Author: Philip Tirone

Call me crazy, but I once sent a  seven-day bowel cleansing formula to  President Clinton. He looked  unhealthy at the time, and I was a  concerned citizen …
Another time, I convinced billionaire  Rick Caruso to have coffee with me. I  got Coach Ken Carter (of the 2005 film  Coach Carter starring Samuel  Jackson) to meet with my staff  members and me. And when I was 23,  I persuaded Zig Ziglar to have lunch with me.
I did all these things because I believe  in getting exposure to big thinkers— people who can help me shape my future.
In one of my posts emails, I  suggested that if you are struggling  with debt or credit problems, you could  “change your physical environment so  that you are more likely to create the  psychological shift necessary to fulfill  your financial goals.”
I got several requests asking for more  information about how to do this if you  are deeply in debt, can’t get credit, or  are having to start over from scratch.
So I thought I’d pass along an idea that has worked for me …
Get physical exposure to people you admire.
If you start talking to other people who have been in your circumstances, and who are now living a life you admire, you will get at least a few ideas for changing your circumstances. Plus,
you will build a supportive network of people who are on your side … who want you to achieve your goal.
I know that financial problems can be embarrassing, and you might not want to reach out to people for help. But you can save yourself from years of pain if you decide to reach out to a few strategic (and trustworthy) people who will give you ideas for changing your finances and your future.
So whom should you get exposure to? Basically, you need to find people who have “been there, and done that”—people who have successfully moved past obstacles to find success and financial stability. This might be your sister-in-law, a local businessperson, or a good friend.
Or, you might want to reach even farther outside of your social circle, especially if you are deeply in debt, unemployed, or starting from scratch.
You could start looking for people who can pull you up, a few mentors or advisors who can help you make radical shifts in your situation.
That’s what I did when I got Zig Ziglar to have lunch with me. And that’s what I did when I brought Coach Carter into my office.
So how did I do it?
Well, you’ll have to wait for my next post, but I’ll give you a hint …
I used Seven Magic Words.
Until then, post a comment below and let me know your ideas for getting physical exposure to people who can help you change your circumstances.
– Philip Tirone

From time-to-time, I give tips that extend beyond the subject of how to build credit and how to have a 720 credit score. Here’s a hot tip from a friend of mine who is a bankruptcy attorney …
Never pay off your debt by using a retirement account, education savings account, Roth IRA, IRA, or 529 plan.
Too many people who are in a financial crisis liquidate these accounts, and then turn around and declare bankruptcy. But guess what? These plans, intended as long-term savings vehicles, are protected from bankruptcy, so you would be far better off declaring bankruptcy before tapping into this accounts.
That’s right: You can declare bankruptcy and still hold onto all the money in your retirement, education savings, Roth, IRA, and 529 plans.
Of course, if you are in debt, your bank is going to try to strong-arm you into withdrawing money from all of your accounts. When this happens, just remind them that under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, you are legally protected from paying any debt using these accounts.
As always, I encourage my readers to be strategic about their debt-repayment plans. Sometimes, when faced with a mountain of bills, emotions and anxiety take over, and we tend to make rash decisions.
Remember that your goal is to create a long-term plan for financial stability. Try to resist getting caught-up in the short-term anxiety. Take a deep breath, and make a plan to protect your future.
Lastly, if you are struggling with your debt, it’s important to know all your options…  and don’t put this off!

• Is debt consolidation right for you?
• Is bankruptcy an option?
• What other things are possible that you might not know about?

As you know, I don’t handle debt negotiations and I’m not an attorney. However, I know the best people in business!
If you would like an introduction, click here and answer some basic questions, and I’ll get you an introduction ASAP.

