3 Reasons Why Most People Don’t Take Control of Their Finances and Credit

By Conquest Credit

Is your state of mind preventing you from taking control of your finances and rebuilding your credit?  Are you fearful, ashamed or feeling hopeless about your situation?  If yes, then you are not alone.  Finances and Credit can be a touchy subject, especially when there are thoughts and emotions attached to them.  These thoughts and emotions can paralyze you, and keep you from making the changes that are needed to improve your financial situation. 

Many of us at some point in our lives have made mistakes with managing our money and keeping good credit.  Our educational system has failed us, and It’s unfortunate that so many of us were not taught how to manage money, create a zero-based budget, save or about how credit works.  The educational system in our country does not place a high emphasis on teaching our youth the importance of managing money, budgeting, saving or how credit really works.  This lack of education in finances has caused many problems, and the consequences are hurting our county and our people in so many ways.  For example, many marriages have ended in divorce due to financial problems, and the cause of many suicides has been contributed to feelings of hopelessness or feeling there is no way out of their financial situation.

Every day we are bombarded with advertisements and commercials that use psychological messages aimed at convincing us to buy things we don’t necessarily need.  Our society runs and survives on consumption/consumerism, and our children learn at a very young age to spend, spend, and spend.  All this spending and a lack of education in money management and credit can leave many people feeling discouraged, hopeless, fearful, ashamed, and depressed.

At Conquest Credit and Debt Consulting, we have found a few reasons why some people don’t take control of their finances and credit.  We are sharing this information with you to let you know that we understand what you may be going through, and we are here to help you.  Please read below to find out some of the reasons why−

 1)    FEAR− is a powerful emotion that comes from thoughts or stories we create in our minds.  When we allow thoughts relating to failure, the unknown, exposure, judgment, loneliness and unhappiness to consume us, it can lead us to believe that the stories we create in our minds are real and factual.  Eventually this will create a lot of fear; it will paralyze you; and it will prevent you from taking the steps you need to improve your financial situation. 

For example, someone living off credit cards for years and living beyond their means can find it very scary to change their habits and lifestyle.  They have come to believe they will not be able to survive without their credit cards.  By letting go of the fear and seeking out help, this person can take control of their finances, and change how they view credit.  The only way to overcome your fear is to face it, change your negative thoughts to positive thoughts, take positive action or seek out help or information on how to take the necessary steps.

2)      SHAME− is another powerful emotion that comes from fear of being teased, mocked, scorned, rebuked, ridiculed, humiliated and rejected.  We all want to feel accepted, whether it’s by our family, friends, peers, colleagues or coworkers, and, for some of us that can mean “keeping up with the joneses”.  Getting that car, house, iPad or iPod, Android or video game can add up, leaving you with a huge amount of debt.  The debt can pile up and become a dark cloud hanging over you everywhere you go.  It may seem easier to ignore it or figure out ways to avoid defaulting, but in the end, if your habits and actions don’t change, your situation will get worse and worse.  Find someone you can trust that will not judge you for your past mistakes.  At Conquest Credit and Debt Consulting we can provide you with the financial knowledge and tools to help you start moving towards a brighter financial future, we are not here to judge or condemn, but to help you.     

3)      HOPELESSNESS− unmet dreams, expectations, and desires can leave us feeling hopeless, sad and alone.  It can also lead to feeling trapped, with no solution or way out, or like you have hit a brick wall.  At this point you have abandoned or given up on your dreams and aspirations and the future appears bleak and purposeless.  

In the past five years many of us have lost our job, home, or damaged our credit during the financial mortgage crisis.   Losing something of value that you have worked so hard for can be very devastating and upsetting.  Thoughts of failure and disappointment can overtake our mind and lead to feelings of depression, despair, and hopelessness.  If you allow these thoughts and feelings to control your actions, you will never take the steps you need to rebuild and start dreaming again.  Anything is possible if you set your mind to it!  Many families have had to start from scratch and rebuild their credit so they could have the home of their dreams again.  It may take time, but nothing is impossible and you are definitely not alone.  There are so many resources and support available to help you get back on track, start dreaming again, and taking the necessary steps to rebuild and reach your dreams and goals again. 

