Debt and Marriage: What You Should Know Before the Wedding

debt and marriageDebt can ruin a marriage, so how can you beat debt before your wedding day? Although you many not be able to eliminate debt before tying the knot, there are steps to prepare for debt in married life.

Dating and Debt

When you get married, your two families become one and so do your personal finances – the good and the bad. It’s important to find out what your spouse-to-be’s likes and dislikes are, and it’s just as important to find out about their personal finances.

Uncover this information while you’re dating and hammer out your plans for the future during your engagement. Waiting until you’re married to discover bad financial habits and low credit scores can add financial stress to your relationship.

How to Talk About Debt

Money is one of leading causes of divorce so talking about your finances should rank as a high priority. You don’t want your marriage to end before it begins, so make time to talk about finances with your significant other.

Share the debts and expenses you have and ask what debts and expenses they have. People are often embarrased by the debt they’ve accumulated so if you explain your financial situation first then they’ll probably feel more comfortable sharing.

Financial Behaviors

You can also learn a lot by watching spending habits and observing certain behaviors. If they always pay with a credit card rather than cash or a debit card, this may be a red flag of credit card debt. Inquire if they pay off the balance each month.

Of course he might put your mind at ease when he says he uses his credit card to earn points, but he pays off the balance in full. Or a red flag may pop up if she says she only makes the minimum payment each month.

A soon-to-be spouse that never seems to have money is another sign of a problem. It may be a sign of living beyond their means – spending more than they’re making. The way to get to the root of the problem is to ask the questions that give you the answers you need. Before you marry someone, you need to know everything about them including income, expenses and credit history.

Credit History and Debts

When you’re married, your credit history, credit scores and debts affect your ability to make major purchases. If your partner has a bad credit score and you’re buying a house, lenders may require a higher down payment or charge you a higher interest rate. It can even cause you to get denied for the mortgage.

In the current economy, credit scores and credit history play an even bigger role than ever before. It’s important that you enter into marriage with full knowledge of the debts and credit history that comes along with your spouse. It affects your ability to reach milestones in your relationship, such as buying a home and your day-to-day finances.

Avoid Wedding Debt

Definitely avoid starting your marriage in debt because you threw a wedding you couldn’t afford. You can have a wonderful wedding and still be conscious of the amount you’re spending.

Throwing a smaller more intimate affair is back in style. This helps couples to save money on everything from the venue space and the number of invitations to the food and beverages served at the reception.

Shopping for gently used wedding dresses at high-end consignment shops or borrowing gowns from friends and family members help brides to save thousands of dollars on buying a new gown. Remember you only wear it once.

Marriage and Debt

Finances are a leading cause of divorce because money problems can cause fighting and stress that trickle into the other areas of your marriage. If you go into your marriage with your eyes wide open, you can alleviate this problem in your marriage. Talk about your finances with your soon-to-be spouse before you get married. Don’t dwell on the past and hold it over their head. Instead make a plan for how you’ll handle your finances going forward together!

This post on debt and interest rates is part of a series on credit and debt in marriage.  You can also read about credit scores and interest rates, improving your credit score, and free credit reports.

How are you going to handle debt in your marriage? Leave a comment!

This article was originally published May 12, 2009.

Should You Save for Retirement or Pay Off Debt?

pay off debtShould you save for retirement, or pay off debt? Tough question.

Living in the shadow of debt can be frustrating and difficult. As a result, many are anxious to get rid of debt as quickly as possible, choosing to tackle the debt before they start saving for retirement.

This might help you feel better, but does it always make sense?

High Interest Debt vs. Low Interest Debt

My mom once asked me why I hadn’t started destroying my student loan debt at a faster pace. My husband had just finished his Ph.D. and was making some money as an adjunct. My freelance business was doing well. Shouldn’t we be on track to be rid of student loan debt in almost no time?

I told her that I was fine with the situation because I was boosting my investments. With my student loan interest rate below 2%, any extra money had better potential earning the greater returns that come with investing. Plus, student loan interest is tax-deductible.

My reason for not being fussed about paying off my mortgage early is similar. Why should I? I’ve got a low rate and a tax deduction, and that money is better put to use with investments.