There’s a lot of talk about the new scoring model called VantageScore. Proponents say that it will boost your score and help people with no credit history build a strong credit score.
Here’s the bottom line: don’t even clutter your mind.
Now… the back-story for those that want it:
Until the majority of lenders are using a new scoring model, the FICO score will remain the main credit scoring system out there.
As of right now, major lenders like Fannie Mae and Freddie Mac are not using VantageScore. In fact, I have never met a single lender who does use VantageScore.
When deciding whether to extend a loan to you, your potential creditors want to know how risky you are. Currently, the model they use to determine your creditworthiness is FICO, and almost exclusively FICO.
So if you want to qualify for a loan, or if you want to qualify for better terms on your existing loans/credit cards, you must follow the FICO model and demonstrate the behaviors that will boost your FICO score.
Ignore everything else because it will not make an ounce of difference if you lender is not looking at it.  All it will do is paint an unrealistic picture of what loan terms you can expect.
I want you to focus on reality. And the reality is this: Almost every lender out there relies on FICO and only FICO when determining a credit score.
If you have any questions about how the credit-scoring models work, be sure to leave a comment on my blog.

Back in 2001 at the non-profit organization Myvesta.org we held a contest and solicited the best cheap meals from people all cross the country. The resulting entries were combined into the Cheapmeals.com Cookbook.
You can download a free copy of this cookbook below.
The Cheap Meals Cookbook is divided into:

1. Appetizers
2. Soups & Salads
3. Entrees
4. Desserts
5. Kitchen Tips & Tricks

But first, here are some great tips for eating cheap meals.

Starting at Home:

1. Get a plan. If you’re always spending more for food than you expected to, then a plan is in order. It doesn’t have to be elaborate, just sit down with your family and come up with a dozen or so recipes that are tried and true. Write down the ingredients you’ll need and stock up well enough that you’ll have plenty on hand. The fact is most people eat basically the same dishes over and over again anyway.
2. Choose just one new dish a week to try. If the family really likes it, add it to your tried and true list.
3. Keep a pad of paper handy on the refrigerator so you can write down what you’ve run out of — it’ll probably save you more than a few trips to the store. (Don’t forget to take the list with you!) Those last minute trips for one or two items often result in a bag of groceries that break the budget.
4. Keep a running tally of what’s in the refrigerator or freezer. You can post this list on the fridge, too. Maybe now you won’t forget about the lasagna you froze last year!
5. Clip coupons but only for items you already buy. Then, if your local store offers double coupon days, time your visit accordingly. Kids can be great coupon clippers, especially if you offer to give them a share of any money you save.
6. One of the biggest reasons we’ve heard as to why people don’t use coupons is that they always seem to be for items that you never buy. Here’s what you do: Clip the coupons for the products you don’t buy, but are made by the same company as a product you do buy. As long as the first 4 digits on the coupon match the first 4 digits on the item’s UPC code, they are made by the same company and you’ll get the discount. So if there is a coupon for diapers, and you buy paper towels made by the same company, you can use the diaper coupon to get the savings on the paper towels. Some stores allow this use of coupons and some do not. Ask the store manager if this use of coupons is allowed at the store where you shop.

Shopping:

