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Your Free Credit Score Without a Credit Card

11.18.2011 by Matt Jabs //

It doesn’t matter if we like credit scores.  It doesn’t matter if we agree with credit scores.  They’re here to stay so we might as well know our score – and we shouldn’t have to pay for it.

This article will show you how to get and monitor your credit score – for free – without a credit card.

Who to trust

I work to find the best “free credit report” services so you don’t have to.  I research them, try them, and compare the offers to see who has something worth using.  Who do I trust?  Mmm, several – but I like Credit Sesame the best.

Free credit score and more

Credit Sesame offers a 100% free personal finance credit and debt management tool with no credit card required or trial period. Their mission is to make managing credit, owing less in interest, and saving money on mortgages and other loans easy through their online interface.

Here’s how Credit Sesame’s tools help you, for free:

  • Free Credit score and profile alerts – They provide your score and alert you of any changes to your score and credit profile, for free, for life, without taking your credit card to do it.
  • Manage your credit and debts – Automatically track and monitor your loan and debt information and tell you how you’re doing by showing your loans, debt and credit all in one place. You’ll know where your credit score stands every month, and understand how to improve your debt situation.
  • Showing you more ways to save – They monitor the lending markets and track data from major banks so you can check back daily to find out if they’ve found ways for you to save by consolidating debt.
  • Goal planning for the future – Wondering how much you can save if you had a better credit score or a higher income? They have a “What If” section that lets you see how much you’ll save and what you’ll be prequalified for as your financial situation changes.
  • Personalized mortgage refinancing options – Refinancing saved us more than $40,000 over the lifetime of our mortgage.  Credit Sesame applies bank analytics to your credit profile showing you the best home refinancing options available to help you save on your home loan.

How Credit Sesame makes money

Credit Sesame makes money when you save money.  If they find you a higher interest paying bank account and you sign up, they earn a commission.  If they find you a better home refinancing option and you take their advice, they earn money.  If you never take their advice it doesn’t matter, you still have access to your free credit score and all the tools for life.  That’s why I’m telling you about it as the best option out there to get your free credit score without having to give your credit card number.

What is my credit score?

I used Credit Sesame to get my free score.  793 baby! After you visit Credit Sesame and find your free credit score, share your score in the comments… see if you can beat my score of 793!

Enjoy this quick video showing my score along with a brief overview of the Credit Sesame interface.

(if you don’t see the video in your email click here to watch.)

What is your score?

After you visit Credit Sesame and find your free credit score, share your score in the comments… see if you can beat my score of 793!

My friend Neal over at WealthPilgrim.com, a Certified Financial Planner, also highly suggests using Credit Sesame to get your free credit score with no credit card, but he didn’t share his score… is he afraid my 793 will beat him?  Mwhahahah!

Categories // Debt, Money Management Tags // credit, Debt, free, score

Pay Off Debt

04.26.2011 by Matt Jabs //

Many of the reader questions I receive are inquiries on how to pay off debt, most in regards to the optimal order to pay off the debts.

Ways to pay off debt

I have mentioned this before, but it’s worth repeating – in most circumstances it is best to pay off debt in order from highest to lowest interest rate.  Put another way, if you have an auto loan at 10%, credit card 1 at 16%, and credit card 2 at 24%… it’s usually best to repay credit card 2, credit card 1, then the auto loan.  This route should cost you the least amount of money.

Some exceptions to this rule can include losing motivation to repay highest interest debts because of large balances, or debt with tax deductible interest like student loans and mortgages.  If the balances on your high interest debts are quite large, they may take awhile to pay off, possibly several years or more.  If that will cause you to lose steam you should consider repaying your debt in order from smallest to largest balance – as suggested in Dave Ramsey’s Financial Peace University.  Debt with tax deductible interest may be best left for last since it can reduce your tax burden… but determining the order is always unique to each situation, so generalizations should be considered just that.

Whatever your circumstances, I encourage you to try repay debt using good old fashioned discipline and self-management before paying someone to help you pay it off – but since many are beyond being able to help themselves… let’s consider some progressive options.

Debt consolidation using peer lending

Sometimes you’re better off consolidating a number of smaller debts into one.  Possible benefits of consolidation include lower interest rates and the simplicity of having fewer lenders.

I consolidated debt using Lending Club.  Read my Lending Club Review for details but in summary I consolidated an auto loan and 3 credit cards – each with higher rates than my Lending Club loan.  You don’t have to use peer lending to consolidate your debt, but it’s certainly a solid option.  Using Lending Club I repaid over $11,000 in just 7 short months – the process would have taken much longer had I not consolidated.

DIY debt management

If you can afford to repay debt but could use help organizing payments and determining who to pay first… check out DebtGoal.  Before you consider using a full-fledged debt relief company, I encourage you to give their service a shot.  In short, DebtGoal is a DIY middle ground between self service debt management and full service debt management.

I am in the process of writing a full review of their product, but have already checked it out and feel comfortable endorsing it.  Using their service should save you far more each month than it costs, and right now they’re offering a free trial.

Debt relief

If you are in financial trouble and need professional help, be sure to choose your debt relief partner company carefully.  I’ve been searching for a reputable debt relief services company for years and will confidently endorse a company once I find one I trust.  If you can manage your debt yourself, then do so, but if not… debt relief services with the right company can be a solid option.

I highly recommend this free professional debt relief analysis to help you get a handle on things. This company rocks, and I endorse them with confidence.

Debt management

Debt management plans are useful for those struggling to keep up with monthly credit card or other debt payments.  A company offering this service should help facilitate the consolidation of unsecured debt into a single monthly payment, negotiate lower interest rates and waived late fees with creditors, and provide comprehensive debt counseling.

