A Financial Education Event
     

Service Academies and Military Funded Education

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 I recently spoke at Congresswoman Katie Hill’s (25th Congressional District) Military Academy night.  The audience members were parents and students in high school.   These federal academies are highly competitive and look at the whole person. So it’s not enough to be a brainianc (super smart), they are also looking for students who are exceptional in the area of athletics, community involvement and leadership.  In return for this amazing education valued at $450,000, your student will be required to serve in the military for their “commitment” period. The commitment is a minimum of 5 years of service and can be longer, depending on a number of factors in regards to additional training after graduation.  If you have a “hero at home” who wants to go to a service academy, there are several things to keep in mind.


One of the first places to visit is your service academy’s admissions site:

USAFA – The United States Air Force Academy

USNA – The United States Naval Academy
USMA — The United States Military Academy

USMMA  The Merchant Marine Academy

USCGA    Coast Guard Academy (does not require a congressional nomination)

From Prospect to Appointee:  

  • Prospect: A student who has filled out the initial response form showing interest. This means they are essentially on an admissions mailing list. You can fill this out as early as middle school by going to the academy’s website.
  • Applicant: The individual has filled out a pre-candidate questionnaire and provided initial info on PSAT/SAT/ACT scores, grades and extra-curricular activities. This is usually done NO LATER than the spring of their junior year. This is also the time to contact your congressman and senator in regards to a nomination. In addition, if the student’s parent is qualified for a Presidential nomination, (see nominations and appointments below) then the student can contact the academy directly to pursue this nomination as well.
  • Candidate: To move from applicant to candidate indicates that you have cleared your first competitive hurdle. This step is decided by the Academies admissions staff in the early summer of a student’s Senior year. Not all students will get to this point, but this is when they will be interviewed by the Academy Liaison Officer (or the equivalent). It is from this list that appointments will be offered as early as the fall. For example, one of our sons was offered an USNA appointment by October.
  • Appointee: This means that the candidate has been offered an appointment into the Academy. They can choose to accept it or turn it down, but it means they have not only received an official nomination, but they have also been approved by the Academy’s admissions board and offered an actual appointment.

The Essay

It’s never too early to begin to think about what you would like to write in your admissions application essay. These are very important and should be well thought out before submitting. Be sure to have you liaison officer review it before you submit it or ask an academy graduate to help. It also wouldn’t hurt to have a faculty member from your school review it as well. More eyes on the project can mean a broader perspective, but it still needs to be your own voice, so you will have the final word on the essay.

Back to College – The Kay Way – part two

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When people ask me how we are put our kids through college debt free, the answer is multi-fold.

First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more.

Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses.

Thirdly, we have saved a modest amount of college money to help them pay their room and board and partial tuition in some cases.

Lastly, but certainly not least, we require that they work part time in the summers or during the school year (through a work/study program or a regular job) in order to do their part in paying for college. By implementing these four disciplines, graduated debt free, with our most recent grad finishing up this past May. The older Kay kids had over ½ million in scholarships and and the last two garnered over a million dollars in scholarships.

Priorities
In any discussion of college costs, it’s important to keep priorities straight:
Parents need to leave yourself some fun money for retirement. How else can you afford that mechanical bull riding lesson and those parasailing flights (been there, done that, LOVE it)?
I really believe that you, as a parent, should try to avoid borrowing on your future in order to pay for your child’s future. Why would you want to take one of your greatest investments and leverage it for college expenses? Yet millions of parents make that devastating financial choice every year. I’m talking about avoiding any college funding plan that includes a home equity loan, a HELOC (home equity line of credit) or refinancing of an existing home mortgage. These options reduce the amount of equity in your home, increasing the risk of possible foreclosure and you incur costs in interest charges that may cost you more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