High-interest debt might be another matter, though. When you’re paying 15.99% APR on credit cards, you aren’t likely to make more with your investments. It can make sense to put a little more effort into paying down your debt in those cases, since there aren’t a lot of advantages to high-rate consumer debt.

Long-Term Retirement Accumulation

Even if you have credit card debt, though, it might still make sense to divert some of your intended debt reduction payment toward your retirement account. This is just so that you can put the power of compound interest to work on your behalf. The longer you put money in, the better off your retirement account is.

This is especially true if you work for a company that offers a matching contribution. That’s free money that you can use to help fund your retirement. Perhaps contribute as much as you can to get the match, and then use the rest to pay down the credit card debt. Once the debt is paid off, you can boost your retirement account contribution, and pick up the pace, partially making up for lost time (although it’s difficult to ever truly make up for the lost time).

Of course, this means that you might be in debt longer, and that you pay more in interest than you would like. It can be a result that you might not be willing to live with.

Over time, you might still benefit from putting a little bit in your retirement account, even though you still have high interest debt – it depends on how much you have, and what it’s costing you.

What do you think? Does it every make sense to contribute to your retirement when you have debt hanging over your head? Leave a comment!

Improve Your Credit Score in 5 Simple Steps

credit scoreImproving your credit score can be simple if you know what steps to follow. If you have poor credit, bad credit, or simply want to improve your credit score, there are specific steps you can take to make it happen. Your credit score is computed mainly using:

  • Payment history
  • Type of credit you have
  • Length of your credit history
  • Your outstanding balances
  • New credit you’ve established

Each of these items is weighted differently, but tweaking all of them can play a role in increasing your credit score. If you can take these steps you should see your credit score improve.

1. Make payments on time and pay down your balances.

The biggest contributor to your credit score is your payment history. This means that if you do nothing else, you have to make your payments on time. Find a payment system that works for you and make sure your payments are received on or before the due dates.

It also helps to pay down the balances of your outstanding debt. This doesn’t mean paying off the debt completely. It’s about your ability to manage your debt, so making payments that reduce your outstanding balances also raises your credit score.

2. Leave your credit accounts open.

The longer your relationships with creditors or lenders, the better off your credit score is. Do not fall into the trap of closing unused accounts or completely paying off credit and loan accounts thinking it will increase your credit score. Leave your credit accounts open, if you don’t use them.

The longer your credit relationships are, the higher your credit score. It’s important to note that you also have to have a good relationship – a good payment history – combined with the longevity of your relationship with the creditor.

3. Diversify the types of credit.

Again, your credit score is an evaluation of your ability to manage your credit, so another way to give your credit score a boost is to diversify the types of credit and loans you have. A good mixture of credit cards, mortgages, car loans, and student loans – a variety of credit – illustrates your ability to manage various types of credit. If you only have one type of loan, apply for different types of credit to diversify your mix.

This doesn’t mean run out and start applying for various types of loans, but apply where appropriate. For example, when you buy your furniture, apply for the furniture store credit account instead of buying it with your credit card or paying cash. You can then simply pay off your store card with your cash.

4. Clean up your bad credit.

Review your credit report at least once a year. Look for negative items such as late payments, collection accounts and discharges – all items that drag down your credit score. If these items appear on your credit report and they are accurate, make arrangements with the creditors to pay off this bad debt.

If these items appear on your credit report but are inaccurate, dispute the items with the credit agencies to have these items removed. Over time, getting rid of these negative marks on your credit report increases your credit score.

5. Create new credit.

As much as your credit score depends on long-term credit history, it loves new credit too. Applying for new credit once in awhile also gives your credit score a boost. Combine your application for new credit with diversifying your mix of credit and you can accomplish two goals at once.

Credit scores can seem complex at times but since they’re determined by a formula that means there’s a formula you can follow to help improve your credit score.

Before you make any changes, get your free credit report so you can see where your score stands today. Then start working on these five steps and you should see your credit score increase over time.

Can you think of additional ways to improve your credit score? Leave a comment!

This article was originally published May 16th, 2009.

Paying Off Your Mortgage vs Paying Down Your Mortgage

paying off your mortgageShould you pay off your mortgage, pay down your mortgage, or simply just make regular mortgage payments? This is a decision facing many of us because one of the biggest purchases we make in a lifetime is a home. Since few of us can afford to pay cash for a house, most of us use a mortgage for the purchase so the majority of homeowners owe money to a lender.

