I am embarking on a personal challenge during the month of April that will hopefully create new habits to enhance my finances. My goal is to share with you my trials and tribulations on the areas of my life that I am looking to get a better handle on to improve my financial life.
To give you a little idea of who I am: I’m a working mom of two, married, and in my late 30’s. I am a homeowner (with a mortgage), college graduate, and have both an auto loan and credit card debt. I juggle car pools, extracurricular activities, meal time and more to make sure everything gets taken care of for my family. My time is precious, and so is my money.
Look for my daily posts on the Credit Union’s Facebook page. I encourage you to share your thoughts, stories and how you make it work in today’s busy world.
I was waiting for a meeting to start recently when I engaged in a “get to know you” conversation with two ladies. We exchanged the usual pleasantries of names, and then our occupations. Upon finding out that I worked for a financial institution, they started peppering me with questions. I was a bit surprised, but very thankful that they wanted to engage in a “money talk” for the few minutes we had before the meeting started.
Here’s what they asked me:
1. What is a good interest rate on a car loan?
2. How can I build my credit?
3. Is it good to take out student loans to further my education?
These were all great questions, and got us talking about personal finances. My first question back to them was: when was the last time you looked at your credit report? I got two “deer in the headlights” looks. I kind of figured! I shared with them that the first step in getting a hold of your finances, and building credit to get a great rate on something like an auto loan is to know what credit you have. By law, you are entitled to one free credit report each year and this will not effect your credit score. The best website to look up your report is www.annualcreditreport.com This website will not give you your credit score, but will show you all of your open lines of credit (loans) and most importantly, allow you to see if you have been the victim of fraud or identity theft.
A few years ago, I applied for a car loan and was asked by the loan officer if I knew about a $250 judgement on my credit report. What!?! Prior to applying for this auto loan, it had been a few years since I checked my credit report. To my astonishment, this judgement (from a past job in insurance sales, where the policy was cancelled and the commission was “charged-off” to me) had made its way onto my credit report and negatively effected my score. I was glad to have this knowledge, and immediately contacted the insurance company, paid the judgement and requested it to be removed my report. If I hadn’t taken the time to look at my credit report, that $250 judgement would have stuck with me for years, and pulled my score down enough to not qualify for the best rates I was seeking.
The power of personal finances is in your hands. There are a multitude of resources available to help you, including your local Credit Union. Do your homework before obtaining a new checking account, credit card or other loan. That fine print can mislead you into a rate you are not comfortable with, and terms that you didn’t think you were getting at first. Arm yourself with knowledge, and don’t be afraid to speak up, as these two ladies did.