Financial Expert Ryan Mack: Basic Advice

28 Jun

Black finance expert Ryan Mack is back with part two of his informative interview full of great practical financial guidance. In our first installment, we learned the background of the mortgage crisis and what people can do to avoid losing their homes. This week, Ryan brings us more details about rebuilding credit and ways to battle the recession. Read on for his expert money management tips.
Miss Part 1? Read:
‘Ryan Mack Has Help For Housing Crisis Victims’

So Ryan, if someone loses a house at this time, what would be your best piece of advice for them as a next step?

At the risk of sounding elementary, the first thing the person should do is make sure they have a place to live. Afterward, they need to start to re-establish credit. My company offers a plan called ‘Seven Steps to Improving Credit.’ The basic outline is as follows:

Step One – Basic Housekeeping
You should know that 75% of all credit reports have errors and small balances that have been neglected. These should be cleared up immediately.

Step Two – Pay Bills on Time (35% of FICO score)
Missing just one payment can deduct 50 – 100 points from your score. Skipping payments for one month can take a 700 FICO score down to 562. To repair your credit, please get into the habit of paying your bills on time.

Step Three – Pay Down Debts
Carrying a balance serves no purpose. (For those planning on buying a house within a year, begin paying down all your balances NOW!)

Step Four – Don’t Cancel Old Accounts
Your Balance/Lending Limit Ratio makes up another 30% of your FICO score. If you must cancel accounts, cancel the newest accounts first. Try to spread out the time between cancellations by 6 months.

Step Five – Don’t Be Afraid of Credit Counselors
FICO ignores credit counseling and credit consolidation remarks. After payment is paid remarks are removed. That’s all you need to worry about.

Click to read more.

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