Frequently Asked Questions

How do I start a budget?
Where can I get a copy of my credit report?
How can I establish credit?
What should I do if I am facing a financial crisis?
What do I do if I become a victim of identity theft?
Is student loan consolidation a good idea?
Will the bank repossess my car if I miss one payment?
Is it still possible to qualify for an auto loan even if I have bad credit?
How long will the bankruptcy stay on my record?  Is there anything I can do?
I was recently on vacation and lost one of my credit cards, what do I do now?
How can I pay off my credit card debt when the minimum payments I have been making don’t seem to make a dent in the balance?
How do you dispute inaccurate entries on a credit report?

How do I start a budget?

Write down all the debts and payments you are making.  To get an idea of what you are spending per month, refer to past bills, examine your bank statements and even flip through your check register.  Include all your living expenses, (i.e. grocery, child care, etc.) and any other items you are paying each month.

To get an even more accurate picture of where your money is being spent, keep a journal of all your expenditures you make in a month to see where your money may be wasted.  Such expenditures would include coffee drinks, fast food, and other such items.  Once you see exactly where your money is going, you can begin to save and put more money toward paying off your bills.

Next, calculate your monthly income.  Refer to previous paycheck stubs or bank deposits to determine this amount.

Your monthly income should be more than your monthly expenses.  If not, examine your monthly expenses to see if there are areas in which you can cut back.

Where can I get a copy of my credit report?

You can order your reports online.  The websites for the three credit reporting bureaus are:

Trans Union (www.transunion.com)
Equifax (www.equifax.com)
Experian (www.experian.com)

I recommend ordering your report from all three credit reporting bureaus.
 

How can I establish credit?

I would recommend getting 2 or 3 pieces of new credit, such as secured credit cards.  Make only small purchases and pay off the balances each month. 

Contact your local bank to see if they offer secured credit cards.  The bank will require that you open a savings account and will then issue a secured card with a limit up to the amount you deposited into the savings account.  A secured credit card works just like a regular credit card.

What should I do if I am facing a financial crisis?

I would first recommend that you prioritize your bills.  There are basically three categories of bills: essential, non-essential, and borderline.  Essential bills must be paid first and these include rent/mortgage, utilities, food. Basically, any items that are vital to your survival should be included in this category. Non-essential bills include those that would have no immediate consequences if paid late.  They are unsecured and include credit and charge cards, attorney, medical and accounting bills, and newspaper and magazine subscriptions.  These should be paid after all the essential bills are paid. Borderline bills are bills that could be included in either category.

If you have a hobby or craft you enjoy, you may want to see if you can use it to make extra cash. For example, if you love sewing or gardening you could offer your services for a fee to neighbors, friends, and acquaintances.

I have created a video titled, A Gift For America: How To Survive A Financial Crisis, that contains a lot of helpful information regarding debt. The video is free except for shipping and handling.  Visit www.agiftforamerica.com for more information.

What do I do if I become a victim of identity theft?

The following is a list of actions you need to take:

• Contact your creditors and/or banks immediately.  The longer you wait, the higher your liability.
• File a police report.  Occasionally, the police department is reluctant to file a report, but insist that they do.
• Contact the three major credit-reporting agencies to have a "fraud alert" placed on your file.
• Make sure to keep a copy of all your correspondence with your creditors, banks, and police department. You want to have proper documentation in the case that problems arise later due to the identity theft.
• In a case where a social security number was stolen contact the social security department and have them cancel the number and re-issue a new social security number.

Is student loan consolidation a good idea?

Student loan consolidation can be a great option.  With consolidation, you will be able to lock in one fixed rate and extend your loan term which will lower your payments.  If you would like to learn a little more about consolidation, the U.S. Department of Education has a lot of information. (http://loanconsolidation.ed.gov/)

Websites such as www.salliemae.com (Sallie Mae), www.cfsloans.com (Collegiate Funding Services), and www.collegeloancorp.com (College Loan Corporation) also offer information about consolidation, including applications.  You may consider contacting your current student loan lenders.  They will have information about consolidation as well.

Will the bank repossess my car if I miss one payment?

Contact the loan company handling your payments.  Explain your situation.  Some lenders will allow you to defer one payment per year.  That means that the lender will allow you to miss one payment and add the missed payment to the end of your contract.  Don’t let too much time lapse before you make the call.  If the payment is delinquent and rolls into the next billing cycle, a derogatory mark will be placed on your credit report.  A lender can repossess a vehicle at any time if they feel they are at risk of not getting paid.

Is it still possible to qualify for an auto loan even if I have bad credit?

There are car dealers that will offer loans for people with poor credit scores.  The loans usually have a higher cost and interest rate.  This is not a bad option if this is the only way you can get a car.  You can refinance your automobile once your credit has improved.

How long will the bankruptcy stay on my record?  Is there anything I can do?

Bankruptcy can remain on your credit report for up to ten years.  That does not necessarily mean that your credit is ruined for ten years.  It is important to establish new credit after your bankruptcy.  You can start to re-build a good credit history by paying your bills on time, every month and avoiding derogatory entries.

I was recently on vacation and lost one of my credit cards, what do I do now?

You need to contact your credit card company within a reasonable time after the card was lost, generally within thirty days.  Any charges that are made before you report the lost card to your credit company, you are liable up to $50.  After the lost card is reported, you are not liable for any charges that are accrued without your authorization.

When you discover that the credit or charge card is stolen, call the customer service department of the card issuer.  Be sure to get the name of the person to whom you are speaking and be sure to send a follow up letter reporting the loss by certified mail with a return receipt requested.  Also, keep a copy of all of your correspondence with the card issuer.

How can I pay off my credit card debt when the minimum payments I have been making don’t seem to make a dent in the balance?

Don’t feel alone, your situation is a common one for many individuals.  Did you know that if you have a balance of $2,000.00 and only make the minimum payments, it would take you approximately 16.5 years to pay it off?  That’s why it is important to pay more than the minimum payment each month.  If you can afford to make more than the minimum payments on your credit cards, even if it is only $5 or $10 extra, you will significantly reduce the amount of years it will take to pay off the debt.

Another suggestion is to generate extra cash.  You might want to look into getting a part-time job, if your schedule allows for it.  Or you can try making money by using your hobbies or skills.  If you enjoy gardening or handy work, you can offer your services to others for a fee.   Use the extra income to pay off your debts.
 

How do you dispute inaccurate entries on a credit report

Make sure you have copies of your credit report from the three major credit reporting bureaus, TransUnion (www.transunion.com), Equifax (www.equifax.com), Experian (www.experian.com).  You can dispute the accounts on your credit report with the credit bureaus that are reporting it.  Write a letter to each credit reporting bureau disputing the entries.  Make sure to include the account numbers, your name, social security number, and address in the letter.  Also include your reason for disputing the entries. 

The credit reporting agencies will begin an investigation with the creditors.  The investigation must be completed within 30 days.  Once the investigation is complete, the credit reporting agencies will send you an updated credit report.  When you receive the updated report, make sure the items have been corrected.  If not, go through the dispute process again.