7. Stock up on staples so you’ll always have the basic ingredients for a recipe. If you have the room for storage, buy plenty when the price is right but make sure that they will store well.
8. Also, stock up on your favorite items when they go on sale. If your favorite apple juice normally costs $2.29 and you buy it on sale at $1.50, you’re guaranteed to save 34 percent, taxfree. Stock up and save!
9. Let younger kids pick out one item within a certain price range (say $2) when they shop with you. They’ll learn to compare prices and hopefully won’t bug you to buy everything they see that looks good.
10. Let older kids use their allowances to buy items that aren’t on your list. (But if you want to buy them treats from time to time when they’re on sale, that’s OK, too.)
11. Look high and look low. The more expensive items are usually right at your level of eyesite, says Mary Hunt, publisher of the Cheapskate Monthly (www.cheapskatemonthly.com). The less expensive ones are probably up high or down low on the shelves.
12. Buy cheaper generic or store brands of staples (flour, tomato paste, etc.) Keep in mind that store brands are generally made by the manufacturers of the big name ones — they just slap on a different label.
13. Stick to your list and only buy promotional items when the price is really right and you’d normally buy them anyway. Otherwise, you’ll end up with a case of artichoke hearts that you’ll never use.
14. Alternate where you shop based on what’s on sale. Hit the warehouse clubs from time to time to stock up on good deals.
15. Use unit pricing. These days, most stores display unit prices on the shelf labels (the price per pound or per ounce for example). It may be in tiny type, but it’s usually there. Use that to help you figure out what’s really the best deal.
16. Stay out of stores as much as possible. If you find yourself running to the store for more milk or bread, or because you’ve run out of something, then look at your master shopping list again to make sure you’re shopping for what you need.
17. Buy in season. It sounds obvious, but buying fruits and vegetables in season can be dramatically cheaper than buying out of season. The flavor is usually a lot better, too.
18. Create a price list with the prices of items you usually buy at the stores you frequent. That way, you’ll know which stores have the best deals on certain items. You’ll also know when a “sale” price is a bargain and when it’s not.
19. Bring only your budgeted amount of cash to the store and leave your credit cards, checkbook and ATM card at home. You’ll have no choice but to stay within your budget!

Cooking It Up:

20. When you make a meal, double the recipe if you can. Then save the rest for a meal later that week, or put it in the freezer. You’ll save time and money! You may even want to try making one month’s meals at once and freeze them. This method can save time and money. Get Month of Meals by Kelly Machel or Once a Month Cooking by Marilyn Wilson for details.
21. Join up with others and start a meal exchange. The idea is for four families to share cooking responsibilities. One family cooks a meal one night a week for everyone. Then the meals are either delivered that evening or exchanged at a convenient location once a week. Shopping can be a once-a-month group activity or divided among the group’s members.
22. Become a master at substituting. For example, Nancy Castleman, editor of The Pocket Change Investor newsletter (goodadvicepress.com), substitutes shelled sunflower seeds for expensive pine nuts in her pesto. It tastes delicious. A powdered egg substitute that can be used in place of eggs in most baking recipes is available at health food stores. Keep your eye out for other inexpensive ingredients that can work just as well as more expensive ones.
23. Ask family members to take turns cooking one night a week. You’ll get a break and they’re much more likely to eat what they cook! (You may be surprised, they may be very good at it.)
24. Have a “leftover” night on Friday or Saturday where you eat what was left from the week. Make it a family fun night with plenty of games and conversation and the kids will probably get into it.
25. Start a small herb garden in your window or on your patio. Herbs will be there when you need them and will be much less expensive than buying them fresh at the store (potted herbs also make wonderful, inexpensive hostess gifts).
26. Learn to cook. If your idea of making dinner is to pick up the phone, invest in a few cooking lessons or learn from a friend or relative. You may surprise yourself and your family!

Download the Free Cheap Meals Cookbook

Click on image above.

@GetOutOfDebtGuy
Author: This article was contributed by GetOutOfDebt.org, a site that provides free help and debt advice on how to get out of debt.
Source: Free Cheap Meals Recipes Cookbook

Okay, let me just preface this post by saying that I know the question I’m going to ask is a little over-the-top …
But I’m going to ask it anyway.
First, though … I wanted to pass along pics from my family vacation to the Bahamas. Several people left comments on my blog asking, so here they are:

(Just the six of us: Philip, Lily and baby-to-be, Dominic, Lucas, and Ava)

(Daddy and Ava, my oldest canoeing)

(Lucas, the trooper)

(Dominic, my middle child perfecting his swing)

