His perfect FICO score obsession (via bankrate.com)

April 29, 2014 | Posted in Credit, Finance | By

David-Howe

(photo from bankrate.com)

by Polyana da Costa

A good credit score is usually nothing more than a financial necessity for most people. For David Howe, good wasn’t good enough. He wanted a perfect credit score and obsessed over it for years.

“In the last six or seven years my score was into the 800s and I knew I was getting close,” he says.

Howe says that a few weeks ago, his dream came true: an 850 FICO score. FICO scores range from 300 to 850 and achieving the highest score is extremely rare. Many people in the financial industry say they have never seen one.

“For me this is an absolutely stunning accomplishment,” Howe says. “I worked on it for so long. I will continue to make sure my credit is very strong but will not obsess over it anymore. I have had a few sleepless nights because of this. It’s a sense of relief for me.”

Why the obsession?

Howe says the pursuit of the perfect credit score was a personal and professional goal. He is a credit manager at a company based in Massillon, Ohio, and founder of a consumer credit reporting agency that serves cable and telephone companies. But on a personal level, he has always been fascinated by the credit scoring system.

“FICO doesn’t discriminate,” he says, adding that income and age aren’t part of the calculations that determine your score. “You can be a janitor at Walmart and have exceptional credit or a CEO with bad credit.”

‘Howe’ did he do it?

Howe warns that he is not a FICO expert, but for those who want to improve their credit scores, here are his tips, based on his journey to achieving the perfect credit.

  • Watch your score like a hawk: Howe spent thousands of dollars over the years buying credit reports and monitoring his score. “I have my scores going back at least seven years,” he says. “In the most recent three of four years I have watched every single detail.”
  • Manipulate the balance and payment date on credit cards: “I know exactly when my statement is going to cross,” he says. Credit card companies usually report your balance to the credit bureaus on the day of or a few days after the statement date, which is different than your due date. So even if you are paying off your credit card every month on the due date, but maintaining a high balance through the month, this can impact your score negatively, he says.
  • Avoid unnecessary inquiries: Hard inquiries can make small dents on your credit score and they appear to affect your score for up to a year, Howe says. While it’s impossible to avoid inquiries when you have to apply for an auto loan, a mortgage or even a new cellphone account, don’t go wild opening new credit cards, because doing so may affect your score. “I have not opened a revolving credit card account in almost a decade,” he says.
  • Have a decent amount of credit: Avoiding too many credit inquiries doesn’t mean don’t ever open a credit card account. You’ve got to start somewhere but you have to know when to stop. Howe says he has 11 credit cards but uses only about four of them. On a day-to-day basis, he uses one.
  • Keep a small balance but not a zero balance: Paying off all of your credit cards won’t get you a perfect credit score, Howe warns. But an extremely low balance will help. Howe says he made sure to keep a small balance on one of his credit cards. How small? He says he kept it under 7 percent of the available credit. “I always pay before my due date but I would leave, say, $30 on there,” he says.
  • Pay down the mortgage: Howe says paying down his mortgage was a key factor to achieving a perfect credit score. He has paid down more than half of his 1-year-old mortgage.
“Just a month ago I was getting 845,” he says. “I paid down another $6,000 on the mortgage and that additional $6,000 was the magic threshold.”You don’t need a perfect score to get the best rates as a consumer. To lenders, as far as rates, there’s really no difference between a 780 score and an 850. But if you are pursuing an excellent score, Howe’s tips might help you.

His score wasn’t always great

About 10 or 15 years ago, Howe says, his credit score was as low as 630.

“I’ve had some missteps,” he says.

He says even if your credit history is tainted by collections, foreclosure or bankruptcy there’s still ways to fix your credit if you are patient and persistent.

“If you have a bankruptcy or a foreclosure let time heal that,” he says. “I’ve had some serious issues in the past and here I am.”

Follow him on Twitter @Polyanad.

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Is Paying an Annual Fee on a Credit Card Really Worth It?

April 22, 2014 | Posted in Credit | By

Credit and Financial Mgmt

By Mike Jelinek, Contributor at www.clarkhoward.com

You probably know that paying an annual fee for a credit card typically means you’ll get more benefits. Whether or not it’s truly worth it comes down to your purchasing decisions and spending habits.

In most cases, my research has shown that the annual fee is worth the extra rewards — unless you simply don’t use your credit card that often. Also, keep in mind that just about every credit card with an annual fee will waive the fee for the first year.

There aren’t many cards that have a no fee version and an annual fee version, but some of the best credit cards do have this option. If you are considering the no fee version vs. the annual fee version of a card (or if you’re just trying to decide on paying an annual fee at all), this breakdown should help answer your questions.

To illustrate my point, I’m going to conduct a brief case study of two very popular cards by comparing the no fee version and the annual fee version. I’ll compare both versions of the best travel credit card as well as the top cash back credit cards from American Express.

Barclaycard Arrival™ World MasterCard®

The Barclaycard Arrival™ World MasterCard® offers two versions: Earn 1x or 2x on all purchases. As you guessed, the 1x version comes with no annual fee, while the 2x comes with an $89 annual fee that is waived for the first year.

Let’s start by taking a quick look at the rewards overview for each card.