 To read more blogs like this or if you would like any advise or help in any of these areas feel free to visit our website and sign up for our for our Newsletter. Like us onFacebook page and we will send you a free ebook on "Understanding Your Fico Score"

 No matter where you're at in the US we can help. 

To Read more blogs like this, Like us on Facebook or sign up for our Newsletter 

Conquest Credit & Debt Consulting: Black Friday Beware of Department Credit Store Off...

Conquest Credit & Debt Consulting: Black Friday Beware of Department Credit Store Off...: Avoid Making This Mistake on Black Friday! Every year after Thanksgiving it can be so easy to get caught up in the Black Friday shopping ...

Black Friday Beware of Department Credit Store Offers!

Avoid Making This Mistake on Black Friday!

Every year after Thanksgiving it can be so easy to get caught up in the Black Friday shopping frenzy.  There are so many great deals and special offers available and companies are quick to let us know all about them.  We all want a great deal and it feels good to know you saved some money. Unfortunately, we can unknowingly make a huge mistake that can end up hurting our credit score and our bank account....

Signing up for retail store credit cards-
Eager to get that one-time discount that is sometimes offered with a brand new retail store credit card can be very tempting. Our advice? Don't ever agree to a retail store credit card. You won't save money in the long run, and you might hurt your credit score.

Let me explain...  

Imagine that you are doing some Christmas shopping, and you approach the cashier with a few nice tops for your sisters, toys for your kids, and a wallet for your husband. The total is about $163. The cashier immediately makes you an offer:

"Do you want to apply for a retail store credit card? You'll save 15 percent on today's purchases."

No matter how tempting it is to save that $25, don't say yes.

Think about it: The banks and the retail stores that promote these store-specific credit cards offer these promotional savings because they know they are going to recoup the discount... and then some.

Consider all the ways the banks and the retail stores can make money off you:

1) First, you will pay interest on whatever you buy on the day you open the card. Most retail store credit cards have a high interest rate-usually in the range of 20 to 30 percent. So unless you pay your balance in full right away, you are going to pay more than you saved.

2) Have you ever bought something just to take advantage of a coupon? A lot of people have. By signing up for that retail store credit card, you will be put on the store's mailing list, and you will receive coupons that are just for cardholders. They are intended to entice you to the store.

3) In the future, you will be more likely to engage in a little "retail therapy" if you have store-specific credit cards in your wallet. Using credit cards is always easier than using cash; it's also an easy way to get into debt.

4) If you are given a one-time offer to save on today's purchase, you just might pile a few more items into your shopping cart.

Suddenly, that $25 savings doesn't seem worth it, does it?

Keep in mind, your credit score could also suffer if you use retail store credit cards. Here are three reasons...

1) Keeping these cards active can be tough. Credit-scoring bureaus want to know that you can responsibly manage your credit cards. If you let your credit cards go inactive, the bureaus have no idea whether you are able to manage balances and debt. In other words, inactive credit cards do nothing for your credit score.

But keeping a retail store credit card active can be tough. Are you going to buy a dishwasher from Sears each and every month just to keep your Sears card active? Are you sure you need a new pair of jeans from the Gap twelve times a year?

Most likely, you will either keep the card active by making unnecessary purchases (which costs you money), or the card will go inactive. Either way, it's bad news.

2) Let's talk about the second reason I'm opposed to retail store credit cards: You might end up with too many credit cards. The credit-scoring bureaus are the happiest if you have the right number of credit cards (between three and five). If you do not have at least three credit cards, they don't have the information they need to make a judgment about whether you are responsible. If you have more than five credit cards, they know that you are in danger of getting in over your head.

Three to five is the sweet spot. So if you are limited to just three to five credit cards, why waste one on a card that will only be accepted by one merchant? You cannot reserve a car using your Macy's card, but you can purchase a suit from Macy's using a Visa.

Too often, people apply for retail cards each time they are offered a discount. These people must also carry American Express, MasterCard, and Visas for everyday expenses, traveling, and business needs. And they quickly find themselves carrying a lot more than five cards.

3) Finally, let's talk about the third reason a retail card could hurt your credit score: You will definitely add a credit inquiry to your score. Ten percent of your credit score is based on the number of credit inquiries you have on your credit report in the past year. If you apply for a retail store credit card, your score could drop a few points, and this could cost you a lot of money in interest on future loans and credit cards.

