Saturday, August 23, 2008

Personal Finance

Case Study (8):

Estate Planning: Trusts


Trust are being used in estate planning. Here are a few articles:

http://ezinearticles.com/index.php?Legacy-Planning---A-Holistic-Approach&id=1130048

http://www.nolo.com/article.cfm/pg/1/objectId/BD474328-5A05-43D1-A295E5AD51C7EC84/catId/9F594B71-B41B-4513-923BF19B4D9ACDAA/309/227/CHK/

http://www.finweb.com/financial-planning/living-trusts.html

Using these articles and any from your search, please analyze the pros/cons of a trust and why or why not you should consider a trust in your planning.



There are many positive aspects of setting up a Trust, but it is not always necessary. Trusts typically cost in excess of $3000 (Yochim, 2008) so it is important that our needs be carefully identified before deciding to set up a Trust. The other negative that I saw is that once the trust is established all deeds and titles as well as financial accounts need to be transferred into the name of the Trust. This can be expensive and take a lot of time and energy, however, it may be worth it if you are leaving a complex or valuable estate.

Now that the negative points of Trusts have been laid out, they have benefits that can far exceed these costs. The first and most impacting reason for having a Trust is that the inheritance will avoid probate. Probate is the legal proceedings that follow your death to settle any outstanding accounts or debts (Kapoor, et al, 2008). Once debts have been settled and assets are known then the inheritance is distributed according to the Will. The cost of Probate can be as high as 5% of the total value of the estate and last several years before any money is released to your beneficiaries (finweb.com 2008). Since the estate does not have to enter Probate when you utilize a Trust, the assets can be distributed immediately.

There are many specialized Trusts that can be used to eliminate inheritance tax or give financial protection for heirs and spouses. Most of these Trusts have additional restrictions that enable you to utilize the benefits. For example, Irrevocable Trusts eliminate many Taxes, but as their name indicates, once they are in place there is no way to make changes (kiplinger.com 2007). Living Trusts are legal entities that operate while you are still alive, while Testamentary Trusts only go into effect after your death (kiplinger.com 2007). It is important to clearly understand all the options and your personal situation before engaging in any Trust.

Personally, my estate is very small and simple at this time. I will not be arranging a Trust until that changes. If my estate reaches $2 million or it becomes complex, I will consider researching what my best options are. The $3000 price tag is a bit steep right now, especially compared to my net worth of about $45,000, most of which is in my house or my 401(k).














Resources:

Finweb.com (2008). Living trusts. Financial Web. Retrieved August 22, 2008 from: http://www.finweb.com/financial-planning/living-trusts.html

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Kiplinger.com (2006). Putting your trust in trusts. Kiplinger.com. Retrieved August 23, 2008 from: http://www.kiplinger.com/basics/archives/2007/09/trusts.html

Loquvem, J. (2008). Legacy planning - a holistic approach. Retrieved August 22, 2008 from: http://ezinearticles.com/index.php?Legacy-Planning---A-Holistic-Approach&id=1130048

Randolph, D. (2008). Make a trust. Nolo.com Retrieved August 22, 2008 from: http://www.nolo.com/article.cfm/pg/1/objectId/BD474328-5A05-43D1-A295E5AD51C7EC84/catId/9F594B71-B41B-4513-923BF19B4D9ACDAA/309/227/CHK/

Yochim, D. (2008). The truth about living trusts. The Motley Fool. Retrieved August 22, 2008 from: http://www.fool.com/personal-finance/taxes/the-truth-about-living-trusts.aspx


Personal Finance

Case Study (7):

Legacy Planning


Read the following article about Legacy Planning:

http://www.financial-planning.com/asset/article/527840/legacy-planning.html

This is the latest in the evolution of Financial Planning. It goes beyond just estate planning. As the article states "It also involves the spiritual, intellectual and ethical development of family members."

Take some time to think about this. Please comment on what you think about this and how this would be accomplished in your life. Write up a "Family Mission Statement" that pertains to your legacy.



It can be difficult to truthfully state what is actually important in your life. Most people have a idealistic view of themselves and what they believe. That is to say that they know what others want to hear or what is socially acceptable. This idealistic thought is the mission statement we want to share with everyone. As believers, the Bible clearly tells us what our mission statement should be: to bring glory to God and serve Him in all aspects of our life. If this is truly our mission statement, all our actions should reflect it.

