Credit Education –
Building the Knowledge
to 
use Credit Wisely!

In our Education Center, we have provided you with information on financial topics like credit repair, building credit, mortgages, personal loans, credit cards, interest rates and so much  more!

 Call 1-866-639-3426 for a FREE Credit Consultation CALL NOW

6 Ways to Teach Your Kids Financial Literacy

By | Personal Finance

Now that the kids are back in school mode, it’s an excellent time to introduce some real-world lessons about money management. Financial literacy is a topic that isn’t covered much in the classroom, and many adults find it difficult to explain money issues in a way that youngsters can understand. However, kids can generally pick up the basic concepts. Planning these exercises for after school or weekend activities keeps their critical thinking skills sharp. Especially now, when most financial transactions take place through a screen, it’s more important than ever that kids understand the value of a dollar. Here are six fun ways to teach your kids financial literacy.

1. Set Up a Lemonade Stand

Lemonade stands have stood the test of time for a reason—they’re an invaluable tool for kids to practice their entrepreneurial skills and learn about the value of money. Before they set up shop, dole out a few dollars to spend on supplies and advertising/marketing. Suggest ways to keep expenses down (such as visiting the dollar store for supplies like chalk and signs, and making a homemade recipe) and explain that the lower the expense, the more cash their enterprise will earn. Let them handle the money, which also offers a great real-life example of math skills. Running a lemonade stand requires patience and hard work—but kids will learn that if they practice those values, they will be able to earn money.

2. Use Physical Tools for Savings

Handing out an allowance is a major first step to teach yours kids financial literacy. Since most parents tie allowance to completed chores, take the chore routine outside and show kids how they can earn money for tasks such as watering the garden, cleaning up outdoor toys, and washing the car. When you distribute their earnings, provide them with two clear jars—with instructions to use one jar for spending money and one for saving. This introduces them to the basics of budgeting.

3. Take Them Shopping With Their Own Money

Kids need to understand that everything costs money and that decisions must be made for wants versus needs. The key is to make the process as visual as possible. When they want to buy something, help them count out money from their spending jar. At the store, explain how much the desired item costs and whether or not they have enough funds available to afford it. If they don’t have enough money, they will have to consider whether to dip into their savings—which also forces them to prioritize what they really want.

4. Play Money Games

Introducing money into your children’s gameplay is another way to help them practice their financial savvy. One idea is to assemble a “store,” including toys or stuffed animals, and label each item with a price tag (under a dollar). Provide them with a bowl of coins in different denominations, and encourage them to count out the coins to the correct amount for their “purchases.” The younger the child, the smaller the price tag (and pennies are easiest to use). For older kids, you can play board games such as Life, Monopoly, and the Allowance Game.

5. Involve Them in Financial Decisions

The best way to raise kids to use money responsibly? Set a good example. If they question why you can’t afford to make a large purchase, peel back the curtain of how adulthood works—showing them your own budget, or a printout of your monthly expenses for mortgage or rent, car, food, insurance, and so on. If you do happen to splurge on an item, explain how other sacrifices were made in order to allow you to do so.

6. Make Saving a Team Effort

Introduce your kids to the reality of paying bills and economizing. Choose one of your monthly bills, such as electricity, water, or phone, and challenge your kids to come up with ways to reduce it. For example, encourage them to use less water or to turn off the lights each time they exit a room. Review some of the bills with them and explain how certain practices add up to higher charges. You can also turn the savings into a competition. If they manage to shave some dollars off the bill in the following month, let them come up with a reward to spend the savings on.

It takes time to teach your kids financial literacy, it won’t happen overnight. But by devoting a small part of your days with these fun exercises, you will be setting the groundwork for their futures as responsible adults.

5 Credit Mistakes You Need to Avoid

By | Your Credit

It doesn’t matter whether you’re trying to improve your credit or build a positive credit history from scratch, there are a few financial moves you should almost always avoid. Even one small misstep can result in lasting damage, undoing all the hard work you’ve already achieved.

Take a look at five of the most common credit mistakes and how you can prevent them from hurting your own credit report.

1. Making Late Payments

The largest factor determining your credit score is your payment history, making it extremely important to avoid paying any of your bills late. Obviously this includes any type of financing payments, like credit cards, student loans, mortgage, car loans, and any other kind of personal loan. But even things like your cell phone bill or utility payments have the potential to impact your credit report if you leave them unpaid for too long.

How much leeway do you have with your payments?

Your creditor can of course charge late payments according to your user agreement, so it’s always smart to pay by the due date. If you do happen to miss that, you have 30 days until the late payment can be reported to the credit bureaus. Once a negative item like that appears on your report, it can stay there for seven years, unless there’s been some type of credit error.