So come Black Friday when the holiday-shopping-season officially starts, be a smart shopper and SAY NO to retail store credit cards. 

To learn more about your Credit or how to create and maintain a solid budget, feel free to email or call us anytime.

To Read more blogs like this, Like us on Facebook or sign up for our Newsletter 

Staggering Statistics Reveal a Huge Lack of Financial Literacy and Consumer Credit Education in the United States.

Staggering Statistics Reveal a Huge Lack of Financial Literacy and Consumer Credit Education in the United States.

Financial Literacy and Education:

        93 percent want Financial Literacy taught in high school, but currently only FOUR states require high school students to take a semester-long course in personal finance.

(Visa, Back to School Survey Shows Americans Want Personal Finance Taught in the Classroom, July 20, 2010,http://www.practicalmoneyskills.com/about/press/releases_2010/0720.php)

         41 percent of U.S. adults, or more than 92 million people living in America, gave themselves a grade of C, D, or F on their knowledge of personal finance, suggesting there is considerable room for improvement. This number is highest among Gen Y adults at 47 percent. 80 percent of adults agree that they would benefit from advice and answers to everyday financial questions from a professional, and more than one-third (35 percent) strongly agree.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling, http://www.nfcc.org/NewsRoom/FinancialLiteracy/files/2009FinancialLiteracySurvey.pdf)

·         Almost one-third of college students, when reflecting back on their freshman year, admit that they were not very well prepared for personal money management on campus.

(KeyBank and conducted by Harris Interactive)

·         41 percent of the young adults in Generation Y (ages eighteen to twenty-none) do not pay their bills on time every month.

 (2008 Financial Literacy Survey National Foundation for Credit Counseling, Inc. and MSN Money)

·         A poll from Gallup shows that 32 percent of Americans put together a budget each month to track income and expenditures, and just 30 percent have a long-term financial plan laying out savings and investment goals.

http://www.gallup.com/poll/162872/one-three-americans-prepare-detailed-household-budget.aspx

Credit Score:

·         In spite of it being free, nearly two-thirds (64 percent), or 144 million people have not ordered a copy of their credit report in the past year, this number grows to three quarters (72 percent) among Hispanic Americans. Additionally, more than one-third (37 percent) admit that they do not know their Credit Score.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling)

Housing:

·         42 percent of adults, or more than 94 million people, currently have a home mortgage and, of those, 28 percent say that the terms of their mortgage somehow turned out to be different than they expected, including: either payment or terms of loan were different than expected, the interest rate or its duration were different, or they had no knowledge of PMI.

·

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling)

Debt and Credit Cards:

·         26 percent, or more than 58 million adults, admit to not paying all of their bills on time. Among African-Americans, this number is at 51 percent. In the last 12 months, 15 percent of adults, or nearly 34 million people, have been late making a credit card payment and 8 percent (18 million people) have missed a payment entirely. More than 13 million adults (6 percent) report that their household carries credit card debt of $10,000 or more from month to month, and the same number have debts in collection, are seriously considering filing for bankruptcy, or have already done so within the past three years.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling, http://www.nfcc.org/NewsRoom/FinancialLiteracy/files/2009FinancialLiteracySurvey.pdf)

Budgeting:

·         Only 42 percent of adults keep close track of their spending. Nearly 16 million adults (7 percent) don’t know how much they spend on food, housing, and entertainment, do not monitor their spending.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling)

Savings:

·         One-third of adults (32 percent), or 72 million people, report that they have no savings. Nearly half (48 percent) of Gen Y adults- more than any other age group- report having no savings. Of those with no savings, more than one in four report that, if faced with an emergency, they would charge that expense to a credit card (29 percent) or take out a loan (26 percent), thus adding to their debt load.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling)

Retirement:

·         One-third of adults (33 percent), or more than 74 million people, do not put any part of their annual household income toward retirement.

(The 2009 Consumer Financial Literacy Survey Topline Report and Data Sheet, The National Foundation For Credit Counseling)

AVOID HURTING YOUR CREDIT SCORE THIS HOLIDAY SEASON

3 Strategies To Control Emotional Spending 

Holidays come and go, but the damage done to your credit can last long after the season is over. Are you still trying to pay down high balances on your credit cards? Are you willing to break the cycle this year?  

