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The thought of personal bankruptcy is very frightening, however over 5.4 per 1,000 people have filed for bankruptcy last year, and this rate has been growing at an average of nearly 7 percent. Researchers have determined that the primary cause of personal bankruptcy is uncontrollable levels of consumer debt oftentimes coupled with an unexpected event, such as a major medical expense not covered by insurance, the loss of a job, divorce or death of a spouse.

According to economists’ surveys, the classic bankruptcy filer is a blue collar, high school graduate who is the head of a household in the lower middle-income class with heavy use of credit. In order to protect both debtor, and creditor, laws were enacted to provide equal, and fair measures to satisfy the objectives of all parties. The primary purpose of the laws of bankruptcy are: (1) to give an honest debtor a fresh start in life by relieving the debtor of most debts, and (2) to repay creditors in an orderly manner to the extent that the debtor has property available for payment.

There are two types of structured plans for filing for personal bankruptcy, Chapter 7 or Chapter 13. Over two-thirds of personal filers choose Chapter 7 bankruptcy. Basically Chapter 7 requires the debtor to liquidate all non-exempt assists, and have them distributed among creditors. Some examples of exempt assists include equity in a primary residence, and a retirement program. On the other hand, Chapter 13 does not require liquidation, rather a debtor agrees to a specific payment plan, whereby a portion of any unsecured debts is paid, and the balance is forgiven. It must be stressed, that under both plans, certain debts are ineligible for bankruptcy protection. These debts include government student loans, child support, alimony, and income tax debt. These must be paid back in full.

Some analysts are concerned that this unprecedented level of debt might pose a risk to the financial health of American households. In an attempt to reverse the increasing trend in personal bankruptcy, the federal government has recently implemented sweeping bankruptcy reform legislation. On March 10, 2005, the Senate passed S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. On April 20th, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Act of 2005). This act makes filing for bankruptcy more difficult through income-means testing, tougher guidelines for the homestead exemption, increased lawyer liability and required credit counseling.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Reduce Debt By Taking Charge

Getting out of debt and staying out of debt is not easy. If you’ve already amassed a fair amount of debt and are thinking it will be impossible to ever get out from under it all, don’t despair, you can learn how to stop incurring new debt and take charge of your life.

The first thing you must do is STOP increasing your debt! If you have any credit cards that are maxed out, destroy them. The best way to manage your debt is to get spending under control by eliminating all of your credit cards, except one. Use your one credit card ONLY to buy “must haves” until you can get your finances in check.

Avoiding more debt starts with knowing what you are spending your money on. Record your spending. This is key to getting out of debt. You’re in debt because you spent money you didn’t have. If you’re like most people, your debt didn’t come from a single large purchase; it was trickles of spending amassed over time.  Each day for at least one month, write down every penny you spend, no matter how small.

The next step is to categorize your spending. Put your monthly expenses into groups of “Must have,” “Should have,” and “Like to have.” “Must haves” are things that will cause harm if you don’t buy them, such as food, rent, medicine, pet food, etc. “Should haves” are things that you need, but can do without for a little while, e.g., new clothes for work, gym membership, etc. “Like to haves” are things that you don’t need, but enhance your life, e.g., magazine subscriptions, newspaper, cable tv, coffee with friends, etc. By doing this, you’ll have a good idea of what you spend your money on, and you’ll be able to figure out where you might need to cut back on spending. You don’t want to eliminate all of the “should haves” and the “like to haves,” but take a look at those first.

Now, make a budget based on your spending record. Looking at your new budget, you’re going to be able to see areas where you might be able to cut back. Chances are, your budget has some fat that can be trimmed. Be realistic, but vigilant. Over time you will be able to hold back on purchases and you will be able to come up with a dollar amount that can be put toward paying down your debt.

To begin paying off your debt, first figure out how much you owe, to whom, and on what terms. Debt can often feel overwhelming because you really don’t have a clear idea of how much in debt you really are. Gather your bills, and make a simple list of all the debts you have. Write down all the pertinent facts, including name of the creditor, your total balance, your minimum monthly payment, and your interest rate.

Prioritize your debts. Debts that are past due, ones where the creditors are hounding you, and those with exceedingly high interest rates should be considered top priorities. You should pay the minimum on your low interest rate debts, and apply the bulk of your available funds to the highest interest rate notes. Once you pay off one creditor, each debt gets easier to pay off than the last. Continue to pay off each debt in your priority list. You’ll refine your budget over time, increase the amount of money you can pay yourself, and the amount you can put toward debt.

