PROPER MONEY MANAGEMENT:

• Set up monthly budget and stick to it (allow reserves for emergencies)
• Review budget periodically to account for inflation or new expenses
• Keep larger receipts and monitor
• Look for ways to cut spending on non-essentials (establish priorities: new vs. used, soda/coffee/donut/cigarettes /candy bar, etc)
• Start putting aside savings (10%) each week or month (save for a rainy day)
• Use store coupons wherever possible
• Always shop using a list and shop alone…no impulse buying
• Comparison shop all major purchases
• See if you can do it yourself rather than hiring someone
• Don’t carry credit cards with you except when you have planned to make a specific needed purchase
• Access your overall lifestyle to see if it’s commensurate to your income, and make adjustments if necessary

HOW TO AVOID DEBT:

• Be honest and admit there is a problem and develop a strategy
• Only spend what you can buy w/cash or pay off in full each month (see budget) learn to live within your means (lifestyle adjustments)
• If paying less than entire monthly credit card payment, always pay more than minimum eg: used 1 time for $500 debt @15% int, paying min pmt (2%), = 6-1/2 yrs, $800
• If continually late on payments call creditors to change payment due date to a more convenient time to avoid late fees and penalties
• Cut up and cancel unused credit and store cards
• Always live below your means to allow for financial/work downturns
• Review credit card statements monthly for any interest increases and any credit card policy change notifications….if interest has increased call creditor to reduce or get new credit card
• Never take cash advances to pay off other credit card bills
• Thoroughly read and understand all terms and conditions before accepting any new credit
• Avoid impulse spending…if discretionary sit on it for 30 days to make sure it’s needed

WHAT CREDITORS ARE LOOKING FOR:

• Does the applicant have a stable job? How many years there? Do they have a responsible position?
• Does applicant have a stable lifestyle? Have they been at their residence 5+ yrs? Do they rent or own?
• Does the applicant exhibit sound financial stability? Do they have a checking and savings account? Do they have recent inquiries?
• Does applicant have a good payment history on existing and previous lines of credit? Do they have a credit history free of judgments, bankruptcies, charged off accounts, liens or other signs of financial mismanagement?
• Does the applicant have a favorable debt to income ratio? (A comparison of your outstanding indebtedness to the income you have to support debt repayment). Does it appear that applicant is overextended on credit (at or close to available credit lines)?

GOOD BUDGETING AND CREDIT HABITS

• Keep well below credit limits …20% of available line
• Cut up unused cards and voluntarily ask creditors to close accounts & provide letter
• Buy only what you can afford to pay w/cash or pay full credit card bill (Stick to budget)
• Regularly review credit report (all 3 major-Experian, Equifax , TRW) and dispute any errors
• Avoid excessive inquiries and opening new accounts…indicates possible desperation
• Bring delinquent accounts to current status asap
• Pay off accounts that are public records (tax liens and judgments), charge-offs and collections asap.
  • Negotiate settlements where possible

ADVANTAGES TO GOOD CREDIT

• Better chance of qualifying for credit
• More favorable interest rates on credit extensions
• Better chance of qualifying for jobs, housing, college, & jobs with high security clearance whether government or civilian
• If in military, avoid reprimand or worse from UCMJ
• Peace of mind…..less marital problems ($$ #1 cause of marital problems/no harassing calls/better self esteem)