Archive for July, 2010

What’s the Difference Between Credit Report and Credit Score?

By: Green Panda | Date posted: July 07, 2010 (5:00 am)

Sometimes I hear friends and family use credit reports and credit scores interchangeably. While they are definitely related, there are differences. I want to share how you can improve your credit report and how your credit score is determined.

Why is it important to be familiar with them? If you plan on getting mortgage, having a car loan, or even are shopping for car insurance, your credit report and score will most likely be checked. You want to have the best record you can have to get the best interest rate and deals.

Your Credit Reports

Your credit report is basically a record of your history of payments and helps lenders determine your credit worthiness. You technically have 3 credit reports, one with each credit bureau.

Credit Agency Contact Numbers

  • Equifax: (800) 685-1111
  • Experian: (888) 397-3742
  • TransUnion: (800) 888-4213

In theory, they should have the same information, but sometimes you can have inaccuracies in any or all of them.

Get Free Credit Reports

The Federal Trade Commission has one site where you can really get your credit reports for free at annualcreditreport.com. If you do not have Internet access, you can also call 1-877-322-8228 to order your credit reports.

You should at least see if there are any mistakes on your credit report and fix them, as they can lower your credit score or put you in a bad light with lenders.

Your Credit Scores

Your credit score is a number between 300-850 that each of the credit agencies assign based on the information on your credit report. I wouldn’t get too hung up on credit scores, as leach bureau has their own little system. I would just shoot for 720 or higher.

By the way, you can’t get your credit scores with the Annual Credit Report site. They are completely separate. You can either buy your score from the credit agencies or you can use a service like myFICO.

If you want a general idea of your credit score, you may want to check out Credit Karma. It was in the ballpark when I tested it out.

Fixing Your Credit Score

While we don’t exactlyhow Fair Issac calculates your score, we do know what factors they take into account. Here’s how your score is broken down:

  • 35% – Paying your bills on time: If you’re late with your payments, not only can you get a late fee charged to you, but after 30 days, it ges reported to the credit bureaus.
  • 30% – Debt you owe and the amount of available credit: This measure how much of your lines of credit you are using. If you only have a $200 balance on a $1500 card, that’s better credit score-wise than having $200 balance on a $500 card.
  • 15% – Your credit history length: This is basically keeping track of how long you’ve had your accounts. If you’re a new credit card holder, this will naturally improve the longer you have a solid history.
  • 10% – New credit applications: A small part of your score is determined by how many accounts you’ve opened up recently.
  • 10% -Different Types of Credit: I’m not crazy about this since it encourages several different types of debts. I think the less you have, the better. A mortgage and or a student loan already seems like more than enough debt.

It does take some time for improve your score, but it’s completely doable.

Your Thoughts on Credit Scores and Reports

Have you checked your credit reports recently?

CFP- Certified Financial Planner : Why It is the Best Job In The world

By: Mike | Date posted: July 06, 2010 (4:57 am)


For those who are in the middle of a career crisis of if you are about to choose your career path, I have one thing to say: Being a CFP is the best job in the world!

I made this career decision about 5 years ago when I started to study in order to get my CFP title. It took me about 2 years to get all the classes done and write my CFP final exam. I have been a financial planner for the past 2 years and a half and I just love my job. This is why I wanted to share my experience as a CFP.

What Does A CFP do Anyways?

I would compare a Certified Financial Planner to a family doctor of finance. As your family doctor, you go see him once a year to make sure that you are healthy (wealthy) or more often if you are hurt (have financial needs). He will give you medicine (financial advice / recommend products) in order to help you heal and if you have a very specific problem, he will refer you to a specialist (like a CFP would refer you to a lawyer or an accountant if you seek for legal or tax advice).

As you can see, it is more than a regular financial advisor. The Financial Planner will create a retirement plan, help manage your investments and optimize your debt structure and offer you tax tips. Therefore, he is a kind of a one-stop-shop for most of your financial needs.

What Makes A CFP So Cool As A Job?

I personally think that there is a ton of advantages of being a Certified Financial Planner:

#1 The Pay check is good

Overall, I think that CFP’s are pretty well paid. Some of them are paid solely on commission (i.e. they need to sell investment products or debt instruments to earn money), some others are fee based or salary based (paid by the client or by the employer) and there are also hybrid (part salary based with a bonus that can reach 50% of their income). In any kind of these structures, a good CFP can make about $100,000 a year. I would guess that the average pay check for a Financial Planner is around $70,000.