Once things become more manageable, make sure you always pay more than the minimum required, otherwise it will take an extremely long time to eliminate your debt. For example, a single credit card with just a $1,000 balance and 19% interest will take about FIVE YEARS to pay off by making only the minimum payment of $26. Paying the minimum, you will spend $1556.40, with the Total Interest Paid: $556.40! Paying only the minimum payment will equate to giving them 55% more than you actually borrowed.

Don’t give up. You probably didn’t get into debt in a day, and you won’t get out of debt in a day. There are no quick fixes. Consider contacting a credit counseling agency to consolidate or settle your debts. Learning how to manage your money can bring great peace into your life, and will give you the freedom to spend your energy on other things.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Don’t Succumb To Financial Stress

Financial stress is common if you are facing economic distress as a result of a lost job, divorce, death in the family, or being over your head in debt. This can lead to feelings of insecurity, fear, anxiety, anger, and depression.

These feelings can cause you to continue to make poor money management decisions. These poor decisions can lead to even heavier debt loads, and start a vicious cycle that never seems to end.

If you reach the point where your feelings of helplessness and hopelessness become overwhelming, get the help you need. Talk to a friend, loved one, your doctor, pastor, a debt counselor , someone.

No situation is hopeless. With just a little guidance, a few well thought out goals, and emotional support from family and friends, you can take steps in the right direction. As with many obstacles you overcome in life, you will emerge with a new outlook, new skills, and best of all, a new feeling of self-esteem.

You may want to consider debt consolidation or debt settlement to pay off your credit cards. One payment, usually a lot lower than your credit card payments, can help you get back on track.

The well being of you, and your family, has to be your priority during times of financial stress. Make the decision now to learn how to cope, to make the changes you can, to stay focused and goal-oriented, and to let anxiety and financial stress go.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Goal Setting Your Way Out Of Debt

Everyone talks about the importance of setting goals, but how many people really understand the process of effective goal setting? Goal setting is the foundation for both personal and professional growth and should rank high on your priority list, especially when it comes to the area of finances. If you are in debt, ignoring it is not going to benefit you. You must first asses your situation so you can determine what your options are.

If you are barely getting by financially and have no money in savings, contacting a credit counselor, who can offer advice on how to manage outstanding debts and answer related credit questions, may help you head in the right direction. You may want to consider entering a debt management program to allow credit counselors to negotiate with your creditors for lower balance, no fees and a lower rate of interest. If you have over $10,000 in unsecured debt, you may qualify for debt settlement. Bankruptcy, although a last resort, may ultimately be your best alternative. Whatever your situation is, the first step is to determine the best path for you. Only then can you begin to set realistic goals that will give you your desired results.

Once you’ve achieved this, you are ready to set your goals. Start by prioritizing which goals you’d like to focus on immediately. Goals should be specific, measurable, action-oriented, reasonable, and timely. You should have laser focus on what you want to achieve, how you are going to achieve it, and when you expect results.

Another important aspect to successful goal planning is positive language. Too often goals sound like painful work! Instead of a “to-do” list, how about an “action list” or “an action plan”. Instead of thinking in terms of what you don’t have, celebrate what you do have. Proper language should inspire, motivate and give you solutions, not cause you stress and be something you dread.

Breaking a goal into manageable steps is another helpful tool. Often we set goals, get overwhelmed, and give up. If a goal seems too big, pump it into steps that are achievable, but still challenge you.

Plan your weekly and daily goals and rank them in order, from most critical, to least. Your goals should consistently be rotated up the priority level and to accomplish them more efficiently.

Finally, visualization is an amazing tool to have in your toolbox when it comes to goal setting. Seeing yourself debt free is a powerful motivator that will keep you energized and on track.

Whatever debt relief solution you decide to embark upon, goal setting is an important component in the success of your venture.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Hybrid Cars: Cheap Transportation?

Maybe you want to do your part for the environment. Perhaps, you want a more economical way to travel since gasoline prices are on the rise. Or, you may want to purchase a vehicle that rewards you with federal tax incentives. Regardless of your reason for purchasing a hybrid vehicle, you need to do research and make sure you get the most out of this financial investment.

There are many web sites that help consumers with the process of purchasing a hybrid vehicle.  However, the research itself can still be overwhelming. Therefore, below are some important aspects you should consider.

