Improving Your Credit Score

There are very simple things you can do to improve your credit score. Some of the tips listed below can improve your credit score in less than three months. Other tips will not produce immediate results but in the long run will help improve your credit score.

Step One: Know the Facts

The easiest step to increasing your credit score is to know what’s on your credit report. Go to the annual credit report website and order a free copy of your credit score. Once you receive the copy of your credit report look for mistakes. Sometimes credit reporting carriers make mistakes by putting credit accounts that aren’t yours on your credit report. So double check that all the credit listed actually belongs to you. Also look for late charges. Make sure the payment was actually late. If there are problems on your credit report don’t be afraid to challenge them.

Step Two: Get A Strategy In Place

If you have outstanding balances on your credit report you need to find the best way of paying that debt. Many financial experts suggest paying down the highest balances first. Credit scores are formulated. One of the important factors to determining your credit score is a ratio of credit available versus credit used. Experts suggest that the ratio of credit available to credit used should be no more than 30%. Here’s an example: You have $1000 dollar credit limit, you should never use more than $300 dollars of that credit.

Step Three: Get Smart

If you have outstanding debt don’t create more by opening new lines of credit. Another important tip is to not close old accounts. If you have paid off an old debt don’t close the account because the length of your credit history really does matter.

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Save On Hotel Room Rates

Getting ready for that summer vacation and want to save money? Just so you know, hotels are raising their rate, but there are some things you can do to keep money in your pocket.

According to the consulting firm, STR the average room fee this year will increase by 4%. That means that the average hotel room will charge you around 106 dollars per night and that doesn’t include the “extra fee” trend. Just like the airlines did, hotel are charge extra fees for just about everything. Some of the extra fees come in the form of: Use of the Internet, parking, receiving packages, in room safe, resort fees, towel fee, getting the morning paper, and in room phone calls. You don’t have to be one of those people paying the increase rates.

How to save money on your next hotel stay: checkout what the extra fees are before you check into a hotel. If there are some extra fees that you will be charged asked to have them waived before you enjoy the service. The best ways to avoid the fees are to avoid using the extra services. And you won’t know what the extras are if you don’t do the research before you check-in.

Another way to save money on your next hotel stay is to pick a small hotel. Smaller hotels usually don’t have all the extra fees associated with larger chain hotels. The best thing to do to get the biggest bang for your dollars is to research for the best deals.

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Using QuickBooks Online For Business

QuickBooks Online offers five different online options. We will discuss these options in details.

QuickBooks Online Options

Online Simple Start
Online Essentials
Online Plus
Online Essentials with Payroll
Online Plus with Payroll

How To Decide Which QuickBooks Online Option Is Right For Your Business

The first step in deciding which QuickBooks Online Option is right for you is determining how many people in your organization needs access to your accounting system. The Online Simple Start option is not for multiple users. However the Online Essentials option allows for up to 3 users and the Online Plus option allows for up to 5 users.

Why Consider Multiple Users?

If you have a very small company but your bookkeeper is overworked, consider allowing another staff member to enter bill or print invoices. To achieve this a multiple users system is required.

Additional Features With the More Advance QuickBooks Options

Using QuickBooks’ Online Essentials and Online Plus options allows your company the flexible to automatically communicate with your bank seamlessly. The automatic banking feature records all transactions. That’s right, from a simple report you can see all your bank accounts in one place, keep tabs on your current bank balances, and saves time on monthly reconciling. Transactions are automatically downloaded every 24 hours. Due to the constant communication with the bank your company is in a better position to caught costly mistakes as they happen.

Using QuickBooks Online also allows your company to pass special discounts to your customers. With the Online Essentials and Online Plus options your company can reward its customers with an early payment discounts. How’s that for improving customer relationships.

Using QuickBooks Online Plus Is The Big Bang For Your Bucks

With the Online Plus option you can track inventory and orders. This allows your business to know how much you have in inventory at any given time. Tracking your inventory is a very important feature that allows for accurate cost of goods sold and gross profit reporting.

If your organization is large enough you may want to track expenses and profits by departments. Using the Online Plus option allows you break down reports by different classifications like departments, divisions, etc.

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Are We Headed For Another Recession?

The market has been selling off and people are coming to the conclusion that we are headed for another recession.  Some may say we never recovered from the last recession.  Others would states that we are in a depression and have been.  The only reason why the depression eased a bit was due to the stimulus packages.