Poor little two-year-old Lucas split open his lip while we were on the trip. Fortunately, we called the front desk, who had paramedics and a doctor on staff, so within about 90 minutes, he was all stitched up and ready to continue the vacation.
And it really was a “Heaven on Earth” type vacation… as you can see from the pictures!
Speaking of “Heaven on Earth,” my family has started asking a new question. We want to create the ideal life for ourselves and our children. So about once a week at dinnertime, we ask a question:
“If we were to create Heaven on Earth, what sort of things would we be doing?”
And then we try to do those things—vacations to tropical locations, dinner parties with great friends, etc. An added bonus of this question is this …
Lily and I learn all sorts of amazing stuff about our kids by asking this question. We find out what they are interested in. If they have fears, we find out about those too because they tell us what Heaven on Earth doesn’t look like.
Of course, I’m a Catholic boy, so the “Heaven on Earth” concept might be a little over-the-top for your tastes.
But how about asking yourself and/or your family this question …
“If we were to be living the ideal life, what sort of things would we be doing?”
By asking this question, you might identify a lot of things that don’t feed into your vision of the ideal life. And this is great information to find out because then you can make a plan to change your situation.
But you have to identify your ideal situation first!
So what does that ideal life (or Heaven on Earth) look like? Feel free to share your answers below.
– Philip Tirone

“Would you like to save 10 percent on your purchase today by applying for a retail store credit card?”
Does that sound familiar? Just about every major clothing and electronics store has promotion aimed at getting people to sign up for a store-specific credit card. But what you don’t know about retail store credit cards could hurt your wallet and your credit score.
In 7 Steps to a 720 Credit Score, I talk about the importance of revolving credit cards in building your credit score. Indeed, a large portion of your credit score is determined by your credit card behavior. One of the best ways to earn a high credit score is to responsibly manage three to five revolving lines of credit, which include your major credit cards (Visa, MasterCard, and the like) as well as retail store credit cards, which are credit cards affiliated with a store like Gap or Chevron.
Before we talk specifically about how retail store credit cards can hurt your credit score, let’s take a look at the method credit-scoring bureaus use to gauge your creditworthiness. The credit-scoring bureaus want to see that you can responsibly handle a number of credit accounts at the same time. Having three to five credit cards allows them to tell whether you can make regular payments and determine whether you are a responsible person.  If you do not have at least three cards, they do not have enough information about you to tell whether you are reliable or not. On the other hand, if you have fifteen credit cards, they know that you could quickly get in over your head by racking up huge credit card bills you are unable to pay.
In the words of Goldilocks, three to five is “just right.”
Of course, you must also show a record of timely payments. Doing so will cause your score to increase whereas failing to make payments on time will cause your score to drop.
You must also keep a card active.  Inactive cards don’t tell the credit-scoring bureaus anything about your ability to manage debt.
Though retail store credit cards will help you boost your score, they cause unnecessary problems:

1. How will you keep your retail store credit cards active? If you do not need to buy a new washing machine each month, you might have a hard time keeping your Sears card active.
2. If you are limited to no more than five revolving credit cards, why waste one on a card that will only be accepted by one merchant?  You cannot book a plane ticket using your Old Navy credit card (but you can purchase an Old Navy shirt using a MasterCard).

Retail store credit cards have limited use. If you apply for too many of these cards on top of the Visa, American Express, MasterCard, and Discover cards that you use for traveling, meals, and other expenses, you will soon find yourself with more than five credit cards.
And there is another downside to consider. Many stores promote their store-specific credit cards by offering a 10 or 15 percent discount on same-day purchases if you open an account.
Let’s do the math and see how this adds up. Imagine that you are buying a pair of $60 jeans from the Gap when the cashier tells you that you will get 10 percent off your entire purchase—$6—if you open a Gap credit card. You figure it is a wise move, so you sign up on the spot.
Consider all the downsides:

• I should take advantage of this offer, you might think, piling a few more items in your shopping cart. Sure, you “saved” 10 percent, but you also just made a rash decision to splurge on things you probably do not need.
• You have added a credit inquiry to your credit report. Credit inquiries count for 10 percent of your credit score, so your score drops a few points. This might not be a big deal, unless you plan to open another credit card, apply for a home loan, or get a car loan in the next few months. If you do, you might pay higher interest rates, which means that $6 “savings” just cost you a bundle.
• If you do not pay this and subsequent bills immediately, you will have to pay interest
• Ever heard of retail therapy? Having credit cards in your wallet strengthens your ability to make emotional buying decisions by creating opportunities for you to charge things you do not need.
• Especially during the holidays, you will be more likely to make purchases you cannot afford.