The College Mantra
When I began a young adult, got married and began having kids (in that order) I was first exposed to the whole idea of “the college my child gets accepted to.” As a mom of many I frequently heard, “What college did they get accepted into?” The part of that question that amazes me is that the answer that is most impressive are also the most expensive (Columbia, Harvard, Stanford, Yale, etc). While an average of 40% of the students who attend these schools either get financial aid, grants or scholarships, they only average out to an assistance of $9600 per year. This leaves a boatload that the student and mom/dad owe for college. Most of this is usually in loans of some kind. So then the average student graduating from some of the most prestigious colleges have student loans upwards to $80,000 or more.
So why is the question: What college did they get accepted into?
The question should be: What college did they get accepted into that they can afford?
Why do you want to leverage your future (through HELOCS or loans) or leverage their future (through massive consumer debt) when it will take many years of earning power, for them to pay back those loans? One of the most common problems in young married Millennials is the burden of dual student loans in a marriage.

Three of our children went to service academies, which each have a value of about 425k that is paid back in a minimum of five years of military service. You can read more about those in my service academy blog, which will come out next week.

I’m doing what I can to help families minimize student loan debt so that both the parents and the graduates can have a better quality of life with more flexibility once they start those new careers. For more practical aspects of very specific ways you can pay for college. Please email assistant@elliekay.com and put “College Crunches” in the subject line. Our offices will send you a wonderful resource file that I wrote to help you fund a quality education for a fraction of the debt.

Ellie Kay

 

Back to College – The Kay Way – part one

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Back To College

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”

1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice. In fact, when his department downsized and he needed to find another job, many in his section were overwhelmed because of their student loan debt. But his lack of college debt allowed him the freedom to find a job he really enjoys and he didn’t have to take the first job that came along.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board.  You may want to look at renting textbooks through Follett’s Rent-A-Text program, students can cut costs by 50 percent or more. Or go to amazon to find used textbooks, making sure that you have an amazon prime account and can filter the options with the prime filter to get free shipping.

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3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Have your student go to College Board or Fast Web  to find scholarships that might be a fit for your student.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by downloading Mint to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Join us next week for part two of our Back To College series and let me hear your tips and idea to make college more affordable!

Ellie Kay
America’s Family Financial Expert

Back to College – The Kay Way – part one

BGadmin

Back To College

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”

1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice. In fact, when his department downsized and he needed to find another job, many in his section were overwhelmed because of their student loan debt. But his lack of college debt allowed him the freedom to find a job he really enjoys and he didn’t have to take the first job that came along.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board.  You may want to look at renting textbooks through Follett’s Rent-A-Text program, students can cut costs by 50 percent or more. Or go to amazon to find used textbooks, making sure that you have an amazon prime account and can filter the options with the prime filter to get free shipping.

3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Have your student go to College Board or Fast Web  to find scholarships that might be a fit for your student.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by downloading Mint to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Join us next week for part two of our Back To College series and let me hear your tips and idea to make college more affordable!

Ellie Kay
America’s Family Financial Expert

Coupon Blessings – Diary of a Coupon Queen

I had five children seven and under, a fighter pilot husband who was gone more than he was home, and we had just made our eleventh military move in thirteen years. Because we moved so much, we homeschooled the kids to give the poor little dears the continuity they needed.  In the midst of keeping a clean home, volunteering at our local base, couponing, grinding our wheat and making our bread, I decided to do something totally unreasonable:  I wrote my first book, Shop, Save and Share. This photo is what we looked like when I penned the “Coupon Queen’s” book, just after coming back from my first book signing.

Besides having a high energy level at that time, the main reason I wrote a book was to help other families get out of the debt the same way we were able dig out from $40,000 in consumer debt. It seemed that writing a book was the best way to get the word out to a lot of people at once.  Fast forward twelve years, and my kids are almost all grown and gone and I now have 14 books under this expanding belt of mine. 🙂 As I reflect on whether Shop, Save and Share achieved it’s intended purpose, I introduce a guest blogger, Andrea Wiener, who will give us her story. (This is a shortened version, for the full version go to Coupon Blessings.)

