Laptop computer sitting on a table with money symbols in the background.

Blog Archive July 2019



How Credit Report Errors Affect Your Credit Score

Close up of woman holding credit card and mobile phone at desk.

Credit bureaus are depended upon to determine your credit score. A credit bureau, otherwise known as a consumer reporting agency, collects data regarding your credit and financial history. Three main agencies are highly regarded for this purpose in the United States: Equifax, TransUnion and Experian. A credit report is usually obtained when you apply for a loan, line of credit or request a credit limit increase. Potential employers sometimes obtain a credit report when you apply for a new position. The credit bureaus utilize the information they have collected about you to determine your reliability and risk level.

Credit bureaus gather regular reports from banks, credit card companies, retail stores and mortgage lenders regarding loans. The information they are interested in is if you made your payments on time, never miss a payment, and how much of your credit has been used. Credit reports will include notes for each time a loan or credit application is applied for. A report will also list court judgments and outstanding bills that had to be referred to collection agencies by the creditor for payment.

Originally, credit bureaus were small and locally operated, therefore if a lender needed information regarding a potential borrower they simply contacted their closest agency. As time evolved and the process of credit reporting automated, the many agencies consolidated into the three major companies used today which have all expanded to have a nationwide presence.

Unfortunately, credit bureaus can make mistakes regarding your financial information, leading to huge consequences for you if not corrected. The Federal Trade Commission reported that one in five people found errors on their credit report and one in ten of those errors made a negative difference in their credit score. One in twenty was so erroneous that it led to the person being completely denied credit.  Your credit score is an extremely powerful tool. Aside from buying potential, it also affects the insurance rates you qualify for and your capability to find employment so it is crucial that the information that contributes to determining your score is exact.

Under federal law, consumers are entitled to obtain a free copy of their credit report from each of the credit reporting agencies once per year. You can obtain your free credit reports by going to the website When reviewing your reports, as you should make a habit of doing periodically, there are key things you should make a note of checking. For instance, confirm that all accounts in your name were actually initiated by you. Millions of accounts are opened fraudulently each year so this is an important step to verify.  Review your information to guarantee that you are not a victim of identity theft or that you have not been mistaken for another person with the same or a similar name.

Any negative information on your report can be removed after designated periods of time so be sure to have that information cleared as soon as possible. Late payments, collection notices and foreclosures can be cancelled after seven years, and bankruptcies after ten years. Billing issues that have been resolved should be itemized as such. Even mistakes that seem minor can have a large impact if left uncorrected. For instance, having your name spelled incorrectly could lead to having someone else’s information attached to yours down the road and a much more complicated process to resolve it than a simple name spelling.


3 Basic Steps To Setting a Realistic Budget

Close up of man using laptop and calculator with cup of coffee.

Anyone attempting to set a budget has good intentions. Because of this, depending on their financial goals, the budget ideals may be overzealous and not align with their lifestyle realities. Budgeting is usually tiresome and requires sacrifice, neither of which is easy to have the discipline to follow for long. Many will usually try to cut costs from several areas, making them feel deprived and resentful rather than ambitiously looking forward to the better financial situation they are creating. To avoid this scenario, try these techniques instead:

Know your Income Totals

Base your budget on the amount of money that is actually deposited into your checking account per pay period. Confirm that taxes and health insurance costs have been accounted for, as well as HSA, retirement account contributions and any other necessary deductions. This is the net amount of your paystub that is available for your budget. Do not depend on potential income such as possible bonuses, raises or tax refunds. Once those types of additional funds have cleared your account you can add them into your budget, but counting on money that might not materialize may fail you greatly in the long run.

Do your Homework

Before creating a budget, you must know what your actual expenses are. For instance, many minor expenses add up to surprising amounts or there may be expenses you can painlessly eliminate such as an unused membership. Tracking one or two months’ worth of actual expenses may alter the way you calculate your budget. You may need more or less funds in a category than you realized or you might be overspending in an area that you will not mind cutting back. An easy way to do this would be to review bank statements and credit card statements or to download an app such as that will allow you to input all expenses and sort them by category.


Once you have an overall picture of your current financial situation, there should be obvious areas where cuts can be made. There are a couple ways to approach your budgeting cut backs. Try to find two or three large expenses to tackle such as trading in an expensive vehicle for a more economical version or swapping out an expensive vacation for a less costly one. If larger expenses are not on your list to eliminate, you can make it a point to avoid the smaller expenses that add up like daily coffee drinks or frequently eating out.

Be Diligent and Open Minded

Just as with any process, one must follow through to the end to succeed. Once you’ve committed to reaching your goal, consider each step you take towards following the budget as a step closer towards achieving your goal.  Continuing the use of your chosen method of tracking will help to maintain the budgetary guidelines you set. Most likely some modifications will be needed once the budget is actually utilized. Goals and timelines may be adjusted as well. The most important aspect of the budgetary concept is having a financial goal that will improve your financial position and making changes to reach it.


Determining Your Net Worth

Stacks of coins growing with leaves.

Headlines frequently publish the net worth of celebrities and entrepreneurs to attract attention and interest, usually continuing on to list their other notable assets such as homes, yachts and expensive cars. Many times salaries or company buyout information may also be listed, but what exactly does all of this info add up to? How much money does the individual in question actually have?

A person’s net worth is the value of what is owned, minus what is owed.

