When I was a little girl I was a big fan of Peter Pan (the Lost boy not the peanut butter) and I believed in fairies. I remember making fairy wings with my seven-year-old girlfriend, they were beautiful. We would walk up a few steps in her house's open circular stairway leading to the second floor. Then we'd jump and "fly" with our wings. Our goal was to jump from the second floor. We kept flying off "one more step" until we were halfway up and got caught by her mom. Drats! Our airborne hopes were "grounded" and we went back to playing Chinese Jump Ropes instead.
If there is one tip you can use that is almost like sprinkling fairy dust over your finances, it would be to improve your FICO (or Fair Issac Credit Score). Currently, a good FICO can make the difference between paying $900 a month in mortgage payments or $1400. It can mean a $395 car payment or a $600 payment. It can mean you pay more in car insurance with a low FICO or you lose the job or the promotion because your employer checked the scores. This list could go on and on, but a better FICO can literally save you thousands of dollars each year---and its so easy to improve your score in three simple steps:
- Step One: Pay A Day Early Rather Than A Day Late - Late payments can cost you as much as $45 dollars in penalty fees and they are a hit on your FICO as well. Set up an automatic payment online at your credit card provider's website and you'll never be late again.
- Step Two: Pay A Bit More Than The Minimum - By paying as little as $10 more than the minimum balance on your credit card bill, you will improve your score. This shows up on the record as "paying down" your debt and it helps a lot!
- Step Three: Proportionality Plus - Keep the proportion on your various cards at 50% or below to improve your overall credit picture. This means that if you have a $5000 limit on a particular card, you don't want to charge more than $2500 on this card. Redistribute the debt on your existing cards to remain at 50% or less and you will truly help your FICO score.
Peter Pan had a score to settle--and you do, too! But you don't need fairy dust, you've got a good FICO to keep your finances flying high!
Ellie Kay
"America's Family Financial Expert" (R)
www.elliekay.com