When I read this article I could not help but see it as a marketing ploy. Not that there is anything wrong with the intent, in fact just the opposite. These folk are doing a great job of discovering who you are and what you stand for. They appear to have some great tools to get to the truth about how you got to where you are today, and what is truly important to you. This gets into marketing in my mind because there are similar methodologies to other sales/advising markets. Financial Planning comes immediately to mind. I feel like this short article had the same message as the first book we read this class, Values-Based Financial Planning (Bachrach, 2002). I think that it is a great way to do business as a professional advisor, however I wonder how much is fad and how much is real. I believe that it would be possible to tell the difference between someone who embraces this ideology and one who is just trying the next great marketing trick.

What I liked about creating a family mission statement is that those left behind, possibly many generations later, can look back at this document and understand the legacy a family intended to leave. I defined legacy as how people remember you, those things that define your life. Were we known as loving, joyful, peaceful, patient, kind, gentle, faithful, generous, hospitable and a follower of Christ? That is what I want people to remember me by, especially if anyone remembers me as a Christian. If my legacy is not positive and reflective of Christ, I would rather not be known as a Believer, because of the potential damage done to the Church. There are to many professing believers in the world who have terrible reputations.

Clearly, having a mission statement written for all to read, would help others hold me accountable for my actions. It could also redefine how some people view our family history. I come from a long line of Christians, probably eight or more generations on both sides. That is an incredible heritage, but it is possible that some time in the future I will have family members that don't know the significance of Christ in our family. If this mission statement is found it is possible that it would make someone curious enough to search for Christ themselves and find their Savior because of a simple statement.

To create my families mission statement I would like to talk to my grandparents, my parents then sit down and search the scriptures for exact references that describe successful Christian living. After reviewing what the Bible states and writing my fist draft I would share it with close friends and ask them to not only hold me accountable to the statement, but point out any deficiencies that they see in my life. Next, I would take that input and modify my mission statement as needed and then pray that God would change me to match what His plan is for my life. Since I haven't done this yet, I think I could sum it up with one verse: Mathew 22:37. “...Love the Lord out God with all your heart, and with all your soul, and with all your mind” (Holy Bible) Jesus was restating some of the message presented to the Israelites shortly after Moses refreshed their minds with the Ten Commandments. Jesus went on to say that this commandment along with loving our neighbors was a succinct statement of all the revealed Word of God, until the time He lived on earth. Any verse that can so completely sum up 4000+ years of teaching, is worth meditating on.




















Resources:

Brown, C. (2006). Legacy planning. Financial-Planning.com. Retrieved August 19, 2008 from: http://www.financial-planning.com/asset/article/527840/legacy-planning.html

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Holy Bible (2006), New american standard bible: update edition. Thomas Nelson Publishing, Lockman Foundation. La Habra, Ca, USA.

Saturday, August 16, 2008

Personal Finance

Case Study (6):

Long Term Investments


Compile an accurate list of all of your current long term investments. Explain the advantages of each (like matching contributions to 401plans). Now calculate the balance at age 65 assuming no changes in the amount you currently set aside. This site can help:

http://www.finance.cch.com/tools/calcs.asp#DZ06

How much is it and is it enough to retire on? What changes do you plan on making that will help you reach your goal?

Now look at other options that you may not be using. (like employee stock options, real estate) Is there a reason for/against using these options?




As I am reflecting on the current long term investments it is easy to see that I should be doing more. I have only one; a 401(k) plan through my employer. However, I am currently saving $100 each month that will be put towards a No-Load Roth IRA. In my research I found that I need $3000 to open the account, so it is a slow process. In the mean time I am investing in the 401(k) program though my employer.

The 401(k) is the only “retirement” plan through my employer. The owner gives each employee 6% of their annual salary. There is no matching; just the straight 6%. That is great, but it does not give any additional incentive to invest more as the employee. I invest an additional $87.50 each two week pay period. My current account balance is $14,743. According to a 401(k) Savings Calculator (CCH, 2008) at age 65 my balance will be $1,705,014. This calculation was using a very conservative 7% annual return and assumed that my salary would increase at a 3.5% rate each year. This includes my continued $175 monthly investment and the 6% through work.