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The cost to replace hybrid parts can be extremely expensive.  Reviewing your options when considering these costs can help you quickly eliminate some hybrids off your list. Check the Technical Service Bulletins (TSBs) and recalls. Go to and search for the vehicle you have in mind for more information.


If you are purchasing a used hybrid or plan on owning the vehicle longer than the standard warranty, really think about spending the extra bucks on an extended warranty.  Because hybrid vehicles are loaded with new technology, the cost to repair them is going to be extremely high.  Not to mention the cost of the knowledgeable mechanic working on these vehicles. So, between repair and labor, it may be a wise decision to purchase the extended warranty and have a little peace of mind.  Be sure to look into what the manufacturer offers.  If you cannot afford to buy the extended warranty at the time of purchase, consider buying it before the standard warranty expires.

Compare a Hybrid to a Conventional Car

Buy That New Car and Control Your Budget

Do you still think you need that new car?  The chart above is a good illustration of how much one would spend on either a conventional car versus a hybrid, plus the difference in gas mileage.  It also shows how a budget will be affected by the purchase of a hybrid. The extra money you could save every month for purchasing a conventional car would look great in your savings account.

Finding A Credit Counselor

Reputable credit counseling organizations advise people on managing money, bills and debts, help them develop a budget, and usually offer information and workshops. They should evaluate your entire financial situation with you, and help you develop a personalized plan to get you on the right track. Debt consolidation, debt settlement and credit counseling are often better options than bankruptcy. Input from a trained professional can help guide you in the best direction for your individual situation.

Finding reputable credit counselors has become more convenient. New laws requires credit card issuers to include a toll-free number on their statements that directs cardholders to information about finding nonprofit counseling agencies.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, look for nonprofit credit counseling programs. Just as with any other venture, the more educated you become, the better choices you will make for yourself and  your finances.

Save Your Money

Saving money is one of the single most important steps to achieving most of your financial goals in life and becoming financially sound. The sooner you begin to save, the better of you will be. Having a savings in place can also serve as a form of protection during a financial crisis such as job loss, unexpected medical expenses, death of a family member, etc.

A savings serves as your cash reserve or safety net when you need it. The key is to have it in place before the need arises. At the core of building adequate savings is debt avoidance.

You should try to save a minimum of 10 percent of your take home pay in addition to your retirement planning contributions. If you do this on a regular basis, you will become used to it and accustomed to living below your means. If you are able to save more then 10 percent, do it!

Also, you have 3 to 6 months worth of expenses saved up as your emergency fund. This amount includes all expenses, fixed and unfixed. For example, if in January you spent a combined total of $2500 on your mortgage, car loan, home utilities, insurance, food, credit card bill, and other expenses, then you would need to save three times that, or $7500 at the minimum.

Unfortunately, most people live paycheck to paycheck with little or no savings. Work to build your reserve as fast as possible. Consider automating your savings. Most payroll providers provide an auto transfer feature directly to your savings when you get paid.

Start saving as early as possible. The amount doesn’t matter in the beginning. Just start some place and be consistent. Condition yourself into not missing or needing that amount. Over time, your savings will grow due to your diligence. View your savings as another bill that has to be paid. Once you pay off a line of credit (car note, credit card, or mortgage), continue to pay that same amount toward your savings.

Before you know it, you will have the protection you need on the event of an emergency. By building your savings now, you will have a larger nest egg available when you need it.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Start Fresh After Bankruptcy

Getting back on your feet following bankruptcy can be a very difficult task. You’ll be starting from scratch. It’s critical to your future financial success to make sure you don’t make the same mistakes .

To ensure you make a “fresh” start, you need to think and analyze your previous spending habits. What really lead you to go bankrupt? Analyze your expenses, the way you handle your money and of course your lifestyle. Do you have to live a lavish lifestyle? And the major question is can you afford that kind of living? What are your major purchases recently? Asses your situation, and the causes that made you experience bankruptcy.

After that, make a plan on how recover and live without going into a financial difficulty. The primary thing that you have to do is to reestablish your credibility, especially to financial institutions. You must regain a good financial standing status. Start to build up resources. Save your money and put it to good use. Don’t splurge on extravagant items. Keep in mind what drove you to bankruptcy, your too much spending attitude. You have to change the way you regard your expenses.

If you use a credit card, be sure to pay on time, in full. Make sure also that when using credit cards, it’s for emergency purposes and not for luxurious items. Keep only one or two credit cards. A lot of credit cards may lead to temptation. You don’t want to end up into the same situation again. Having a savings account is also a good option because it means less reliance on your credit card purchases. You’ll learn how to set aside cash in your account for large purchases.

