What Is a Credit Utilization Rate?


We recently discussed the sheer volume of terminology inundating the world of personal finance – and now we’re on a mission to bring some clarity to the terms and phrases you may hear on a daily basis. Today’s term?

“Credit Utilization Rate”

Simply put, your credit utilization rate is the amount of credit you’re using based on what’s available to you. For example, if you have a $2,000 balance on a credit card with a credit limit of $10,000, then your credit utilization rate for that card is 20%.

However, it’s not just the credit utilization of one card that matters – what matters is your overall credit utilization. This number makes up 30% of your credit score and more or less “tells” lenders how responsible they can expect you to be with new credit. That’s just one of many reasons why it’s so important to monitor your credit utilization rate.

What Is Pay To Delete?


If you have debt, then I’m probably preaching to the choir when I say how much of a drain it can be on our lives. So much so that it’s almost too easy to fall prey to get rid of debt quick schemes such as debt settlement and credit cleanup products.

Yes, there are occasions in which debt settlement and similar services can work. But more often than not the companies who tout these services are predatory and the results costly – costly in both your budget and your credit score.

The truth is, there’s no such thing as a quick fix for debt. Resolving financial issues takes time, knowledge, and diligence. Anyone who tells you otherwise is likely trying to sell you a predatory product. And the same goes with some of the financial advice we can run across when researching our options.

One such piece of dangerous advice is to use “Pay to Delete” to get rid of items in collections on your credit report. The idea behind Pay to Delete is to pay a collections agency so that they’ll mark delinquent items as paid off and lobby to have them removed from your credit report entirely (as though it never happened). The question is, does it really work?

Overcoming the Guilt Associated with Mismanaged Finances


I’m no stranger to financial slip-ups. When I was in college I had my wrist slapped by the bank for overdrafts… 17 times to be precise.

17 times – a bit excessive? Well, yes. But it wasn’t a typical situation. Here’s what happened:

I had a fairly low account to begin with but then an unexpected automatic fee took out close to the remainder of my funds overnight. The result? My total account balance fell to $3.12. What came next was an unfortunate series of 99 cent iTunes purchases, 14 of which garnered a 35 dollar overdraft fee. Let’s do the math real quick to see just how much I racked up.

Oh yes, that’s right: $490.00

Topics We’re Talking About: Minimalism and Financial Success


When I moved in with my college boyfriend for the first time, we had a throw-down over how to furnish the apartment. I started listing all the things we needed, and he countered by listing all the things we didn’t need. It was pretty much a zero sum game…

We need a microwave.
We don’t need a microwave.

We need a bath mat.
We don’t need a bath mat.

… and so on and so forth. I was the one who wanted more, he was very much the one who wanted less. Though we probably each dug our heels in a little too hard, I recognize now that I was just trying to fill an empty space rather than think about whether I actually wanted the things that would fill it. In that respect, I did learn a bit about my spending habits.

Debt Settlement May Not Provide The Relief You’d Expect


Even though we’re an internet company, our phone rings a lot. And one of the most common questions people ask is if we can settle or consolidate their debt for them.

The quick answer is that our mission isn’t to do debt consolidation, settlement, or management. Our mission is to help you find a strategy that you can use to pay your debt off faster, on your own. Then we track your progress to keep you motivated along the way.

The second half of that phone call can go one of two ways. One is disappointment that we don’t provide an even faster solution (like debt settlement) and one is interest in trying the plan out. Since it’s become clear that many people seek out debt settlement as an option, I wondered if debt settlement is really the fast solution it seems to be.

Recent data seems to prove that it isn’t. In fact, the data points to debt settlement being a cause for even more financial troubles down the road. So if you’ve been hoping to try debt settlement as a means to eliminate your debt quickly, then read on first to make sure this is the right solution for you.

Creating Change in Life AND Finances: What CrossFit Can Teach Us About Paying Off Debt


Many of you might not know this (or have any reason to know this), but we sometimes work loooong hours here at ReadyForZero. While I love what I do and don’t mind spending the extra time doing it, it can be pretty challenging to fit in other important parts of my life.

The byproduct of working long hours? You end up looking for anything that might help you optimize everything.