It’s been a long debate among professional money advisors on whether homeowners should suck up making the monthly mortgage payment, pay down, or pay off a mortgage early. The short answer is that it depends on the personal situation and financial situation you’re in as the homeowner.

Homeowner Situations

Financial experts and authors, such as Jane Bryant Quinn advise homeowners to stop considering their home as an investment vehicle and instead see it as a place to live. This is especially true if you are buying a starter home or just starting out with a mortgage, where your payments in the first few years are almost all interest anyhow.

If you’re halfway through your mortgage, such as the 15th year of a 30-year mortgage, you’re starting to reach the point where the proportion of the payment switches from mostly interest to mostly principal – thus reducing the mortgage balance.

In the recent turbulent times of the housing and lending market, many homeowners have found themselves owing more on their mortgage than their home is even worth. Most experts agree that defaulting on your mortgage and facing foreclosure is not the option to rectify the situation. If you are unable to obtain a mortgage loan modification with your current lender, continue to make the payments on your mortgage because each mortgage payment brings you closer to building more equity in the home and reaching the end of the mortgage.

Pay it One Way or the Other

Getting financial experts to agree on when a homeowner should simply make the monthly mortgage payment, when they should pay it down and when it may be beneficial to pay the mortgage off early is not a one-size-fits-all solution. The best-selling personal finance author Dave Ramsey suggests that homeowners should apply any additional money they can to paying down the balance on their mortgage. Other personal finance experts argue that a home mortgage is one of the biggest tax deductions most homeowners have.

When you do the math, however, your mortgage interest tax deduction may not be benefiting you as much as you think. Assume you are in the 25 percent tax bracket and pay $10,000 in mortgage interest during the tax year. This equates to a $2,500 tax deduction on your personal tax returns, leaving you with a difference of $7,500 ($10,000 – $2,500 = $7,500). If your mortgage is paid in full, then you would pay $2,500 more in income taxes, but you would be walking away with $7,500 more in your pocket.

The bottom line is that if you intend on living in the home for the long haul and you can afford to do so, the interest tax savings does not cancel out the interest you end up paying in the end. Experts also agree that you should focus on paying off high interest debt and debt that is not tax-deductible before focusing on paying off your mortgage.

3 Mortgage Pitfalls to Avoid

While it may be your goal to pay a mortgage off early, three mortgage-related actions to avoid include biweekly payment programs, pre-payment penalty fees and reverse mortgages.

Payment Program Fees

Biweekly payments, where you break your monthly mortgage payment into two payments, can help you to pay off the mortgage sooner. The problem is that this program typically requires an up-front fee that ranges from $200 to $400. You can accomplish the same goal by simply making one additional principal reduction per year or making additional principal payments with your normal mortgage payment.

Pre-Payment Penalties

If you do plan to pay your mortgage off early, contact your mortgage company about prepayment penalty fees. Most prepayment penalty fees occur if you pay the mortgage off or down within the first one to five years the mortgage is in place.

Reverse Mortgages

According to financial guru Dave Ramsey, a reverse mortgage is another pitfall to avoid because it puts you back in debt. In addition, the rates and fees on these mortgages can be very high. According to the Federal Trade Commission (FTC), reverse mortgages are one of the largest fraud outlets.

While a home purchase is one of the biggest purchases you make in a lifetime and it may be one of your biggest tax deductions, financial experts agree that if and when you can, paying off your mortgage makes sense. Make principal reduction payments, but avoid accomplishing your goal by using biweekly payment programs or incurring prepayment penalty fees.

While each personal financial advisor, accountant and family member may offer you an opinion on whether you should pay off your mortgage early, in the end you are the only one qualified to assess your personal situation and make the final decision.

Are you planning on paying off your mortgage early? Leave a comment and tell us why or why not!

This article was originally published August 4th, 2010.

Should you payoff your mortgage, pay down your mortgage, or simply just make regular payments?

5 Personality Traits that Can Help You Pay Off Debt

debt payoff personality traitsAre you trying to pay off debt? It can seem like a long slog sometimes . . . especially if you haven’t developed personal traits that can help you in your efforts.