The other investment I plan to make is the Roth IRA. Although the account is not started I have saved $1100 to date and plan to contribute $100 monthly. If I start this plan as scheduled, the account balance at retirement will be $225,477 using the same conservative 7% annual rate of return using a Roth IRA Calculator (CCH, 2008). As my income increases I plan to put additional money in to this account and start one for my wife as well. However, those plans will be left out of the analysis.

With those two investments totaling $1,930,491 at retirement. There are some variations that could be looked at, the most obvious of which is a higher rate of return. If I use the average rate of return of the S&P 500 of 11.4% (Glassman, 2008), that total would rise to $5,915,517. Getting those historic returns would be great, however according to Dent (June 2008) the next several years may not be so good. I still have 38 years to weather any storms that come my way, but it would be nice to have almost $6 million when compared to $1.9 million. Honestly I don't know what I would do with either of those sums of money. I could easily live off of 5% return each year an not have to reduce the principal.

The benefits of a 401(k) plan are threefold (CNNMoney.com 2008):

A 401(k) represents a way to reduce your taxable income since contributions come out of your pay before taxes are withheld; many plans include a matching contribution from your employer; and the money you save benefits from tax-deferred growth, which lets your money compound more quickly than it would if it were taxed yearly.

This means that all my income dollars are reduced by up to $15,500 (the annual maximum) which reduced the taxes I pay today. Then the taxes that would have been removed (if it were taxed before I payed into the plan) are now earning returns for me. I do not have a benefit from the matching program, but it is still a free 6% each year for me personally. The Roth IRA has one distinct benefit as well: “the earnings on your investment are free from Federal income taxes” (Wachovia, 2008). There are several restrictions that apply, but as long as investors are working within the established guidelines, it is a great secondary investment after the 401(k).

I would like to have approximately $2 million nest egg when I retire. According to Kiplinger.com (2008), somewhere between $500,000 and $1 million is enough to cover most expenses in retirement. They were figuring in a social security check which I am not anticipating, and I want to travel internationally as much as possible.

Looking at the future, I have changed my mindset to some extent. I realize that investing to the maximum in my 401(k) is probably a good idea. I will get some additional input from my (future) financial advisor before making my final choice, but it seems like it may be better to reduce my taxable income as much as possible. I would also like to increase my contributions once I have eliminated my debt.














Resources:

CCH (2008). Financial planning toolkit. Wolters Kluwer. Retrieved August 14, 2008 from: http://www.finance.cch.com/sohoApplets/Retire401k.asp

CNNMoney.com (2008). Money: 101, lesson 23, 401(k). CNN. Retrieved August 15, 2008 from: http://money.cnn.com/magazines/moneymag/money101/lesson23/

Dent, H. S. (June 2008). H.S. Dent forecast: The economic guide for effective financial decision making. Retrieved August, 12, 2008, from www.hsdent.com

Glassman J. (2006). Why I love dividends:Dividends force managers to make the case for reinvestment. That's a very good thing. Kiplinger.com. Retrieved August 15, 2008 from: http://www.kiplinger.com/magazine/archives/2006/08/glassman.html

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Kiplinger.com (2008). The basics: How much do I need to retire? MSN Money. Retrieved August 15, 2008 from: http://moneycentral.msn.com/content/Retirementandwills/Createaplan/P142702.asp

Wachovia (2008). Tax planning: Roth IRA. Wachovia. Retrieved August 15, 2008 from: http://www.wachovia.com/personal/page/0,,505_3846_4745_4773_4778,00.html



Saturday, August 9, 2008

Personal Finance

Case Study (5):

Personal Credit Report Review


Look at the Personal Financial Plan sheet #33. Use this and the suggested web sites of:

www.insure.com

www.kiplinger.com/tools/

to calculate your life insurance needs. Go online and shop for term insurance for both you and your spouse. What are the results? Given your personal life situation, what would be a good decision for you?


Life insurance was a must several years ago when I started traveling with my job. My agent quickly ran me through an analysis and made a recommendation according the the off the cuff answers I could provide him while sitting in my car at the local grocery store. Things have changed since I got my policy, a different house more debt (college, mostly) and higher expectations and salary. Sitting down to review the needs was the first step. Guessing what my family may need after I die is pretty complex at first glance, but can be simplified and quite accurate. “Many experts say the best way to calculate the amount of life insurance you need is through a needs analysis, which can be broken down into a simple formula: Short-term needs + long-term needs - resources = how much life insurance you need” (insure.com, 2005). I have a term life policy but my wife does not. This experience has caused me to place a higher priority on getting one for her.