Right now is the right time to prevent further damage to your credit and finances! 

The holidays are right around the corner, which means- preparing for delicious dinners, buying and giving gifts, holiday parties, and family gatherings- BUT it can also be that time of year when we are most vulnerable to our emotions, allowing them to take over and control our spending.  The damage done when we give into our emotions leaves us feeling sad, frustrated, lonely, embarrassed, anxious, disappointed and hopeless.

We are all victims of emotional spending at some point in our lives.  Yes, you know you don’t need it, but you can’t stop yourself from buying it.  Emotions can have a strong effect on our logic and reasoning, leading us to do things or buy things we later regret.  During the holidays it can be even harder to be strong and not let sentimentality get the best of us.

Here are 3 strageties that can help you control Emotional Spending.

  Strategy #1  Be Aware of Your Emotions- It’s important to be connected and aware of how you are feeling before you decide you need to go out and buy something.  Sometimes our emotions can lead us to think we need something of material value to feel complete, but that need isn’t really a material need, but a lack or void of something missing in our lives. During the holiday season, it can be even harder to control emotional spending because we want to buy presents for our loved ones.  This year try to spend %50 less than you did last year, try to think of creative ideas to show you care.  For example, a picture frame with a memorable picture and a $25 gift card can be creative, thoughtful and within a reasonable budget.

 Strategy #2  Be Aware of Your Weaknesses-Entering a department or electronic store can be like walking into a battlefield of emotions.  Our eyes visualize how that outfit would make us look, or our ears imagine how that surround sound system would sound in our living room.  Our senses can trigger all kinds of thoughts and emotions.  When we are aware of our weaknesses, it gives us a head start because we are able to prepare and develop a strategy to help us avoid emotional spending.  For example, if you need to purchase an item from the store, and you know you might be tempted to buy things you don’t need, then your first strategy should be to not use a shopping cart.  Often times, we can end up filling up the cart with things we think we need.  If your original plan was to shop for a few things, then take a shopping basket, that way you can avoid excessive shopping.

 Strategy #3  Shop Around, Invest Time and Be Patient- You work hard for your money, so why not work hard to save it!  Many times we immediately go to the first store we think of to get something we need, only to later find it for less or on sale at another store.  You can end up paying full price or more because it’s convenient and quick.  If you need something, instead of going straight to the mall and overpaying, shop around and compare prices and brands.   For example, we found a laptop at Best Buy for $1,299, plus $350 if you get the warranty.  After some research, we found the same laptop at Costco for $999, plus $99 for the warranty, that’s more than a $500 difference.  It takes time to earn a paycheck, so why not take the time to shop around and do some research before spending it.  It will take some time, self-control and self-discipline, but if you are patient and shop around, you will find something worth your time and money.  Remember, impulse shopping gets you what you need right away, but at a price.  Give value to your hard earned money and start implementing strategies that can help  you save hundreds, if not thousands over a lifetime.

To Read more blogs like this, Like us on Facebook or sign up for our Newsletter 

5 WAYS YOUR MONEY COULD BE GOING DOWN THE DRAIN!

Could Poor Credit and Poor Money Management be to Blame?

By Conquest Credit

1.Paying High Interest Fees on Credit Cards- Poor Credit, a low FICO Score and poor money management usually equals higher interest rates and higher balances on credit cards, which can quickly suck your money down the drain.   For example, if you carry a balance of $1000 throughout the year on a credit card that charges an 18% interest rate, you could be spending up to $180 a year on interest rate fees alone. If you have more than one credit card or several credit cards that carry high balances, and high interest rates, not only will your credit score go down resulting in poor credit, but you could also be wasting up to $1000 a year on interest rate fees, compared to someone with Excellent or Good Credit.  

2.Paying High Interest Fees on a Car Loan- Depending on your Credit and FICO Score, the interest rate on a Car Loan can vary between 0% and 22%.  For example, a car loan for $25,000, 0 money down, with an 11% interest rate, and a 60 month payment or 5 year contract, will end up costing you an average of $1,522.72 a year in interest fees. That’s a grand total of $32,613.60. Now compare this to someone with good credit and a high FICO score. A car loan for $25,000, 0 money down, with a 1.99% interest rate, and a 60 month payment or 5 year contract, will end up spending an average of $256.96 a year in interest fees. A grand total of $26,284.80. This person saved $6,328.80.      