#2 Financial Institutions Are Looking for CFPs

There is an important demand for this certification. In fact, Financial Planners are part of the top career choice for the next decade. You will certainly not lose your job for the next 10 years if you go this route!

#3 The CFP schedule is flexible

As I work with my clients, my schedule looks like my clients’ schedule. Therefore, I am able to move my work time from early in the morning or late at night. If I have a good week, there is no problem that I can take my Friday off to go golfing ;-) . As long I as meet my objectives and my clients are happy, I am free to come and go as I please (note; you still have to work hard if you want to reach this level of “freedom”).

#4 You Help People

What I really like about this job is that I really help people while I’m getting paid. It is very interesting to meet different people with different stories and different visions. In the end, I really feel good when I am able to help someone going through a divorce, plan his retirement or help him save thousands of dollars in fees or via tax tips.

What Do You Need To Become A CFP

Depending on where you live, there are different requirements. I personally think that you would be a better CFP with a bachelor degree in finance or accounting. Then, you have to complete your Certified Financial Planning certification.

In addition to the academic requirement, I think that a good CFP is someone who:

- Loves to talk with people

- Is not afraid to share his point of view

- Has strong social abilities

- Loves finance (duh!)

- Is meticulous and rational

Do You Have Any Questions Regarding the CFP Job?

If you have any specific questions, don’t hesitate to comment or contact me at thefinancialblogger (at) gmail (dot) com.

Disclaimer: I am a CFP in Canada, therefore, my job may differ from the CFP position in the United States. Overall I think it is pretty similar, but still, never take any of my financial articles as financial advice. You are better off meeting a CFP in your area to look at your personal financial situation.

When Obvious Meets Procrastination – A Car Trouble Story

By: Mike | Date posted: July 05, 2010 (4:54 am)


I rarely admit it. In fact, I try to avoid admitting it most of the time. But today, I have to stand up, look straight in the mirror and tell myself:”I am the perfect example of a procrastinator”.

I know I am good at a lot of things. One of them is that I am very effective in everything I do. The downside of being so productive is that I have the tendency to procrastinate. For things I don’t like, I always postpone them until later on. And this is what this article is all about.

A month ago, I fell in love

I was looking for a second car. Since I moved one hour further away from work, I needed to get a sound, reliable second car to drive to work each morning. On the other hand, I was also looking for a car that would make me feel good about the additional driving of such a long distance everyday. This is why I opted for a Mazda RX-8 (okay… it’s a 2004 but it still rocks!).

So, I started to shop around and found this great deal: The car was in great condition (I bought it in May and was inspected in February 2010), the guy was trustable (he was the VP of a real estate firm) and he gave me a second set of wheels with brand new winter tires on it. Since I really wanted the car, I decided to buy it right after a test drive with my father. I must say that the car drive smooth and life was perfect back then.

2 weeks ago, I was disappointed

2 weeks after my purchase, driving this car was still awesome but the front brake pads were finished and I scrapped the 2 discs. Along with an oil change, regular maintenance, I splurged another $1,000 during thes weekend to bring my car back  to “new”.

I was disappointed in myself as I should have asked for another inspectionby an independent mechanic on the car just before I bought it. I would have been warned that the brakes were finished and I could have:

#1 bargained a lower price for the car

#2 had the brake pads replaced before I had to pay for brand new disks!

This was, again, the price I had to pay for my procrastination. I knew I should have had an inspection but I thought I would wait until my first oil change to have my car checked over (once it is obviously too late) and have the “little things” fixed at the same time.

This morning; I am pretty darn angry

Once again, I let the procrastinator in me take control of my actions (or should I say lack thereof?). 2 days ago, the check engine light went on but since my car was running smoothly, I didn’t call the garage right away and thought it could wait until next week (since I had more time to go to the garage and take care of it). So I drove my car with the light on for 2 days without any problems. In fact, I didn’t notice anything different and I was still very happy to drive it.

This morning, the darn car didn’t start! So I had to take my main car to go to work, leaving my wife with a broken (but nice looking) sports car in the driveway.

So now I am left with my bad habits and a broken car… How much do you think procrastination will cost me in this situation?

I think I should add “procrastination” to my monthly expenses!