Budgeting is also very important because it teaches you on how to manage your money. Stick to your budget!.

Some lenders are willing to offer housing loans to people who have declared bankruptcy. If you find a financial company to hold your home mortgage, make sure you pay them promptly. Prove to them that you’re worth their risk.

Bankruptcy can bring stress to your life, but there is a lesson to be learned. You’ll know now how to deal with your monthly expenditures. Your spending habits will change for the better and you’ll live a life without worries. Keep in mind, it’s fine to have debts as long as you know how to manage your resources and pay your creditors.

Have a Teen Driver? Learn How to Save Money on Insurance

Did you know that adding a teen to a car insurance policy could increase premiums from 100 percent to 355 percent, even if the teen is just driving the family minivan?

There are several different ways to get lower premiums for your teenagers. Many insurance companies offer online tutorials that they can take and, if passed, companies will provide substantial discounts. For example, State Farm has an online tutorial called Steer Clear and if the new driver passes it, State Farm will give up to a 15 percent discount to first time drivers. Many other insurance companies have similar online programs that offer discounts for teens. Esurance, an online car insurance company, gives discounts every six months for clean driving records.

According to, here are a few insurance tips for teen divers and their parents.

– Call around to different companies and compare prices with discounts that best suit your needs.

– Be aware that your insurance rates typically increase when a new driver is added to the policy. If you are not adding a new vehicle to the plan, it is best to have the teen as a primary driver of one of the family cars.

– Take advantage of student discounts. In most states, students at accredited high schools, colleges and universities can get discounts if they have a grade point average of a B or higher.

– Talk to your teen about safe driving habits and how traffic violations can increase their rates.If you are planning to buy a brand new car for your teen, you may want to check which vehicles get the best rates.

Most Insurance Companies use three different ways to rate cars in terms of damage, safety and liability.

1. The Damage and Theft Index (DTI), rates vehicles on the cost of payment for damage and theft.

2. The Vehicle Safety Discount (VSD), awards discounts up to 40 percent for car models that generate lower payment for injury to occupants in the vehicle.

3. The Liability Rating Index (LRI), rates vehicles on the amount of damage and injury it causes to the other vehicle and its occupants.

-Consider getting a Personal Liability Umbrella Policy (PLUP). If you or your teenage driver accidentally injures someone or damages their property, you could be sued. Even though your underlying policies may provide substantial liability limits, it is not uncommon today for juries to award damages that exceed those limits.

There are many different areas insurance companies look into while quoting you a premium for you and your teen. Companies will look at what kind of deductible you want, the kind of car you drive, the areas you drive in, the amount of time you are on the road, your age and gender, your driving record and even your credit history. So if you live in a major metropolitan area with high auto theft rates, chances are good that your rates will be much higher than those who live in the suburbs with low auto theft rates.

Here are other ways to save yourself and your teen some money when buying car insurance.

– Most companies give an Anti-Theft Device Discount for cars that have car alarms and other forms of security.

– If you have ever been convicted of a moving violation or have been an in accident, take Driver Improvement Courses to improve your chances of having a lower rate. Many of these courses can be taken on the Internet now.

– Teens can get discounts if they complete a Drivers Education course through their school or accredited agencies.

– Vehicles that have airbags, anti-lock brakes, head restraints and day-time head lights can also get you a discount on car insurance.

Everyone knows that car insurance can be really costly, but there are ways to slash the price if you ask about them.

Deal With Your Debt

If you are one of the millions of Americans out of work, and your cash flow has been impacted dramatically, there are several things you should do especially if you are carrying large credit card balances.

If you know you will be going delinquent on your payments, you should stop using your credit cards immediately, except for one that you will need in case of emergency.

It’s important to contact the remaining credit card companies to let them know your situation and that you will need some relief from your payments due to your employment situation. In the current economy, there are thousands of people defaulting on their credit cards and going bankrupt. When you show that you want to do the right thing and work with the issuer to come up with a solution to your problem, the issuer generally will do all that they can to help you.

Your creditors may suggest that you work with a local credit counseling firm. This is in their interest because those companies receive a portion of their fees on an annual basis from the issuers, along with whatever fee you would be paying them for their service. Asking them for a settlement probably won’t be helpful, they generally do not do this until you are severely delinquent and they have exhausted other resources, such as consumer credit counseling.