2. Reaching Your Credit Limit

Another credit mistake to avoid in order to fix credit or build it is to balance your credit utilization. How much you utilize each line of credit available to you also has a major impact on your credit health.

For instance, maxing out $5,000 on a single credit card is generally more harmful to your credit than spreading that same amount over multiple cards. The is because your finances seem more precarious if you don’t have much of an emergency buffer through your various lines of credit.

A quick credit repair tactic is to either pay down your maxed out cards or ask for a credit limit extension. If you take that route, just make sure you don’t actually use the extra room on your card.

3. Closing Accounts for the Wrong Reasons

When you have problems with accumulating credit card debt, your immediate reaction may be to shut down your accounts. But that can actually hurt you instead of helping to improve your credit. Here’s how:

First, your average account age is part of the calculation determining your credit score. When you close a credit card, the card eventually drops off your credit report and lowers the length of your credit history.

Second, when you close one line of credit, that automatically increases your overall credit utilization if you still have outstanding balances on other accounts.

Avoid this credit mistake – when is it a good idea to close an account?

If you’re paying an annual fee and not getting any kind of benefit, it might be time to say goodbye. Additionally, you may want to close a card after a credit dispute over a fraudulent account.

4. Applying for Multiple Credit Cards or Loans at Once

Every time you apply for any type of financing, you’ll see a new inquiry appear on your credit report. Some lenders or credit card companies start off the pre-approval process with a “soft check,” which doesn’t hurt your credit repair efforts. But once you fill out a formal application, they’ll usually perform a hard check.

These inquiries stay on your credit report for two years and can damage your credit for one year. Even though the drops are usually just minor, several inquiries can really start to add up. If you want to fix your credit, pay attention to how many hard pulls are being done.

5. Ignoring the Need for Credit Repair

Getting help with the credit repair process is oftentimes a good choice for many Americans. In fact, the FTC has performed lengthy studies indicating that at least 70% of the population believe they have unresolved credit disputes plaguing their reports.

At Ovation Credit, it’s easy to find out if you would benefit from professional credit repair services. See if it’s the best option for your personal situation by signing up for a free consultation on our site.

Sources:

https://www.myfico.com/credit-education/whats-in-your-credit-score/

https://www.ftc.gov/news-events/press-releases/2015/01/ftc-issues-follow-study-credit-report-accuracy

Pay Down Your Debts: Top Tech Tools to Help You

By | Debt

Thanks to technology, it’s now easier than ever to keep tabs on your financial situation. The major banks and credit cards offer mobile applications, allowing you access to your balance and payment history at any time. You can check your credit score with the click of a button. As much as technology facilitates the act of buying (imagine how much less you’d spend without online shopping!), it also makes it much, much easier to pay down your debts. Check out these top tech tools to keep your debt situation under control.

Take advantage of your bank and credit card app features

It helps to download the app connected to your credit card and bank, if available, so you can instantly access your information at any time. Some apps will also notify you when a statement is available or a bill is due (in addition to regular email alerts). These apps also simplify the process of setting up auto-payment every month, so you don’t have to worry about forgetting to pay.

Check out budget and goal-setting tools

You may already choose to use a household budget app, such as the one offered by Mint.com. This site also offers a financial goals feature that allows you to link up your credit card and loan accounts. Once you designate paying down your debt as one of your financial goals, the site will suggest different options for repayment, such as using any available savings or making changes to your budget. This feature also provides a timeline based on the expected date when you will be free of debt.

Track your debts in app form

Debt reduction apps abound in the App Store, and you might want to try out a couple of different ones to see which interface works the best for you. Some of the most popular examples include ReadyForZero, Debt Control Free, and Debt Assistant. (A bonus is that they are all free apps.) The theory behind these apps is generally similar across the board: You link up your outstanding debts and due dates, come up with payment strategies and utilize the built-in calculators to determine the best strategy for payoff. They also allow you to zero in on your progress, which keeps you motivated when you’re trying to repair your credit.

Put money aside without even having to think about it

Some apps aim to take the stress and aggravation out of debt payoff, by doing some of the work for you. Take, for example, Digit, which will analyze your spending habits and come up with an amount to withdraw from your checking account that it thinks you won’t notice (don’t fret – the app guarantees no overdrafts). You can set goals for reaching a certain amount to pay off a debt. Once the app accumulates that amount in an in-app savings fund, you can then use it to pay down a debt.