Image source: Mrak75

Green Panda; What is Cool Around the Web This Week

By: Mike | Date posted: July 02, 2010 (5:00 am)

Every Friday, I’ll pull out the 15 coolest personal finance article I found on the blogs I read weekly:

#1 Your Net Worth Is An Illusion @ Financial Samurai. Really? Well when I go see my bank, they like my illusion ;-)

#2 The Quest for Perfect Credit Score @ PT Money. Having a high credit score makes your financial life so much easier!

#3 How To Sell Junks For Cash @ The Digerati Life. I never take enough time getting rid of my stuff. I always end-up giving it!

#4 Money Lesson from Wal Mart @ Christian PF

#5 401k Ripoff @ Joe Taxpayer

#6 Q&A on Credit Cards @ Studenomics

#7 Capitalizing on Limitation @ Canadian Finance Blog

#8 Would You Lend Money To Family or Friends @ 20 Something Finance. I’ve borrowed money once and I would never do it again!

#9 10 ways to save money on wedding @ Money under 30.

#10 Morningstars Stars; Are Mutual Fund Ratings Any Use @ The Oblivious Investor. I believe that they are not of any use ;-)

#11 Best mortgage for first time home buyer : 15 vs 30 year term @ The Wealth Pilgrim.

#12 REITs: A TireRed Investment for Dyslexics @ Len Penzo

#13 Borrower is Slave to the Lender @ Money Help For Christians

#14 Should I Get Out Of The Market @ Gen X Finance

#15 Before You Agree To A Debt Settlement @ Amateur Asset Allocator.

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Working In College– Good or Bad Idea?

By: MD | Date posted: July 01, 2010 (6:00 am)

I worked throughout my college career. My brother has chosen not to. There will be readers that will share stories about working 40 hours a week during college. There will also be readers that come from a really intense college program that will talk about their 40 hours per week course load. Instead of trying to give you a final answer (I hate people that do that!), I wanted to share the pros and cons of working during college:

Pros of working in college:

Pay down debt.

As mentioned last week, one  of the most effective strategies for killing off student loans is to begin paying them down while you’re still a student. I technically never had any debt because I always paid my way through school as I went along. There were a few times where I was late on my payments, but I never had to take out any kind of a loan. This is the greatest benefit to working in college. It will suck. You’ll drink more caffeine than water. You’ll feel like there’s no end in sight. Then one day you’ll see the light at the end of the tunnel. It will all be over. You’ll have your college degree and your finances will be in check. Trust me.

Build solid habits.

The owner of this blog, managed to work full time while pursuing his MBA. That’s pretty impressive if you asked me. However, I’m willing to bet that he built his solid work habits in his early 20s. I personally find that this is the best time to create a productive lifestyle, that will follow you into your career and whatever comes after that (I’m guessing family?).

Create time management skills.

The last few weeks it seems as if I have no time for anything. Yet when I was in college I had time to attend all of my courses and still work full time. Why is that? Because I was forced to pickup time management skills. Now that schools out for the summer I’ve started to slack a little bit. I’m not proud of it but I definitely feel that the fall semester will force me to reunite with my good ol’ time management skills.

Cons of working in college:

Dilutes focus.

I don’t want to come off as arrogant. I do realize that many college programs are so rigorous that you can barely get 6 hours of sleep nightly, let alone hold any sort of part-time job. This is where working in college becomes totally pointless. The money that you earn will be offset by your diminishing academic performance.

It’s difficult to study for finals when your shift ends at 11pm. I know this because I’ve been there. There’s been many times where I felt that I thought I could have performed better academically if my focus wasn’t so diluted.

Energy drain.

This one really depends on your job. Some college jobs (bartending, manual labor, etc.) can be very physically demanding. After a long shift at work the last thing you’re going to want to do is study for that World Trade Economics exam the next morning. What will happen? Who knows. You might drink a Red Bull and pull an all nighter– or you might just crash and not get enough studying in. Neither options sounds very enticing. This is where working in college will start to wear you down slowly.

Less networking/socializing.

Yes I realize that socializing in college usually refers to playing drinking games with your buddies. However, is this such a bad thing? Think of all the dudes you can meet playing beer pong that’ll be able to help you out in the future. Think of all of the cute girls in the gym that might be working for that top company that you want to get into. Think of all those professors who need help on research projects, I’m sure they can write you a decent reference letter one day in the future. Working in college becomes a major issue when you always work and miss out on life. There are many networking opportunities available to you in college. Take advantage of them.

You might get a hot date– or you might get a nice reference letter one day in the future.

On which side of the fence do you fall on? Did you work during college? Did you choose to focus solely on your studies?

image source: big230

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