Using Kiplinger.com (2008) calculator I found the need for life insurance if my wife or I died. Short term needs included eliminating my college loans, car payments, (the evil) credit cards and an emergency fund. Long term needs were the living expenses, eliminating the mortgages and creating a savings account for my family's college needs as well as child care expenses. The first time through I was pretty generous and ended up finding that I and my wife needed about $5 million each. After running some numbers and realizing almost half of the living expenses had already been eliminated, the numbers dropped by 1/2 to 1/3. This is still considerably higher than had anticipated, but it was based on the assumption that income would not increase over time. The other assumption made was that the insurance needed to take the family through the next 60 years.

My policy included four additional years of schooling for my wife to finish her masters. It showed that she would not make any money for those years and need child care for the next 10 years. Her final income was also about 40% lower than my predicted income because of her field of interest. Education has significantly lower income than engineering careers. Other than these small changes the needs for my wifes policy were identical.

Insure.com (2008) gave quotes for a $2.5 million and $1.75 million policy for 20 years at $85.32 and $53.38 each month for a total of $138.70 each month. That is assuming that my wife and I are at peak physical condition and have no other history related issues (my wife is much healthier than I, she actually exercises). The values of the policy still seem to be high, but making some comparisons and discussing the assumptions with a knowledgeable person is the next step.

At this time my family will take the next steps in purchasing a life policy for my wife. Then we will evaluate adding extra insurance to get us to a comfortable level. Term life definitely seems like the way to go for a young family (smartmoney.com, 2008). My current policy is ten year term and if it were not for this class I may not have looked at it again until the policy was a bout to expire. Making a life insurance policy review a part of our yearly financial planning will ensure that it is updated when life situations change.





Resources:

Insure.com (2005). How much life insurance do you need? Retrieved August 8, 2008 from: http://www.insure.com/articles/lifeinsurance/coverage.html

Smartmoney.com (2008). Term or whole life? Retrieved August 8, 2008 from: http://www.smartmoney.com/insurance/life/index.cfm?story=lifeterm

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Kiplinger.com (2008). How much insurance do I need? (Calculator). Used August 8, 2008 at: http://partners.leadfusion.com/tools/kiplinger/lifeins01/tool.fcs


Personal Finance

Case Study (4):

Auto Insurance Policy


Pull out your personal auto insurance policy. What can you do to lower the premium or have better coverage? Review pages 259-260. Contact your agent and discuss some changes. Find out what is the highest you can raise your deductibles and what are the premium savings. Discuss increasing some areas that might be low. You might be surprised at how little it would cost to double or triple you coverage in certain areas. Should you make some changes?

Finally, go online and get a quote from http://www.progressive.com . Make sure you use the same coverage/deductibles that you now have with your current policy. You can use the Personal Financial Plan sheet #30 at the end of the chapter to help with the format. What are the results?



It was interesting to review the Auto Insurance policy that we have been using for several years. Insurance seems to be one of the items that matches the cliché “out of sight, out of mind”. Once it was decided on, reviewing it was not on the high priorities list. After digging though the insurance policies for the current revision, it was positive to see that it is still meeting our needs.

In looking at what modification could be made to decrease my premiums or increase my coverage, I found two potentials. First, my current policy deductibles are $500 for collision and $100 for comprehensive. I have the option of increasing both to $1000. This change would reduce my premiums by $52 each year. The problem I see with increasing the deductible, is keeping the extra $500-900 in a savings account somewhere waiting for the accident to happen. The only way that this change would pay off is if any deductible payment were not needed for nine and a half years; never more frequent than that. Past experience has shown that my family will avoid paying even the $500 deductible if possible (which explains why we have so many dents and dings on our vehicle).

The second opportunity to make modifications to the policy for added benefit was to increase coverage amounts. Currently the policy has the maximum available for Personal Injury Protection, Uninsured and Underinsured Motorists at $100,000. The only category where there was a potential fro improvement was for Liability. The current limits are 100/300 ($100,000/person and $300,000/occurrence), I have the option to increase that to 250/500. Adding this coverage would add approximately $25 or going with a single sum $500,000 each occurrence total which would add $43 to my current yearly premium. The added coverage seems like a good investment, but I would like to research the real benefit of having the extra coverage. According to the Oregon Insurance Division (2008) the benefits of having higher coverage will be needed if many vehicles, people and property are damaged.

