Posts Tagged ‘Tools’

Check Your Credit Score & Report

In Uncategorized on November 3, 2010 at 11:27 am

Today I invested in my credit rating. I bought my credit report and score online. Normally I request my free credit report in writing, or by phone, every year from each of the credit reporting agencies (Transunion and Equifax). I have them on a rotation so that I get a credit report mailed to me every six months. It keeps me feeling like I have a finger on the pulse of my credit. Fun! (and someone yells ‘nerd!’ from the crowd)

But today I spent the money and got my FICO Score. I haven’t done that in about two years. It is better than it used to be, but there were a few things I needed to attend to, and one thing on my report that I didn’t know was there!

An old joint account that had three missed payments! Eek! FICO don’t like 90 days past due. It was one of those annoying cards that add the interest even though you paid off the balance in full. Then they neglected to send us any statements for months. When I called to confirm that they received the payment they informed me that the account was still owing $6.11. I was so stinkin’ mad. I paid the stupid $6.11 and called immediately to confirm. I got them to not only mail me a letter but also to fax a written confirmation that it was paid and the account was closed. That account is closed, but now I just have to wait for it to drop off my report. Shouldn’t be long now..

The other housekeeping items I took care of were two things: one account that doesn’t get used and has been paid off for over 4 years. It was revolving credit, so I called them up and closed it. They are mailing me a confirmation letter. Check! The second item is to close off some of my paid credit cards. I’ve decided to close off Credit Card #1. As you may or may not recall, Credit Card #3 was dropped to a $500 limit. I’ve decided to use this one as my regular use card.

Here’s why.

It has no annual fee. It has only a $500 limit. They will give me 5% cash back on groceries and gas purchases for the first 6 months, then 3% after. Once my cashback credit gets to $50 they send me a cheque. Who can say no to free money? This works well for me as I’ve been using Credit Card #1 as my gas card. I charge all my gas purchases to it and pay it off right away (weekly). So I’ll just switch that habit to Credit Card #3 and cancel out Credit Card #1.

I will also be closing, or at least reducing the credit limit on, Credit Card #2 – the one I’ve had the very longest. It will be paid off in full in only three more payments. I can’t wait. At that point, I will be down to one credit card, or line of credit and will be just that much closer to my credit-card-debt-free life!


Adding to my Debt

In Uncategorized on March 16, 2010 at 11:18 am

Despite where the title of this blog post might lead your assumptions, know that this blog has primarily been about my credit card debt only.

Until now.

I love to play with my Excel spreadsheet “Debt Reduction Calculator” from vertex42. It has single handedly kept me motivated to stay on my debt repayment plan. To enter a few numbers and see the resulting debt free dates pop up gets me excited. Lame, I know. There is also a sheet that outlines the payment amounts to make to each debt every month until you are paid off. Its great! You can also enter lump sum amounts to any debt and it recalculates your payment schedule. Neato. And you can play with your plan by ranking your debts in priority order. You can snowball the payments, pay lowest balance first, or highest interest first. And you can play with the options and it spits out how much interest you will be paying in total over the lifetime of your debts. Trust me, seeing that number alone will get you motivated to pay everything down as quickly as humanly possible!

Up until two weeks ago I only had my credit card debts entered into the spreadsheet. This is because they are my primary focus right now. I am dedicated to them until they are gone forever.

I decided to go a little wild. I entered ALL of my debts. I entered my car loan, my student loans, and our mortgage. I put in all of the interest rates, monthly payment amounts, and the debt amounts. It was fun!

Ok, well seeing my debt free date get pushed back 15 years (due to mortgage amortization) wasn’t fun, but I loved to see where I would be in 3 years, 5 years, 10 years, you get it.

I took the mortgage off the calculator though because we don’t know how long we’ll actually be in this house and we consider the mortgage better than rent. Plus, our home value is higher than what we paid so let’s just pretend it doesn’t exist right now, okay? *sticks head in sand*

Anyways. All of this just to say that I’ve added 4 more debts to my repayment plan and the outcome looks good.

Credit card debt free by July 2011.
Car loan debt free by February 2012.
Free and clear of all my student loan debt by April 2013.

And that does not include any extra payments I make, any future increase in salary, or interest rate renegotiations. Which I do regularly – about every 6 months I review what interest rates are at various banks/credit cards and call and ask for consideration to lower, or an opportunity to transfer balances.

So in at max three years I will be completely debt free except for our mortgage. Hurray!

The Debt Snowball

In Uncategorized on June 15, 2009 at 10:33 pm

This is the method I am using to pay off my debt: its called the debt snowball.

First, you write down all you debts. For myself, I excluded my mortgage and student loans as they are not as essential to pay off right now. I also excluded by car loan simply because to me it is also not as essential to pay off at this time. I’ve had a car payment for the last three years, I need a car for work, and despite all the recommendations to include it in my debt calculation, for the sake of my own sanity and my own snowball, for now I have left it out.

Then you also include all the interest rates for each debt and each minimum payment. Make sure you are covering your interest every month, and maybe a little bit more! Sometimes your minimum doesn’t cover this, so run the numbers to be sure.

Then, tackle your smallest debt first. Or highest interest, whichever gives you the best feeling of achievement. In order to know how much you are paying towards debt, you need to work out a budget.

Instead of going into all the fine details here, I will refer you a blog entry at The Simple Dollar, a great resource for all things personal finance. This is the article here.

And if you want to play around with the numbers and the ‘snowball method’, I found an excellent free download spreadsheet you can use! Just check it out here.

Screenshot of Debt Reduction Calculator

My Wake Up Call

In Uncategorized on May 12, 2009 at 9:26 pm

Through all my reading of financial blogs, I always wondered when the authors had their wake up call. When was their moment of clarity when they realized that their financial state was not what they imagined for themselves?

For me it was a small task of plugging in some numbers into an excel spreadsheet. It was a free tool offered by here: Debt Reduction Calculator and I thought, ‘Sure! I’d like to see how my debt has added up.’

What a scary moment it was to see the final sum and the date that came up to be debt free by paying off my cards at my current rate.

A moment of clarity if you will.

And so, that was when I began my debt reduction plan.

If you have any tools you have found useful in determining your debt repayment plan, or otherwise, feel free to share and I can add them to my tools.