The important thing is to get in front of your debt problem. Don’t wait until you are overwhelmed. By that time your choices become more limited, you will most likely be recieving numerous collection calls, and maybe even threatened with lawsuits.

You are more in control than you might imagine if you start early, recognize the problem and deal with it.

Credit Report A Factor In Hiring

We’ve come to accept that our credit history will be pulled and checked if we want to borrow money. That’s fair enough. We’ve begrudgingly accepted that insurers set car or home insurance premiums in part based on how customers handle their credit.

A growing number of people affected by record joblessness and foreclosure rates nationwide now have a new worry: Will bad credit keep me from getting the job?

Regarding the use of credit background checks for employment, supporters say the checks are a smart business tool for certain industries and critics counter that the reports unfairly discriminate against minorities and those affected by the recession.

With millions of Americans nursing damaged credit reports after a bruising recession, some lawmakers are seeking to limit the use of credit reports as a factor in hiring.

According to The Fair Credit Reporting Act, employers are required to receive written authorization from an applicant to run the report and then must provide that person, or employee, with a copy of the information.

But, do workers with money troubles have a propensity to steal from their employers? If a person has lousy credit, is he or she is more likely to embezzle money or accept bribes? There is insufficient data to support a correlation between a credit score and job performance and risk.

Certainly there are some jobs where it does matter how an employee or applicant handles money. Some employers are required to pull a credit report if an employee is going to handle cash or work in a financial services position. At least that makes sense.

The assumption that is made is, if somebody is behind on their bills, then it tells something about their integrity or responsibility, but in many cases that assumption is flawed.

This trend of employers digging into people’s personal finances is something we should be challenging and restricting.

Should You Refinance?

Interest rates have fallen so much, it may seem like a no brainer to refinance your home mortgage.

The decision to refinance your mortgage isn’t one that should be taken lightly. Before deciding, you need to understand all that refinancing involves. Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms. Remember that, along with the potential benefits to refinancing, the interest rate isn’t the only thing to consider when shopping for a new loan. Refinancing, after all, isn’t free. There are the bank fees, the bills for a new appraisal and inspection, your lawyer’s fee, etc.

When you refinance, you pay off your existing mortgage and create a new one. You may even decide to combine both a primary mortgage and a second mortgage into a new loan. Refinancing may remind you of what you went through in obtaining your original mortgage, since you may encounter many of the same procedures–and the same types of costs–the second time around. It requires an application, credit check, new survey and title search, as well as an appraisal and inspection fees. As you know, this process can be quite lengthy and expensive.

Age is another consideration. Carrying a mortgage into retirement has traditionally been viewed as a bad idea – ideally, you should be as debt-free as possible when your income stops.

As a rule of thumb, it pays to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. However, every situation is different. Make sure to carefully weigh the benefits against the costs to make the best choice for your situation.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email

Ways To Build Your Financial Future

You’re just out of college, starting your first job. Building long-term financial security is probably the last thing on your mind. But. young people just entering the workforce must not underestimate the importance of financial planning geared toward saving for the future.

One of the best deals is an employer-sponsored retirement plan such as a 401(k) plan, if available. These tax-advantaged plans allow you to make pretax contributions, and taxes aren’t owed on any earnings until they’re withdrawn. What’s more, Roth-style plans allow for after-tax contributions and tax-free withdrawals in retirement, provided certain eligibility requirements are met. Another big plus is direct contributions from each paycheck so you won’t miss the money as well as possible employer matches on a portion of your contributions.

If you’re already participating, think about either increasing contributions now or with each raise and promotion.

If a 401(k) isn’t available to you, shop around for individual retirement accounts (IRAs), both traditional and Roth, at banks or mutual fund firms. Generally, contributions to and income earned on traditional IRAs are tax deferred until retirement; Roth IRA contributions are made after taxes, but earnings thereon can be withdrawn tax-free upon retirement. Note that certain eligibility requirements apply and nonqualified taxable withdrawals made before age 59 1/2 are subject to a 10% penalty.

Teach Children Early About Money

Just as with many other life lessons you will teach your kids, it is important to instill sound money management principles in children. As you attempt to instill other good habits in your youth, do not ignore a vital ingredient: financial awareness. Many children grow to adulthood, lacking the skills and ability to handle money. This can lead to years of unhappiness and hardship.

When teaching your children about money, begin early. The sooner your children develop awareness, the better they will understand the realities of the financial world.

It should go without saying, but your best bet is to lead by example, practice what you preach. You must display financial soundness. Whether you  realize it or not, your children pay close attention to what you say and do. Chances are they will model their behavior after yours.