If you want to pay off debt there are some essential personality traits that you need to develop (if you don’t have them already):

1. Self-Control

The first thing you need to develop if you want to pay off debt is self-control. You need to be able to say no to things – even if you think you want them.

If you plan to pay off debt, the very first thing you need to do is have the self-control to stop digging the debt hole deeper. You need to stop buying things with debt, and say no to your spending preferences if you expect to make serious progress.

2. Self-Motivation

On top of that, you need to be self-motivated. You have to be able to keep yourself going.

Sometimes, trying to pay off debt can be disappointing. It is difficult to get used to telling yourself no all the time. Additionally, at the beginning, it can take a while to see real results as you pay down debt.

The high interest charges tend to reduce the effectiveness of your payments. You need to be self-motivated to keep yourself going and paying down debt.

3. Organization

It also helps to be organized when you want to pay off debt. You need to be able to order your debts, and create a system to help you pay them off. A good debt reduction plan is essential if you want to rid yourself of these types of obligations. Organize your debts, and then systematically pay them off.

Part of being financially organized during the debt pay-down phase is also creating a budget or spending plan. You need to know how your resources are being used, and organize them so that you can pay off your debt as quickly as possible.

4. Patience

Sometimes, it’s not about the impetuous and grand gesture. Sometimes it’s about patiently sticking to your plan for the next three years. It can be hard to keep moving forward when you want the problem to be solved right away.

However, unless you are willing to take extreme measures, chances are that your debt reduction plan will last somewhere between two and five years, depending on how much debt you have. You need to be patient as you forge new financial habits, and get used to making your regular debt payments.

In the end, your patience will be rewarded, since you will have done more than just pay off your debt. Living a different lifestyle tends to help you more permanently change your habits. At the end, you will be less likely to fall back into the practices that led to your debt in the first place.

5. Creativity

The creative person can find new ways to improve the debt pay-down process. If you want to turbo-charge your debt pay-down, you can look for creative methods of saving a little more money each month, and putting that toward debt reduction. A really creative person can look for additional ways to make more money, so that can be applied to the debt pay-down efforts.

Creativity can also help you find other activities to occupy yourself so that you aren’t upset about the fact that you are practicing self-control and organizing yourself to pay off debt. Find creative and inexpensive ways to pass the time, and you will not feel as though you are giving anything up as you improve your financial situation.

What are some additional personality traits you think might help? Leave a comment!

This article was originally published December 13th, 2012.

Do You Have a Debt Payoff Support System?

debt payoff support systemDebt is often very difficult to handle. Indeed, debt affects more than your finances; it can also affect your emotional wellbeing and impact your relationships. As you tackle debt, it is important that you have a debt payoff support system. Do your best to find people that can help you stick with your goal while providing emotional support.

Who’s in Your Debt Payoff Support System?

As you prepare to pay down your debt, consider the people in your support system. You want to find people who can encourage you in your goal, and even help you reach your goal. Some of the people in your life who might be able to help you include:

  • Your significant other
  • Children
  • Parents
  • Extended family
  • Friends

All of these people impact how you spend your money, and drafting them to your cause can help you see a reduction in spending, and an increase in saving behaviors that can help you pay down your debt. Look for people in your life who normally support you in other aspects. To whom do you turn when you need help? These are likely the same caring people who can help you in your efforts to pay down debt.

Choose carefully, though. Not everyone in your life is going to be able to support you in your efforts. Try to avoid toxic acquaintances who might make fun of you or constantly criticize you for past mistakes, rather than helping you move forward as you make better decisions for now and the future.

Once you have an idea of those you can count on in your debt payoff support system, it’s time to share your goal.

How to Tell Others About Your Debt Payoff Goal

Letting others know that you are in debt can be a painful process. However, if you want support, you will need to share at least some of the particulars.

For some members of your support system, you will have to be detailed. A life partner will have to know the details of your debt – how much there is, and how you plan to pay it down. Your debt goal should be decided upon with the help of your life partner. It can be a hard conversation to have, but you need to be on the same page.

You can also ask your children to help by sharing your conviction that you want to provide a better financial future for the whole family, and asking your children if they can help. Encourage them to be creative in their efforts. Let them know what is happening in a way that is age appropriate. Perhaps they can craft a debt payoff thermometer for you!