Another app called Qoins links up to your bank account and rounds each of your purchases to the nearest dollar. It then applies the savings to your chosen debt.

Figure out the best debt repayment method

A free online service known as Unbury.me asks you to enter all of your debts and loans. Based on that information, the service shows you how you can tackle your debt using two options – the debt snowball (where you pay the smallest balance first, followed by the next smallest and so on) method, or the high interest rate method (in which you’ll start paying off the balances that carry the highest interest). Having such a clear, side-by-side comparison of the two debt payment strategies can help you decide which one would work best for your particular situation.

Calculate your debt-to-income ratio

You can find calculators on numerous websites that allow you to determine your debt-to-income ratio and then figure out a plan to pay down your debts in the most financially prudent way possible. Many of these services are free, but you may want to consult with a professional if you have a substantial amount of debt to pay down.

While debt payoff can be overwhelming at times, technology offers plenty of options to make the process a whole lot easier. And at Ovation Credit, we want to give you a hand. Let us know if we can help you work through any credit report issues that arise by contacting us for a free consultation.

Sources:

https://www.thesimpledollar.com/best-debt-repayment-tools-and-apps/

https://www.nbcnews.com/better/business/4-tech-tools-help-you-get-out-debt-faster-ncna828351

Time to ditch debt? There’s an app for that!

Better Credit Score

5 Strategies for a Better Credit Score

By | Credit Scores

When you’re committing to a healthier financial future, a good credit score should be one of the first areas you focus on. With a better credit score, you’ll qualify for more favorable loan terms and interest rates, which add up to substantial savings over time. Credit scores range from 300 to 850, with a score of 750 or higher generally considered excellent. Although the path to a higher credit score isn’t easy, you can set yourself up for success by adopting certain strategies. It’s worth noting that sound credit management is quite a bit like deciding to stick to a healthier lifestyle. You’re more likely to find success if you can implement these practices as “lifestyle changes,” rather than viewing the process as simply a temporary fix to your credit problems. Here are five of the most effective strategies to attain a higher credit score.

1. Pay down your monthly balances as much as you can.

Your payment history is one of the most important factors determining your credit score. So it’s a good idea to keep those credit card balances low. Your payments affect the percentage of revolving credit you have compared to what you’re actually using — and a low percentage is good for your overall score. Experts generally recommend keeping your percentage at or below 30%. So, for example, if a credit card has a limit of $1,000, you would not want a balance higher than $300 per month. And always make the minimum payment at the very least — if you can, try to set aside a few extra dollars to pay more than the minimum.

2. Stick to one or two cards.

If you have multiple balances across several different cards, look into consolidating them into one loan with a lower interest rate. Having multiple cards with balances will eventually lower your score. You should limit yourself to spending on only one or two cards (preferably with low interest and decent rewards and incentive packages). This strategy also carries the additional benefit of limiting the number of bills you’ll be responsible for paying every month.

3. Pay attention to all of your bills.

You might be surprised by what items affect your credit score — even down to an overdue fine on a library book. Paying your bills on time every month is an essential strategy in achieving a better credit score. Having a bill get sent to collections for lack of payment could send your score into a nosedive. If you can, try to set up all of your bills on auto-pay — and always pay the smaller fees, like those for library books or medical expenses, as soon as you receive the bill.

4. Spend within your means.

One of the biggest pitfalls that credit card users face is spending more than they can afford to pay back. Although it’s sometimes easier said than done, the trick is to start to view credit the same way as you would cash. If you’re thinking of purchasing something on credit that you can’t afford to buy right now with cash, the simple answer is to delay the purchase until you have the cash. If you find yourself frequently resorting to credit cards to cover unexpected expenditures, shop around for a card that offers low interest rates, so that if you end up having to pay for a larger expense over time, you will ultimately pay less interest.

5. Leave old “good” credit accounts open.

Many people make the mistake of closing accounts that they no longer use, mistakenly believing that too many open and unused accounts hurt their score. The fact is, the unused older accounts are actually quite beneficial to your credit. Don’t rush to close an account that’s paid off. That’s considered good credit, and lenders will look favorably on those items in your credit report. Closing an account could also change your credit utilization levels. If you close an account with a $1,000 limit, that’s significantly less available credit — which could make your debts look higher in comparison.

As part of your goal to get a better credit score, you’ll want to keep a close eye on your credit reports to ensure that no incorrect or outdated information is unfairly lowering your credit score. If you think you need to dispute something on your credit report, we can help. Contact the pros at Ovation Credit for a free consultation to learn how we can help you clean up your credit report.

Call Now for a FREE Credit Consultation

CALL US NOW