professionalimpact


Author	Title
Bobbi Bartsch Curtis	The Beginning: Creating Your Credit File
Bobbi Bartsch Curtis	Is it Time for a Change?
Cara Sathrum	The Little List of Skin Care Tips
	Your Contributions

The Beginning: Creating Your Credit File

By Bobbi Bartsch Curtis

I’ve worked on both ends of the credit industry – approving and issuing credit as well as collecting from those who have run into trouble. All told, I’ve spent about fifteen or so years in the business. Primarily, what I learned is this: Most people don’t really understand how credit works. I consistently hear that credit cards are just a rip-off. People have told me about their discussions with their older children concerning those dirty, nasty credit card companies that just take all your money and try to bleed the consumer dry. They advised their children to NEVER apply for or accept any credit cards. I’m guessing that these people want their children to either lived with them or rent for the rest of their lives and to drive old clunkers that don’t cost more than a few hundred dollars. I know people who are proud of the fact that they have never had a credit card, until they try to make a major purchase for which they do not have enough cash to buy the item outright – a house, for instance. Some of these same people will not lend their best friend $20. Why? Because they’re afraid that their friend will not pay them back, but they think that a bank should loan them $150,000 to buy a house without anything to prove that they have a history of paying their bills

A few facts just to get started:

If one has no credit history, one might (with great difficulty) be able to finance a home; however, the interest rate will be higher than if one has built a strong credit history. The house will cost more, and the payments will be higher.

If one has no credit history, one might be able to finance a car; however, the interest rate will be higher than if one has built a strong credit history. The car will cost more, and the payments will be higher.

If one has no credit history, many apartment complexes charge additional deposit fees, much of which may not be refundable when the tenant moves out.

If one has no credit history, most banks or major lending institutions will not loan one any money for anything. There are some finance companies that will take the risk, but the interest rate may be as much as four times what the bank’s going rate is. Borrowing the money will cost more and the payments will be higher.

If one has no credit history, some A rated car insurance companies will not take the risk of issuing insurance. A less reputable company may take the risk, but the auto insurance could cost more, making the payments higher.

If one has no credit history, one should probably be prepared to pay cash for major purchases such as furniture and appliances.

If one has no credit history, deposits for utilities such as power, gas, phones, etc. are generally higher, costing one more money.

If one has no major credit card, most car rental agencies will not rent a car without a substantial cash deposit.

If one has no major credit card, one cannot book a hotel room in advance because a cash deposit is required.

If one has no major credit card, acquiring a cell phone that is not prepaid will require a larger cash deposit.

Are we seeing a trend? Having either no credit history or no credit card can make doing personal business expensive. Yes, credit cards charge interest on unpaid balances. They charge fees for certain services – one must pay for services received. When was the last time your mechanic (unless he/she is a relative) fixed your car and told you the labor was on the house? Charging interest and fees is how they pay their employees who service their customer’s accounts. That is how they have offices and phones and computers and all the things necessary to do business so that we can buy things that will take us time to pay for. They essentially made a loan, in good faith, to the person who has the credit card. They fronted the money and paid the store that sold the merchandise. You, the consumer, took the merchandise home. Did you expect the credit card company to give the money to the store for you free of charge because they liked your handwriting on your application? Paying them a few dollars in interest for several months could save you thousands of dollars a year on a 30-year home loan.

If this has convinced you that creating a good credit history would be valuable to you, then let’s get started. It used to be that the major credit card companies would not issue accounts unless the applicant had a good credit history already. One was forced to apply to local stores for their in-house charge accounts in order to begin building their credit history. This is no longer the case. Usually, your best bet to get your first credit account is to apply at the financial institution where you have your checking account. If you have maintained your checking account well for a couple of years (few to no overdrafts, etc.), they will generally approve a major credit card (like Visa or MasterCard) with a starter limit – something around $300 to $500. (Please note that this means that you need to maintain a good reputation with your bank or credit union.) If you are not approved on the first try, apply again. If you are again turned down, go to your financial institution and ask them about the turndowns. If they are still not willing to issue you credit, then it might be time to seek elsewhere. You should reapply at your financial institution at least one or two more times. Persistence can pay off. They will see their credit inquiries on your credit report each time you apply, and they pull your credit report. They will realize that you are serious about getting an account. Most will give you a chance at this point. If this does not work, pick up a few applications for major credit cards at stores or go online to apply.

