While the formulas are a secret, the elements of the FICO score are made public. The largest portion of your credit score is payment history, accounting for 35% of your credit score. The fewer times you’ve ever been late and the longer it has been since those late payments, the better.

So the number one thing you can do to improve your credit score is to pay your bills on time, month after month. If you’re not currently caught up, get caught up.

Another major factor that goes into your credit score is how much you owe. This accounts for another 30% of your score. Not only does this consider how much you owe, but the amount of your credit lines you are using. The smaller the balances, the better. If the amount you owe is at or near 80% of your credit limit, you are considered maxed out. After you’ve gotten caught up on your bills, the next thing to work on is getting the balances lowered. Bonus: this will help you save money as you’ll be paying less interest!

A third major factor is the length of your credit history, which figures for 15% of your credit score. This accounts for how long you’ve had the accounts, and how long it has been since there has been activity on your account. The longer you’ve had your accounts, the better, as you’ve proven your creditworthiness over time. If you have older credit cards that you no longer use, it is often best to keep them open, using them for small purchases a couple of times a year, and then immediately paying them off. Of course, if they have any time of annual fee, it is best to close them.

Of lesser importance are the types of credit you have and the number of newer accounts, each making up 10% of your score. For credit purposes, it is good to have some type of revolving account (credit card) and some type of installment loan (mortgage, car loan) currently or in your recent history. You also want to avoid opening multiple new accounts over a short amount of time.

The more you understand how your credit score is figured, the more you are prepared to improve that score.

The credit course will be held at the South Wilmington Street Center in downtown Raleigh.  The class will be held on August 24th at 3:00 pm.

For more information and to register, contact Jimmie Watson with the Wake County Supportive Housing Program at 919-856-5710.

Time:

Location:

The workshops will introduce you to the components that affect your credit score.  Several credit scoring myths will also be addressed.

Times and Locations:

First Workshop: Wednesday, August 19, 2009, 1:00 pm to 4:00 pm.  For more information or to register, contact Terrie Deal with the Wake County Supportive Housing Program at 919-231-5957. This workshop is hosted by the A.A. Thompson Center:

Second Workshop: Wednesday, August 19, 2009, 6:30 pm to 9:30 pm. To register, contact Sharon Gibson at 919-231-5957 with the Wake County Supportive Housing Program. This workshop is hosted by Hollenden Place Apartments:

The Ready to Rent series combines tenant education with consumer training. Participants that complete the workshop series are better prepared to make good financial decisions, understand their credit reports and make progress toward improving their credit.

Tenant education focuses on the rights and responsibilities of tenants and their landlords. Participants find out what to do to resolve conflicts over perceived breaches in their rental contracts.

Segments on budgeting and saving helps tenants prepare for unexpected expenses and recurring costs so that they can make sure their rent is paid on time each month. An emergency fund can be established with just a few dollars a week, which can quickly reach over $100 that can be used for emergency expenses.

Anyone with damaged credit or a history of evictions can benefit from this class because of the focus on credit repair. We teach how you can repair your own credit rather than use expensive credit repair companies. An improved credit score can improve your approval chances when submitting a rental application.

Time

Wednesday, June 10 from 1:00 p.m. to 4:00 p.m.

Location

To register for the event, please contact Terrie Deal with the Wake County Supportive Housing Program at 919-231-5954 or 919-856-5270.

These are not all necessarily for everyone. In fact, you will probably only find that one or two of these methods will apply to your situation the best.

1. Sell an Asset

This may sound like a non-option, but selling an unneeded asset can do wonders to your finances. Consider that extra vehicle that you keep around. Sure it is convenient to have a truck for those 2 times a year you need to haul something. Once you factor in the license fees and insurance costs, you still might be talking about a few hundred dollars a year just to keep it on the road. It might be much cheaper to rent or borrow a truck when you need it.

A boat also a common off-limits asset. I see people frequently that refuse to give up their boat even though they can barely afford to put gas in it. Remember that boats are notoriously expensive to maintain. Also, keep in mind that the 2 best days in a boat owner”s life are the day you bought it and the day you sold it! Extra cash can be used to pay off your higher interest debt in a lump sum payment.

