Women and the World’s Money

Women, whether we like it or not, control our lives. If you have a woman or multiple women in your life, whether it be a spouse, girlfriend, daughter or even just a close friend; she controls pretty much all aspects of your life, whether you realize it or not.

Fact

By 2014, women will control 65 percent of global spending and more than 80 percent of U.S. spending. Now you know where all your money will go!

Women Control the World’s Money

According to She-Economy.com, women account for 85% of all consumer purchases including everything from autos to health care. The following is a list of categories where women had a deciding factor in making the final decision:

• 91% of New Homes
• 66% of Personal Computers
• 92% of Vacations
• 80% of Health Care
• 65% of New Cars
• 89% of Bank Accounts
• 93% of Food
• 93% of OTC Pharmaceuticals

American women spend about 5 trillion annually- over half the US Gross Domestic Product (GDP).

The Glass Ceiling

It has been long understood that women are to succumb to the preverbal corporate "glass ceiling" where they can only climb so high until they are shut out from any further progression. No matter how hard they work and how productive they prove themselves to be, they are blocked from the top of the company, blocked from the real decision makers.

In the U.S. only 12.6% of corporate board rooms have women directors. Roughly 10% of the American companies, in a CNN survey, have at least 3 female directors on their boards. It is interesting how in a world that is statistically driven and influenced by women, men, still attempt to maintain their “death grip” in perceived control.

Big Business and Women

If corporate America, being the profit-driven capitalists they are were truly smart, they would have a disproportionate population of top-level female executives and decision maker’s vs. their male counterparts simply because of the fact that women are the key financial spenders and decision makers in America and the world. It makes sense that in the business world women should represent a proportionate population in leadership roles to the dollars that women spend in the marketplace.

Or could it be that because women have such an overwhelming influence on pretty much every aspect of our lives that the male population (consciously or subconsciously) desire to maintain even a modicum amount of control in their worlds and shut the majority of the female leadership roles in the board rooms out.

Corporate America has already figured out that women are a major spending power, which is why most companies market toward the female audience. What they have not yet figured out is that if they dared to increase the female presence in their board rooms, captured the female psyche at its source, it is highly likely that company profits could experience a new explosion of growth.

The banking and large ticket-items industries would greatly benefit by asking themselves the age-old question of “what do women want?” Who better to answer those questions than female board members.

Finally

My point in writing this article focused on the female economy is that the banking and lending industries need to realize that women are the new economy, women are the backbone of the new American economic stimulus, and they are the decision makers and the money spenders. Without their influence, the global economy dies.

How to Detect and Avoid Credit Repair Scams

Back when life was much simpler, when credit was in the form of a firm handshake and the person’s word that they will repay the loan, the terms FICO (Fair Isaac Corporation), CROA (Credit Repair Organizations Act), FCRA (Fair Credit Reporting Act), among others, would have seemed like a foreign language. All anyone needed to do to “fix” their credit or to gain credit in those days was to “appear” credit worthy.

In the early days of credit, a person’s credit worthiness was determined by the city “welcoming committee.” The welcoming committee would come to a new family’s home, bring gifts and greetings from the city, make conversation with the new husband and wife, take mental notes of their surroundings, their employment, lifestyle, religion, etc. Then they would pass the word about this family and essentially, word of mouth created their credit worthiness in that new city.

Fast forward half a century to September 30, 1996, President Bill Clinton signs into law the CROA (Credit Repair Organizations Act). This act is specifically designed to prevent unscrupulous companies touting their credit repair services as “guaranteed,” or the “cure to bad credit.” So many of these types of companies would prey on the desperate individuals or families who are in financial crisis that the families would be in a worse situation had they not hired the credit repair company.

The Basics of CROA

Credit repair companies cannot engage in the following:
Make any statement which is untrue or misleading
Advise any consumer to make any untrue or misleading statements
Charge the consumer in advance for services
Hold the consumer under binding contract (consumer has the ability to cancel at any time)

What Credit Repair Companies Must Do:

Give the consumer 3 days to cancel without penalty or obligation
Explain in writing the terms of the service including all guarantees of performance
Perform what they promise to perform
Compliance of the CROA laws are enforced and regulated by the FTC (Federal Trade Commission).

When shopping for a company to correct your credit you would be wise to just ask them if they are familiar with CROA, and if they comply with its standards. Don’t do business with anyone who does not comply with the CROA standards.

A MAJOR Red Flag!

If any credit repair company suggests you obtain an EIN (Employer Identification Number) to use in place of your social security number they are soliciting fraud! Avoid them at all costs! (And possible prison time).

It is legal for anyone to have an EIN, as long as they are using that for their legitimate business purposes. To use an EIN in place of your social security number is known as File Segregation and is considered fraud.

So How Does Credit Repair Work?

It is completely possible to correct a bad credit history. It is not a simple or fast process. Avoid anyone who claims to be able to correct your credit seemingly overnight.

Credit repair is the process of leveraging your consumer rights per the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), and others to delete or have corrected any false, misleading, or unverifiable accounts on your credit reports. The disputes go to the credit bureaus (Equifax, Experian, and TransUnion), then the credit bureaus inform the creditor that there is a dispute with your account. The creditor has 30 days (or a reasonable amount of time) to conduct an investigation on that claim. The creditor will then contact the credit bureau with the results of the investigation. The credit bureau will then contact you regarding the results.

Often it is necessary to re-dispute items until they do get corrected or deleted off of your credit file. Persistence pays off when correcting your credit.

Get Your Credit Reports

You are allowed (by law) to obtain a free copy of your credit reports every 12 months from http://www.annualcreditreport.com/. It’s a good idea to check your reports at least every year to look for errors. If you find errors, these can be corrected with the credit repair process.