For those outside the reach of your immediate family, there is no reason to go into deep detail about your situation. Share your goal simply by letting friends and extended family know that you are striving to get rid of debt, and that you would appreciate their support.

Watch Out for Sabotage

Really, the best support your system can provide you is to not always be tempting you with expensive outings. Ask friends and family if you can do more home-based entertaining – they should know you’re on a budget! Invite everyone over for a potluck dinner. Have movie nights at home. Engage in baby-sitting exchanges. All of these efforts are fun and inexpensive ways for you to enjoy the company of those you love without spending a great deal of money.

Watch out for those who try to pressure you into buying expensive gifts for holidays and birthdays, as well as those who think that eating out is the only way to have an enjoyable time. People who know that you are trying to pay off debt, yet still try to encourage you to pay money, and who are unwilling to find less expensive alternatives, are not truly your friends.

With the right support system around you, you can make better financial decisions, and pay off your debt quickly.

Are you needing to pay off debt? Do you have some people in mind that would be a good support system? Leave a comment!

This article was originally published October 4th, 2012.

10 Ways to Get Ahead at Work

get ahead at workMany of us are looking for ways to get ahead at work.

Whether it’s looking for a promotion, or whether you are looking to get a new job, or whether you just want better job satisfaction, there are things you can do to enhance your marketability.

If you want to advance further in your career – and in your life – here are some ways to get ahead at work:

1. Know what you’re good at and play to your strengths.

One of the best things you can do for your career is to understand your strengths and play to them. Know what you’re good at, and find ways to integrate your skills into your work.

When you can use your skills, you will be happier in work, and you will be more likely to excel in your job. Definitely consider this when you’re looking for a new job – look for one that best matches your skill set. Here are some interview tips that can help you highlight this in an interview.

2. Improve your skills.

Constant improvement can help you perform your job better, and get you more noticed at work. It can also result in a pay raise, or in the ability to change careers.

3. Develop new skills.

Find out what skills are desirable in a certain job or career field that you want, and make an effort to acquire those skills. You can go through a certification program, or work on a degree. Know what your employer, or what a potential employer, is looking for, and then do what you can to achieve the requisite skills.

4. Know your worth.

You should understand your worth. Find out what, generally, those doing similar work are paid, and what is reasonable to expect for someone with your skill set and experience level. There are a number of sites, including and, that can help you figure out what is average for your location. Know what you’re worth, and don’t be afraid to ask for it. One good way to help demonstrate your value is to build a work portfolio. If you didn’t know this already, chances are your company thinks you’re overpaid.

5. Consider the worth of benefits.

Another thing you can do to get ahead at work is to consider how much your benefits are worth. In some cases, these can be more beneficial than a small raise in pay. Plus, if you are willing to be flexible about pay so that you can see an improvement in benefits, you can present yourself as a team player, and as someone who thinks outside the box.

6. Tend your network.

Who you know can be as important as what you know when it comes to your career. Make sure to keep your network current, and include contacts in your own company. You never know when a contact in another department can provide you with the inside track on transferring, or when you can get an in at a new company because of who you know. It never hurts to earn points by helping to refer a friend for a job either. Put effort into maintaining a network, and you could have access to more opportunities.

This comes in handy, not just when you’re looking to change or upgrade jobs. One of the best ways to prepare for a layoff is to build your network. If a pink slip shows up, one of first things to do is hit the phone and ask former co-workers if they know of any job openings.

7. Practice the Golden Rule.

We’ve all been told to treat others as we would like to be treated. Remembering the Golden Rule can help you get ahead at work as well. Help others when you can, and be willing to mentor others. Also, be willing to provide good advice, and help others as part of their networks. When you can build mutual respect, you will have more success in your job efforts.

8. Find useful things to do during downtime.

If you have downtime, find something useful to do at work. Whether it’s working on an idea to help improve efficiency, getting ahead on some other project, cleaning up your workspace or doing some extra preparation for a meeting, your commitment to being useful and industrious will be noticed – and that can help you get ahead at work. Surfing the net at work is probably not the sort of “useful” thing that will get you noticed in a good way.

9. Behave professionally.

This means that you don’t gossip about your co-workers, or badmouth your old boss in a job interview. Professionalism in your manner, as well as in how you dress and the speed and competency of your work, can go a long way toward helping you get ahead in your career.