Save gift-giving for special occasions. Though generosity may seem like a good quality, dumping extra money into their hands, without adherence to a budget, can send mixed messages.

Allow children to control their own discretionary spending. If a child is to learn about money, he or she must sense some meaningful connection to it. Though the parents should advise their kids on sensible spending and saving, they should not dictate how their offspring handle their earnings. The decision should be theirs, on how money received is to be spent, or saved.

If there’s one common mistake when it comes to raising financially responsible children, it is an inability of many parents to properly regulate their own financial lives. Prior to the age of about twelve the average child lacks exposure to finances, except for whatever involvement the parent or guardian generates. Regardless of your own current situation, the way you handle your finances is critical in securing the future financial success of your children.

Saving On Your Homeowners Insurance

As with any insurance purchase, it is important to evaluate coverage and research your options to find the best coverage for your dollar. Here are some tips from the National Association of Insurance Commissioners (NAIC) to help you save money on your homeowners insurance.

Shop Around

Homeowners insurance can be costly, but it is necessary. The premiums charged for homeowners insurance can vary widely from company to company, so it pays to take the time and effort to shop around to get the best value for your insurance dollar.  The cost of homeowners insurance depends on a number of factors including location, age and type of building, the use of the building (i.e. residence and/or commercial enterprise), local fire protection, choice of deductibles, application of discounts, and the scope and amount of insurance coverage you purchase.

Stick With the Company That Offers the Best Deal

Once you have considered all of the alternatives and have chosen the company that fits your needs, consider multiple policies with that company.

Change Your Deductible

In choosing the deductible amount, you bear the burden of loss up to the  amount you feel you can afford. Deductibles save money because the first dollars of the insurance are the most expensive to buy. Contact your insurance company to see if they offer higher deductibles, such as $500 or $1,000 on your homeowners insurance coverage.

Pay Attention to Rebuilding Costs Versus Actual Land Value of the Home

Consider the home and its contents when pricing the value of a Homeowners Insurance policy, not the land beneath the home. The property itself is not at risk of theft, fire or other hazards covered under your homeowners policy. Adding the land value could increase your premiums.

Discount Opportunities

You should also check with your insurance company to see if they offer premium discounts for the use of dead-bolt locks, smoke alarms, fire extinguishers, sprinkle systems and security systems.

Build a History with the Same Insurer

If coverage remains with the same insurer for 3-5 years, some companies offer up to a 5% discount plan for these long term consumers. After 6 years of coverage, a consumer may find up to a 10% discount. It is important to periodically compare the price with other policies, but the history benefits may be enough to reduce the premiums.

Actual Cash Value vs. Replacement Cost

Actual cash value coverage, as the name implies, will reimburse you for the cost of the property (less depreciation) at the time of the claim, minus your deductible. This may result in a lower claim payment than you expect. Replacement cost coverage, on the other hand, will reimburse the full value of the property. While the up-front cost is greater, you are more likely to receiveaccurate compensation for your possessions.

Raising Your Credit Score

Let’s face it, now a days, a high credit score isn’t easy to achieve. Not only do you have to master the basics — maintaining positive payment history and a low debt to credit ratio, but in order to be part of the upper echelon, you must pay attention to details as well.

Knowing what characteristics those with the highest marks possess can lead you in the right direction.

Since the bulk of your credit score is determined by your payment history and the amount of debt you may or may not have currently on file, having a clean record and impressive payment history is key.  Those with perfect credit scores use credit regularly while paying it off on time, every time. They also have a squeaky clean record. The credit elite have no liens, no bank repossessions, no settlements, no debt to speak of. Nothing!

Top credit scorers also have a diverse set of accounts. A careful balance of credit lines including a mortgage, a car loan and a few credit cards on file.

History, also, is paramount in determining your credit score. Typically, due to age, our parents stand a better chance of having a higher credit score than we do. Unless, of course, they have mismanaged their finances. It’s not necessarily your age, but the age of your oldest credit account on file that influences your overall score. You may want to keep that store charge card you opened up in college.

The number of credit inquiries on your record can also factor into determining your credit rating. While having large number of credit card inquires on file won’t dramatically decrease your score, it can keep you from joining the credit elite, especially if several inquiries are recorded over a short period of time. No matter what type of discount retailers offer, you may be best advised to refrain from opening up a bunch of store accounts.

To get more educational information on credit reporting and a complete breakdown of the credit scoring factors, contact DMCC.