Here are some situations to avoid:

DO NOT APPLY FOR OR ACCEPT A CREDIT CARD from a company that wants to charge you anything more than an annual fee in order to open the account. Many companies have initial charges, which will be applied to your account before you even receive your card. They can add up to the entire limit on the account. If you are not prepared to pay off these various fees at the outset, you will be paying interest on the fees until they are paid in full. This will create a credit file for you, but you have received nothing for that money but the plastic card. This will cost you money that you should not have to spend to build a credit history.

DO NOT APPLY FOR OR ACCEPT A CREDIT CARD from a company that requires that you purchase something from them in order to receive your card. These are usually credit-related educational items such as videos or DVD’s that teach how to handle credit. The charges are applied to the account before the cards are issued. These packages can cost several hundred dollars, generally eating up the whole credit limit on the card. Again, unless you are prepared to pay off this balance at the outset, you won’t be using the card for purchases that you would normally make. This will cost you money that you should not have to spend to build a credit history.

DO NOT APPLY FOR OR ACCEPT A CREDIT CARD with an annual interest rate that is more than 20%. I’ve been a little lenient here on the side of the credit card company. 12% to 14% is a good rate for someone with no credit history. However, you may have to shop around to find those rates, and it may not be worth the time. You will see in the next section why the interest rate is not as important as you may think

DO NOT APPLY FOR OR ACCEPT A CREDIT CARD with an annual fee of more than about $40. Even that’s a little high, but an extra $5 or $10 a year is still a lot less than the thousands in interest you might pay unnecessarily due to the higher interest charged for a home or car loan as mentioned above.

DO NOT APPLY FOR OR ACCEPT A CREDIT CARD that requires a security deposit or a deposit in a “savings account” to back the credit account (known as a “secured charge account”). When these accounts report to the credit bureaus, there have negative connotations attached as far as other credit issuers are concerned. They do not improve your credit history. If someone tells you that they do, this is not the case. When your credit score is being calculated, these types of accounts reduce your score, they do not increase it. Increasing it is good. Decreasing it is bad.

DO NOT APPLY FOR LOANS AT SECOND RATE FINANCE COMPANIES. They charge more interest; and, as in the case of the secured charge account, thrift and loan and finance company loans reduce your credit score. It is assumed by other lenders that you were not able to get a loan from a more reputable company, making you a higher risk.

Once you’ve received your new credit card, DO NOT RUN OUT AND CHARGE ANYTHING FOR WHICH YOU WOULD NOT OR COULD NOT NORMALLY PAY CASH. There is a secret to building a good credit history. That secret DOES NOT include over-extending yourself the minute you get the account.

Here are some suggestions for building your credit history wisely:

Use your new credit card to charge gas for your car. Every time you charge gas, reduce the balance in your check register by the amount of the charge. When the bill comes, pay it in full well before the due date (allow at least seven days mailing time). Pay the bill online if possible. This is much more reliable than mailing a check. The money will be sitting in your checking account because you’ve been tracking it as if you’d written checks for it already. Now, this is a normal expense for which you’ve been paying cash. YOU HAVE NOT CHANGED YOUR MONTHLY BUDGET BY ADDING A BILL. You are simply paying it a bit differently as you create your GOOD credit history. If the account you have has an annual fee, that is the only thing that will affect your regular budget and for only one month each year. Some credit accounts charge interest only on balances that remain unpaid after the billing cycle within which they were charged. Even if your credit card company charges interest on an average balance over each month, you are not spending more than a few dollars on the balances we’re talking about. The interest you will pay will be minimal; and, as mentioned before, is a very small investment in your future. You may substitute any of your normal monthly expenses for the gasoline suggestion as long as you are not increasing your normal outflow of money in order to put a balance on the account each month and then pay it off in full each month. The purpose is to pay the card off every month and create a history of paying your bill. The purpose is NOT to create yet another bill to pay.