Andrea’s Story:

So glad to have this opportunity to tell my story – how God used Ellie Kay and her ministry to help eliminate my $30,000 credit card debt.

 At the age of 17, I was $30,000 in debt from almost a dozen credit cards.  [In 1999] I’m prayin “Lord, I’m still up to my ears in debt and now I gotta stock up on stuff”[for Y2K].

 God quickly started answering that prayer – a few days later, Ellie Kay appeared as a guest on “Life Today” with James and Betty Robison. Ellie had just come out with Shop, Save, and Share – I was excited to read it cos’ here was somebody that made sense – and I wanted to know how to share blessings with others when I didn’t have too much myself – and a whole bunch of debt besides which.

 Ellie’s book was SO simple – I think I ended up dog-earing a few of them – her explanation of couponing and blessings were easy. Simplest concepts were new to me – like using a store coupon with a manufacturers’ coupon!

 As I mastered each concept, I immediately started using it – and moved on to the next one. I used to keep her book in my bag – that’s why it was getting so dog-eared, and I ended up having to buy a few of them.

 What I like about the book is that Ellie’s Christian worldview and integrity come out from the VERY first chapter. I remember this quote from the Shop Save and Share audio/video series – “everything we do must be done with integrity and honor” – so whenever the shelf-clearing tendencies try to take over as I shop, I go back to that.

 In 2000, all my debt was paid off. 12 years later, I have a couponing website (www.couponblessingsnow.com) and a corresponding Facebook page (CouponBlessingsNow) – but if it wasn’t for God putting Ellie Kay and Shop Save and Share into my life, I don’t think I would have any of this.

 My advice to you guys? If you haven’t already, check out Ellie Kay on her website (which is www.elliekay.com) and on her “Ellie Kay” Facebook page – you will be blessed, for she will teach you a LOT.

*************

Thanks, Andrea, for sharing your story today and everyone be sure to check out her blog.

Ellie Kay

America’s Family Financial Expert (R)

Buy a New Car Cheaper Than a Used One!

 

The Dream Car That Took 30 Years to Get

My first car was a 1974 Datsun B210. I was fifteen years old and forked over the cash from a multilevel babysitting service that I launched three years earlier. My folks firmly believed that I should pay my own way and it developed a “cash only” sensibility when it came to buying cars. Of course, my baby brother, didn’t have to pay for his car, but THAT is another discussion for another day!  Fast forward a few years (ok, a LOTTA years) and I was able to buy a dream car with that same philosophy. Buying used was the smartest way for me to go—but today, buying used could cost you MORE than buying new in some cases!

 This time of the year is a great time for looking into getting a car. Dealers have the 2013 models rolling in and at the end of the month, some salesmen are eager to deal in order to try and win the “salesman of the month” with all the perks associated with that coveted title. But which models should you look for in a new vehicle instead of used?

The gap between a one–year-old car and a new one can range as much as 20%, meaning the car you paid $25,000 for last year is worth $20,000 this year. Unless you purchase a car model that closes that gap such as a Chevrolet Camaro LT, where a one year old car cost only $126 less than the average price paid for a new 2012! Plus, if you finance, you usually pay a higher interest rate for used car than a new one, so if you include these expenses, a used car can cost more overall than a new one. For example, at Edmunds.com we found a $452 payment for a used, one year old Honda Odyssey minivan versus a $445 a month payment for a new one!