2. Increase your Payments

If your credit card minimum payment is $30, chances are $25 of it is interest. You don’t have to be a rocket scientist to know that it takes a long time to pay down a $1,000 balance at $5 a month!

Just an extra $5 a month can allow you to repay the debt in half the time. Keep in mind we are still talking in terms of years to repay it at this rate. Sending an extra $30 can allow you to repay the debt in a little over 2 years. This option assumes that you have extra money each month, but may sometimes lack the discipline to send more than minimum payments.

3. Work More

A second job can burn you out. So can overtime. Temporarily increasing your income in order to find more money for repaying debt can give you additional resources for eliminating your debt quickly. The extra stress from working more may be offset by the sense of relief you get by paying off a debt.

The best additional work is one that provides you with reasonable pay and satisfies some of your social needs. Bartending and waiting tables are often overlooked, but they provide some of the higher earning part-time jobs available. Best of all, these pay the most during the hours when you are probably away from your regular job anyway. Thursday through Saturday nights tend to carry higher tips, so use your time wisely. In addition, you can have fun on the job if you find the right work environment. Carefully choosing a schedule can help you limit any impact on your current job and any family or friends.

4. Complete Credit Counseling

Credit counseling is more than just helping you budget and manage your money. The common stigma that people place on credit counseling is that it is just for people that cannot manage their money. The truth is that over half of credit counseling clients were able to manage their money, but they fell victim to life changing events that made debt payment difficult.

Credit counselors also have a pretty effective tool for eliminating debt. It is called a debt management plan and it utilizes a special program available through major credit card companies where you can get a break on interest, fees and payments.

Most people that enroll in a debt management plan are able to repay their debt by making lower payments than before. This may seem counterintuitive, since repaying debt faster typically means that you have to increase your payments. However, these programs are so effective because participating creditors lower your interest rates by so much that your finance charges are often less than half what they were before. Where before you saw $5 of your $30 minimum payment go toward principal, a debt management plan could allow for your finance charges to drop to only $10 a month. Even if they reduce your payment from $30 to $22 on the account, you have just increased your principal payment to $12 from $5. Under the program, your payment also stays the same, so that even though your balance is dropping you keep sending in the same amount. Every single month, your finance charges end up less than the previous month and your principal payments increase, much like they do on an installment loan. That way, you can normally eliminate your debt in 3 to 5 years while making lower credit card payments.

5. File for Bankruptcy

At some point, you might need to consider throwing in the towel. Bankruptcy is an ugly option and it has all sorts of public humiliation often associated with it. It even has rather high costs, since most attorneys charge at least $2,000 to help you file for bankruptcy.

Still, bankruptcy may need to be one of your options. The biggest sign that you might need protection from your creditors is if you have several creditors in which you owe very large balances that are threatening legal action. Since it is illegal to threaten legal action without a reasonable expectation to follow through with it, you should consider such threats to be credible.

Bankruptcy can give you bad credit for up to 10 years. However, you might need to consider it as an alternative to judgments and garnishments that may be possible depending on your state of residency.

Non-Options for Eliminating Debt

Debt settlement is almost always a non-option. Companies that offer debt settlement services do nothing to shield you from legal action. They also pay themselves several thousands of dollars before they ever begin working on your behalf. If you were looking for help eliminating debt, then you just created another creditor for yourself by hiring a debt settlement company. Furthermore, every time you do settle on a debt, understand that the so called savings is considered a gift and is generally taxable as income. If your income is $40,000 a year and you save $5,000 by settling a debt, you will generally be taxed as if you earned an additional $5,000. Depending on your state and federal tax rates, this could result in up to $2,000 in additional taxes!

Credit repair is also a non-option for eliminating debt. Such companies promise to make these things just go away, but the only thing they do is file frivolous disputes to the 3 main credit bureaus every single month. These frivolous disputes are discounted as such by the credit bureaus, and they are ignored. Meanwhile, you keep paying them for something you could easily dispute on your own. If you through this money toward your debts rather than throwing it away, you could make your debts disappear and improve your credit.

The biggest mistake people make is to borrow money to eliminate debt. That’s like asking for a torch to put out a bonfire. You cannot eliminate debt by taking on more debt. This is why approximately 70% of homeowners that used home equity loans or a cash out refinance loan to repay credit card debt ended up in worse shape in as little as 2 years.

