– How to Build Credit When You’re In Debt

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Do you want to know how to build your credit score when you’re in debt? Well, this week that’s exactly what I discussed on, so watch the segment above to find out what you can do!

Email Question From Mary:

I went on a Debt Management Plan about 2 and a half years ago. I want to start rebuilding my credit. I’ve looked at pre-paid credit cards, but I am not sure this is the best way to go. Do you have any suggestions on how to start rebuilding my credit now? Or do I have to wait until the Debt Management Plan is complete?

My advice:

-          Go apply for a credit card, NOT a debit card.

-          Go to and look for a credit cards that right for you.

-          Only get one that has a small limit on it, $1,000 – $3,000.

-          Use the card WISELY, and pay it off every month!

Live Rich,

David Bach



NBC’s Today Show – Money 911 – February 29, 2012

If you missed me this morning on NBC’s Today Show – Money 911, make sure you take some time and watch the segment. This week we helped some people with some BIG problems. One viewer’s ex-husband was ruining her credit score, another was a consumer considering defaulting on her debt, and then was one was having trouble with the fine print on those tricky 0% balance transfer offers we’ve all seen in the mail. There’s tons of information in the segment and hopefully it can help you too!

Also, Danny Devito was at there this morning promoting his new movie The Lorax—which I can’t wait to see! I also got the chance to take a picture with the Lorax himself, so check out the picture below! Will you go and see The Lorax when it comes out? I know I will!

Live Rich,

David Bach

Me and the LORAX!
Me and the LORAX!

NBC’s Today Show – Money 911 – February 22, 2012

If you missed me this morning on NBC’s Today Show – Money 911, make sure to watch the segment above! Today we answered questions about financing options for furnishing your home, getting help with your credit score, healthcare savings plans and what to do with this year’s return.

PLUS, I shot a special video for you, where I speak in depth about Flex Spending Accounts and Health Savings Accounts, what they are, what they are not, and how they could be a great option for you to help pay for your health care expenses!

Let me know if this information helped you by commenting below!

Live Rich,

David Bach


NBC’s Today Show – Money 911 – January 4, 2012 – Plus My Tip to Earn 3% in 2012

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Can you believe it? Today was my 100th segment on NBC’s Today Show! If you missed me this morning on Money 911 make sure to check it out now! We answered questions about investing, emergncy funds, credit scores and using your 401k plan for home improvements. 

Plus dont’ miss the special video I did below, where I share how YOU can earn 3% on your money in 2012! 



Live Rich,
David Bach

TODAYLogo – How Many Credit Cards is Too Many?

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Check out my latest video from!

Question: I have good credit and have opened another credit card recently to get the travel rewards. I now have 5 credit cards open, but all with zero balances. How manycards is too many? And will my credit score be impacted if I close one or two of them?

My Advice:
- Five credit cards is too many
- Closing credit cards may impact your credit score
- Keep the credit cards open
- Continue paying them off on time
- If you choose to close one of the cards, close the one with the smallest credit limit

Live Rich,

David Bach


It’s Time to Get to Know Your Credit Score

While everyone says you should check your credit score, what you should be checking are your scores. In fact, you have more than one.  That’s because lenders, creditors, and the three national credit-reporting agencies—Equifax, Experian, and TransUnion—all have their own particular methods and formulas for calculating what kind of a credit risk you are.

The most widely-used rating is the FICO score. Many people think the term “FICO score” is just another way of saying credit score (sort of the way people call all adhesive bandages Band-Aids and all facial tissues Kleenex). It’s not. While FICO is the oldest and most popular credit-scoring system, the Big Three credit-reporting agencies have their own rating system (Equifax, Experian, and TransUnion).

That said, the credit-reporting agencies all base their individual scoring systems on mathematical models developed by Fair Isaac. So while your FICO score may differ slightly from the scores calculated by the credit-rating agencies, it’s not likely to be wildly different. In other words, if you have a great FICO score, chances are your credit score from the three credit bureaus will be pretty good too. The opposite is also true: bad FICO score, bad score from the bureaus.


So how do the credit-rating companies decide what credit score to assign you? What they do is take your credit history based on your credit reports and run it through a complicated series of calculations. In the case of FICO, the result is a number somewhere between 300 and 850. This is your FICO score. Anything over 720 is considered good. Score 740 or higher and most lenders will give you their best deals.

On its website, Fair Isaac spells out how it weighs the various factors that go into calculating your score. They are, in order of importance: 

35% of your score: Payment History. Do you always pay your bills on time or do you have delinquencies? Any bankruptcies, liens, judgments, garnishments, etc., on your record?  PAY ATTENTION TO THIS! Simply paying your bills on time impacts more than a third of your score.

30%: Amounts Owed. How much do you owe? What kinds of debt do you have? What proportion of your total credit limit is being used? Most experts agree that a credit utilization of more than 30% will hurt your score. So if your Visa card has a credit limit of, say, $5,000, you’ll want to avoid carrying a balance of more than $1,500 at any one time. According to FICO, more than half of all credit card users manage to do this. On the other hand, one in seven are using more than 80% of their available credit. 