  Here’s the list of cars you should consider buying new according to the Kelly Blue Book:

   Vehicle                                     Price Difference                          Percentage

                                                                    Vs. new                             difference

Chevrolet Camaro LT                         $126                                                    0.5%

Toyota 4Runner SR5                          $254                                                    0.8%

Toyota FJ Cruiser                              $244                                                    0.9%

Subaru Impreza 2.0i                            $150                                                    0.9%

Jeep Wrangler Sport                           $281                                                    0.9%

Honda Fit                                            $234                                                    1.3%

VW Gold TDI 4 door                         $438                                                    1.4%

Kia Rio LX                                         $283                                                    2.1%

Mazda2 4 door                                   $306                                                    2.2%

Chevrolet Equinox LT                        $540                                                    2.2%

If the car you want doesn’t fit in this category, and you are going to buy used, then be doubly safe by ordering a car history from Carfax, AutoCheck and the Justice Department’s new database at nmvtis.gov in order to see if the car has been in a wreck or flood. But don’t stop there, take it for a thorough inspection by an independent mechanic because it’s almost impossible, in some cases to determine if that car is one of the 12% that ends up being a “salvage” car and some of these can end up on a dealers lot. If the used car is a CPO (Certified Previously Owned), then you should be safe.

      Also, whether you are buying new or used, be sure to come to the dealership armed with a printout version of the car’s evaluation/price according to Edmunds.com and/or KBB.com.

Finally, be prepared to negotiate the price of the car in THREE separate steps:

1)    PRICE – Negotiate the price of the car without a trade. Tell them you are thinking of selling your existing car yourself, and get the rock bottom price on the car you want to purchase without the bait and switch tactic of a dealer offering you a padded price on your trade to get you to go for the deal.

2)    TRADE – Once you’re satisfied you’ve negotiated the best price WITHOUT a trade, then negotiate the value of your trade-in vehicle SEPARATE from the price of the car you want to buy.

3)    FINANCING – Check out your own financing through a credit union or other resources before you look at what the dealership has to offer. If you walk in as a “payment buyer” meaning you have to secure a certain monthly payment, then they will work with you to get that monthly payment, even if you end up paying a lot more for the car.

Let me know your tips on how you get a good deal on a vehicle, I’d love to hear from you!

Ellie Kay

America’s Family Financial Expert ®

www.elliekay.com


Buying a New or New-to-You Car This Fall

What is the least expensive car to drive?

The least expensive car for you to drive is probably the vehicle you are currently driving! So consider driving that paid-for car a little longer and take the money you would spend on a car payment and put it into a car fund in order to reach the goal of eventually paying cash for your cars.

People talk themselves into a new car for a variety of reasons such as gas mileage. However, when you calculate gas mileage and the money “saved” when compared to interest payments and depreciation on that new car, you will find that you do not even come close to saving money. The average new car depreciates roughly 30 percent within the first eighteen months, with an average loss of value of five thousand dollars as soon as you drive it off the dealer lot. So if it really is time to replace your car, always consider purchasing a used vehicle first.

However, there are occasions when a new car may make sense. For example, when interest rates are incredibly low or your family needs the warranty (because of high mileage commutes). Try to get and end-of-the-year clearance model or a demonstrator model. If possible, buy the car at the end of September, which is the end of their fiscal year.

The following tips can apply to buying a new or used car, but each sales point should be negotiated separately.

Price

Negotiate the price of the car at a dealership apart from the value of the trade-in. Tell the salesperson you want to determine the price of the car without the trade-in. The reason you want to do this is because salespeople will often give you far more for your trade than you expected—thus hooking you on the deal. However, this higher-value-for-the-trade-in shtick can be part of the technique they use to get you to purchase the car. If a higher value is given to the trade, then they will give a lower discount on the price of the vehicle, because all the discounting went into the value of the trade.

Trade-In

            Now that you’ve determined the price of the car, ask what the dealer will give you for your trade-in. Most likely, you will get more for your car if you sell it yourself. A little elbow grease and some top-notch detailing can net you hundreds of dollars more than a dealer can give you, if you can find a buyer. Some people (like military families) don’t always have the time to sell their car because of mobbing schedules and so forth. So if you are going to try to trade in your car, look up the value of your existing car at http://www.Kbb.com/ or http://www.Edmunds.com/, print the page, and bring it with you to the car lot to negotiate the price. Consider negotiating the price and trading at the same time. Bottom line: try your best to gather enough facts so that you make a wise decision. Unfortunately, we often see the deal inaccurately as the smell of new leather and gleam of fresh paint job cloud our sensibilities.