How to Build Credit When You Don't Have Any

Ahhhh, the age-old question, “how can I get credit when I don’t have any?” Well there’s no time to start like the present. The first question you need to ask yourself is:

What TYPE of Credit Should I Get?

There is a difference in types of credit. If you are just building credit, you are going to want to get the most “bang for your buck.” Since 30% of your FICO score is based on amounts owed, this also goes to say that 30% of your credit score is based on CREDIT CARDS and how you use them. Now in my years of working in the credit business, many of my clients, when they heard that they had to get credit cards to have good credit, flatly rejected the idea. I then would explain to them that credit building is simply a game, much like Chess and Checkers are games. They have RULES. Like with any game, if you don’t know and understand the rules, you will lose.

The Rules of The Game

The following are the basic pieces of the “good credit score” pie:
35% Payment history
30% Amounts owe
15% Length of credit history
10% New credit
10% Types of credit used

Since payment history and amounts owed are by far the two largest pieces of the pie, this is where you will also want to focus your efforts.

Ok now back to the best way and the fastest way to build good credit. Credit cards are the #1 fastest way to build good credit. Here are a few key things to know about building good credit with credit cards:

• Size DOES NOT matter. You can build good credit just as easily with a $250.00 limit as you can with a $10,000 limit.
• The percentage of use is vital! With any credit card you get, make sure you don’t use more than 30% of the available credit. The less available credit you have on that card, the worse your credit score will be.
• Payment history is 35% of your credit score, so make sure you pay your credit cards on time every month.
• The longer you have that credit card the better your score will be. This is 15% of your score listed as, length of credit history.
• Your credit score will grow the same regardless of if you are using secure credit cards or traditional unsecured credit cards.

What Type of Credit Card Should I Get?

When speaking of what types of credit cards you should get, there are a few different types of cards.

• Charge cards such as American Express. Charge cards must be paid in full each month. These are kind of tricky on your credit report, because many times your credit report will display as the credit limit the most you have ever spent on that card. This could be misleading to your credit score.
• Revolving credit cards. These are pretty much every other type of credit card available to consumers. This is essentially an endless loan. As long as you continue to pay the loan, you will have credit available.
• Secured credit cards. This type of card is where you first make a deposit of a certain amount in order to activate the card.
• Unsecured credit cards. This is the credit card we all are most familiar with. No deposit required, just use the card and pay the bill.

When searching for a credit card to build your credit, regardless of if it’s a secured card or unsecured card, the key thing you want to make certain of is that the credit card reports to the credit bureaus. Often people will go to their bank or grocery store and purchase a pre-paid Visa debit card thinking this will build their credit. This is not the case. Pre-paid Visa debit cards are simply gift cards with the Visa logo on them. They do not build credit. Make sure that whatever card you are looking into it states in the terms and conditions that it reports to the credit bureaus.

Where Should I Go?

If you don’t have credit, I’m assuming your mail box is not getting bombarded with a plethora of credit card offers. Most of us also don’t have the time or patience to scour different websites looking for the best deals either. There is a very easy to use and very consumer friendly website called http://www.creditcards.com/ which is a one-stop-shopping location for all sorts of banks and all sorts of credit cards. They even have a “search by credit quality” section on their front page that will bring up all sorts of offers that a person of the selected credit condition might qualify for. Then each offer will give you a brief detailed synopsis of what the offer is like. If you like it, you can apply on the spot.

I hope this information will assist you in getting started and WINNING at the credit game.

Dealing With Your Personal Finance Holiday Hangover

Ahhhh the New Year is up on us! 2012 here we come! Now that your Christmas/Hanukkah/Kwanzaa/Winter Solstice gifts are unwrapped, the fruit cake from Aunt June is put away to age for the rest of eternity, you finally have a moment of clarity! Holy crap! I have credit card bills on their way. I have to pay for all of these merry festivities now!

Not to fret, we’re here to make some sense of it for you, and to give you some guidance so that you don’t go as crazy as “Cousin Eddie” standing in the snow with a septic hose in his hand.

First Things First

You should obtain your free copy of your credit report after the New Year. Since you are allowed, by law, one free copy per year- what better time to get it than the start of a new year. Go to http://www.annualcreditreport.com/ to access your Experian, Equifax, and TransUnion credit reports. Review these reports very carefully, make note of any accounts or any details of the accounts that don’t seem accurate or even are not your accounts at all.

Second

Take note of credit card utilization on your revolving lines of credit. Since you were likely hittn’ those credit cards like….well you know. Your credit card utilization ratios likely went close to 100%. Anytime your credit cards exceed 50% utilization, your credit score will take a serious dive. According to the FICO credit scoring model, credit card utilization accounts for 30% of your entire credit score.

Third

Set some financial goals. Now that you have your free credit reports in hand, added with the fact that you are entering a new year, what better time to set some goals? What do you want to accomplish in 2012? Do you need to refinance your home? Buy a new car? Prepare a son or daughter for college or an up-coming wedding? You are likely going to need to use credit to accomplish any of these goals.

With your credit reports spread in front of you now, you can now see the “big picture”. You can now see what cards need to get paid down to achieve that 30% or less utilization ratio to help grow that FICO score. You will be able to take note of any accounts that have erroneous information so that you can begin disputing these inaccurate items with the credit bureaus.

Finally

In order to have a successful, prosperous, and relatively stress-free 2012, you must start now to recognize areas of trouble and deal with these financial issues promptly.

Just think, you should want to have your financial life in order given the Mayan Prophecies anyway. You don’t want to be that guy whose sole financial survival plan is to post-date all his checks until December 22, 2012 do you? I knew you were smarter than that guy!
Good luck and have a happy and prosperous 2012.