Like it or not, your credit score is not an indicator of winning financially. All it tells you is whether you are good at borrowing money and paying it back. That’s it.

But let’s take a deeper look. How is your FICO score determined?

• 35% of your score is based on your debt history.
• 30% is based on your debt level.
• 15% is based on the length of time you’ve been in debt.
• 10% is based on new debt.
• 10% is based on type of debt.

It’s the I-Love-Debt Score

Your FICO score is an I-love-debt score, isn’t it? Does it factor in your income—or, even better, your debt-to-income ratio? Nope. Does it factor in your savings accounts, net worth—anything other than debt? Absolutely not.

The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly—without adding too much debt or paying too much off. In other words, stay in debt for as long as you can. How ridiculous is that?

Now, if you are on Dave’s plan—paying off old debt and not opening any new debt—then you’ll eventually reach the point of being debt-free. At first, you’ll pay off credit cards, car and student loans and things like that. Then, one sweet day, you’ll finally knock off that mortgage.

After killing all that debt, your credit score will become “indeterminable.” This is great news! By this point in your life, you haven’t taken out a loan in years, you’ve saved a ton of money, and you’re paying cash for everything. So you don’t need a credit score, anyway, since you don’t plan on using credit!

Getting a Mortgage Without a Credit Score

Let’s go back a few years, though—back before you paid off that mortgage. How can you get a mortgage without a credit score in the first place? Isn’t this magic number your key to the world of mortgages and homeownership?

Actually, no, it isn’t. You can get a mortgage without a credit score. How so? Manual underwriting.

Not every lender is going to do manual underwriting—which is basically when they use a little common sense and look at factors like your income and not just your credit score. Churchill Mortgage is one lender we recommend for manual underwriting.

Now, this doesn’t mean that just anyone can walk into a bank or mortgage lender and walk out with a home loan using manual underwriting. Remember, this is the way weird people do it, so there are some requirements you’ve got to live up to. Specifically, you must:

• Put at least 20% down on your home.
• Choose a 15-year, fixed-rate conventional mortgage.
• Have a strong employment history and personal income to support the loan.
• Demonstrate 4–6 trade lines that span 18–24 months. These are just regularly recurring expenses such as rent, electric bills, water bills, cell phones, etc.

Also, your old credit history has to be in good shape. Even if you have a zero score, the old history is still there and impacts the loan decision. If you have an old history of late or missing payments, then you could have some problems.

You Can Live Without It!

Now don’t go out and trash your credit score and say “Dave Ramsey told me to!” That’s not what we’re saying. But we will tell you not to bow at the altar of the “Great FICO.” In other words, don’t worship your credit score—because you can live without it.

Dump debt, save money, and pay cash. Do that and you will be well on your way toward building wealth—not your credit score. And what’s more important?

Get started now dumping debt and building wealth the right way! Dave’s best-selling book The Total Money Makeover is a great place to start.

This is a repost from Dave Ramsey.com.

Derrick’s heart was in the right place as he invested heavily into the redevelopment and revitalization of downtown Detroit, but his trouble started when he began defaulting on payments for a mall (Coleman’s Corner). The area was in one of the worst areas in Detroit. What’s worst is that Coleman had to list his available assets, which included his NBA pension, which in it’s earnest amount came in at approximately $90,000. This is a former player that still has probably about 14 years before he can collect on that pension.

I hope the leagues, players unions, and the unversities are taking notes because everytime one of their marquee athletes has financial problems or life skills issues, it leaves a black mark on the leagues, the players unions, the agents, and the university where they starred. It’s not enough to supply an individual with a degree, you have to look at their future and if you provide an education to a star athlete, the university has an moral obligation to provide a life skills and financial counseling program for the athlete that they can use in their life.

These athletes should be involved in my Player Development program (PLADEV™).

Tip #1: Try to relate to the interviewer

It’s not easy to do, but it is a must and the reason is not for the interviewer to like you initially, but to show him or her that you can build a rapport with anybody in a relatively short period of time. Try to discuss more than weather banter. Listen for cues as to where the interviewer is geographically, if it is a phone interview. Ask how their day is going. Relating to the interviewer won’t get you to the next level, but it will get you to tip #2 J

Tip #2: Summarize yourself

What sets you apart from everyone else? What is different about you in person than on paper? You should have a 30 second commercial that is rehearsed, but does not sound rehearsed to provide an interviewer that allows them to see or hear your personality come alive. I make it a habit to give one crazy fact about myself that isn’t on paper.