So when I came home one day from work and told my husband I can’t possibly imagine doing a long workout when I really should be asleep soon, he told me he knew a way I could work out for 5 minutes and get the cardio equivalent of a 30 minute run.

“Say what?” I asked. “What is this magical workout?”

His answer: CrossFit. Since I knew we didn’t have the budget to join a CrossFit gym, I immediately balked at this. “But,” he said, “since you’re not in stellar shape anymore [thank you startup hours], all you have to do is a 5 minute warmup and I promise you won’t be able to move afterwards.”

I had to try it. I’m realistic enough to know I’m not going to get a long workout in when I get home late. So he gave me the 5 minute routine:

30 squats, 20 sit ups, 10 push ups – 3 times in a row – as fast as possible while still keeping form.

I tried not to laugh. It sounded so easy! Well…I wasn’t laughing 5 minutes and 30 seconds later. Nope. I was on the floor in our living room panting and barely managing to mutter the word “water” before he handed me water and a towel. He was certainly laughing though…

And thus I learned that you can get faster results for large goals if you’re willing to work really, really hard. And the results could not only be faster, but far more powerful! With this in mind, I thought it would be interesting to look more closely at the principles of CrossFit and see if they can be applied to financial goals, such as debt payoff. Join me for the analysis! I promise you won’t be on your living room floor begging for water by the end of this…

Reader Perspective Series

Why Living At Home After Graduation Is NOT a Cop-Out


This is a guest post by Natasha, who writes at Refuse To Be Broke.

Like millions of others in America, I graduated from college within the last five years. Since graduating in December 2012, I have read a lot of articles about Millennials and found that many times the authors have a negative tone. Sometimes, these articles are very irritating with regard to how they discuss certain degrees and majors. For example, I majored in Professional Writing (aka Technical Writing). While writing may be considered an unwise major by some so-called experts, I have acquired both technical and soft skills and I am optimistic about my prospects. Oh, and I also live at home in order to save money. In the process, I have learned even more and have been able to save more money.

Why You Should Never Say You’re Bad at Math (and Other Financial Wisdom)


A few years ago, the only thing on my mind was credit card debt. “Want to go out to lunch?” a friend would ask. Can’t, I’d think, I have credit card debt. How about a surprise trip to visit my parents? Oops, can’t really afford the plane tickets – what with my credit card debt and all. The heat would go out in my apartment (again) in the middle of January and I’d think about moving. Hmmm….better wait until the credit card debt is paid off. Brrrr….

Then one day, my credit card debt was paid off.

I knew there wouldn’t exactly be a ticker tape parade in my honor, but I was still pretty dang excited. Years of hard work took me one big step closer to financial freedom. Finally, no more credit card debt! Finally, I can make decisions without that black cloud hovering over my head! Finally, I can get on with my life!

I rode off of this high for a few months until a new worry crept into my brain: not having a retirement fund. Seemingly out of nowhere, it occurred to me that my 20s were nearly over and I didn’t have any retirement account to speak of. To make matters worse, I still had quite a bit of student loan debt and a wedding to deal with, leaving a lot less room in my budget for savings.

Sound familiar?

Millennials are hitting the age when adult transitions collide into one expense after another – saving to buy a house, getting financially ready to have kids, slowly starting to work toward debt freedom. And, unfortunately, millennials are hitting this peak with more student loan debt than any generation before them.

What’s worse, millennial women are facing these challenges at a time when they still earn less dollar per dollar than their male counterparts. Not exactly a cocktail for success. So what can be done about it? We can start preparing for our futures. Ladies, it’s time to have the retirement talk.

Announcing Our New Get Out of Debt and Auto Loan Resource Centers


There’s a lot of fun, feel-good action going on in the ReadyForZero office whenever we create a new resource center. Not only do we get to sort through the very best of our archives, we get to scour the web for the most helpful posts from other amazing bloggers and sites. The result is the creation of epic online resources chock full of useful tips and comprehensive info about a specific financial area.

For our latest resource center release, we’ve created the Get Out of Debt Resource Center featuring all sorts of good stuff related to kicking debt’s butt, as well the Auto Loan Resource Center dedicated to answering all your questions about car loans and auto loan repayment.