Since lenders are looking for at least three good credit references, apply for another account about three months after getting the first one and another about three months after being approved for the second account. Treat all three accounts alike, choosing only one type of transaction for each account so that you are not creating new bills, just paying out what is already in your budget with them. When the bills come, check them against your check register to make sure that you have already deducted the correct amount from your checking account to cover the pay off on the credit card bill, adding any fees or interest.

Watch the credit limits on your accounts. Do not go over the limits. If the limit is $300, stop using the card when your balance hits about $260. This leaves room for the annual fee, charged the month before or the month of your anniversary of opening the account, and for any interest being charged.

You may want to apply for one more card for use in case of emergencies only, such as car repairs or doctor visits and medicine. Let it sit with a zero balance for the rest of the time. If you need to use the card for an emergency, be sure to pay off the balance as quickly as possible. Keep in mind that paying the minimum payment listed on the bill each month before the due date will keep your credit in good standing, but the balance will reduce very slowly, and you will be charged interest on the open balance or average balance each month until it is paid in full. Paying at least double the minimum payment will greatly reduce the length of time to pay off the bill as well as reducing by a considerable amount the total interest paid.

Clearing up a few misconceptions

Creating a credit history requires showing that you have a HISTORY of paying your accounts. You need to show that you systematically and regularly pay your bills. It does not mean that you opened an account and never used it. It does not mean that you put a balance on it once and paid it. It’s called a history because it shows consistency. Either you consistently pay your bills or you do not. This is what lenders look at on a credit report and how they base their decisions to either issue or not issue credit.

Utility companies typically do NOT report to credit bureaus unless the bill is not paid for an extended period of time, is charged off and goes to a collection agency. Lenders do not really care much about your utility bills being kept current. This is not generally considered to be a part of your credit history unless it shows up as bad credit.

Rents paid do NOT generally report to credit bureaus unless they are reported by a collection agency as bad credit due to lack of payment for some reason. Paying your rent on time WILL NOT create a good credit history.

Most lenders are looking for a two to five year history on which to base their decision to issue credit. You need to build your credit history for at least this amount of time in order to expect a loan company such as a bank, a car dealership or a mortgage lender to consider you for a loan at those really great interest rates that are advertised. When you hear about the special at the car lot for a loan at 2.8%, keep in mind that that is for those who have impeccable credit ONLY. If you have no credit or bad credit, that rate can go as high as 34%, depending on the state in which you reside. This can increase your payment on a good-sized loan (enough for a nice, new car) by a few hundred dollars each month. It’s worse on a home loan, since the loan amount is typically much more than the cost of a car; although, there are some really expensive cars on the market. If your credit is not good enough, chances are slim that you will be approved for a pricey vehicle.

Keep in mind that the amount of the monthly payments on a loan is determined by at least three factors – the amount of money being borrowed, the interest rate being charged and the number of months over which the loan will be paid back. When buying a car, consider the total that will be paid out including all the interest. It might be worthwhile to take a shorter term loan, say 4 years instead of 6, with a higher monthly payment to avoid paying a few thousand more dollars (varies depending on how much is being borrowed at the outset) in interest. Just a thought.

Congratulations. You are now on your way to saving a bunch of money and aggravation!

Come back in mid-July for the next installment on managing your good credit.

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IS IT TIME FOR A CHANGE?

By Bobbi Bartsch Curtis

Life can be hectic, unsettling, confusing, disheartening, and downright overpowering. There are issues at home, issues at work, issues with or surrounding people we love. We are expected to do too much in too little time. We get less and less sleep, either from having too much to do or because our minds are constantly trying to figure out what we can do to make things right and never really relax enough to get some solid sleep. We suffer physical and emotional pain for ourselves and for those we love. We just have too much to do!

When we already feel down, tired and maybe depressed, it is that much harder to accomplish what we must. We fall further and further behind. It’s time for a change!