In the first weeks of August 2011 the markets have lost $800 billion.  Experts are saying you should keep our eyes on job growth and real estate prices.  The current unemployment percentage stands at 9.2%.

If you haven’t notice – Treasury bond yields are down, interest income rates are down, and real estate prices are at an all time low.  On the flip side, electricity is up, gas is up, and food prices are up.

Some experts believe that the bad economy today is a correction to bad economy from yesterday.   Nevertheless, the trading markets have lost over $1.9 trillion over the last 9 sessions.

Do you think we are headed for another recession?

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Self Directed IRA At A Glance

What is a Self Directed Individual Retirement Account?  A Self Directed IRA is an IRA that is held by a trustee or custodian.  The trustee or custodian responsibility is to maintain assets and transactions records for reporting to the IRS.  They are also responsible for issuing regular statements to the account owner.

Self Directed IRA Restrictions

Self Directed IRAs come with some restrictions.  Certain asset types and transactions are prohibited with respects to a self directed IRA.  The IRS prohibits self directed IRA account owner from investing in these asset types:

• Life Insurance
• Artwork
• Rugs
• Antiques
• Metals
• Gems
• Stamps
• Coins
• Alcoholic
• And other personal property

Learn which Self Directed IRA transactions are prohibited — Wikipedia

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What is Financial Leverage

Financial leverage can be the key to financial freedom. So, what is financial leverage? Let’s get started by understanding the term “Leverage”. Thinking of leverage in the context of physics. A lever is a tool used to help or assist you in lifting something you couldn’t lift by yourself, or couldn’t do with ease. For example – a crane utilizes levers to help dig a massive hole. You could dig a massive hole yourself but how long would it take you. Surely, it would take longer to dig a massive hole manually then with the help of a crane.

Let’s applied the use of leverage and finance. The term leverage is use in the same context as the physics term lever. Let’s say you don’t have enough cash on hand to purchase something. Leverage would be the use a credit card. Leverage in this context is the borrowing of money to finance an investment decision.

If you have figured it out yet – Leverage always amplifies the effect. Whether we are talking about physics or finance leverage is always a multiplier. Because leverage is always an amplifier when you use it the outcome is multiplied. For example – You are using a crane to dig a massive hole. You read the plans wrong and the massive hole is in the wrong locate. If you have been digging the hole manually, maybe the error could have been spotted before you had a massive hole in the wrong location.

Financial Leverage Example (Using Real Estate)

In 2006 I purchase a house for $100,000 dollars. I borrowed $90,000 dollars and used $10,000 dollars I had on hand. The $90,000 dollars is leverage (money I borrowed from the bank). In 2007, the house market increased the value of the home to $105,000 dollars. Okay, that’s $5,000 dollars return on a $10,000 dollar investment. Remember, I only invested $10,000 dollars. Meaning I just got a 50% return on my investment. By using leverage I was able to multiply my return.

In 2008, the house market declined. The same house is now valued at $90,000 dollars. Because of the leverage (make I have borrowed) my return on investment is now ZERO. Remember, I borrowed $90,000 dollars and the house value is $90,000 dollars. Therefore, my $10,000 dollars is gone. Using leverage can produce greater returns and/or greater losses.

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Investing In An Index Mutual Fund

Perhaps you have heard of Index Mutual Funds but know nothing about them. Read this article to learn about indexing basics. Choosing a index mutual fund may be the right investment for you. Let’s take a look at how index mutual funds work.

An index fund seeks to chart the returns of a certain market segment or benchmark. The goal is to produce a return based on the performance of that index. A good example will be the Standard & Poor’s 500 (S&P 500). Index funds hold the same securities (stocks) as the index. Securities include stocks, bonds, and other types of securities.

Why Chose An Index Fund Over Other Investments?

Diversification at a low cost is the best answer. Index funds typically have lower cost than actively managed funds because they are not actively managed. Since the fund simply charts a particular index, it doesn’t have to pay a fund manager. A fund manager actively seeks to buy and sell securities to try and beat the market. That is how the returns are generated. With an index mutual fund the lower cost is passed to the investors along with the returns the fund generates.

If all where equal, an index fund verses a similar managed fund – The index fund probably is going to be ahead of the game.

Other Benefits To Investing In An Index Mutual Fund

With index mutual funds there are less turnover of securities in the index. This is good because they will distribute fewer taxable gains. This is not to say that there are not good managed funds available. However, an index fund takes a simpler approach to the stock market.