Tip #3: Quantify and Qualify yourself

You have a certain level of experience, but how can you quantify your experience to the interviewer, you should state something like this, “I’m an experienced sales manager that has worked for a fortune 500 company and I was directly or indirectly responsible bringing in $12 million in revenue in 2009.” With that statement in your 30 second commercial you have instantly gave yourself credibility and created value for the company you are interviewing with.

Tip #4: Research the Devil Out of the Company

If you have a certain interest in a particular company, you should have an idea about what that company does well, where it operates, how it makes money, what’s current in the industry, and the core values of the company. There is nothing worse than interviewing a perspective employee that knows nothing about the opportunity. There are websites that you can use like ZoomInfo that can provide information about the company executives. If it’s a public company, I like using Yahoo Finance to look up information about what’s current, whether the stock is up or down and why. This type of information will help you to seem knowledgeable and also give you information to ask the interviewer questions.

Tip #5: Dress for Success!

We are in a crazy environment right now and some of the values that existed years ago do not exist currently. One of them is dressing for the part. I have interviewed people that just appeared as though they didn’t care. Let be the first to tell you that first impressions are the last impressions. I can remember applying for a job with Apple, Inc. in their retail division to supplement my income from my full-time job and I wore a suit to the interview even though I knew they had a relaxed environment. The goal was to make a lasting impression on the manager. It’s important to shave for all positions to look as professional as possible. We live in a society where it seems that the majority of the people have a tattoo on their body. Unless you are interviewing for a tattoo artist, please refrain from showing the tattoo during the interview. Whether it is a non-traditional or traditional role, I believe the consensus is that what you may call “art,” may not be art in the eyes of many.

Happy job hunting and if you have questions, please feel free to contact me for a free consult.

In an age where calendars are computerized, photos are files, and documents are downloaded, the humble checking account register is often ignored. But, if you’ll take 15 minutes to balance your checking account, you’ll stay on top of your budget and avoid bounced checks and overdraft fees.

Keep Track

The point of balancing or reconciling your checking account is to make sure you and the bank agree on how much money is in your account. That means you have to keep a record of your spending. The easiest way to do this is to write every transaction in your checking account register when the transaction takes place and keep a running balance.

Another option is to save all your receipts, and either enter your transactions into your register or, if you want to be super-nerdy about it, a spreadsheet. You’ll still need to keep a running balance every day.

The next step is also up to you—you must actually open and read your account statement from your bank. Whether you get your statement by mail or online, you can no longer ignore it. Open it up, and get to work!

The Balancing Act

Start by comparing transactions on your statement with your register. Make a checkmark in your register for every transaction included on your statement. Be sure all entries on the statement are written in your register, including any bank fees or service charges.

If you’ve been keeping good records, you’ll notice transactions in your register that aren’t included on your statement yet. Good job! Start with the ending balance on your bank statement and add the deposits that aren’t on the statement. Then subtract any transactions that aren’t on the statement. The total should match the running balance on your account register.

If the numbers don’t match up, you’ve probably forgotten to record a transaction. Look over your statement and try again. If it’s been a while since you balanced your checking account, you’re probably not going to get it balanced this month. Just total things up the best you can and continue keeping your records. Next month, if you’re off by the same amount, you can assume you’re on track. Just make the correction in your register.

Some Tips

Don’t use ATM receipts as a method of checking your balance. The balance printed on your receipt is just a snapshot of how much is in your account at that moment. It will not reflect any checks, debits, fees or deposits that haven’t posted to your account.

You may find it easier to balance your account a couple of times a month if you have online access to your checking account. The important thing is that you actually do it.

Balancing your checkbook is a lot like working on your budget. It can be difficult to get all the numbers to work right when you first start, but the process gets easier the more you do it. Once it’s done, you’ll feel much more confident.

Budgeting your money also helps you keep control of the money in your account. Check out Dave’s online budgeting tools that you can access at any time!

By William Jiggetts

Money is not wealth. High income is not wealth. Of course, you need those to grow wealth but they are just tools for empire building. You also need credit, leverage and know-how. With those and other tools, you create comfort and peace of mind for your family and your legacy.

By definition, wealth is multi-generational so no matter how much money you have, it’s not wealth until it’s secured for your legacy. Therefore, in order to create wealth you have to prepare future generations to be wealthy.

For example…

Bill Gates is wealthy. He famously dropped out of college to start his company. What’s often missed is that Mr Gates dropped out of Harvard and borrowed money from his father to start his business. The senior Gates had prepared the way by seeing to his son’s education, supporting his ambition and by having the assets to support his son’s dream financially. Now, the Gates’ are very wealthy.