15%: Length of Credit History. How long since you opened your first credit account? How old is your oldest active account? (The average is 14 years; the longer your history, the better.) This is why you should no longer close old accounts you don’t use—and why when you are asked to “opt out” now by credit card companies you should still keep the accounts open even after you have paid them off.

10%: New Credit. How many accounts have you opened recently? How many recent inquiries by potential lenders? A lot of new activity makes the credit-rating agencies nervous.

10%: Types of Credit Used. How many different kinds of active credit accounts do you have? A varied mix of credit—e.g., credit cards, installment loans, mortgages, retail accounts, etc.—is a plus; too much of one type is a minus. According to FICO, the average consumer has 13 active credit accounts at any given time—nine of them for credit cards and four for installment loans.

The reality is, your credit score is your financial GPA, and you need to know where you stand in the eyes of  the creditors. To get your scores and explore how you can work on your financial health click HERE!


Debt Free For Life Cover

The Five Crucial Questions You Need To Ask Your Partner Before You Say “I Do”

He popped the question but now it’s time to ask a few questions of your own. Even though fighting about money is the number one cause of divorce in America, many couples spend more time thinking about where to hold their wedding and which flowers to purchase than they do thinking about their financial lives together. With so many marriages torn apart because of finances, I created five crucial questions every bride and groom must ask (and answer) before they say “I do.”

  1. What is your partner’s credit history?
    The smallest mistake can cause big trouble for your financial future as a couple when it comes to your credit score. That one credit card with a $500 balance that your partner forgot to pay since college can seriously damage your credit history once you become legally married.
  2. Do we need to sign a pre-nuptial agreement?
    Not signing a pre-nuptial agreement can be one of the biggest mistakes a couple makes before they tie the knot. If one of you has significantly more assets than the other, it is crucial that you protect yourself against the legal repercussions of divorce, no matter how unlikely the prospect may seem at the time.
  3. Is your partner currently saving any money?
    The time to find out if your fiancé is financially clueless is before you get married. Ask them if they are putting any money away. Find out if they’ve ever taken a finance class or read a book on investing. This is a great way to suggest that the two of you take an investment class together. Couples that learn together… stay together.
  4. How did your partner’s parents handle their money?
    This is one of the most overlooked issues with couples today. How your partner’s parents handled money in their marriage can give you a pretty good inclination of how your partner will handle money in your marriage. If their parents were constantly relying on credit cards, for example, there’s a good chance that they have inherited this bad financial behavior as well.
  5. What are your partner’s plans and dreams for retirement?
    Don’t wait till you are both in your sixties and your spouse informs you that they plan to retire to the Carolina coast to go fishing every day, when you thought the plan was to go to Europe. Make sure you take the time to talk about your dreams for the future, and that you have the same plan for your retirement accounts.

You need to know exactly who you are marrying before you say “I do,” especially when it comes to their financial life. If you want to learn more about couples and money and how you can effectively communicate in your relationship make sure to listen to my interview from the teleseminar entitled “The Art of Love.”  You will have 24 hours to access the interview for FREE so SIGN UP NOW!  My interview will be airing at 6pm EST on Sunday, November 6th, 2011 – you won’t want to miss it!

Live Rich and Happy,

David Bach


the art of love

NBC’s Today Show – Money 911 – October 19, 2011

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Just in case you missed me on NBC’s TODAY Show – Money 911 this morning here’s the segment – so make sure to check it out. Today, I answered viewer’s questions on financial aid for college students and how to increase your credit score—fast! In my first answer,  I mentioned a few websites to look into to get money for school without a cosigner, so below is Loran’s question and the information that I gave her, that can hopefully help you too!

Question from Loran:

My daughter is in college and needs more money for school, which we don’t have. She’s been working several jobs, but with her apartment and car she often doesn’t have enough money. She’s tried getting loans but needs a co-signer which we can’t do. What should we do?

My Answer:

First look at a Federal Pell Grant, it is for undergraduate students unlike a loan, does not have to be repaid. The amount depends on your financial need, costs to attend school, status as a full-time or part-time student, and plans to attend school for a full academic year or less. The maximum amount given is $5,550.

Next, I would look into a Federal Perkin’s Loan which is a low interest (5%) loan for students with “exceptional financial” need. The U.S. Department of Education provides funding to your school. In turn, your school determines which students have the greatest need. Your school combines federal funds with some of its own funds for Perkins loans for qualifying students.  Both of these can be applied for at

You can find out more information on getting money for school at  under the tab – “Get Money for School.”  Also check out It bills itself as “the leading scholarship search provider for every student, whether you’re in high school or a mother of two returning to school” and with 34 million users, the boast is probably justified. This amazing website contains everything you need to know to find help quickly about both scholarships and college loans.