Payday Loans

May 2010 Monthly Archive

Anyone that has been denied credit will remember the added-on fine print at the end of the denial letter telling you that you can receive a free credit report from a specific credit reporting agency.  Sometimes this will require you to mail in a written response to request the free credit report, sometimes it will be as simple as logging on to the reporting agency’s website and fill in a few information.

While it’s little solace to being denied credit (let’s face it, rejection blows), Federal law dictates that you should be given clear reason as to why you’ve been denied, and free access to your credit report so you better understand your credit history.

One problem in the previous solution is that by providing consumer with only their credit report, many people couldn’t make heads or tails on where they stand in terms of credit worthiness.  Unless you’ve read up on your credit report know-hows, it can be at times difficult to distinguish what’s positive or negative — if any — in your list of credit history.

Hot on the heels of numerous financial regulation reform and amendments, Senator Mark Udall of Colorado introduced the Fair Access to Credit Scores Act as an amendment to the hotly debated Wall Street Accountability legislation.  This amendment, which was approved by a voice vote by the Senate on Monday, will allow consumers to receive a free credit score whenever the score has negatively impacted the lending/approving decision process.

Here’s what you can expect if the amendment becomes part of law:

  • If you’re denied credit or approved for a more disadvantaged rate, then you’ll have free access to your credit score.
  • The credit score you’ll have access to is the specific score that impacted you in the decision making process, not some random score from an unknown company or credit reporting bureau, nor would it be a range of score.  Since most lenders are still using FICO scores, the leading credit scoring model, that means it would most likely be the credit score you’ll receive and not some “FAKO” score.
  • No maximum amount or limit to the amount of scores you can get for free.  If you’re denied credit by lenders fifteen times, you’ll get fifteen scores. Though one prudent move may be to closely examine why your credit isn’t up to par before you apply for further loans.
  • If credit score was one of the many factors in denying a potential employment, you will also receive a free credit score.  You should note however that credit report is but one of many hiring factors for many employers.
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Despite the fact that FIA (formerly MBNA, now owned by Bank of America), told me to bend over as they slashed my credit limit on my Schwab credit card, I still prefer to use the Charles Schwab credit card as my primary transaction card.  It’s simply too hard to ignore the 2% cash back on any purchases, plus there’s the absolutely zilch foreign transaction fee when you use the card while traveling abroad.

While in Italy last month, I extensively used this credit card along with my Schwab debit card as my traveling pals and I roam around tourist traps in a decisively awesome country:

As you can see above, had the Schwab credit card emulated other Visa, MasterCard, and American Express credit card’s usual 3% foreign transaction fee,  my traveling cost would have went up by an additional $21 or so dollars.  Not a whole lot of money in the grand scheme of things, but that’s still three-and-a-quarter-less margherita pizza I’d be able to eat.

And that, my friends, is what personal finance should truly be about: how many slices of pizza you may be missing out on.

This is a post from Jeff Bogle, one of our first contributing blogger here at StopBuyingCrap. Back in 2008, Jeff left his steady corporate job at Vanguard to be a stay-at-home dad. Jeff writes regularly at Out With The Kids, a daddy blog, and you may also find his work on iVillage, Time Out New York Kids, and Curious Parents Magazine.

Surprise! Learning is Easier When You’re Having Fun

Many of the best lessons in life are learned as a child, while having fun. It’s why we could always memorize lyrics to our favorite songs with ease but struggled mightily with the periodic table in science class.

Do you want to teach your young kids about budgeting and making sound fiscal decisions? Minimize the spreadsheets and play shopkeeper.

It’s important to teach kids about the value of money, not just what you can do with it, but that you must also make choices about how to wisely use what you’ve got. When I play store with my daughters, I see that it helps them prioritize and begin thinking about the consequences of foolish spending. That’s right — I dish out my best financial decision-making assignments surrounded by picture books, fancy shoes, clothes, and feather boas.

Despite the volume of stuff in their toy chest, I strive to instill in my 6-year old and her nearly-3-year old sister an understanding that you cannot have it all. There is, after all, a finite amount of money most of us have at any given moment (no, Capital One, that was not an invitation to begin soliciting my children about the joys of revolving debt; credit cards and borrowing discussions are intentionally being saved for when they’re a tad older — thank you very much).

So, I set up an elaborate pretend toy store — books, necklaces, tutus, plush snuggle friends, I sell it all! Then, I give my daughters some cash and role-play through different situations. During one trip through my toy Mecca, they need to buy birthday gifts for family members. Another visit is spent shopping for something fun for themselves. Either way, they have to ask how much each item costs and decide if they have enough or if they have to come back after saving up a little longer. Sometimes, instead of yet another stuffed animal, they’ll opt to hold onto some of their dollars to use at Dad’s fictional ice-cream shop – because that’s important too, from time to time!

Real Impact From Fun Lessons

These lessons have yielded interesting real-life results. When my oldest gal needed a pillow and blanket for school, she had a choice to make. The first pillow she picked, she adored. It cost $16. There was another, just-as-cool pillow on sale for $8. She had a firm $15-$20 budget, which she knew going into the store. If she selected the cheaper pillow, there was a very comfy matching blanket she could afford, also on sale for $8. If she went with the pricier one, her old blanket would be accompanying her to school. The choice was hers, and hers alone. She ended up walking into her 1st day of kindergarten with a crisp new pillow and blanket set.

Playing store is one of my girls’ all-time favorite games. I truly believe it’s one of the reasons they rarely ever whine for things when we shop together. After all, they know what it’s like to be short some coin, thanks to shopping in our own living room.

Do you have your own tips and activities you engage with your children to teach them about money management? Feel free to share.

photo credit: tudy

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