My point is that you most certainly do not save a single dollar by opening retail store credit cards.
Still not convinced? Think of it this way: Why would retail stores promote these cards with discounts unless they know they can eventually make money off the retail store credit cards?
A final note: Upon reading this article, you might be inclined to close those retail store credit cards. Resist this temptation as closing credit card accounts could damage your credit score by lowering the average age of your credit cards.  Instead, pay off your retail credit cards so the credit-scoring bureaus know you are being a responsible borrower. Then make a commitment to say good-bye to retail accounts.

Perhaps the most difficult part of trying to build your credit score to 720 is tackling collection accounts.
But tax season offers a great opportunity for you to eliminate your collection accounts, once and for all.
First, though, a little background on collection accounts …
When you pay off your collection account, your credit score could be damaged.
You see, the payment renews the seven-year timeframe that the collection account will stay on your credit report, and it causes your score to drop.
Isn’t that crazy? If you do not pay the debt at all, the item will fall off your credit report sooner than if you make a payment!
Of course, paying off your debt is the moral thing to do. You could also be sued if you do not pay the debt.
So what’s the solution?
If you want to build a 720 credit score, your goal is to negotiate with the creditor/collection agency so that you can pay the collection account but not have it impact your credit score.
You can accomplish this through something called a letter of deletion.
As I mention in my program, this is not something that works every time, however, you have to ask!
And this is where tax season offers a great opportunity to remove the collections accounts from your credit report. Let me show you how…
Let’s say you are expecting a tax refund, and you have a $1,500 outstanding collection account.
You can call the collection company/creditor and say something like this:
“I have a tax refund coming my way, and I’m trying to figure out how to spend it. I’d like to use it to pay off some of my outstanding debt, but I want to be wise about it. My account with you is outstanding in the amount of $1,500. If I pay, would you consider the account settled in full, and would you give me a letter of deletion in exchange for sending 100 percent of my tax refund to you?”
Given the terrible economy, the creditor/collection account will be thrilled to get a payment, but the creditor or collection agency might not be so thrilled to give you a letter of deletion.
The key here is to keep asking… ask, and ask again.
Be polite—after all, paying the debt is your responsibility.
If one collection company says “no,” if you have another collection, call the other one up and offer the same to them.
Let the collection company know that you will send the money to a different creditor if it does not agree to your terms.
This is a golden strategy for paying off collections and helping to build a 720 credit score. When it works (and it will!), be sure to leave a comment on my blog!
Make it a great day.
Philip Tirone
P.S. Because collection accounts are complicated, I suggest that you review our credit lessons on dealing with collection offices before you do anything.

For those of you who missed the Q&A call yesterday, here was a common theme that I want everyone to understand:
Rebuilding Your Credit – The easiest way to rebuild your credit is by applying for new credit.  However, if you have more than five credit cards, this does not apply to you.
Please read this entire email…
Keep one thing in mind: I do not want you to apply for just any credit. Apply for credit that is going to help build your credit score.  As I teach in my program, according to a Federal Reserve Board Study, 46% of credit cards hurt your credit score.
Reminder #1: If you are married, do NOT apply for joint credit.
Reminder #2: You need three new credit cards after a major financial meltdown (Bankruptcy or Foreclosure), so apply for all three credit cards right away.
Reminder #3: Don’t put this off… this is the #1 reason people do not have the big jump on their credit report.
I’ve done all the research for you and there are different credit cards you should apply for, depending on where your credit score is:
For those with a credit score of 660+: Click Here

For those with a credit score below 659: Click Here

Please Note: For those of you with a credit score of 660+: if you don’t get approved for any of those credit cards listed, then go to the other site for credit scores below 659.
Remember, these are not going to be your credit cards forever. You will have them for just enough time to rebuild your credit, and then I’ll show you how to get the great credit cards!
Promise yourself right now to take the time and apply for new credit this week. Put it in your calendar… And when you accomplish it, give yourself a gift or a bonus.
In six months you will be THRILLED with the results.
Philip Tirone
P.S. This one step is the biggest mistake people make, don’t let it be yours.