Donald Trump is another example. He did his first deal with money borrowed from his father. Dad got the cash by mortgaging his real estate holdings. The senior Trump was a developer. He had assets, credit, experience, connections and a belief that his son would make good on the opportunity with what he had learned about the business of real estate development.

The Graves Family wealth no doubt has a similar track. The Graves family runs a Media Empire of which Black Enterprise Magazine is the crown jewel. Earl Graves Senior and his wife have not only worked really hard and made a lot of money; they have prepared their family and their estate so that the earnings from his efforts will result in generations of wealth.

Again, money is not wealth…

Money goes away but wealth stays and grows. After you have planted the seed of wealth there needs to be a protected environment where wealth can grow. This is where estate planning comes in. Wills, trusts, income, asset and cash-flow protection, liability protection all have to be in place in order for money to grow to wealth.

There is no end of stories of lost fortunes and people who had money but are now broke. On the other hand, there are the estates that just don’t break no matter what. The Hilton Estate for example: Those girls couldn’t break that estate if they tried. Some say they have been trying.

This is an important example. The Hilton family does not live parsimoniously. They live like Hiltons. Having millions in the bank or under the mattress and being afraid to touch it for fear of running through it is not wealth. I don’t know what to call that, but it’s not cool. Wealth affords your life-style and continues to grow and leaves a legacy.

So, what do you need to do?

Develop a mind-set of planting a tree for someone else’s shade. If you are not wealthy already, you won’t be. You can get rich though. Do that. Use your assets and whatever else you can to plant wealth seeds for your legacy. Confucius said, “The best time to plant a tree is forty years ago. The second best time is now.” Remember, “Now” is going to be forty years ago in forty years. It shouldn’t still look like now.

Make and save a lot of money. See to your children’s education. Teach them what you know and support them in learning what they want to know. Send them to great colleges so they can learn what you can’t teach and so that they can meet the people who will be their important contacts later when it’s time for them to make a lot of money. Plan your estate now. Wealth grows within a protected environment. Even if you’re not wealthy now, set up the estate anyway. Investments, life insurance, etceteras should be held in trust. Outside of that, it’s just stacks of cash waiting for a wealth-eroding wind to blow it away. Get professional help with the details and minutiae. It’s important.

Simple. Not easy.

This is a repost from the Examiner.com

During my time as a Wealth Manager at a major financial services firm, I had an opportunity to see how true networking works and it begins with the legacy that your family has left behind. Traditionally, networking was based on who your father knew or who he could connect you to and his reputation was on the line for referring an individual, but this is how people make it to the next level and beyond middle management. Let me give you a couple of examples: Jamie Dimon is the CEO of JP Morgan Chase, but it was due to his father’s (Theodore Dimon) influence and his reputation that propelled Jamie to the next level. Jamie has been very successful at JP Morgan and managed the risk of the one the nation’s premier financial services firms. Jamie graduated from Harvard Business School, and because of his father’s reputation and his relationship with Sandy Weill, he had some success and created a series of mergers that helped Citi become one of the premier financial services organizations in the world. Eventually he moved onto Bank One, where he was CEO and after a series of mergers and acquisitions he became the CEO of JP Morgan. He was well positioned to succeed, not because he went to hundreds of networking events and collected hundreds of business cards, he was positioned like a company marketing a product. His father helped elevate him, by helping him get over the hurdles and around the red tape.

Have you ever heard the phrase, “what’s in a name?” Your name means everything. People associate everything that you do by name and if your name goes back generations and has a good reputation, you are generally in a position to reap a good harvest. This makes so much sense to me in the natural and spiritually. Let me give you another example: Do you recognize the name Trump? You and everyone else, but people in New York City have recognized the name for years. His father (Fred Trump) was heavily involved real estate for years and his reputation was great among his peers and the banks the he had business relationships with. It was an easy transition to bring Donald into the mix. Donald Trump took the real estate business to the next level.

Are both of these individuals extremely successful without the help of their fathers? Yes they are without a doubt, but what if they didn’t have fathers that created the legacy for them? Would they have been at this level? It’s possible, but the power of traditional networking allowed them to leverage the use of their name to position them higher.

How does this affect your blueprint or your definition of “networking?” It’s more than collecting business cards, sending emails, and sending networking profiles to people at the company you desire to work at. Networking is so much more; it’s about creating a legacy and opportunities that will have a positive impact on you and your family for generations.

The examples that I used are on a large scale, but situations like this happen every day. One more example, I am sure that Chelsea Clinton was an exceptional student, but the with the influence of her parents and the name that she carries, she continued her graduate studies at Oxford and received a six figure job with a major consultant firm after graduating. How many people do you know that make the transition from college to a six figure role?