Other Things To Know Before Investing In An Index Mutual Fund

Remember, just like any thing else – all index funds are not created equal. Many investment brokers charge a sales load or other fees to buy shares in an index fund. There is also an associated commission fee for the trade. Certain index funds run the risk of tracking errors. A tracking error is when a fund returns differs from its index. This type of error can be cause by many factors including:

• Fund Expense Ratio
• Transaction Costs

These are good reasons to choose an index fund from an investment company that has expertise knowledge with the ins and outs of indexing.

How To Get Started With An Index Mutual Fund

A good first step to get started with an index fund is to seek a fund that tracks a total market index. This could be an index that contains stocks, bonds, or both. Another option would be owning an exchange traded fund. An exchange traded fund goal is to track an index. However, an exchange traded fund or ETFs come with a commission fee to buy and sell.

Just as a single mutual fund diversifies your investments, there is nothing wrong with having managed funds as well. It’s not that there aren’t good managed funds that exceed the market, but remember the manager has to be paid.

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Inflationary Debt Prevention

You’ve got a credit card or may be a car loan, right? You are making your minimum payments and you are making those payments on time. All of a sudden you receive an offer from your lender to skip a payment. For a small monthly fee some lenders are allowing customers to skip payments. Do you think it’s a good deal? Learn the facts about inflationary debt.

Inflation and Debt

To explain inflationary debt let’s use an example. Let’s say you have a credit card that charges 18% in interest. On that credit card you have a $5,000 balance. You monthly payments should be about $150.00 a month. However, when you skip a payment you are actually add your monthly payment to your balance. In the example above, you monthly payment is $150.00. And don’t forget the interest. That’s $150.00 at 18%. That means instead of just paying the $150.00, your have just added $170.00 additional to your $5000 balance.

Along with the addition to your balance many lenders charge a processing fee for this type of service. After you add up the small fee for the offer, $170.00 added to your balance, and the processing fee – you may be thinking, I should have just paid my bill.

Let’s make the math very simple. The only time you should ever consider not paying you debt is when you literally can’t. Any other circumstance falls under – not a good financial move. Not only should you pay your bills every month, you should try to pay then off fast. That means you should be added additional money when you can.

In short, keep paying off your debts. The quicker you pay off the debt the less interest you are paying. Plus, being debt free is a wonder feeling.

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Layoffs at Wilmington Trust

Later this year, Wilmington Trust is scheduled to layoff hundreds as the company combines with M&T Bank.  The total layoffs will amount to 30% of Wilmington Trust employees.  Even after the conversion due to occur during the summer of 2011, Wilmington Trust employees will not be safe.  More layoffs will occur after the two banks combine.

On the bright side, Wilmington Trust customers can rest easy.  Current Wilmington Trust branch locations are scheduled to remain open.  Also, on 2/8/2011 Wilmington Trust announced filling a created position of “Director of Endowments & Foundations” with F. Mackey Hughes.

More Wilmington Trust and M&T Bank news to come.

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Correcting Credit Report Mistakes

If you have mistakes and wrong information on your credit report it will eventually ruin your credit score. To correct mistakes and wrong information on your credit report you will have to file a dispute with the three main credit bureaus. The three main credit bureaus are Equifax, TransUnion, and Experian. Below are the links to the three credit bureaus online dispute forms. Each year you should review your credit report for mistakes. All three credit bureaus provide free “Annual Credit Reports”.

Correcting Credit Report Mistakes By Filing A Dispute

Disputing credit report mistakes start with writing a letter. You can also call or go to the websites of the three credit bureaus to file a dispute as well.  The dispute process normally takes about 30 days. Keep in mind, Experian, Equifax, and TransUnion are credit reporting agencies. They are not the creditor to whom you owe money to. Credit bureaus simply report what the creditor submits as debt owed. If the mistake on your credit report was not a simply error and the creditor insists you owe the debt, you must clear the matter with the creditor. Some disputes are never resolved because the creditor will not release you from the claimed debt.

Some disputes are harder to solve then others. Disputing mistakes and wrong information on your credit report depends on the records you keep. If you can prove the debt is not yours — you have a better chance of resolve the credit dispute.

Hope this helps with correcting your credit report mistakes! Below are the links to the three credit reporting agencies.

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