One of the most frequently asked questions about credit is this:
Can I raise my credit score by paying off my debt?
The short answer is yes, but there’s a big caveat: You must keep your credit cards active.
Two of the factors that the credit-scoring bureaus consider when assigning credit scores are:

1. Your balance-to-limit ratio.
2. Whether your accounts are active.

Let me start with your balance-to-limit ratio. Credit-scoring bureaus award higher scores to people who have credit card balances that are no more than 30 percent of their overall limit. If your limit is $10,000, for instance, your balance should never exceed $3,000.
One of my first strategies for helping a person build a 720 credit score is to lower each credit card balance to no more than 30 percent of the credit card’s limit.
That 30 percent target is the minimum you should aim for. If you can pay your credit cards entirely, great! Your score will be higher.
Important: Many people think that if they pay their credit card balances in full each month, they don’t have to worry about having a high balance the rest of the month. This is a common misconception.
From a credit-scoring perspective, bureaus look at your credit-card balances as a snap shot in time, which means that if you have a credit card with a $2,500 limit and a $2,000 balance on the day your credit report is pulled, your score will be lower … even if you just sent in a check for $2,000 that simply has not cleared the bank.
That is why in my Webinar, I teach people to never charge more than 30 percent of their credit card balance. And the closer they can keep their balance to $0, the better!
This brings me to my second point.
You must keep your credit cards active. When I give my webinar, I explain to people learning how to build credit that they must use their credit cards. Otherwise, the credit-scoring bureaus have no way of telling whether you are a responsible borrower.
Consider it like this: Let’s say you own an airplane. Owning an airplane isn’t enough to be granted a pilot’s license. You must first demonstrate your ability to take off and land, you must have hours of flight practice under your belt, and you must hold the proper certification.
Likewise, owning credit cards is not enough to demonstrate that you know how to use them. And because credit-scoring bureaus consider the most recent activity to be the most important, you must use them regularly.
So how do you keep a low balance on your credit cards while still keeping them active?
Simple. Let’s say you have four major credit cards that you want to pay off but keep active. (Ideally, you should have between three and five major revolving credit cards.) Here is a plan that shows you how to raise your credit score by paying off your debt.
1. Identify four bills that have a set monthly payment. For instance, your gym membership, magazine subscription dues, car insurance, and health insurance bills are probably the same amount each month.
2. For each of your four credit cards, schedule an auto pay of one of these bills.
3. Then, create an auto payment from your checking account to each credit card company. This auto payment should occur two days after your credit cards are charged for the bills. Let’s say, for instance, that you create auto payments for your Visa, MasterCard, American Express, and Discover cards to pay your gym membership, magazine dues, car insurance, and health insurance bills (respectively), on the 5^th of the month. You would then create another level of auto payments so that your checking account pays your credit card balances two days later.
This way, you will never pay interest, keep your credit cards active, and keep your credit cards paid off.
So what about other debt, like loans? Here’s a tip on how to build credit by getting small loans:
Let’s pretend you are going to buy some new furniture. Assume that you have enough money to buy the furniture outright; however, you would like to build your credit.
If the bank will report the loan as an “Installment Loan” to all three credit bureaus, it’s a great idea to finance part of the purchase. Then, pay the bills for three months before paying the remaining balance in full.
Let’s assume you finance $5,000 and pay 10 percent as an interest rate. Your monthly payments are $41.66, and you pay these for three months before paying the balance in full. During these three months, you pay only a little bit in interest, but you have a new item on your credit report that appears as “Paid in Full” and “In Good Standing.”
If you have any other questions about credit, be sure to post them below.
Make it a great day,
Philip Tirone