Have you ever had a really rough night’s sleep and looking in the mirror in the morning is painful? You were awake several times during the night because you’re kind of half sick. Your skin was a pasty gray; there were bags under your eyes; your hair was limp; you felt like crap. So you jumped in the shower, took a little extra time with your makeup, making sure that it complimented the clothes you’d decided to wear. Since the hair wouldn’t comply, you pulled it back in a French twist. You put on your favorite suit – the one that has always elicited at least a couple of compliments. You made a concerted effort to make yourself look better so that you’d feel better. You left the house feeling as though you could make it through the day – maybe not take over the world, just get through the day gracefully. Guess what. It worked. Several people at the office told you how refreshed you look, and they knew what a rotten day you’d had yesterday. How do you do it? You are amazing.

Then, there’s the reverse. You get up in the morning, feeling rather jaunty. You take a little extra time primping because you know that it’s going to be a better day than usual – you feel great! You decide to wear your hair down today because it is just too pretty and full of life to pull back. You put on that new suit on which you splurged and spent too much -- the one that is that oh-so-in-vogue shade of green. You get to work, and everybody to whom you speak asks if you’re feeling all right, telling you that you look tired and your coloring isn’t very good. Now your great day is in the toilet. Even though you felt wonderful, now you’re tired and worn out with no drive for the day. The power of others’ opinions got to you. Ok, so we’re all human. When our friends and associates tell us something, we internalize it. Our minds run right with it, and we allow ourselves to be carried along.

However, they didn’t lie to you on either occasion. On the day that you really felt horrible, you did some things that helped your appearance. On the day that you felt good, you did some other things that reduced your natural vibrancy. How do you make sure that everyday you look your best? What are the things that you can do on a regular basis to make you fabulous?

The first thing is to determine whether your skin tone is cool or warm. If you’re unfamiliar with this concept, there is a really easy way to determine this. What you need: a piece of peach colored fabric, a piece of medium blue colored fabric, a mirror – or a really honest friend – and sunlight. With a perfectly clean face (no makeup at all) drape the peach fabric around your neck so that all you can see is your face and the fabric. Look at yourself in the mirror or have your friend look at you closely. Now do the same with the blue fabric. One of them will make you look tired and drained and make your skin look rather sallow or washed out and a little unhealthy. The other will make you look fresh and healthy, giving a glow to your skin and hair and brightening up your general appearance. If the peach brightens your skin then you have warm skin tones. If it is the blue fabric, then you have cool skin tones. Warm skin tones generally have yellow undertones while cool skin tones have bluish undertones.

In the first example above, the color of the suit (which had received compliments from others already) is more than likely compatible with your skin tone, bringing out a more healthy appearance even under less than perfect circumstances. In the second example above, the stylish green shade could be either a yellow-green or a blue-green. If you have warm skin tones, the blue-green does not enhance the natural you. Likewise, if you have cool skin tones, yellow-greens will not bring out the best you. In both cases, you will tend to appear tired; and your skin tone will not look especially healthy no matter how good you feel.

Most of this is quite simple: Warm folk should choose both makeup and clothing colors (especially those that are right next to the face) that contain some yellow – yellows, oranges, yellow-greens, orangey reds, browns, olives, khakis – and steer clear of colors containing blue. Cool folk should choose both makeup and clothing colors (especially those that are right next to the face) that contain some blue – blues, violets, blue-reds, blue-greens, black – and steer clear of colors containing yellow.

Playing it Safe in Your Closet

Spring-cleaning time is right around the corner. Now would be a good time to delete the colors that are not right for you from your closet. If you’re lucky enough to have a friend who is a cool to your warm or vice versa, and you wear virtually the same clothing sizes, clean out your closets and trade. If not, there are plenty of charities in need of donations. You are doing both you and them a favor. This is also a good time to get rid of any makeup that makes you look more like the walking dead than the vivacious goddess you were born to be.

Trim Down Your Shopping Time

You can now save time when shopping for clothing. Before you begin your shopping trip, make a list of the colors that enhance your skin tone. At the store, eliminate all colors that do not benefit you and look only for those that magnify your natural beauty. In the long run, you will be more pleased with your purchases since they will accentuate your coloring, helping you to look your best at all times. Do the same when choosing makeup shades – foundations, blushes, eye shadows, etc. You’ll find that you will save not only time but money by choosing user friendly colors and shades.