3.Paying Late Fees on Bills- Making several late payments on more than one account can quickly add up to hundreds of dollars a year in late fees. Credit Cards, Mortgage loans, Rent, Student Loans, Insurance bills, Utility and Phone bills.  Lenders, creditors and companies are quick to charge you a LATE FEE for missed payments. For example, if you miss your credit card payment by even one day, you will have to pay a $25 late fee ($35 if it’s the second time within six months).  If you miss your Mortgage or Rent, they will usually charge a 5% fee of the monthly amount. For example, if your mortgage payment or rent is $1,200 a month, a 5% late fee would cost you $60. If you are late more than once on several bills throughout the year, you could be spending up to $500 a year on late fees. To avoid these late fee, we recommend you use automatic bill pay

4.Payday Loan Fees- An emergency came up and you had to borrow quick cash from a Payday Loan Center. If you borrowed $300, you most likely paid a $35 fee. The next month comes around and you keep renewing the loan and borrowing the money because you can’t afford to pay it off.  You could be wasting up to $420 a year in fees, and if you have more than one payday loan, you could be spending over $1000 a year in payday loan fees.

5.Paying High Interest Fees on a Mortgage Loan- Depending on your Credit and FICO Score, the interest rate on your Mortgage Loan can vary between 4% and 9%.  On average, a FICO score of 720 will earn you a 4.1% APR on a 30 year fixed loan.  Compare this to a FICO score below 720, on average this score will earn you a 5.4% APR on a 30 year fixed loan.  The difference between both amounts is $242.11 a month.  On average, a better credit score will save you $242.11 a month, which comes out to $2,913.24 a year, and over the life of the loan, a grand total savings of $87,397.20. 

Depending on your financial situation, credit score and money management skills, you could be wasting between $300 and $800 a month on interest rate fees, late fees, and payday loan fees. Your money is literally going down the drain and landing into other people's pockets.

To read more blogs like this or if you would like any advise or help in any of these areas feel free to visit our website and sign up, you can also sign up for our for our Newsletter. Like us on Facebook page and we will send you a free ebook on "Understanding Your Fico Score" No matter where you're at in the US we can help. 

Best Time Of The Year To Repair Your Credit?

Are you aware that the best time of the year to repair your credit is during the holiday season?

Due to the fact that 80% of credit bureau employees, collection company employees and creditors take vacation from November to January, you have a huge advantage when you take action to restore your credit during this time of year.

Under the federal Fair Credit Reporting Act, credit reporting agencies must reply within 30-45 days from the time we submit your investigation. Because there is a time frame that legally must be adhered to for both the credit bureaus and the lenders/creditors, who must verify any items you are disputing, November and December are the optimal times to work on repairing your credit and getting negative items removed.
At CONQUEST CREDIT, our goal is the same as yours: to restore your credit profile in the fastest time frame possible. The best gift you could give yourself is excellent credit, so call us today to get started.

If you take advantage of Credit Repair in the month of November we will take off $100. It will only cost you $99 for a set up/Credit Analysis to start. On top of that you will not have to pay for Credit Repair until the month of February. We understand that the holidays are approaching fast and if your like us we want to save our money for our loved ones, However if you act now, not only will you have a few months to pay the remaining balance but you will have better credit by February,.You can start the new year with a bang! Then you can refinance any loans you have and start saving money in the year 2014!

 To read more blogs like this or if you would like any advise or help in any of these areas feel free to visit our website and sign up, you can also sign up for our for our Newsletter. Like us on Facebook page and we will send you a free ebook on "Understanding Your Fico Score" No matter where you're at in the US we can help. 

4 Ways To Improve Your Credit Score Before Christmas.

Thanksgiving and Christmas is coming up fast and this is a time when many people are celebrating.

However, if you have a bad credit score, it is easy to feel like you do not have much to be thankful for.

Wouldn't it be great to know you can have your credit back on track in time for the holidays? It is definitely possible to improve it by then.

There are ways to noticeably improve bad credit in very little time. Follow these steps and you will have a great shot of having better credit by Christmas.

