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Archive for the ‘Finance’ Category

UNDERSTANDING CREDIT SCORES

Posted by Tim Bryce on July 12, 2017

BRYCE ON FINANCES

– You would be wise to keep track of yours.

Click for AUDIO VERSION.
To use this segment in a Radio broadcast or Podcast, send TIM a request.

Whether we like it or not, our lives are greatly impacted by our financial credit scores. If you have a good credit rating, lending institutions are more than happy to loan you the money to buy a house, a boat, a car, help you start a business venture, or whatever. If you have a bad rating, you’re basically stuck in Nowheresville.

For our younger readers, your credit score begins the day you get a revolving line of credit, such as a credit card or gasoline card, or purchase something on time, such as a house, furniture, or whatever. Your ability to pay off debt is monitored and scored from this point to the day you finally die (and pass your financial troubles to your heirs). In other words, it is an albatross hanging around all of our necks.

Interestingly, most consumers pay little attention to their credit scores which are ultimately maintained by three major credit bureaus: Experian, TransUnion, and Equifax. A lot of people seem to prefer operating in the dark. I guess ignorance is bliss. To the rest of us, it’s a wise move to periodically look over your credit report and make sure it is an accurate accounting of your credit history. If it is wrong, it could do considerable damage to your reputation from a financial perspective.

Your credit score is primarily a reflection of your ability to pay your debt. Period. Remarkably, your income is of little concern in this regards. Just because you make a lot of money, it doesn’t necessarily mean you will use it to pay off your debt. Instead, they carefully monitor your credit cards and loans. In particular, they analyze the amount of credit available to you, your outstanding balance, and if you are paying it off on time. Late payments are flagged accordingly. From this, they calculate a credit score which lending institutions use to pass judgment on you. Having a good credit score, therefore, is a sign you are able to manage your finances responsibly. It should be noted that gender, race, and religion are not considered when determining scores.

Although the credit report is available free to you once a year, the credit score must be purchased separately for a modest fee. Perhaps the best place to begin to study your credit profile is at the web site, Annual Credit Report, a free service to guide you through requesting a credit check.

We all understand what is necessary to raise credit scores; in a nutshell, don’t bite off more than you can chew, and pay it off on time. However, knowing this and having the discipline to implement it are two different things, as evidenced by our current recession which was started, in large part, by people defaulting on home loans (and don’t get me started on the idiots who loaned them the money in the first place).

At the time of this writing, the Experian credit bureau reported that America’s “National Score Index” was 673 which, by my estimate, is a “Good” credit rating (“B”). This is either an overly generous estimate or perhaps Experian is telling us our economy is not as bad as we thought and is indicative of a healthy rebound. I suspect the latter as their numbers are based on fact, not speculation.

If anything, this recession has taught us the virtue of paying attention to credit ratings, both for the consumer and for lending institutions. Like it or not, it is how we quantify an individual’s financial responsibility. Regardless of your credit score though, always remember this: The less money you have, the less likely you will get a loan. Conversely, if you already have a lot of money, you’ll get all the cash and credit you want. Sorry, that’s just the way it is. I don’t make the rules, I just report them.

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:   timbryce.com

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Copyright © 2017 by Tim Bryce. All rights reserved.

Also read Tim’s columns in the THE HUFFINGTON POST

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Posted in Finance | Tagged: , , , , | 2 Comments »

STARTING THE DAY

Posted by Tim Bryce on March 3, 2011

As I was growing up, it was impressed upon me that breakfast was the most important meal of the day. We therefore always had something to eat before going off to school, be it eggs, oat meal, cereal, pancakes, etc. You have to remember this was well before the advent of toaster strudel or instant French toast or waffles. I don’t know which was more important though, eating the meal or sitting down with the family before we all scattered to the four winds. Breakfast was useful for me to wake up and converse with other human beings before I had to face the rest of the world. My parents made sure I was properly prepped for the day. I therefore concluded the value of breakfast was not so much the meal itself, but that it put me in the proper frame of mind to tackle my assignments for the day.

A lot has obviously changed since then, but I find we all have some sort of ritual we follow in starting the day. As for me, I shave and shower early. For some reason, the water invigorates me and I start thinking about what I have to do for the day. I also start to think about ideas for a column, perhaps resulting from a leftover dream I was just having. After I get dressed, I go out and retrieve the morning newspaper and, if I’m lucky, I’ll recover a leftover cigar that I’ve been saving, light it up, and smoke it on my way to work. Rarely, if ever, do I have breakfast anymore. I’m just not hungry, but crave a cup of coffee instead which I usually drink black.

