Your Money & Your Credit

Access To Your Credit

With so many people having access to personal information these days, it is important for you to cut down on the circulation of your personal data as much as possible. You should do this immediately or as soon as you have obtained the credit you desire. There is a trade association that all the major direct marketing companies belong to that sells your name and buys information about you. They are called the Direct Marketing Association and their mailing address is below. Write them immediately with a short insistent letter asking to remove your name entirely from their data banks.

Direct Marketing Association

Box 9008

Farmingdale, NY 11735

Okay, I will admit that as a loan officer I have purchased names of targeted credit ratings in order to send these individuals a mass mailing in solicitation for a loan. Below is the phone number for the Credit Reporting Opt Out Alternative.  The call center will remove your name from the access of credit card companies that might otherwise buy your information.

The Art of the Deal

A few years ago, a client called to request some financing work. It turned out to be one of the most involved financing files I would ever encounter. The intention was to refinance the home to make some repairs and consolidate a few debts.

But the client's credit needed quite a bit of work. Three creditors were actively in pursuit with collection actions.

The first creditor, upon my discovery, actually had a second mortgage on my client's home. They were just harassing the client for more regular payments because they knew filing foreclosure would have been more costly than productive since there was such little equity in the home.

The second creditor had not attempted any contact with my client for two months outside of letters. They simply put the account in charge-off status. The balance due this creditor was $1,700. They were more than eager to take the approximately $600 we offered.

Now, the third creditor is the one I take real pride in dealing with.

This creditor was so eager to establish contact with my client (or should I say, the collection representative I re-trained was so eager) I simply baited a path for them to follow. I wrote several letters informing them of the client's poor financial situation, which was why they had not received any payments.  My client owed this creditor roughly $4,400. In the third or fourth letter I sent along a loan commitment showing them that the client was going to be coming into some money via a new loan and that we would be able to pay off their $4,400. Well, the collection rep called me up and was so much nicer; seemingly understanding of the difficulties my client was facing.  Note that all of this happened right after I informed him that we were going to pay his $4,400.

Simplistic Investing

This is investing for the everyday man or woman who does not have a ton of money to start with or just wants simplified investing. A mutual fund company is an investment company that takes your money along with many other investors' money and makes the investing decisions for you. The average minimum account value to open one is about $1,000. The mutual fund’s big brother is called the managed account. These are typically for more complex and sophisticated investors and have higher minimum account values--usually around a $100,000 to $250,000.

The mutual fund manager places your money into a pool with other investors and then goes out and buys several investments instead of just one or two. Owning fewer investments can be risky if they perform poorly by declining in value. The concept behind a mutual fund is that it has the financial strength of a large pool of money to go out and buy many investment positions. The idea is that if five or six of the investments are down in value, the other 60 investments hopefully will be up. The overall average should be positive over longer time horizons. Investing over long periods of time, such as 15 to 20 years, has proven thus far to be more profitable than just letting your money sit in bank savings accounts or CDs.

When you purchase shares of a mutual fund you money is spread across many different types of investments, including stocks, bonds, and money markets. A money market is a type of cash product similar to a bank savings account. This type of spreading across different investment types is called asset allocation. The fact that several investments in any type or class are purchased is also called diversification. Both asset allocation and diversification are extremely important investment concepts, which you receive in "balanced mutual funds" that help lower your investment risk.

You are trying to build this money for retirement, correct? Did I hear you say the $114,593 you earned on your mutual funds isn't enough? Well, here is the other part of my simple retirement plan for the everyday John Doe.