1. Order your credit report and review for mistakes.

The first step toward fixing a bad credit score is to identify the problem. Order a copy of your credit report from the rating agencies.

This document will list all your outstanding debts, your credit score and the reasons why your credit score has problems. For example, it could show you have missed payments on a car loan or have maxed out a credit card.

Closely review all these negative points. Is there anything you do not recognize?

Credit agencies sometimes make mistakes and it is possible there is incorrect information dragging down your credit score. If so, call up the agencies and ask for this problem to be fixed. They should be able to fix your score just in time for Christmas.

2. Make all your upcoming payments on  time

On-time minimum credit payments are the key to a good credit score. If you make all your payments on time your score goes up, but if you miss even one payment, your score tumbles down.

Have you struggled with missed payments in the past? Make it a goal to hit every single payment on time by Christmas.

Every month you follow this habit, your score will improve. A goal like making every single payment on time for a year might seem impossible, but can you make it just to Christmas?

“This could be your start to

a lifetime of better credit.”

3. Pay down what you can.

Another way to repair your credit score quickly is to pay down your credit card balances.

A big part of your credit score depends on how close you are to maxing out your accounts. If your balances are too high, it negatively impacts your score.

Take whatever extra money you have on hand and pay down as much of your debt as you can. Focus on cards that are closest to their limit.

The rating agencies will see you have less outstanding debt and this will help raise your score by Christmas.

4. Avoid excess holiday spending.

When the holidays come around, it is easy to get carried away with spending. Between preparing family dinners, traveling around the country and buying presents, you can quickly spend a fortune.

All of this spending equals to more money that could have paid down your accounts as well as more debt on your credit card. This is not the way to fix things.

Instead, plan to spend less this year so you can focus on your credit problems. Once things are under control, you can then spend more on future holidays.

If you are serious about fixing your credit, you can take big steps forward by Christmas. Follow the advice in this guide and you will be on track to finish the year with a much better credit score. You can call us anytime for advice at 800 288 4833 or email us at customercare@conquestcredit.org. Like our Facebook page and receive a free ebook on "understanding your fico score" No matter where you're at in the US we can help.

Tips to save you $50k on your next home loan

Ready to apply for a home loan? Here's the one piece of advice that can save you tens of thousands of dollars on your mortgage, plus six more tips to help you get the best mortgage deal you possibly can.
Read more at 

The best advice: Pull your credit history

Before you apply for a mortgage, pull your credit history and get your credit score. Why? Cleaning up your credit history and raising your score can make you eligible for the best interest rates on a mortgage. You'll want to do this as soon as possible - giving yourself a year to improve your credit.

Borrowers with scores above 720 get the best mortgage rates. They are welcomed with open arms by lenders. If your score is below 720 you can still get a mortgage. But it's more difficult. And it'll cost you more. 

*Source: MyFICO; **Annual percentage rate

In this chart, you'd pay $195 a month less with a 760 credit score than with a 639 credit score. That's a difference of nearly $70,000 over the total life of your mortgage.

Don't worry that checking your credit report might bring down your credit score. Personal inquiries won't do that.

Some credit report services charge a fee for a copy of your credit history. But why would you want to pay for it? You can get a free report from each of the three major credit bureaus - Experian, TransUnion and Equifax - at AnnualCreditReport.com, a federally mandated site.

This step-by-step guide tells what to expect when you apply.

What's next? Here are six tips to ensure you'll get a better rate on your mortgage:

1. Fix any errors on your credit report

Comb each credit report for errors and negative items. Don't be surprised if each report shows different items and has unique errors.

Is checking worth it? Decide for yourself. A study released this year by the Federal Trade Commission found that 26 percent of 1,001 randomly selected consumers who reviewed their credit reports reported a "material error" - something that affected their credit scores. For 5 percent of participants, the mistake put them in a greater credit risk tier, which could result in higher interest and insurance rates.

Fix any errors you find. You can complain at the credit bureau's website or send a letter. There's detailed information on the dispute process at this page of the FTC website. (See: "Ask Stacy: Can I Repair My Own Credit?")

If your issue with your credit report is not resolved to your satisfaction, you can file a complaint with the Consumer Financial Protection Bureau.

2. Pull your credit score, too

Don't stop there. Get your credit score, too.