It’s still nighttime when I drive to work. I like it this way as there are hardly any cars on the road, thereby allowing me to enjoy my cigar and think. I keep a handheld tape recorder nearby to record any pertinent notes or thoughts I don’t want to forget. After arriving, I start the coffee for the day, and open the office. It’s still nice and quiet. I then check voice mail and my backlog of e-mail messages. If I have a column ready, I post it accordingly. By 7:00am I have accomplished quite a lot and am now in the proper frame of mind to address the remaining items on my list for the day.

I don’t like it when my morning ritual is upset, and I don’t believe any of us really do. We have just arisen for the day and are trying to find our stride. If we don’t, the rest of the day can become rather miserable and convoluted. Consequently, we develop familiar routines that put us on autopilot until we can start to become productive. On commuter trains you see people sleeping, reading the newspaper, finishing the crossword puzzle, reading, listening to music, or reading their e-mail on their smart phone. It’s all rather quiet though.

For those commuting by automobile, you see people drinking coffee, shaving, touching up their makeup and hair, talking on their cell phones, or listening to their radios or CD players. The only problem here is if someone doesn’t pay attention on the highway he will likely disrupt the routines of a lot of other people, not just himself.

There is one custom I firmly believe you should do to start your day, and that is simply to pay a bill. It forces you to think about your economic situation, thereby influencing your priorities and points you in the proper direction for the day. Believe me, writing a check in the morning can motivate people a lot better than anything you can eat for breakfast.

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
http://www.phmainstreet.com/timbryce.htm

Like the article? TELL A FRIEND.

Tune into Tim’s THE BRYCE IS RIGHT! podcast Mondays-Fridays, 11:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

Posted in Finance, Life | Tagged: , , , , , | 1 Comment »

BEING NICKELED AND DIMED TO DEATH

Posted by Tim Bryce on April 5, 2010

For those of you who possess a credit card with a “rewards” program, have you ever stopped to think who pays for the reward points? Let me give you a hint, it’s not the credit card companies. Such programs are popular among consumers and used to obtain such things as travel, books, CD’s, DVD’s, electronics and photography, home and garden items, sporting goods, toys, gift cards, and a lot more. Some even help you finance the purchase of a new car. The more you use it, the more points you accumulate for freebies; sounds great, right?

In reality, every time you use your credit card, the merchant is charged extra for reward points. Now, you don’t really think the merchant is going to foot the bill for your rewards do you? Of course not. Instead, he is forced to raise his prices to compensate accordingly. This means you are footing the bill for all of this. Interestingly, some reward programs have a policy whereby you forfeit the reward points if you do not use them within a certain period of time. When they expire, the points revert back to the credit card company who keeps the money associated with them. Not a bad little scam is it? Someone in the marketing department of the credit card companies was really on the ball as this program significantly induces consumers to use credit cards as opposed to checks or cash.

The point is, whether we know it or not, we are all getting “nickeled and dimed” to death, and I’m sure we can all site instances where we, the consumers, are being duped into paying for what appears to be innocuous costs. For example:

* A penny sales tax as levied by a government body. A penny here, a penny there, and it all adds up rather fast.

* Wire transfer fees to move money from one account to another. This is a favorite of U.S. banks. Not only do they charge you for the service, but they hold your money for 24 hours so they can make interest on it. In this day and age of electronics, you would think such a service would be cheap and instantaneous; maybe in Europe and Asia, but not in the United States.

* Paying a surcharge on fuel, particularly as the price of gasoline falls.

* Products priced at “Just $X.95”. I wonder why some people have an aversion to round numbers. I have never bought anything at such a list price, something is always added on to it, particularly “handling and shipping” charges. Let us also not forget the 9/10 cent added at the gas pump.

Regardless of how little we seem to be paying, it all adds up over time, and is paid by the consumer and nobody else. Actually, I think it is rather brilliant marketing to make consumers believe they are saving money. It’s not the nickels and dimes that bother me, it is the pettiness that rubs me the wrong way and how we are being treated as suckers. Maybe we should return the favor and pay our bills less five cents, whereby they have to send us a $.42 letter notifying us we are in arrears. I would love to see them turn that over to a collection agency.

Nonetheless, I now have a true appreciation for the old proverb, “If you take care of the pennies, the dollars will take care of themselves.”

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
http://www.phmainstreet.com/timbryce.htm

Copyright © 2010 by Tim Bryce. All rights reserved.

Posted in Business, Finance, Life | Tagged: , , , , , | Leave a Comment »

 
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