Nonprofit Organization Expose Truth About Debt Relief Advertisements

Nonprofit agency presents free Webinars to tell consumers the truth about debt settlement and loan modification advertisements.

DEERFIELD BEACH, Fla., May 13 /PRNewswire-USNewswire

Debt Management Credit Counseling Corp., a nonprofit organization (“DMCC”), today announced that it will be presenting free Webinars to inform consumers of the truth behind certain debt relief advertisements. The free Webinars will focus on helping consumers identify the misinformation being given by marketers of debt settlement and loan modification programs. Consumers attending the Webinars will learn the truth about these programs and be provided information about other debt relief options. Webinars will be presented Wednesday, June 3rd at 1:00 p.m. and 6:00 p.m. EDT, and Saturday, June 6th at 11:00 a.m. EDT.

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Avoiding Identity Theft

According to the Federal Trade Commission, over half a million Americans will have their identities stolen each year.  The most common types of identity theft are:

• Using or opening a credit card account fraudulently

• Opening cell phone or utility accounts fraudulently

• Passing bad checks or opening a new bank account

• Getting loans in another person’s name

Victims spend on average 175 hours and $800.00 to clear their names.

Tips on How to Avoid Identity Theft

• Completely review your credit card and bank account statements and make sure you are receiving them regularly. If anyone is trying to steal your identity, they need to get possession of your documents. Thieves do this by calling your bank and changing the address on your account(s). If bank or credit card documents are late, immediately call your creditors to confirm your information has been sent to your home address and ask for copies. Purchase an inexpensive paper shredder and shred these copies when you are finished with them.

• Do not give out personal information to anyone you do not know. Professional thieves can pose as bankers or government agents in order to steal your information.• Do not leave any important documents in your mailbox. Thieves will take outgoing payments and correspondence from your mailbox and collect the information for their use. Deposit your letters directly into an official mailbox.

• Shred any credit card offers or pre-approved loan offers. Thieves will go through your trash to find these documents and activate these accounts.

• Your social security number is the key to your identity. Do not carry it around in your handbag or wallet. Keep a minimal number of ID cards and credit cards in your possession. Keep them at home in a safe place and bring them with you when you need them.  The following toll-free number, 1-888-567-8688 or 1-888-5OPTOUT, is a phone service run by the nation’s credit bureaus: Equifax, Experian and TransUnion. Consumers may call this number and ask to be removed from mailing lists for unsolicited credit cards or so-called pre-approved loan offers.

Marketing Databases

If you would like to remove your name from mail and telephone marketing databases, write a letter to both Direct Marketing Association locations below and request your name be removed from these lists.

Direct Marketing Association

Mail Preference Service

P.O. Box 9008

Farmingdale, NY 11735-9008

Telephone Preference Service

P.O. Box 9014

Farmingdale, NY 11735-9014

Safeguard Your Computer

These days thieves do not even have to come in contact with you to steal your identity. They can do it by hacking into your computer. If you are connected to the Internet, you need the protection of a firewall and a secure browser. Be careful not to open spam e-mails that may contain “worms” that let cyber thieves monitor your Internet transactions. When you upgrade your computer, do not dispose of the old one without using a “wipe” utility program to erase the entire hard drive. Just deleting files does not make them unrecoverable to a clever techno thief.

What to Do if You are a Victim

If you think your identity is being used, you must immediately contact all of the three major credit bureaus and the Federal Trade Commission. These bureaus have fraud centers that will request you follow certain procedures and forward copies of certain documents to them. Follow the procedures they have in place and make sure you ask them to place a “fraud alert” on your file. Here is the contact information for each major credit bureau:

Equifax: To order your credit report call: 1-800-685-1111 or write: P.O. Box 740241, Alanta, GA 30374-0241. To report fraud call: 1-800-525-6285 and write to the same address.

Experian: To order your report call: 1-888-EXPERIAN (397-3742) or write: P.O. Box 2104, Allen, TX 75013 To report fraud call same number and write: P.O. Box 9532, Allen, TX 75013

TransUnion: To order your report call: 1-800-916-8800 or write: P.O. Box 1000, Chester, PA 19022. To report fraud call: 1-800-680-7289 and write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Federal Trade Commission: Identity Theft Hotline: toll free 1-877-IDTHEFT or write: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

Cases of stolen identity happen to real people every day. Protect your identity and your good name.

What Is A Credit Score?