A one-time look at your credit score costs $19.95 at MyFICO.com. The cost isn't the only problem. There's no guarantee the score you're being sold  is calculated the same way as the score that will be sold to your lender, when you eventually apply for a loan. A Consumer Financial Protection Bureau study found that in 19 percent to 24 percent of cases, consumer scores differed from lender scores sufficiently to land the consumer in an entirely different credit category.

An alternative is to use one of the sources of free credit scores like Credit Karma and Credit.com . Your purpose is to get an idea of what your score is and what you need to do to improve it.

3. Pay down debt

One of the factors in your credit score is your "utilization ratio." That's the amount you owe on credit cards vs. your available credit. For example, if the credit limit on your Visa is $1,500 and your card balance is $900, you're using 60 percent of your credit limit.

At any time, it's wise to use less than 30 percent of your available credit. That means, if your limit is $1,500, keep your balance below $450. Note: We're not suggesting you carry a balance from month to month. That would require you to pay interest. Rather, charge no more than $450 before you pay it off. (See: "3 Tips to Raise Your Credit Score - Fast.")

Now, if you're going to buy a house, improve your score even more by paying off that credit card debt. MyFICO recommends:

Reduce the amount of debt you owe. This is easier said than done, but reducing the amount that you owe is going to be a far more satisfying achievement than improving your credit score. The first thing you need to do is stop using your credit cards.

Then come up with a plan to retire that debt.

There's another reason to reduce what you owe. Your mortgage lender will also be looking at your debt-to-income ratio - how much debt you are carrying compared with your monthly income. This number will affect whether you qualify for a loan and what your interest rate will be.

Ads by Google

3 Credit Scores (Free)
View your latest Credit Scores from All 3 bureaus in 60 seconds for $0!
FreeScore360.com

4.  Keep old accounts open

You'll be tempted, as you clean up your credit, to close old accounts you no longer use. Don't do it. At least not before applying for a mortgage.

The reason: Part of your credit score is based on the length of your credit history. Even if you have to pay an annual fee to keep your oldest account open, do it until that mortgage is securely in hand.

5. Pay your bills on time

This is a hard one for many people. It can seem crazy, to be sure. You may think, "I was late on one or two payments but what does it really hurt since I paid the late charge and got back on track?" But it does hurt you. Just one late payment can bring down your credit score.

Play by the rules when it comes to paying credit cards and other bills, even if the rules seem silly to you.

6. Avoid new credit

Don't apply for any new credit - even a simple store credit card - before you apply for a mortgage. The reason: Opening a new account or even giving a company permission to look at your credit history might lower your credit score. MyFICO says:

In general, credit inquiries have a small impact on one's FICO score. For most people, one additional credit inquiry will take less than five points off their FICO score. ... Inquiries can have a greater impact if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk.

Of course you'll need to apply for credit when you shop for a mortgage, but FICO treats those inquiries about your credit history differently. They will have no or very limited impact on your credit score, as myFICO explains here.

Have you applied for a home loan or refinance recently? What was your experience like? Tell us by posting a comment below or on our Facebook page.

5 Ways your Bank might be ripping you off!

You trust them with your money, but they may be putting the proverbial knife in your back.

While some banks go to great lengths to set up friendly neighborhood branches - complete with smiling tellers who know you by name - the fact remains that big banks are big business. And in case there was any doubt, big businesses are all about making big profits.

Banks can be so into making money they sometimes walk the line of what is legal or ethical. Here are five ways your bank may be ripping you off in their pursuit of profits.

1. Misleading you about bank fees

Bank fees, glorious bank fees! If you have ever wondered how banks make money off of checking accounts, this is it. A report from the federal Consumer Financial Protection Bureau found that 61 percent of a bank's checking account revenue comes from overdraft and NSF fees.

Now, the government tried to protect you from yourself back in 2010 by requiring banks and credit unions to have consumers opt in to so-called overdraft protection programs. Previously, many accounts were automatically enrolled, enabling banks to let your overdrafts go through and charge you a large fee for each one.

However, many institutions were apparently not clear about what overdraft protection entails. A 2012 report from the Pew Charitable Trust found that more than half of those who had incurred an overdraft fee in the past year did not realize they had opted in to the program.

2. Jacking up your costs

Speaking of checking accounts, even if you have a so-called free account, you may be paying significantly more than you were even a few years ago.

Bankrate.com surveys bank fees annually and has found the costs associated with checking accounts haven't gone up a little; they have gone up a lot.

Check out how much the following fees went up from 2007 to 2012:

• Average overdraft charge - up 11 percent.
• Average ATM surcharge - up 40 percent.
• Average monthly service fee - up 142 percent.

Plus, the minimum balance needed to avoid a monthly fee jumped 365 percent in a five-year period to an average of $723 in 2012. So much for free checkin

3. Looking the other way when fraudulent charges appear

If it weren't bad enough that banks are increasing their fees and other costs, even worse is the fact that some banks apparently don't care if their customers are fraudulently charged.

The New York Times came to that conclusion after it analyzed hundreds of court documents this past summer.

According to the report, some banks regularly allow suspicious transactions to withdraw money from customer accounts. Banks that allow such transactions stand to make a lot of money from processing and overdraft fees.

While the report focused on two banks in particular, federal officials told the Times the problem is widespread.

Ads by Google

10 Best Credit Cards
Compare Credit Cards with 0% APR. Lock-in 0% APR for 18 Months Today!
www.comparecards.com

4. Facilitating consumer-gouging payday loans

You may think you are smart enough not to use a payday lender, but don't be so sure. Some banks offer cash advance products that are essentially the same.

The Center for Responsible Lending says some institutions  extend money to customers who then pay it back along with a fee that is the equivalent of up to 365 percent interest. These aren't small, backwoods banks either. They are big names that include Wells Fargo, Fifth Third and Regions Bank.

Meanwhile, other banks appear to be helping out-of-state payday lenders circumvent state laws by allowing them access to customer accounts via automated clearing house transactions.

For example, payday lending is illegal in New York, but residents may be getting around the law by using online cash advance services. In response, the state this summer asked banks not to allow transactions from known payday lenders.

According to Bloomberg, residents of Maryland and Pennsylvania are taking a different tack by suing banks they say are allowing payday lending transactions.

5. Continuing to mishandle mortgage paperwork

Finally, you'd think banks would have learned their lesson about mismanaging mortgage paperwork. Remember robo-signing and the $25 billion settlement?

But apparently old habits die hard. The Consumer Financial Protection Bureau found that many bank and non-bank mortgage servicers continue to have sloppy paperwork and are missing protocols to guide the handling of key documents.

Other problems uncovered by the bureau include the following:

• Delays in paying property tax.
• Delays in canceling private mortgage insurance.
• Long application review periods.
• Deceptive communications regarding the status of loan modifications.

How to avoid being ripped off

So now that you know banks don't necessarily have your best interests at heart - but you already knew that - what are you going to do?

Fortunately, not all banks are bad seeds and there are certainly plenty of affordable and ethical companies out there. To find them, you only need to take a little time to do your homework rather than signing up with the first bank that promises $100 for opening an account and setting up direct deposit.

Try these ideas on for size:

• Credit unions are member-owned and tend to have lower fees and more favorable policies. See if you are eligible to join one in your area.
• Consider using an online bank. Like credit unions, these banks tend to have lower costs, and some - such as Ally Bank - will even reimburse you for ATM fees.
• If you have opted in for overdraft protection, opt out. Do you really want to pay $35 to avoid the embarrassment of having your debit card declined? That is essentially what you are doing with overdraft protection.
• Avoid cash advance programs that act like payday loans. If you absolutely can't avoid spending money before your next payday, it may be better to swallow your pride and ask for help from a friend or relative. Doing so also gives you added accountability so you don't end up in an endless cycle of payday loans.
• Keep on top of bank and mortgage statements. It would be nice if you didn't have to think about it but don't count on the bank to catch potentially fraudulent charges or to pay your property taxes on time. When your statements arrive, open and review them. Every month.
• Stay on top of loan modification applications. Keep the lines of communication open and think twice before you simply stop paying your mortgage on the promise of a modification.

Not all banks are bad, but remember that all those conveniences they offer come with a price. They aren't giving you overdraft protection and other services to be nice; they are doing it to turn a profit. Keep that in mind, and you'll be one step ahead when it comes to beating them at their own game.