To eliminate debt, consider taking on one or two of the top 5 methods revealed above. The sooner you take action, the sooner you see results!

Residents as well as men who utilize services at the South Wilmington Street Center are welcome to register for the workshop series, which is conducted several times each year. This particular series is held in the evening to accommodate those who are working during traditional business hours.

In addition to segments on tenant rights and responsibilities, participants will find out how to order their credit reports and understand what steps they may take to improve their credit. Even bad credit can be improved by taking a few steps. Budgeting and saving are also included in the series.

Many previous participants were amazed at how much information showed up on their credit reports. They were relieved to discover that some of their negative records could be improved by paying them off or having incorrect information expunged.

Time

Monday, May 18 from 5:00 p.m. to 8:00 p.m.

Location

Jimmie Watson of Wake County Human Services is accepting registrations for the Ready to Rent Workshops at the South Wilmington Street Center. To register, contact Jimmie at 919-856-5710.

If you have experienced financial difficulties, there is a good chance that your credit has suffered. If you have neglected your credit, you could be missing out on a lot of opportunities. Do any of these scenarios sound familiar?

• Denied a loan
• Paying 25% on a car loan
• Passed over for a job opportunity
• Unable to pass a landlord credit check

Even if you rely mostly on paying cash, damaged credit could affect you in many ways you never thought of such as higher insurance rates. In fact, you could even be denied a life insurance policy simply because you have poor credit.

I will be providing a breakdown of how your credit scores are calculated so that you can identify which records in your credit report are causing the most damage. I will also show you how you can dispute inaccurate items.

Time:

6:00 p.m. to 8:00 p.m. on April 23, 2009

Location:

To register, call Tarin Washington with The Women’s Center at 919-968-4610. Class participants are also eligible to sign up for a free 45-minute credit review session on Thursday, April 30.

The Ready to Rent workshop series is a collaboration between the Supportive Housing Program of Wake County Human Services and the various community groups that host these events. Each workshop series consists of four individual workshops of three hours each.

Participants will learn budgeting and savings tips. We will review the rights and responsibilities of both tenants and their landlords.

Vision Credit provides a three hour course that teaches the factors that make up credit scoring. Participants find out how their financial decisions impact their credit scores as well as methods for improving those scores.

The purpose of these workshops is to help families with credit challenges pass landlord credit checks as well as to maintain a positive rental history. Individuals and families with  prior evictions or other negative credit records that have experienced difficulty gaining rental approval are encouraged to join the Ready to Rent program.

Time:

6:30 p.m. to 9:30 p.m.

Location:

To register for this event, contact Sharon Gibson with the Supportive Housing Program at 919-231-5957.

In partnership with the Supportive Housing Program of Wake County Human Services, Vision Credit will be providing a 3-hour credit improvement workshop at the South Wilmington Street Center. This is one of four workshops that completes the Ready to Rent workshop series.

Participants wil learn about landlord and tenant rights and responsibilities. In addition, budgeting and savings will be discussed so that prospective tenants understand what rent payments they can afford given the approximate utilities payments and other expenses that they are responsible for.

We will delve into the complexities of credit scoring. Find out how some changes can have a positive impact on your credit scores, which could help you gain approval for an apartment rental.

Time:

3:00 p.m. to 6:00 p.m.

Location:

For more information and to register for the program, contact Jimmie Watson with the Incentive Housing Dormitory at 919-856-5710.

(Chapel Hill, NC) The Women’s Center of Chapel Hill is hosting a full slate of financial workshops in honor of Financial Literacy month throughout the month of April.  All workshops will be held at The Women’s Center and are open to both men and women.

Topics will include budgeting, repairing and improving your credit, your legal rights as a debtor, and more.  

Vision Credit will partner with the Women’s Center to  provide free credit reports and scores, as well as a 45 minute session to review and discuss your credit report.  Idividual credit reviews are limited and are by appointment only.  

To make an appointment for your free credit review, contact Tarin Washington with the Women’s Center at 919-968-4610.

Times:  April 14 – 1:00-6:00 pm and April 30 – 10:00 am – 2:00 pm

Location: