Your Credit Score is How Low!!!!

Are you one of the 16 percent of Americans whose credit score is so low that it is negatively impacting your life?  A very low credit score can make it nearly impossible to qualify for a home mortgage or a business loan.  You may be able to get a loan to purchase a car, but you will be assessed a high rate of interest.  Those with very low credit scores pay more for auto insurance than those with average or good scores.  If you are one of these people, it is important to take immediate steps to improve your credit score.  It will take some effort and time, but it is a very achievable goal.

Credit score ratings

I recently helped a man write a business plan and develop a cash flow forecast to open a restaurant.  He had many years of restaurant experience, along with some of his own money to invest, and other income to help support his family.  Everything looked good.  In our first meeting, I asked him his credit score, and he assured me it was in the mid-600’s.  A score in the mid-600’s considered to be Fair—not great but certainly high enough for him to qualify for the loan.  Unfortunately, he was quite wrong in his assessment. He applied for a loan and the banker pulled his credit report, which revealed a credit score of about 450. 

By any measure, a credit score of 450 is Bad.  In fact, a score of less than 579 is viewed as very poor credit.  The man was shocked and embarrassed by his low credit score.  He had qualified for a mortgage less than a year earlier, so it is likely that his credit rating was at least Fair at that time.  So, what happened?  I don’t know the answer, as he didn’t share his credit report with me. I did provide him with guidance in regard to reviewing his credit report to see if it contains errors, correcting any errors, and being diligent in managing his credit.  If you are in a similar situation, these steps can help you.

The first thing you need to do is review the report for errors. Any errors should be reported to credit report agency.  Most credit reports and scores are generated by Equifax, Experian, and TransUnion.  You should check your report with each agency at least once a year and report any errors that your find immediately.  Errors might include information for someone who is not you but has a similar name, incorrect information about loans that have been paid off, and credit that you applied for but did not accept.  You should also check for evidence of identity theft.

Here are links for filing disputes with each of the major credit report agencies:

Getting any errors corrected can have a significant impact on your credit score.  Unfortunately, it will take a little time for the agency to investigate your dispute and correct any misinformation.

If your score is low due to poor management of your finances, such as late payments, missed payments, and charge offs, you should follow these guidelines to better manage credit and improve your score:

  • Be sure to make at least the minimum payment on all accounts every month.
  • Make payments by the due date.  Late payments and skipped payments hurt your score.  The later the payment, the larger the negative impact on your score.
  • Don’t open any new credit accounts–don’t buy a car, don’t refinance your home, don’t apply for any new credit cards.  Every new account increases your available credit and lowers your score, at least temporarily.
  • Don’t close any older accounts.  If you recently opened accounts you don’t need, you might want to close them. But, keep open your oldest accounts. Length of credit history improves your score.
  • Keep your credit card balances at 50% or less of the amount of credit extended.

Within a few months, you should see an improvement in your credit score.

The man above will have to put his dreams of opening a restaurant on hold for a while.  It is too bad.  However, if he can get any errors corrected, and if he commits to taking the steps above to improve his credit, he may be able to qualify the loan he needs in 6 – 12 months.  It will take a real effort and determination on his part; however, if he keeps his goal in his sights, I believe he will reach his goal.

God desires that His people pay their bills on time, honor their commitments, and don’t allow money to rule their lives.  If you are struggling to manage your finances, seek Christian counsel and pray diligently for God’s guidance.  You will find additional information on creating budgets and managing your finances in many of my other blog posts by clicking on the Finances category on the right.

If you have money questions you would like me to answer, you may email me at susan.ball5@aol.com or write your question in the Comment section.  Those who email me will be signed up to receive my free quarterly newsletter with money management tips, encouraging stories, and Scripture inspirations.  For those desiring a better understanding of Biblical principles of money management, I have written a book Honoring God with Your Money. It is available on Amazon and from Barnes and Noble.

Seven Tips for Better Stewardship of Time

Stewardship is the word that God impressed upon me to be my focus for 2021. For me, stewardship involves not only managing our money and financial resources well, but also using the talents God grants us and the time allotted to us in ways that honor Him.

Time stewardship is the most challenging of the three for me. I tend to function best when my to-do list is very long and my time to complete it is short.  When my to-do list is short, it is easy for me to find get distracted.  But the pressure of a long list and little time give me focus and energy. I love making a long list of tasks to be accomplished and then crossing items off as I complete them.

Photo by Suzy Hazelwood on Pexels.com

So, why don’t I make a list each day? That is a question I ask myself regularly, and the only answer I have come up with is that I haven’t found the right tool that works for me.  But, list-making tools is not the subject of this blog.  Rather, this blog is about strategies that I have learned and am attempting to enact to be a better steward of my time, so that I can accomplish the goals God has put into my heart.

  1. Make a List.  Your list should include tasks to be completed today, this week, and over the new few weeks.  A strategy that I learned many years ago is to include some “routine” tasks that you already do at the start of every day, so that you can quickly cross something from your list. Time management experts recommend “Making the bed” or “Showering” as the first task on the list. Crossing off tasks gives you a sense of accomplishment and will help you to accomplish more with your time.
  2. Stack Habits.  This suggestion is from Mark Batterson’s book “Win the Day.”  Mark suggests developing good, daily habits by stacking tasks together routinely.  Develop a routine to help you start the day off right, and you will manage your day better. For me, I have stacked exercise with Bible reading.  When I discovered that I could read books on my kindle while pedaling my exercise bike, my mornings improved significantly.  This works best when I get out of bed, grab my kindle, and get on the bike.  I start the day with God’s word, and I get my blood flowing.  I wake up more fully, and the day goes better.
  3. Prioritize Tasks. It’s not enough to have a list. You have to take some time to consider what tasks must be done today? What tasks can be put off until tomorrow or next week?  If you don’t prioritize what needs to be done, you will end of being distracted by emails, phone calls, and tasks that appear urgent but are not critical to you having a successful day.  Ask God for wisdom to align your priorities with His.
  4. Minimize Distractions.  Set yourself up for success by being pro-activate in minimizing distractions.  Timothy Ferriss, author of “The 4-Hour Workweek,” is a master of minimizing distractions to accomplish more in less time.  One key tip is to avoid checking emails and responding to texts and phone calls throughout the day.  Rather, Ferriss recommends checking emails and messages at a few pre-determined times a day. Evaluate what your primary distractions are and take steps to minimize them.  For those who work in an office, an open-door policy might be a major distraction.  Consider closing your door and putting a “Do Not Disturb” sign on the door for periods of uninterrupted work.
  5. Schedule Down Time.  No one should be all work and no play, and no one should spend too much time playing and avoiding work. Everyone needs time to kick back and read a book, watch television, or go out for a leisurely dinner.  Plan these times in your schedule to ensure balance in your work and leisure time.
  6. Seek God’s Direction.  Start each day with time in God’s word.  Pray for wisdom, and listen for His direction.  God will show you what is important for you to accomplish each day to fulfill His will for your life.
  7. Ask God to Multiply Your Time. As God multiplied the fishes and the loaves, He can multiply your time.  When we seek God’s will and use our time according to His purposes, He will allow us to do more in less time.  When you need to get somewhere quickly, and all the traffic lights you encounter are green—that is God’s blessing on your time.  If you get in and out of an appointment much faster than you expected, that is also God’s blessing. Make a habit of recognizing God’s hand in allowing tasks to be accomplished quickly and smoothly, and thank Him for those blessings.

There are many other time-management strategies. Which ones are your using?  Please share your best tips in the Comments.