There are serious credit repair mistakes you can make that can kill your chances of raising your score.  Avoiding mistakes in credit repair can be fairly easy if you exercise some care. Make sure you have confidence in the organization you go to for help.

Here are five things that can negatively affect your score(s):

* Action Not Taken:

Probably the worst mistake of all. Most of us keep putting off taking action until it’s too late. Seven years  is how long most items that hurt your score will stay on your record.

You won’t be able to get loans or mortgages without clearing your report(s). You need to take action ‘Now’! It’s better to do something rather than nothing.

* Bills not paid on time:

Some people will ‘not pay their bills on time’ even if they can, in order to reduce their overall debt. Not paying on time becomes one of the biggest reasons we have bad credit.

Obviously it’s no secret that getting rid of debt is critical. But remember that late payments will have a negative effect on your report for a long time, which is even more important. Only worry about your overall debt when your monthly expenditures are taken care of.

* Multiple credit cards abound:

Many people do this in order to “establish credit.” This is not exactly a good strategy. Applying for too many cards will negatively impact your score. All those cards make it more difficult for you to pay on time as well.

Think about it: having five different payments is much harder to keep track of then one. And the higher your credit line is, the more likely you are going to spend money on things you can’t afford and therefore, very likely dig your credit hole deeper.

* Try not to shut down your accounts all at one time:

Try to pay off one at a time an then close it. Don’t use one card to pay off another! Keep at least one open. Shutting down all of your accounts while you still have bad credit, doesn’t give you the chance to build it back up.

* Going with dishonest companies:

There are a multitude of scams in the credit repair industry. And todays economy is bringing out more. Many of the companies that claim they can help you raise your score will just take your money and leave you in an even bigger hole.

Raising your credit score by disputing everything in your report(s) is one of the ways these companies claim to help. Avoid them. Many will have you believe you can reverse just about anything on your score. If it’s a legitimate item it will stay on the report(s).

Look for customer reviews to help you spot dishonest companies. Check with the Better Business Bureau. Do an Internet search for reviews of the company you are considering.

And remember, many metropolitan areas have non-profit organizations to help you with credit problems. Check thse sites – http://www.nfcc.org and http://www.aiccca.org

Here is a link to a Federal Government site that may provide useful information – http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm.

Remember, a great deal of changes have occured over the last 12 months or so, regarding financial organizations and your rights. And those changes are continuing. Always check for the most up-to-date information.

I’ve stated this before: You are entitled to a free copy of your credit report each year, from the three major agencies. Use This Entitlement! It is the first and most important step you need to take.

Hopefully this will help you easily avoid scams and locate the right company for you.

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Many of us live paycheck to paycheck, spending without regard to the consequences. Keep that pattern up long enough and you soon discover the money runs out before you’ve paid all the bills, and there is never any left over for special purchases or holidays. Getting control of your household spending means setting u a budget, which will allow you to begin saving as well.

Sticking to a budget makes most of us cringe. It sounds restrictive and boring. But if you are serious about creating wealth, a budget can actually give you freedom. You will have control over your finances, know where your money is going, and have a plan to reach your financial goals. Not spending on things that you can do without right now means you will be able to spend on larger, more important purchases in the future.

Here are some easy household budgeting strategies you can use to get started.

Find out your earnings:

The way you’re paid can determine how you budget your money each month. If you’re paid on a weekly basis, you can calculate your budget based on four paychecks a month. That means you’ll have four extra checks throughout the year to help with extra expenses. If you’re paid bi-weekly, you can calculate your budget based on two paychecks a month, and have two extra checks throughout the year. If you’re paid monthly, calculate your budget based on the monthly amount. You won’t have extra checks throughout the year, so you’ll need to be careful in budgeting for the extras. For those who aren’t paid regularly, figure out your annual income and divide it by 12 to determine your monthly income.

Track your expenses:

Your fixed expenses will be easy to figure out. These are the items that stay the same from month to month, such as your mortgage/rent, car payment, etc. Tracking your other expenses is a bit trickier to accomplish and often where I have fallen down. To find out how much you really spend in a month, carry a notebook with you and write down everything you spend for the next 30 days. This will tell you how much you’re spending, and where your money is all going.

Figure out the difference:

Now, find out the difference between what you spend and what you earn each month. If you have a surplus, a portion of that must be budgeted for investments or a savings account.  If you have a shortage, you have one of two choices to solve your budget woes: lower your expenses or increase your income – do both.

Cutting your expenses:

Lowering your expenses is the most obvious way to solve  discrepancies between your income and your spending. Simple changes made over time, such as renting a video instead of going to the movie theatre, can add up to big dollars in your bank account. Those Latte’s really add up!