Financing

The finance and insurance office is where the lions share of a dealerships profit is made. In this office, you will have to navigate interest rates, payments, terms, and warranties. Unless you put miles on your car for business or you are purchasing a car that will cost a lot to repair (and you intend to keep it longer than the warranty lasts), extended warranties are usually not a good value. When it comes to vehicle financing, you can generally do better on interest by selecting your own creditor (unless, of course, the manufacturer is offering a lower APR). The credit life insurance that dealers offer is more expensive than raising your regular insurance premium by twenty thousand dollars to cover this expense. And don’t forget to go to USAA to see if you qualify for great insurance at a great price. We’ve been with this company for three decades!

What is your favorite part of buying a car?

Ellie Kay

America’s Family Financial Expert (R) 

Keeping to the “B” Word

Families usually have favorite restaurants, movies, and even special songs that reflect the character and tastes of the family. Your budget will be just as unique as your family. It will be based on variable factors, such as your family’s size, geographical location, debt load, and income.

When Bob and I first set up a budget, we realized that both of us wanted to have healthy finances, even though we approached money differently. As you go through the sometimes-painful process of establishing and sticking to a family budget, it is important to make a real commitment to these important issues. We also realized that we didn’t need to go overboard by pinching our pennies so tightly that it strained our relationship and took all the enjoyment out of life. So we allowed for an occasional indulgence, implemented budget-cutting techniques slowly, and modified our plan as needed. As time went on, we fine-tuned some aspects of our budget and then did an annual check-up to make adjustments that allowed the budget to become a part of our lifestyle.

Top Ten Failure Factors for Finances

Welcome to Thursday. Did you know there are only 8 days left in February? By now, it seems that most of our New Year’s resolutions are either given up on, pushed to the side for a little while, or lost a little bit of steam along the way.

It is never too late to reevaluate our resolutions and start over. We never need to wait until the next January 1st to get our finances under control. When we fall off the wagon, it is best to get up and keep going.

Many times when we set goals, they are unachievable. These are the top ten failure factors to setting any goal from my latest book Lean Body, Fat Wallet:

Top Ten Failure Factors:

•   Set unrealistic goals

•   Motivated by the wrong motives

•   Believed failure was inevitable

•   Fulfilled the need for immediate gratification too often

•   Influenced unduly by other people

•   Practiced a “deprivation mentality”  – all or nothing/black or white

•   Rationalized and made excuses rather than taking responsibility

•   Displaced emotional issues through overspending and overeating

•   Procrastinated rather than taking action

•   Lacked the tools to make compounding incremental change

Reread the list above and circle any of the “failure factors” which you believe may be significant influences in your life. Failure needs to be seen as a profound learning opportunity. It’s time to stop trying so hard and start training toward a new way of addressing your wealth challenges. Past failures do not need to be repeated.

After you circle the “failure factors” that may apply to your situation, take the time to write three ways you believe you can counter those factors and turn them into successful areas of your life. I believe in the old saying that “people don’t plan to fail, they just fail to plan.” Having a plan can be over half the battle in discovering ways to be successful in your finances. But implementing that plan is the other half of finding success.

One of the ways that I have found most people can create and stick to a plan is by having a “money buddy.”  If you are married, this might be your partner, and if you are single, it can be a like-minded friend who is good with their own financial resources. Get together with your money buddy and go over this “failure factor” list. Let them help you come up with ways that you can counter the failure to turn it into success. Then, set a date to meet with your financial partner and track your success. It’s kind of like Weight Watchers for money matters and there is great power in unity with other like-minded people who want to overcome their own failure factors.

For great tips for understanding your money better can be found at mint.com—an excellent site for managing finances. Keep checking in week to week for help along the way. You are not alone in this financial journey! There are so many tools to help along the way.