Do your best to carry out your duties in a professional manner, and you will gain a reputation for being someone others want to work with. This also applies when you’re leaving a job. Avoid burning any bridges and be sure to give your two weeks notice.

10. Pay attention to your online profile.

Be aware of what you are posting online, and how it might affect your career. Your employers and coworkers may see what you are doing online, and it could hurt you at work. If you want to stay ahead, be careful about what you post on social media – especially if it is about work. It can also pay to be strategic about building your personal brand online so future employers like what they see when they Google your name.

What are some other ways you can get ahead at work? Leave a comment!

This article was originally published December 3rd, 2012.

3 Ways to Teach Your Kids About Investing

investingWhen I was growing up, my parents didn’t spend any time teaching me about investing. They talked about saving, minimizing debt, and making wise spending choices, but investing didn’t come up in conversation.

I didn’t realize that investing was something I could actually get involved in until I was in college. I’m determined to make sure that my son has some experience with investing before he leaves the house.

If you want to teach your kids about investing, here are a few things you can do to help get them started:

1. Buy them stock in a company.

This is actually something that works well for children that are young. You can choose a publicly traded company that your child might be interested in, like a department store chain, toymaker, or food company. Then you buy a couple shares of stock in the company. In some cases, you can get a paper certificate (Disney makes some attractive ones) printed out, so that you can frame it.

Explain to your child that they now have some ownership in that company. You can occasionally check to see how the company is doing, and encourage your child to read up on the company. My 10-year-old son is always paying attention for news about his favorite companies.

2. Let older children play investing games.

There are games out there, geared for tweens and teens, that can teach your children about money – including investing. There are stock-trading games that you can get your children involved with. You can sign up for free, and your kids can get a solid idea of how the stock market works. Games like How The Market Works can help you and your kids practice making trades, as well as learn about how investing works in the stock market.

Encourage your child to play these types of educational games. They can help your child learn more about how money works, and improve their understanding about what is happening.

3. Open an account.

Don’t forget to actually open an account and encourage your child to invest. I have a 529 plan for my son, and I occasionally show him the results of my regular contributions. He contributes, too, with some of his long-term savings money.

There are other ways to help your child start an investing account. If your kids are earning income, they can have IRAs opened in their names. Get your child started investing in a Roth IRA when they get a first job, and the chances of a successful retirement increase by quite a bit. You will have to be in control of the account until your child reaches the age of majority, but it is still in their name, and contributions can be made.

You can also open a custodial account at an online brokerage. When your child reaches the age of majority, they get control of the account, but until then you have to make the actual trades and manage the account. Encourage your child to make regular contributions, and watch the account together. Talk about long-term investing, and talk about the importance of not letting short-term problems with the market lead to panicked trading decisions.

Bottom Line

Make sure that your child is ready to understand investing to some degree before you begin teaching them. Most children can start grasping the basics of owning a stock while in fourth or fifth grade. Many kids are ready to start understanding more about trading and investing on a better level by the time they are 12 or 13.

Don’t be afraid to talk about investing in your home, and let your child see some of the positive results. You’ll have savvier kids who are more likely to succeed financially later on.

Have you taught your children about investing? What are you teaching them and at what age? Leave a comment and let us know!

This article was originally published December 11, 2012.

Credit Score Improvements: What You Should Know

credit scoreAs technology advances, and as credit score algorithms become more sophisticated, efforts are being made to measure more consumer behaviors, and to include the more subtle shadings of consumer credit use.

Changes being made to scoring models, as well as inclusions of non-credit data in your credit report, might help financial service providers get a more accurate picture of what sort of credit risk you really are.

Experian to Start Tracking Rent Payments

One of the major credit bureaus, Experian, has announced that it will start tracking rent payments. Those who make regular rent payments are not being recognized for their financially responsible behaviors.

Even though landlords can report them to credit bureaus when they are late paying, or skip a payment, there has not been a system in place to report on-time payments. This is changing with Experian’s RentBureau. Positive rent data could be a help to a consumer who is responsible, but who doesn’t have mortgage payment to help boost their credit profile.