Others may be lifestyle changes, such as giving up one car and taking public transportation instead. While I have a vehicle, I often use public transportation – it gives one a different perspective on the world arournd me.

Taking control of your finances by setting up a household budget is an important first step to creating wealth. As you begin to make wise decisions about where your money goes, over time you will find opportunities to spend less and have more money to invest. Do a Google search for ‘free financial software’ and you can find programs that may help you as well.

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How you think about money is the single most important factor to determining whether you are wealthy or not. If more money in your life is what you want it’s crucial that you develop a positive money mindset.

However, many of us have been taught to think negatively about money. We’re told things like “money is the root of all evil,” It’s not! How you acquire/use it is – ‘Greed’. Another is “money doesn’t grow on trees”. Actually it figuratively can if you know how. No wonder we have such a difficult time thinking positively about money!

You may have even been taught that rich people are greedy and as a result you are subconsciously avoiding wealth and missing out on the great opportunities having money can provide.

As long as you hold on to negative and incorrect beliefs about money, you will never create the wealth you desire or deserve.

To change your money mindset, you must first recognize that money is not good or bad by itself. It is just a tool. In fact, money is more often used to do good than bad. Think about the wonderful charities that have been able to help people all around the world when they are given large donations of money. Appreciate all the good that money can be used for. It is important part of life and is used to make positive changes in the world. Money should be sought after, not avoided.

Recognize that money is abundant. When you were young, you may have been told by your parents that money doesn’t grow on trees. If you’re holding onto that belief now, your own mindset could be holding you back from attracting money. Money may not grow on trees, but there is an abundant amount of it for everyone, including you. However, if you believe that money is scarce, that belief will keep it far away from you.

Giving money away, such as charitable giving, is another way to develop a positive money mindset. Wanting to hang onto every cent you have is a sign of a negative mindset, reinforcing the idea that there is not enough of it. Giving reinforces the concept of abundance. Something I do every so often is pick a name/address randomly out of the phone book and. anonymously, send them some money – anywhere from$1 to $20 (or whatever you prefer). I find this a fun thing to do.

Finally, be happy for those who are successful and have money. Try to learn from them. We often remember being told that those who have money are greedy and are tempted to think negatively about them. In fact, the opposite is usually true. Rich people often accumulate their wealth by sharing what they have with others and believing in the idea of abundance.

When someone else has money, don’t resent their success. If you have feelings of jealousy, it will only hold you back from achieving your own wealth and success. Instead, be happy for them and remember that there is enough wealth for you too, and your turn will come.

Making these changes in how you think about money, will put you on your way to developing a positive money mindset. Once you begin thinking about money in a positive way, you will be on the path to achieving your own wealth.

‘The Jedi’s Grandpa’

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Whether you grew up in a household that was plagued with debt, or you simply want to make sure that your kids are money smart and make the right money choices when they grow up, you will discover helping your kids understand things like debt and how to handle money is something that should start early. Some kids have a knack for managing money, while others seem inclined towards being spendthrifts – like I was. But remember, money management is something that can definitely be taught, and when you are thinking about how to get the point across, keep a few things in mind.

First, there does not seem to be a right or wrong method to giving children money. Children who receive an allowance unrelated to chores, children who receive an allowance in exchange for chores, or children who get money only on special occasions don’t seem to have better or worse experiences with money. What is important is showing them where it comes from and how they should spend it. When a child has money, you can make suggestions about what he or she can do with it, but the important thing to emphasize is that there is a finite amount!

Parents need to instruct their children good money management by avoiding making money issues a secretive issue or one that is for the grown-ups. In my family, money was a subject that was held very close to the chest. It was never talked about when we kids were around.

While of course your eight year old may not grasp the intricacies of a mortgage or a loan, you can still explain things to them in manner they can comprehend. Many parents are surprised by how much their children understand. Have faith in your child and remember that they are part of the family as well. Being secretive is more likely to alarm them, and you will find that they can understand quite a lot if you are patient.

When you want to make sure that your kids are money smart, remember to set a good example. Even if you have issues with debt yourself, make sure that you are honest about how you got there and what you are doing to get out of it. Take some time to show them how good money management works, whether it comes with balancing a checkbook, or working with a household budget. Once again, you will be surprised at how interested a child will be in things like this, when presented properly.

When your child is a little older, explain credit cards and loans to them. If they can get a basic understanding early on, it will make further investigation much easier on them when they are young adults.

Many schools today have curriculum’s to instruct children about money management. If your school doesn’t have such a program, look into having the school institute one. Given todays financial climate it’s extremely important to give our kids as much financial acumen as possible. Had such programs been available while I was in high school, I would be much better for it today.
As a parent, you have a responsibility to help your child how to use money. A child who understands money will grow into an adult who is debt aware and money-savvy. So take some time and invest in your child’s financial future and outlook!

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