Net Worth Formula: Assets - Liabilities = Net Worth

Most people do not keep track of their net worth over time, but there are advantages to doing so. Your net worth can be used as a marker for an ultimate goal or as a tally to determine your financial status. Several online calculators are available or an Excel spreadsheet can easily be set up to calculate the difference between your assets and liabilities. If you choose to calculate your net worth on your own, be sure to include the following in your tally:


  • Funds in your Checking and Savings accounts
  • Cash Value of Life Insurance Policies
  • Totals of your Brokerage and Retirement Accounts
  • Business Interests
  • Market Value of your Home
  • Estimated Value of Personal Valuables
  • Value of your Vehicle

Liabilities – Obtaining a recent credit report will confirm all debts owed.

  • Credit Card debt
  • Student Loans
  • Auto Loans and Leases
  • Home Loans, including mortgage, home equity loans and lines of credit
  • Any other loans such as personal loans or 401(k) loans

Subtract the total liabilities from the total assets and the result will be your net worth. Using these calculations on a regular basis can be beneficial. For instance, knowing your net worth has declined may alter your lifestyle prior to it worsening or confirming an increase may motivate you to continue your path to reach a goal.

Understanding your net worth is an important basis to ensuring healthy financial stability. It allows you to not only understand your current financial situation, but also provides a guideline to determine progress towards your goals. There are several steps that can be implemented to improve your net worth. In order to do so, you must save more while reducing debt, which is not an easy task. Here are a few ways to speed up the process of increasing your net worth:

Increase your income

Whether you are able to ask for a raise or acquire a new source of income, bringing in more money will help you achieve your goals faster. If asking for a raise, be prepared with information regarding your work ethic and history to support your request when you speak to your manager. If your request is realistic, your manager should be more than willing to accommodate you. If not, you can consider freelance work or one of the many other opportunities available online that provide extra income.

Purchase a Home

Owning a home, rather than renting one, builds equity, which increases if your house escalates in value. There is also a greater likeliness that you will receive all, if not most, of the money you pay into paying for the house when you sell it. This will increase or at least maintains your asset level. As a renter you only lose the money you apply toward rental payments.

Decrease Debt

Reducing debt is a huge factor in the formula of increasing your net worth. Pay off balances with the highest rates first, to eliminate paying towards interest, which does not apply towards your actual debt. Once one balance is paid off, continue with another until you’ve paid off all balances owed.

Reduce Spending

Concentrating your budget on necessities and items that are of value will allow you to retain more cash, which can be used to pay off debt or for savings and investments.


If you’ve made it to the point that you’ve paid off debt and accumulated enough savings to feel comfortable, it may be time to invest. Expand your money’s growth potential by educating yourself on the types of investments that your money would benefit from most. Study average annual growths from various index funds or blue chip stocks and watch your net worth grow through a long-term investment.


The Most Popular Mobile Payment Apps and How They Work

African American man looking at cell phone.

Using a mobile app to pay back a friend is definitely the preferred way to handle a debt today. Once set up, a mobile payment app allows a user to quickly and safely transfer funds from their bank account to another designated user. Initially, Venmo was the only mobile payment app option to facilitate this type of transaction and therefore, extremely popular when it first initiated in 2009. Originally intended as a method of payment to purchase music equipment by email, Venmo was sold for $26.2 Million to Braintree 5 years later and eventually became part of PayPal. Since then, Venmo’s popularity has skyrocketed to the height of 10 million monthly users and $40 Billion processed transactions just in the year 2017.

Others, of course, have added their versions of this mobile payment app to the market to profit from the popularity. Cash App launched in 2013 and Zelle in 2017. Zelle was positively received, processing 320 million transactions and $94 billion in the first year. Cash App did even better, superseding Venmo’s cumulative downloads by July 2018.

The apps all operate similarly in that they connect to the user’s bank account, a dollar amount is chosen and the funds are transferred quickly. Small details of each app vary. For instance, Venmo provides a feed of all transactions. While some prefer the easy access to check payment history, it is also easily visible to anyone near their device while they use Venmo. Cash App and Zelle do not have a social feed.

Zelle has modeled itself to appeal to a slightly older age group, targeting college graduates in the workforce. Since Zelle is incorporated into several banking services, it is a first choice option for a crowd that is more concerned about privacy and security. If your friends’ or family’s banks aren’t Zelle affiliates, one only needs the app to reciprocate, making it very user friendly. Zelle is also the fastest at liquidating the funds into your account. Cash App and Venmo require you to carry a balance until you’re ready to cash out, which could take a few days unless you pay a fee. Cash App charges 1.5% of the total funds and Venmo charges 25 cents with the stipulation that you must have a Visa or MasterCard debit card.

Security is a major factor when using an app for payment. Users want to know that their money is secure since their bank account is being accessed. Here is how they break it down. Zelle’s marketing campaign revolves around the concept of safety but claims have shown that the app is vulnerable to scams. Zelle verified that strict protocols are in place to verify and validate users. However, Zelle does not offer protection for any purchase or sale conducted using Zelle. The website explains that if money is sent to someone by mistake or for an uncertain situation, such as concert tickets, Zelle is not liable.

Venmo has also experienced scams reported by the Better Business Bureau. Users had figured out ways of purchasing items through Venmo, but then cancelling payment before the funds reached the seller’s account. Some of the scams were for as much as $25,000. Cash App claims to offer encryption, fraud protection and account notification. It also offers the added protection of PIN numbers, Touch ID or Face ID and suggestions to avoid scams. Cash App has also had claims filed.

Regardless of which mobile payment app you choose, payments in actual cash seem to be an inconvenient way of the past. Currently and going forward, more daily exchanges of money will continue to take place as the originators of the first mobile payment app intended when they began their advertising campaign slogan, “Just Venmo me!” Behold yet another rapidly growing new social norm.

The diversity of multiple hands holding dirt with plants growing out of it.
community development

We invest in you.