Hair Color and Style

If you are 30 or younger and are not looking to make your way up the food chain or if you are a showgirl or have a lounge act in Vegas or Atlantic City, this may not apply; however, there are a couple of basics about hair that should be mentioned here. In the movie Working Girl, Melanie Griffith’s character states, “If you want to be taken seriously, you have to have serious hair.” This pretty much tells the tale when it comes to corporate America or any professional practice. In addition, shorter hairstyles do not drag down your face and do not accentuate bags and wrinkles around the eyes. A style that accentuates your bone structure should be chosen. It is usually best to consult a professional stylist to get ideas, opinions and a good cut.

If you color your hair, keep hair colors as close to real shades as possible. Colors that have yellowish tones – golden blondes, strawberry blondes, auburns and chocolate and golden browns – are more attuned to warm skin tones. Cool toned women can choose mink to platinum blondes, ash browns and black to blue-black. It is generally a good idea to keep the color intensity in tune with your natural skin tone. Darker skin can handle darker hair colors in most cases. Generally speaking, avoid extremes. Again, consulting a professional can be very helpful.

Once you’ve got your new look going, and you’ve eliminated the items that are not helping you put yourself in your own best light, when the cruddy stuff happens you will be in a better frame of mind to handle it. By the way, cleaning out your closet and your bathroom or vanity drawers will make you feel better too. These are two steps toward simplifying your life, which is, in itself, a stress reducer. More on this in future issues.

Live well.

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The Little List of Skin Care Tips

You might think this belongs in a Health section, but we in the work force need to take care of ourselves first. Here are some tips.

The Little List of Skin Care Tips

By Cara Sathrum

After shaving your bikini line, apply a little petroleum jelly to prevent those nasty, red bumps.

Always use 100% cotton balls or pads.

Apply make-up in a downward motion.

Cleanse and moisturize in an upward motion.

Do not use facial moisturizers around your eyes. Those moisturizers are designed to plump up the tissue under the epidermis. They tend to make your eyelids appear puffy. Use a product specially designed for use on the skin in the eye area.

Drink eight 8-ounce glasses of water daily.

Get at least 6 hours of sleep each night. Skin cells regenerate only when we sleep.

Never dry your face with a towel. Let your skin air dry.

Optimal results of any skin care regimen are achieved by twice daily use. The most dramatic effects appear between the fourth and twelfth weeks. Continued use results in additional improvement. Benefits diminish shortly after the cessation of the regimen. Skin care, like health care, is a lifetime process.

Use a granular scrub once a week to slough off dead skin. Never use a product containing fruit pits or nut shells. They are too abrasive and can tear your skin. Adding sugar to your daily cleanser is appropriate.

Use a soft, natural fiber, angled brush to apply powder eyeliner (a dark shade of eye shadow). Applying liner that is in pencil or liquid form stretches the tissue around your eyes, causing wrinkles unnecessarily.

Use soft, natural fiber brushes to apply eye makeup. Sponge style applicators stretch the tissue.

Use sunscreen every day – SPF 15 minimum – all over your body. Sunscreen works best when it is applied directly to the skin. Apply other products over the sunscreen.

Wash makeup sponges and brushes weekly to remove dirt, oil and impurities. Allow to dry thoroughly before using.

Wash your hands before washing or touching your face.

When applying moisturizer to the eye area, use your ring finger and pat the product on. Never pull or stretch the skin around your eyes.

When applying powder or powdered blush, do not “scrub” your face with the points of the bristles of the application brush. Use a gentle downward stroke with the edge of the brush.

When choosing a moisturizer for any part of your face or body, be sure it is truly designed to be a moisturizer. Moisturizers should be easily absorbed by your skin in order to improve the texture and hydration of the top two layers of your skin. If you are using a product that still feels oily, greasy or gooey on your skin a short time after applying it, its molecular structure is probably too large to be absorbed properly.

Light blue eye shadow should be added as the eighth deadly sin. The character Mimi on The Drew Cary Show . . . enough said.

Carry tweezers with you at all times so you can pluck out stray hairs when you see them. We all know that at least a third of them hide when you’re staring in the bathroom magnifying mirror under a search beacon hunting for them.

To contact Ms. Sathrum click here.

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