Another addition that I looked into was getting Rental coverage. We have previously not taken rental coverage because we have had two or three vehicles, but recently we have downsized to only one minivan. My commute to work is only a five minute walk from my front door, so having a car sitting in the driveway just doesn't pay. Adding the Rental coverage was only $19, so it seems to make sense if anything does happen.

Looking at Progressive was the next task. I was previously a Progressive customer and had great experience with the company. They gave great rates and had excellent service, however they did not carry homeowners or life insurance. When we purchased Life and homeowners insurance though Country Insurance, we were offered additional discounts if we purchased our Auto policy through them as well, so when the policy came up for renewal we moved over to Country for all of our insurance needs. I was pleased to find that we are still saving money five years later using Country. Our current policy premiums are $308.85 for one vehicle and Progressive quoted $348.

I am very happy with the configuration of our current policy but plan on adding the Rental insurance. This will increase my policy slightly, but with only a single day of renting a vehicle I would spend almost two times the added cost. Most repairs take more than a day and I have experienced a repair job taking almost five weeks so it is worth it.


Resources:


Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Oregon Insurance Division (2008). Consumer guide to auto insurance. Department of consumer and business services, State of Oregon. Retrieved August 8, 2008 from: http://www.cbs.state.or.us/external/ins/publications/consumer/2085.pdf

Progressive.com (2008). Get a quote. Retrieved August 9, 2008 from: https://autoins1.progressivedirect.com/AutoDisplayPage.aspx?Page=RateCoveragePage&ST=OR

Saturday, August 2, 2008

Personal Finance

Case Study (3):

FICO Scores


From different scores, investigate what a FICO score is. Use this site to estimate what yours might be:

http://www.whatsmyscore.org/ Explain what things go into making a FICO score. What are they used for other than getting a loan? Using your information from your credit report and life profile, what changes can you make that might improve your score?


FICO scores are used by many organizations to assess the risk of engaging in a financial relationship with an individual. These relationships may include monetary loans, employment or even housing rental agreements (Marquit, 2007). The FICO score is an effort to eliminate the labor intensive process of case-by-case risk assessment (whatsmyscore.org 2008). This scoring process also removes the possibility of personal feelings affecting the process as well as makes it faster and more efficient (myfico.com 2008). It is also important to remember that a FICO score is only a snapshot of your financial picture which can change over time.

There are five weighted factors that go into making the final FICO score; whatsmyscore.org (2008) summarizes it:

Payment History (35%) , which includes account payment information, bankruptcy or judgments, how long overdue payments are, amount past due, and the time since any adverse occurrences.

Amounts Owed (30%) , which includes the amounts owed on accounts individually and totaled together as a whole, number of accounts with balances, proportion of credit line used and proportion of installment loan amounts still owed.

Length of Credit History (15%) , which includes the time since you accounts have been open as well as the time since your accounts have been active.

New Credit (10%) , which includes the number of and time since recently opened accounts and proportion to total accounts, number of and time since recent credit inquires, and the re-establishment of positive credit history following past payment problems.

Types of Credit Used (10%) , which includes the number of various types of accounts, like credit cards, retail accounts, installment loans, mortgage, etc.


Each of the categories above has another set of rules that go into making the sub-score which is then weighted and combined with the others. The final weighted score is published as the your FICO score. Several pieces of information are not included in the FICO. Aside from the obvious religion, sex, color, etc. age and the employment history are not taken into account. That included salary, employer, job title or employment dates (myfico.com 2008).

There are several factors that were identified as possible areas for improvement. First, making sure that any loan searching is accomplished in a short time frame. Myfico.com (2008) states “FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.” Last year I leisurely searched for possible opportunities to refinance my home, the search lasted about 12mo before I decided not to refinance. Six of the seven inquiries noted in my credit report were from that search (Experian, 2008).

The second thing that would improve my score would be to reduce my debt. I am currently at 27% debt to credit ratio for installment accounts; and 34% ratio for revolving accounts (Equifax, 2008). This has been a goal of mine for the last several years and we are working our way down, though it is still higher than it could be. Overall this is the single most significant thing that I can do to improve my score.

Reducing debt owed on my revolving accounts and ensuring that my payments continue to be on time for another two years. In by the end of 2009 I will have the only “30 day late” remark 7 years in the past. I will also continue to review my credit reports as well as my wife's. If there are any irregularities, we can take care of them early in stead of when we are trying to start a relationship with an organization.