FICO Expansion Score

In addition to being the foremost in credit scoring, FICO is also trying to widen its range offerings when it comes to consumer credit behavior. The company now offers the Expansion Score. The FICO Expansion Score factors in such items as rent payments, utility payments and other regular bills. This product also manages your checking account, so a bounced check can reflect on your consumer credit profile.

PRBC Reporting Agency

If you are interested in a credit reporting agency that focuses on non-traditional indicators of fiscal responsibility, you can consider the PRBC reporting agency. This agency collects information on bill payments, rent payments and more, and uses it to put together consumer credit reports.

PRBC makes use of the FICO Expansion score as well. However, you will have to request that the companies you work with report your good payment habits to PRBC; it doesn’t just happen.


On top of consumer credit profiles including information that isn’t normally considered to be “credit related,” it is worth noting that FICO has been tweaking its formula. FICO 8 is gaining popularity (even though it was released nearly two years ago), and it contains some new items that can help you improve your credit score.

Instead of penalizing you heavily for one-time missed payments, the new FICO score takes into account the fact that isolated late payments happen. If you have a generally good payment history, one missed payment won’t damage your credit score as much (although there will still be some damage done).

Additionally, FICO 8 will no longer take into account small collections. If the original balance was $100 on a bill that goes to collections, the new credit scoring model will disregard it. This should help consumers who might have forgotten about a small bill, or if a payment falls through a crack. FICO 8 is more forgiving in some ways.

Of course, some of the tweaks to FICO 8 will hurt consumer credit scores. The main downside to FICO 8 is that high amounts of debt can be more damaging. If you are close to maxing out your credit cards, it will have more of a negative impact on your credit score.

In the end, the quest is to reduce your financial habits down to an accurate number. In order to do that, credit agencies and credit scoring model developers seek to include more information.

Were you aware that the credit reporting agencies make these types of changes with time? Leave a comment!

This article was originally published March 2nd, 2011.

50 Books for 2014

I’m on a mission to help bloggers create 50 books in 2014.


When I self-published last spring I had a reason to write (and finish) a book – the launch of the Debt Movement. Without that deadline the Debt Heroes book wouldn’t exist.

During the process I met amazing people, learned a ton, and like to think we helped a lot of readers. Being part of a movement was a great experience so I’m starting another movement, to help bloggers share their experience and stories via self-published books.

I get a kick of out creating things, like books and software, and this mission involves both.  First we’ll talk about the books and then about the software.

Why Self-Publish?

If you’re a blogger you’re already familiar with the power of self-publishing. You exercise it every time you hit the Publish button in WordPress.

The great thing about blogging is you can get ideas, stories, and tips out into the wild a little at a time. You don’t have to wait until it’s all packaged and perfect to publish.

Creating a book helps you look back at what you’ve shared and focus in on your most useful content and lets you delve deeper and share more in your areas of expertise.

I think if you ask bloggers who have already put out books you’d find that putting together a book helps bring clarity for both you and your readers about your message and what you’re trying to accomplish.

It helps you focus and refine your direction and gives you more purpose.  There’s no doubt that self-publishing a book is a project that takes time so you want to do it well and create a quality product.

The end result is worth the time and money you spend because getting it on Amazon and other marketplaces lets you reach people who you wouldn’t have otherwise and it can help open doors for you and your site.

What Kind of Books are we Creating?

That’s up to you.  I’m sure there will be some of these and more:

  • Manifestos
  • Collaborations
  • Ultimate resource (the best of your blog)
  • Workbooks
  • How-to books
  • Lessons learned
  • Tips and hacks

How to Reach 50 Books?

How will we create 50 books?  One book at a time : )  I have a schedule in mind but there’s no question it’s a daunting challenge. That’s the great thing about a challenge; it forces you to find solutions.

I do have an ace up my sleeve though, something I’ve been working on for a while now called the Virtual Book Coach.

After being laid off last spring I took a few weeks and built the prototype of the Virtual Book coach.

Since then I’ve been gathering feedback and building its core pieces and now it’s ready for the first group of users.  It walks you through the steps of self-publishing, connects you with the resources you need to get your book out on Amazon, and helps you spread the word about your book once it’s ready.

So if you want to be one of the first few to get your book started head over and check out the early access offer I’m running for the Virtual Book Coach.

Happy New Year!

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