Ellie Kay

Financial Readiness and FICO Scores

On our “Heroes at Home Financial Event Tour” in FY15, one of our most loved segments was given by Gerri Detweiller, who wrote the original book on personal Credit. The Department of Defense realizes that financial readiness impacts military readiness. In fact, credit scores (or Fair Isaac Credit Score) follow you from assignment to assignment and don’t just determine if you qualify for an auto or mortgage loan. Your credit score also can also be an indicator of whether you are allowed to stay in the military or whether you are kindly asked to leave. It’s not so much the score itself, but what the score represents—your credit worthiness. If you have too much debt, then you cannot get the security clearances necessary to do your job and this can follow you into the civilian world as well. Even utility companies check these and decide whether you have to pay a deposit based on the score.

According to recent figures provided by FICO, 25.5% of consumers (nearly 43.4 million) now have a credit score of 599 or less, marking them as bad risks for lenders (see the chart). It makes it is unlikely that this group of people will get credit cards, auto loans or mortgages under the tighter lending standards that banks now use.

These credit ratings can also make the difference between whether you are accepted or rejected for a new insurance policy or as a renter and much more. That’s why it’s important to know your number. Furthermore, some employers check these scores, which could be the determining factor in whether you get that new job at the next assignment.

Summary: Why do I need a good FICO score?

A good credit score is invaluable to everyone. Here are the benefits of a good score in a nutshell:

  • Security Clearances — If you are having financial problems, as indicated by a FICO score, then you are a security risk and cannot be allowed to work in certain areas requiring a security clearance.
  • LoansA good credit score helps you qualify for loans and get faster loan approval.
  • Interest Rates Your FICO score oftentimes is the determining factor when it comes time to be assigned an interest rate. A better rating can help you get a better mortgage rate and could even make the difference between becoming a homeowner versus a continued renter.
  • 0% APR Have you ever been tempted by the advertisement on a new car, furniture or a new credit card that offers a special “0% APR”? No wonder so many people get in line for these special deals. Few people realize that these kinds of special offers only go to those who have the top levels in the national distribution of FICO scores. If a good credit score holder acquires too many of these kinds of loans, they’ll deteriorate their score. So reserve these for long term loans such as a new automobile.
  • So Close and Yet so Far Sometimes the difference between qualifying for a great deal and not qualifying for it can be as close as twenty points on your FICO score. You may say: “So what? I don’t qualify for it, I can still qualify for a fairly low interest rate.” But it adds up and matters a great deal. The difference on a $20K car loan at a 0% APR versus a 7% to 8% APR is around $1800 over the course of the loan.
  • Job Applications – There are jobs that require high security clearances and government positions that can be impacted by your score as well as employment in the financial sector.
  • Renting – Some people cannot rent a home or an apartment without a good credit score.
  • Utilities – You can often have your security deposit waived if you have a good FICO.
  • Insurance Rates It could also affect what kind of an insurance premium you will pay. Some auto insurers are using credit data to help determine insurance rates. In fact, ninety-two of the 100 largest personal auto insurance companies in the country use credit data in underwriting new business, according to a study by Conning & Co.

Improve FICO Scores in Three Easy Steps:

  • Pay credit bills a day early rather than a day late – Set this up online using automatic pay so that you’ll never be late again.
  • Pay attention to proportionality — Keep your charges at 50% or less of the available credit, even if you pay off the card at the end of each month. This means that if you have a $5,000 credit limit, you should never charge more than $2500.
  • Pay at least $5 more than the minimum each month – It will show up on your report as paying down your debt which will make your credit score go up!

 For a copy of your FICO score, go to Credit.com and for a free copy of your credit report go to Annual Credit Report and for more help go to your local Airman and Family Readiness Center (or the equivalent in your branch of the service). You can improve your FICO, pay down debt and get fiscally healthy so that you can find the financial freedom that is worth fighting for!

 

 

 

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