Resources:

Equifax (2008). Personal credit report for Douglas Russell Libby II. Retrieved August 2, 2008 using www.anuallcreditreport.com

Experian (2008). Personal credit report for Douglas Russell Libby II. Retrieved August 2, 2008 using www.anuallcreditreport.com

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Marquit, M. (2007). What is your FICO score used for. Retrieved August 1, 2008 from: http://hubpages.com/hub/What_Is_Your_FICO_Score_Used_For

Myfico.com (2008), Credit education center. FairIssac.com. Retrieved August 2, 2008 from: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

Whatsmyscore.org (2008), Break the code. Whats My Score International. Retrieved August 2, 2008 from: http://www.whatsmyscore.org/break/


Personal Finance

Case Study (2):

Personal Credit Report Review


Get your personal credit report. You can do this free at this site www.annualcreditreport.com.

This will not affect your credit score. Federal law has established that you can review your report from the different agencies for free each year. If you use this site you will not be signing up for a service that will cost/bug you. I recommend you choose Equifax, but you can use any of them you want. Be sure and print it before you leave the site.

Take some time and analyze the information in front of you. Look over every section and see if it is accurate. What kinds of mistakes/errors did you notice? Any credit accounts that are not yours? What about the inquiries? What different types were listed? Anybody checking up on you that you did not know about? If there are irregularities, what are you going to do about them? Do not send me your credit report. That is for you to keep. Please send me your typed review/analysis.


Reviewing my credit report is something that I have not taken the time to do before. The only time it has effected me or I even thought about it was when I was looking at mortgages. The Broker would open a screen and casually look over the report and ask if everything looked correct. Nothing stood out as incorrect so we assumed that it was fine.

As recommended Equifax was used to review my credit report. The process for getting the report was simple and straight forward. In about two minutes all the information was entered and the link to the report was available. Equifax had a summary page that was very helpful by showing all the important information in one comparison. Each category had embedded links that took you to the next level of detail by category. Each category was also a summary but additional details for one or all of the line items was available.

The first task was to carefully review all the information presented. All the accounts were accurate, even the balances for the accounts in use were accurate within one month. It was interesting to see that some accounts that were opened (but never used) five to seven years ago were still considered “open”. Even recalling why some of them had been open was amusing.

Next on the agenda was to check for any problems or look at the payment history. I discovered that one account (a credit card) had been paid 30 days late in 2003. This was the only negative feedback found. (In discussing this with my wife we discovered that it was when my son was born and things were pretty stressful.) The rest of the payment history was boring and revealed nothing of surprise.

The last piece was looking at who and when organizations have been checking on my credit. There were 7 separate inquiries in the last two years that all happened while I was looking at refinancing my mortgage. This was stretched out for almost a entire year. I noted that according to whatsmyscore.org (2008) when shopping for credit, it is best to complete it in a short period of time. That way it is obvious that shopping for a good loan was the agenda, not gathering available credit to exploit. Then there were about six additional not shared inquiries mainly from credit companies trying to market to me.

Since nothing turned up on the Equifax report, Experian was next. Although Equifax was cleanly laid out and organized, Experian had more complete information. They had about 10 aliases listed in my report and two additional Social Security Numbers. They appeared to be mistyped or misread digits. Equifax, had only 3 aliases and the correct Social Security Number. Experian also had about 35 inquiries listed that were from credit companies trying to market to me, some had up to 6 inquires in one year.

This review was a positive experience and will be worked into the schedule of budgeting and financial planning. Getting the report was simple and the information contained in it was valuable. Spending an hour or so several times a year evaluating the credit report could be well worth it, especially if there are problems found and corrected.




Resources:

Equifax. Personal credit report for Douglas Russell Libby II. Retrieved August 2, 2008 using www.anuallcreditreport.com

Experian. Personal credit report for Douglas Russell Libby II. Retrieved August 2, 2008 using www.anuallcreditreport.com

Kapoor, Dlabay, Hughes (2008). Focus on personal finance: an active approach to help develop successful financial skills, 2nded. McGraw Hill Irwin, New York.

Whatsmyscore.org, Break the code. Whats My Score International. Retrieved August 2, 2008 from: http://www.whatsmyscore.org/break/