Barclaycard Arrival™ World MasterCard® – Earn 2x on All Purchases

  • Earn 40,000 bonus miles when you spend $3,000 or more on purchases in the first 90 days from account opening (equals $400 off travel).
  • Earn 2X miles on all purchases
  • Get 10% miles back when you redeem for travel statement credits (i.e. redeem 25,000 miles for travel and get 2,500 miles back)

Barclaycard Arrival™ World MasterCard® – Earn 1x on All Purchases

  • Earn 20,000 bonus miles when you make $1,000 or more in purchases in the first 90 days from account opening (equals $200 off travel).
  • Earn 2X miles on travel and dining purchases
  • Earn 1X miles on all other purchases
  • Get 10% miles back when you redeem for travel (i.e. redeem 25,000 miles for travel and get 2,500 miles back)

Real Life Comparison

I’m going to use a model that assumes you spend $15,000 on your credit card each year. I’ll break that down into specific purchases in detail in order to get a more accurate representation.

In the first year, you spend $5,000 on travel and dining purchases (but let’s assume you spend $3,000 in the first 90 days). You also spend $10,000 in other miscellaneous (non-travel and dining) purchases for the remainder of the year.

In the next three years, you spend the same $5,000 on travel and dining, but let’s assume you earn more money and spend $15,000 on miscellaneous purchases per year.

Rewards Earnings After 1 Year

In the first year, you’ll accumulate the $400 bonus, plus an additional $300 in rewards and you’ll pay no annual fee. With these spending habits, you’ll earn $700 redeemable for travel with the 2x card.

The first year with the 1x card will get you a $200 bonus, plus $200 in rewards for a total of $400 redeemable for travel.

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Ask KP – How Can I Increase My Credit Scores

April 10, 2014 | Posted in Credit, Money | By


1. Change your mindset
2. Pay your bills on time
3. Keep your balances at or below 30% of your credit limits
4. Clear up past issues through payoffs, settlements, etc. This step is tricky because depending on the age of the negative, it may or may not help your credit scores. Contact my office at 404-793-7900 with any questions.

You can join my $250MM Debt Challenge group to begin the journey towards becoming debt-free. It’s not a quick-fix group, but a circle of people with the same goals as you. Visit www.250debtchallenge.com to register absolutely FREE.

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Ask KP – How can I become debt-free?

April 2, 2014 | Posted in Money, Uncategorized | By

What are the steps to becoming debt-free?

1. Change your mindset
2. Assess your current situation
3. Develop a plan of action
4. Execute the plan

You can join my $250MM Debt Challenge group to begin the journey towards becoming debt-free. It’s not a quick-fix group, but a circle of people with the same goals as you. Visit www.250debtchallenge.com to register absolutely FREE.

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Debt Eliminators Wanted for a New Program

November 8, 2013 | Posted in Business, Business and Professional, Credit, Debt, Finance, Money | By

Are You Up for the Debt Elimination Challenge?

Debt_Flyer_color

Join me for one of my biggest programs heading into the New Year!

  • Are you living paycheck to paycheck?
  • Do you have small, moderate or significant financial debt you would like to pay off?
  • Are you having problems saving money for emergencies?
  • Would it help you to have a community of people to partner, encourage and support you during the process of paying off your debt?

If you answered YES to one or more of the above-listed questions, then you are a good candidate to participate in the preview of my upcoming program.

I’m looking for a few individuals like you to join me for a preview of my debt elimination program.

You will be notified via e-mail if you are accepted.

Complete the form below to apply for program consideration!

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5 Financial Questions You Must Ask Before Saying “I do” (blackenterprise.com)

November 6, 2013 | Posted in Business, Business and Professional, Credit, Debt, Finance, Money, Savings | By

Get the full picture before merging finances

CoupleWedding

The subject of love and money used to be an area of focus people wanted to ignore. However, with an increase in divorces citing finances as the primary reason, more and more people are now paying closer attention to finances prior to marriage.

Chemistry and compatibility extend far beyond the physical interaction you have with your special someone. If you are exploring the topic of marriage with your significant other, be sure to discuss the topic of money prior to saying “I do” in order to get a better understanding of what financial picture lies ahead.

Here are five “must-ask” financial questions before tying the knot:

  1. How much debt do you have? This is an important topic to discuss because it provides a snapshot of how your money will be allocated during marriage (at least early on). When debt is brought into a marriage it changes how much can be spent, invested, and shared. And just in case you’re wondering, $125,000 in student loans, $2,500 per month in child support, and $60,000 in credit card debt are things your significant other should know about prior to saying “I do!”
  2. Do you believe in joint or separate bank accounts? This is a decision that needs to be discussed upfront so it doesn’t cause a messy distraction later on. Some couples choose to manage their household finance like roommates, where each is responsible for specific household expenses and pay from separate accounts. Others decide to pool their money together and manage monthly expenses from a joint account. Ultimately, you have to determine what makes the most sense for your relationship.
  3. What are your credit scores? Credit scoring is becoming more and more important in relationships and marriage. Imagine wanting to purchase your dream home only to learn that your spouse’s credit won’t afford you the opportunity to do so? Or learning that you have to put major purchases in your name to avoid paying double-digit interest rates? Fortunately, your credit scores can be improved over time and with discipline. However, it’s a great idea to share your credit scores prior to marriage so you can begin the rebuilding process.

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