Debt settlement

Debt relief companies also typically offer debt settlement services for those who cannot afford the monthly payments and are looking for an alternative to bankruptcy.

Other ways to pay off debt

To pay off debt, you can also:

  • stop spending!
  • get on a budget
  • get a loan from loved ones
  • get a 2nd job
  • considering the cost of owning a car… try selling one
  • sell other stuff you don’t need
  • refinance your mortgage – read how I saved over $41,000 by refinancing.

However you pay off debt… just pay it off! Reducing your debt burden increases you freedom.  If I have a $2,000/month mortgage, a $1,100 in auto payments, $600 in credit cards, etc., etc., etc., I’m going to have a lot of pressure to repay that debt each month.  If I choose instead to sacrifice my wants and focus on true needs… I will simultaneously reduce financial pressure, increase giving,  and increase my freedom to spend my time doing things I enjoy rather than working to repay interest on debt.

I don’t know about you, but that’s very appealing to me!

Categories // Debt Tags // consolidate, credit, Debt, peer lending

Does The FICO Score Matter?

10.19.2010 by Matt Jabs //

This question can only be answered individually, not corporately; so it’s not a question of whether the FICO score matters, but whether it matters to you.

“I start with the premise that the function of leadership is to produce more leaders, not more followers.” – Ralph Nader

I wrote this post to help you realize you have a choice, so you can help others realize they have a choice.

The reality of responsible choice

It is often said that music and art reflect the society within which they are created.  Much the same, financial systems, regardless of right or wrong, also reflect the culture in which they operate.

Much like we choose which artists and musicians to follow, we can also choose which financial systems to adhere to and which to disregard.

Yes, the FICO score is here to stay, but that doesn’t mean we have to follow it.  The decision is ours to make.

Are the foundations and measurements of the FICO score worthy of our allegiance?  I suppose that depends on whether or not it accounts for our chosen lifestyle.

Before taking your stance be sure to give the foundational components of the score careful consideration. If you determine the FICO score accounts for the financial lifestyle you wish to live, then follow its guidelines with confidence.  If your findings are contrariwise, then exercise your choice to abandon its guidelines.

Study the score, make your choice, and be ready to accept the benefits and challenges that accompany your choice.

Examining the FICO score

The FICO score itself is not inherently evil, it’s simply a system for gaging the creditworthiness of the indebted.  It’s amoral.

FICO is praised by some for it’s ability to separate the wheat from the chaff.  It is discredited by others because it fails to account for the debt averse.  It is even hated by some and viewed as an evil system of banker control and world domination.  Well… let’s take a look at what it really is.

What is a credit score?

A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information, typically sourced from credit bureaus.  Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, employers, landlords, and government departments employ the same techniques. Credit scoring also has a lot of overlap with data mining, which uses many similar techniques. [1]

Who is FICO?

FICO is a publicly-traded corporation (under the ticker symbol FICO) that created the best-known and most widely used credit score model in the United States. [1]

How does FICO determine the score?

Although the exact formulas for calculating credit scores are secret, FICO has disclosed the following components:

  • 35% = Payment history – Late payments on bills, such as a mortgage, credit card or automobile loan, can cause a FICO score to drop. Paying bills on time will improve your FICO score.
  • 30% = Credit utilization – The ratio of current revolving debt (such as credit card balances) to the total available revolving credit or credit limit. You can improve your FICO score by paying off debt and lowering the credit utilization ratio.  Alternatively, applying for and receiving the credit limit increase will also drive down the utilization ratio. Closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on their FICO score.
  • 15% = Length of credit history – As your credit history ages it can have a positive impact on their FICO score.
  • 10% = Types of credit used (installment, revolving, consumer finance, mortgage) – You can benefit by having a history of managing different types of credit.
  • 10% = Recent search for credit – Credit inquiries, which occur when you are seeking new credit, can hurt your score. Individuals shopping for a mortgage or auto loan over a short period will likely not experience a decrease in their scores as a result of these types of inquiries, however.  While all credit inquiries are recorded and displayed on your credit report for a period of time, credit inquiries that were made yourself (to check your credit), by your employer (for employee verification) or by companies initiating prescreened offers of credit or insurance do not have any impact on your credit score.

There are other special factors which can weigh on the FICO score.

  • Any money owed because of a court judgment, tax lien, etc. carry an additional negative penalty, especially when recent.
  • Having one or more consumer finance credit accounts may also be a negative. [2]

FICO score = responsible use of debt

My personal stance on the FICO score

I am debt averse, so I do not need the FICO score.  The score fails me because its calculations do not account for my financial modus operandi of complete debt avoidance.  I disregard it as an influence in my life because it fails me.

I understand the ramifications of my choice and accept all challenges it will bring.  The challenges will come, and I look forward to them.  Standing firm in my educated decision will help me seek out companies that do account for my financial lifestyle.  It will help me find companies that do not operate solely on a system that fails me.  Be sure you understand the challenges before making your decision.

Those who determine the FICO score does matter must live within the rules of the score.  That is their challenge.  Just as I should not be faulted for my choice, they should not be faulted for theirs.

Always think for yourself

I never plan to borrow money again.  If an insurance company penalizes me because I am debt averse, I will get a different insurance company.  Rather than doing business with companies who handcuff me, I will seek those who gladly work with people such as myself.  I know they’re out there.

What will you do?

Never be afraid to think *and live* outside the box, and never feel like you need to apologize when you do.

If you want to know your FICO score

Visit Credit Sesame (affiliate).  If you don’t care, then don’t look – I don’t.

Credit Sesame

[1] Wikipedia – Credit score.
[2] Wikipedia – FICO score.

Categories // Debt, Insurance, Money Management Tags // credit, Debt, FICO

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Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

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Disclaimer

Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

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