A credit score is a number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it I will get paid back on time?”  The score is generated through statistical models using elements from your credit report. However, your score is not physically stored as part of your credit history on the credit file.  Rather, it is typically generated at the time a lender requests your credit report, and then included as part of the report.

Three major credit reporting agencies create your credit score.  Because your credit report is an important part of many credit scoring systems, it is very important to make sure it is accurate before you submit a credit application.  To get copies of your report, contact the three major credit reporting agencies:

• Equifax – (800) 685-1111  (FICO/Beacon Score)

• Experian – (888) 397-3742  (Experian Score)

• TransUnion – (800) 916-8800  (TransUnion Score)

How Scores are Calculated

Designers of credit scoring models review a set of consumers – often over a million – who opened loans at the same time, and determine who paid their loans and who did not.  The credit profiles of the consumers who defaulted on the loans are examined to identify common variables  exhibited at the time they applied for the loans.  The designers then build statistical models that assign weights to each variable, and these variables are combined to create a credit score.

What is in a Credit Bureau Score?

The information that impacts a credit score varies depending on the score being used. Credit scores are only affected by elements in your credit report, such as:

• Number and severity of late payments

• Type, number and age of accounts

• Total debt

• Recent inquiries

If the business card/corporate card or gas card does not appear on your credit report, it will not affect your score.

What’s Not in a Credit Bureau Score?

Credit bureau-based scores, like those generated by Experian, cannot use demographics prohibited under the Equal Credit Opportunity Act, such as race, color, religion, national origin, gender, age, marital status, receipt of public assistance, or exercise of rights under the Consumer Credit Protection Act.

Why Lenders Use Credit Scores

Credit scores help lenders assess risk more fairly because they are consistent and objective.  Consumers also benefit from this method.  No matter who you are as a person, your credit score only reflects your likelihood to repay debt responsibly, based on your past credit history and current credit status.

Credit Score Factors

Score factors are the elements from your credit report that drive your credit score.  For example, such elements as your total debt, types of accounts, number of late payments and age of accounts are what determine the outcome of your credit score.  Score factors can have a positive or negative affect on your credit score.

Factors with the Most Significant Impact to a Credit Score

Paying your bills on time is the single most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you may want to minimize outstanding debt, avoid overextending yourself and avoid applying for credit needlessly.  Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt.  You may want to use the credit you already have to prove your ongoing ability to manage credit responsibly.

If you do have negative information on your credit report, such as late payments, a public record item (e.g., bankruptcy), or too many inquiries, your best strategy may be to pay your bills and wait.  Time is often your best ally in improving credit.

Improving Your Credit Score

Scores reflect credit payment patterns over time with more emphasis on recent information.  In general, a score may improve if you:

• Pay your bills on time.  Delinquent payments and collections can have a major negative impact on a score.

• Keep balances low on credit cards and other “revolving credit.”  High outstanding debt can affect a score.

• Apply for and open new credit accounts only as needed.  Do not open accounts just to have a better credit mix – it probably will not raise your score.

• Pay off debt rather than move it around.  Do not close unused cards as a short-term strategy to raise your score.  Owing the same amount but having fewer open accounts may lower your score.

Also, make sure the information in your credit report is correct.  It will not affect your score to request and check your own credit report.  If you find errors, contact the consumer reporting agency and your lender.

How Long Does it Take to Rebuild a Score?

The length of time to rebuild your score after a decrease depends on the reason behind the drop in the score.  Most decreases in scores are due to the addition of a new element to your credit report such as a delinquency or an inquiry.  These new elements will continue to affect your score until they reach a certain age.  Delinquencies remain on your credit report for seven years, although some bankruptcies may remain for 10 years and unpaid tax liens remain for 15 years.  Inquiries remain on your report for two years.

What Happens if you are Denied Credit or do not get the Terms you Want?

If you are denied credit, the Equal Credit Opportunity Act requires that the creditor give you a notice telling you the specific reasons your application was rejected. You have the right to learn the reasons if you ask within 60 days.  Indefinite and vague reasons for denial are illegal, ask the creditor to be specific.

Credit scoring systems consider updated information and change over time.  Sometimes, you can be denied credit because of information from a credit report.  If so, the Fair Credit Reporting Act requires the creditor to give you the name, address, and phone number of the credit reporting agency that supplied the information.  You should contact the agency to find out what your report said.  This information is free if you request it within 60 days of being turned down for credit.  The credit reporting agency can tell you what is in your report, but only the creditor can tell you why your application was denied.