time, lenders can't look to your credit score to decide whether or not to lend you money. In these situations they have to examine other factors that can help them decide if you are a good credit risk or not. Here are basic guidelines to follow to establish or re-establish your credit: 1) First and foremost, pay any bills that come your way on time. 2) If you don't have a checking account, open one. You have very little credibility with lenders if you don't have at least a checking account and preferably a savings account as well. Just as importantly, be sure not to overdraw your bank account. Bouncing checks sends a signal to potential lenders that you can't manage your daily finances and are therefore not a good credit risk. 3) Establishing a relationship with a bank will improve your chances in obtaining a loan or credit card through them. If you already do business with a bank, they should be the first place to look. 4) Open a charge card with a local department store or apply for a gasoline credit card. Pay off the entire balance each month. Remember, if you cannot pay off the balance each month, you are spending outside your means. 5) Keep in mind that a lender or creditor may say you are approved for a particular amount, but that does not mean you have the resources to repay it quickly. Borrow only what you can afford to repay quickly. 6) Another important factor lenders look at is your employment history. They want to see if you are able to hold a job or if there are periods of unemployment. Your ability to hold a steady job can improve the likelihood of getting approved. 7) Lenders will also look to see how often you move and whether you rent or own. As with employment history, it pays to have a stable residence. 8) Even without a credit history, it is possible to sign up for many utilities in your own name. Having an electric or gas bill, telephone, cable, or water service in your name also helps. Just having your name on these accounts won't establish a credit score, but it can be helpful for first-time borrowers. 9) Get a secured credit card. To obtain this type of card, you deposit a specified amount of money into a financial institution who will then issue you a bank credit card. The amount you deposit is your credit limit. After you maintain that account in good standing for a while, you may be able to obtain a regular credit card or loan. Establishing Credit is Only the First Step Establishing a good credit history takes time. There are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months.