Special Feature: What Moms Should Know About Improving Credit Scores

The housing market is changing in today's economy, read my  special feature, 2010 Real Estate Market & What Moms Should Know About It. Last week I interviewed two realtors about real estate, and now I would like to focus more on estate planning. I interviewed family estate planning attorney Darlynn Morgan from Newport Beach, California. 

Darlynn Morgan is an attorney, speaker and a mom. Darlynn makes it easy for families to talk about and plan for tough subjects like money, death and taxes.  Darlynn started Morgan Law Group in 2005, you can visit  Morgan Law Group for more resources. 

Katja Presnal:  What kind of shift have you seen in the families estate planning in the
past six months, if any?

Darlynn Morgan: In the past 6 months, I’ve seen an increase in families coming in to the office to take care of their planning.  People have shifted away from some of the fear we saw in 2009; that fear was replaced by a new awareness that having a solid legal and financial foundation- for families with all levels of assets- is essential in order to grow into the life you really want.

Presnal: Is now a good time to buy a house or make any big investments such as
real estate? Why or why not?

Morgan: I say yes!  The old adage of “buy low, sell high” is the environment we are in.  Housing prices and the cost of money (interest rates) are at all time lows. 

Presnal:  Who especially should be thinking about purchasing houses right now?

Morgan: Young families with kids. Three or four years ago, this group was completely priced out of the market and absolutely could not afford the inflated prices of homes on the market.  These people are sitting pretty now, because they don’t have an (often under water) house to sell and have had a few years to save.  And, as first time home buyers, there are a lot of incentives out there to make it even easier for them to get in to their first home.

Presnal: The economy reflected on many people's credit scores, do you have any
tips how to get them up?

Morgan: First off, don’t put your head in the sand.  You need to get a copy of your credit report and find out exactly what you are dealing with. This is the place to start because you need to know what is on there, like what is your current credit score?  Is there any incorrect information on it or errors that need to be fixed?  What accounts are open, what are the credit limits, and what is being reported?  And, surprisingly, it is not going to boost your scores to close unused accounts, and it may actually hurt you.
The other things to do may seem obvious:  pay your bills on time, keep account balances low and don’t take out any new credit unless you absolutely need to.
Finally, get help. There are consumer credit agencies out there who can help you raise your scores or work with creditors or lenders on your behalf. The bottom line: taking action can help!  There are many different options available to you, in terms of improving your score.

Presnal: What are your best tips for starting to build equity if the family is facing tough times, and struggling even paying bills?

Morgan:  Albert Einstein said that the same thinking that got you into your current situation isn’t going to be sufficient to get you out.  So you are going to need to start thinking outside the box.  Take a look at the family budget and see if there is any “fat” you can cut out.  Are there any ways that you can bring additional income to the family?  Get creative, and be resourceful!  Decide what you want your life to look like, ultimately.  Mindset plays an important role, so keep a positive outlook; stress and negativity will only undercut your efforts.  Finally, take action. If you are struggling to pay bills, you are going to have to be proactive.  Contact your creditors and see if they will work with you to change payment terms or even reduce balances.  Now is the time to get your financial house in order, even if there isn’t much there currently!