Learn how make your name stand out and experience how true networking impacts you for generations.

The story that has come out today is about Iverson’s alcohol and gambling issues. It has been reported by Stephen A. Smith that Iverson has been banned from Atlantic City, NJ casinos and some in Detroit. His life has been categorized by some people that know him as, “out of control.” Stephen A. has covered A.I. for years and knows him personally as he says, that Allen Iverson is in need of guidance.

As a life coach for professional athletes, this is the path that many athletes take. It’s an unfortunate set of circumstances for Allen Iverson, but the reality is that his core values are not intact and that he is reaching out for help. Financially, Allen Iverson has four homes in three cities that have not sold. He has homes in Philadelphia, Detroit, and two in Denver. Allen Iverson has made approximately $156 million in salary alone. There are reports that he has had some of his cars repossessed, but this is speculation and I have no way of confirming whether or not these rumors are true. What I can say is that this path that A.I. took was very predictable. He thought he was invincible and could overcome life’s pitfalls. He lived a hardcore life and his personal life and his physical body are now paying for it.  He has pushed everyone away that could help him including his wife. It’s a sad day for basketball fans and for the NBA as well. These leagues need to do a better job of helping their stars. An athlete’s life should not spiral out of control like Iverson’s without intervention.

What kind of man, kidnaps a kid and forces her to have sex with men and make her dance at strip club and sell her like a piece of meat. This is another example of bad judgement and some athletes not positioning themselves in better positions after their playing days are over. I feel very sorry for this girl and her family and this young lady will probably need counseling for the rest of her life. What was wrong with Robertson’s blueprint? I have to believe that he is insane! Insanity is the only reason that I can come up with for this malice and sinful act.

I am hoping that by working with professional athletes that we can help athletes think more about their decisions before committing something crazy and sick like this. Sexual assault is nothing new in the world of athletes, but when it involves a minor, I think this sets a new precedent in professional sports. I wonder what services the retired players association provided to Robertson after he retired from the NBA. It’s great to have these programs in place, but if they aren’t being made a priority, I don’t think the athletes that need to take advantage of the services and programs will ever accept the service and let it help them.

Just so we’re clear, I help healthy athletes, not sick athletes like this, but I could have helped in the very beginning, when he retired. This is very sad! My heart goes out to the victim and makes me want to help more athletes so we can avoid these types of headlines in the future.

Here are some of the highlights of the CARD Act for the consumers:

Finance Charges, Interest-Rate Hikes and Notifications

• No rate increases for the first 12 months after opening an account.
• Rate increases can only be applied to new charges.
• Annual and application fees cannot exceed 25% of your initial credit line.
• No more double-cycle billing.
• A six-month minimum promotional-rate period.
• No more over-limit fees, unless the card holder opts in.
• No fees to make credit-card payments online or over the phone, unless you make a payment on your due date.
• Must give 45-day notice of pending rate or fee hikes or any other significant changes to credit-card terms.

Billing Statements, Payments and Disclosures

• Billing statements must be sent 21 days before the due date.
• Your due date should be the same date each month.
• Payments are considered on time when received by 5 p.m. on the due date or the next business day after a holiday or weekend.
• Payments above the minimum must be applied to the highest-rate balance first.
• Each monthly statement must include information on how long it would take you to pay off your balance if you make minimum payments only and the total you’ll pay, including interest and principal; and how much you need to pay each month in order to pay off your balance in 36 months and the total you’ll pay, including interest and principal.
• Statements must also include a warning that by making only minimum payments you will pay more interest and it will take you longer to pay off your debt, as well as a toll-free number to call if you want to be referred to a credit-counseling service.

College Students and Young Adults

• No credit cards for college students unless co-signed by a parent or they can demonstrate “ability to pay.”
• No credit-limit increases if you are under 21 and have a co-signer without that co-signer’s permission.
• No credit-card marketing and freebies on college campuses.

As with everything, there are loopholes with this new CARD Act and you should read your disclosures or read this article. What I do like is that college students can no longer be suckered into signing up for a new credit card with t-shirts and toys because credit card companies are not allowed to market on campus and students must have a co-signer or show the ability to pay for the credit card. As I mentioned before I am opposed to using credit cards because personal finance is not taught at any level of education in this country and I believe these credit card companies have preyed on the financially uneducated for decades. True financial independence will come when people learn that cash is still king.

Sources: The bulleted information is from Smart Money and Aleksandra Todorova