Military Financial Advice - Army Times

Good credit leads to good fortune

Money. The stuff just causes stress, doesn’t it? We want more of it, can’t get enough of it, spend it too fast, borrow it too often, fight about it, dream about it and scream about it. Maybe they’ve had it wrong all these years. Perhaps it is the lack of money that is the root of all evil.

I’m an expert on credit scores and credit reports. I teach loan officers how credit really works. I help people raise their credit scores to help them qualify for better loans.

And I can handle a household budget. I may charge $1,000 a month on my credit cards, but they are paid in full every month on time. How many people can say they owe nothing for credit cards and automobiles?

These steps alone could save you plenty in interest costs over the years.

This column will teach you about credit, debt, loans and handling money.

Chances are you’ll earn between $1.5 million and $4 million in your lifetime — so you are already a millionaire. Congratulations. How you spend, control and invest your money will determine whether life is good or bad for you financially as the years roll by.

Credit matters — especially good credit. When you have great credit, you pay much less interest for vehicle and home loans and, most likely, on credit cards and other loans. Excellent credit will lower your car and health insurance rates. Many jobs in and out of the military require a good credit rating, as well.

Think of it this way: Managing your credit is like winning the lottery in slow motion — with proper money management and investments, you’ll save potentially thousands of dollars over the years. That adds up to living more comfortably after you retire, rather than relying on a government check each month.

Do you know your digits?

Your credit also is an indicator to companies and financial institutions of how trustworthy you are. This trust is measured with credit scores. Different institutions have different scoring methods but, in general, the following applies:

Above 720: Your credit score is very good.

680-719: Your credit is good.

620-679: Your credit is OK.

585-619: Your credit is not good.

About 535 to 584: Your credit is poor.

500 to 534: Your credit is very bad.

Below 500: Your credit is terrible.

Never miss a payment

A major part of keeping your credit score high is paying bills on time, but many people don’t. I have never, ever paid a bill late, and I’ve devised a way to ensure bills get paid on time:

1. As soon as a bill arrives, open it and throw away all of the advertising (but not the payment envelope or the bill).

2. Since creditors sometimes change due dates, always check the due date written on the statement or bill.

3. Subtract 10 days from the due date and mark this date on the envelope the bill came in. Put the bill and the return envelope back inside.

4. Keep all bills in a stack in date order.

5. Always pay bills on the same day at the same time every week if at all possible. Look through the stack of bills on bill-paying day and pull out all bills that have your handwritten date coming up within one week. Pay every bill that way.

6. I always pay by check. Maybe this is old-fashioned, but many problems can occur when you allow your creditors to have electronic access to your bank account.

7. Write your account number on the check or money order.

8. Drop it in the mail.

And it’s a good idea to call creditors to make sure payments were received.

Dave Peters is a retired loan officer and credit repair specialist. He is a trustee of the nonprofit organization Credit Learning Systems, which teaches college students about credit and debt. E-mail him at creditmatters@atpco.com.