A tool Named Credit Karma allows us to see what debts have been turned over to collectors, outstanding loans and More.
A useful resource provided by the Federal Trade Commission at Consumer.gov offers classes on debt help / budgeting tips (offered in toolkit section) and a straight forward outline for my favorite form of budgeting on paper.
One simple way to log incoming and going money is the free Money Manager App. Understanding all it has to offer may take some time, but this is one of the best applications out there. No need to sign up or enter bank information. A tutorial on the app can also be found here:
(start at 3:48) https://www.youtube.com/watch?v=h0m9ZUcCYaQ
Wallet is another application for iPhone and Android that you can manually enter or pay 21$ a year for a premium subscription making the process effortless by linking banks.
At the end of every month if a balance remains on a credit card a additional charge will be added. This charge is typically around 25% of whats owed. If you owe 1000$ then the interest is 250$ you have to pay on top of the already owed money.
If your credit is in good standing you can see what credit cards are open for you on Credit Karma. When choosing a new card the main things to look for are:
1. No interest for 6-16 months. (allows you to keep money on the card without having to pay interest on balance every month)
2. Low or no fees for balance transfers*
3. No annual fees (we don't want to pay for a card we are not even using)
4. Bonus (many card companies will give you 1-500$ after a certain amount of purchases are made in the first months)
Once we have found a good card we do a balance transfers to the new credit card at around a 3% cost. So for 30$ you can transfer the 1000 to a new credit card and not pay interest for up to 16 months.
For debts that are old and have already been turned over to a debt collector we can pay a discounted rate.
First Select a Outstanding debt and find out more about the contact on Credit Karma. After calling them let them know you can pay 20-30% of whats owed and its all you can afford, But only if its "pay to delete" These key words may allow you to get it completely erased from your credit record instead of it being reported as settled.
When we have no or bad credit in order to build it back up we need to show a history lenders can trust.
To do this we can get a secured card. Secured credit cards are obtained by putting a down payment that you borrow against. For example you would pay 500$, get a secured card and use it like you would a normal credit card making sure to meet the payments EVERY month. If you decide to close the card the 500$ will be returned.
Official loans such as a mortgage or car loan also help build credit and trust over time.
**Be careful of new vehicle loans. High interest rates are not worth it for a item that will depreciate as soon as you drive it off the lot. Homes are a better choice as you get a nicer place compared to paying the same for rent and you build equity.
Reporting on-time rent payments can improve your credit score. Everything seen has around a 6-10$ a month fee. More options, can be found on Google.
***A trick to build credit early for your child is to add them as an authorized user to your credit card. No card or information about it need be given to the child while their credit builds. Different issuers have different policies regarding adding minors as authorized users. Some have a minimum age requirement.
Disclaimer: The information listed on this page is for educational purposes only. Always do your own research/ consult a licensed financial adviser. Your financial decisions are your own.